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gao_GAO-13-157

gao_GAO-13-157_0

Background DOD’s key priority is maintaining military superiority. Knowledge about which technologies are critical and warrant protection from illegal or unauthorized access is needed for, among other things: export controls and licensing decisions for dual-use and arms exports, which fall under the purview of the Departments of Commerce and State, respectively; consideration of anti-tamper protection of critical technologies on defense systems, which is primarily coordinated by anti-tamper officials and acquisition program offices within the military services; review of foreign acquisitions of U.S. firms that are involved in the development or manufacture of defense technologies, which is coordinated with several federal agencies; counterproliferation and counterintelligence programs and activities performed by DOD entities such as DSS to protect against industrial espionage; and determinations about the public release of technical or scientific information. Despite DOD’s Actions to Address Weaknesses, MCTL Is Outdated and Updates Have Ceased DOD Took Steps to Respond to MCTL Weaknesses Since our 2006 report, DOD has taken steps aimed at clarifying the MCTL’s purpose and improving its utility. To address concerns about the currency of the list, DOD began updating the MCTL to ensure that each technology section had been updated at least once since our 2006 report. As part of these efforts to revamp the MCTL, DOD issued an instruction, in 2008, that clarifies MCTL implementation by outlining roles and responsibilities for informing the list’s content, specifying procedures for updating and maintaining the list, and designating the purposes for which certain DOD components are to use the MCTL. Among other things, the instruction: specified that it is DOD policy that the MCTL serve as a technical reference to inform the development and implementation of technology security policies on international transfers of defense- related goods, services, and technologies; directed DTSA to consult the MCTL when developing DOD export control proposals, processing export license requests, and making technology transfer decisions; specified that DOD components are to use the MCTL in making decisions about what information can be shared with foreign entities and provide subject matter expertise in identifying and assessing technologies for the MCTL; required the development of a methodology—based on objective criteria that produce logical and repeatable results—for determining whether a given technology is militarily critical; and accelerated the frequency of technology section updates from every 4 years to every 2 years to keep pace with technology development. Further, implementation of the operational concept has been limited due to funding constraints; however, it calls for enhancing the functionality of the MCTL by: supporting real-time technology updates from approved contributors as information becomes available rather than updating a technology section with all its sub-sections and datasheets in a single effort; transitioning to a web-based application that will make data available in various document formats; providing a more robust capability to search across multiple MCTL technology sections which is beneficial in cases where a given technology may have relevance to multiple sections; enabling users to track content changes to each section and providing rationale for changes and access to previous versions; and linking a given technology to its corresponding reference in export control lists such as the Commerce Control List and U.S. Munitions List. The restricted version is still available via the same website, but program officials have posted a disclaimer noting that the list is no longer being updated and that content is being provided for information purposes only and is no longer intended to support technology decisions. DOD has also halted its plans to integrate the compendium of emerging technologies with the MCTL. These efforts are taking place without input from users on their requirements because, according to program officials, users have not been responsive to their efforts to solicit user requirements for the new automated system. Commerce officials reiterated longstanding concerns that the MCTL is too broad to be useful in reviewing individual export license applications. While these programs have different missions, they refer to the MCTL and have integrated this technical reference into their processes. In an effort to create a consistent and standardized method for identifying critical technologies across multiple programs, the Army and Navy have issued guidance that designates the MCTL as a reference that can be used to support the identification of critical technologies as part of the broader spectrum of For example, the Navy issued guidance critical program information.identifying the MCTL as an available resource for acquisition programs to use in determining critical technologies, among other things. Additionally, the list of militarily critical technologies allows DSS to assess the overlap and connections between different categories of technologies which, in turn, bolsters its analysis. DSS had previously relied on the compendium of emerging technologies for its analysis, but found it to be outdated and too broad for its purposes. Faced with uncertainty about the availability of the MCTL, programs are considering alternatives, and in one case, developing their own technical reference, which may not be in the best interest of the federal government as such actions redirect resources from other critical missions and may result in unnecessary duplication and inconsistent approaches to identify and protect critical technologies. Recommendations for Executive Action Recognizing that there are widespread requirements to know what is militarily critical, we recommend that the Secretary of Defense take the following two actions: 1. determine the best approach to meeting users’ needs for a technical reference, whether it be MCTL, other alternatives being used, or some combination thereof; and 2. ensure that resources are coordinated and efficiently devoted to sustain the approach chosen. If DOD determines that the MCTL is not the optimal solution for aiding programs’ efforts to identify militarily critical technologies, we also recommend that the Secretary of Defense seek necessary relief from DOD’s current responsibility. GAO staff who made key contributions to this report are listed in appendix IV. Appendix I: Scope and Methodology To determine the extent to which the Department of Defense (DOD) addressed identified weaknesses in updating and maintaining the Militarily Critical Technologies List (MCTL), we obtained program documents such as the MCTL Concept of Operations which was drafted in 2010. We also interviewed officials within DOD and the Departments of Commerce, State, and Treasury to obtain their perspectives on the MCTL.

Why GAO Did This Study DOD spends billions of dollars on sophisticated weapon systems and technologies to maintain military superiority. Such technologies are vulnerable to exploitation when exported, stolen, or lost during military missions. To identify critical technologies and help minimize these risks, DOD established the MCTL--a technical reference--as well as a compendium of worldwide emerging technologies. In 2006, GAO reported that the MCTL was out of date and not meeting users' requirements, and subsequently included the list as a key component of GAO's high risk area on protecting critical technologies. This report updates GAO's 2006 work and reviews the extent to which 1) DOD has addressed weaknesses in updating and maintaining the MCTL, and 2) agencies use the MCTL as a resource in identifying critical technologies. GAO reviewed laws, directives, and guidance, as well as documentation of DOD actions since 2006 to address MCTL concerns and interviewed officials from DOD and the Departments of Commerce, State, and the Treasury. What GAO Found While the Department of Defense (DOD) took steps to address previously identified weaknesses in updating and maintaining the Militarily Critical Technologies List (MCTL), the list remains outdated and updates have ceased. For example, DOD has solicited users' requirements and feedback on the MCTL, and added a search engine capability to improve navigation of the list and updated each technology section at least once. DOD also determined the list's purpose is to support export control decisions and in October 2008, issued an instruction that (1) recognized the list's usefulness for other DOD programs and activities and (2) outlined the roles, responsibilities, and procedures for updating and maintaining the list. However, in 2011, DOD cut funding for the program from $4 million in prior years to about $1.5 million and ceased MCTL content updates. Subsequently, DOD removed the public version of the list from the Internet, and officials posted a disclaimer for the restricted version noting that the list should only be used for informational purposes as it had not been updated. Similarly, the compendium of emerging technologies is outdated and two sections have not been updated since 1999. Program officials from the Militarily Critical Technologies Program have devised a plan to improve how MCTL content will be updated in the future, including relying on contributions from the user community, but implementation of the plan has been limited due to funding constraints. However, program officials have yet to get input from users to agree to this approach and would still require additional funding to implement it. The MCTL is not used to inform export decisions--its original purpose. Export control officials from DOD and the Departments of Commerce and State reiterated their longstanding concern that the MCTL is outdated and too broad to meet export control needs. DOD officials who provide input on the criticality of technologies as part of export license determinations and reviews of foreign acquisition of U.S. companies told us that they do not rely on the MCTL to inform their decision making despite DOD guidance to do so. Instead, they consult their own network of experts, which they consider to be a more reliable source to get current technology information. Other DOD programs to protect critical technologies need a technical reference such as the MCTL and have integrated the list to help inform decision making. For example, the MCTL has been fully integrated into DOD's anti-tamper critical technology tool, which is designed to facilitate analysis and decision making to protect the most valuable military assets from tampering when exported or lost in military missions. Also, to inform its analysis of industrial espionage activities such as foreign targeting of U.S. technologies, the Defense Security Service relies on the MCTL to identify overlap and connections between different technology categories. With the suspension of MCTL updates, these programs are seeking alternatives, and in one case, developing their own technical reference which could result in inefficient use of resources. DOD officials working with MCTL users have an opportunity to coordinate efforts and help minimize inconsistent approaches to identify critical technologies and any potential duplication of effort. What GAO Recommends GAO recommends that DOD take steps to (1) determine the best approach for meeting users' requirements for a technical reference to consistently identify critical technologies, whether it be the MCTL or an alternative and (2) ensure adequate resources are available to sustain the approach chosen. Further, if DOD determines that the MCTL is not the optimal solution, it should seek necessary relief from its responsibility to develop the list. DOD concurred with GAO's recommendations.

gao_GAO-16-46

gao_GAO-16-46_0

The inventory is to include a number of specific data elements for each identified activity, including the function and missions performed by the contractor; the contracting organization, the component of DOD administering the contract, and the organization whose requirements are being met through contractor performance of the function; the funding source for the contract by appropriation and operating agency; the fiscal year the activity first appeared on an inventory; the number of contractor employees (expressed as full FTEs) for direct labor, using direct labor hours and associated cost data collected from contractors; a determination of whether the contract pursuant to which the activity is performed is a personal services contract; and a summary of the information required by section 2330a(a) of title 10 of the U.S. Code. Prior GAO Work We have issued several reports on DOD’s efforts to compile and review its inventory of contracted services, including initiatives to standardize contractor manpower data collection across the department. DOD Components’ Certification Letters Included More Required Information, but Reviews May Understate Contractors Performing Closely Associated with Inherently Governmental Functions We found that DOD components’ 2013 inventory review certifications better addressed required reporting elements than in prior years; however, for the second consecutive year, the Air Force, which accounts for about 20 percent of DOD’s obligations for contracted services, did not submit a certification letter. For example, the Army identified nearly 80 percent of its contracts for certain types of services as including such functions. Overall, our analysis found that at least 12 of the 28 contract actions we reviewed appeared to include closely associated with inherently governmental functions, but—of those 12—DOD identified only one prior to contract award and only two during the inventory review process as including such functions. In turn, without accurate identification of the number of contractors performing these functions, DOD cannot be assured that proper oversight is in place or provide data to ensure that it is meeting statutory requirements to reduce, to the maximum extent practicable, the number of contractors performing closely associated with inherently governmental functions. DOD concurred with this recommendation, but the military departments have not appointed an accountable official responsible for coordinating these efforts as of September 2015. As such, Navy officials stated that they relied on FPDS-NG rather than its CMRA to compile its inventory for fiscal year 2013. A good internal control environment requires, in part, that an agency’s organizational structure to clearly define key areas of authority and responsibility and establish appropriate lines of reporting. In contrast, the Navy and other defense agencies identified about 13 percent of their contracts as doing so in these same codes. The lack of documentation on whether a proposed contract includes closely associated with inherently governmental functions may result in inventory review processes incorrectly reporting these contracts. We continue to believe that implementing the recommendations we previously made to do so would facilitate the use of the inventory for decision-making purposes. Recommendations for Executive Action To ensure proposed contract activities, as reflected in the statement of work and other contract documents, are assessed against the criteria provided by the FAR and OFPP policy, we recommend that the Under Secretary for Defense for Acquisition, Technology, and Logistics ensure that the Director of the Office of Defense Procurement and Acquisition Policy provide clear instructions, in a timely manner, on how the service requirement review boards are to identify whether contract activities include closely associated with inherently governmental functions; and require acquisition officials to document, prior to contract award, whether the proposed contract action includes activities that are closely associated with inherently governmental functions. To help facilitate the collection and use of inventory data in decision- making processes, we recommend that the Under Secretary of Defense for Personnel and Readiness clearly identify the longer term relationships between the support office, military departments, and other stakeholders. To assess the extent to which DOD components have developed plans and processes to use the inventory to inform management decisions pursuant to subsection (f), we used the data we collected for our November 2014 report on this issue to establish the extent to which each military department’s strategic workforce planning, manpower mix, and budgeting guidance and documentation required or cited the use of the inventory of contracted services.

Why GAO Did This Study DOD is the government's largest purchaser of contractor-provided services. In 2008, Congress required DOD to compile and review an annual inventory of its contracted services to identify the number of contractors and the functions contractors performed. In 2011, Congress required DOD to use that inventory to inform certain decision-making processes. GAO has previously reported on the challenges DOD faces in compiling, reviewing, and using the inventory. Congress included a provision in statute for GAO to report on the required DOD reviews and plans to use these inventories. For this report, GAO assessed the extent to which DOD components (1) reviewed contracts and activities in the fiscal year 2013 inventory of contracted services and (2) developed plans to use the inventory for decision-making. GAO reviewed relevant laws and guidance; 35 component inventory certification letters and 28 contract actions for services categorized as often supporting inherently governmental functions; and interviewed DOD acquisition, manpower, and programming officials. What GAO Found The Department of Defense (DOD) continues to face challenges in ensuring that it fully reviews its inventory of contracted services. As of September 2015, 35 of 37 components certified they had done so and generally addressed more of the review elements required by DOD guidance than in prior years. For the second consecutive year, however, the Air Force did not submit a certification letter. Further, components may be inaccurately reporting on the extent to which contractors were providing services that are closely associated with inherently governmental functions, a key review objective to help ensure that DOD has proper oversight in place. The Office of Federal Procurement Policy indicates that certain contracted services—such as professional and management support—are more likely to include such functions. In fiscal year 2013, the Army reported that nearly 80 percent of the $9.7 billion it obligated for these types of services included closely associated with inherently governmental functions. In contrast, the Navy and other DOD agencies reported about 13 percent of the $10.7 billion obligated for similar contracted services included such functions. GAO's review found that the lack of documentation on whether a proposed contract included such functions may result in inventory review processes incorrectly reporting these contracts. At least 12 of the 28 contract actions GAO reviewed appear to include these functions, but—of those 12—DOD components identified only one prior to contract award and only two during the review process as such. Without accurate identification of the functions contractors are performing, DOD cannot be assured that proper oversight is in place or provide data on the activities and functions contractors are performing. Military departments have not developed plans to facilitate the use of the inventory for workforce planning or budgetary decisions nor have they appointed an accountable official to help do so, as DOD previously stated they intended to do. Further, DOD has not outlined the relationships between a management support office, military departments, and other stakeholders to facilitate the collection and use of inventory data in decision-making processes. Internal control standards state that management should define key areas of authority and responsibility to achieve management objectives and to comply with laws. What GAO Recommends GAO recommends that DOD focus increased attention on contracts more likely to include services closely associated with inherently governmental functions during the review process, document whether proposed contracts include such functions, and clarify the relationships between the support office and key stakeholders. DOD concurred with GAO's recommendations.

gao_GAO-12-218

gao_GAO-12-218_0

FDA and the Drug Approval Process FDA oversees the drug development process. A second provision extended the duration of market exclusivity from 3 years to 5 years for new drugs that meet certain detailed, scientific criteria. Label changes of this type require FDA’s approval. FDA will generally designate the generic version of the drug with the largest market share as the new reference-listed drug. FDA Has Not Taken Sufficient Steps to Ensure That Antibiotic Labels Contain Up-to-Date Information FDA has not taken sufficient steps to implement the FDAAA provision regarding preserving antibiotic effectiveness by ensuring that antibiotic labels contain up-to-date breakpoints. In 2008 FDA requested that sponsors respond to the agency regarding whether their antibiotics’ labels included up-to-date breakpoints, but FDA has not yet confirmed whether the majority of these labels are accurate. As of November 2011, over 3.5 years after FDA sent its letters, 146, or 70 percent, of the 210 antibiotics are still labeled with breakpoints that have not been updated or confirmed to be up to date. However, it took FDA longer than a year to review many of the submissions it received, and as of November 2011, FDA still had a backlog of five submissions from 2008. FDA Issued Guidance on Sponsors’ Responsibility to Evaluate and Maintain Up- to-Date Breakpoints, but Has Not Been Tracking Their Responses Another step FDA took to implement the FDAAA provision regarding preserving the effectiveness of antibiotics was to issue guidance that reminded sponsors of the requirement to maintain accurate labels, and thus, their responsibility to keep information about breakpoints up to FDA officials stated that in part because the agency received date.questions in response to its 2008 letters, officials determined that it would be useful to issue guidance. FDA has not been systematically tracking whether sponsors have been responsive to the guidance. The guidance also explained that FDA intended to comply with FDAAA’s requirement that it identify, periodically update, and make publicly available up-to-date breakpoints by using two approaches. According to FDA officials, they have received very few inquiries regarding this provision and as of November 2011, no NDAs for antibiotics have been submitted that would qualify for this exclusivity. None of the drug sponsors from which we obtained comments said that this FDAAA provision provided a sufficient incentive to develop a new antibiotic of this type. FDA Public Meeting Required by FDAAA Facilitated Discussion of Existing and Potential Incentives for Antibiotic Innovation As required by FDAAA, FDA held a public meeting on April 28, 2008, to explore whether and how existing incentives and potential new incentives could be applied to promote the development of antibiotics as well as to discuss whether infectious diseases may qualify for grants or other incentives that may promote innovation. The incentives mentioned as useful mechanisms to encourage the innovation and marketing of antibiotics were both financial and regulatory in nature and are summarized in table 1. Conclusions The growing public health threat associated with bacterial resistance to antibiotics makes the development of new antibiotics critical. Recommendations for Executive Action We recommend that the Commissioner of FDA take the following six actions to help ensure that antibiotics are accurately labeled: expeditiously review sponsors’ submissions regarding the breakpoints on their antibiotics’ labels; take steps to obtain breakpoint information from sponsors that have not yet submitted breakpoint information in response to the 2008 letters sent by the agency; ensure that all sponsors responsible for the annual review of breakpoints on their antibiotics’ labels—including discontinued brand- name antibiotics and reference-listed antibiotics designated since 2008—have been reminded of their responsibility to evaluate and maintain up-to-date breakpoints; establish a process to track sponsors’ submissions of breakpoint information included in their annual reports to ensure that such information is submitted to FDA and reviewed by the agency in a timely manner; notify sponsors when one of their drugs becomes or ceases to be a clarify or provide new guidance on which antibiotic sponsors are responsible for annually evaluating and maintaining up-to-date breakpoints on drug labels. We are sending copies of this report to the Secretary of Health and Human Services and appropriate congressional committees. GAO staff who made major contributions to this report are listed in appendix V. Appendix I: Drug Sponsors Contacted by FDA in 2008 Regarding Information on Antibiotic Labels As one step in FDA’s efforts to implement the provision in the Food and Drug Administration Amendments Act of 2007 regarding antibiotic effectiveness, FDA identified 210 antibiotics for which sponsors were responsible for evaluating and maintaining and, if necessary, updating the breakpoints on their antibiotics’ labels. In addition, the letters requested that sponsors evaluate and maintain the currency of breakpoints included on their labels and within 30 days submit evidence to FDA showing that the breakpoints were either current or needed revision.

Why GAO Did This Study Antibiotics are critical drugs that have saved millions of lives. Growing bacterial resistance to existing drugs and the fact that few new drugs are in development are public health concerns. The Food and Drug Administration Amendments Act of 2007 (FDAAA) required the Food and Drug Administration (FDA), an agency within the Department of Health and Human Services (HHS), to identify, periodically update, and make publicly available up-to-date breakpoints, the concentrations at which bacteria are categorized as susceptible to an antibiotic. Breakpoints are a required part of an antibiotic’s label and are used by providers to determine appropriate treatments. FDAAA provided a financial incentive for antibiotic innovation and required FDA to hold a public meeting on antibiotic incentives and innovation. FDAAA directed GAO to report on the impact of these provisions on new drugs. This report (1) assesses FDA’s efforts to help preserve antibiotic effectiveness by ensuring breakpoints on labels are up to date and (2) examines the impact of the antibiotic innovation provisions. GAO examined FDA data, guidance, and other documents; interviewed FDA officials; and obtained information from drug sponsors, such as manufacturers, that market antibiotics. What GAO Found FDA has not taken sufficient steps to ensure that antibiotic labels contain up-to-date breakpoints. FDA designates certain drugs as “reference-listed drugs” and the sponsors of these drugs play an important role in ensuring the accuracy of drug labels. Reference-listed drugs are approved drug products to which generic versions are compared. As of November 2011, FDA had not yet confirmed whether the breakpoints on the majority of reference-listed antibiotics labels were up to date. FDA contacted sponsors of 210 antibiotics in early 2008 to remind sponsors of the importance of maintaining their labels and requested that they assess whether the breakpoints on their drugs’ labels were up to date. Sponsors were asked to submit evidence to FDA showing that the breakpoints were either current or needed revision. As of November 2011, over 3.5 years after FDA contacted sponsors, the agency had not yet confirmed whether the breakpoints on the labels of 70 percent, or 146 of the 210 antibiotics, were up to date. FDA has not ensured that sponsors have fulfilled the responsibilities outlined in the early 2008 letters. For those submissions FDA has received, it has often taken over a year for FDA to complete its review. Officials attributed this delay to reviewers’ workload, challenging scientific issues or difficulties in obtaining needed data, and incomplete submissions. FDA also issued guidance to clarify sponsors’ responsibility to evaluate and maintain up-to-date breakpoints. The guidance reminded sponsors that they are required to maintain accurate labels and stated that certain sponsors should submit an evaluation of breakpoints on their antibiotic labels to FDA annually. However, FDA has not been systematically tracking whether sponsors are providing these annual updates. Some sponsors remain confused about their responsibility to evaluate and maintain up-to-date breakpoints. At GAO’s request, FDA reviewed a small sample of annual reports and determined that few sponsors appear to be responsive to the guidance. The FDAAA provisions related to antibiotic innovation have not resulted in the submission of new drug applications for antibiotics. FDAAA extended the period of time that sponsors of new drugs that meet certain criteria have exclusive right to market the drug. According to FDA officials, the agency has received very few inquiries regarding this provision and, as of November 2011, no new drug applications for antibiotics have been submitted that would qualify for this exclusivity. None of the drug sponsors GAO received comments from said that this provision provided sufficient incentive to develop a new antibiotic of this type. FDAAA also required that FDA hold a public meeting to discuss whether and how existing or potential incentives could be applied to promote the development of antibiotics. Both financial and regulatory incentives were discussed at FDA’s 2008 meeting, including tax incentives for research and development and providing greater regulatory clarity during the drug approval process. What GAO Recommends GAO recommends that the Commissioner of FDA take steps to help ensure antibiotic labels contain up-to-date information, such as by expediting the agency’s review of breakpoint submissions. HHS said it will consider implementing GAO’s recommendations.

gao_GAO-08-691

gao_GAO-08-691_0

Currently Interior has the legal authority to change most aspects of the oil and gas fiscal system. The Gulf of Mexico Has a Relatively Low U.S. Government Take and the United States Is an Attractive Place to Invest in Oil and Gas Development Multiple studies completed as early as 1994 and as recently as June 2007 all indicate that the U.S. government take in the Gulf of Mexico is lower than most other oil and gas fiscal systems. For example, data we evaluated from a June 2007 report by Wood Mackenzie reported that the government take in the deep water U.S. Gulf of Mexico ranked as the 93rd lowest out of 104 oil and gas fiscal systems evaluated in the study. When other factors are taken into consideration, the U.S. Gulf of Mexico is an attractive target for investment because it has large remaining oil and gas reserves and the United States is generally a good place to do business compared to many other countries with comparable oil and gas resources. The Inflexibility of Royalty Rates to Changing Oil and Gas Prices Has Cost the Federal Government Billions of Dollars in Foregone Revenues The lack of price flexibility in royalty rates and the inability to change fiscal terms for existing leases have put pressure on Interior and the Congress to change royalty rates in the past on future leases on an ad hoc basis. Assuming that the District Court’s ruling is upheld, future foregone royalties from all the DWRRA leases issued from 1996 through 2000 could range widely—from a low of about $21 billion to a high of $53 billion, depending on the outcome of ongoing litigation concerning the authority of Interior to place price thresholds that would remove the royalty relief offered on certain leases. These royalty rate increases appear to be a response by Interior to the high prices of oil and gas that have led to record industry profits and raised questions about whether the existing federal oil and gas fiscal system gives the public an appropriate share of revenues from oil and gas produced on federal lands and waters. In addition, in choosing to increase royalty rates, Interior did not evaluate the entire oil and gas fiscal system to determine whether or not these increases were sufficient to balance investment attractiveness and appropriate returns to the federal government for oil and gas resources. Interior Does Not Have a System in Place to Evaluate Whether the Federal Fiscal System Is in Need of Reassessment Interior does not routinely evaluate the federal oil and gas fiscal system as a whole, monitor what other resource owners worldwide are receiving for their energy resources, or evaluate and compare the attractiveness of the United States for oil and gas investment with that of other oil and gas regions. As a result, Interior cannot assess whether or not there is a proper balance between the attractiveness of federal lands and waters for oil and gas investment and a reasonable assurance that the public is getting an appropriate share of revenues from this investment. Interior does not have procedures in place for routinely evaluating the ranking of (1) the federal oil and gas fiscal system against other resource owners or (2) industry rates of return on federal leases compared to other U.S. industries which could factor into any decisions about whether or how to alter the fiscal systems in response to changing market conditions. Our work indicates that federal oil and gas leases in the deep water U.S. Gulf of Mexico and other U.S. regions are attractive investments and that the government take in the U.S. Gulf of Mexico ranks among the lowest across a large number of other oil and gas fiscal systems. However, we cannot infer from our review of the Gulf of Mexico federal oil and gas leases how the data on federal government take or industry returns to investment are applicable to federal onshore leases. We also collected and analyzed various studies generated by MMS, the agency responsible for collecting oil and gas royalties from federal lands and waters and interviewed private consulting firm officials. 2. This lack of flexibility explains, in part, why the Congress enacted the Deep Water Royalty Relief Act in 1995, a time when oil and gas prices were much lower than they are today. 3. 9.

Why GAO Did This Study In fiscal year 2007, domestic and foreign companies received over $75 billion from the sale of oil and gas produced from federal lands and waters, according to the Department of the Interior (Interior), and these companies paid the federal government about $9 billion in royalties for this oil and gas production. The government also collects other revenues in rents, taxes, and other fees, and the sum of all revenues received is referred to as the "government take." The terms and conditions under which the government collects these revenues are referred to as the "oil and gas fiscal system." This report (1) evaluates government take and the attractiveness for investors of the federal oil and gas fiscal system, (2) evaluates how the absence of flexibility in this system has led to large foregone revenues from oil and gas production on federal lands and waters, and (3) assesses what Interior has done to monitor the performance and appropriateness of the federal oil and gas fiscal system. To address these issues, we reviewed expert studies and interviewed government and industry officials. What GAO Found In addition to having a low government take, the deep water Gulf of Mexico and other U.S. regions are attractive targets for investment because they have large remaining oil and gas reserves and the U.S. is generally a good place to do business compared to many other countries with comparable oil and gas resources. Multiple studies completed as early as 1994 and as recently as June 2007 indicate that the U.S. government take in the Gulf of Mexico is lower than that of most other fiscal systems. For example, data GAO evaluated from a June 2007 industry consulting firm report indicated that the government take in the deep water U.S. Gulf of Mexico ranked 93rd lowest of 104 oil and gas fiscal systems evaluated. Generally, other measures indicate that the United States is an attractive target for oil and gas investment. The lack of price flexibility in royalty rates--automatic adjustment of these rates to changes in oil and gas prices or other market conditions--and the inability to change fiscal terms on existing leases have put pressure on Interior and the Congress to change royalty rates in the past on an ad hoc basis with consequences that could amount to billions of dollars of foregone revenue. For example, royalty relief granted on leases issued in the deep water areas of the Gulf of Mexico between 1996 and 2000--a period when oil and gas prices and industry profits were much lower than they are today--could cost the federal government between $21 billion and $53 billion, depending on the outcome of ongoing litigation challenging the authority of Interior to place price thresholds that would remove the royalty relief offered on certain leases. Further, royalty rate increases in 2007 are expected to generate modest increases in federal revenues from future leases offered in the Gulf of Mexico. However, in choosing to increase royalty rates, Interior did not evaluate the entire oil and gas fiscal system to determine whether or not these increases strike the proper balance between the attractiveness of federal leases for investment and appropriate returns to the federal government for oil and gas resources. Interior does not routinely evaluate the federal oil and gas fiscal system, monitor what other governments or resource owners are receiving for their energy resources, or evaluate and compare the attractiveness of federal lands and waters for oil and gas investment with that of other oil and gas regions. As a result, Interior cannot assess whether or not there is a proper balance between the attractiveness of federal leases for investment and appropriate returns to the federal government for oil and gas resources. Specifically, Interior does not have procedures in place for evaluating the ranking of (1) the federal oil and gas fiscal system or (2) industry rates of return on federal leases against other resource owners. Interior also does not have the authority to alter tax components of the oil and gas fiscal system. All these factors are essential to inform decisions about whether or how to alter the federal oil and gas fiscal system in response to changing market conditions.

gao_GAO-13-130

gao_GAO-13-130_0

Reported Medical Appointment Wait Times Are Unreliable; VHA Uses Additional Methods to Monitor Patients’ Access to Medical Appointments Medical appointment wait times used for measuring and assessing performance toward VHA’s wait time goals are unreliable due to problems with recording the appointment desired date in the VistA scheduling system. Consequently, the reliability of reported wait time performance is dependent on the consistency with which schedulers record the desired date in the VistA scheduling system. In addition, we found that some schedulers at select VAMCs did not correctly implement other aspects of VHA’s scheduling policy for recording the desired date. Aspects of VHA’s scheduling policy and related training documents on how to determine and record the desired date are unclear and do not ensure replicable and reliable recording of the desired date by the large number of staff across VHA who can schedule medical appointments in the VistA scheduling system. While the policy defines desired date as “the date on which the patient or provider wants the patient to be seen,” it also instructs that the “the desired date needs to be defined by the patient” for new patient medical appointments, medical appointments scheduled in response to consult requests, and established patient follow-up medical appointments. Therefore, reported wait times for these appointments may not have accurately reflected how long patients actually waited. However, reported wait time data for the month we visited showed that the clinic completed all new patient appointments on the desired date, resulting in an unlikely high percentage of appointments with zero-day wait times that was inconsistent with information gathered during our site visit, raising questions about whether the desired date was recorded in accordance with VHA’s scheduling policy. Inconsistent Implementation of VHA’s Scheduling Policy and Other Problems Impede VAMCs’ Ability to Schedule Timely Medical Appointments The four VAMCs we reviewed did not consistently implement certain elements of VHA’s scheduling policy, including oversight requirements, which may result in increased wait time or delays in scheduling medical appointments. VAMCs also described other problems with scheduling timely medical appointments, including outdated technology, gaps in staffing of schedulers and providers, and telephone access problems. Officials at all of the VAMCs we visited told us that high call volumes and a lack of staff dedicated to answering the telephones impede the timely scheduling of medical appointments. In January 2012, VHA distributed suggested best practices for improving telephone design, service, and access in its Telephone Systems Improvement Guide. VHA Is Implementing a Number of Initiatives to Improve Access to Medical Appointments VHA is implementing several initiatives to improve veterans’ access to medical appointments. Specifically, these initiatives focus on more patient-centered care; using technology to provide care, through means such as telehealth; and using care outside of VHA to reduce travel and wait times for veterans who are unable to receive certain types of outpatient care in a timely way through local VHA facilities. Secure messaging allows veterans to communicate electronically with their health care team. Without reliable measurement of how long patients are waiting for medical appointments, VHA is less equipped to identify and address factors that contribute to wait times, or gauge the success of its initiatives to improve access to timely medical appointments, including efforts to improve primary care medical appointments. To better facilitate timely medical appointment scheduling and improve the efficiency and oversight of the scheduling process, we recommend that the Secretary of VA direct the Under Secretary for Health to take actions to ensure that VAMCs consistently and accurately implement VHA’s scheduling policy, including use of the electronic wait list, as well as ensuring that all staff with access to the VistA scheduling system complete the required training. To improve timely medical appointments and to address patient and staff complaints about telephone access, we recommend that the Secretary of VA direct the Under Secretary for Health to ensure that all VAMCs provide oversight of telephone access and implement best practices outlined in its telephone systems improvement guide. VA Health Care: Access for Chattanooga-Area Veterans Needs Improvement.

Why GAO Did This Study VHA provided nearly 80 million outpatient medical appointments to veterans in fiscal year 2011. While VHA has reported continued improvements in achieving access to timely medical appointments, patient complaints and media reports about long wait times persist. GAO was asked to evaluate VHA’s scheduling of timely medical appointments. GAO examined (1) the extent to which VHA’s approach for measuring and monitoring medical appointment wait times reflects how long veterans are waiting for appointments; (2) the extent to which VAMCs are implementing VHA’s policies and processes for appointment scheduling, and any problems encountered in ensuring veterans’ access to timely medical appointments; and (3) VHA’s initiatives to improve veterans’ access to medical appointments. To conduct this work, GAO made site visits to 23 clinics at four VAMCs, the latter selected for variation in size, complexity, and location. GAO also reviewed VHA’s policies and data, and interviewed VHA officials. What GAO Found Outpatient medical appointment wait times reported by the Veterans Health Administration (VHA), within the Department of Veterans Affairs (VA), are unreliable. Wait times for outpatient medical appointments--referred to as medical appointments--are calculated as the number of days elapsed from the desired date, which is defined as the date on which the patient or health care provider wants the patient to be seen. The reliability of reported wait time performance measures is dependent on the consistency with which schedulers record the desired date in the scheduling system in accordance with VHA's scheduling policy. However, VHA's scheduling policy and training documents for recording desired date are unclear and do not ensure consistent use of the desired date. Some schedulers at Veterans Affairs medical centers (VAMC) that GAO visited did not record the desired date correctly. For example, three schedulers changed the desired date based on appointment availability; this would have resulted in a reported wait time that was shorter than the patient actually experienced. VHA officials acknowledged limitations of measuring wait times based on desired date, and described additional information used to monitor veterans' access to medical appointments, including patient satisfaction survey results. Without reliable measurement of how long patients are waiting for medical appointments, however, VHA is less equipped to identify areas that need improvement and mitigate problems that contribute to wait times. While visiting VAMCs, GAO also found inconsistent implementation of VHA's scheduling policy that impedes VAMCs from scheduling timely medical appointments. For example, four clinics across three VAMCs did not use the electronic wait list to track new patients that needed medical appointments as required by VHA scheduling policy, putting these clinics at risk for losing track of these patients. Furthermore, VAMCs' oversight of compliance with VHA's scheduling policy, such as ensuring the completion of required scheduler training, was inconsistent across facilities. VAMCs also described other problems with scheduling timely medical appointments, including VHA's outdated and inefficient scheduling system, gaps in scheduler and provider staffing, and issues with telephone access. For example, officials at all VAMCs GAO visited reported that high call volumes and a lack of staff dedicated to answering the telephones impede scheduling of timely medical appointments. In January 2012, VHA distributed telephone access best practices that, if implemented, could help improve telephone access to clinical care. VHA is implementing a number of initiatives to improve veterans' access to medical appointments such as expanded use of technology to interact with patients and provide care, which includes the use of secure messaging between patients and their health care providers. VHA also is piloting a new initiative to provide health care services through contracts with community providers that aims to reduce travel and wait times for veterans who are unable to receive certain types of care within VHA in a timely way. What GAO Recommends GAO recommends that VHA take actions to (1) improve the reliability of its medical appointment wait time measures, (2) ensure VAMCs consistently implement VHA's scheduling policy, (3) require VAMCs to allocate staffing resources based on scheduling needs, and (4) ensure that VAMCs provide oversight of telephone access and implement best practices to improve telephone access for clinical care. VA concurred with GAO's recommendations.

gao_T-GGD-98-13

gao_T-GGD-98-13_0

Supervisory and examination procedures today show evidence of lessons learned from the bank and thrift crises of the 1980s and early 1990s. These procedures are the primary basis used by the federal regulatory agencies to assess the risks that banks and thrifts assume and to take actions that are needed to maintain a safe and sound banking system and protect the deposit insurance funds. Excessive Regulatory Forbearance Contributed to Problems of Thrifts and Banks and Insurance Fund Losses Banks and thrifts failed during the 1980s for several reasons. The second law, the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), was enacted, in part, because of concerns that the exercise of regulatory discretion during the 1980s did not adequately protect the safety and soundness of the banking system or minimize insurance fund losses. FDICIA contains several safety and soundness provisions based on a simple principle: if a depository institution fails to operate in a safe and sound manner, it should be subject to timely and forceful supervisory response, including, if necessary, prompt closure. FDICIA mandates annual on-site examinations of insured banks and thrifts. However, section 39, as implemented, appears to do little to reduce regulatory discretion. Insufficient review of loan quality and loan loss reserves: Effective loan quality assessment is important, because loans generally make up the majority of bank and thrift assets and involve the greatest risk. Regulators Have Made Significant Efforts to Improve Examinations Regulators have made a number of changes in an effort to improve their examinations since the bank and thrift crises of the late 1980s, and I would like to highlight some that seem most significant. A Changing Banking Environment Has Prompted Greater Emphasis on Risk Management and Internal Controls One of the most significant efforts at improvement involves changes in examinations to account for a dynamic banking environment in which institutions can rapidly reposition their portfolio risk exposures. Examiners were instructed in 1996 to give greater emphasis to the adequacy of an institution’s risk management processes, including its internal controls when evaluating management under the CAMEL system. In our report on the operations of foreign bank organizations in the United States, we noted deficiencies in the internal controls of these organizations.

Why GAO Did This Study GAO discussed bank and thrift supervision and examination. What GAO Found GAO noted that: (1) bank supervision and examination today show evidence of lessons learned from the bank and thrift crises of the 1980s and early 1990s; (2) these procedures are the primary basis for federal regulatory agencies to assess the risks that banks and thrifts assume and to take actions to maintain a safe and sound banking system and protect deposit insurance funds; (3) one critical lesson of the earlier crises was that excessive regulatory forbearance contributed to the extent of the crises; (4) the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) based regulatory practices on a simple principle: if a depository institution fails to operate in a safe and sound manner, it should be subject to timely and forceful supervisory response, including, if necessary, prompt closure; (5) FDICIA also required that banks reform their corporate governance and accounting practices and that the regulatory agencies improve their supervision of insured banks and thrifts; (6) in a November 1996 report, however, GAO noted that questions remain about the effectiveness of FDICIA's trip-wire provisions which are intended to limit regulatory discretion; (7) as implemented, the trip-wire that enables regulatory action at the early stage of problems in a bank does little to limit regulatory discretion; (8) in several reports in the early 1990s, GAO also noted limitations in the safety and soundness examinations conducted by the regulatory agencies; (9) the limitations included a lack of comprehensive internal control assessments, insufficient review of loan quality and loan loss reserves, weaknesses related to insider lending, and insufficient assessment of bank subsidiaries; (10) regulators have made a number of changes in an effort to improve their examinations; (11) the changes respond, in part, to the dynamic banking environment in which institutions can rapidly reposition risk exposures; (12) to ensure that banks and thrifts have the managerial ability and internal control structure to effectively manage risk, the examination process is evolving to put greater emphasis on risk management and internal controls; and (13) in its recent report on foreign banking organizations operating in the United States, GAO noted that regulators have begun to put greater emphasis on risk management processes and operational controls in examinations of these organizations.

gao_GAO-11-235

gao_GAO-11-235_0

Financial Planners Are Primarily Regulated by Federal and State Investment Adviser Laws There is no specific, direct regulation of “financial planners” per se at the federal or state level. When acting as insurance agents, financial planners are subject to state standard of care requirements, which can vary by product and by state. Federal and State Laws and Regulations Can Apply to the Use of Marketing Materials and Financial Planning Titles and Designations At the federal level, SEC and FINRA have regulations on advertising and standards of communication that apply to the strategies investment adviser firms and broker-dealers use to market their financial planning services. In addition, although the regulatory structure itself for financial planners may generally be comprehensive, attention paid to enforcing existing statute and regulation has varied. SEC staff told us that they did not have comprehensive data on the extent of enforcement activities related to financial planners per se. Some Changes in the Oversight of Financial Planners Could Be Beneficial, but Most Stakeholders Believe Substantial Overhaul Is Not Needed Stakeholders Have Suggested a Variety of Approaches to the Regulation of Financial Planners Over the past few years, a number of stakeholders—including consumer groups, FINRA, and trade associations representing financial planners, securities firms, and insurance firms—have proposed different approaches to the regulation of financial planners. While no single law governs the broad array of activities in which financial planners may engage, given available information, it does not appear that an additional layer of regulation specific to financial planners is warranted at this time. Yet consumers may be unclear about standards of care that apply to financial professionals, particularly when the same individual or firm offers multiple services that have differing standards of care. As such, consumers may not always know whether and when a financial planner is required to serve their best interest. Second, we have seen that financial planners can adopt a variety of titles and designations. Finally, SEC has limited information about the nature and extent of problems specifically related to financial planners because it does not track complaints, examination results, and enforcement activities associated with financial planners specifically, and distinct from investment advisers as a whole. However, a regulatory system should have data sufficient to identify risks and problem areas and support decisionmaking. Because financial planning is a growing industry and has raised certain consumer protection issues, regulators could potentially benefit from better information on the extent of problems specifically involving financial planners and financial planning services. We also recommend that the Chairman of the Securities and Exchange Commission direct the Office of Investor Education and Advocacy, Office of Compliance Inspections and Examinations, Division of Enforcement, and other offices, as appropriate, to: Incorporate into SEC’s ongoing review of financial literacy among investors an assessment of the extent to which investors understand the titles and designations used by financial planners and any implications a lack of understanding may have for consumers’ investment decisions; and Collaborate with state securities regulators in identifying methods to better understand the extent of problems specifically involving financial planners and financial planning services, and take actions to address any problems that are identified. NAIC said it generally agreed with the contents of the draft report and would give consideration to our recommendation regarding consumers’ understanding of the standards of care with regard to the sale of insurance products. Appendix I: Scope and Methodology Our reporting objectives were to address (1) how financial planners are regulated and overseen at the federal and state levels, (2) what is known about the effectiveness of regulation of financial planners and what regulatory gaps or overlap may exist, and (3) alternative approaches for the regulation of financial planners and the advantages and disadvantages of these approaches. In addition, we spoke with representatives of the federal and state agencies cited above, as well as FINRA and organizations that represent or train financial planners, including the Financial Planning Coalition, The American College, and the CFA Institute; organizations that represent the financial services industry, including the Financial Services Institute, Financial Services Roundtable, Securities Industry and Financial Markets Association, Investment Advisers Association, American Society of Pension & Professional Actuaries, National Association of Insurance and Financial Advisors, American Council of Life Insurers, Association for Advanced Life Underwriting, American Institute of Certified Public Accountants, American Bankers Association; and organizations representing consumer interests, including the Consumer Federation of America and AARP.

Why GAO Did This Study Consumers are increasingly turning for help to financial planners-- individuals who help clients meet their financial goals by providing assistance with such things as selecting investments and insurance products, and managing tax and estate planning. The Dodd-Frank Wall Street Reform and Consumer Protection Act mandated that GAO study the oversight of financial planners. This report examines (1) how financial planners are regulated and overseen at the federal and state levels, (2) what is known about the effectiveness of this regulation, and (3) the advantages and disadvantages of alternative regulatory approaches. To address these objectives, GAO reviewed federal and state statutes and regulations, analyzed complaint and enforcement activity, and interviewed federal and state government entities and organizations representing financial planners, various other arms of the financial services industry, and consumers. What GAO Found There is no specific, direct regulation of "financial planners" per se at the federal or state level, but various laws and regulations apply to most of the services they provide. Financial planners are primarily regulated as investment advisers by the Securities and Exchange Commission (SEC) and the states, and are subject to laws and regulation governing broker-dealers and insurance agents when they act in those capacities. Federal and state agencies have regulations on marketing and the use of titles and designations that also can apply to financial planners. The regulatory structure applicable to financial planners covers the great majority of their services, but the attention paid to enforcing existing regulation can vary and certain consumer protection issues remain. First, consumers may be unclear about when a financial planner is required to serve the client's best interest, particularly when the same financial planner provides multiple services associated with different standards of care. SEC is studying these issues with regard to securities transactions, but no complementary review is under way by the National Association of Insurance Commissioners (NAIC) related to the sale of high-risk insurance products. Second, financial planners can adopt numerous titles and designations, which vary greatly in the expertise or training that they signify, but consumers may not understand or be able to distinguish among them. SEC has a mandated review under way on financial literacy among investors and incorporating this issue into that review could assist in assessing further changes that may be needed. Finally, the extent of problems related to financial planners is not fully known because SEC generally does not track data on complaints, examination results, and enforcement activities associated with financial planners specifically, and distinct from investment advisers as a whole. A regulatory system should have data to identify risks and problem areas, and given that financial planning is a growing industry that has raised certain consumer protection issues, regulators could benefit from better information on the extent of problems specifically involving financial planning services. A number of stakeholders have proposed different approaches to the regulation of financial planners, including (1) creation of a federally chartered board overseeing financial planners as a distinct profession; (2) augmenting oversight of investment advisers with a self-regulatory organization; (3) extending the fiduciary standard of care to more financial services professionals; and (4) specifying standards for financial planners and the designations that they use. While the views of stakeholder interests vary, a majority of the regulatory agencies and financial services industry representatives GAO spoke with did not favor significant structural change to the overall regulation of financial planners because they said existing regulation provides adequate coverage of most financial planning activities. Given available information, an additional layer of regulation specific to financial planners does not appear to be warranted at this time. What GAO Recommends GAO recommends that (1) NAIC assess consumers' understanding of the standards of care associated with the sale of insurance products, (2) SEC assess investors' understanding of financial planners' titles and designations, and (3) SEC collaborate with the states to identify methods to better understand problems associated specifically with the financial planning activities of investment advisers. NAIC said it would consider GAO's recommendation and SEC provided no comments.

gao_GAO-11-195

gao_GAO-11-195_0

Federal Agencies Use a Layered Security Strategy to Identify and Address Foreign Seafarer Risks; Opportunities Exist for CBP to Enhance Inspection Methods State Department Screens Seafarers Applying for Visas The State Department’s visa adjudication process is the first layer of security implemented by federal agencies to prevent terrorists, certain criminals, or otherwise inadmissible aliens from gaining entry into the United States. Within DHS, CBP and Coast Guard Conduct Advance-Screening, Inspections, and Enforcement Operations Before Vessel’s Arrival, CBP and Coast Guard Screen Manifests and Assess Risks Before a commercial vessel’s arrival, both CBP and Coast Guard are to receive and screen advance information on commercial vessels scheduled to arrive at U.S. ports. CBP conducts almost all cargo vessel admissibility inspections on board the vessel without the benefit of tools—such as mobile passport readers— for electronically verifying a seafarer’s identity or immigration status. DHS has recommended that DHS components electronically verify all immigration status determinations. A CBP headquarters official reported that the primary challenge in deploying mobile biometrics readers or other tools for electronically verifying the identity of seafarers is a lack of available connectivity to network communications in the maritime environment. However, according to the DHS S&T proposal, it is expected to take several years before this technology can be made available for use by DHS agencies, such as CBP. DHS Faces Challenges in Ensuring Absconder and Deserter Records Are Accurate and Reliable and Has Not Adjusted Related Civil Monetary Penalties, as Required by Law DHS Lacks Accurate and Reliable Data on Absconder and Deserter Incidents CBP has primary responsibility for identifying and reporting absconder and deserter incidents at U.S. seaports—both to Coast Guard and other federal and local law enforcement stakeholders—and for tracking them in CBP database systems. Because of these variances, CBP’s data are of undetermined reliability. As a result, although DHS has identified illegal entry into the United States as a great concern, it is unclear how reliable the department’s records of such events are for determining the extent of the activity and informing its strategic and tactical planning for addressing it. CBP has not met legal requirements for adjusting these civil penalties for inflation. For fiscal years 2005 through 2009, CBP reported assessing civil monetary penalties in 320 cases involving a total of 508 individual seafarers. CBP and the Department of Justice (DOJ) share responsibility for issuing regulations pertaining to these civil penalties. ILO 185 Implementation Is Limited; the United States Has Not Ratified Convention Due to Visa Requirement Concern As of January 2011, ILO 185 Is Not Widely Ratified or Implemented, and Key ILO Mechanisms to Promote Compliance Are Not in Place International implementation of ILO 185 has been limited to date—since its adoption in 2003 18 countries representing approximately 30 percent of the global seafarer supply have ratified it, and of that number, only 4 have been confirmed to issue ILO 185 seafarers’ identity documents (SIDs), according to a senior ILO official and an ILO meeting document. U.S. Voted to Adopt ILO 185, but Did Not Ratify Due to Visa Provisions As of January 2011, the United States had not ratified ILO 185 largely due to concerns over a provision for facilitating visa-free shore leave for foreign seafarers arriving in U.S. seaports with ILO 185 credentials. While CBP and DOJ reported taking steps to meet requirements for inflation adjustment, the agencies have not developed a plan including timelines for issuing required regulation. We recommend that the Secretary of Homeland Security: direct the Commissioner of CBP to assess the national-security and other risks faced by CBP in the absence of technology to provide electronic verification as part of CBP’s admissibility inspections for cargo vessel seafarers and identify options for addressing these risks and their costs; direct the Commandant of the Coast Guard and Commissioner of CBP to: determine the reasons that absconder and deserter data varies between headquarters and field units, and between the Coast Guard and CBP and determine any actions necessary to address any variance; and jointly establish an interagency process for sharing and reconciling records of absconder and deserter incidents occurring at U.S. seaports. Regarding our recommendation that the Secretary of Homeland Security and the Attorney General of the United States develop a plan with timelines for issuing regulations, as required by the Inflation Adjustment Act, to adjust civil monetary penalties associated with violations of the Immigration and Nationality Act involving foreign seafarers gaining illegal entry into the United States and provide this plan to Congress, both DHS and DOJ concurred. However, it remains important that the two departments develop a plan with timelines for completing these actions and provide this information to Congress. Maritime Security: DHS Progress and Challenges in Key Areas of Port Security. 9, 2010.

Why GAO Did This Study The State Department and two components of the Department of Homeland Security (DHS), Customs and Border Protection (CBP) and the Coast Guard, are responsible for preventing illegal immigration at U.S. seaports and identifying individuals who are potential security risks. The International Labor Organization (ILO) adopted the Seafarers' Identity Documents Convention (ILO 185) to establish an international framework of seafarer identification documents and reduce their vulnerability to fraud and exploitation. GAO was asked to examine (1) measures federal agencies take to address risks posed by foreign seafarers and the challenges, if any, DHS faces; (2) the challenges, if any, DHS faces in tracking illegal entries by foreign seafarers and how it enforces penalties; and (3) the implementation status of ILO 185. GAO reviewed relevant requirements and agency documents on maritime security, interviewed federal and industry officials, and visited seven seaports based on volume of seafarer arrivals. The visits provided insights, but were not projectable to all seaports. What GAO Found Federal agencies use a layered security strategy to address foreign seafarer risks, but opportunities exist to enhance DHS seafarer inspection methods. Federal actions include: (1) State Department screening of seafarer non-immigrant visa applicants overseas and (2) DHS advance screening of commercial vessels' seafarer manifests and admissibility inspections of all arriving seafarers. CBP conducts cargo vessel admissibility inspections on board the vessel without the benefit of tools to electronically verify a seafarer's identity or immigration status because of a lack of available connectivity to network communications in the maritime environment. DHS has prioritized the acquisition of a mobile version of this technology capability but expects it to take several years before the technology is developed and available. CBP agrees that obtaining this capability is important but has not assessed the risks of not having it. Until CBP obtains the capability, identifying the risks and options to address them could better position CBP in preventing illegal immigration at seaports. DHS faces challenges in ensuring it has reliable data on illegal entries by foreign seafarers at U.S. seaports and has not adjusted related civil monetary penalties. First, both CBP and Coast Guard track the frequency of absconder (a seafarer CBP has ordered detained on board a vessel in port, but who departs a vessel without permission) and deserter (a seafarer CBP grants permission to leave a vessel, but who does not return when required) incidents at U.S. seaports, but the records of these incidents varied considerably. The Coast Guard reported 73 percent more absconders and almost double the deserters compared to CBP for fiscal years 2005 through 2009. As a result, the data DHS uses to inform its strategic and tactical plans are of undetermined reliability. Second, CBP is responsible for imposing civil monetary penalties on vessel operators whose seafarers illegally enter the United States; however, as of December 2010, CBP and DOJ had not met legal requirements for adjusting the penalties for inflation. Officials reported taking steps to meet these requirements, but have not developed a plan with timelines for doing so. Such a plan would better position CBP and DOJ to demonstrate progress to comply with legal requirements. International implementation of ILO 185 has been limited--18 countries, representing 30 percent of the global seafarer supply, have ratified ILO 185--and key ILO mechanisms to promote compliance are not expected to be in place until later this year. As of January 2011, the United States had not ratified ILO 185 largely due to concerns over a provision for facilitating visa-free shore leave for foreign seafarers. Perspectives varied among the four federal agencies GAO interviewed within DHS and the departments of State, Transportation, and Labor. Within DHS, the Coast Guard reported that it supported U.S. ratification, while CBP stated that ILO 185's lack of oversight did not serve U.S. law enforcement interests. The U.S. has recently undertaken an interagency review to consider ratification but has no timeline for completion. What GAO Recommends GAO recommends that DHS assess risks of not electronically verifying cargo vessel seafarers for admissibility, identify reasons for absconder and deserter data variances, and, with the Department of Justice (DOJ), develop a plan with timelines to adjust civil monetary penalties for inflation. DHS and DOJ concurred with GAO's recommendations.

gao_GAO-02-597

gao_GAO-02-597_0

2). Unlike the DI program, SSI has no prior work requirement. Moreover, because of the statutory design of these programs, the role of assistive technologies is not recognized in making disability decisions. SSA’s slow progress in completing the updates could undermine the purpose of incorporating medical advances into its medical criteria. This limited role of treatment means, by definition, the updates have not fully captured the benefits that treatments can provide to persons with certain impairments. Disability Criteria Not Updated to Reflect Labor Market Changes The disability criteria used by DI, SSI, and VA programs for determining who is disabled have not incorporated labor market changes. In determining the effect that impairments have on individuals’ earning capacity, programs continue to use outdated information about the types and demands of jobs in the economy. Incorporating Scientific Advances and Labor Market Changes into Disability Criteria Has Several Implications Incorporating scientific advances and labor market changes into DI, SSI, and VA programs can occur within the existing program design and at a more fundamental level. Within the context of the programs’ existing statutory and regulatory design, agencies will need to continue updating the criteria they use to determine which applicants have physical and mental conditions that limit their ability to work. In addition to continuing their medical updates, SSA and VA need to vigorously expand their efforts to more closely examine labor market changes. More fundamentally, SSA and VA could consider the impact that scientific advances and labor market changes have on the programs’ basic orientation. Agencies would need to address the accessibility of medical and technological advances for program beneficiaries. Appendix I: Comments from the Social Security Administration Appendix II: Comments from the Department of Veterans Affairs GAO Comments 1.

What GAO Found The three largest disability programs collectively provided $89.7 billion in cash benefits to 10.2 million adults in 2001. However, the Disability Insurance (DI) program, Supplemental Security Income (SSI) program, and VA disability criteria reflect neither medical and technological advances nor the labor market changes that affect the skills needed to perform work and work settings. If these federal disability programs do not update scientific and labor market information, they risk overestimating the limiting nature of some disabilities while underestimating others. Twelve years ago, both the Social Security Administration and the Department of Veterans Affairs (VA) began reviewing relevant medical advances and updating the criteria they use to evaluate claims. However, the time the agencies are taking to revise the medical criteria could undermine the very purpose of the update. Moreover, because of the limited role of treatment in the statutory and regulatory design of these programs, the updates have not fully captured the benefits afforded by advances in treatment. Also, the disability criteria used by DI, SSI, and VA programs have not incorporated labor market changes. These programs continue to use outdated information about the types and demands of jobs needed to determine the impact that impairments have on individuals' earning capacity. To incorporate scientific advances and labor market changes into the DI, SSI, and VA programs, steps can be taken within the existing program design, but some would require more fundamental change. Agencies need to continue their medical updates and vigorously expand their efforts to more closely examine labor market changes. At a more fundamental level, SSA and VA could consider changes to the disability criteria that would revisit the programs' basic orientation.

gao_GAO-12-539

gao_GAO-12-539_0

Carryover and Its Use DOD uses the term “carryover” to refer to the reported dollar value of working capital fund activities work that has been ordered and funded (obligated) by customers but not completed by the end of the fiscal year. During the most recent 6-year period, the reported amounts of actual carryover exceeded the allowable amounts each year, ranging from a high of $59 million in fiscal year 2007 to a low of $7 million in fiscal year 2011. However, in contrast, for the most recent 6 years, DMAG’s actual reported amount of carryover exceeded budgeted carryover amounts by at least $50 million each year. Our analysis showed the actual amounts of reported carryover exceeded budgeted amounts primarily because the Marine Corps underestimated DMAG’s new orders received from customers. Our analysis of DMAG budget documents showed that for fiscal years 2004 through 2011, the Marine Corps budgeted DMAG’s revenue (work to be performed) to be more than the budgeted dollar value of new orders to be received each year. DMAG Carryover Grew Significantly as a Result of OIF/OEF Our analysis of documents and interviews with Marine Corps officials disclosed that DMAG carryover significantly increased from $49 million in fiscal year 2002 to $271 million in fiscal year 2005. Available Marine Corps documentation, including DMAG’s budgets, showed that new orders increased to facilitate higher depot maintenance requirements in support of OIF/OEF operations. As shown in table 4, the DMAG carryover averaged $296 million and represented about 6.4 months of workload since fiscal year 2005. Primary Reasons for Carryover at the End of Fiscal Years 2010 and 2011 Our analysis of 60 orders (and related amendments) with the largest amounts of carryover for fiscal years 2010 and 2011 (the most recent data available) identified three primary reasons for carryover: (1) unanticipated increases in quantities or workload requirements to customer orders, (2) starting work on new orders later in the fiscal year because the centers had not yet completed work on other existing orders from the current and prior fiscal year, and (3) accepting amendments to existing orders in the last quarter of the fiscal year that increased order quantities or the scope of work. Recommendations for Executive Action We recommend that the Secretary of Defense direct the Secretary of the Navy and Commandant of the Marine Corps to take the following two actions to improve the budgeting and management of Marine Corps’ DMAG carryover: Augment DMAG budget development and review procedures to require a comparison of recent years’ trends in budgeted carryover amounts that are over or under the allowable amounts to the actual carryover amounts to identify any differences, reasons for any such differences, and make any appropriate adjustments to budget estimates on carryover. In its comments, DOD concurred with both of our recommendations and cited actions planned to address them. Appendix I: Scope and Methodology To determine if (1) the depot maintenance activity group (DMAG) reported actual carryover exceeded the allowable amount of carryover from fiscal years 2004 through 2011 and any actions the Marine Corps is taking to reduce carryover, and (2) budget information on DMAG carryover from fiscal years 2004 through 2011 approximated reported actual results, we obtained and analyzed DMAG reports that contained information on budgeted and reported actual carryover and the allowable amount of carryover for fiscal years 2004 through 2011. To determine if there was growth in DMAG carryover during the period of Operation Iraqi Freedom/Operation Enduring Freedom (OIF/OEF) and the reasons for any such growth, we analyzed reported order, revenue, and carryover amounts and months of carryover from fiscal years 1998 through 2011 to determine the extent to which OIF/OEF impacted DMAG workload and carryover.

Why GAO Did This Study The Marine Corps DMAG repairs and overhauls weapon systems and support equipment to battle-ready condition for deployed and soon-to-be deployed units. To the extent that DMAG does not complete work at year-end, the work and related funding will be carried over into the next fiscal year. Carryover is the reported dollar value of work that has been ordered and funded by customers but not completed by DMAG at the end of the fiscal year. GAO was asked to determine (1) if DMAG’s actual carryover exceeded the allowable amount and actions the Marine Corps is taking to reduce carryover; (2) if budget information on DMAG carryover approximated actual results; (3) if there was growth in carryover during the period of OIF/OEF and the reasons for any such growth; and (4) reasons for recent years’ carryover. To address these objectives, GAO (1) reviewed relevant carryover guidance, (2) obtained and analyzed reported carryover and related data for DMAG against requirements, and (3) interviewed DOD, Navy, and Marine Corps officials. What GAO Found GAO’s analysis of Marine Corps depot maintenance activity group (DMAG) reports showed that from fiscal years 2004 through 2011, reported actual carryover exceeded the allowable amounts in the most recent 6 years of the 8- year period, ranging from $59 million in fiscal year 2007 to $7 million in fiscal year 2011. GAO’s analysis also showed that the amounts of carryover exceeding the allowable amounts have declined in each of the past 4 years. These reductions could be attributed to DMAG actions, including implementing production efficiencies that reduced the time required to repair weapon systems. In contrast, DMAG’s budgeted carryover amounts were less than the allowable amounts for all 8 years GAO reviewed. In the most recent 6 years, DMAG’s reported actual carryover amounts exceeded budgeted carryover by at least $50 million. GAO’s analysis showed this occurred because the Marine Corps underestimated DMAG’s new orders every year during this 6-year period from a low of 51 percent to a high of 175 percent. The reported dollar value of DMAG carryover significantly increased during the initial years of Operation Iraqi Freedom/Operation Enduring Freedom (OIF/OEF) from $49 million in fiscal year 2002 to $271 million in fiscal year 2005. This increase could be primarily attributed to new orders from customers more than tripling over this period. GAO’s analysis found that the increase in new orders was the result of higher depot maintenance requirements supporting OIF/OEF. Since fiscal year 2005, reported actual carryover amounts have remained relatively stable, averaging $296 million or 6.4 months of work. GAO identified three factors that were key to DMAG’s carryover in fiscal years 2010 and 2011 including: (1) experiencing unanticipated increases in its workload requirements, (2) starting DMAG work on new orders later in the fiscal year because it was already performing work on other orders, and (3) accepting amendments on existing orders in the last quarter of the fiscal year that increased the scope of work. What GAO Recommends GAO recommends that DOD improve the budgeting and management of DMAG carryover by comparing budgeted to actual information on carryover and orders and making adjustments to budget estimates as appropriate. DOD concurred with GAO’s recommendations and cited related actions planned.

gao_GAO-08-1181T

gao_GAO-08-1181T_0

The Digital Television Transition and Public Safety Act of 2005 addresses the responsibilities of two federal agencies—FCC and NTIA—related to the DTV transition. The act directs FCC to require full-power television stations to cease analog broadcasting after February 17, 2009. Private and Federal Stakeholders Have Undertaken a Myriad of Activities Aimed at Increasing the Public’s Awareness of the Transition Private sector stakeholders, such as broadcasters and cable providers, have undertaken various education efforts to increase public awareness about the DTV transition. The NAB and the National Cable and Telecommunications Association initiated DTV transition consumer education campaigns in late 2007 at an estimated value of $1.4 billion combined. Private sector stakeholders have also produced DTV transition educational programs for broadcast and distribution, developed Web sites that provide information on the transition, and engaged in various other forms of outreach to raise awareness. Additionally, most of the national retailers participating in the NTIA converter box subsidy program are providing materials to help inform their customers of the DTV transition and the subsidy program. FCC and NTIA also have ongoing DTV consumer education efforts, which target populations most likely to be affected by the DTV transition. Specifically, they focused their efforts on 45 areas of the country that have at least 1 of the following population groups: (1) more than 150,000 over- the-air households, (2) more than 20 percent of all households relying on over-the-air broadcasts, or (3) a top 10 city of residence for the largest target demographic groups. The target demographic groups include seniors, low-income, minority and non-English speaking, rural households, and persons with disabilities. Furthermore, FCC and NTIA have developed partnerships with some federal, state, and local organizations that serve the targeted hard-to- reach populations. NTIA is Effectively Implementing the Converter Box Subsidy Program, But Concerns Exist about NTIA’s Ability to Manage a Potential Spike in Demand NTIA has processed and issued coupons to millions of consumers, but a sharp increase in demand might affect NTIA’s ability to respond to coupon requests in a timely manner. In our consumer survey, we found that 35 percent of U.S. households are at risk of losing some television service because they have at least one television not connected to a subscription service, such as cable or satellite. However, through August 2008, only 13 percent of U.S. households had requested converter box coupons, and less than 5 percent had redeemed these coupons. In fact, in households relying solely on over-the-air broadcasts (approximately 15 percent), of those who intend to purchase a converter box, 100 percent of survey respondents said they were likely to request a coupon. As a result, consumers might incur significant wait time before they receive their coupons and might lose television service during the time they are waiting for the coupons. We analyzed data to compare areas of the country that comprise predominantly minority and elderly populations with the rest of the U.S. population and found some differences in the coupon request, redemption, and expiration rates for Hispanic, black, and senior households compared with the rest of the U.S. population. However, households in predominantly black and Latino or Hispanic zip codes were less likely, compared with households outside these areas, to redeem their coupons once they received them. To determine participation in the converter box subsidy program in the 45 areas of the country receiving targeted outreach by NTIA and FCC, we analyzed NTIA coupon data (including requests, redemptions, and expirations) in the 45 areas compared to the rest of the country not targeted by NTIA and FCC. As the sellers of the converter boxes, retailers play a crucial role in the converter box subsidy program and are counted on to inform consumers about it. As part of our work, we conducted a “mystery shopper” study by visiting 132 randomly selected retail locations in 12 cities across the United States that were listed as participating in the converter box subsidy program. At most retailers (118) we visited, a representative was able to correctly identify that the DTV transition would occur in February 2009.

Why GAO Did This Study The Digital Television Transition and Public Safety Act of 2005 requires all full-power television stations in the United States to cease analog broadcasting after February 17, 2009, known as the digital television (DTV) transition. The National Telecommunications and Information Administration (NTIA) is responsible for implementing a subsidy program to provide households with up to two $40 coupons toward the purchase of converter boxes. In this testimony, which is principally based on a recently issued report, GAO examines (1) what consumer education efforts have been undertaken by private and federal stakeholders and (2) how effective NTIA has been in implementing the converter box subsidy program, and to what extent consumers are participating in the program. To address these issues, GAO analyzed data from NTIA and reviewed legal, agency, and industry documents. Also, GAO interviewed a variety of stakeholders involved with the DTV transition. What GAO Found Private sector and federal stakeholders have undertaken various consumer education efforts to raise awareness about the DTV transition. For example, the National Association of Broadcasters and the National Cable and Telecommunications Association have committed over $1.4 billion to educate consumers about the transition. This funding has supported the development of public service announcements, education programs for broadcast, Web sites, and other activities. The Federal Communications Commission (FCC) and NTIA have consumer education plans that target those populations most likely to be affected by the DTV transition. Specifically, they identified 45 areas of the country as high risk that included areas with at least 1 of the following population groups: (1) more than 150,000 over-the-air households, (2) more than 20 percent of all households relying on over-the-air broadcasts, or (3) a top 10 city of residence for the largest target demographic groups. The target demographic groups include seniors, low-income, minority and non-English speaking, rural households, and persons with disabilities. In addition to targeting these 45 areas of the country, FCC and NTIA developed partnerships with organizations that serve these hard-to-reach populations. NTIA is effectively implementing the converter box subsidy program, but its plans to address the likely increase in coupon demand as the transition nears remain unclear. As of August 31, 2008, NTIA had issued almost 24 million coupons and as of that date approximately 13 percent of U.S. households had requested coupons. As found in GAO's recent consumer survey, up to 35 percent of U.S. households could be affected by the transition because they have at least one television not connected to a subscription service, such as cable or satellite. In U.S. households relying solely on over-the-air broadcasts (approximately 15 percent), of those who intend to purchase a converter box, 100 percent of survey respondents said they were likely to request a coupon. With a spike in demand likely as the transition date nears, NTIA has no specific plans to address an increase in demand; therefore, consumers might incur significant wait time to receive their coupons and might lose television service if their wait time lasts beyond February 17, 2009. In terms of participation in the converter box subsidy program, GAO analyzed coupon data in areas of the country comprising predominantly minority and senior populations and found that households in both predominantly black and Hispanic or Latino areas were less likely to redeem their coupons compared with households outside these areas. Additionally, GAO analyzed participation in the converter box subsidy program in the 45 areas of the country on which NTIA and FCC focused their consumer education efforts and found coupon requests to be roughly the same for zip codes within the 45 targeted areas compared with areas that were not targeted. Retailers play an integral role in the converter box subsidy program by selling the converter boxes and helping to inform their customers about the DTV transition. GAO visited 132 randomly selected retail stores in 12 cities. Store representatives at a majority of the retailers GAO visited were able to correctly state that the DTV transition would occur in February 2009 and how to apply for a converter box coupon.

gao_GAO-17-65

gao_GAO-17-65_0

In addition, a Boston Consulting Group report also noted in 2011 that SEC’s culture impaired communication and collaboration between divisions. As a result, we recommended that the Chairman of SEC direct the COO and Office of Human Resources to (1) prioritize efforts to expeditiously develop a comprehensive workforce plan, including a succession plan, and establish time frames for implementation and mechanisms to help ensure that the plans are regularly updated; and (2) incorporate OPM guidance as they develop the workforce and succession plans by developing a formal action plan to identify and close competency gaps and fill supervisory positions and institute a fair and transparent process for identifying high-potential leaders from within the agency. As a result, we recommended that the Chairman of SEC direct the COO and Office of Human Resources to (1) create mechanisms to monitor how supervisors use the performance management system to recognize and reward performance, provide meaningful feedback to staff, and effectively address unacceptable performance, for example, by requiring ongoing feedback discussions with higher-level supervisors; and (2) conduct periodic validations (with staff input) of the performance management system and make changes, as appropriate, based on these validations. Although we determined that employee views of SEC’s organizational culture have generally improved, employee perceptions about management’s efforts to improve cross-divisional collaboration remain low and have not changed since 2013. Employees’ Survey Responses Indicate That SEC Continues to Operate in a Compartmentalized Way Our 2016 survey results indicate that SEC continues to operate in a compartmentalized manner. SEC Has Taken Some Steps to Improve Personnel Management, but Progress Has Been Limited Overall SEC has developed mechanisms to monitor supervisors’ use of its performance management system and developed and implemented a system to monitor and evaluate personnel management activities, consistent with our 2013 recommendations in these areas, but progress to improve personnel management in other areas has been limited. In addition, the results of SEC’s human capital accountability system have informed the agency’s human capital goals and spending priorities. SEC Continues to Face a Number of Personnel Management Challenges While SEC has taken some actions to address our 2013 recommendations on workforce and succession planning, performance management, and cross-divisional communication and collaboration, we found that these actions were insufficient to address our 2013 recommendations. SEC’s workforce plan lacks a comprehensive skills gap analysis. As a result, SEC has not fully addressed the recommendations from our July 2013 report related to workforce planning, and we maintain that these 2013 recommendations are still valid. As a result, SEC lacked information on if and what changes needed to be made and how best to make them. Without evaluating its performance management system to identify problems and potential solutions, SEC may not have assurance that the new system will perform better than the current system. Of the seven recommendations that we made in 2013, SEC has made the least progress on the recommendations related to enhancing intra-agency communication and collaboration. 1). The lack of a central position or office with authority over the daily operations of all SEC divisions and offices makes it difficult to lead SEC- wide changes to address long-standing management challenges related to communication and collaboration. Because of the COO’s limited authority and the absence of another SEC official, other than the SEC Chair, with the authority over the divisions and offices to take action to facilitate efforts to improve cross-divisional communication and collaboration, progress in this area will likely continue to be limited. Hiring and Promotions SEC’s hiring and promotion policies and procedures are generally consistent with OPM and other relevant criteria, but SEC lacks assurance that staff, particularly hiring specialists, know how to implement the policies and procedures correctly. Without providing necessary training that is informed by a comprehensive skills gap analysis, SEC may lack assurance that hiring specialists have the skills required to conduct their work effectively, and that it is hiring and promoting the most qualified applicants. Because SEC has not conducted a skills gap analysis across its entire workforce as we previously recommended in 2013, including its hiring personnel, it lacks the information needed to develop an effective training program. In its written comments, SEC agreed with the majority of our findings and one of our two recommendations, but it disagreed with the other. Related to personnel management, SEC acknowledged our second recommendation in this report to develop and implement training for its hiring specialists. However, staff in mission-critical offices and divisions should be enabled to collaborate and communicate with staff in other offices and divisions. Analysis of Employees’ Views of SEC’s Organizational Culture and Personnel Management To examine employees’ views of SEC’s organizational culture and the extent to which they have changed since 2013, we conducted surveys of all SEC staff, a content analysis of open-ended responses to our survey, individual interviews with SEC staff, and structured group interviews with SEC supervisors: Surveys: To examine employees’ views of SEC’s organizational culture and the extent to which these views have changed since 2013, we implemented three web-based surveys of all 4,236 nonsupervisory and supervisory staff and 148 senior officers. Appendix VII: Percentage of Staff Who Left the Securities and Exchange Commission, Fiscal Years 2008- 2015 Among its provisions, Section 962 of the Dodd-Frank Wall Street Reform and Consumer Protection Act included a provision for us to review turnover rates within Securities and Exchange Commission (SEC) subunits. 2. 3.

Why GAO Did This Study The Dodd-Frank Wall Street Reform and Consumer Protection Act contains a provision for GAO to report triennially on SEC's personnel management. GAO's first report in 2013 (GAO-13-621) identified a number of challenges, such as SEC's lack of a mechanism to monitor supervisors' use of its performance management system, and included seven recommendations. This report examines (1) employee views on SEC's organizational culture since 2013 and (2) SEC's current personnel management practices. GAO surveyed all SEC employees (staff in its six key divisions and offices, staff in all other offices and divisions, and all senior officers, with response rates of 69, 60, and 70 percent, respectively); evaluated SEC policies and procedures against relevant criteria; and analyzed information on SEC's practices. What GAO Found Employee views on the Securities and Exchange Commission's (SEC) organizational culture have generally improved since 2013. Employees GAO surveyed cited improved levels of morale and trust within the agency compared to 2013 and noted that SEC was less hierarchical and risk-averse. However, GAO's survey indicated that SEC still operates in a compartmentalized way and that there is little communication and collaboration between divisions. SEC made limited progress on improving personnel management. SEC has addressed two of seven recommendations from GAO's 2013 report, but it faces added challenges in cross-divisional collaboration and hiring and promotion. Mechanisms to monitor supervisors' use of performance management system . Recently, SEC began to monitor how supervisors (1) provide feedback to staff, (2) recognize and reward staff, and (3) address poor performance. SEC's efforts address the related 2013 recommendation. Accountability system . SEC implemented a system to monitor its human capital programs and inform its human capital goals consistent with Office of Personnel Management (OPM) guidance. SEC's efforts address the related 2013 recommendation. Workforce and succession planning . SEC has developed a workforce and succession plan in response to two of GAO's recommendations, but the plan does not include some elements of OPM guidance, such as a skills gap analysis for all SEC staff. As a result, SEC continues to lack assurance that all staff have the necessary skills. Performance management. Although GAO found in 2013 that SEC's performance management system was generally consistent with relevant criteria, SEC redesigned it in 2014 without first examining its effectiveness—a recommendation GAO made in 2013. SEC officials stated they do not plan any future reviews because they are piloting a new system. As a result, SEC lacks assurance that the new system will perform better than the current one. Communication and collaboration . SEC has made little progress to address GAO's two recommendations related to improving cross-divisional collaboration. While SEC has recognized some staff for collaborating, it has yet to set expectations for all staff to collaborate across divisions as needed or implement relevant best practices to break down existing silos. As a result, SEC staff still report that divisions operate in isolation. Other than the SEC Chair's Office, which has competing demands on its time, no official has authority to affect the daily operations of the entire agency. Other organizations rely on their Chief Operating Officer (COO) to make such changes, but because SEC's COO lacks such authority, the agency will likely continue to face challenges. In addition, GAO found that because SEC has not identified skills gaps among its hiring specialists, its training of these staff is limited. As a result, SEC lacks assurance that its hiring specialists have the necessary skills to hire and promote the most qualified applicants, in accordance with key principles of an effective control system. What GAO Recommends SEC should (1) provide authority to the COO or other official to enhance cross-divisional collaboration and (2) develop and implement training for hiring specialists that is informed by a skills gap analysis. GAO also reiterates the need to address the remaining five prior unaddressed recommendations on workforce planning, performance management, and intra-agency collaboration. SEC agreed with the second recommendation but disagreed with the first one. In particular, SEC disagreed that enhancing the role of the COO would be the optimal means to achieve further enhancements. GAO maintains that this recommendation will help improve cross-divisional communication and collaboration, as discussed in the report.

gao_RCED-99-49

gao_RCED-99-49_0

Many Programs Administered by Multiple Federal Agencies Can Provide Services to Homeless People Eight federal agencies administer 50 programs and other resources that can assist homeless people. Both targeted and nontargeted programs provide an array of services to the homeless, such as housing, health care, job training, and transportation. In some instances, different programs may offer the same types of services. Similarly, six agencies administer 26 programs (11 targeted and 15 nontargeted) that deliver food and nutrition services. Nontargeted Programs Receive More Funding In fiscal year 1997, $1.2 billion in obligations was reported for programs targeted to the homeless, and about $215 billion in obligations was reported for nontargeted programs. While the funding for targeted programs must be used to assist homeless people, information on how much of the funding for nontargeted programs is used for this purpose is not generally available. Over three-fourths of the funding for the targeted programs, such as the Health Care for the Homeless and Supportive Housing programs, is provided through project grants, which are allocated to service providers. Most of the remainder for targeted programs is allocated to states and local governments through formula grants. However, a significant portion of the funding for nontargeted programs does not go to serving the homeless. About 20 percent of the funding for nontargeted programs is provided through formula grants. The remainder of the funding for nontargeted programs consists of direct payments for the Food Stamp Program and project grants for several programs whose services are generally available to the homeless. Coordination Is Occurring and Performance Measurement Has Begun Federal efforts to assist the homeless are coordinated in several ways, and many agencies have established performance measures, as the Results Act requires, for program activities designed to assist the homeless. Performance Plans Make Limited Use of Outcome Measures Most agencies have established process or output measures for the services they provide to the homeless through their targeted programs, but they have not consistently provided results-oriented goals and outcome measures related to homelessness in their plans. Scope and Methodology To identify and describe the characteristics of federal programs targeted for the homeless and the key nontargeted programs available to low-income people generally, we developed a preliminary list of programs using studies and evaluations by the federal agencies that administer programs and initiatives for homeless people, as well as information from other sources, such as the Congressional Research Service, Government Information Services, and the Catalog of Federal Domestic Assistance (CFDA). To determine if federal agencies have coordinated their efforts to assist homeless people and developed outcome measures for their targeted programs, we reviewed the agencies’ strategic and annual performance plans to determine if each agency had (1) identified crosscutting responsibilities or established program coordination efforts with other agencies or (2) established performance goals and measures. The appendix does not include all of the resources and activities that serve homeless people. 5. 7. 10. 16. 2.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the federal approach to meeting the needs of the homeless, focusing on: (1) identifying and describing characteristics of the federal programs specifically targeted, or reserved, for the homeless, and key nontargeted programs available to assist low-income people generally; (2) identifying the amounts and types of funding for these programs in fiscal year (FY) 1997; and (3) determining if federal agencies have coordinated their efforts to assist homeless people and developed outcome measures for their targeted programs. What GAO Found GAO noted that: (1) 50 federal programs administered by eight federal agencies can provide services to homeless people; (2) of the 50 programs, 16 are targeted, or reserved for the homeless, and 34 are nontargeted, or available to low-income people generally; (3) while all of the nontargeted programs GAO identified may serve homeless people, the extent to which they do so is generally unknown; (4) both targeted and nontargeted programs provide an array of services, such as housing, health care, job training, and transportation; (5) in some cases, programs operated by more than one agency offer the same type of service; (6) 26 programs administered by six agencies offer food and nutrition services, including food stamps, school lunch subsidies, and supplements for food banks; (7) in fiscal year (FY) 1997, over $1.2 billion in obligations was reported for programs targeted to the homeless, and about $215 billion in obligations was reported for nontargeted programs that serve people with low incomes, which can include the homeless; (8) over three fourths of the funding for the targeted programs is provided through project grants, which are allocated to service providers and state and local governments through formula grants; (9) information is not available on how much of the funding for nontargeted programs is used to assist homeless people; (10) however, a significant portion of the funding for nontargeted programs is not used to serve the homeless; (11) about 20 percent of the funding for nontargeted programs provided through formula grants; (12) the remainder of the funding for nontargeted programs consists of direct payments and project grants; (13) federal efforts to assist the homeless are being coordinated in several ways, and many agencies have established performance measures for their efforts; (14) some departments administer specific programs jointly; (15) although some coordination is occurring through the use of these mechanisms and most agencies that administer targeted programs for the homeless have identified crosscutting responsibilities related to homelessness under the Government Performance and Results Act, the agencies have not yet described how they will coordinate or consolidate their efforts at the strategic level; and (16) most agencies have established process or output measures for the services they provide to the homeless through their targeted programs, but they have not consistently incorporated results-oriented goals and outcome measures related to homelessness in their plans.

gao_GAO-17-261

gao_GAO-17-261_0

Each program office and ARPA-E may fund R&D at any of the national laboratories. ARPA-E does not oversee a national laboratory. Figure 2 shows the locations of the 13 national laboratories that primarily conduct civilian R&D under the oversight of the program offices we reviewed. DOE Uses Various Activities to Oversee Investments in Civilian R&D at National Laboratories, Universities, and Industry The three program offices we selected for detailed review—the offices of Energy Efficiency and Renewable Energy, Nuclear Energy, and Science—use various activities to oversee DOE civilian R&D investments in national laboratories, universities, industry, and other entities: these investments totaled $7.36 billion in obligations in fiscal year 2015. DOE Activities to Identify Research Priorities and Help Inform Investment Decisions For all investments, including those in DOE’s national laboratories, universities, industry, and other entities, the three selected program offices engage in activities to obtain input from multiple sources to identify research priorities and to help inform where DOE invests in R&D. For example, the Office of Nuclear Energy sponsored a series of workshops in 2015 that sought to identify ideas for advancing nuclear energy technologies. First, the three program offices conduct planning activities to help ensure that DOE investments in the laboratories support national R&D priorities. Third, at the end of each fiscal year, program offices use a performance evaluation and measurement plan to assess each laboratory contractor’s scientific, technological, managerial, and operational performance. DOE Oversight Activities for R&D Investments in Universities, Industry, and Other Entities The offices of Energy Efficiency and Renewable Energy, Nuclear Energy, and Science use various processes to help oversee DOE’s civilian R&D investments in universities, industry, and other entities ($2.22 billion in obligations in fiscal year 2015). Research office staff in these three program offices develop solicitations—also referred to as funding opportunity announcements—for R&D proposals from universities, industry, and other entities. According to data provided by DOE, research office staff in the five program offices and ARPA-E conducted or managed more than 6,600 proposal reviews—with reviews consisting of as many as 3 or 4 individual reviewers—to select 1,691 new financial assistance awards in fiscal year 2015. DOE officials indicated that financial assistance awards that did not receive obligations also required support. DOE Staffing Levels to Oversee Civilian R&D Investments Declined from Fiscal Year 2011 to Fiscal Year 2015, and Staff Costs Increased Slightly From fiscal year 2011 to fiscal year 2015, DOE staffing levels for oversight of civilian R&D investments declined by 11.0 percent, while obligations for the civilian R&D that the staff oversaw increased by 3.8 percent. Appendixes I and II present further data on staffing levels in the five program offices and ARPA-E, as well as data on staff costs and R&D obligations. Overall Obligations for Staff Costs of DOE Oversight of Civilian R&D Increased Slightly from Fiscal Year 2011 to 2015, and Varied among Program Offices and ARPA-E Total obligations for staff costs to oversee DOE’s civilian R&D investments increased from $632.9 million in fiscal year 2011 to $647.9 million in fiscal year 2015—an increase of 2.4 percent during the period under review (a decrease of 4.0 percent when adjusted for inflation). The obligations for total staff costs as a percentage of total obligations (R&D and non-R&D obligations) varied among the program offices and ARPA-E (see fig. For example, in fiscal year 2015, the percentage ranged from 3.6 percent in the Office of Science to 21.4 percent in the Office of Electricity Delivery and Energy Reliability. Agency Comments and Our Evaluation We provided a draft of this report to DOE for its review. Appendix II: Data on R&D Obligations, Staff Totals, and Obligations for Staff Costs for DOE Offices, Fiscal Years 2011-2015 To learn about staffing levels and costs associated with Department of Energy’s (DOE) offices that oversee research and development (R&D) investments, we developed a data collection instrument that we sent to the five program offices and the Advanced Research Projects Agency- Energy (ARPA-E).

Why GAO Did This Study In fiscal year 2015, five DOE program offices and ARPA-E invested $7.36 billion for civilian R&D in DOE national laboratories as well as in universities, industry, and other entities. These civilian R&D investments (investments not related to nuclear security) supported diverse science and energy research areas, including energy efficiency, renewable energy, and nuclear energy. The five program offices and ARPA-E also obligated funds for staff to oversee these R&D investments—referred to as staff costs in this report—and include federal staff salaries and benefits, travel, support services, and other costs. GAO was asked to review DOE's oversight of its civilian R&D investments. This report discusses (1) the activities selected DOE offices use to oversee investments in civilian R&D, and (2) staffing levels and costs associated with DOE oversight of civilian R&D. GAO obtained staffing and obligations data from the five DOE program offices and ARPA-E that funded civilian R&D for fiscal years 2011-2015, the most recent years for which data was available; examined DOE policies, plans, and guidance; and interviewed DOE officials. GAO selected three of the five program offices for detailed review because they oversee nearly 90 percent of DOE's civilian R&D investments and 12 of the 13 national laboratories that primarily conduct civilian R&D. GAO used a broad definition of oversight, including any activity that directly or indirectly supported DOE's R&D mission. In commenting on a draft of this report, DOE generally agreed with GAO's findings. What GAO Found Three Department of Energy (DOE) program offices that GAO selected for detailed review—the offices of Energy Efficiency and Renewable Energy, Nuclear Energy, and Science—use various activities to oversee civilian research and development (R&D) investments. Activities to identify research priorities . The program offices obtain input from multiple sources to help determine the areas in which DOE invests in research at its national laboratories, as well as in universities and industry. For example, the Office of Nuclear Energy sponsored workshops in 2015 that sought to identify ideas for advancing nuclear energy technologies. Activities to oversee investments at national laboratories . The program offices require that the laboratories they oversee develop strategic plans to help ensure DOE investments in these laboratories support national R&D priorities. They also monitor and review individual laboratory R&D projects. For example, in fiscal year 2015, the Office of Science oversaw over 1,600 new or ongoing laboratory projects that received $3.67 billion in obligations. Finally, the program offices annually assess each laboratory contractor's scientific, technological, managerial, and operational performance. Activities to oversee investments in universities, industry, and other entities . To help determine where DOE invests in civilian R&D, the program offices review R&D proposals from universities, industry, and other entities. According to data provided by DOE, in fiscal year 2015 the three program offices conducted or managed more than 5,600 proposal reviews—with each review including as many as 3 to 4 individual reviewers—and selected 1,490 proposals for new financial assistance awards. The program offices then monitored and periodically reviewed the awarded proposals. Staffing levels for oversight of civilian R&D decreased by 11.0 percent from fiscal year 2011 to fiscal year 2015 in five DOE program offices—those noted above, plus two others that oversee a smaller percentage of DOE's civilian R&D investments—and in the Advanced Research Projects Agency-Energy (ARPA-E). At the same time, obligations for staff costs and civilian R&D investments increased by 2.4 percent and 3.8 percent, respectively, without adjusting for inflation (obligations declined slightly when adjusted for inflation). Staffing levels and costs changed to varying degrees among the offices and ARPA-E. For example, staff costs increased in three of the offices and ARPA-E but decreased in the other two offices. Obligations for staff costs made up 7.6 percent of total obligations (R&D and non-R&D obligations) in fiscal year 2015; they also varied among program offices and ARPA-E, ranging from 3.6 percent to 21.4 percent.

gao_GAO-17-159

gao_GAO-17-159_0

The Single Audit Act mandates that federal agencies assume oversight responsibility for the funds that they award to nonfederal entities. The reporting package is to include (1) the award recipient’s financial statements and schedule of expenditures of federal awards; (2) a summary schedule of prior audit findings, including the status of all single audit findings included in the prior audit’s schedule of findings and questioned costs for federal awards; (3) the auditor’s report (including an opinion on the award recipient’s financial statements and schedule of expenditures of federal awards, reports on internal control and compliance with laws, regulations, and provisions of contracts or grant agreements, and a schedule of findings and questioned costs); and (4) a corrective action plan. A-133 requires that federal awarding agencies ensure that award recipients complete and submit single audit reports within the required time frames. Most of the Selected Subagencies Did Not Effectively Design Policies and Procedures to Reasonably Assure Timely Issuance of Written Management Decisions with the Required Content The selected subagencies in Agriculture, HHS, HUD, and Transportation did not effectively design policies and procedures to reasonably assure that management decisions were prepared with the required content and issued within 6 months of receipt of the single audit report for each single audit finding, as required by OMB Circular No. To reasonably ensure that award recipients take action to correct single audit findings, management decisions are to describe the corrective actions that federal agencies consider necessary based on their evaluation of the single audit findings and the award recipient’s plan to correct the single audit findings, according to OMB Circular No. Identifying and categorizing certain single audit findings as high risk—that is, those that if they are not corrected in a timely manner, may be seriously detrimental to federal programs—can assist federal agencies in understanding emerging and persistent issues related to award recipients’ use of funds and allow federal agencies to prioritize their resources to help ensure that the award recipients timely address these findings. Recurring single audit findings are also of concern because they indicate deficiencies that have persisted and may need more resources or attention from the agency to address them. Given the numbers of single audit reports and single audit findings as well as constraints in federal resources for conducting oversight of single audits, identifying and managing high-risk and recurring single audit findings using a risk-based approach can assist in identifying problem areas and addressing priorities. Of the five agencies in our audit, only one agency’s (Education) two selected subagencies had effectively designed policies and procedures in the three areas addressed in our audit. Revise its policies and procedures to reasonably assure that management decisions contain the required elements and are issued timely in accordance with OMB guidance. The e-mail did not address our recommendations to the other subagency, FNS. PIH indicated that it had taken actions that addressed our recommendations, while CPD disagreed with the two recommendations directed to it. Appendix I: Objectives, Scope, and Methodology Our objectives were to determine the extent to which selected federal agencies (1) effectively designed policies and procedures for reasonably assuring that award recipients submit single audit reports in a timely manner, (2) effectively designed policies and procedures for reviewing award recipients’ plans to correct single audit report findings and issuing written management decisions on those plans, and (3) had policies and procedures for managing high-risk and recurring single audit findings through a risk-based approach. Because grant awards proportionally represent one of the largest amounts of federal awards, we used grant data from the Office of Management and Budget’s (OMB) Outlays for Grants to State and Local Governments in fiscal year 2013 to select the agencies and subagencies for our audit. These five agencies—the Departments of Agriculture (Agriculture), Education (Education), Housing and Urban Development (HUD), Transportation (Transportation), and Health and Human Services (HHS)—collectively accounted for 93 percent of total reported outlays for federal grants to state and local governments in fiscal year 2013.

Why GAO Did This Study In fiscal year 2015, federal agencies outlaid over $600 billion in federal awards to state and local governments, according to OMB. The Single Audit Act of 1984, as amended, requires that federal agencies oversee their awards to nonfederal entities. OMB Circular No. A-133 provided guidance for implementing the act during GAO's audit. GAO was asked to examine federal agency oversight of single audits. This report examines whether selected agencies effectively designed policies and procedures to reasonably assure that (1) recipients submit timely single audit reports and (2) award recipients take action on single audit findings by issuing timely management decisions. GAO also examined whether selected agencies had policies and procedures for managing high-risk and recurring audit findings. GAO selected the five agencies with the largest dollar amounts of reported outlays for grants to state and local governments in fiscal year 2013. For each agency, GAO reviewed its two subagencies accounting for over 80 percent of outlays, reviewed written policies and procedures, and interviewed the respective officials. What GAO Found Federal agencies have oversight responsibilities for the funds that they award to nonfederal entities and can assign these responsibilities to their subagencies (i.e., operating units or divisions). Nonfederal entities are required to undergo a single audit if their expenditures of federal awards in a fiscal year exceed a certain threshold. A single audit is an audit of the award recipient's expenditure of federal awards and of its financial statements and can identify deficiencies in the award recipient's compliance with the provisions of laws, regulations, contracts, or grant agreements and in its financial management and internal control systems. Correcting such deficiencies can help reasonably assure the effective use of federal funds and reduce federal improper payments. Of the five agencies in GAO's study—the Departments of Agriculture, Education, Health and Human Services (HHS), Housing and Urban Development (HUD), and Transportation—some of the agencies' subagencies that GAO reviewed did not effectively design policies and procedures to reasonably assure the timely submission of single audit reports by award recipients. The Office of Management and Budget's (OMB) guidance requires that federal awarding agencies ensure that award recipients submit single audit reports within certain time frames. This can help assure that single audit findings are timely corrected. Most of the selected subagencies in GAO's review did not effectively design policies and procedures to reasonably assure that they issued timely management decisions containing the information required by OMB guidance. This guidance requires agencies to evaluate each award recipient's audit findings and corrective action plans and issue a management decision within 6 months of receipt of the single audit report as to the actions award recipients must take to correct each single audit finding. Such decisions may add clarity about the agency's position on the single audit finding and the corrective action. Only the two selected subagencies in Education had policies and procedures for using risk-based approaches to manage high-risk and recurring single audit findings. High-risk single audit findings may be seriously detrimental to federal programs and could result in improper payments. Recurring single audit findings have persisted for more than one audit period and may need more attention or resources to correct. With over 30,000 single audit reports submitted for fiscal year 2015 and constraints in resources for conducting federal oversight, managing single audit findings using a risk-based approach can assist in identifying and prioritizing problem areas. What GAO Recommends GAO is making 21 recommendations. One Agriculture subagency agreed with the recommendations and the other did not comment. HHS and Transportation concurred. HUD commented that one subagency had taken actions to address the recommendations, while the other subagency disagreed with the recommendations directed to it. GAO believes that the recommendations are valid as discussed in the report.

gao_GAO-12-732

gao_GAO-12-732_0

Background This section includes (1) an overview of oil and natural gas, (2) the shale oil and gas development process, (3) the regulatory framework, (4) the location of shale oil and gas in the United States, and (5) information on estimating the size of these resources. In contrast, to extract shale oil and gas from the rock, fluids and proppants (usually sand or ceramic beads used to hold fractures open in the formation) are injected under high pressure to create and maintain fractures to increase permeability, thus allowing oil or gas to be extracted. Domestic Shale Oil and Gas Estimates and Production Estimates of the size of shale oil and gas resources in the United States have increased over time as has the amount of such resources produced from 2007 through 2011. In addition, domestic shale oil and gas production has experienced substantial growth in recent years. Estimates of Technically Recoverable Shale Oil and Gas Resources EIA, USGS, and the Potential Gas Committee have increased their estimates of the amount of technically recoverable shale oil and gas over the last 5 years, which could mean an increase in the nation’s energy portfolio; however, less is known about the amount of technically recoverable shale oil than shale gas, in part because large-scale production of shale oil has been under way for only the past few years. As these estimates are based on data available at a given point in time, they may change as additional information becomes available. Their estimates were as follows: In 2012, EIA estimated the amount of technically recoverable shale gas in the United States at 482 trillion cubic feet.increase of 280 percent from EIA’s 2008 estimate. Shale Oil and Gas Development Pose Environmental and Public Health Risks, but the Extent is Unknown and Depends on Many Factors Developing oil and gas resources—whether conventional or from shale formations—poses inherent environmental and public health risks, but the extent of risks associated with shale oil and gas development is unknown, in part, because the studies we reviewed do not generally take into account potential long-term, cumulative effects. According to a number of studies and publications we reviewed, shale oil and gas development pose risks to air quality. These risks are generally the result of engine exhaust from increased truck traffic, emissions from diesel-powered pumps used to power equipment, intentional flaring or venting of gas for operational reasons, and unintentional emissions of pollutants from faulty equipment or impoundments. According to a number of studies and publications we reviewed, shale oil and gas development pose risks to water quality from contamination of surface water and groundwater as a result of spills and releases of produced water, chemicals, and drill cuttings; erosion from ground disturbances; or underground migration of gases and chemicals. For example, tanks storing toxic chemicals or hoses and pipes used to convey wastes to the tanks could leak, or impoundments containing wastes could overflow as a result of extensive rainfall. According to New York Department of Environmental Conservation’s 2011 Supplemental Generic Environmental Impact Statement, spilled, leaked, or released chemicals or wastes could flow to a surface water body or infiltrate the ground, reaching and contaminating subsurface soils and aquifers. Oil and gas development, whether conventional or shale oil and gas, poses a risk to land resources and wildlife habitat as a result of constructing, operating, and maintaining the infrastructure necessary to develop oil and gas; using toxic chemicals; and injecting waste products underground. Extent of Risks Is Unknown and Depends on Many Factors The extent and severity of environmental and public health risks identified in the studies and publications we reviewed may vary significantly across shale basins and also within basins because of location- and process- specific factors, including the location and rate of development; geological characteristics, such as permeability, thickness, and porosity of the formations in the basin; climatic conditions; business practices; and regulatory and enforcement activities. United States Department of the Interior and United States Department of Agriculture. Agency Comments We provided a draft of this report to the Department of Energy, the Department of the Interior, and the Environmental Protection Agency for review and comment. Appendix I: Scope and Methodology Our objectives for this review were to determine what is known about (1) the size of shale oil and gas resources in the United States and the amount produced from 2007 through 2011—the years for which data were available—and (2) the environmental and public health risks associated with development of shale oil and gas. Specifically, to determine what is known about the size of these resources, we obtained information for technically recoverable and proved reserves estimates for shale oil and gas from the Energy Information Administration (EIA), the U.S. Geological Survey (USGS), and the Potential Gas Committee––a nongovernmental organization composed of academic and industry officials.

Why GAO Did This Study New applications of horizontal drilling techniques and hydraulic fracturing--in which water, sand, and chemical additives are injected under high pressure to create and maintain fractures in underground formations--allow oil and natural gas from shale formations (known as "shale oil" and "shale gas") to be developed. As exploration and development of shale oil and gas have increased--including in areas of the country without a history of oil and natural gas development--questions have been raised about the estimates of the size of these resources, as well as the processes used to extract them. GAO was asked to determine what is known about the (1) size of shale oil and gas resources and the amount produced from 2007 through 2011 and (2) environmental and public health risks associated with the development of shale oil and gas. GAO reviewed estimates and data from federal and nongovernmental organizations on the size and production of shale oil and gas resources. GAO also interviewed federal and state regulatory officials, representatives from industry and environmental organizations, oil and gas operators, and researchers from academic institutions. GAO is not making any recommendations in this report. We provided a draft of this report to the Department of Energy, the Department of the Interior, and the Environmental Protection Agency for review. The Department of the Interior and the Environmental Protection Agency provided technical comments, which we incorporated as appropriate. The Department of Energy did not provide comments. What GAO Found Estimates of the size of shale oil and gas resources in the United States by the Energy Information Administration (EIA), U.S. Geological Survey (USGS), and the Potential Gas Committee--three organizations that estimate the size of these resources--have increased over the last 5 years, which could mean an increase in the nation's energy portfolio. For example, in 2012, EIA estimated that the amount of technically recoverable shale gas in the United States was 482 trillion cubic feet--an increase of 280 percent from EIA's 2008 estimate. However, according to EIA and USGS officials, estimates of the size of shale oil and gas resources in the United States are highly dependent on the data, methodologies, model structures, and assumptions used to develop them. In addition, less is known about the amount of technically recoverable shale oil than shale gas, in part because large-scale production of shale oil has been under way for only the past few years. Estimates are based on data available at a given point in time and will change as additional information becomes available. In addition, domestic shale oil and gas production has experienced substantial growth; shale oil production increased more than fivefold from 2007 to 2011, and shale gas production increased more than fourfold from 2007 to 2011. Oil and gas development, whether conventional or shale oil and gas, pose inherent environmental and public health risks, but the extent of these risks associated with shale oil and gas development is unknown, in part, because the studies GAO reviewed do not generally take into account the potential long-term, cumulative effects. For example, according to a number of studies and publications GAO reviewed, shale oil and gas development poses risks to air quality, generally as the result of (1) engine exhaust from increased truck traffic, (2) emissions from diesel-powered pumps used to power equipment, (3) gas that is flared (burned) or vented (released directly into the atmosphere) for operational reasons, and (4) unintentional emissions of pollutants from faulty equipment or impoundments--temporary storage areas. Similarly, a number of studies and publications GAO reviewed indicate that shale oil and gas development poses risks to water quality from contamination of surface water and groundwater as a result of erosion from ground disturbances, spills and releases of chemicals and other fluids, or underground migration of gases and chemicals. For example, tanks storing toxic chemicals or hoses and pipes used to convey wastes to the tanks could leak, or impoundments containing wastes could overflow as a result of extensive rainfall. According to the New York Department of Environmental Conservation's 2011 Supplemental Generic Environmental Impact Statement, spilled, leaked, or released chemicals or wastes could flow to a surface water body or infiltrate the ground, reaching and contaminating subsurface soils and aquifers. In addition, shale oil and gas development poses a risk to land resources and wildlife habitat as a result of constructing, operating, and maintaining the infrastructure necessary to develop oil and gas; using toxic chemicals; and injecting fluids underground. However, the extent of these risks is unknown. Further, the extent and severity of environmental and public health risks identified in the studies and publications GAO reviewed may vary significantly across shale basins and also within basins because of location- and process-specific factors, including the location and rate of development; geological characteristics, such as permeability, thickness, and porosity of the formations; climatic conditions; business practices; and regulatory and enforcement activities.

gao_GAO-15-582

gao_GAO-15-582_0

As VBA continues to develop and implement the system, three areas could benefit from increased management attention. First, the PMO does not have a reliable estimate of the cost for completing the system. Second, although VBA has improved VBMS’s availability to users, it has not established goals for system response times. Third, while the program has actively managed system defects, a recent system release included multiple unresolved defects that adversely impacted performance and users’ experiences. VBA Has Made Important Progress toward Developing and Implementing VBMS to Support the Processing of Disability Claims; but Key Capabilities Are Delayed and Plans for Processing Pension Benefits and Appeals Are Uncertain Since completing the implementation of VBMS at all regional offices in June 2013, VBA has continued to make important progress toward developing and implementing additional system functionality and enhancements that support electronic processing of disability compensation claims. Specifically, the PMO has identified the need to automate steps associated with a veteran’s request for an increase in disability benefits, such as when an existing medical condition worsens. Further, VBA has not yet developed and implemented end-to-end pension processing capabilities in VBMS. Nevertheless, due to the department’s incremental approach to developing and implementing VBMS, VBA has not yet produced a plan that identifies when the system will be completed and can be expected to fully support disability and pension claims processing and appeals. Through May of fiscal year 2015, it was available for 99.98 percent of the time. VBA’s Methods for Determining User’s Feedback on VBMS Have Not Included Establishing Goals or Conducting a Survey; GAO’s Survey Identified Varied Satisfaction Levels While VBA has several methods to obtain VBMS users’ feedback, it has neither established goals to define user satisfaction, nor conducted a survey of claims processing employees to obtain a comprehensive picture of overall customer satisfaction. Our survey of VBMS users found that a majority reported satisfaction with the system, but decision review officers were considerably less satisfied. Although the results of our survey provide VBA with useful data about users’ satisfaction with the system, the absence of user satisfaction goals limits the utility of survey results. While 95 percent of records related to veterans’ disability claims are electronic and reside in VBMS, additional capabilities to fully process disability claims will be delayed beyond fiscal year 2015, which is when completion was originally planned. Thus, it will be difficult for VA to hold its managers accountable for meeting its time frame and for demonstrating progress. Specifically, without a reliable estimate of the total costs associated with completing work on VBMS, the department’s stakeholders have only a limited view of future resource needs, and the program risks not having sufficient funding to complete development and implementation of the system. Additionally, established goals for system response times would provide users with an expectation of the response times they can anticipate, and management with an indication of how well the system is performing relative to performance goals. Furthermore, continuing to deploy system releases with large numbers of defects that reduce system functionality could adversely affect users’ ability to process disability claims in an efficient manner. Specifically, without having established goals to define user satisfaction, VBA does not have a basis for gauging the success of its efforts to promote satisfaction with the system or for identifying areas where its efforts to complete development and implementation of the system might need attention. Recommendations for Executive Action We recommend that the Secretary of Veterans Affairs direct the Under Secretary for Benefits and the Chief Information Officer to take the following five actions to improve VA’s efforts to effectively complete the development and implementation of VBMS: Develop an updated plan for VBMS that includes (1) a schedule for when VBA intends to complete development and implementation of the system, including capabilities that fully support disability claims, pension claims, and appeals processing and (2) the estimated cost to complete development and implementation of the system. Reduce the incidence of high- and medium-priority level defects that are present at the time of future VBMS releases. The department also concurred with our recommendations and described actions it is planning to take in response to four of our five recommendations. Appendix I: Objectives, Scope, and Methodology The objectives of this study were to (1) assess the Department of Veterans Affairs’ (VA) progress toward developing and implementing the Veterans Benefits Management System (VBMS) and (2) determine to what extent users report satisfaction with the system. 3. 5. How long have you been using the Veterans Benefits Management System (VBMS)?

Why GAO Did This Study VBA pays disability benefits for disabling conditions incurred or aggravated while in military service, while pension benefits are for low-income veterans who are either elderly or have disabilities unrelated to military service. In fiscal year 2014, the department paid about $58 billion in disability compensation and about $5 billion in pension claims. The disability claims process has been the subject of attention by Congress and others, due in part, to long waits for processing claims and a large backlog of claims. To process disability and pension claims more efficiently, VA began implementation of an electronic, paperless system in 2009. GAO was asked to study VBMS. Specifically, GAO (1) assessed VA's progress toward completing the development and implementation of VBMS and (2) determined to what extent users report satisfaction with the system. To do so, GAO reviewed relevant program documentation, administered a survey to a stratified random sample of about 3,500 users, and interviewed appropriate VA officials. What GAO Found The Veterans Benefits Administration (VBA) within the Department of Veterans Affairs (VA) has made progress in developing and implementing the Veterans Benefits Management System (VBMS), with deployment of the system to all of its regional offices as of June 2013. While 95 percent of records related to veterans' disability claims are electronic and reside in the system, additional capabilities have not yet been completed, such as automation of the steps associated with a veteran's request for an increase in benefits. Further, VBA has not yet developed and implemented pension processing capabilities in VBMS, nor has it articulated when the system will support appeals processing. The VBMS program reported receiving funding of about $1 billion from fiscal years 2009 to 2015, at which time system completion was originally planned. Although development of the system is expected to continue beyond 2015, the incremental approach VA is using to develop and implement VBMS has not yet produced a plan that identifies when the system will be completed and can be expected to fully support disability and pension claims processing and appeals. Thus, it will be difficult for VA to hold its managers accountable for meeting its time frame and for demonstrating progress. As VA continues its efforts to complete development and implementation of the system, three areas could benefit from increased management attention. Cost estimating: The program office does not have a reliable estimate of the cost for completing the system. Without such an estimate, VA management and the department's stakeholders have a limited view of the system's future resource needs, and the program risks not having sufficient funding to complete development and implementation of the system. System availability: Although VBA has improved its performance for ensuring the system is available to users, it has not established system response time goals. Without such goals, users do not have an expectation of the system response times they can anticipate and management does not have an indication of how well the system is performing relative to performance goals. System defects: While the program has actively managed system defects, a recent system release included unresolved defects that impacted system performance and users' experiences. Continuing to deploy releases with large numbers of defects that reduce system functionality could adversely affect users' ability to process disability claims in an efficient manner. While VBA has employed various methods to obtain VBMS users' feedback, it has neither established goals to define user satisfaction, nor conducted a survey of claims processing employees to obtain a more comprehensive picture of overall customer satisfaction. GAO's survey of VBMS users estimated that a majority report satisfaction with the system, but that one group of users who are responsible for examining claims decisions was considerably less satisfied. Although the results of GAO's survey provide VBA with useful data about users' satisfaction with the system, the absence of user satisfaction goals limits the utility of survey results. Specifically, without having established goals to define user satisfaction, VBA does not have a basis for gauging the success of its efforts to promote satisfaction with the system. What GAO Recommends GAO recommends that VA develop a plan for completing VBMS, establish goals for system response time, minimize the incidence of high and medium priority system defects for future VBMS releases, assess user satisfaction, and establish satisfaction goals to promote improvement. VA concurred with the recommendations and described actions it is planning to take in response, except for the first recommendation. GAO continues to believe development of a plan for completing the system is important.

gao_GAO-14-706

gao_GAO-14-706_0

The partnership agreements explicitly address subcontracting limitations in a few ways by requiring the agencies to at the time of the contract award, conduct and document an assessment of the 8(a) firm’s ability to comply with the subcontracting limitations; include monitoring and oversight provisions in all 8(a) contracts to ensure that the contractors comply with the subcontracting limitations; and ensure that 8(a) contractors comply with the subcontracting limitations. Responsibilities for Ensuring Compliance with Subcontracting Limitations Still Not Fully Met or Understood Contracting Officers Are Generally Not Ensuring Compliance with Subcontracting Limitations With two exceptions, the contracting officers we met with generally do not monitor the amount of subcontracted work to ensure 8(a) contractors comply with subcontracting limitations, which is consistent with our past findings. For example, one HHS contracting officer stated that the 8(a) contractors he works with understand the amount of work they must perform, should be monitoring the amount of subcontracted work, and should inform the government if subcontractors perform more work than allowed. This contracting officer, however, was not aware if the contractor had performed the required amount of work on the contract we reviewed, and contractor representatives for this contract told us that they were not in compliance with the subcontracting limitations at the time we spoke with them. While agencies’ policies and guidance may supplement parts of the FAR, the purpose of the FAR is to provide uniform policies and procedures for federal acquisitions, and most agencies must follow these regulations. When contracting officers are not aware of or do not implement their responsibilities to monitor 8(a) subcontracting limitations, there is an increased risk that contractors are not in compliance. Large businesses awarded contracts that are expected to exceed a certain amount are required to develop a plan detailing the extent to which they will subcontract work to small businesses, which is evaluated by contracting officers prior to awarding a contract. They said, however, that they likely could demonstrate compliance if required. Figure 1 shows that 5 of the 10 contracts in our sample exhibited one or more of these situations. Some of these roles, however, should have been performed by the 8(a) prime contractor, according to the contracting officials. Contracting officers and contractors reported that these pending changes could have mixed effects on monitoring compliance. Changes to How Subcontracted Work Is Determined The NDAA for Fiscal Year 2013 amended the Small Business Act to change what costs are considered to be subcontracted work under 8(a) contracts, in part, to make it easier for contractors to determine if they are in compliance. The NDAA amendments to the Small Business Act were enacted on January 2, 2013, and it could take years to incorporate these changes into the FAR. In January 2014, SBA announced that it was drafting a proposed rule to implement these changes into federal regulations through the public rulemaking process, which is generally an initial step in the federal rulemaking process needed to amend the small business regulations as well as the FAR. The officials stated that SBA will submit the final rule to the FAR Council, chaired by the Administrator of OFPP, which will then solicit comments from other interested parties and take steps to incorporate any changes into the FAR. Instead of needing information on both the 8(a) firm’s and its subcontractors’ total personnel costs, only the amount paid to subcontractors would be needed to determine the amount of subcontracted work. Prior to this change, no such monetary penalty existed. The Small Business Act did not specify which system to modify. Recommendations for Executive Action We recommend that the Administrator of OFPP take appropriate steps to amend the FAR to include the following three requirements: At the time of the contract award, contracting officers shall conduct and document an assessment of the 8(a) firm’s ability to comply with the subcontracting limitations; Contracting officers shall include monitoring and oversight provisions in all 8(a) contracts to ensure that the contractors comply with the subcontracting limitations; and Prime 8(a) contractors shall periodically report to the contracting officer on the percentage of subcontracted work being performed.

Why GAO Did This Study SBA's 8(a) program is one of the federal government's primary means for developing small businesses owned by socially and economically disadvantaged individuals. To ensure that 8(a) firms do not pass along the benefits of their contracts to their subcontractors, regulations limit the amount of work that can be performed by subcontractors. In 2013, the Small Business Act was amended to make several changes related to these subcontracting limitations. GAO was asked to review how federal agencies and small businesses monitor the amount of subcontracted work under 8(a) contracts and the potential effects of the changes to the Small Business Act. This report examines (1) the extent to which contracting officers and firms monitor compliance with 8(a) subcontracting limits and (2) the implementation status of changes to the Small Business Act and potential effects. GAO reviewed a nongeneralizable sample of 10 8(a) contracts at the three agencies with highest 8(a) obligations in fiscal years 2011 and 2012. GAO selected a small sample to delve more deeply into the circumstances of the contracts. GAO also examined the amendments to the Small Business Act. What GAO Found Similar to prior GAO findings from April 2006 and January 2012, contracting officers are generally not collecting information on the amount of subcontracted work performed under the 8(a) contracts reviewed, as required. The amount of work prime contractors must perform differs according to what is being procured. For example, the subcontractor's personnel costs are not to exceed 50 percent of the total work under service contracts. Two of the contracting officers associated with the 10 contracts GAO reviewed had monitored and ensured that the subcontracting limitations were not exceeded. In these cases the contractors had been asked to provide necessary information. In the other cases, however, contracting officers did not monitor and were not fully aware of what they were required to do, in part because their responsibilities are not set forth in the Federal Acquisition Regulation (FAR), the primary source for federal procurement policies, to which they regularly turn for guidance. Instead, these responsibilities are outlined in agency agreements with the Small Business Administration (SBA). All 10 contractors GAO met with stated that they maintain and are willing to provide information to demonstrate compliance with subcontracting limitations, if required. While all 8(a) contracts GAO reviewed must comply with the limitations, 5 of the 10 contracts had an increased risk of exceeding these limits. These situations, which underscore the need to monitor, included cases where a subcontractor had been the prime contractor under a prior contract for the same or similar work. In January 2014, SBA took an initial step in the federal rule making process by announcing that it was drafting a rule to implement the amendments to the Small Business Act. It will take more actions and could take years, however, to incorporate any changes into the FAR, which is maintained by a council chaired by the Administrator of the Office of Federal Procurement Policy (OFPP). Contracting officers and contractors stated that pending changes could make it easier to determine compliance with subcontracting limitations. At the same time, however, contractors had some concerns that it could be more challenging to comply because previously excluded subcontracted costs, such as materials, will be considered as subcontracted work. Contractors said that new monetary penalties—a minimum of $500,000—for violating subcontracting limitations are high but would encourage firms to perform the required amount of work. What GAO Recommends GAO recommends that the OFPP Administrator take the appropriate steps to amend the FAR to reflect contracting officers' responsibilities for monitoring 8(a) subcontracting limits and require 8(a) contractors to regularly report on the amount of subcontracted work. OFPP agreed with GAO's recommendations.

gao_GAO-17-68

gao_GAO-17-68_0

Criteria DOD Uses for Determining Items Appropriate for Its OCO Budget Request Do Not Address the Full Scope of Activities Included in Its OCO Budget Request In 2010, in collaboration with DOD, the OMB developed updated criteria for deciding whether items properly belong in the base or in the OCO funding request, but these criteria do not address the full scope of activities included in DOD’s fiscal year 2017 OCO budget request. OMB’s criteria were issued when military operations in Iraq and Afghanistan were the principal contingency operations supported by DOD. Specifically, the criteria do not address operations in new geographic areas such as Syria and Libya, the department’s deterrence and counterterrorism initiatives, or requests for OCO amounts to fund base budget requirements, such as readiness. For fiscal year 2017, DOD requested $20 million for Operation Odyssey Lightning. Moreover, the proportion of OCO appropriations DOD considers to be non-war increased between fiscal years 2010 and 2015. However, DOD officials noted that the OMB has deferred the decision to update the criteria until a new administration is in place in 2017. Without the OMB and DOD reevaluating and revising the criteria for determining items and activities that can appropriately be included in DOD’s OCO budget request, decision makers may be hindered in their ability to set priorities and make funding trade-offs. DOD Has Developed an Initial Estimate of Its Enduring Costs but Has Not Finalized and Reported the Estimate Externally DOD officials told us that the department had developed an initial estimate of costs being funded with OCO appropriations that are likely to endure beyond current operations, but that it has not finalized or reported its estimate outside of the department. According to DOD officials, an internal working group established in 2014 estimated that enduring costs account for between $20 billion and $30 billion per year – as much as 46 percent of DOD’s total OCO budget request for fiscal year 2017. DOD Developed an Initial Estimate of Its Enduring OCO Costs In May and July 2016, the OMB and DOD officials respectively told us that the estimate of DOD’s enduring OCO costs, those costs that would remain after the contingency operations end, and that would need to be transitioned to DOD’s base budget request if OCO funding were no longer available, are in the range of $20 billion to $30 billion per year. These officials indicated that the department continues to evaluate and revise this estimate, and that it could be closer to the higher end of the range. According to DOD officials, although DOD developed an initial estimate of enduring costs, DOD has not finalized and reported its estimate of enduring costs externally because current statutory spending caps limit its ability to increase base budget funding. Without a reliable estimate of enduring costs, decision makers will not have information needed to make informed choices and trade-offs in budget formulation and decision- making. To assist decision makers in formulating DOD’s future budgets, we recommend that the Secretary of Defense direct the Under Secretary of Defense (Comptroller) to develop a complete and reliable estimate of DOD’s enduring OCO costs and to report these costs in concert with the department’s future budget requests, and to use the estimate as a foundation for any future efforts to transition enduring costs to DOD’s base budget. In its written comments, reproduced in appendix IV, DOD concurred with our first recommendation that it, in consultation with the Office of Management and Budget, reevaluate and revise the criteria for determining what can be included in DOD’s OCO budget requests. To assess whether DOD has developed and reported an estimate of the costs being funded with OCO appropriations that are likely to endure beyond current contingency operations, we reviewed DOD’s budget submissions and met with staff from the OMB, the Office of the Under Secretary of Defense (Comptroller), and each of the military services to discuss steps taken to develop and report to Congress or other stakeholders an estimate of enduring OCO costs.

Why GAO Did This Study Since 2001 Congress has provided over $1.6 trillion in appropriations to fund OCO. For fiscal year 2017, DOD requested $64.6 billion in funding for OCO. While DOD's OCO budget request has included amounts for contingency operations primarily in Iraq and Afghanistan, more recently the request has also included other activities, such as efforts to deter Russia and reassure U.S. allies and partners. DOD acknowledges that many OCO costs are likely to endure after contingency operations cease. GAO was asked to review DOD's use of OCO funds. This review assesses (1) the extent to which OMB's 2010 criteria address the activities included in DOD's OCO budget request; and (2) whether DOD has developed and reported an estimate of the costs being funded with OCO appropriations that are likely to endure beyond current contingency operations. GAO analyzed OMB's criteria for determining whether costs belonged in the OCO budget and reviewed DOD-provided information on its enduring OCO costs. What GAO Found In 2010 the Office of Management and Budget (OMB), in collaboration with the Department of Defense (DOD), issued criteria for deciding whether items properly belong in the base budget or in the overseas contingency operations (OCO) funding request, but the criteria are outdated and do not address the full scope of activities included in DOD's fiscal year 2017 OCO budget request. For example, they do not address geographic areas such as Syria and Libya, where DOD has begun military operations; DOD's deterrence and counterterrorism initiatives; or requests for OCO funding to support requirements not related to ongoing contingency operations. Further, the amount of OCO appropriations DOD considers as non-war increased from about 4 percent in fiscal year 2010 to 12 percent in fiscal year 2015. DOD officials agree that updated guidance is needed but note that the Office of Management and Budget has deferred the decision to update the criteria until a new administration is in place in 2017. Without reevaluating and revising the criteria, decision makers may be hindered in their ability to set priorities and make funding trade-offs. DOD officials told GAO that the department had developed an initial estimate of costs being funded with OCO appropriations that are likely to endure beyond current operations, but has not finalized or reported its estimate outside of the department. In May and July 2016, OMB and DOD officials said the estimate of enduring costs was between $20 billion and $30 billion—as much as 46 percent of DOD's total OCO budget request for fiscal year 2017—and indicated that DOD continues to evaluate and revise this estimate, which might be closer to the higher end of that range. GAO recommended in 2014 that DOD develop guidance for transitioning enduring costs funded by OCO appropriations to DOD's base budget. According to DOD officials, DOD has not finalized and reported its estimate of enduring costs because current statutory spending caps limit its ability to increase base budget funding. Without a reliable estimate of DOD's enduring OCO costs, decision makers will not have a complete picture of the department's future funding needs or be able to make informed choices and trade-offs in budget formulation and decision making. What GAO Recommends GAO recommends that DOD, in collaboration with OMB, reevaluate and revise the criteria for determining what can be included in DOD's OCO budget requests; and that DOD develop a complete and reliable estimate of enduring OCO costs to report in future budget requests. DOD concurred with our first recommendation and plans to propose revised OCO criteria to OMB. DOD partially concurred with our second recommendation but identified no steps planned to develop and report its enduring OCO costs.

gao_GAO-03-303T

gao_GAO-03-303T_0

Government officials are increasingly concerned about attacks from individuals and groups with malicious intent, such as crime, terrorism, foreign intelligence gathering, and acts of war. Experts also agree that there has been a steady advance in the sophistication and effectiveness of attack technology. Specifically, this program is to include periodic risk assessments that consider internal and external threats to the integrity, confidentiality, and availability of systems, and to data supporting critical operations and assets; the development and implementation of risk-based, cost-effective policies and procedures to provide security protections for information collected or maintained by or for the agency; training on security responsibilities for information security personnel and on security awareness for agency personnel; periodic management testing and evaluation of the effectiveness of policies, procedures, controls, and techniques; a process for identifying and remediating any significant deficiencies; procedures for detecting, reporting and responding to security incidents; an annual program review by agency program officials. These six areas are (1) security program management, which provides the framework for ensuring that risks are understood and that effective controls are selected and properly implemented; (2) access controls, which ensure that only authorized individuals can read, alter, or delete data; (3) software development and change controls, which ensure that only authorized software programs are implemented; (4) segregation of duties, which reduces the risk that one individual can independently perform inappropriate actions without detection; (5) operating systems controls, which protect sensitive programs that support multiple applications from tampering and misuse; and (6) service continuity, which ensures that computer-dependent operations experience no significant disruptions. Although our current analyses showed that most agencies had significant weaknesses in these six control areas, as in past years’ analyses, weaknesses were most often identified for security program management and access controls. For security program management, we identified weaknesses for all 24 agencies in 2002—the same as reported for 2001, and compared to 21 of the 24 agencies (88 percent) in 2000. Our current analyses of information security at federal agencies also showed that the scope of audit work performed has continued to expand to more fully cover all six major areas of general controls at each agency. They more likely indicate that information security weaknesses are becoming more fully understood—an important step toward addressing the overall problem. Federal agencies and other public and private entities rely extensively on computerized systems and electronic data to support their missions. Accordingly, the security of these systems and data is essential to avoiding disruptions in critical operations, data tampering, fraud, and inappropriate disclosure of sensitive information. The weaknesses identified place a broad array of federal operations and assets at risk. In particular, our review of 24 of the largest federal agencies showed that agencies had not fully implemented requirements to conduct risk assessments for all their systems; establish information security policies and procedures that are commensurate with risk and that comprehensively address the other reform provisions; provide adequate computer security training to their employees, including contractor staff; test and evaluate controls as part of their management assessments; implement documented incident handling procedures agencywide; identify and prioritize their critical operations and assets and determine the priority for restoring these assets should a disruption in critical operations occur; or have a process to ensure the security of services provided by a contractor or another agency. At this time, however, GISRA is still scheduled to expire on November 29, 2002. We believe that continued authorization of such important information security legislation is essential to sustaining agencies’ efforts to identify and correct significant weaknesses. In addition, in October 2001, President Bush signed executive orders creating the Office of Homeland Security and establishing the President’s Critical Infrastructure Protection Board. First, it is important that the federal strategy delineate the roles and responsibilities of the numerous entities involved in federal information security. Fifth, agencies must have the technical expertise they need to select, implement, and maintain controls that protect their information systems.

Why GAO Did This Study Protecting the computer systems that support our critical operations and infrastructures has never been more important because of the concern about attacks from individuals and groups with malicious intent, including terrorism. These concerns are well founded for a number of reasons, including the dramatic increases in reported computer security incidents, the ease of obtaining and using hacking tools, the steady advance in the sophistication and effectiveness of attack technology, and the dire warnings of new and more destructive attacks. As with other large organizations, federal agencies rely extensively on computerized systems and electronic data to support their missions. Accordingly, the security of these systems and data is essential to avoiding disruptions in critical operations, as well as to helping prevent data tampering, fraud, and inappropriate disclosure of sensitive information. At the subcommittee's request, GAO discussed its analysis of recent information security audits and evaluations at 24 major federal departments and agencies. What GAO Found Although GAO's current analyses of audit and evaluation reports for the 24 major departments and agencies issued from October 2001 to October 2002 indicate some individual agency improvements, overall they continue to highlight significant information security weaknesses that place a broad array of federal operations and assets at risk of fraud, misuse, and disruption. GAO identified significant weaknesses in each of the 24 agencies in each of the six major areas of general controls. As in 2000 and 2001, weaknesses were most often identified in control areas for security program management and access controls. All 24 agencies had weaknesses in security program management, which provides the framework for ensuring that risks are understood and that effective controls are selected and properly implemented. Implementation of the Government Information Security Reform provisions (GISRA) is proving to be a significant step in improving federal agencies' information security programs. It has also prompted the administration to take important actions to address information security, such as integrating security into the President's Management Agenda Scorecard. However, GISRA is scheduled to expire on November 29, 2002. GAO believes that continued authorization of such important information security legislation is essential to sustaining agencies' efforts to identify and correct significant weaknesses. In addition to reauthorizing this legislation, there are a number of important steps that the administration and the agencies should take to ensure that information security receives appropriate attention and resources and that known deficiencies are addressed. These steps include delineating the roles and responsibilities of the numerous entities involved in federal information security and related aspects of critical infrastructure protection; providing more specific guidance on the controls agencies need to implement; obtaining adequate technical expertise to select, implement, and maintain controls to protect information systems; and allocating sufficient agency resources for information security.

gao_GGD-96-63

gao_GGD-96-63_0

Buyouts would generate over $60,000 (up to 50 percent) more in net savings than RIFs for each vacated position over the 5 years. Employees separated from the federal government through buyouts are typically at higher grade levels than those separated through RIFs, thereby producing greater savings in salaries and benefits. However, if employees separated from the federal government through RIFs are retirement eligible and do not displace lower-graded employees, savings from RIFs could marginally exceed savings from buyouts over a 5-year period. For these cases, RIFs could generate around $29,000 (up to 12 percent) more in net savings than buyouts for each position vacated over the 5-year period. Bumping and Retreating Reduces RIF Savings The right of federal employees to bump and retreat reduces the savings achieved under a RIF, because the savings realized represent the salary and benefits of the lower-graded employee who actually leaves the federal payroll. In such instances, any savings from buyouts or RIFs could be reduced by the cost of refilling the position or contracting out the work. More Buyouts Than RIFs May Be Needed to Reach an Agency’s Downsizing Target An agency may need a larger number of buyouts than RIFs to reach its downsizing target. Buyouts Avoid Noneconomic Effects of RIFs on Workforce Agency officials noted that buyouts avoid or reduce some of the negative noneconomic effects of RIFs, such as diminished workforce diversity. In addition, some agencies that recently conducted RIFs said they experienced other adverse effects historically associated with RIFs, including decreased productivity and lower employee morale. 2. 3. 5. 7. GAO Comments 1. 4. 6.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed federal workforce downsizing, focusing on the projected costs and savings from federal workforce buyouts and reductions-in-force (RIF) over a 5-year period. What GAO Found GAO found that: (1) employee buyouts could produce over $60,000 more in net savings over 5 years than RIF for each vacated position because buyouts can be used at higher grade levels that generate more savings in salaries and benefits when downsized; (2) if federal agencies separate retirement-eligible employees who do not displace lower-grade employees, RIF could produce about $29,000 more in net savings over 5 years than buyouts; (3) displacing employees in the same competitive areas but lower-tenure groups or with less service within the same tenure groups reduces RIF savings because those savings represent the salaries and benefits of lower-grade employees; (4) savings from buyouts or RIF could be reduced if the vacated positions are refilled or privatized; (5) federal agencies may need more buyouts than RIF to achieve their downsizing targets because normal attrition slows prior to buyouts; (6) buyouts avoid or reduce the non-economic adverse effects of RIF, such as reduced diversity, decreased productivity, and lower morale; and (7) buyouts may help federal agencies improve diversity, since buyouts typically affect older white males.

gao_RCED-99-219

gao_RCED-99-219_0

Number and Value of Stolen Ticket Stock Definitive information on the amount and value of ticket stock stolen annually does not exist. However, from 1989 through 1998, subscribing airlines and other worldwide suppliers of ticket stock reported 11.3 million pieces of stolen ticket stock for inclusion in ARINC’s database—an annual average of about 1.1 million. ARC reported the majority of these losses—8.2 million pieces (72 percent). However, ARC’s database only tracks 27 percent of the stolen stock it reported to ARINC. Financial Implications Associated With Use of Stolen Ticket Stock The airlines bear the financial risk for most situations involving stolen ticket stock, but their losses are small relative to their total annual revenue and represent only a small portion of their total losses from all airline-related fraud. In contrast, losses incurred by travel agencies held liable for not adequately safeguarding ARC ticket stock can result in serious financial hardships. Of the 447,000 pieces of ticket stock stolen in 1997 and 1998, we estimate that the potential financial risk to the airlines and travel agencies would be about $151 million each. In actual practice, however, travel agencies would likely incur significantly smaller losses because airlines frequently settle for far less than the amounts that travel agencies owe. U.S. tax officials believe that the financial consequences to the federal government from the use of stolen ticket stock are minor and of limited interest for auditing purposes compared with higher-risk tax issues, such as the depreciation of airline assets. In the unlikely event that all of this stock is used, we estimate that the airline industry could incur about $151.3 million in losses—$94.7 million for ticket stock losses in 1997 and $56.6 million for losses in 1998. Other Issues Associated With the Use of Stolen Ticket Stock The traveling public does not appear to be at any greater risk from terrorists or illegal aliens who could use tickets created from stolen ticket stock than they are from individuals who travel on legitimate tickets. Law Enforcement Efforts to Combat the Theft of Ticket Stock Efforts to combat the theft of ticket stock have focused on passengers who use tickets created from stolen stock. Technological Interventions and Other Initiatives to Detect the Use of Stolen Ticket Stock While the ARINC database can be used to detect stolen ticket stock at airport check-ins, many airlines do not subscribe to the database. Moreover, according to the airline officials we contacted, their airlines do not routinely use the database because the time required to query it delays passenger processing. The Airlines Reporting Corporation also provided editorial and technical comments. (3) What other issues are potentially associated with the use of stolen ticket stock? Then, using the average cost per ticket that the airlines’ reported to ARC, we computed the potential losses for the airlines and travel agencies if all of the ARC ticket stock reported stolen in 1997 and 1998 were used for travel.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on issues associated with the theft of stock used to create airline tickets, focusing on: (1) the number and value of the airline ticket stock stolen annually; (2) financial implications associated with the use of stolen ticket stock; (3) issues that are potentially associated with the use of stolen ticket stock; and (4) technological interventions and other initiatives designed to detect the use of stolen ticket stock. What GAO Found GAO noted that: (1) definitive information on the amount and value of airline ticket stock stolen annually does not exist; (2) however, from 1989 through 1998, worldwide suppliers of ticket stock reported 11.3 million pieces of stolen ticket stock to Aeronautical Radio, Incorporated; (3) the Airlines Reporting Corporation reported the majority of these losses--8.2 million pieces; (4) the Corporation, for a variety of reasons, tracks only 27 percent of the stock it reported and, based on this information, identified over 447,000 pieces of its stock that were stolen in 1997 and 1998; (5) in the event that all of this stolen ticket stock is used, GAO estimates the potential value (loss) attributable to the Corporation's ticket stock could range between $116 million to $302 million, depending on the number of pieces of stock used to create each airline ticket; (6) the airlines bear the financial risk for most situations involving the theft of ticket stock; (7) for the airlines, however, the losses are relatively small compared with their total annual revenue and their losses from other airline-related fraud; (8) in contrast, the losses incurred by travel agencies that did not adequately safeguard the Airlines Reporting Corporation's ticket stock can result in serious financial hardships; (9) if all of the Corporation's ticket stock stolen in 1997 and 1998 were used for travel, which is unlikely, GAO estimates that the airline and travel agency industries could lose about $151 million each; (10) in practice, however, travel agencies would likely incur significantly smaller losses because airlines frequently settle for far less than the amounts the travel agencies owe; (11) U.S. tax officials believe that the financial consequences to the federal government from the use of stolen ticket stock are minor and of limited interest for auditing purposes compared with higher-risk tax issues; (12) the travelling public does not appear to be at any greater risk from individuals who use tickets created from stolen ticket stock than they are from individuals who travel on legitimate tickets; (13) federal law enforcement and intelligence officials and airline officials were unaware of any individual who had travelled on stolen ticket stock to conduct terrorist activities; (14) the airline industry's centralized database on fraudulent ticket stock is the principal means for detecting the use of stolen stock; and (15) while this database is an effective tool, many airlines do not subscribe to it because the time required to manually query it delays passenger processing.

gao_GAO-05-747

gao_GAO-05-747_0

The civil settlements we examined ranged in size from about $870 thousand to over $1 billion. In preparing for negotiations, two agencies— EPA and DOJ—consider certain tax issues in calculating the amounts they propose to seek in negotiating environmental settlements. This calculation estimates a company’s financial gain from not complying with the law, that is, their economic benefit. The officials emphasized that the law is generally clear that civil penalties paid to a government are not deductible and stating so in the agreement is essentially restating the law and is not necessary. The officials said they do not negotiate with the settling companies about whether the amounts are deductible. A Majority of the Surveyed Companies Deducted Civil Settlement Payments, Generally When Settlement Agreements Did Not Label Payments as Civil Penalties In responding to our survey, companies that paid some of the largest civil settlement payments at the four agencies we reviewed generally reported that they deducted civil settlement payments when the settlement agreements did not label the payments as penalties. Overall, for 20 of the 34 settlements for which we received survey responses, companies stated that they deducted some or all of their civil settlement payments. No Permanent System Is in Place for Agencies to Routinely Inform IRS of Civil Settlements or Provide Other Settlement Information That IRS Would Find Useful The four federal agencies do not systematically provide IRS with civil settlement information that would be useful to IRS for compliance purposes, although the agencies do provide such information on a case-by- case basis at IRS’s request, such as for audits of companies with settlement agreements. IRS usually contacts the agencies on a case-by-case basis to obtain information to use during audits in assessing whether companies properly treated their settlement payments on their income tax returns. Because Schedule M-3 collects information on fines, penalties, and punitive damages, it may help IRS identify settlements that should be considered if a company is audited. Appendix I: Scope and Methodology The objectives of this report were to (1) identify federal agencies that negotiated some of the largest dollar civil settlements in recent years, (2) determine whether the selected federal agencies having some of the largest civil settlements take the tax consequences of the companies into account when negotiating civil settlements and officials’ views on whether they should address the deductibility of payments in the agreements, (3) determine whether the companies that paid some of the largest civil settlement payments deducted any of the payments on their federal income tax returns, and (4) determine what information the Internal Revenue Service (IRS) collects on companies with civil settlements reached by federal agencies. Also, during these 2 fiscal years, we determined that the Department of Health and Human Services (HHS) was involved in negotiating some of the largest dollar False Claims Act health- care-related civil settlements that DOJ has primary responsibility for negotiating.

Why GAO Did This Study Although some civil settlement payments are deductible, their deterrence factor could be lessened if companies can deduct certain settlement payments from their income taxes. GAO was asked to (1) identify federal agencies that negotiated some of the largest dollar civil settlements, (2) determine whether selected federal agencies take tax consequences into account when negotiating settlements and officials' views on whether they should address payment deductibility in settlement agreements, (3) determine whether companies with some of the largest civil settlement payments deducted any of the payments on their federal income taxes, and (4) determine what information the Internal Revenue Service (IRS) collects on civil settlements reached by federal agencies. What GAO Found The Environmental Protection Agency (EPA), Securities and Exchange Commission (SEC), and Department of Justice (DOJ) negotiated civil settlements that were among the largest in the federal government in fiscal years 2001 and 2002. Also, the Department of Health and Human Services (HHS) was involved in negotiating some of the largest dollar False Claims Act (FCA) health-care civil settlements for which DOJ has primary responsibility. The largest civil settlements at these agencies ranged from about $870 thousand to over $1 billion. Officials in the four agencies we surveyed said that they do not negotiate with settling companies about whether settlement amounts are tax deductible. They said it was IRS's role to determine deductibility. In preparing to negotiate environmental settlements, EPA and DOJ may consider certain tax issues in calculating the amounts they propose to seek. This calculation estimates a company's economic benefit, that is, the financial gain from not complying with the law. Some DOJ environmental settlements with civil penalties have language stating that penalties are not deductible. DOJ officials said since the law is generally clear that civil penalties paid to a government are not deductible, stating so in the agreement was merely restating the law and is not necessary. The majority of companies responding to GAO's survey on how they treated civil settlement payments for federal income tax purposes deducted civil settlement payments when their settlement agreements did not label the payments as penalties. GAO received responses on 34 settlements totaling over $1 billion. For 20 settlements, companies reported deducting some portion or all of their settlement payments. IRS does not systematically receive civil settlement information from all four agencies. IRS officials said that a permanent system for agencies to provide information would be useful. IRS obtains information on a case-by-case basis from public sources and agencies. IRS also has two temporary compliance projects focusing on tax issues that affect settlement payment deductibility. In 2004, IRS introduced a tax schedule to provide information on a company's fines, penalties, and punitive damages.

gao_GAO-06-632T

gao_GAO-06-632T_0

Other vulnerable countries receive counter-terrorism-financing training and technical assistance through other U.S. government programs as well as through TFWG. U.S. Government Lacks an Integrated Strategy to Coordinate the Delivery of Training and Technical Assistance Although the U.S. government provides a range of training and technical assistance to countries it deems vulnerable to terrorist financing, it lacks an integrated strategy to coordinate the delivery of this assistance. Specifically, the effort lacks key stakeholder acceptance of roles and practices, a strategic alignment of resources with needs, and a process to measure results—three elements that previous GAO work has identified as critical to effective strategic planning within and across agencies. State and Treasury disagree regarding State’s role in coordinating the training and technical assistance. Treasury, a key stakeholder, asserts that there are numerous other efforts outside States’ purview and that State’s role is limited to coordinating, as chair of TFWG, the provision of such assistance in priority countries. GAO Recommended Actions to Improve Interagency Coordination, and Agencies Are Taking Steps To ensure that U.S. government interagency efforts to provide counter- terrorism-financing training and technical assistance are integrated, efficient, and effective, ‘particularly with respect to priority countries, we recommended in our report that the Secretary of State and the Secretary of the Treasury, in consultation with NSC and relevant government agencies, develop and implement an integrated strategic plan for the U.S. government that designates leadership and provides for key stakeholder involvement; includes a systematic and transparent assessment of the allocation of U.S. government resources; delineates a method for aligning the resources of relevant U.S. agencies to support the mission based on key needs and related risks; and provides processes and resources for measuring and monitoring results, identifying gaps, and revising strategies accordingly. Treasury Needs Meaningful Performance Measures and Information to Show Results and Progress of Terrorist Asset Blocking Treasury’s OFAC undertakes a number of activities as part of its efforts to block terrorist assets. In our report, we recommended that the Secretary of the Treasury finalize the development of the performance measures as well as an OFAC-specific strategic plan and provide more complete information in its annual reports to Congress on terrorist assets blocked. Treasury’s Performance Measures Do Not Assess Results of Terrorist Asset Blocking At the time of our October 2005 review, Treasury lacked effective performance measures to assess the results of OFAC’s terrorist asset blocking efforts or show how these efforts contribute to the department’s goals of disrupting and dismantling terrorist financial infrastructures and executing the nation’s financial sanctions policies. In addition, Treasury officials said that they were developing a strategic plan to guide OFAC’s efforts. According to OFAC officials, as of March 30, 2006, the strategic plan had not yet been finalized. Treasury Report Does Not Show Progress in Asset Blocking Treasury’s annual Terrorist Assets Report, which offers a year-end snapshot of dollar amounts of terrorist assets held in U.S. jurisdiction, does not provide sufficient information to demonstrate OFAC’s progress in its terrorist asset blocking efforts. However, the report does not document or quantify changes from amounts of assets blocked in previous years. The new performance measures that OFAC has recently developed may enable Congress and other officials with oversight responsibilities to ascertain the strengths and weaknesses of these efforts as well as hold OFAC managers accountable. Matter for Congressional Consideration In view of congressional interest in U.S. government efforts to deliver training and technical assistance abroad to combat terrorist financing and the difficulty of obtaining a systematic assessment of U.S. resources dedicated to this endeavor, as stated in our report, Congress should consider requiring the Secretary of State and the Secretary of the Treasury to submit an annual report to Congress showing the status of interagency efforts to develop and implement an integrated strategic plan and Memorandum of Agreement to ensure TFWG’s seamless functioning, particularly with respect to TFWG roles and procedures. Appendix I: Terrorist Finance Working Group (TFWG) Membership and Program Development Process According to the Department of State (State), the Terrorist Finance Working Group (TFWG) was convened in October 2001 to develop and provide counter-terrorism-financing training to countries deemed most vulnerable to terrorist financing. 2. 3.

Why GAO Did This Study Disrupting terrorists' financing is necessary to impede their ability to organize, recruit, train, and equip adherents. U.S. efforts to strengthen domestic and global security include, among others, the provision of training and technical assistance in countering terrorist financing abroad. An interagency Terrorist Financing Working Group (TFWG), chaired by the U.S. Department of State (State), coordinates the delivery of this training and technical assistance to "priority" countries--those considered most vulnerable to terrorist financing schemes--as well as to other vulnerable countries. In addition, the Department of the Treasury (Treasury) Office of Foreign Assets Control (OFAC) leads U.S. efforts to block access to designated terrorists' assets that are subject to U.S. jurisdiction. In response to multiple congressional requesters, GAO examined U.S. efforts to combat terrorist financing abroad, publishing the report in October 2005. In this testimony, GAO discusses the report's findings about challenges related to (1) TFWG's coordination of the counter-terrorism-financing training and technical assistance abroad and (2) Treasury's measurement of results and provision of information needed to assess OFAC's efforts to block terrorist assets. What GAO Found Under State's leadership, TFWG has coordinated the interagency delivery of counter-terrorism-financing training and technical assistance--for example, providing training and placing resident advisors--in more than 20 priority countries as well as other vulnerable countries. However, TFWG's effort has been hampered by the absence of a strategic and integrated plan. GAO found that the effort lacks three elements that are critical to strategic planning for operations within and across agencies: (1) Key stakeholder acceptance of roles and practices; (2) strategic alignment of resources with countries' needs and risks; and (3) a process to measurement the effort's results For example, two key TFWG stakeholders, State and Treasury, disagree about the extent of State's leadership as chair of TFWG. GAO recommended that State and Treasury, with other government agencies, implement an integrated strategic plan that addresses these challenges and sign a Memorandum of Agreement to improve coordination of counter-terrorism-financing training and technical assistance abroad. State and Treasury responded that they are taking several steps to improve the interagency process, but they did not address all of GAO's recommendations. OFAC undertakes a number of efforts related to the blocking of terrorists' assets. For example, OFAC compiles evidence as a basis for designating terrorist groups and individuals. However, GAO found limitations regarding Treasury's measurement of results and provision of information about FAC's efforts. Inadequate measures. At the time of GAO's review, Treasury lacked adequate measures to assess the results of OFAC's efforts. OFAC was in the process of developing new measures, which it recently completed. Although GAO has not reviewed them, these measures may enable officials overseeing OFAC to ascertain the strengths and weaknesses of its efforts as well as hold OFAC managers accountable. GAO recommended that, in addition, Treasury develop an OFAC-specific strategic plan that describes, among other things, how its performance measures relate to general program goals and objectives. As of March 30, Treasury had not yet finalized the strategic plan. Insufficient information. Treasury's yearly report to Congress on terrorist assets blocked does not provide sufficient information for Congress to assess OFAC's progress. For instance, the report shows the total dollar value of blocked terrorist assets held under U.S. jurisdictions but does not show changes from amounts of assets blocked in previous years. GAO recommended that Treasury provide information on such changes, along with other key performance metrics, in its annual Terrorist Assets Report. Treasury responded that it would discuss with Congress recrafting the report to address congressional interests.

gao_GAO-10-314T

gao_GAO-10-314T_0

In the SSO program, state oversight agencies are responsible for directly overseeing rail transit agencies. FTA’s role in overseeing safety and security of rail transit is relatively limited. Rail transit has been one of the safest modes of transportation in the United States. Our 2006 Report Found Most Participants Stated That the State Safety Oversight Program Was Worthwhile but FTA Faced Several Challenges in Administering the Program Effectively Our 2006 report found that officials from the majority of oversight and transit agencies with whom we spoke stated that the SSO program enhances rail transit safety. Officials at several state oversight agencies we spoke with stated that since FTA provided little to no funding for rail transit safety oversight functions, and because of competing priorities for limited state funds, they were limited in the number of staff they could hire and the amount of training they could provide. For example, we found that 13 oversight agencies dedicated less than one full- time equivalent (FTE) staff member to oversight. To help ensure that oversight agency staff were adequately trained for their duties, we recommended that FTA develop a suggested training curriculum for oversight agency staff and encourage those staff to complete it. Enforcement powers of oversight agencies varied. In our 2006 report, we stated that 19 of 27 oversight agencies had no punitive authority, such as authority to issue fines, and those that did have such authority stated that they rarely, if ever, used it. Preliminary Observations on DOT’s Plans For Revamping Rail Transit Safety Oversight and Key Issues Congress May Need to Consider DOT is planning to propose major changes in FTA’s role that would shift the balance of federal and state responsibilities for setting safety standards for rail transit agencies and overseeing their compliance with those standards. Based on information provided to us by DOT, the department plans to propose a new federal safety program for rail transit, at an unspecified future date, with the following key elements: FTA, through legislation, would receive authority to establish and enforce minimum safety standards for rail transit systems not already regulated by FRA. States could become authorized to enforce the federal minimum safety standards by submitting a program proposal to FTA and receiving approval of their program. In determining whether to approve state safety programs, FTA would consider a state’s capability to undertake rail transit oversight, including staff capacity, and its financial independence from the transit systems it oversees. DOT would provide federal assistance to approved state safety programs. These changes would bring its authority more in line with that of other modal administrations within DOT. The new program DOT is planning to propose has the potential to address some challenges and issues we cited in our 2006 report. Requiring that participating states not receive funds from transit agencies would make the state agencies more independent of the transit agencies they oversee. Providing FTA and participating states with the authority to enforce minimum federal safety standards across the nation’s transit systems could help ensure compliance with the standards and improved safety practices, and might prevent some accidents as a result. While the new program, as envisioned by DOT, may have some potential benefits, our work on the SSO program, other transit programs, and regulatory programs suggests there are a number of issues Congress may need to consider in deciding whether or how to act on DOT’s proposal. These include finding the appropriate level of FTA oversight of state programs and allocating costs between the federal government and the states. Enforcement.

Why GAO Did This Study Rail transit generally has been one of the safest forms of public transportation. However, several recent notable accidents are cause for concern. For example, a July 2009 crash on the Washington Metro Red Line resulted in nine deaths. The federal government does not directly regulate the safety of rail transit. Through its State Safety Oversight program, the Federal Transit Administration (FTA) requires states to designate an oversight agency to directly oversee the safety of rail transit systems. In 2006, GAO issued a report that made recommendations to improve the program. The Department of Transportation (DOT) is planning to propose legislation that, if passed, would result in a greater role for FTA in regulating and overseeing the safety of these systems. This statement (1) summarizes the findings of GAO's 2006 report and (2) provides GAO's preliminary observations on key elements DOT has told us it will include in its legislative proposal for revamping rail transit safety oversight. It is based primarily on GAO's 2006 report, an analysis of key elements of DOT's planned proposal through review of documents and interviews with DOT officials, and GAO's previous work on regulatory programs that oversee safety within other modes of transportation. GAO's 2006 report was based on a survey of the 27 state oversight agencies and transit agencies covered by FTA's program. GAO provided a draft of this testimony to DOT officials and incorporated their comments as appropriate. What GAO Found GAO's 2006 report found that officials from the majority of the state oversight and transit agencies stated that the State Safety Oversight program enhances rail transit safety but that FTA faced several challenges in administering the program. For example, state oversight agencies received little or no funding from FTA and had limited funding for staff. In fact, some required that the transit agencies they oversaw reimburse them for services. Also, expertise, staffing levels, and enforcement powers varied widely from agency to agency. This resulted in a lack of uniformity in how oversight agencies carried out their duties. As of 2006, 13 oversight agencies were devoting the equivalent of less than one full-time employee to oversight functions. Also, 19 oversight agencies GAO contacted lacked certain enforcement authority, such as authority to issue fines, and those that did have such authority stated that they rarely, if ever, used it. DOT is planning to propose major changes in FTA's role that would shift the balance of federal and state responsibilities for oversight of rail transit safety. According to DOT officials, under this proposal, the agency would receive authority to establish and enforce minimum standards although states still could maintain an oversight program. States could become authorized to enforce these standards if FTA determines their program capable and financially independent of the transit system they oversee. FTA would provide financial assistance to approved programs. Such changes would have the potential to address challenges GAO cited in its 2006 report. For example, providing funding to participating state agencies could help them maintain an adequate number of trained staff, and providing FTA and participating states with enforcement authority could help better ensure that transit systems take corrective actions when problems are found. Congress may need to consider several issues in deciding whether or how to act on DOT's proposal. These include determining whatlevel of government has the best capacity to oversee transit safety, ensuring that FTA and state oversight agencies would have adequate and qualified staff to carry out the envisioned program, and understanding the potential budgetary implications of the program.

gao_GAO-03-973

gao_GAO-03-973_0

During 2003, FHFB staff, at the direction of the agency’s chairman, analyzed the benefits and costs associated with multidistrict membership. Our review of key advance pricing terms—advance interest rates, collateral requirements, advance borrowing capacity, and capital stock purchase requirements—identified several significant differences among the 12 FHLBanks. The FHLBanks may charge different interest rates on advances with comparable maturities, some may establish interest rates on the basis of advance size while others do not, and the FHLBanks apply differing haircuts to the same type of collateral, establish different borrowing limits, and require members to purchase FHLBank stock in differing amounts depending upon their levels of advances outstanding. For example, officials at one FHLBank said that its representatives had the authority to negotiate the stated advance interest rates. For example, a member could borrow up to 85 percent of its pledged single-family collateral at FHLBank L (which has a 15 percent haircut) but only up to 60 percent at FHLBank J (which has a 40 percent haircut). Although the FHLBanks have adopted differing approaches to setting advance pricing terms, FHFB’s examination program has not identified significant violations in the banks’ practices over the past several years. FHFB’s FHLBank System Safety and Soundness Data Reporting Procedures Have Limitations Although FHFB has collected collateral data from the FHLBanks since 2000 that are intended to assist in monitoring the FHLBanks’ safety and soundness, the data have questionable value in their current format. FHFB requests data on, among other things, the total value of collateral securing advances, collateralization by member type (such as commercial bank and thrifts), collateralization by member size (such as members with $10 billion or more in assets), and the use of eligible collateral by member institutions (such as the use of single- family mortgages and small business and agricultural CFI collateral). Although FHFB has identified such data as useful for assessing the FHLBank System’s safety and soundness, we found that FHLBanks do not have clear information on how FHFB wants the data to be reported. Given FHFB’s oversight responsibilities for the FHLBank System, it could benefit by collecting data necessary to better understand the degree of competition within the System. In particular, FHFB is responsible for ensuring that the FHLBanks do not price advances below the cost of funds and fully secure advances with eligible forms of collateral. Moreover, FHFB does not collect data that could be helpful in assessing the competitive implications of holding companies whose subsidiaries operate in different FHLBank districts as well as multidistrict membership. GAO staff who made major contributions to this report are listed in appendix V. Objectives, Scope, and Methodology As discussed with your staff, our report objectives are to (1) describe the laws and regulations pertaining to the terms that FHLBanks can offer on advances; (2) provide information on whether key differences exist in current advance pricing and other terms across the FHLBanks; (3) determine whether holding companies face any legal or regulatory barriers in transferring assets among subsidiaries who are members of different FHLBank districts; and (4) describe FHFB's safety and soundness oversight of the FHLBanks' advance pricing practices and review selected data that FHFB collects to monitor the safety and soundness of the FHLBank System. To meet objective (1), we reviewed the Federal Home Loan Bank Act as amended.

Why GAO Did This Study The Federal Home Loan Bank System's (FHLBank System) traditional approach to providing community and housing finance through 12 regional FHLBanks faces continual challenges due to consolidation in the financial services industry and the emergence of mortgage lenders with nationwide operations. In addition, the Federal Housing Finance Board (FHFB), the System's financial regulator, is analyzing the benefits and costs of potential changes to the System's membership rules that would make it easier for financial institutions to join multiple FHLBank districts (referred to as multidistrict membership). To provide information that would be helpful in assessing the potential safety and soundness implications of these developments, GAO was asked among other items to (1) determine whether key differences exist in the terms--such as interest rates and collateral requirements--that FHLBanks make on loans, also known as advances, to member financial institutions such as banks and thrifts and (2) discuss FHFB's oversight of the FHLBanks and safety and soundness data reporting requirements. What GAO Found Federal statutes and regulations require that the FHLBanks set advance interest rates above their borrowing costs and fully secure advances with eligible forms of collateral, such as single-family mortgage loans. However, within this framework, each of the 12 FHLBanks has independent authority to set advance pricing terms, which can result in several significant key differences among the banks. For example, due to differing costs and business strategies, FHLBank advance interest rates may differ and many FHLBanks charge lower interest rates based on advance size while others do not. Moreover, FHLBanks may set differing collateral requirements for their members. For example, one FHLBank allows its members to borrow up to 60 percent of the value of single family mortgages pledged as collateral to secure advances while another allows up to 85 percent. Among the FHLBanks' differing approaches to setting advance pricing terms, FHFB has not found that any practice results in significant violations of statute or regulation. However FHFB also collects collateral data from the FHLBanks that have questionable value in their current format for monitoring the System's safety and soundness. Because FHLBank officials do not have clear information about how FHFB would like the data reported, the FHLBanks use different reporting definitions and criteria, which limits the data's analytical usefulness. Moreover, FHFB has not collected data necessary to assess the current extent of competition within the FHLBank System and the implications of holding companies with subsidiaries that operate in multiple FHLBank districts as well as multidistrict membership.

gao_GAO-12-578T

gao_GAO-12-578T_0

That is, an agency may suffer losses due to weaknesses or uncertainties in the work of its counterparties, which include lenders and appraisers for FHA and issuers for Ginnie Mae. The Fund’s Financial Condition Has Continued to Worsen, Increasing the Possibility That FHA Will Require Additional Funds The Fund’s capital ratio dropped sharply in 2008 and fell below the statutory minimum in 2009, when economic and market developments created conditions that simultaneously reduced the Fund’s economic value (the numerator of the ratio) and increased the insurance-in-force (the denominator of the ratio). 1). Higher-than-expected declines in house values contributed to both higher defaults and claims and higher loss- on-claim than anticipated in 2010. 2). At the same time, the Fund’s condition has worsened from a budgetary perspective. 3). FHA’s Current Methodology for Assessing the Fund’s Condition Does Not Fully Account for Future Economic Volatility As we reported in September 2010, FHA and its actuarial review contractor enhanced their methods for assessing the Fund’s financial condition but still were addressing other methodological issues that could affect the reliability of estimates of the capital ratio. However, the current methodology is significantly limited by its reliance on a single economic forecast to produce the estimate of the capital ratio that is used to determine if the Fund is meeting the 2 percent capital reserve requirement. This approach does not fully account for the variability in future house prices and interest rates that the Fund may face. FHA’s loan volume grew significantly from 2006 to 2010. To provide assistance to the Office of Risk Management (one of the offices within the Office of Risk Management and Regulatory Affairs) in developing a risk- management strategy and organizational structure and establishing risk- management policies and processes, FHA hired a consultant to produce a comprehensive report and recommend best practices for its operation.According to FHA officials, FHA plans to adopt the consultant’s recommendation to establish an enterprise risk committee to address overall risk to the organization and a second tier of committees to address program and operational risks. While the consultant recommended that FHA integrate risk assessment and reporting throughout the organization, currently the Office of Single Family Housing’s quality control activities and the Office of Risk Management’s activities remain separate efforts. More specifically, without an integrated risk-assessment strategy, certain risks may not be fully addressed at the operational level in a way that minimizes risk to the insurance programs; without annual reassessments of its risks, the Office of Single Family Housing lacks assurance that its quality control efforts address all its risks; and without ongoing mechanisms in place to anticipate and address new or emerging risks, FHA lacks a systematic approach to help the agency identify, analyze, and formulate timely plans to respond most effectively to changed conditions and risks. While FHA has taken some steps to address succession planning, these steps have been limited. Department of Housing and Urban Development, Succession Management Plan, Fiscal Year 2006-2009, (Washington, D.C.: September 2006). Ginnie Mae Has Undertaken Efforts to Improve Risk Management, but Many Remain to Be Implemented Ginnie Mae has taken steps to better manage operational and counterparty risks and has several initiatives planned or under way. GAO and others have identified limited staff, substantial reliance on contractors, and the need for modernized information systems as risks that Ginnie Mae may face. Ginnie Mae’s counterparty risk would stem from the failure of issuers of Ginnie Mae-guaranteed MBS to provide investors with monthly principal and interest payments. It will be important for Ginnie Mae to complete its initiatives related to operational and counterparty risk as soon as practicable. Ginnie Mae Has Not Yet Implemented Certain Practices for Modeling Costs and Revenues In developing inputs and procedures for the model used to forecast costs and revenues, Ginnie Mae did not consider certain practices identified in Federal Accounting Standards Advisory Board (FASAB) guidance for preparing cost estimates of federal credit programs. Ginnie Mae has not developed estimates based on the best available data, performed sensitivity analyses to determine which assumptions have the greatest impact on the model, or documented why it used management assumptions rather than available data. By not fully implementing practices in FASAB guidance that we believe represent sound internal controls for models, Ginnie Mae’s model may not be using critical data that could affect the agency’s ability to provide well-informed budgetary cost estimates and financial statements. Ginnie Mae has indicated that it plans to implement all of our recommendations but has not provided a specific timeline. In addition, Ginnie Mae agreed with our observation about the importance of completing ongoing and planned initiatives for enhancing its risk- management processes, as soon as practicable, to improve operations.

Why GAO Did This Study In recent years, two components of HUD—FHA and Ginnie Mae—have played a major role in the single-family mortgage market. FHA insures lenders against losses from mortgage defaults. Ginnie Mae guarantees the timely payment of principal and interest for securities backed by federally insured or guaranteed mortgages. Due partly to the contraction of other mortgage market segments, FHA's and Ginnie Mae's business volumes have risen sharply. This growth highlights the need for these entities to properly manage financial risks while meeting the housing needs of borrowers. This testimony discusses (1) changes in the financial condition of FHA's insurance fund, the budgetary implications of these changes, and how FHA evaluates the fund's financial condition; (2) steps FHA has taken to assess and manage risks; and (3) steps Ginnie Mae has taken to manage risks and estimate costs and revenues. This testimony draws from GAO reports on FHA's oversight capacity (GAO-12-15), the financial condition of FHA's insurance fund (GAO-10-827R), and Ginnie Mae's risk management (GAO-12-49). GAO also reviewed updated information on the fund's condition as of September 30, 2011. What GAO Found For the third consecutive year, the Department of Housing and Urban Development's (HUD) Federal Housing Administration (FHA) reported that the capital ratio for the Mutual Mortgage Insurance Fund—the ratio of the fund's economic value to insurance obligations—has not met the 2 percent statutory minimum. FHA cites declines in the fund's economic value due to higher-than-expected defaults, claims, and losses. At the same time, the other component of the ratio, insurance obligations, grew rapidly. The fund's condition also worsened from a budgetary perspective, with balances in the fund's capital reserve account reaching new lows. If the account were depleted, FHA would require more funds to help cover costs on insurance issued to date. FHA has indicated that it will narrowly avoid this scenario in fiscal year 2012. FHA enhanced methods for assessing the fund's financial condition but has not fully addressed GAO's 2010 recommendation for improving the reliability of its estimates. It relies on a single economic forecast, which does not fully account for variability in future house prices and interest rates. The approach GAO recommended would simulate numerous economic paths for house prices and interest rates would improve the reliability of its capital ratio estimates. FHA has taken or plans steps to better assess and manage risk. It created a risk office in 2010 and hired a consultant to recommend best practices. FHA plans to establish committees to evaluate risks at enterprise-wide and programmatic levels. It began a quality control initiative for single-family housing, in which program and field offices assess and report on risks, and enhanced lender and appraiser reviews. While FHA's consultant recommended integrating risk assessments, the quality control and risk office activities currently remain separate efforts. Also, since 2009, the Office of Single Family Housing has not updated assessments annually in accordance with HUD guidance. Without integrated and updated risk assessments that identify emerging risks, FHA lacks assurance it has identified all its risks. GAO recommended integrating quality control and risk office activities and updating assessments annually. GAO and others have identified limited staff, substantial reliance on contractors, and the need for modernized information systems as risks that the Government National Mortgage Association (Ginnie Mae) may face. Ginnie Mae has several planned initiatives to enhance its risk-management processes related to gaps in resources, contracts, and issuers, but these plans have not been fully implemented. It will be important for Ginnie Mae to complete these initiatives as soon as practicable to enhance its operations. Also, in developing inputs and procedures for the model used to forecast costs and revenues, the agency did not consider certain practices identified in guidance for preparing cost estimates of federal credit programs. Ginnie Mae has not developed estimates based on the best available data, performed sensitivity analyses to determine which assumptions have the greatest impact on the model, or documented why it used management assumptions rather than available data. By not fully implementing certain practices, which GAO believes represent sound internal controls for models, Ginnie Mae's model may not use critical data that could affect the agency's ability to provide well-informed budgetary cost estimates and financial statements. GAO recommended that Ginnie Mae adopt these practices. What GAO Recommends GAO previously recommended that FHA and Ginnie Mae take additional steps to improve their risk management. FHA and Ginnie Mae agreed with these recommendations and said they had efforts under way to implement them.

gao_GAO-11-569

gao_GAO-11-569_0

When we review an agency’s actions taken to address high-risk challenges, we assess the actions against five criteria: (1) a demonstrated strong commitment to and top leadership support for addressing problems, (2) the capacity to address problems, (3) a corrective action plan that provides for substantially completing corrective measures in the near term, (4) a program to monitor and independently validate the effectiveness and sustainability of corrective measures, and (5) demonstrated progress in implementing corrective measures. These prior plans represented positive steps toward resolving weaknesses in supply chain management. DOD Has Developed and Is Implementing a Corrective Action Plan for One of Three High-Risk Focus Areas Needing Improvement DOD Has a Corrective Action Plan for Inventory Management That Addresses the Requirements Forecasting Focus Area DOD has developed and begun to implement a corrective action plan for requirements forecasting, one of the three major focus areas we identified as needing improvement in supply chain management. Specifically, DOD’s Comprehensive Inventory Management Improvement Plan, issued in October 2010 in response to a statutory mandate, includes developing more accurate demand forecasting as a key improvement effort for the department. Corrective action plans are critical to resolving weaknesses in high-risk areas. DOD Does Not Have Detailed Corrective Action Plans for the Asset Visibility and Materiel Distribution Focus Areas DOD has not developed corrective action plans for two other supply chain management focus areas: asset visibility and materiel distribution. DOD Has Outlined a Framework for Guiding and Overseeing Improvement Efforts but Has Not Provided Implementation Plans DOD Has Outlined a Performance Management Framework for Guiding and Overseeing Improvement Efforts In its 2010 Logistics Strategic Plan, DOD outlined a performance management framework to provide guidance and oversight of logistics improvement efforts, including supply chain improvement efforts. DOD’s framework consists of a six-step process (see table 2) and offers a new management tool that may enable DOD to manage performance in supply chain management. For example, the framework refers to developing measures and targets that are tied to goals and initiatives, and it calls for an ongoing assessment and feedback process that could help to ensure that improvement efforts are effective and staying on track. DOD Has Not Included Key Elements for Instituting Its Performance Management Framework The department has not instituted the framework because key elements have not been fully defined and developed. Until these elements are fully defined and developed, DOD may not be in a position to effectively use this new management tool to monitor and validate the effectiveness and sustainability of corrective actions. Further, our prior work has shown that in order to fully address high-risk challenges, agencies must be able to demonstrate progress achieved through corrective actions, which is possible through the reporting of performance measures. Developing Enterprisewide Performance Measures for Supply Chain Management Has Challenged DOD DOD and its components track many aspects of supply chain performance, but DOD does not have performance measures that assess the overall effectiveness and efficiency of the supply chain across the enterprise. A similar collaborative process for defining performance measurement for asset visibility and materiel distribution has not yet occurred. The corrective action plan or plans should (1) identify the scope and root causes of capability gaps and other problems, effective solutions, and actions to be taken to implement the solutions; (2) include the characteristics of effective strategic planning, including a mission statement; goals and related strategies (for example, objectives and activities); performance measures and associated milestones, benchmarks, and targets for improvement; resources and investments required for implementation; key external factors that could affect the achievement of goals; and the involvement of all key stakeholders in a collaborative process to develop and implement the plan; and (3) document how the department will integrate these plans with its other decision-making processes; delineate organizational roles and responsibilities; and support departmentwide priorities identified in higher- level strategic guidance (such as the Strategic Management Plan and Logistics Strategic Plan). Problems in supply chain management, including the three focus areas of requirements forecasting, asset visibility, and materiel distribution, are long-standing and complex. DOD did not concur with our recommendation to use a collaborative approach to identify, develop, and implement enterprisewide performance measures needed to demonstrate progress in the focus areas of asset visibility and materiel distribution. As noted in our report, DOD used a collaborative process to define existing and needed performance measures as part of the development of its Comprehensive Inventory Management Improvement Plan. To assess the extent to which DOD has an effective program for monitoring and validating the effectiveness and sustainability of corrective actions, we reviewed the performance management framework identified in DOD’s 2010 Logistics Strategic Plan.

Why GAO Did This Study DOD estimated that overall spending on logistics, including supply chain management, was more than $210 billion in fiscal year 2010. Because of long-standing weaknesses in supply chain management, GAO has designated DOD supply chain management as a high-risk area and identified three focus areas for improvement--requirements forecasting, asset visibility, and materiel distribution. GAO reviewed the extent to which DOD has developed and implemented (1) corrective action plans that address challenges in the three focus areas, (2) an effective program for monitoring and validating the effectiveness and sustainability of supply chain management corrective actions, and (3) an ability to demonstrate supply chain management progress. GAO prepared this report to assist Congress in its oversight of DOD's supply chain management. GAO reviewed strategic and improvement plans, reviewed documents detailing the performance management framework, and assessed performance measures. What GAO Found DOD has developed and begun to implement a corrective action plan for requirements forecasting, one of the three focus areas GAO identified as needing improvement in supply chain management. However, it does not have similar plans for the focus areas of asset visibility or materiel distribution. Such corrective action plans are critical to resolving weaknesses in these two areas. Such plans should (1) define root causes of problems, (2) identify effective solutions, and (3) provide for substantially completing corrective measures in the near-term, including steps necessary to implement solutions. DOD's Comprehensive Inventory Management Improvement Plan, issued in October 2010 in response to a statutory mandate, includes the elements necessary to serve as a corrective action plan for requirements forecasting. DOD's 2010 Logistics Strategic Plan, and other prior logistics-related plans, do not contain all of the elements needed to serve as corrective action plans for either asset visibility or materiel distribution, such as definition of problems or performance information to gauge progress in achieving outcomes. DOD outlined a performance management framework that is designed to provide guidance and oversight of logistics efforts, including supply chain improvement efforts. GAO's prior work has shown that in order for agencies to address challenges, they need to institute a program to monitor and validate the effectiveness and sustainability of corrective actions. The framework, as outlined in the 2010 Logistics Strategic Plan, offers a new management tool that may enable DOD to manage performance in supply chain management. For example, it calls for an ongoing assessment and feedback process that could help to ensure that improvement efforts are effective. However, DOD has not included key elements for instituting its performance management framework, such as implementing guidance to affected stakeholders, a strategy to communicate results internally and to stakeholders such as Congress, or definition of the roles and responsibilities of senior logistics governance bodies and chief management officers. Until the framework is fully instituted, DOD may not be able to effectively use this new management tool to monitor the effectiveness of corrective actions. DOD and its components track many aspects of the supply chain; however, DOD does not have performance measures that assess the overall effectiveness and efficiency of the supply chain across the enterprise. In order to fully address challenges, agencies must be able to demonstrate progress achieved through corrective actions, which is possible through the reporting of performance measures. In the development of its inventory management improvement plan, a collaborative process was used to define existing and needed performance measures for requirements forecasting. A similar collaborative focus on developing enterprisewide performance measures for asset visibility and materiel distribution has not occurred. The department may have difficulty demonstrating progress until enterprisewide performance measures are developed and implemented in all three focus areas for improving its supply chain management. What GAO Recommends GAO recommends that DOD develop and implement corrective action plans and performance measures for asset visibility and materiel distribution and take steps to fully institute its performance management framework. DOD concurred or partially concurred with two recommendations and did not concur with four, citing ongoing initiatives and existing policy. GAO believes all recommendations remain valid, as further discussed in the report.

gao_GAO-16-342

gao_GAO-16-342_0

Administrative leave is an excused absence without loss of pay or charge to another type of leave. Over the Past 5 Fiscal Years, More than 100 DHS Employees Were on Administrative Leave for Personnel Matters for 1 Year or More Between fiscal years 2011 and 2015, DHS placed 116 employees on administrative leave for personnel matters for 1 year or more, with a total estimated salary cost of $19.8 million during the same period, as shown in table 1. DHS placed the majority of these employees (69 employees or 59 percent) on administrative leave for matters related to misconduct allegations, according to DHS data. For example, as of September 30, 2015, a law enforcement agent at a DHS component had been on administrative leave for over 3 years while under investigation for allegations of criminal and administrative misconduct. Of the 116 DHS employees on administrative leave for at least 1 year between fiscal years 2011 through 2015, 28 employees (24 percent) faced matters related to fitness for duty and 19 employees (or 16 percent) faced matters related to security clearances. Prior to proposing an adverse action, such as suspension or removal, an agency often conducts an investigation. Specifically, DHS ultimately returned to duty 32 employees (28 percent), separated from the agency more than half (59 percent) of the employees, and put on indefinite suspension 2 employees (2 percent), according to DHS data. Numerous Factors Affect the Length of Administrative Leave Several factors can contribute to the length of time an employee is on administrative leave for personnel matters. Factors contributing to the time an employee is on administrative leave include (1) adverse action legal procedural requirements and the length of time needed for completing investigations related to misconduct, fitness for duty, or security clearance issues; (2) limited options other than administrative leave; and (3) agency inefficiencies in resolving administrative leave cases as expeditiously as possible. These factors are described below with examples from the DHS case files we reviewed where the employee was on administrative leave for 1 year or more. For example, in a particularly long and complex misconduct investigation, component officials said the third-party investigation (by the DHS OIG) took over 2 years to complete, including over 50 interviews conducted abroad. During this time, the employee remained on administrative leave. Component officials said they would modify their policies and procedures as necessary to ensure compliance with the requirements of the DHS policy. Requiring elevated management approval for longer periods of use. Routine reporting on administrative leave use to component and DHS management for increased visibility. Finally, conducting evaluations of DHS’s administrative leave policy may help ensure DHS’s administrative leave policy and procedures are effective in reducing the use of administrative leave—one of the intended goals of the new policy—and ensuring the use is proper and justified. While the reporting requirements in DHS’s new administrative leave policy should help increase DHS and component awareness regarding the use of such leave and will allow for regular monitoring, the policy does not require a more comprehensive separate evaluation of the effectiveness of the policy and related procedures. Once the DHS policy and procedures have been in place and administrative leave routinely monitored, a separate evaluation of the policy and procedures can help the department identify and share effective components practices for managing administrative leave as well as make adjustments needed to help ensure proper and limited use of administrative leave across DHS. Recommendation for Executive Action To ensure that the department’s administrative leave policy is working as intended, we recommend that the Secretary of Homeland Security direct the Chief Human Capital Officer to conduct evaluations of the department’s policy and related procedures to identify successful practices, potential inefficiencies, and necessary policy and procedural adjustments, and to share the evaluation results across the department. In its comments, DHS concurred with the recommendation in the report and described planned actions to address it. Appendix I: Department of Homeland Security (DHS) Employees on Administrative Leave for 3 Months or More between Fiscal Years 2011 and 2014 by Component To present more detailed information on DHS’s use of administrative leave, and to help verify the reliability of the information we obtained from DHS, we analyzed data from the Office of Personnel Management’s (OPM) Enterprise Human Resources Integration (EHRI) system on DHS employees on at least 3 months of administrative leave between fiscal years 2011 and 2014.

Why GAO Did This Study Federal agencies have the discretion to authorize administrative leave—an excused absence without loss of pay or charge to leave—for personnel matters, such as when investigating employees for misconduct allegations. In October 2014, GAO reported on the use of administrative leave in the federal government. GAO found that, between fiscal years 2011 and 2013, 263 federal employees were on this type of leave for 1 year or more during this 3-year period. Of these, 71 were DHS employees. GAO was asked to examine DHS's use of administrative leave across directorates, offices, and components (DHS components). This report describes (1) the number of DHS employees who were on administrative leave for 1 year or more for personnel matters from fiscal years 2011 through 2015, (2) the factors that contribute to the length of time employees are on administrative leave, and (3) the extent to which DHS has policies and procedures for managing such leave. GAO used data from DHS and the Office of Personnel Management, reviewed DHS policies and procedures, interviewed DHS officials, and reviewed information on selected cases of DHS employees placed on administrative leave. Cases were selected based on length of leave, reason for using leave, and DHS component, among other things. What GAO Found Between fiscal years 2011 and 2015, 116 Department of Homeland Security (DHS) employees were on administrative leave for personnel matters for 1 year or more, with a total estimated salary cost of $19.8 million for this period. Of these 116 employees on administrative leave: 69 employees (59 percent) were for matters related to misconduct allegations, 28 employees (24 percent) were for matters related to fitness for duty issues, and 19 employees (or 16 percent) were for matters related to security clearance investigations. As of September 30, 2015, DHS reported that of these 116 employees: 68 employees (59 percent) were separated from the agency, 32 employees (28 percent) were back on duty, 2 employees (2 percent) were on indefinite suspension, and 14 employees (12 percent) remained on administrative leave. Several factors can contribute to the length of time an employee is on administrative leave for personnel matters, such as certain legal procedural steps that must be completed before suspending or removing an employee, or time needed for completing investigations. For example, in one particularly long and complex misconduct investigation, an employee was on administrative leave for over 2 years while investigating officials conducted over 50 interviews abroad. In September 2015, DHS issued an administrative leave policy to ensure proper and limited use of administrative leave across the department. The policy clarifies when such leave is proper, elevates the level of management approval needed for longer periods of leave, and requires quarterly reporting of leave use to component heads and the Chief Human Capital Officer. Component policies and procedures varied prior to the DHS policy; however, component officials stated they would make changes needed to comply with the new policy. Federal internal control standards call for agencies to conduct routine monitoring and separate evaluations to ensure agency controls are effective, and to share their results. While the quarterly reports required under DHS's policy provide routine monitoring information, the policy does not address how DHS will evaluate the effectiveness of the policy and related procedures or how DHS will share lessons learned. DHS officials said they plan to learn from reviewing quarterly reports, but agreed evaluations could be valuable in assessing policy effectiveness. Evaluations of DHS's administrative leave policy can help the department identify effective practices for managing administrative leave, as well as agency inefficiencies that increase the time employees spend on such leave. Sharing evaluation results with components may help ensure DHS's administrative leave policy and procedures are effective, and are achieving the intended result of reducing leave use. What GAO Recommends GAO recommends that DHS evaluate the results of its administrative leave policy and share the evaluation results with the department's components. DHS concurred with the recommendation.

gao_GAO-09-61

gao_GAO-09-61_0

We found in our 1981 report that having field safety and health personnel solely within the program offices at DOE nuclear facilities did not allow for independent oversight, particularly with respect to overseeing the implementation of nuclear safety policies by the program offices. HSS Lacks Basic Information about Nuclear Facilities, Has Gaps in Its Site Inspection Schedule, and Does Not Routinely Ensure That Its Findings Are Effectively Addressed HSS has the authority to and does conduct periodic environment, safety, and health program inspections of DOE sites with high-hazard nuclear facilities, but there are several limitations in its review functions. In addition, HSS has not taken primary responsibility for preventing recurring nuclear safety violations because DOE views its role as secondary to the program offices. DOE shifted its position on the need for a site presence for its independent oversight office in 1999. Nearly all of the shortcomings in HSS with respect to our elements of effective independent oversight of nuclear safety are primarily attributable to DOE’s desire to strengthen the oversight of the program offices by concentrating the necessary responsibilities and technical resources within them. Such actions would include giving HSS the responsibilities, technical resources, and policy guidance necessary to 1. review the safety basis for new nuclear facilities and significant modifications to existing facilities to ensure there are no safety concerns; 2. monitor the safety basis status of high-hazard nuclear facilities and ensure that all such facilities operate under current nuclear safety requirements, including the appropriate use of Justifications for Continued Operations; 3. increase a presence at DOE sites with nuclear facilities to provide more frequent observations of nuclear safety, provide more independent information to facilitate any necessary enforcement actions, and more routine monitoring of the effectiveness of corrective actions taken in response to HSS findings of deficiency; 4. ensure that enforcement actions are strengthened to prevent recurring violations of the nuclear safety requirements; and 5. establish public access to unclassified appraisal reports. First, DOE commented that by focusing on HSS’s responsibilities in isolation rather than as one element of DOE’s approach to nuclear safety, the draft report appeared to be based on the incorrect premise that DOE program and site offices are inherently ineffective and that all DOE oversight must be performed by HSS. HSS is a critical component of DOE’s self-regulation approach because it is the only DOE safety office intended to be independent of the program offices, which carry out the department’s mission responsibilities. Appendix I: Objectives, Scope, and Methodology In our review, we examined 1) the extent to which the Office of Health, Safety and Security (HSS) meets the elements of effective independent nuclear safety oversight and (2) the factors contributing to any identified shortcomings with respect to these five elements. To examine the extent to which HSS, as currently structured, meets the elements of effective independent nuclear safety oversight, we assessed the oversight and enforcement practices of HSS and its predecessor offices against our criteria for (1) independence; (2) technical expertise; (3) ability to perform reviews and have findings effectively addressed; (4) enforcement; and (5) public access to facility information. What is the operational status of ? For example, DOE stated that they placed these technical experts in the authority to help the program offices review and approve their nuclear facility safety basis, in part because of the challenge to get some sites to upgrade the safety basis of these nuclear facilities. DOE is incorrect in stating that we did not provide a complete and accurate picture of HSS’s role in corrective actions. This is incorrect. 31.

Why GAO Did This Study The Department of Energy (DOE) oversees contractors that operate more than 200 "high-hazard" nuclear facilities, where an accident could have serious consequences for workers and the public. DOE is charged with regulating the safety of these facilities. A key part of DOE's self-regulation is the Office of Health, Safety and Security (HSS), which develops, oversees, and helps enforce nuclear safety policies. This is the only DOE safety office intended to be independent of the program offices, which carry out mission responsibilities. This report examines (1) the extent to which HSS meets GAO's elements of effective independent nuclear safety oversight and (2) the factors contributing to any identified shortcomings with respect to these elements. GAO reviewed relevant DOE policies, interviewed officials and outside safety experts, and surveyed DOE sites to determine the number and status of nuclear facilities. GAO also assessed oversight practices against the criteria for independent oversight GAO developed based on a series of reports on DOE nuclear safety and discussions with nuclear safety experts. What GAO Found HSS falls short of fully meeting GAO's elements of effective independent oversight of nuclear safety: independence, technical expertise, ability to perform reviews and have findings effectively addressed, enforcement, and public access to facility information. For example, HSS's ability to function independently is limited because it has no role in reviewing the "safety basis"--a technical analysis that helps ensure safe design and operation of these facilities--for new high-hazard nuclear facilities and because it has no personnel at DOE sites to provide independent safety observations. In addition, although HSS conducts periodic site inspections and identifies deficiencies that must be addressed, there are gaps in its inspection schedule and it lacks useful information on the status of the safety basis of all nuclear facilities. For example, HSS was not aware that 31 of the 205 facilities did not have a safety basis that meets requirements established in 2001. Finally, while HSS uses its authority to enforce nuclear safety requirements, its actions have not reduced the occurrence of over one-third of the most commonly reported violations in the last 3 years, although this is a priority for HSS. These shortcomings are largely attributable to DOE's decision that some responsibilities and resources of HSS and prior oversight offices more appropriately reside in the program offices. For example, DOE decided in 1999 to eliminate independent oversight personnel at its sites because they were deemed redundant and less effective than oversight by the program offices. DOE also decided in forming HSS in 2006 that its involvement in reviewing facility safety basis documents was not necessary because this is done by the program offices and adequately assessed by HSS during periodic site inspections. Moreover, DOE views HSS's role as secondary to the program offices in addressing recurring nuclear safety violations. Nearly all these shortcomings are in part caused by DOE's desire to strengthen oversight by the program offices, with HSS providing assistance to them in accomplishing their responsibilities. In the absence of external regulation, DOE needs HSS to be more involved in nuclear safety oversight because a key objective of independent oversight is to avoid the potential conflicts of interest that are inherent in program office oversight.

gao_GAO-13-534

gao_GAO-13-534_0

These include costs that are classified as both direct and indirect. Recognizing the limitations of its cost data, DOE and NNSA are implementing the Institutional Cost Reporting initiative, but this initiative may only provide limited improvements over existing data. Differences in How M&O Contractors Allocate Indirect Costs Limit the Comparability of Program Costs across Laboratories M&O contractors’ differ in how they allocate indirect costs to specific programs, as allowed by Cost Accounting Standards. M&O contractors differ in how they classify costs as direct or indirect. DOE and NNSA Are Taking Additional Steps to Standardize the Reporting of Certain Indirect Costs, but These Efforts May Provide Only Limited Improvements DOE and NNSA are taking steps to standardize the reporting of certain costs; however, these efforts may provide only limited improvements because the data will continue to only be reported at an aggregate level. OFFM works with laboratory M&O contractors to try to bring cost allocation models into compliance with Cost Accounting Standards and has identified instances when a laboratory’s cost allocation model did not comply with Cost Accounting Standards. NNSA Generally Relies on M&O Contractors’ Internal Audits to Assess Whether Day-to-day Cost Allocation Practices Conform to Disclosed M&O Contractor Models Officials with NNSA’s OFFM told us that they generally rely on the M&O contractors’ internal audit efforts to assess whether M&O contractors’ day-to-day cost allocation practices conform to their disclosed cost allocation models. Following are examples: Los Alamos. Lawrence Livermore. Sandia. NNSA’s Efforts to Independently Assess M&O Contractors’ Day-to- day Cost Allocation Practices for Compliance With Cost Accounting Standards Are Limited Although NNSA’s OFFM has responsibility for supporting contracting officers in the day-to-day oversight of M&O contractors’ management of indirect costs, its role does not include conducting independent audits to assess compliance with Cost Accounting Standards, according to OFFM officials. OIG officials stated that the frequency and scope for conducting audits for contractors’ compliance with Cost Accounting Standards should be based on the level of risk. However, OFFM and OIG officials and M&O contractors hold varying opinions regarding the level of risk of inaccurate indirect cost allocation practices at the laboratories. Without a formal, periodic risk assessment regarding the level of risk posed by noncompliance, NNSA may not have a well-documented basis for its decisions regarding the type, timing, and extent of future monitoring or oversight. NNSA Reviews M&O Contractor Information and Uses Other Means to Help Ensure the Reasonableness of Indirect Costs NNSA reviews M&O contractor information to assess the reasonableness of M&O contractor costs, including indirect costs, at the laboratories. NNSA also uses other means to help ensure the reasonableness of costs, such as requiring M&O contractors to compare costs with other laboratories and industry, but these efforts vary across laboratories. Although contracts for the three laboratories do require that benchmarking be performed, the contract provisions do not specify the areas that should be examined, how frequently benchmarking should occur, and what process should be used for implementing any needed corrective actions. Recognizing these challenges, DOE has been developing the Institutional Cost Reporting initiative to separately collect data on certain costs, including many indirect costs, in an effort to improve its ability to oversee M&O contractors’ costs, including, indirect costs, at the NNSA laboratories. Appendix I: Objectives, Scope, and Methodology This report examines (1) whether laboratory Management and Operating (M&O) contractors' practices differ for allocating indirect costs and, if so, how; (2) the extent to which National Nuclear Security Administration (NNSA) ensures that laboratory M&O contractors’ allocated indirect costs are accurate; and (3) the extent to which NNSA ensures that laboratory M&O contractors’ indirect costs are reasonable.

Why GAO Did This Study NNSA, a semiautonomous agency within DOE, oversees the nation’s nuclear security programs. M&O contractors manage NNSA’s facilities, including its national security laboratories––Lawrence Livermore, Los Alamos, and Sandia. Each year, M&O contractors spend billions of dollars to manage and operate these laboratories. Costs include both direct costs—which can be identified with a specific objective or program—and indirect costs, such as management, administrative, and facility costs. Federal Cost Accounting Standards give M&O contractors flexibility in how costs are classified as direct or indirect and allocated to programs. GAO was asked to review M&O contractor indirect cost management. GAO examined (1) whether laboratory M&O contractors' practices differ for allocating indirect costs and, if so, how; (2) the extent to which NNSA ensures that laboratory M&O contractors’ allocated indirect costs are accurate; and (3) the extent to which NNSA ensures that laboratory M&O contractors’ indirect costs are reasonable. GAO reviewed NNSA and laboratory M&O contractor data and documents and spoke with DOE and NNSA officials and M&O contractors. What GAO Found The National Nuclear Security Administration’s (NNSA) management and operating (M&O) contractors differ in how they classify and allocate indirect costs at NNSA laboratories. Although different approaches are allowed by Cost Accounting Standards, these differences limit the ability to compare program costs across the laboratories. Recognizing the limitations of its current cost data, the Department of Energy (DOE) and NNSA are implementing the Institutional Cost Reporting initiative intended to create a standardized report of certain costs, including many indirect costs. However, DOE is uncertain how it will use the data gathered by this initiative, and these efforts may provide only limited improvements because the data will continue to only be reported at an aggregate level. NNSA examines M&O contractors’ models for allocating indirect costs for compliance with Cost Accounting Standards’ requirements at least annually, which helps ensure accuracy. NNSA has identified instances when these models did not comply with these requirements, but NNSA has worked with M&O contractors to address these issues. NNSA generally relies on the M&O contractors’ internal audits, however, to assess whether M&O contractors’ day-to-day cost allocation practices conform to disclosed cost allocation models. NNSA reviews some summary data to independently assess day-to-day compliance with Cost Accounting Standards but does not conduct independent audits. DOE’s Office of Inspector General (OIG) has audit authority at NNSA laboratories. OIG officials stated that the frequency and scope for conducting audits to assess contractors’ compliance with Cost Accounting Standards should be based on the level of risk. However, NNSA and OIG officials and M&O contractors hold varying opinions regarding the level of risk that inaccurate indirect cost allocation practices at the laboratories pose. In the absence of formal, periodic risk assessments, NNSA may not have a well-documented basis for its decisions regarding the type, timing, and extent of future monitoring or oversight. NNSA reviews M&O contractors’ cost data and other information to assess the reasonableness of their costs, including indirect costs. NNSA also uses other means to help ensure the reasonableness of these costs. For example, NNSA’s contracts require M&O contractors to regularly benchmark their costs to other contractors and industry. These requirements, however, do not specify the areas that should be examined, how frequently benchmarking should occur, and what process should be used for implementing any needed corrective actions. As a result, M&O contractor efforts to benchmark costs varied across laboratories. What GAO Recommends GAO recommends DOE clarify the uses of the data gathered through the Institutional Cost Reporting initiative, conduct periodic risk assessments, and incorporate more specific requirements for benchmarking in its laboratory M&O contracts. DOE generally agreed with GAO’s recommendations.

gao_NSIAD-96-198

gao_NSIAD-96-198_0

The Air Force has also sent AN/PSS-12s to Bosnia. According to intelligence reports, over half of the landmines in Bosnia are buried, and about 75 percent of them are low-metallic mines. AN/PSS-12 Detector Performed Poorly Against Low-Metallic Mines in Operational Testing The Army’s Test and Experimentation Command, under the auspices of the Operational Test and Evaluation Command, conducted two operational tests during 1991 to assess the performance of the candidate metal detectors in a field environment. The Test and Evaluation Command did state that the procurement decision should not depend too heavily on the detectors’ inability to detect low-metallic mines because such mines were just a step away from nonmetal mines, which would render a metallic mine detector useless. These results showed that against the high-metallic mine targets remaining in the operational test, all three detectors found virtually all the mines and passed the Army’s 92-percent detection requirement. Demonstrations of portable mine detectors have been conducted in a field environment; however, the detectors have been operated by contractor personnel or Army civilian personnel. Again, as in operational testing, they must contend with a variety of factors that can affect detector performance. However, this information is not consistent with the Army’s 1991 test results and information from other sources. Consequently, we believe the potential effectiveness of the AN/PSS-12 against low-metallic mines in Bosnia is inconclusive. The steps the Army has taken to minimize the threats posed by landmines there and the resultant infrequent reliance on the AN/PSS-12 may help to explain why the detector’s poor performance against low-metallic targets in testing has not been exhibited in Bosnia. We believe it is the prudent steps taken by the Army to avoid and minimize the landmine threat in Bosnia—more so than the capability of the AN/PSS-12 or the detectability of the low-metallic content mines there relative to the test targets—that explains the difference between the detector’s performance in operational testing with its experience in Bosnia.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Army's development of a portable land mine detector, focusing on: (1) how the Army's AN/PSS-12 mine detector performed in detecting low-metallic mines in procurement tests; (2) the nature of the land mine threat in Bosnia-Herzegovina; and (3) the mine detector's potential effectiveness in Bosnia. What GAO Found GAO found that: (1) the Army has not clearly demonstrated the ability of its AN/PSS-12 mine detector to detect low metallic mines; (2) the detector performed poorly during operational testing and failed to meet the Army's 92-percent detection requirement against low metallic mines; (3) although both candidate detectors performed equally well after the Army removed low metallic targets from the procurement tests, the Army selected the AN/PSS-12 because of its lower price; (4) the detector's field accuracy is questionable, since the Army did not sufficiently control other environmental and operating factors that can affect detector performance; (5) the detector's usefulness in Bosnia may be limited because about 75 percent of the buried mines have a low metallic content; (6) although the detector's reported performance in Bosnia is good, the Army has limited the detector's use there; (7) the Air Force has warned its personnel in Bosnia that the detector is not sufficiently sensitive to low metallic mines and some countries have switched to other mine detectors; and (8) the Army has reduced its reliance on the detector through alternative threat-reduction practices, such as extensive personnel training in mine awareness, avoiding or carefully selecting routes through suspected mine fields, and using heavy equipment to clear paths.

gao_GAO-16-112

gao_GAO-16-112_0

A cost risk analysis determines the reliability of a program’s cost estimate by determining a program’s cost drivers and the risk of cost overruns through an analysis that links historical schedule information along with technical issues and uncertainties in schedule and cost. JWST Is Meeting Schedule Commitment with Majority of Testing and Challenging Integration Work Still to Come The JWST project is currently on schedule with 8.75 months of schedule reserve remaining. This is a tenuous position for the project given that it must complete five integration and test periods, three of which have not yet started. To achieve mission success, the project will have to address over 100 technical risks and ensure that the project’s potential areas for mission failure are fully tested and understood before project launch in October 2018. However, as shown in figure 4 below, the use of schedule reserve on any element or major subsystem—two of which have entered integration and testing phases—may reduce the overall project schedule reserve. While some use of schedule reserve is expected, the proximity of each element and major subsystem schedule to the critical path means that the project must prioritize the mitigations when problems occur. Our prior work has shown that it is in integration and testing where problems are most likely to be found and as a result, schedules tend to slip. Additionally, as the project moves further into integration and testing, events become more serial so flexibility will be diminished. Project Continues to Meet Cost Commitments but Contractor Workforce Increases and Unreliable Contractor Performance Data Pose Management Challenges The JWST project continued to meet its cost commitments throughout fiscal year 2015 despite cryocooler delays that used a disproportionate amount of cost reserves. To help manage the project and account for new risks since the 2011 replan, JWST project officials conducted a cost risk analysis of the Northrop Grumman contract. We found that while the cost risk analysis substantially met best practices, these officials do not plan to periodically update it. Instead, the project is using risk-adjusted analyses to update and inform its cost position. Finally, we also found the project lacks an independent surveillance mechanism for the data to ensure anomalies are corrected by the contractor before being incorporated into larger analyses. As a result, the project is relying partially on unreliable information to inform its cost and schedule decision-making. However, we found that the risk-adjusted analyses do not serve as an adequate substitute for an updated cost risk analysis because they are a simplified version of a cost risk analysis that does not allow the project to prioritize risks or assign confidence levels to meet key milestones in the schedule consistent with best practices for cost risk analyses. NASA implemented all of these recommendations. Because the project is not going to conduct another cost risk analysis, putting independent surveillance in place to improve the accuracy of its risk- adjusted analysis—despite its weaknesses relative to the information a cost risk analysis provides—will provide better information to inform its decision making. Recommendation for Executive Action To resolve contractor data reliability issues and ensure that the project obtains reliable data to inform its analyses and overall cost position, we recommend that the NASA Administrator direct JWST project officials to require the contractors to identify, explain, and document all anomalies in contractor-delivered monthly earned value management reports. GAO staff who made major contributions to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our objectives were to assess (1) the extent to which technical challenges have impacted the James Webb Space Telescope (JWST) project’s ability to meet its schedule commitments, (2) the current cost status of the JWST project and the primary challenges that may influence the project’s ability to meet its future cost commitments, and (3) the extent to which independent oversight provides insight about project risks to management.

Why GAO Did This Study JWST is one of NASA's most complex and expensive projects, at an anticipated cost of $8.8 billion. With significant integration and testing scheduled in the 3 remaining years until the planned launch date, the JWST project will need to continue to address many challenges and identify problems, many likely to be revealed during its rigorous testing to come. The continued success of JWST hinges on NASA's ability to anticipate, identify, and respond to these challenges in a timely and cost-effective manner to meet its commitments. Conference Report 112-284 included a provision for GAO to assess the project annually and report on its progress. This is the fourth such report. This report assesses (1) the extent to which JWST is meeting its schedule commitments and (2) the current cost status of the project, among other issues. To conduct this work, GAO reviewed monthly JWST reports, reviewed relevant policies, conducted independent analysis of NASA and contractor data, and interviewed NASA and contractor officials. What GAO Found The National Aeronautics and Space Administration's (NASA) James Webb Space Telescope (JWST) project is meeting its schedule commitments, but it will soon face some of its most challenging integration and testing. JWST currently has almost 9 months of schedule reserve—down more than 2 months since GAO's last report in December 2014—but still above its schedule plan and the Goddard Space Flight Center requirement. However, as GAO also found in December 2014, all JWST elements and major subsystems continue to remain within weeks of becoming the critical path—the schedule with the least amount of schedule reserve—for the overall project. Given their proximity to the critical path, the use of additional reserve on any element or major subsystem may reduce the overall project schedule reserve. Before the planned launch in October 2018, the project must complete five major integration and test events, three of which have not yet begun. Integration and testing is when problems are often identified and schedules tend to slip. At the same time, the project must also address over 100 technical risks and ensure that potential areas for mission failure are fully tested and understood. JWST continues to meet its cost commitments, but unreliable contractor performance data may pose a risk to project management. To help manage the project and account for new risks, project officials conducted a cost risk analysis of the prime contract. A cost risk analysis uses information about cost drivers, technical issues, and schedule to determine the reliability of a program's cost estimates. GAO found that while NASA's cost risk analysis substantially met best practices for cost estimating, officials do not plan to periodically update it. Instead, the project is using a risk-adjusted analysis to update and inform its cost position, but this analysis is a simplified version of a cost risk analysis—and not a replacement—and is based on contractor-provided performance data that contains anomalies that render the data unreliable. Further, the project does not have an independent surveillance mechanism, such as the Defense Contract Management Agency, to help ensure data anomalies are corrected by the contractor before being incorporated into larger cost analyses, as GAO recommended in 2012. As a result, the project is relying partially on unreliable information to inform its decision making and overall cost status. What GAO Recommends GAO recommends that the JWST project require contractors to identify, explain, and document anomalies in contractor-delivered monthly earned value management reports. GAO continues to believe that its 2012 recommendation to implement formal surveillance to help improve the reliability of contractor-provided data has merit and should be implemented. NASA concurred with the recommendation made in this report.

gao_GAO-09-941

gao_GAO-09-941_0

The Proportion of Polling Places Without Potential Impediments Increased Since 2000 Compared to 2000, the proportion of polling places without potential impediments increased and almost all polling places had an accessible voting system. In 2008, based upon our survey of polling places, we estimate that 27.3 percent of polling places had no potential impediments in the path from the parking area to the voting area—up from 16 percent in 2000; 45.3 percent had potential impediments but offered curbside voting; and the remaining 27.4 percent had potential impediments and did not offer curbside voting. All but one polling place we visited had an accessible voting system to facilitate private and independent voting for people with disabilities. However, 46 percent of polling places had an accessible voting system that could pose a challenge to certain voters with disabilities, such as voting stations that were not arranged to accommodate voters using wheelchairs. Most States Have Established Requirements and Funded Improvements to Help Facilitate Voter Accessibility The majority of states have established accessibility requirements and funded improvements to help facilitate accessible voting, and all states reported that they required local jurisdictions to offer alternative voting methods. Forty-three states reported on our survey that they required accessibility standards for polling places in 2008, up from 23 states in 2000. Additionally, most states reported that they used federal HAVA funds to improve the physical accessibility of polling places. Further, all states reported that they required local jurisdictions to offer alternative voting methods, such as absentee voting. According to our state survey, 31 states reported that ensuring polling place accessibility was very or moderately challenging. Justice Assessed States’ Implementation of HAVA Requirements for the 2006 Deadline, But Its Current Oversight Has Some Gaps Justice provided guidance on polling place accessibility and conducted an initial assessment of states’ compliance with HAVA’s January 2006 deadline for accessible voting systems. Since then, Justice’s oversight of HAVA’s access requirements is part of two other enforcement efforts, but gaps remain. Justice currently conducts polling place observations for federal elections that identify whether an accessible voting system is in place, but it does not systematically assess the physical accessibility of polling places or the level of privacy and independence provided to voters with disabilities. Justice also conducts a small number of annual community assessments of ADA compliance of public buildings, which includes buildings designated as polling places. However, these assessments do not provide a national perspective on polling place accessibility or assess any special features of voting areas and accessible voting systems that are set up only on Election Day. This effort might include the following activities: working with states to use existing state oversight mechanisms and using other resources, such as organizations representing election officials and disability advocacy organizations, to help assess and monitor states’ progress in ensuring polling place accessibility, similar to the effort used to determine state compliance with HAVA voting system requirements by the 2006 deadline; expanding the scope of Election Day observations to include an assessment of the physical access to the voting area and the level of privacy and independence being offered to voters with disabilities by accessible voting systems; and expanding the Americans with Disabilities Act: ADA Checklist of Polling Places to include additional information on the accessibility of the voting area and guidance on the configuration of the accessible voting system to provide voters with disabilities with the same level of privacy and independence as is afforded to other voters. Appendix I: Scope and Methodology Our objectives were to examine (1) the proportion of polling places that have features that might facilitate or impede access to voting for people with disabilities and how these results compare to our findings from the 2000 federal election; (2) the actions states are taking to facilitate voting for people with disabilities; and (3) the steps the Department of Justice (Justice) has taken to enforce the Help America Vote Act of 2002 (HAVA) voting access provisions. We also reviewed federal laws, guidance, and other documentation.

Why GAO Did This Study Voting is fundamental to our democracy, and federal law generally requires polling places to be accessible to all eligible voters for federal elections, including voters with disabilities. However, during the 2000 federal election, GAO found that only 16 percent of polling places had no potential impediments to access for people with disabilities. To address these and other issues, Congress enacted the Help America Vote Act of 2002 (HAVA), which required each polling place to have an accessible voting system. We examined (1) the proportion of polling places during the 2008 federal election with features that might facilitate or impede access for voters with disabilities compared to our findings from 2000; (2) actions states are taking to facilitate voting access; and (3) steps the Department of Justice (Justice) has taken to enforce HAVA voting access provisions. GAO visited 730 randomly selected polling places across the country, representing polling places nationwide, on Election Day 2008. GAO also surveyed states and interviewed federal officials. What GAO Found Compared to 2000, the proportion of polling places without potential impediments increased and almost all polling places had an accessible voting system. In 2008, based upon our survey of polling places, we estimate that 27.3 percent of polling places had no potential impediments in the path from the parking to the voting area--up from16 percent in 2000; 45.3 percent had potential impediments but offered curbside voting; and the remaining 27.4 percent had potential impediments and did not offer curbside voting. All but one polling place we visited had an accessible voting system--typically, an electronic machine in a voting station--to facilitate private and independent voting for people with disabilities. However, 46 percent of polling places had an accessible voting system that could pose a challenge to certain voters with disabilities, such as voting stations that were not arranged to accommodate voters using wheelchairs. Most states have established accessibility requirements and funded improvements to help facilitate accessible voting, and all states reported that they required local jurisdictions to offer alternative voting methods. In 2008, 43 states reported that they required accessibility standards for polling places, up from 23 states in 2000. Additionally, most states reported that they used federal HAVA funds to improve the physical accessibility of polling places. Further, all states reported that they required local jurisdictions to offer alternative voting methods, such as absentee voting. At the same time, 31 states reported that ensuring polling place accessibility was challenging. Justice provided guidance on polling place accessibility and conducted an initial assessment of states' compliance with HAVA's January 2006 deadline for accessible voting systems. Since then, Justice's oversight of HAVA's access requirements is part of two other enforcement efforts, but gaps remain. While Justice provided guidance on polling place accessibility, this guidance does not address accessibility of the voting area itself. Justice currently conducts polling place observations for federal elections that identifies whether an accessible voting system is in place, but it does not systematically assess the physical accessibility of polling places or the level of privacy and independence provided to voters with disabilities. Justice also conducts a small number of annual community assessments of Americans with Disabilities Act compliance of public buildings, which includes buildings designated as polling places. However, these assessments do not provide a national perspective on polling place accessibility or assess any special features of the voting area and the accessible voting system that are set up only on Election Day.

gao_GAO-01-633

gao_GAO-01-633_0

In 1998, Boeing Reusable Space Systems proposed a propulsion module concept that was to rely heavily on existing shuttle hardware, provide for on-orbit refueling, and cost about $330 million. Basic Project Management and Requirements Principles Not Followed NASA proceeded with Boeing’s proposal without following fundamental processes involving project planning and execution. Develop realistic cost and schedule estimates for the life of the project. However, other items were unique to the propulsion module project. NASA Reviews Identified Deficiencies in the Propulsion Module Design NASA proceeded to implement Boeing’s proposal before it determined whether the design would fully meet the project’s technical requirements. Although the assessment team found the Z1 truss option superior, it recommended a follow-on study because issues associated with this option’s integration into the space station were not well understood. NASA Recently Identified Lessons Learned to Apply to Future Programs NASA acknowledged that problems with the management of the initial propulsion module project contributed to its unsuccessful conclusion, and it is undertaking lessons learned efforts to help avoid similar problems in managing future programs.

Why GAO Did This Study This report discusses the National Aeronautics and Space Administration's (NASA) contract with Boeing Reusable Space Systems to build the now-canceled follow-on propulsion module for the International Space Station. What GAO Found GAO found that the initial propulsion module project did not meet performance, cost, and schedule goals largely because NASA proceeded with Boeing's proposal without following fundamental processes involving project planning and execution. Once it was determined that Boeing's proposal was inadequate, NASA began to assess alternatives to the Boeing-proposed propulsion module. The assessment team defined mission success criteria, identified key design assumptions, and performed comparative analysis on competing designs. On the basis of its analyses, the team recommended a follow-on design. NASA acknowledged that its initial approach to developing a propulsion module was inadequate and contributed to the project's unsuccessful conclusion. NASA officials sought to learn lessons from the project in order to avoid similar problems in managing future programs.

gao_GAO-09-700

gao_GAO-09-700_0

Branded gasoline is that supplied from major refiners and sold at retail stations under these refiner’s trademarks, and often contains special additives. In October 2008, we reported that unplanned and planned refinery outages across the United States did not show discernible trends in the frequency or location of outages from 2002 through 2007, with the exception of impacts beginning in 2005 related to Hurricanes Katrina and Rita. While Refinery Outages Can Have Large Price Effects on Rare Occasions, in Most Instances and on Average, Price Effects of Outages Are Relatively Small While it can be expected that some refinery outages have quite large price effects, the results of our analysis found that on average refinery outages were associated with small increases in gasoline prices. Based on our analysis of wholesale prices across 75 U.S. cities from 2002 through September 2008, planned outages generally did not influence prices, while unplanned refinery outages had generally small wholesale gasoline price effects in the cities they serve. For example, as we recently testified, petroleum product prices increased dramatically following Hurricanes Katrina and Rita. DOE reported that 21 refineries in affected states were either shut down or operating at reduced capacity in the aftermath of the hurricanes. Unplanned outages, on the other hand, were associated with gasoline price increases but these increases were generally small and depended on key factors, including whether or not the gasoline was branded or unbranded and the type of gasoline being sold. Specifically, we found that for conventional gasoline—the most common and widely available gasoline blend—unbranded gasoline had an average 0.5-cents-per-gallon increase in price associated with unplanned refinery outages, while branded gasoline had a smaller—about 0.2-cents- per-gallon—increase. Specifically, we were limited in this report in our ability to fully evaluate 1) the price effects of unplanned outages at individual cities and 2) a city’s gasoline re-supply options in the event of an outage. In a January 2009 Congressionally mandated study to identify potential pipeline infrastructure constraints, DOT was unable to fully address the study’s objectives due to the lack of appropriate federal pipeline flow and petroleum product storage data. Despite these gaps in federal data, individual agencies have generally continued to take steps to update their data collection surveys to meet their respective agency objectives or needs, and have often coordinated to more efficiently obtain petroleum product data needed for a variety of purposes at multiple agencies. Nonetheless, in some cases the individual agency efforts have resulted in the collection of information that does not necessarily meet the data needs of other agencies or analysts who monitor petroleum product markets. The panel should: assess the costs and benefits of collecting more systematic information about which refiners serve which cities and more discrete reporting of the volumetric entry, flow, and exit of petroleum products through the pipeline infrastructure system; identify additional data that would be useful to track and evaluate emerging market trends—such as the proliferation of biofuels and special blends—and assess the costs and benefits of collecting such data; identify opportunities to coordinate federal data collection efforts so that agencies can respond fully to Congressional requests and meet governmentwide data needs to monitor the impact of petroleum product market disruptions; and identify areas where data collection is fragmented—such as multiple survey instruments collecting similar information—to determine if those efforts can be consolidated and modified to enhance the overall usefulness and improve the efficiency of collecting and reporting these data. We limited our analysis to utages that (1) were determined to be of the largest 60 percent within odel, we limited the effect of an outage on prices to one week, after l for some of these factors. In addition, we found unplanned outages were significantly associated with an increase in branded gasoline prices but the effect was for unbranded prices.

Why GAO Did This Study In 2008, GAO reported that, with the exception of the period following Hurricanes Katrina and Rita, refinery outages in the United States did not show discernible trends in reduced production capacity, frequency, and location from 2002 through 2007. Some outages are planned to perform routine maintenance or upgrades, while unplanned outages occur as a result of equipment failure or other unforeseen problems. GAO was asked to (1) evaluate the effect of refinery outages on wholesale gasoline prices and (2) identify gaps in federal data needed for this and similar analyses. GAO selected refinery outages from 2002 through September 2008 that were at least among the largest 60 percent in terms of lost production capacity in their market region and lasted at least 3 days. GAO developed an econometric model and tested a variety of assumptions using public and private data. What GAO Found While some unplanned refinery outages, such as those caused by accidents or weather, have had large price effects, GAO found that in general, refinery outages were associated with small increases in gasoline prices. Large price increases occurred when there were large outages; for example, in the aftermath of hurricanes Katrina and Rita. However, we found that such large price increases were rare, and on average, outages were associated with small price increases. For example, GAO found that planned outages generally did not influence prices significantly--likely reflecting refiners' build-up in inventories to meet demand needs prior to shutting down--while for unplanned outages, average price effects ranged from less than one cent to several cents-per-gallon. Key factors influenced the size of price increases associated with unplanned outages. One such factor was whether the gasoline was branded--gasoline sold at retail under a specific refiner's trademark--or unbranded--gasoline sold at retail by independent sellers. Our analysis showed that during an unplanned outage, branded wholesale gasoline prices had smaller price increases than unbranded, suggesting that refiners give preference to their own branded customers during outages, while unbranded dealers must seek out supplies in a more constrained market. Another factor that affected the size of price increases associated with outages was the type of gasoline being sold. Some special blends of gasoline developed to reduce emissions of air pollutants exhibited larger average price increases than more widely used and available conventional gasoline, suggesting that these special gasoline blends may have more constrained supply options in the event of an outage. Existing federal data contain gaps that have limited GAO's and Department of Transportation's (DOT) analyses of petroleum markets and related issues. For example: (1) Data linking refiners to the markets they serve were inadequate for GAO to fully evaluate the price effects of unplanned outages on individual cities, limiting the analysis to broader average effects. (2) Pipeline flow and petroleum product storage data were inadequate for DOT to fully address a January 2009 Congressionally mandated study to identify potential pipeline infrastructure constraints, and limited GAO's ability to identify re-supply options for cities experiencing outage disruptions. Federal agencies generally have continued to update their data collection surveys to meet their respective needs and emerging changes in the energy sector. However, in some cases the individual agency efforts have resulted in the collection of information that does not necessarily meet the data needs of other agencies or analysts who monitor petroleum product markets.

gao_GGD-99-147

gao_GGD-99-147_0

More recently, postal documents noted that some automated sorting equipment intended for Mojave processing operations was being stored in warehouses due to insufficient space. Scope and Methodology To evaluate the Service’s approval process for this project, we performed the following: obtained and reviewed Service policies and guidance in effect when the project began and the policies and guidance currently in effect for facility planning, site acquisition, and project approval; obtained and analyzed Service documents related to the proposed Antelope Valley project and project approval process; discussed the proposed project and the review process with Service officials in Headquarters, the Pacific Area Office, the Van Nuys District, and the Lancaster and Mojave MPOs; observed operating conditions at the existing Lancaster and Mojave postal facilities and visited the postal-owned site in Lancaster that was purchased in 1991; reviewed cost estimates for the two alternatives under consideration prior to the project being placed on hold in March 1999; these cost estimates were included in draft project approval documents that were submitted for headquarters review in February 1999; and discussed the impact of the proposed project with community officials in Mojave, Kern County, and Lancaster, CA. The Service Followed Most of its Key Requirements for Advance Site Acquisition The Service followed most of its key requirements for acquiring a site in Lancaster prior to obtaining approval for the proposed Antelope Valley project, although some requirements were vague. Available Analyses to Support Advance Site Acquisition Decisions Were Incomplete and Documentation Was Inadequate Service guidance required that alternatives be identified and analyzed before a project could qualify for advance site acquisition but did not clearly state the type or depth of analyses required. Moreover, the available documentation did not explain why this alternative was preferred over the other alternatives considered. Consequently, the status and funding of the proposed project remains uncertain almost 10 years after it was initiated. Consideration of the project has been delayed due to two suspensions, reductions in capital investment spending, and a recent reclassification of the proposed facility. In addition, the Service has incurred additional costs that have resulted from the need to repeat analyses and update documents required for final project approval. Such a review might have prevented the unexplained reclassifications of this project that have contributed to delays in its funding. Because of continued space deficiencies, automated equipment has not been deployed as scheduled, and the projected operating efficiencies and savings have not been realized. Some of the equipment was stored at district warehouses. The project delay has also affected the business development opportunities in Lancaster. We could not determine whether review and approval of the proposed project justification and alternatives by the Headquarters CIC would have resulted in changes in the proposed project justification and alternatives or more in-depth analysis of the alternatives. However, what is known is that the Service spent about $6.5 million over 8 years ago to purchase a site that has remained unused. This site may or may not be used by the Service in the future, and its investment has a substantial annual interest cost associated with it. The Postmaster General generally agreed with our recommendations to address the unresolved status of the Antelope Valley project and the operational deficiencies in the Antelope Valley area.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the project approval process the Postal Service used in proposing to relocate postal operations for the Antelope Valley, California, area from the Main Post Office in Mojave, California, to a new facility in Lancaster, California. What GAO Found GAO noted that: (1) the Service followed most of its key requirements for acquiring a site in Lancaster in 1991 prior to obtaining approval for the proposed Antelope Valley project, although some requirements were vague; (2) one major exception was that review and approval of the proposed project justification and alternatives by the Headquarters Capital Investment Committee did not take place prior to the advance site acquisition in Lancaster, as required by Service policies; (3) Service guidance was unclear because it required that alternatives be identified and analyzed before a project could qualify for advance site acquisition, but it did not clearly state the type or depth of analysis required; (4) at the time of the Lancaster site acquisition, the analysis to support the decision was incomplete; (5) more detailed analyses were still under development; (6) GAO could not determine from available documentation why the alternative to construct a new facility in Lancaster was preferred over other alternatives that had been proposed or why various alternatives were not considered viable; (7) the Lancaster site purchased for $6.5 million in 1991 has remained unused since that time due to the Service's failure to decide how and when it will resolve the long-standing problems that the proposed Antelope Valley project was to address; (8) continuing negative effects have resulted from the incomplete status of the project for almost 10 years; (9) project approval and funding of the project remain uncertain due to delays resulting from two suspensions, limits on capital spending, and changes in project classification; (10) it is unclear how the Service intends to address the space deficiencies that have contributed to operational processing and delivery deficiencies in the Antelope Valley area; (11) because of continued space deficiencies, automated equipment was sitting unused in warehouses, some mail delivery was being delayed, and the projected operating efficiencies and savings have not been realized; (12) the Service has invested $6.5 million in land that has been unused for nearly 8 years; such an investment has a substantial annual interest cost estimated at over $300,000; (13) it has also incurred additional costs to update documents required for project approval and may incur more costs if some of these documents again have to be updated when the project is reviewed for approval; and (14) the Lancaster and Mojave communities have faced uncertainty over business development opportunities as a result of the project delays.

gao_GAO-06-678

gao_GAO-06-678_0

Highlights In 2002, GAO reported that the number of restatement announcements due to financial reporting fraud and/or accounting errors grew significantly between January 1997 and June 2002, negatively impacting the restating companies’ market capitalization by billions of dollars. GAO was asked to update key aspects of its 2002 report (GAO-03-138). This report discusses (1) the number of, reasons for, and other trends in restatements; (2) the impact of restatement announcements on the restating companies’ stock prices and what is known about investors’ confidence in U.S. capital markets; and (3) regulatory enforcement actions involving accounting- and audit-related issues. To address these issues, GAO collected restatement announcements meeting GAO’s criteria, calculated and analyzed the impact on company stock prices, obtained input from researchers, and analyzed selected regulatory enforcement actions. While the number of public companies announcing financial restatements from 2002 through September 2005 rose from 3.7 percent to 6.8 percent, restatement announcements identified grew about 67 percent over this period. Industry observers noted that increased restatements were an expected byproduct of the greater focus on the quality of financial reporting by company management, audit committees, external auditors, and regulators. GAO also observed the following trends: (1) cost- or expense- related reasons accounted for 35 percent of the restatements, including lease accounting issues, followed in frequency by revenue recognition issues; and (2) most restatements (58 percent) were prompted by an internal party such as management or internal auditors. In the wake of increased restatements, SEC standardized disclosure requirements by requiring companies to file a specific item on the Form 8-K when a company’s previously reported financials should no longer be relied upon. However, between August 2004- September 2005, about 17 percent of the companies GAO identified as restating did not appear to file the proper disclosure when they announced their intention to restate. These companies continued to announce intentions to restate previous financial statements results in a variety of other formats. For example, 314 companies announced restatements in 2002 and 523 announced restatements in 2005 (through September). This was an increase from about 49 percent in our 2002 report. These declines, while potentially significant for the investors involved, if realized, represented about 0.2 percent of the total market capitalization of the three securities exchanges, which was about $17 trillion in 2005. But, when the losses were adjusted for general movements in the overall market, the market capitalization of the restating companies decreased an estimated $36 billion. Certain Restatements Appear to Affect Investor Confidence but Trends in Restatements Complicate Analysis Although researchers generally agree that restatements can have a negative effect on investor confidence, the surveys and indexes of investor confidence that we reviewed did not indicate definitively whether investor confidence increased or decreased since 2002. For example, some researchers have noted that, since 2002, investors may have had more difficulty discerning whether a restatement represented a response to aggressive or abusive accounting practices, constituted remediation of past accounting deficiencies, or merely represented technical adjustments. Moreover, in fiscal year 2005, cases involving financial fraud and issuer reporting issues constituted the largest category of enforcement actions. Of the enforcement actions SEC resolved between March 1, 2002, and September 30, 2005, most of the actions were taken against companies or their directors, officers, employees, and other related parties.

Why GAO Did This Study In 2002, GAO reported that the number of restatement announcements due to financial reporting fraud and/or accounting errors grew significantly between January 1997 and June 2002, negatively impacting the restating companies' market capitalization by billions of dollars. GAO was asked to update key aspects of its 2002 report (GAO-03-138). This report discusses (1) the number of, reasons for, and other trends in restatements; (2) the impact of restatement announcements on the restating companies' stock prices and what is known about investors' confidence in U.S. capital markets; and (3) regulatory enforcement actions involving accounting- and audit-related issues. To address these issues, GAO collected restatement announcements meeting GAO's criteria, calculated and analyzed the impact on company stock prices, obtained input from researchers, and analyzed selected regulatory enforcement actions. What GAO Found While the number of public companies announcing financial restatements from 2002 through September 2005 rose from 3.7 percent to 6.8 percent, restatement announcements identified grew about 67 percent over this period. Industry observers noted that increased restatements were an expected byproduct of the greater focus on the quality of financial reporting by company management, audit committees, external auditors, and regulators. GAO also observed the following trends: (1) cost- or expense-related reasons accounted for 38 percent of the restatements, including lease accounting issues, followed in frequency by revenue recognition issues; and (2) most restatements (58 percent) were prompted by an internal party such as management or internal auditors. In the wake of increased restatements, SEC standardized disclosure requirements by requiring companies to file a specific item on the Form 8-K when a company's previously reported financials should no longer be relied upon. However, between August 2004-September 2005, about 21 percent of the companies GAO identified as restating did not appear to file the proper disclosure when they announced their intention to restate. These companies continued to announce intentions to restate previous financial statements results in a variety of other formats. Although representing about 0.4 percent of the market capitalization of the major exchanges, which was $17 trillion in 2005, the market capitalization of companies announcing restatements between July 2002 and September 2005 decreased $63 billion when adjusted for market movements ($43 billion unadjusted) in the days around the initial restatement announcement. Researchers generally agree that restatements can negatively affect overall investor confidence, but it is unclear what effects restatements had on confidence in 2002-2005. Some researchers noted that investors might have grown less sensitive to the announcements. Others postulated that investors had more difficulty discerning whether restatements represented a response to aggressive or abusive accounting practices, complex accounting standards, remediation of past accounting deficiencies, or technical adjustments. Although researchers generally agree that restatements can have a negative effect on investor confidence, the surveys, indexes, and other proxies for investor confidence that GAO reviewed did not indicate definitively whether investor confidence increased or decrease since 2002. As was the case in the 2002 report, a significant portion of SEC's enforcement activities involved accounting- and auditing-related issues. Enforcement cases involving financial fraud- and issuer-reporting issues ranged from about 23 percent of total actions taken to almost 30 percent in 2005. Of the actions resolved between March 1, 2002, and September 30, 2005, about 90 percent were brought against public companies or their directors, officers, and employees, or related parties; the other 10 percent involved accounting firms and individuals involved in the external audits of these companies.

gao_GAO-03-92

gao_GAO-03-92_0

Within the OIG, the national ombudsman will report to a newly created Assistant Inspector General for Congressional and Public Liaison. Prior to the reorganization, the ombudsman had authority to determine which cases warrant further investigation. Recordkeeping and accountability. According to officials from the Office of Solid Waste and Emergency Response and the OIG and draft operating procedures for the ombudsman, the investigative aspects of the ombudsman function will be assigned to the OIG and the regional ombudsmen will respond to inquiries and have a role in informally resolving issues between the agency and the public before they escalate into complaints about how EPA operates. Issues Raised by EPA’s Reorganization of the Ombudsman Function EPA’s reorganization of the ombudsman function does not fully address the issues we raised in our July 2001 report and, as noted in our subsequent testimonies, raises some new concerns as well. First, several aspects of EPA’s reorganized ombudsman function are not consistent with existing professional standards for ombudsmen. However, under EPA’s reorganization, the national ombudsman will not be able to exercise independent control over budget and staff resources, even within the general constraints that are faced by federal agencies. While the national ombudsman will be consulted about the hiring, assignment, and supervision of staff, overall authority for staff resources and the budget allocation rests with the Assistant Inspector General for Congressional and Public Liaison, to whom the ombudsman reports. OIG officials pointed out that the concern our July 2001 report raised about control over budget and staff resources was closely linked to the ombudsman’s placement within the Office of Solid Waste and Emergency Response. Specifically, the role of an ombudsman typically includes program operating responsibilities, such as helping to informally resolve program-related issues and mediating disagreements between the agency and the public. With the ombudsman function a part of the OIG, the Inspector General can no longer independently audit and investigate that function, as is the case at other federal agencies where the ombudsman function and the OIG are separate entities. In addition, as we recommended, EPA’s ombudsman function now has written criteria for selecting and prioritizing cases for investigation and, by virtue of its relocation to the OIG, will be adopting many of that office’s existing procedures for tracking, documenting, and reporting the results of investigations and summarizing annual activities in a public report. Recommendations for Executive Action To ensure that EPA’s national ombudsman (1) is consistent with what the ombudsman community and the public have come to expect from that position and (2) does not adversely affect the independence of the agency’s OIG, we recommend that the Administrator, EPA, reconsider placement of the national ombudsman in the OIG. ABA’s standards clearly define the ombudsman’s role as including certain responsibilities that have been omitted from the OIG’s conception of the ombudsman function. To identify issues raised by the reorganization, we followed up on preliminary observations provided in our testimony of June 2002 and July 2002. We also reviewed legislation applicable to Inspector General offices and other relevant GAO reports.

Why GAO Did This Study Federal ombudsmen help their agencies be more responsive to the public through the impartial investigation of citizens' complaints. Professional standards for ombudsmen incorporate certain core principles, such as independence and impartiality. In July 2001, GAO reported that key aspects of EPA's hazardous waste ombudsman were not consistent with professional standards, particularly with regard to independence. (See GAO-01-813 .) Partly in response to GAO's recommendations, EPA reorganized its ombudsman function and removed the national ombudsman from the Office of Solid Waste and Emergency Response. GAO made preliminary observations on these changes in testimony in June and July 2002. (See GAO-02-859T and GAO-02-947T). This report provides information on (1) the current status of EPA's reorganization of the ombudsman function and (2) issues identified in our prior report and testimonies that have not yet been addressed. What GAO Found EPA's national ombudsman now reports to a newly created Assistant Inspector General for Congressional and Public Liaison within the Office of Inspector General (OIG), unlike other federal agencies whose ombudsmen report to the highest levels of the agency. Control over the budget and staff resources for EPA's ombudsman is held by the Assistant Inspector General and not the ombudsman. Similarly, overall responsibility for the work performed by the OIG rests with the Inspector General; the ombudsman no longer has the authority to decide which complaints warrant further review, as was the case prior to the reorganization. Regarding the recordkeeping and accountability aspects of the ombudsman function, OIG officials say that they will likely adopt many of the office's existing procedures for tracking, documenting, and reporting the results of investigations. While EPA's reorganization addresses some of the concerns raised in GAO's July 2001 report and subsequent testimonies, other issues remain. For example, EPA removed the national ombudsman from the Office of Solid Waste and Emergency Response, whose decisions the ombudsman was responsible for investigating. However, the ombudsman still will not be able to exercise independent control over budget and staff resources as called for by relevant professional standards. Relocating the ombudsman to the OIG also raises some new issues regarding (1) the extent to which the position will function as a "true" ombudsman in interactions with the public and (2) the potential impact of the reorganization on the OIG's role. Although the role of an ombudsman typically includes program operating responsibilities, such as helping to informally resolve disagreements between the agency and the public, for legal reasons such responsibilities have been omitted from the ombudsman's role within the OIG. In addition, with the ombudsman function a part of the OIG, the Inspector General can no longer independently audit and investigate that function, as is the case at other federal agencies where the ombudsman and the OIG are separate entities.

gao_GAO-08-560T

gao_GAO-08-560T_0

Interior’s Oversight Does Not Provide Adequate Assurance That the Government Is Being Fully Compensated for Oil and Gas Production on Federal Lands and Waters Interior lacks adequate assurance that it is receiving the full royalties it is owed because (1) neither BLM nor OMM is fully inspecting leases and meters as required by law and agency policies, and (2) MMS lacks adequate management systems and sufficient internal controls for verifying that royalty payment data are accurate and complete. However, BLM officials from all 5 field offices told us that when they have conducted production inspections they have identified a number of violations. For example, OMM officials responsible for meter inspections in the Gulf of Mexico told us that they completed about half of the required 2,700 inspections, but that they met OMM’s goal for witnessing oil and gas meter calibrations. In addition, MMS lacks a process to routinely and systematically reconcile all production data included by payors on their royalty reports or by operators on their production reports with production data available from third-party sources. Furthermore, MMS’s financial management system lacks internal controls over the integrity and accuracy of production and royalty-in-value data entered by companies. MMS’s Compliance Efforts Do Not Consistently Use Third-Party Data to Check Self-Reported Royalty-in-Value Payment Data MMS’s increasing use of compliance reviews, which are more limited in scope than audits, has led to an inconsistent use of third-party data to verify that self-reported royalty data are correct, thereby placing accurate royalty collections at risk. According to MMS, compliance reviews can be conducted much more quickly and require fewer resources than audits, largely because they represent a quicker, more limited reasonableness check of the accuracy and completeness of a company’s self-reported data, and do not include a systematic examination of underlying source documentation. To help meet this goal, MMS continues to rely heavily on compliance reviews, yet it is unable to state the extent to which this performance goal is accomplished through audits as opposed to compliance reviews. The MMS Royalty-in- Kind Program Is at Risk of Inaccurate Collection of Natural Gas Royalties because of Inconsistent Oversight Because MMS’s royalty-in-kind program does not extend the same production verification processes used by its oil program to its gas program, it does not have adequate assurance that it is collecting the gas royalties it is owed. The methods that MMS uses to identify these imbalances differ for oil and gas. For oil, MMS obtains pipeline meter data from OMM’s liquid verification system, which records oil volumes flowing through numerous metering points in the Gulf of Mexico region. Data from the gas verification system could be useful in validating production volumes and reducing discrepancies. Significant Questions and Uncertainties Exist Regarding the Reported Financial Benefits of the Royalty-in-Kind Program The methods and underlying assumptions MMS uses to compare the revenues it collects in kind with what it would have collected in cash do not account for all costs and do not sufficiently deal with uncertainties, raising doubts about the claimed financial benefits of the royalty-in-kind program. Interest Revenues from the sale of royalty-in-kind oil are due 10 days earlier than cash payments, and revenues from the sale of in-kind gas are due 5 days earlier. Our work on this issue is continuing along several avenues, including comparing the royalties taken in kind with the value of royalties taken in cash, assessing the rate of oil and gas development on federal lands, comparing the amount of money the U.S. government receives with what foreign countries receive for allowing companies to develop and produce oil and gas, and examining further the accuracy of MMS’s production and royalty data. We plan to make recommendations to address the weaknesses we identified in our final reports on these issues.

Why GAO Did This Study Companies that develop and produce federal oil and gas resources do so under leases administered by the Department of the Interior (Interior). Interior's Bureau of Land Management (BLM) and Offshore Minerals Management (OMM) are responsible for overseeing oil and gas operations on federal leases. Companies are required to self- report their production volumes and other data to Interior's Minerals Management Service (MMS) and to pay royalties either "in value" (payments made in cash), or "in kind" (payments made in oil or gas). GAO's testimony will focus on whether (1) Interior has adequate assurance that it is receiving full compensation for oil and gas produced from federal lands and waters, (2) MMS's compliance efforts provide a check on industry's self-reported data, (3) MMS has reasonable assurance that it is collecting the right amounts of royalty-in-kind oil and gas, and (4) the benefits of the royalty-in-kind program that MMS has reported are reliable. This testimony is based on ongoing work. When this work is complete, we expect to make recommendations to address these and other findings. To address these issues GAO analyzed MMS data, reviewed MMS, and other agency policies and procedures, and interviewed officials at Interior. In commenting on a draft of this testimony, Interior provided GAO technical comments which were incorporated where appropriate. What GAO Found Interior lacks adequate assurance that it is receiving full compensation for oil and gas produced from federal lands and waters because Interior's Bureau of Land Management (BLM) and Offshore Minerals Management (OMM) are not fully conducting production inspections as required by law and agency policies and because MMS's financial management systems are inadequate and lack key internal controls. Officials at BLM told us that only 8 of the 23 field offices in five key states we sampled completed their required production inspections in fiscal year 2007. Similarly, officials at OMM told us that they completed about half of the required production inspections in calendar year 2007 in the Gulf of Mexico. In addition, MMS's financial management system lacks an automated process for routinely and systematically reconciling production data with royalty payments. MMS's compliance efforts do not consistently examine third-party source documents to verify whether self-reported industry royalty-in-value payment data are complete and accurate, putting full collection of royalties at risk. In 2001, to help meet its annual performance goals, MMS moved from conducting audits, which compare self-reported data against source documents, toward compliance reviews, which provide a more limited check of a company's self-reported data and do not include systematic comparison to source documentation. MMS could not tell us what percentage of its annual performance goal was achieved through audits as opposed to compliance reviews. Because the production verification processes MMS uses for royalty-in-kind gas are not as rigorous as those applied to royalty-in-kind oil, MMS cannot be certain it is collecting the gas royalties it is due. MMS compares companies' self-reported oil production data with pipeline meter data from OMM's oil verification system, which records oil volumes flowing through metering points. While analogous data are available from OMM's gas verification system, MMS has not chosen to use these third-party data to verify the company-reported production numbers. The financial benefits of the royalty-in-kind program are uncertain due to questions and uncertainties surrounding the underlying assumptions and methods MMS used to compare the revenues it collected in kind with what it would have collected in cash. Specifically, questions and uncertainties exist regarding MMS's methods to calculate the net revenues from in-kind oil and gas sales, interest payments, and administrative cost savings.

gao_GAO-08-719

gao_GAO-08-719_0

If beneficiaries are not satisfied with certain aspects of the Part D program, they may file a complaint with CMS, a grievance with their respective plan sponsors, or they can file with both. 2). Complaints Data Highlight Beneficiaries’ Enrollment Problems, Decline in Complaint Rates, and Ongoing Challenges Most complaints related to enrollment issues and while both the number of complaints and the time needed to resolve them decreased as the Part D program matured, ongoing challenges continued to pose problems for some beneficiaries. In addition, a small proportion of complaints involved cases where beneficiaries were at risk of depleting their medication supplies. Most Complaints Were Related to Enrollment Issues and Were Resolved During the 18-month period from May 1, 2006, through October 31, 2007, 629,792 complaints were filed with CMS—an average monthly complaint rate of 1.5 complaints per 1,000 beneficiaries. In addition, the average time needed to resolve beneficiaries’ complaints declined by 73 percent, from a peak of 33 days in July 2006 to 9 days in October 2007 (see fig. Specifically, the data confirmed information-processing issues related to beneficiaries’ requests for enrollment changes and automatic premium withholds from their Social Security payments remained. Limitations in Grievances Data Reported by Plan Sponsors for Their Contracts Prevent Reliable Assessment of Beneficiaries’ Experiences with Part D Grievances data reported by plan sponsors for their contracts contained limitations and anomalies and did not yield sufficient insight into beneficiaries’ experiences with Part D. In contrast to the data CMS collects on complaints, CMS only requires plan sponsors to submit quarterly reports on the total number of grievances they received in 11 CMS-defined categories for each of their Part D contracts. In addition to their limited nature, we identified a number of anomalies in the grievances data that raise questions about their accuracy and usefulness in drawing conclusions about beneficiaries’ experiences with Part D. Among these anomalies, we found that grievances were concentrated in a small number of contracts, and at a rate that was significantly disproportionate to their respective enrollments, raising questions about whether plan sponsors were reporting grievances data for their contracts in a comprehensive and consistent manner. To oversee the complaints process, CMS has established a framework consisting of several key elements, which include standard operating policies and procedures and a centralized repository of complaints data, and staff that routinely review and assess the complaints data and take actions against plan sponsors it determines have noncompliant processes. In contrast to complaints, CMS’s oversight of plan sponsors’ grievances processes has been more limited. medication. In contrast to complaints, CMS’s oversight of plan sponsor grievances processes has been more limited. CMS provided plan sponsors with general guidance for determining whether beneficiaries’ problems were grievances or coverage determinations, which are addressed through a separate process. CMS also provided plan sponsors with time frames for resolving grievances, periodically reviewed plan sponsor grievances data, and began auditing plan sponsors’ grievances processes in 2007. Such confusion about how to classify grievances increases the likelihood that plan sponsors report erroneous or inconsistent information to CMS and that they rely on the wrong processes to address beneficiaries’ concerns. CMS officials also could not explain many of the anomalies we identified in the grievances data, such as substantial variation in the enrollment category from 2006 to 2007 and considerable variation in the grievance rates between contracts with similar levels of enrollment. CMS took issue with the report’s conclusion that its oversight activities were focused almost exclusively on resolving complaints with little attention devoted to plan sponsors’ grievances processes. Appendix II: Comments from the Centers for Medicare & Medicaid Services

Why GAO Did This Study Medicare Part D coverage is provided through plan sponsors that contract with the Centers for Medicare & Medicaid Services (CMS). As of April 2008, about 26 million beneficiaries were enrolled in Part D. When beneficiaries encounter problems with Part D, they can either file a complaint with CMS or a grievance with their plan sponsors. CMS centrally tracks complaints data and plan sponsors must report summary data on grievances for each of their contracts. GAO provided information on (1) complaints and what they indicate about beneficiaries' experiences with Part D, (2) whether grievances data provide additional insight about beneficiaries' experiences, and (3) CMS's oversight of the complaints and grievances processes. To conduct its work, GAO reviewed CMS's complaints and grievances data and interviewed the plan sponsors of eight, judgmentally selected contracts, which accounted for 40 percent of 2006 enrollment. What GAO Found While the number of complaints filed with CMS and the time needed to resolve them has diminished as the Part D program has matured, complaints data indicate that ongoing challenges pose problems for some beneficiaries. From May 1, 2006, through October 31, 2007, about 630,000 complaints were filed; most complaints were related to problems in processing beneficiaries' enrollment and disenrollment requests. The monthly complaint rate declined by 74 percent over the period, and the average time needed to resolve complaints decreased from a peak of 33 days to 9 days. However, trends in the complaints data also indicate ongoing implementation issues, such as information-processing issues related to beneficiaries' requests for enrollment changes and automatic premium withholds from Social Security payments. In addition, CMS and plan sponsors did not resolve a significant proportion of complaints related to beneficiaries at risk of depleting their medications in accordance with applicable time frames. Due to limitations and anomalies, the grievances data that plan sponsors reported for their contracts did not provide sufficient insight into beneficiaries' experiences with Part D. Specifically, these data did not include information about whether beneficiaries who filed grievances were at risk of depleting their medications or whether plan sponsors were resolving grievances in a timely manner. In addition, GAO identified a number of anomalies in the grievances data, raising questions about whether plan sponsors were reporting these data consistently and accurately. For example, reported grievances were concentrated in a small number of plan sponsors' contracts and at a rate that was significantly disproportionate to their respective enrollment levels; varied considerably among contracts with similar levels of enrollment; and increased from 2006 to 2007, in contrast to patterns in complaints data. CMS's oversight efforts thus far have focused almost exclusively on resolving complaints with little attention devoted to plan sponsors' grievances processes. CMS routinely monitors the status of complaints and has taken actions against plan sponsors who failed to comply with requirements for the complaints process. In contrast, CMS oversight of plan sponsor grievances processes has been more limited. CMS provided plan sponsors with general guidance for classifying grievances and periodically reviewed these data. However, several plan sponsors indicated that the guidance was insufficient, increasing the likelihood that plan sponsors report erroneous and inconsistent information to CMS and that they rely on the wrong processes to address beneficiaries' concerns. Further, CMS could not explain many of the anomalies in the grievances data that GAO identified.

gao_GAO-05-421

gao_GAO-05-421_0

Special Gasoline Blends Are Widely Used and Use May Increase in the Future There were 12 distinct gasoline blends in use in the United States during the summer of 2004: 11 special gasoline blends and the conventional gasoline used everywhere a special blend is not used. When different grades of gasoline, special blends used in winter, and other factors are considered, the number of gasoline blends rises to at least 45. New ozone standards and other factors may further increase the number or the use of special gasoline blends in the future, in part because EPA must approve any state’s application to require use of a special gasoline blend as long as the proposed fuel meets EPA’s environmental standards. In addition, a new federal standard for all gasoline—including special blends—that mandates reduced sulfur, promises to improve the effectiveness of catalytic converters already present in most vehicles and could aid some areas in meeting federal air quality standards, potentially reducing the need for these fuels in some areas. EPA staff told us that there had been congressional debate regarding EPA’s authority during consideration of recent energy legislation, but that its authority had not changed as of May 2005. The extent of reductions remains unclear, however, because the estimates have not been comprehensively validated through testing on current vehicles and emissions controls. As shown in table 1, the models estimate that special gasoline blends reduce emissions by varying degrees. The special gasoline blend most commonly used in areas not using conventional gasoline—gasoline with an RVP of 7.8—is estimated to reduce VOC emissions by 12-16 percent and NOx by about 0.7 percent. Reduced Vehicle Emissions Have Led to Air Quality Improvements, but the Extent of Benefits Attributable to Special Gasoline Blends Is Uncertain EPA and other experts have concluded that improvements in air quality in some parts of the country are at least partly attributable to the use of special gasoline blends. Special blends also add to the number of fuels shipped through pipelines, reducing the efficiency of the pipelines and raising costs. MTBE is generally less expensive than ethanol as an oxygenate but has raised water quality concerns. Several terminal operators told us that their terminals were built before the proliferation of special gasoline blends and were designed to handle fewer, but larger, batches of gasoline. Areas That Use Uncommon Special Gasoline Blends Tend to Have Higher and More Volatile Gasoline Prices Among the 100 cities we examined, the highest wholesale gasoline prices tended to be found in cities that used a special gasoline blend not widely available in the region or that is more costly to make than other blends. Further, the greater complexity and higher refining, transportation, and storage costs associated with supplying special gasoline blends have almost certainly resulted in increased prices or volatility, either because of more frequent or severe supply disruptions, or because higher costs are likely passed on, at least in part, to consumers. Recommendation for Executive Action To provide a better understanding of the emissions impacts of using special gasoline blends and these blends’ impacts on the gasoline supply infrastructure, we recommend that the EPA Administrator direct the agency to take the following four actions: (1) work with states and other stakeholders to comprehensively analyze how various gasoline blends affect the emissions of vehicles that comprise today's fleet, including how overall emissions are affected by the use of ethanol and other oxygenates; (2) use this updated information to revise the emissions models that states use to estimate the emissions and air quality benefits of these fuels and provide this information to Congress; (3) work with states, the Department of Energy, and other stakeholders to develop a plan to balance the environmental benefits of using special gasoline blends with the impacts on gasoline supply infrastructure and prices, and report the results of this effort to Congress; and (4) work with the states, the Department of Energy, and any other appropriate federal agencies to identify what statutory or other changes are needed to achieve this balance and report these findings to Congress and request that Congress provide these authorities to the appropriate federal agency or agencies. Scope and Methodology To determine the extent to which special gasoline blends are used in the United States and how, if at all, this use is expected to change in the future, we reviewed related literature, reviewed data on the use of these fuels, and interviewed government and other officials.

Why GAO Did This Study The Clean Air Act, as amended, requires some areas with especially poor air quality to use a "special gasoline blend" designed to reduce emissions of volatile organic compounds (VOC) and nitrogen oxides (NOx) and requiring the use of an oxygenate such as ethanol. In less severely polluted areas, the Act allows states, with EPA approval, to require the use of other special blends as part of their effort to meet air quality standards. GAO agreed to answer the following: (1) To what extent are special gasoline blends used in the United States and how, if at all, is this use expected to change in the future? (2) What effect has the use of these blends had on reducing vehicle emissions and improving overall air quality? (3) What is the effect of these blends on the gasoline supply? (4) How do these blends affect gasoline prices? What GAO Found Although there is no consensus on the total number of gasoline blends used in the United States, GAO found 11 distinct special blends in use during the summer of 2004. Further, when different octane grades and other factors are considered, there were at least 45 different kinds of gasoline produced in the United States during all of 2004. The 11 special blends GAO found are often used in isolated pockets in metropolitan areas, while surrounding areas use conventional gasoline. The use of special blends may expand because a new federal standard for ozone may induce more states to apply to use them. To date, the Environmental Protection Agency (EPA) has generally approved such applications and does not have authority to deny an application to use a specific special blend as long as that blend meets criteria established in the Clean Air Act. EPA staff told us that there had been recent congressional debate regarding EPA's authority with regard to approving special gasoline blends but that the bills had not passed. EPA models show that use of special gasoline blends reduces vehicle emissions by varying degrees. California's special blend reduces emissions the most--VOCs by 25-29 percent, NOx by 6 percent compared with conventional gasoline, while also reducing emissions of toxic chemicals. In contrast, the most common special gasoline blend (used largely in the Gulf Coast region) reduces VOCs by 12-16 percent and NOx by less than 1 percent compared with conventional gasoline. The extent of reductions remains uncertain, because they rely, at least in part, on data regarding how special blends affect emissions from older vehicles, and these estimates have not been comprehensively validated for newer vehicles and emissions controls. Regarding air quality, EPA and others have concluded that improvements are, in part, attributable to the use of special blends. The proliferation of special gasoline blends has put stress on the gasoline supply system and raised costs, affecting operations at refineries, pipelines, and storage terminals. Once produced, different blends must be kept separate throughout shipping and delivery, reducing the capacity of pipelines and storage terminal facilities, which were originally designed to handle fewer products. This reduces efficiency and raises costs. In the past, local supply disruptions could be addressed quickly by bringing fuel from nearby locations; now however, because the use of these fuels are isolated, additional supplies of special blends may be hundreds of miles away. GAO evaluated pretax wholesale gasoline price data for 100 cities and generally observed that the highest prices tended to be found in cities that use a special gasoline blend that is not widely available in the region, or that is significantly more costly to make than other blends. There is general consensus that increased complexity, and higher costs associated with supplying special blends, contribute to higher gasoline prices either because of more frequent or severe supply disruptions or because higher costs are likely passed on at least in part to consumers.

gao_GAO-04-111

gao_GAO-04-111_0

DOD Plans to Privatize Most Family Housing by 2005, but Its Reported Data Do Not Fully Show Progress in Eliminating Inadequate Housing Although DOD reported to Congress that the services plan to privatize most of their family housing units by the end of fiscal year 2005, these reports do not include the number of privatized units that have been renovated or newly constructed. As of March 2003, the military services had signed contracts privatizing about 28,000 family housing units and plan to privatize a total of about 140,000 units by the end of fiscal year 2005. We recognize it can take developers several years to renovate existing housing units or construct new ones after the military housing is privatized. Furthermore, as the privatization program progresses, it will become increasingly important to have complete data on the status of actual renovation and new construction of privatized housing units on which to determine how quickly the program is creating adequate family housing and improving the living conditions of the servicemembers and their families. Consultant Costs Represent Less than Half of Total Privatization Support Costs According to the services’ budget data, costs for consultants are less than half of the services’ total privatization support costs, actual and projected. As figure 2 shows, the services project sharp declines in privatization support and consultant costs after fiscal year 2004. Military Services Use Inconsistent Definitions of Privatization Support and Consultant Costs The military services are not consistent in their definitions for privatization support and consultant costs. The differences in the services’ definitions for privatization support costs result in inconsistent budgeting for these costs. Furthermore, OSD does not report its own program consultant costs in the quarterly report. Differences in the Services’ Definitions for Consultant Costs Result in Inconsistent Reporting to Congress Because OSD had not defined the types of costs to be included in determining consultant costs, the services define them differently, resulting in inconsistent reporting of consulting expenditures in the department’s quarterly housing privatization report to Congress. Several Factors Limit Evaluation and Comparison of Consultant Fees Although housing privatization fees paid to individual consultants vary among the services, several factors limit an evaluation and comparison of these fees. Such factors include the differences in labor categories, hours, and skills mix that each consulting firm can use to describe the work they need to do to accomplish the work specified by the services, such as the following: Labor categories. As a result, service officials said that they have contracted with firms that provide the best value to the government based on their needs. To provide for more consistent and complete data on privatization consultant costs, we recommend that the Secretary of Defense direct the Under Secretary of Defense for Acquisition, Technology, and Logistics, in consultation with the Under Secretary of Defense (Comptroller), to (1) define consultant costs, including a determination of the inclusion of portfolio management costs, for the military services; and (2) include OSD’s own program consultant costs associated with its efforts to privatize military housing in the department’s quarterly housing privatization report to Congress.

Why GAO Did This Study In 2000, Congress required the Department of Defense (DOD) to report quarterly on the services' expenditures for consultants in support of the military family housing privatization programs. GAO was asked to review the costs of the consultants DOD used to support privatizing housing for servicemembers and their families. This report discusses (1) the number of family housing units the services have privatized, particularly newly constructed or renovated units, and project to be privatized by fiscal year 2005; (2) the portion of privatization support costs used for consultants; (3) the services' consistency in the definition for privatization support and consultant costs; and (4) factors that limit an evaluation of how consultant fees for the military housing initiative compare among the services. What GAO Found Although DOD reported to Congress that the services plan to privatize most of their family housing by fiscal year 2005, DOD's reports do not provide decision makers with the number of privatized units that have been renovated or newly constructed. As of March 2003, the services had contracts privatizing about 28,000 family housing units and planned to privatize 140,000 units by fiscal year 2005. As a result of this privatization, about 7,600 units had been constructed or renovated. It can take developers several years to renovate existing housing or construct new units after they are privatized. As the program progresses, it will become increasingly important to have complete data on which to determine how quickly the privatization program is creating adequate family housing. Costs for consultants are less than half of the services' privatization support costs. The services anticipate many privatization support and consultant costs to peak in fiscal year 2004 when the need for consultants diminishes once most privatization contracts are signed. Remaining support costs will then focus increasingly on managing the portfolio of the privatized housing. The services are not consistent in their definitions for privatization support and consultant costs. The differences in the services' definitions for privatization support costs result in inconsistent budgeting for these costs. Also, the differences in the services' definitions for consultant costs result in inconsistent reporting of consultant costs in the department's quarterly housing privatization report to Congress. Further, the Office of the Secretary of Defense does not report its own program consultant costs in the quarterly report. Several factors, such as differences in labor categories, hours, and skills mix that each consulting firm can use to accomplish work, limited our evaluation of how consultant fees for the military housing initiative compare among the services. Even though these factors hinder a comparative evaluation of consultant fees, service officials told us they believe that they have contracted with firms that provide the best value to the government based on their needs and that the consultants' fees are fair and reasonable.

gao_GAO-10-241

gao_GAO-10-241_0

Background Many individuals receiving monthly compensation and pension benefits from the VA have mental impairments that can prevent them from managing their finances. In 1935, Congress created an early version of the VA Fiduciary Program to select and oversee responsible third parties, called fiduciaries, who help manage and protect beneficiaries’ funds. Inconsistent Compliance with Some Policies and Weaknesses in Others Hinder VA’s Ability to Monitor Fiduciaries and Safeguard Benefits Program Staff Do Not Always Comply with Policies for Conducting Visits and Obtaining Timely Financial Reports and Bonds Although VA has established Fiduciary Program policies intended to ensure that qualified fiduciaries are selected and regularly monitored, staff did not always take required actions within established time frames or document in the case files that required actions were taken. Similar to initial visits, program managers and staff noted that compliance with the 120-day time frame for follow-up visits can be challenging due in part to a lack of staff and time. VA’s Policy for Periodic On-site Reviews Does Not Ensure Effective Monitoring of Professional Fiduciaries In 2005, VA developed a new policy requiring Fiduciary Program staff to conduct periodic on-site reviews of professional fiduciaries as required by the Veterans’ Benefits Improvement Act of 2004. These financial reviews examine records kept by fiduciaries who manage funds for multiple beneficiaries. Though managers and staff in regional offices we visited and in the Central Office said that on-site reviews are useful when conducted properly, we found two associated policy weaknesses: (1) not all fiduciaries who need these reviews can be reliably identified and (2) VA lacks a nationwide quality review process to ensure that these on-site reviews are conducted properly and consistently. However, this computer match is based on a fiduciary’s name, rather than a unique identifier, such as the fiduciary’s Social Security number or tax identification number. In addition, although VA policy requires that at least 25 percent of a fiduciary’s beneficiary case files (or up to 25 case files) be examined during the on-site reviews, we found that this threshold was not met in four reports. System Limitations and Insufficient Training Hamper Program Performance and Oversight; However, VA Is Taking Steps That May Help We identified two key challenges that limit VA’s ability to improve Fiduciary Program performance and oversight. First, VA’s electronic fiduciary case management system does not provide sufficient information to managers and staff about their cases, and it is cumbersome to use. Second, some managers and staff may not have received sufficient training to ensure that they have the necessary expertise to effectively monitor individual fiduciaries and oversee the program. VA’s Fiduciary Case Management System Provides Insufficient Information and Is Cumbersome to Use VA’s electronic fiduciary case management system, FBS, does not provide sufficient data to effectively manage the Fiduciary Program. VA Provides Some Training for Fiduciary Managers and Staff, but Additional Standardized Training Is Needed Managers and staff in all three regional offices we visited said the Fiduciary Program is complex and requires a great deal of specialized knowledge to effectively monitor fiduciaries and provide program oversight. Central Office management said that they expect to implement these training programs some time in fiscal year 2010. VA Consolidated Western Fiduciary Program Units to Improve Performance and Oversight but Has Not Yet Evaluated the Outcomes of This Effort Beginning January 2008 through September 2008, VA consolidated Fiduciary Program unit managers, staff, and files from 14 western VA regional offices into a single location in Salt Lake City, Utah—referred to as the Western Area Fiduciary Hub—to improve program performance and oversight. Also, in the absence of sufficient standardized training, managers and staff may not have the expertise needed to effectively carry out program responsibilities. Appendix I: Objectives, Scope, and Methodology The objectives of our report on the Department of Veterans Affairs (VA) Fiduciary Program were to examine (1) how effective program policies and procedures are in monitoring fiduciaries and safeguarding beneficiary assets and (2) challenges VA faces in improving program performance and oversight.

Why GAO Did This Study Many individuals receiving monthly compensation and pension benefits from the Department of Veterans Affairs (VA) have mental impairments that prevent them from managing their finances. VA's Fiduciary Program selects and oversees third parties, called fiduciaries, to help manage and protect beneficiaries' funds. GAO examined (1) how effective program policies and procedures are in monitoring fiduciaries and safeguarding beneficiary assets, and (2) challenges VA faces in improving program performance and oversight. GAO reviewed program policies, analyzed a nationally representative random sample of case files, interviewed Central Office managers and staff, and conducted three site visits to Fiduciary Program offices which accounted for 25 percent of program beneficiaries. During these visits GAO interviewed regional office managers and staff and conducted 32 file reviews. What GAO Found VA's Fiduciary Program has policies in place that are intended to ensure that qualified fiduciaries are selected and regularly monitored; however, insufficient staff compliance with some policies and weaknesses in others hinder VA's ability to safeguard veterans' benefits. For example, VA was late in conducting required follow-up visits to monitor fiduciaries or provided insufficient documentation to show whether these visits were conducted in about 18 percent of the cases GAO reviewed. In addition, while GAO estimated that nearly 40 percent of fiduciaries who were required to submit financial reports to demonstrate how beneficiary funds are managed turned their reports in late, VA did not always take actions to obtain them on time or provide documentation that an attempt had been made, as required by VA policy. GAO also found that files did not always contain documentation that a bond was secured when required to safeguard beneficiary estates or that the requirement was waived. Fiduciary Program managers and staff said that they did not always comply with VA policies due, in part, to a lack of time, resources, and staff. In addition, VA's policies for conducting on-site reviews of professional fiduciaries who manage funds for multiple beneficiaries do not ensure these fiduciaries are effectively identified and monitored. For example, VA's policy may not ensure that all fiduciaries who need to be reviewed are identified because the agency's policy allows the use of the fiduciary's name--which may be entered inconsistently--to match them to beneficiaries rather than requiring a unique identifier, such as a Social Security number. Moreover, VA does not have a nationwide quality review process to ensure that these reviews are conducted properly and consistently. GAO identified two key challenges that hinder VA's ability to improve Fiduciary Program performance and oversight. First, managers and staff in the three regional offices visited said VA's electronic fiduciary case management system does not provide sufficient information and is cumbersome to use. For example, the system limits staff's ability to track multiple actions on a case or enter all needed information. Also, the system does not generate comprehensive management reports that would facilitate effective oversight. In addition, managers and staff indicated that available training may not be sufficient to ensure they have the necessary expertise to carry out program responsibilities. Moreover, many managers and staff had less than 2 years of program experience, and the lack of sufficient training may have contributed to inconsistent compliance with some program policies. VA is developing standardized training that it expects to implement some time in fiscal year 2010. VA is also piloting a consolidated Fiduciary Program unit covering 14 western units, in part, to address program challenges. While the pilot is intended to improve program performance and oversight, managers and staff noted that difficulties, such as not having resources in place and up-to-date case files, impeded effective implementation. VA has not yet evaluated the impact and effectiveness of this model.

gao_NSIAD-96-119

gao_NSIAD-96-119_0

Background A primary goal of the U.S. national drug control strategy is to reduce the amount of cocaine entering the United States. Drug-Trafficking Activities Occur Throughout the Caribbean Puerto Rico is the major entry point for cocaine moving through the Eastern Caribbean. U.S. drug officials believe that after 1993 traffickers moved some of their activities from the Bahamas to Puerto Rico because U.S. interdiction efforts in the Bahamas had increased the risk to traffickers. However, most Caribbean nations lack resources and law enforcement capabilities and have some corruption problems that hamper their efforts to combat drug trafficking. However, Jamaica has not completed its counterdrug legislation or fully implemented it. As a result, U.S. officials are trying to improve interdiction capabilities by signing agreements that allow U.S. personnel to conduct antidrug sea and air operations within the territorial waters and airspace of these nations. Despite these rumors, authorities have not initiated any investigations. Capabilities to Interdict Drug Traffickers in the Transit Zone Have Been Reduced From fiscal year 1992 to fiscal year 1995, the budgets for most federal activities in the transit zone declined significantly. ONDCP-Supported Transit Zone Study In 1995, the ONDCP contracted with Evidence-Base Research to conduct a study to (1) develop a baseline inventory for fiscal year 1994 of interdiction and law enforcement operations and resources in the transit zone and (2) consider the impact on disruption success rates with a $200-million and a $500-million increase in resources. Lack of Regional Plan Hampers Interdiction Effort The executive branch has not developed a plan to implement the U.S. antidrug strategy in the Caribbean. DEA raised concerns regarding intelligence sharing in the Caribbean. At that time, we will send copies to the Director of ONDCP, the Secretaries of the Departments of Defense and State, the Commissioner of the U.S. Customs Service, the Commandant of the U.S. Coast Guard and the U.S. Interdiction Coordinator, the Administrator of DEA, the Director of the Federal Bureau of Investigation, and interested congressional committees. GAO Comments 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed drug trafficking activities in the Caribbean, focusing on: (1) the activities' nature in the transit zone, particularly in the Eastern Caribbean; (2) host nation impediments to an effective regional control strategy; (3) U.S. agencies' capabilities to interdict drug trafficking throughout the Caribbean transit zone; and (4) federal agency planning, coordination, and implementation of U.S. interdiction efforts. What GAO Found GAO found that: (1) U.S. officials believe that drug trafficking through the Caribbean is increasing; (2) drug traffickers have shifted their drug transportation operations from primarily air to commercial and marine transportation and are using advanced technologies to counter U.S. interdiction efforts; (3) the U.S.-Caribbean strategy attempts to strengthen host nations' political will and capabilities to support U.S. objectives, but most host nations lack the resources to conduct antidrug operations; (4) the United States has entered into agreements with several governments that give it authority to operate in their territorial waters and airspace; (5) widespread political and police corruption in the Caribbean hampers U.S. interdiction efforts; (6) budget cuts have reduced the Department of Defense's and law enforcement agencies' interdiction capabilities in the transit zone and the expected increases in funds for source country activities have not materialized; (7) lost radar and ship capabilities had the greatest impact on air and surface interdictions; (8) cocaine seizures declined by almost one-half from fiscal year (FY) 1991 to FY 1995; (9) the Administration has not developed a regional, antidrug implementation plan, adequately staffed interagency organizations with key personnel, or fully resolved intelligence-sharing issues; and (10) the two organizations with coordination responsibilities lack the authority to command the use of any agency's resources.

gao_GAO-04-756

gao_GAO-04-756_0

Wind Power Is a Small but Growing Part of the Nation’s Electric Power Generation Capacity Although wind power accounted for about one-tenth of 1 percent of total U.S. electric power generation capacity in 2002, it had quadrupled in generating capacity between 1990 and 2003, and has been growing at a much higher rate than other sources of electric power generation. This rate also makes wind power the fastest growing source of electric power generation, on a percentage basis, in the United States in recent years. For example, from 1999 through 2003, the average annual growth rate of wind power was 28 percent, and in 2003 alone, enough new wind turbines were erected to provide electricity to 400,000 to 500,000 U.S. homes. The nation’s wind potential—particularly in areas with frequent, strong winds needed to generate electricity from wind power—remains largely untapped. On average, wind power turbines operate the equivalent of less than 40 percent of the peak hours in a year due to the intermittency of wind. In contrast, fossil fuel power plants are a significant source of air pollution. Wind Power Does Not Contribute Significantly to Total Farm Income, but Some Individual Farmers and Communities Have Benefited Wind power does not currently contribute significantly to total farm income in the 10 states with the highest installed wind power capacity, although some individual farmers and rural communities have benefited considerably from this energy source. However, wind projects located on farmland have increased some individual farmers’ income significantly, according to our site visits and analysis. Wind Power Accounts for Only a Very Small Amount of Total Farm Income, but Provides Substantial Income to Some Farmers and Communities In the 10 states we examined, total net farm income exceeded $14 billion in 2002, but total direct income to all U.S. farmers from wind power ranged from only $10 million to $45 million, representing only a fraction of 1 percent of net farm income in these states. Furthermore, according to DOE, increasing the proportion of the nation’s energy generation attributable to wind power to 5 percent by 2020 would add about $60 billion in capital investment in rural America; provide an estimated $1.2 billion in new income to farmers, Native Americans, and rural landowners; and create approximately 80,000 new jobs. We found that farmers generally find leasing their land for wind power projects to be easier than owning projects because of the complexity of, and risk associated with, developing a wind power project. USDA Can Do More to Promote Wind Power USDA has not fully utilized all of the farm bill’s renewable energy provisions to promote wind power development on farms and in rural communities, although it has provided some funding through other provisions of the farm bill. In particular, USDA had not issued a regulation for loans and loan guarantees under the farm bill’s key wind power assistance program—the Renewable Energy Systems and Energy Efficiency Improvements Program (Renewable Energy Program). Many stakeholders consider the Renewable Energy Program as the key USDA program for promoting renewable energy sources, including wind power, on farms, ranches, or other rural lands. Table 6 summarizes the grant assistance provided for renewable energy projects, including wind power, under the program in fiscal year 2003. There are no plans for the group to meet again. Objectives, Scope, and Methodology At the request of the Ranking Democratic Member, Senate Committee on Agriculture, Nutrition, and Forestry, we agreed to examine (1) the amount of wind power generation in relation to all U.S. electricity generation and the prospects for wind power’s growth, (2) the contribution of wind power generation to farmers’ income and to the economic well-being of rural communities in the 10 states with the highest wind power generation capacity, (3) the advantages and disadvantages for farmers and rural communities of owning a wind power project or leasing their land to a commercial wind power developer, and (4) the efforts of the U.S. Department of Agriculture (USDA) to promote the development of wind power on farms and in rural communities.

Why GAO Did This Study Wind-generated electricity--wind power--has the potential to provide electricity to homes and businesses without causing air pollution or depleting nonrenewable resources, unlike electricity generated by fossil fuels (coal, natural gas, and oil). Furthermore, because wind power has no fuel costs--wind power depends on the energy of the wind--its operating costs are lower than the costs for power produced from fossil fuels, although its capital costs are greater. Wind power relies on frequent, strong winds to turn the blades of power-generating turbines. In the United States, a wind turbine with generating capacity of 2 megawatts (MW), placed on a tower situated on a farm, ranch, or other rural land, can generate enough electricity in a year--about 6 million kilowatt hours (kWh)--to serve the needs of 500 to 600 average U.S. households. In addition to environmental benefits, wind power has the potential to contribute significantly to America's growing energy needs while providing economic benefits to farms and communities in rural America. In this connection, the Department of Energy's (DOE) "Wind Powering America" program has set a goal of producing 5 percent of the nation's electricity from wind by 2020. DOE estimates that achieving this goal would add $60 billion in capital investment in rural America, provide $1.2 billion in new income for farmers and rural landowners, and create 80,000 new jobs by that year. Congress asked us to report on (1) the amount of wind power generation in relation to all U.S. electricity generation and the prospects for wind power's growth, (2) the contribution of wind power generation to farmers' income and to the economic well-being of rural communities in the 10 states with the highest wind power generation capacity, (3) the advantages and disadvantages for farmers of owning a wind power project versus leasing their land to a commercial wind power developer, and (4) the efforts of USDA to promote the development of wind power on farms and in rural communities. What GAO Found Nationwide, wind power accounted for only about one-tenth of 1 percent of total electric power generation capacity in 2003, and an even smaller percentage of electric power actually generated. However, U.S. wind power generating capacity quadrupled between 1990 and 2003--to 6,374 MW--and DOE has projected continued growth for this renewable power source through 2025. On a percentage basis, wind power capacity has been growing at a much higher rate than other sources of electric power generation--an average annual growth rate of 28 percent during the period 1999 through 2003. In addition, according to DOE, the U.S. Midwest theoretically has enough wind power potential to meet a significant portion of the nation's electricity needs; however, this potential remains largely untapped. Wind power does not currently contribute significantly to total farm income in the 10 states with the highest installed wind power capacity, but some individual farmers and rural communities have benefited considerably from this energy source. In these 10 states, net farm income was about $14 billion in 2002, but total direct income to farmers from wind power ranged from only $10 million to $45 million, representing a fraction of 1 percent of net farm income. However, wind projects located on farms have increased some individual farmers' income by tens of thousands of dollars annually. Farmers generally find leasing their land for wind power projects to be easier than owning projects. Leasing is easier because, unlike farmers, energy companies have the financial resources and legal and technical expertise to address the costs, complexity, tax advantages, and risks of wind power development. However, ownership may be more profitable than leasing. USDA has not fully utilized all of the farm bill's renewable energy provisions to promote wind power development on farms and in rural communities. For the Renewable Energy Systems and Energy Efficiency Improvements Program (Renewable Energy Program)--the key program for supporting wind power and other renewable energy initiatives--USDA offered grants totaling $7.4 million for 35 wind power projects in eight states in fiscal year 2003, the program's first year, but it has not implemented the loan and loan-guarantee components of the program. Without the latter, USDA has not fully fulfilled farm bill provisions and limits the ability of the program to promote renewable energy sources.

gao_GAO-04-579T

gao_GAO-04-579T_0

Iraq’s oil revenue was placed in a U.N.-controlled escrow account. Estimated Revenue Obtained Illegally by the Former Iraqi Regime from the Oil for Food Program Exceeds $10 Billion We estimate that, from 1997 through 2002, the former Iraqi regime acquired $10.1 billion in illegal revenues related to the Oil for Food Program—$5.7 billion through oil smuggling and $4.4 billion through surcharges against oil sales and illicit commissions from commodity suppliers. This estimate is higher than the $6.6 billion we reported in May 2002. We updated this estimate to include (1) oil revenue and contract amounts for 2002, (2) updated letters of credit from prior years, and (3) newer estimates of illicit commissions from commodity suppliers. U.S. Efforts to Recover Iraqi Assets Involve Many Agencies and Use Recently Developed Domestic and International Authorities The United States has tapped the services of several U.S. agencies and used recently developed U.S. and international authorities in its efforts to recover Iraqi assets worldwide. To lead the asset recovery efforts, the United States created an interagency coordinating body headed by the Department of the Treasury. On May 22, 2003, the U.N. Security Council adopted Resolution 1483, which (1) noted the establishment of the DFI, a special account in the name of the Central Bank of Iraq; and (2) required member states to freeze and immediately transfer to the DFI all assets of the former Iraqi government and of Saddam Hussein, senior officials of his regime and their family members. U.S. Efforts to Recover the Former Iraqi Regime’s Assets Have Had Varying Results In 2003, the U.S. government quickly vested Iraq’s assets held in the United States and transferred them to Iraq. The United States Transferred Nearly $1.9 Billion in Vested Assets to Iraq In 2003, the United States vested about $1.9 billion of the former regime’s assets in the U.S. Treasury. The United States Seized More Than $900 Million in Iraq CPA informed us in March 2004 that the U.S. military, in coordination with U.S. law enforcement agencies had seized about $926 million of the regime’s assets in Iraq. Treasury officials reported that, as of March 2004, more than 10 countries and the Bank for International Settlements have transferred $751 million to the DFI. To encourage other countries to transfer the funds to Iraq, the Secretary of the Treasury requested that the international community identify and freeze all assets of the former regime. U.S. government officials have cited estimates ranging from $10 billion to $40 billion in illicit earnings. Challenges to Transferring Frozen Assets and Locating the Hidden Assets The U.S. government has faced key challenges to recovering the assets of the former Iraqi regime. First, recovering the former regime’s assets was not initially a high priority in the overall U.S. effort in Iraq. Second, U.S. expectations for the quick transfer of funds under U.N. Security Council Resolution 1483 may have been overly optimistic given the lack of legal capabilities of some countries to do so. U.S. officials stated that many countries needed to adopt additional legislation to implement the U.N. requirements and transfer the funds to the DFI. Third, the impending transfer of sovereignty to an interim Iraqi government on June 30, 2004, may further complicate U.S. efforts to locate and recover assets of the former regime. It is uncertain whether the new government will allow the United States to continue its hunt for the former regime’s assets. Identify, freeze, and transfer assets to the Development Fund for Iraq. ?

Why GAO Did This Study Rebuilding Iraq is a U.S. national security priority. Billions of dollars are needed for Iraq's reconstruction. The U.S. government and the international community have undertaken important efforts to recover the assets of the former regime and return them to the Iraqi people. In this testimony, GAO will present its preliminary observations on the recovery effort. Specifically, GAO (1) updates its estimate of the revenues diverted from the Oil for Food Program, (2) describes the U.S. government agencies working on the asset recovery effort, (3) discusses the results of U.S. efforts, and (4) highlights challenges that the United States faces in recovering Iraqi assets. What GAO Found GAO estimates that from 1997 through 2002, the former Iraqi regime acquired $10.1 billion in illegal revenues related to the Oil for Food program--$5.7 billion in oil smuggled out of Iraq and $4.4 billion in illicit surcharges on oil sales and after-sales charges on suppliers. This estimate is higher than our May 2002 estimate of $6.6 billion because it includes 2002 data from oil revenues and contracts under the Oil for Food Program and newer estimates of illicit commissions from commodity suppliers. The United States has tapped the services of a variety of U.S. agencies and recently developed domestic and international tools in its efforts to recover Iraqi assets worldwide. Led by the Department of the Treasury, about 20 government entities have combined efforts to identify, freeze, and transfer the former regime's assets to Iraq. The United States also used the International Emergency Economic Powers Act, as amended by provisions in the USA PATRIOT Act of 2001, to confiscate the property of the former Iraqi regime under U.S. jurisdiction and vest the assets in the U.S. Treasury. Finally, U.N. Security Council Resolution 1483 required all U.N. members to freeze without delay and immediately transfer assets of the former Iraqi regime to the new Development Fund for Iraq (DFI). U.S. efforts to recover Iraqi assets have had varying results. In March 2003, the U.S. government quickly took control of Iraq's assets in the United States. From May to September 2003, the United States transferred $1.7 billion to Iraq to help pay for the salaries of Iraqi civil servants, ministry operations, and pensions. Within Iraq, U.S. military and coalition forces seized about $926 million of the regime's assets. Other countries froze about $3.7 billion of Iraqi regime assets in compliance with U.N. Security Council resolutions. As of March 2004, Treasury reported that more than 10 countries and the Bank for International Settlements had transferred approximately $751 million to the DFI. Little progress has been made in identifying and freezing additional Iraqi assets that remain hidden. While the amount of hidden assets accumulated by the former Iraqi regime is unknown, estimates range from $10 to $40 billion in illicit earnings. The United States faces key challenges in recovering Iraq's assets. First, recovering the former regime's assets was not initially a high priority in the overall U.S. effort in Iraq. Second, U.S. officials stated that many countries needed to adopt additional legislation to implement the U.N. requirements and transfer the funds to the DFI. U.S. expectations for the quick transfer of funds may have been overly optimistic given the legal capabilities of some countries. Third, the impending transfer of sovereignty to an interim Iraqi government on June 30, 2004, may further complicate U.S. efforts to locate and recover assets of the former regime. It is uncertain whether the new government will allow the United States to continue its hunt for the former regime's assets.

gao_GAO-14-472

gao_GAO-14-472_0

FTA’s New Starts projects under SAFETEA-LU were defined as new fixed guideway or extensions to existing fixed guideway capital projects with a total capital cost of $250 million or more or a Capital Investment Grant program contribution of $75 million or more. The Length of the Development Process for Projects Varies Substantially Depending upon Project-Specific and Local Factors Length of the Development Process Varies Substantially across Projects Among the 32 transit projects we reviewed, we found significant variation in the length of time sponsors of New Starts, Small Starts, and Very Small Starts projects needed to complete the development process (see fig. 2). Specifically, according to our analysis of FTA and project sponsor data, we found that New Starts projects took about 3 to 14 years to complete the development process, Small Starts projects took about 3 to 12 years, while Very Small Starts projects took about 2 to 11 years. 3). Sponsors of 17 of 32 of the projects we reviewed stated that activities to secure local funding contributed to the length of the development process. For example, project sponsors for 2 of the 32 projects we reviewed cited FTA’s risk assessment as a requirement that affected the length of the development process.addition, sponsors of 4 of the 16 Very Small Starts projects we reviewed speculated that some of the longer review times for smaller projects may have been a result of FTA’s initial uncertainty in how it would implement the simplified review process for Very Small Starts projects. While FTA has acknowledged that the process can be lengthy and frustrating, FTA has taken some steps over the last several years to further streamline the development process. The Majority of Capital Cost Estimates Did Not Change Significantly during the Development Process, and Changes That Did Occur Were due to Various Factors We found that capital cost estimates for New Starts, Small Starts, and Very Small Starts projects during the development process generally did not change substantially prior to the award of federal funding. Project sponsors told us that cost estimate changes occurred as a result of changing market conditions, FTA’s application of additional project contingencies and scope modifications, among others. For 23 of the 32 projects we reviewed, the original cost estimated upon entry into the Capital Investment Grant pipeline was within 10 percent of the final cost estimated prior to receiving federal funding. The original capital cost estimates for the remaining 9 projects varied by as much as 41 percent lower and 55 percent higher from the estimates used at the end of the development process. For example, officials at Valley Transportation Authority (VTA) (located in Santa Clara, California) stated that, as part of FTA’s risk assessment review, the project-management oversight contractor recommended an increase in the contingency amount for the project by $100 million. Project Sponsors Use Regional Travel Models to Forecast Ridership, and FTA Provides Funding and Technical support Project Sponsors Generally Forecast Ridership Using Regional Travel Models Project sponsors rely on support from MPOs to develop their ridership forecasts. By and large, New and Small Starts project sponsors whom we interviewed generally use the regional travel models of the project sponsor’s local MPO to forecast ridership. This method essentially uses actual transit ridership data, which includes, among other data, observed origins and destinations of transit users and surveys of region-wide transit riders. For example, for the Portland, Oregon, Streetcar Loop project, the Tri-County Metropolitan Transportation District of Oregon (TRIMET) used travel forecasts prepared by the Portland Metropolitan Planning Organization. As previously mentioned, according to FTA, one of the key requirements for a Very Small Starts project is that at least 3,000 existing transit riders will use the proposed project on an average weekday. To adequately document the required number of existing transit riders, the sponsoring agency must conduct a detailed counting of riders of existing public transportation in the project corridor, and estimate the number of existing riders that will use the Very Small Starts project. 1. These include the following: Funding. According to FTA officials, the agency contributes funding to state agencies and MPOs to support, among many other activities, the collection of travel data and the development of travel-forecasting procedures. We interviewed 13 New Starts and Small Starts project sponsors, and a majority (7) said that FTA’s technical assistance, which includes reviewing ridership forecasts, was generally helpful. Agency Comments We provided DOT with a draft of this report for review and comment. DOT provided technical comments, which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology The Moving Ahead for Progress in the 21st Century Act (MAP-21) mandated GAO to biennially review FTA’s processes and procedures for evaluating, rating, and recommending new fixed-guideway capital projects and core capacity improvement projects and the Department of Transportation’s (DOT) implementation of such processes and procedures. In this report, we identify (1) the extent to which the length of the development process varies across New Starts, Small Starts and Very Small Starts projects and what factors affect the length of this process, (2) the extent to which capital cost estimates for New Starts, Small Starts, and Very Small Starts projects change throughout the development process, and what factors contribute to the changes, and (3) how project sponsors forecast ridership, including any support that FTA provides in helping them develop these forecasts.

Why GAO Did This Study FTA provides funds to transit project sponsors to build new or extensions to existing fixed-guideway transit systems through the Capital Investment Grant program. This program funds New, Small, and Very Small Starts projects—funds that are based partly on the project's total estimated cost. For example, for New Starts, project capital costs exceed $250 million or the program contribution exceeds $75 million; for Small Starts, capital costs are less than $250 million and the program contribution is less than $75 million. The pre-construction development process for these projects includes various steps between the time when a project sponsor identifies the project to be funded and the formal award of FTA construction funds. During this process, the scope, capital cost, and ridership estimates can change. The Moving Ahead for Progress in the 21st Century Act mandated that GAO biennially review these types of projects. This report describes (1) the length of the development process across these projects and the factors affecting the length, (2) capital cost-estimate changes throughout this process, and the factors contributing to the changes, and (3) how project sponsors forecast ridership, including support that FTA provides. GAO analyzed pertinent laws, regulations, agency guidance, and FTA data for the 32 New, Small, and Very Small Starts projects initiated and funded from 2005 to 2013, prior to recent changes in program processes. GAO interviewed FTA staff and project sponsors. DOT reviewed a draft of this report and provided technical comments, which were incorporated as appropriate. What GAO Found For the 32 New Starts, Small Starts, and Very Small Starts projects funded from 2005 to 2013 that GAO reviewed, the length of the development process varied substantially, from as little as 2 to as long as 14 years, based on GAO's analysis of data from the Federal Transit Administration (FTA) and project-sponsors. GAO found that the development process took 3 to 14 years to complete for New Starts projects, 3 to 12 years for Small Starts projects, and 2 to 11 years for Very Small Starts projects. The length of the process is generally driven by factors that are often unique to each project, including (1) the extent of local-planning activities prior to formal approval for funding, (2) the extent and availability of local and financial support, and (3) the extent of FTA oversight activities. For example, sponsors of 17 of the 32 projects GAO reviewed stated that activities to secure local funding contributed to the length of the development process. FTA has taken some steps to streamline this process. For example, in January 2012, FTA eliminated the requirement for the development of a hypothetical alternative that served as a basis of comparison to evaluate a proposed project. GAO found that capital cost estimates for New Starts, Small Starts, and Very Small Starts projects during the development process generally did not change substantially prior to the award of federal funding. For 23 of the 32 projects GAO reviewed, the final cost estimated prior to receiving federal funding was within 10 percent of the original cost estimates. The remaining 9 projects varied by as much as 41 percent lower and 55 percent higher than the estimates used at the end of the development process. Several project sponsors told us that, when changes did occur, it was a result of changing market conditions and FTA's recommending that sponsors increase project costs to cover unforeseen events, among other factors. For example, officials at the Valley Transportation Authority, located in Santa Clara, California, stated that FTA recommended that it increase the project's cost by $100 million to cover unforeseen events. New and Small Starts project sponsors whom GAO interviewed generally forecast ridership using regional travel models prepared by metropolitan-planning organizations (MPO). Specifically, 8 out of the 9 New Starts project sponsors and 3 out of 4 Small Starts project sponsors GAO spoke with use these travel models. For example, for a Portland, Oregon, streetcar project, the project sponsor used travel forecasts prepared by the Portland MPO. The other New Starts and Small Starts project sponsors use actual transit-ridership data from surveys of regional transit riders; and a statewide travel model, respectively. On the other hand, FTA procedures permit sponsors of Very Small Starts projects to essentially demonstrate, through a detailed counting of riders of existing public transportation in the project's corridor, that the proposed project will service at least 3,000 transit riders on an average weekday. FTA has taken a number of actions to support the development of ridership forecasts. These include, among other actions, providing funding to state agencies and MPOs to help them collect travel data and develop forecasting procedures and providing technical support, such as reviews of final forecasts. GAO interviewed 13 New Starts and Small Starts project sponsors and most said that FTA's technical assistance, which includes reviewing the ridership forecasts, was generally helpful.

gao_GAO-07-358T

gao_GAO-07-358T_0

In the United States, federal programs either directly purchase and distribute prescription drugs or reimburse pharmacies or other providers for drugs dispensed or delivered. In the face of rising prescription drug spending, the governments of other countries, U.S. private payers, and federal programs have applied both demand- and supply-side measures to contain prescription drug spending. PBMs also provide health plans with clinical services, such as formulary development and management, prior authorization and drug utilization reviews to screen prescriptions for such issues as adverse interactions or therapy duplication, and substitution of generic drugs for therapeutically equivalent brand drugs. Federal Programs Beyond Medicare Part D, a range of federal programs, established by statute, in the United States offer drug benefits to individuals meeting various eligibility criteria. Medicaid is the joint federal-state program that finances medical services for certain low-income adults and children. Medicare, the federal health insurance program that serves the nation’s elderly and certain disabled people, in addition to the outpatient prescription drug benefit offered in Part D, covers certain other drugs through Part B. These countries have three main approaches to limiting the amount they pay to acquire drugs: profit limits. Ceiling prices allow purchasers to negotiate lower prices directly with drug manufacturers. Alternatively, a government may set a price ceiling and allow purchasers to negotiate more favorable prices with manufacturers directly. Reference prices use local or international price comparisons of drugs classified in the same therapeutic group to determine a single or maximum price for all drugs in that group. Profit limits control the amount of profit a drug manufacturer may earn on a product or within a specified period of time. Several other key factors can influence drug price negotiations in OECD countries. These payers, including employer-based health plans and private health insurers, typically contract with PBMs to help manage their prescription drug benefits. PBMs negotiate rebates or payments with manufacturers and prices with networks of retail and mail-order pharmacies, passing along at least some of the savings to health plans and enrollees. One of the key ways PBMs influence price negotiations with manufacturers is through formulary development and management. Similarly, PBMs often set up contractual arrangements with manufacturers based on manufacturers’ entire line of products rather than per drug. Approaches Used by U.S. Federal Programs for Negotiating Drug Prices Approaches for negotiating drug prices vary among federal programs in the United States. While these approaches reflect the laws that govern them, markets, and health care delivery and financing, there are also elements common to some of the approaches used by other countries and by private payers. Some federal programs set ceiling prices, others establish prices by referencing prices negotiated by private payers in the commercial market, and still others rely on negotiations with manufacturers, either directly or through private health plans. For example, VA’s and DOD’s prices for particular prescription drugs may be the lowest of an FSS price, a ceiling price, or the price that each agency can negotiate directly with the manufacturer. The FEHBP uses a different approach, modeled after other large U.S. employers’ health benefits; health plans participating in the FEHBP typically contract with PBMs to negotiate drug prices and offer other pharmacy benefit, administrative, and clinical services. Medicaid Unlike VA and DOD, state Medicaid programs do not negotiate drug prices with manufacturers, but reimburse retail pharmacies for drugs dispensed to beneficiaries at set prices. The rebates are meant to take advantage of the prices manufacturers receive for drugs in the commercial market and are required to reflect the results of negotiations by private payers such as discounts and rebates. In a 2003 report that reviewed the use of PBMs by three FEHBP plans representing about 55 percent of FEHBP enrollment, we found that the PBMs used three key approaches to achieve savings for FEHBP participating health plans: passing on certain rebates negotiated with manufacturers to the plans; obtaining drug price discounts from retail pharmacies and dispensing drugs at lower costs through mail-order pharmacies; and using intervention techniques that reduce utilization of certain drugs or substitute other, less costly drugs.

Why GAO Did This Study Rising prescription drug spending has led the United States and other countries to seek ways to negotiate lower prices with drug manufacturers. Currently, the Medicare Part D benefit, which offers outpatient prescription drug benefits to beneficiaries including elderly and certain disabled people, comprises competing prescription drug plans overseen by the Centers for Medicare & Medicaid Services. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 prohibits the Secretary of Health and Human Services from interfering with price negotiations between Part D plan sponsors and drug manufacturers and pharmacies. Some Members of Congress have proposed amending the statute to allow the Secretary of Health and Human Services to negotiate directly with drug manufacturers on behalf of Part D beneficiaries. GAO was asked to describe how prescription drug prices are negotiated. This testimony provides an overview of such efforts (1) by governments in other countries; (2) by U.S. private payers, such as employer-based health plans; and (3) by federal programs other than Medicare Part D. This testimony is based on previous GAO reports from 2002 through 2006 on federal programs that purchase or cover prescription drugs and other relevant literature from congressional agencies and federal or international organizations. What GAO Found Governments in other countries use a range of approaches to limit the amount they pay to acquire drugs. Ceiling prices establish a maximum price manufacturers may charge for their products. Purchasers may sometimes negotiate more favorable prices directly with drug manufacturers. Reference prices use local or international price comparisons of drugs classified in a group as therapeutically similar to determine a single or maximum price for all drugs in that group. Profit limits control how much profit a drug manufacturer may earn per product or within a specified period of time. Other factors--such as scope of coverage and national formularies, which are generally lists of preferred drugs--influence drug price negotiations. In the U.S. private health insurance market, health plans typically contract with pharmacy benefit managers (PBM) to help manage their prescription drug benefits. PBMs negotiate rebates or payments with drug manufacturers, encourage substitution of generic drugs for therapeutically similar brand drugs, and negotiate discounted prices with networks of retail and mail-order pharmacies, passing along at least some of the savings to health plans and enrollees. PBMs influence price negotiations with manufacturers through formulary development and management and through the large market share they often represent. Approaches for negotiating drug prices vary among federal programs in the United States. In part, these approaches depend on whether the programs purchase and distribute drugs directly or reimburse retail pharmacies or other providers for dispensing or delivering drugs. While the approaches used by federal programs in the United States reflect U.S. laws, markets, and health care delivery and financing, there are also elements common to some of the approaches used by other countries and by private payers. Some federal programs set ceiling prices, others establish prices by referencing prices negotiated by private payers in the commercial market, and still others rely on negotiations with manufacturers, directly or through private health plans. For example, the Departments of Veterans Affairs's and Defense's prices for a prescription drug may be the lowest of a ceiling price, other established price, or a price negotiated with the manufacturer. State Medicaid programs, joint federal-state programs that finance medical services for certain low-income adults and children, reimburse retail pharmacies for drugs dispensed to beneficiaries at set prices. The programs receive rebates from manufacturers that are meant to take advantage of the prices for drugs in the commercial market and are required to reflect discounts and rebates negotiated by private payers with manufacturers. For health benefits offered to federal employees, retirees, and dependents, rather than negotiating with manufacturers, the government contracts with participating health plans that typically use PBMs to negotiate drug prices and offer other pharmacy benefit, administrative, and clinical services.

gao_GAO-17-536

gao_GAO-17-536_0

The most recent of these studies estimated that only 11 percent of men and 6 percent of women in the Early Baby Boomer cohort gradually retired from their full-time career jobs. Formal Phased Retirement Programs Are Not Common, with Larger Employers and Those with Technical and Professional Workforces More Likely to Offer Them Phased Retirement Programs Are Not as Common as Informal Arrangements, and the Number of Programs Remained Steady in Recent Years While no nationally representative data on the prevalence of phased retirement exist, one large study we reviewed and experts we interviewed indicated that formal phased retirement programs are relatively uncommon. Nine of the 16 experts we interviewed explained that industries with skilled workers or with labor shortages have motivation to offer formal phased retirement programs in part because their workers are hard to replace. Designing Phased Retirement Programs Can Be Challenging, According to Experts, Employers, and Publications, but Some Employers Report Benefits in Doing So Key Cited Challenges to Designing a Phased Retirement Program Include Compliance with IRC Nondiscrimination Provisions and Employment-related Discrimination Laws Employers face potential challenges in complying with various laws and regulations when designing a phased retirement program, according to experts and employers we interviewed and the publications we reviewed. Of large employers, 71 percent agreed that “regulatory complexities and ambiguities involving federal tax and age discrimination laws impact their organization’s ability to offer a phased retirement program,” according to a small MetLife study of employers with 1,000 or more workers. These provisions generally prohibit a qualified plan from discriminating in favor of highly compensated employees. However, health care coverage was provided for both full-time and phasing workers by all eight of the employers we interviewed who offered phased retirement. Appendix I: Objectives, Scope, and Methodology This report examines (1) the recent trends in the labor force participation of older workers, (2) the extent to which employers have adopted phased retirement programs and what type of employers offer them, and (3) what challenges and benefits, if any, exist to the design and operation of phased retirement programs. To describe the recent trends in labor force participation of older workers, we analyzed nationally representative data from the Current Population Survey (CPS) and the Health and Retirement Study (HRS), two datasets with information about the labor force participation of older workers. For example, we used HRS to estimate the percentage of older workers that can reduce their work hours, that plan to reduce their work hours as they transition to retirement, that would like to reduce hours even if their pay is also reduced, and the percentage that are partly retired. For example, it asks about workers’ plans for retirement and work patterns. To inform all sections of this report, we reviewed relevant federal laws and regulations and conducted a literature review regarding the prevalence of phased retirement programs in the United States. We also interviewed 16 experts on the topic of phased retirement. We conducted semi-structured interviews with 9 employers that offered or considered offering phased retirement programs.

Why GAO Did This Study As the large baby boomer generation retires, the workforce will lose much of their knowledge and experience. Encouraging phased retirement, in which older workers reduce their work hours with their current employer to transition into retirement, has been cited by retirement experts as one way to mitigate this loss. GAO was asked to review the work patterns of older Americans and phased retirement programs. In this report, GAO examines (1) recent trends in the labor force participation of older workers, (2) the extent to which employers have adopted phased retirement programs and what type of employers offer them, and (3) what challenges and benefits, if any, exist in designing and operating phased retirement programs. GAO analyzed data from two nationally representative surveys, the Health and Retirement Study (2004-2014) and the Current Population Survey (2005-2016); reviewed relevant federal laws and regulations; conducted a literature review; and interviewed 16 experts on retirement and 9 employers who offer or considered offering phased retirement programs. While phased retirement programs exist in both the private sector and government, this report focuses on private sector programs. What GAO Found Participation of older workers in the labor market has increased in the last decade, according to GAO analysis. Further, most individuals ages 61 to 66 who were still working maintained a full-time work schedule. However, although about a quarter of workers in this age group had planned to reduce hours as they transitioned to retirement, fewer than 15 percent subsequently reported being partly retired or gradually retiring from their career jobs. While no nationally representative data on the prevalence of phased retirement exist, GAO's review of studies and interviews with retirement experts indicate that formal phased retirement programs are relatively uncommon. Of those that are offered, they are more common among employers with larger or technical and professional workforces, such as education, consulting, and high-tech, according to studies GAO reviewed (see table). Nine of 16 experts GAO interviewed explained that industries with skilled workers or with labor shortages are motivated to offer phased retirement because their workers are hard to replace. Formal phased retirement programs present design and operational challenges for employers, including compliance with provisions and laws related to discrimination, according to publications GAO reviewed and experts and employers GAO interviewed. For example, in one study GAO reviewed, 71 percent of large employers agreed that regulatory complexities and ambiguities involving federal tax and age discrimination laws impact their ability to offer phased retirement programs. Experts and employers said programs that target highly skilled workers, who are often highly paid, could violate rules that allow for favorable tax treatment that generally prohibit qualified pension plans from favoring highly compensated employees. Despite these challenges, most employers GAO interviewed who reported having phased retirement programs found them beneficial. For example, eight of the nine employers GAO interviewed said they were able to address various design and operational challenges and cited program benefits related to worker retention, knowledge transfer, transition into retirement, and workforce planning. What GAO Recommends GAO is not making recommendations in this report.

gao_GAO-03-205

gao_GAO-03-205_0

Instead, the accounting functions, along with their complement of 102 employees, are to be relocated into leased space in the Bay Area. The Service Is Following Its Investment Review and Approval Process The Service is following its Investment Review and Approval Process in deciding whether or not to close the San Mateo IT Center, because it will require an investment of $8 million to support the closure. Given this, before the Service makes its decision about closing the San Mateo IT Center, the IT Department’s DAR may need to be reviewed and updated, if appropriate, to better reflect current economic conditions and recent plans to consolidate accounting functions. Economic and Other Conditions Have Changed Since the DAR Was Prepared in 2000 In 2000, when the Service’s IT Department prepared the DAR to support its proposal to close the San Mateo IT Center, general economic conditions were noticeably better than they are currently; and the Service had not yet made plans to automate and reengineer its field accounting activity, which involves closing its 85 district accounting offices and consolidating residual activity into its 3 Accounting Service Centers. San Mateo IT Center Employees Anticipate Mostly Economic Impacts if they Opt to Stay in the Bay Area and Social Impacts if they Opt to Relocate to Another Postal IT Center San Mateo IT Center employees responding to our survey anticipate more economic impacts than social impacts if they choose to remain in the Bay Area and more social impacts if they relocate with the Service to another postal IT center. Bargaining unit employees are covered by a collective bargaining agreement with a no- layoff provision and are therefore guaranteed a job at another postal IT center. According to postal officials, about half of the EAS employees will be offered jobs at other postal IT centers. Other respondents indicated they wanted to stay in the Bay Area but did not want to take a non-IT job. These programs included job placement assistance, employee and family counseling, relocation assistance, and training. Similar to other organizations that have helped displaced employees, the Service has indicated that it plans to provide assistance to San Mateo IT Center employees to minimize the impact, if it decides to close the center. When the IT Department first proposed closing the San Mateo IT Center in 2000, economic conditions and the employment outlook in the Bay Area were noticeably better than they are today; so much so that the Service anticipated that postal positions would be available in the Bay Area for many displaced employees who did not relocate. Given these changed conditions, bargaining unit employees who do not relocate might encounter difficulty in finding employment in the Bay Area.

Why GAO Did This Study While the U.S. Postal Service (USPS) rationalizes its infrastructure, it is weighing a proposal to close and sell its Information Technology (IT) center located in San Mateo, California. According to USPS, closing the IT center and selling the facility should save USPS about $74 million over the next 10 years and result in increased efficiency. All IT union employees and about half of IT management employees will be offered the opportunity to relocate with their jobs to other postal IT centers. The San Mateo IT Center also houses an Accounting Service Center whose functions and staff are to be moved into leased space in the San Francisco Bay Area. GAO undertook this study to, among other things, identify the process USPS is following in making its decision about closing the IT center and determine the impact such a closure would have on IT employees at the center. What GAO Found USPS is following its Investment Review and Approval Process in reaching a decision about closing the San Mateo IT Center. To support the investment needed to close the IT center, the process requires--and USPS prepared--analyses based on prevailing economic and other conditions. However, these conditions have changed since USPS prepared the analyses in 2000. In 2001, USPS announced plans to automate and reengineer its field accounting activity, which will result in USPS closing its 85 district accounting offices and consolidating the residual activities into its 3 Accounting Service Centers. USPS has not updated its analyses to reflect the changed conditions, but said that it planned to do so. San Mateo IT employees anticipate mostly negative social impacts if they relocate and mostly negative economic impacts if they stay in the Bay Area. Of the 213 San Mateo IT employees who responded to our survey, 36 (17 percent) indicated they would likely relocate, although most would be offered jobs at other postal IT centers. In 2000, USPS' economic analyses included an assumption--and San Mateo IT employees believed--that local jobs would be available for those individuals who did not want to relocate. However, local postal jobs are no longer available, and nonpostal IT job opportunities have tightened considerably in the Bay Area. GAO has previously noted that progressive organizations that are restructuring often provide job placement assistance to employees faced with losing their jobs. USPS plans to offer job assistance to management employees seeking nonpostal jobs. However, USPS does not plan to offer job assistance to union employees because such assistance is not covered by their collective bargaining agreement. Because the employment outlook in the Bay Area has changed dramatically, union employees who decide not to relocate may encounter difficulty finding employment in the Bay Area.

gao_GAO-12-630

gao_GAO-12-630_0

In Georgia, Quality and Sustainability Issues Jeopardize the Long-Term Usefulness of the Samtskhe- Javakheti Road Project In Georgia, MCC funded the rehabilitation of about 217 kilometers of road linking the previously isolated Samtskhe-Javakheti region with Tbilisi, the country’s capital. However, the urgency to meet fixed time frames resulted in problems implementing the quality assurance framework and led to construction defects in parts of 5 of the 11 road lots. Furthermore, while MCC took steps to ensure the road project’s sustainability, the Georgian government has demonstrated limited ability to keep the road operational and maintained up to this point. The purpose of the rehabilitation was to improve transportation for regional trade to increase exports from the region; increase social, political, and economic integration of the people in the region with those in the rest of Georgia; expand international trade by providing a more direct link from Tbilisi and eastern and southern Georgia to Turkey and Armenia; develop the tourism potential of Vardzia, a 13th century rock-cut monastery. In addition, problems identified by MCC’s independent engineer were not adequately addressed. However, several sections of the road had pavement defects and structures such as drainage systems and retaining walls that are deteriorating. We observed in December 2012 that much repair work remained to be done. In Benin, Port Construction Is Generally Good Quality, but Full Operability of Port Components Is Uncertain In Benin, MCC constructed several infrastructure improvements to the Port of Cotonou, including a jetty, a wharf, internal port roads, a railway, and security and electricity distribution systems. The project was intended to increase the efficient transport and volume of goods flowing through the port. At project completion, the quality of construction generally met established quality standards. The government of Benin’s inability to supply the resources, manpower, or policies needed to operate all of the port’s components calls into question whether the port project will meet expected compact results or be sustainable for the life of the infrastructure. Although MCC took steps to ensure the port project’s sustainability, many of the project’s key components—the south wharf, the security system, the electricity distribution system, and the fire station—were either not operational or only partially operational at the end of the compact. These steps included conducting a feasibility study, incorporating conditions precedent into the compact, hiring a port advisor, requiring a compact closure plan, and identifying steps the government of Benin should take to support sustainability in the compact letter of completion. Although MCC funded a new south wharf to increase tonnage moving through the port, and ensured that the Port Authority contracted a concessionaire to operate the south wharf, to increase private investment and generate income for the Port Authority, it is not in operation because the Port Authority has not completed additional dredging and the concessionaire has not finished the landside works, such as paving the wharf area or installing cranes (see fig. As a result, the road had significant pavement defects and numerous quality issues at compact completion. Recommendations for Executive Action To maximize the quality and sustainability of future projects, we recommend that the MCC Chief Executive Officer take the following actions: To ensure that its quality assurance framework is fully implemented and to ensure that transportation infrastructure projects are built to the established quality standards, MCC should review how MCC uses information and professional recommendations provided by its independent engineers to address identified deficiencies and to ensure projects are constructed to the quality standards set out in contracts, and develop a mechanism to maintain influence through contracts’ defects liability periods when they extend beyond the compact end date. To ensure sustainability of compact projects, MCC should evaluate the effectiveness of the tools it uses (such as its feasibility studies and conditions precedent) to ensure that partner countries have adequate infrastructure, staff, and policies necessary to operate and maintain MCC- funded infrastructure following the compact. Our selection universe was those compacts ending in 2010 and 2011 that had a transportation infrastructure project. To assess the quality and longer-term sustainability for compacts in Georgia and Benin, we analyzed MCC, MCA, and other documents; interviewed MCC officials and stakeholders; and observed project results in both countries. We reviewed the compact agreement for Georgia and Benin. Millennium Challenge Corporation: Progress and Challenges with Compacts in Africa.

Why GAO Did This Study MCC was established in 2004 to help developing countries reduce poverty and stimulate economic growth through multiyear compact agreements. As of June 2012, MCC had signed 26 compacts totaling about $9.3 billion in assistance. Seven compacts, including those with Georgia and Benin, closed in 2010 or 2011. Most had a transportation infrastructure project (a road or a port) that received about 50 percent of the compact’s total funding. This report, prepared in response to a congressional mandate to review compact results, examines how MCC ensured the quality and sustainability of MCC’s two transportation infrastructure projects in Georgia and Benin. GAO analyzed MCC documents, interviewed MCC officials and stakeholders, and observed the transportation infrastructure projects in those countries. What GAO Found In Georgia, quality and sustainability issues jeopardize the long-term usefulness of the Samtskhe-Javakheti road project. The Millennium Challenge Corporation (MCC) funded the rehabilitation of about 217 kilometers of road linking the previously isolated Samtskhe-Javakheti region with Tbilisi, the country’s capital, and reducing the driving time from 8 ¼ hours to 2 ¾ hours. The project was intended to increase exports from the region, integrate people in the region with the rest of Georgia, and expand trade with Turkey and Armenia. However, the urgency to meet fixed time frames resulted in problems implementing the project’s quality assurance framework. For example, the construction supervisor did not have enough staff to properly monitor construction and ensure quality. Despite several recommendations from MCC’s independent engineer, MCC and its Georgian counterpart, the Millennium Challenge Account (MCA-Georgia), did not adequately increase the number of construction supervisors, which resulted in pavement defects in parts of 5 of the 11 road sections and deterioration of structures such as drainage and retaining walls. One 15-kilometer section contained enough defects that the road had to be completely repaved. Furthermore, much of the repair work was to be done in the contracts’ 1-year defects liability period, after the compact closed and at a time when MCC no longer had oversight authority. Although MCC took steps to ensure the road project’s sustainability, the Georgian government has demonstrated limited ability to keep the road operational and maintained. In Benin, construction for the Port of Cotonou project generally met established quality standards, but several components were not in operation at the compact’s end. MCC funded the construction of several port infrastructure improvements, including a jetty, a wharf, internal port roads, a railway, and security and electricity distribution systems. The project was intended to increase the efficient transport and volume of goods flowing through the port. However, several components—including the new south wharf, the port security system, and the electricity distribution system—were not in operation at compact completion because the Port Authority had not ensured that the necessary infrastructure, staffing, or policies were in place to operate them. For example, the new south wharf, which was intended to increase the cargo tonnage moving through the port, is not in operation in part because the Port Authority does not have the funds to complete the dredging needed to allow large vessels to access the new wharf. Even though MCC took steps to ensure that the government of Benin could sustain the operations and maintenance of the project—such as conducting a feasibility study, incorporating conditions precedent into the compact, hiring a port advisor, requiring a compact closure plan, and identifying steps the government of Benin should take to support sustainability in the compact letter of completion—they were not sufficient. As a result, Benin’s inability to supply the resources, manpower, or policies needed to operate all of the port’s components calls into question whether the port project will achieve expected compact results or be sustained throughout the life of the infrastructure. What GAO Recommends To ensure that compact projects are implemented to established quality standards, GAO recommends that MCC (1) review how it uses information from its independent engineers, and (2) develop a mechanism to maintain influence on contractor repairs after compact closure. To ensure sustainability of compact projects, GAO recommends that MCC evaluate the tools it uses to ensure that partner countries have adequate resources to operate and maintain MCC-funded infrastructure. MCC agreed with all three recommendations but did not commit to taking any actions to address them.

gao_GAO-13-55

gao_GAO-13-55_0

The average application processing time is the average number of calendar days between the receipt of a new application and the final determination of eligibility. 1.) 2.) Because of data limitations, we were unable to assess the extent to which the number of applications states processed kept pace with the number of new applications received each month from January 2008 through December 2011. Most states provided incomplete or inconsistent data on new applications received and processed. States Made Numerous Changes to Provider Payments and Beneficiary Services States reported changes—both increases and decreases—to provider payment rates, provider taxes, and beneficiary services since 2008. The Number of States Reducing Providers’ Payments or Implementing Supplemental Payments Grew The number of states that reported making at least one payment rate reduction grew from 13 in 2008 to 34 in 2011, while the number of states increasing at least one provider payment rate fell over the same period. Overall, more states reported increasing provider payment rates in 2011 than reducing them. 4.) From 2008 through 2011, states reported making more changes to coverage for dental, primary, and specialty care services and prescription drug benefits than for other services. Over Two-Thirds of States Reported Challenges Ensuring Sufficient Providers, Including Dental and Specialty Providers Of the 55 states responding to our survey, 38 states reported experiencing challenges to ensuring enough participating providers for Medicaid beneficiaries. Full-Year Medicaid Beneficiaries Reported Similar Difficulty Obtaining Needed Medical Care as Privately Insured Individuals Beneficiaries covered by Medicaid for a full year reported low rates of difficulty obtaining necessary medical care and prescription medicine, similar to those with private insurance for a full year.2008 and 2009, approximately 3.7 percent of Medicaid beneficiaries enrolled for a full year and 3 percent of individuals enrolled in private insurance for a full year reported difficulties obtaining needed medical care; the difference between these two groups was not statistically significant. Full-year Medicaid In calendar years beneficiaries did however, report experiencing greater difficulty obtaining necessary dental care than those with full-year private insurance. Medicaid beneficiaries were more likely than individuals with private insurance to report factors such as lack of transportation and long wait time as reasons for delaying medical care. Individuals who were uninsured were the most likely to cite cost as a reason for delaying care. We provided a draft of this report to HHS for its review and comment. HHS provided technical comments, which we incorporated as appropriate. Development and Analysis of GAO Survey of States To examine states’ experiences processing Medicaid applications, states were asked to report their current average processing time for new regular Medicaid applications—those not based on disability—and how those times changed since 2008.about the factors states attributed to any reported changes in the average processing time for Medicaid applications. Analysis of Other Federal Health Care Consumer Survey Data To examine the extent to which Medicaid beneficiaries reported difficulties obtaining care, we analyzed data from the Medical Expenditure Panel Survey (MEPS) and the National Health Interview Survey (NHIS). In addition to determining the extent to which full-year Medicaid beneficiaries had difficulty accessing care, we also compared Medicaid beneficiaries’ reported experiences to the experience of respondents with private insurance and respondents who were uninsured, in order to provide context.Medicaid for a full year reported greater difficulty accessing medical care than children in Medicaid or full-year Medicaid beneficiaries 65 and older.

Why GAO Did This Study Medicaid enrollment has grown significantly in recent years due to the economic downturn. This growth is expected to continue as the Patient Protection and Affordable Care Act potentially extends Medicaid eligibility in 2014 to millions of uninsured individuals. To better understand whether states are providing adequate access to medical care for beneficiaries, this report examines (1) states' experiences processing Medicaid applications, (2) states' changes to beneficiary services and provider payment rates, (3) the challenges states report to ensure sufficient provider participation, and (4) the extent to which Medicaid beneficiaries reported difficulties obtaining medical care. To examine the first three objectives, GAO administered a nationwide web-based survey to Medicaid officials on states' experiences from 2008 through 2011 and obtained a response rate of 98 percent. To examine the last objective, GAO analyzed data from the 2008 and 2009 Medical Expenditure Panel Survey, the most current available at the time of our analysis, to assess Medicaid beneficiaries' reported difficulties obtaining care, and the 2009 National Health Interview Survey to assess their reasons for delaying care. To provide context, we compared their experiences to those of individuals with private insurance or who were uninsured. What GAO Found From 2008 to 2011, more than half of states reported maintaining or decreasing their average Medicaid application processing times--the average number of calendar days between the receipt of a new application and the final determination of eligibility. The average processing times reported by 39 states ranged from 11 to 45 calendar days. For the same time period, however, GAO was unable to assess whether states processed applications at a rate that kept pace with the number of new applications received each month, because most states provided incomplete or inconsistent data. States reported making numerous changes to provider payments, provider taxes, and beneficiary services since 2008. While more states reported provider-rate and supplemental payment increases each year from 2008 through 2011, the number reporting payment reductions and increased provider taxes also grew. More states reported increasing services than limiting them. Over two-thirds of states reported challenges to ensuring enough Medicaid providers to serve beneficiaries--including dental and specialty care providers. States cited Medicaid payment rates and a general shortage of providers as adding to the challenge. To attract new providers, over half the states reported simplifying administrative requirements or increasing payment rates. In calendar years 2008 and 2009, less than 4 percent of beneficiaries who had Medicaid coverage for a full year reported difficulty obtaining medical care, which was similar to individuals with full-year private insurance; however, more Medicaid beneficiaries reported difficulty obtaining dental care than those with private insurance. Beneficiaries with less than a full year of Medicaid coverage were almost twice as likely to report difficulties obtaining medical care as those with full-year coverage. Medicaid beneficiaries reported delaying care for reasons such as long wait times and lack of transportation. The Department of Health and Human Services reviewed a draft of this report and provided technical comments, which GAO incorporated as appropriate.

gao_GAO-03-622T

gao_GAO-03-622T_0

Fiscal Year 2002 Performance and Results Fiscal year 2002 was a year of challenges, not just for GAO but also for the Congress and the nation. In fiscal year 2002, GAO also served the Congress and the American people by helping to: Contribute to a national preparedness strategy at the federal, state, and local levels that will make Americans safer from terrorism Protect investors through better oversight of the securities industry and Ensure a safer national food supply Expose the inadequacy of nursing home care Make income tax collection fair, effective, and less painful to taxpayers Strengthen public schools’ accountability for educating children Keep sensitive American technologies out of the wrong hands Protect American armed forces confronting chemical or biological weapons Identify the risks to employees in private pension programs Identify factors causing the shortage of children’s vaccines Assist the postal system in addressing anthrax and various management challenges Identify security risks at ports, airports, and transit systems Save billions by bringing sound business practices to the Department of Foster human capital strategic management to create a capable, effective, Ensure that the armed forces are trained and equipped to meet the nation’s defense commitments Enhance the safety of Americans and foreign nationals at U.S. Assess ways of improving border security through biometric technologies Reduce the international debt problems faced by poor countries Reform the way federal agencies manage their finances Protect government computer systems from security threats Enhance the transition of e-government—the new “electronic connection” between government and the public During fiscal year 2002, GAO’s analyses and recommendations contributed to a wide range of legislation considered by the Congress, as shown in the following table. 1). 2). Maximizing GAO’s Effectiveness, Responsiveness and Value The results of our work were possible, in part, because of changes we have made to maximize the value of GAO. We had already realigned GAO’s structure and resources to better serve the Congress in its legislative, oversight, appropriations, and investigative roles. Over the past year, we cultivated and fostered congressional and agency relations, better refined our strategic and annual planning and reporting processes, and enhanced our information technology infrastructure. We also continued to provide priority attention to our management challenges of human capital, information security, and physical security. Changes we made in each of these areas helped enable us to operate in a constantly changing environment. GAO’s Fiscal Year 2004 Budget Request GAO is requesting budget authority of $473 million for fiscal year 2004 to maintain current operations for serving the Congress as outlined in our strategic plan and to continue initiatives to enhance our human capital, support business processes, and ensure the safety and security of GAO staff, facilities, and information systems. Our requested increase of $18.4 million in direct appropriations represents a modest 4.1 percent increase, primarily for mandatory pay and uncontrollable costs. Our fiscal year 2004 budget includes $4.8 million for safety and security needs that are also included in the supplemental. If the requested fiscal year 2003 supplemental funds are provided, our fiscal year 2004 budget could be reduced by $4.8 million. The performance goals lay out the work we plan to do in fiscal years 2002 and 2003 to help achieve our strategic goals and objectives.

Why GAO Did This Study GAO is a key source of objective information and analyses and, as such, plays a crucial role in supporting congressional decision-making and helping improve government for the benefit of the American people. This testimony focuses on GAO's (1) fiscal year 2002 performance and results, (2) efforts to maximize our effectiveness, responsiveness and value, and (3) our budget request for fiscal year 2004 to support the Congress and serve the American public. What GAO Found In fiscal year 2002, GAO's work informed the national debate on a broad spectrum of issues including helping the Congress answer questions about the associated costs and program tradeoffs of the national preparedness strategy, including providing perspectives on how best to organize and manage the new Transportation Security Administration and Department of Homeland Security. GAO's efforts helped the Congress and government leaders achieve $37.7 billion in financial benefits--an $88 return on every dollar invested in GAO. The return on the public's investment in GAO extends beyond dollar savings to improvements in how the government serves its citizens. This includes a range of accomplishments that serve to improve safety, enhance security, protect privacy, and increase the effectiveness of a range of federal programs and activities. The results of our work in fiscal year 2002 were possible, in part, because of changes we have made to transform GAO in order to meet our goal of being a model federal agency and a world-class professional services organization. We had already realigned GAO's structure and resources to better serve the Congress in its legislative, oversight, appropriations, and investigative roles. Over the past year, we cultivated and fostered congressional and agency relations, better refined our strategic and annual planning and reporting processes, and enhanced our information technology infrastructure. We also continued to provide priority attention to our management challenges of human capital, information security, and physical security. We have made progress in addressing each of these challenges, but we still have work to do and plan to ask for legislation to help address some of these issues. GAO is requesting budget authority of $473 million for fiscal year 2004. Our request represents a modest 4.1 percent increase in direct appropriations, primarily for mandatory pay and uncontrollable costs. This budget will allow us to maintain current operations for serving the Congress as outlined in our strategic plan and continue initiatives to enhance our human capital, support business processes, and ensure the safety and security of GAO staff, facilities, and information systems. Approximately $4.8 million, or about 1 percent, of our request relates to several safety and security items that are included in our fiscal year 2003 supplemental request. If this supplemental request is granted, our fiscal year 2004 request could be reduced accordingly.

gao_GAO-14-411T

gao_GAO-14-411T_0

CBP’s Program Schedules and Life- cycle Cost Estimates Reflect Some but Not All Best Practices In our March 2014 report, we assessed OTIA’s schedules as of March 2013 for the IFT, RVSS, and MSC programs and found that these program schedules addressed some, but not all, best practices for scheduling. The Schedule Assessment Guide identifies 10 best practices associated with effective scheduling, which are summarized into four characteristics of a reliable schedule—comprehensive, well constructed, credible, and controlled. According to our overall analysis, OTIA at least partially met the four characteristics of reliable schedules for the IFT and RVSS schedules (i.e., satisfied about half of the criterion), and partially or minimally met the four characteristics for the MSC schedule, as shown in table 1. For example, we reported that the schedule for the IFT program partially met the characteristic of being credible in that CBP had performed a schedule risk analysis for the program, but the risk analysis was not based on any connection between risks and specific activities. DHS concurred with the recommendation and stated that OTIA plans to ensure that scheduling best practices are applied as far as practical when updating the three programs’ schedules. Further, in March 2014 we reported that CBP has not developed an Integrated Master Schedule for the Plan in accordance with best practices. Rather, OTIA has used the separate schedules for each individual program (or “project”) to manage implementation of the Plan. OTIA officials stated that an Integrated Master Schedule for the overarching Plan is not needed because the Plan contains individual acquisition programs as opposed to a plan consisting of seven integrated programs. However, collectively these programs are intended to provide CBP with a combination of surveillance capabilities to be used along the Arizona border with Mexico. Moreover, while the programs themselves may be independent of one another, the Plan’s resources are being shared among the programs. According to schedule best practices, an Integrated Master Schedule that allows managers to monitor all work activities, how long the activities will take, and how the activities are related to one another is a critical management tool for complex systems that involve the incorporation of a number of different projects, such as the Plan. DHS did not concur with this recommendation. In particular, DHS stated that maintaining an Integrated Master Schedule for the Plan undermines the DHS-approved implementation strategy for the individual programs making up the Plan and that a key element of the Plan has been the disaggregation of technology procurements. Cost-estimating best practices are summarized into four characteristics—well documented, comprehensive, accurate, and credible.completed at the time of our review for the IFT and RVSS programs showed that these estimates at least partially met three of these characteristics—well documented, comprehensive, and accurate. In terms of being credible, these estimates had not been verified with independent cost estimates in accordance with best practices. We recommended that CBP verify the Life-cycle Cost Estimates for the IFT Our analysis of CBP’s estimate for the Plan and estimates and RVSS programs with independent cost estimates and reconcile any differences. Rather, the Test and Evaluation Master Plan describes CBP’s plans to conduct a limited user test of the IFT. However, this approach is not consistent with DHS’s acquisition guidance, which states that even for commercial off-the-shelf systems, operational test and evaluation should occur in the environmental conditions in which a system will be used before a full production decision for the system is made and the system is subsequently deployed. We recommended that CBP revise the IFT Test and Evaluation Master Plan to more fully test the IFT program, before beginning full production, in the various environmental conditions in which IFTs will be used to determine operational effectiveness and suitability. CBP Has Identified Mission Benefits, but Does Not Capture Complete Data on the Contributions of Its Surveillance Technologies We reported in March 2014 that CBP has identified the mission benefits of its surveillance technologies, but does not capture complete data on the contributions of these technologies, which in combination with other relevant performance metrics or indicators, could be used to better determine the contributions of CBP’s surveillance technologies and inform resource allocation decisions. CBP has identified mission benefits of surveillance technologies to be deployed under the Plan, such as improved situational awareness and agent safety. Although CBP has a field within its Enforcement Integrated Database (EID) for maintaining data on whether technological assets, such as SBInet surveillance towers, and non-technological assets, such as canine teams, assisted or contributed to the apprehension of illegal entrants, and seizure of drugs and other contraband, according to CBP officials, Border Patrol agents are not required to record these data. Our analysis of apprehension events included instances in which an event had at least one deportable individual. We recommended that CBP require data on asset assists to be recorded and tracked within EID and that once these data are required to recorded and tracked, analyze available data on apprehensions and technological assists, in combination with other relevant performance metrics or indicators, as appropriate, to determine the contribution of surveillance technologies to CBP’s border security efforts. 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 This testimony summarizes the information contained in GAO's March 3, 2014 report, entitled Arizona Border Surveillance Technology Plan: Additional Actions Needed to Strengthen Management and Assess Effectiveness , GAO-14-368 . What GAO Found The Department of Homeland Security's (DHS) U.S. Customs and Border Protection's (CBP) schedules and Life-cycle Cost Estimates for the Arizona Border Surveillance Technology Plan (the Plan) reflect some, but not all, best practices. Scheduling best practices are summarized into four characteristics of reliable schedules—comprehensive, well constructed, credible, and controlled (i.e., schedules are periodically updated and progress is monitored). GAO assessed CBP's schedules as of March 2013 for the three highest-cost programs that represent 97 percent of the Plan's estimated cost. GAO found that schedules for two of the programs at least partially met each characteristic (i.e., satisfied about half of the criterion), and the schedule for the other program at least minimally met each characteristic (i.e., satisfied a small portion of the criterion), as shown in the table below. For example, the schedule for one of the Plan's programs partially met the characteristic of being credible in that CBP had performed a schedule risk analysis for the program, but the risk analysis was not based on any connection between risks and specific activities. For another program, the schedule minimally met the characteristic of being controlled in that it did not have valid baseline dates for activities or milestones by which CBP could track progress. Source: GAO analysis of CBP data. Note: Not met—CBP provided no evidence that satisfies any of the criterion. Minimally met—CBP provided evidence that satisfies a small portion of the criterion. Partially met—CBP provided evidence that satisfies about half of the criterion. Substantially met—CBP provided evidence that satisfies a large portion of the criterion. Met—CBP provided complete evidence that satisfies the entire criterion. Further, CBP has not developed an Integrated Master Schedule for the Plan in accordance with best practices. Rather, CBP has used the separate schedules for each program to manage implementation of the Plan, as CBP officials stated that the Plan contains individual acquisition programs rather than integrated programs. However, collectively these programs are intended to provide CBP with a combination of surveillance capabilities to be used along the Arizona border with Mexico, and resources are shared among the programs. According to scheduling best practices, an Integrated Master Schedule is a critical management tool for complex systems that involve a number of different projects, such as the Plan, to allow managers to monitor all work activities, how long activities will take, and how the activities are related to one another. Developing and maintaining an Integrated Master Schedule for the Plan could help provide CBP a comprehensive view of the Plan and help CBP better understand how schedule changes in each individual program could affect implementation of the overall Plan. Moreover, cost-estimating best practices are summarized into four characteristics—well documented, comprehensive, accurate, and credible. GAO's analysis of CBP's estimate for the Plan and estimates completed at the time of GAO's review for the two highest-cost programs showed that these estimates at least partially met three of these characteristics: well documented, comprehensive, and accurate. In terms of being credible, these estimates had not been verified with independent cost estimates in accordance with best practices. Ensuring that scheduling best practices are applied to the three programs' schedules and verifying Life-cycle Cost Estimates with independent estimates could help better ensure the reliability of the schedules and estimates. CBP did not fully follow key aspects of DHS's acquisition management guidance for the Plan's three highest-cost programs. For example, CBP plans to conduct limited testing of the highest-cost program—the Integrated Fixed Tower (IFT: towers with cameras and radars)—to determine its mission contributions, but not its effectiveness and suitability for the various environmental conditions, such as weather, in which it will be deployed. This testing, as outlined in CBP's test plan, is not consistent with DHS's guidance, which states that testing should occur to determine effectiveness and suitability in the environmental conditions in which a system will be used. Revising the test plan to more fully test the program in the conditions in which it will be used could help provide CBP with more complete information on how the towers will operate once they are fully deployed. CBP has identified mission benefits for technologies under the Plan, but has not yet developed performance metrics. CBP has identified such mission benefits as improved situational awareness and agent safety. Further, a DHS database enables CBP to collect data on asset assists, defined as instances in which a technology, such as a camera, or other asset, such as a canine team, contributed to an apprehension or seizure, that in combination with other relevant performance metrics or indicators, could be used to better determine the contributions of CBP's surveillance technologies and inform resource allocation decisions. However, CBP is not capturing complete data on asset assists, as Border Patrol agents are not required to record and track such data. For example, from fiscal year 2010 through June 2013, Border Patrol did not record whether an asset assist contributed to an apprehension event for 69 percent of such events in the Tucson sector. Requiring the reporting and tracking of asset assist data could help CBP determine the extent to which its surveillance technologies are contributing to CBP's border security efforts. This is a public version of a For Official Use Only—Law Enforcement Sensitive report that GAO issued in February 2014. Information DHS deemed as For Official Use Only—Law Enforcement Sensitive has been redacted.

gao_GAO-12-137

gao_GAO-12-137_0

In order to ensure the implementation of this framework, FISMA assigns specific responsibilities to (1) OMB, to develop and oversee the implementation of policies, principles, standards, and guidelines on information security; to report, at least annually, on agency compliance with the act; and to approve or disapprove, agency information security programs; (2) agency heads, to provide information security protections commensurate with the risk and magnitude of the harm resulting from unauthorized access, use, disclosure, disruption, modification, or destruction of information collected or maintained by or on behalf of the agency; (3) agency heads and chief information officers, to develop, document, and implement an agencywide information security program, among others; (4) inspectors general, to conduct annual independent evaluations of agency efforts to effectively implement information security; and (5) NIST to provide standards and guidance to agencies on information security. Accordingly, we and agency inspectors general have made hundreds of recommendations to agencies in fiscal years 2010 and 2011 to address these security control deficiencies. The Number of Incidents Reported by Federal Agencies Continues to Rise Federal agencies have reported increasing numbers of security incidents that placed sensitive information at risk. An underlying reason for these weaknesses was that the Internal Revenue Service had not yet fully implemented required components of its comprehensive information security program. We continue to identify information security as a governmentwide high-risk issue in our biennial reports to Congress, most recently in February 2011. Actions Under Way, but More Work Necessary for Implementing FISMA Requirements OMB, executive branch agencies, and NIST have taken actions intended to improve the implementation of their FISMA-related security requirements, but much work remains. Beginning in fiscal year 2009, OMB instituted the use of a new online tool for agencies to report their information security posture on a recurring basis and, in fiscal year 2010, provided them with new and revised metrics for reporting such information. Conclusions Persistent governmentwide weaknesses in information security controls threaten the confidentiality, integrity, and availability of the information and information systems supporting the operations and assets of federal agencies. Until hundreds of recommendations made by us and inspectors general are implemented and program weaknesses are corrected, agencies will continue to face challenges in securing their information and information systems. In response to our recommendation, OMB stated that since, unlike in previous years, OMB and DHS now issue separate memoranda regarding FISMA reporting guidance, it is more appropriate for the performance targets to be included in DHS’s memorandum since that is where the metrics are listed. We agree that including the performance targets in the metrics issued by DHS would meet the intent of our recommendation. All seven responded that they did not have any comments. Appendix I: Objectives, Scope, and Methodology In accordance with the Federal Information Security Management Act of 2002 (FISMA) requirement that the Comptroller General report periodically to the Congress, our objectives were to evaluate (1) the adequacy and effectiveness of agencies’ information security policies and practices and (2) federal agencies’ implementation of FISMA requirements. In addition, we reviewed the mandated annual FISMA reports from the Office of Management and Budget and the National Institute of Standards and Technology, as well as the Department of Homeland Security’s U.S. Computer Emergency Readiness Team report of security incidents for fiscal year 2010. Specifically, FISMA requires information security programs to include, among other things:  periodic assessments of the risk and magnitude of harm that could result from the unauthorized access, use, disclosure, disruption, modification, or destruction of information or information systems; 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; subordinate plans for providing adequate information security for networks, facilities, and systems or groups of information systems, as appropriate; security awareness training for agency personnel, including contractors and other users of information systems that support the operations and assets of the agency;  periodic testing and evaluation of the effectiveness of information security policies, procedures, and practices, performed with a frequency depending on risk, but no less than annually, and that includes 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  plans and procedures to ensure continuity of operations for information systems that support the operations and assets of the agency.

Why GAO Did This Study For many years, GAO has reported that weaknesses in information security can lead to serious consequences--such as intrusions by malicious individuals, compromised networks, and the theft of sensitive information including personally identifiable information--and has identified information security as a governmentwide high-risk area. The Federal Information Security Management Act of 2002 (FISMA) established information security program, evaluation, and annual reporting requirements for federal agencies. The act requires the Office of Management and Budget (OMB) to oversee and report to Congress on agency information security policies and practices, including agencies' compliance with FISMA. FISMA also requires that GAO periodically report to Congress on (1) the adequacy and effectiveness of agencies' information security policies and practices and (2) agencies' implementation of FISMA requirements. To do this, GAO analyzed information security-related reports and data from 24 major federal agencies, their inspectors general, OMB, and GAO. What GAO Found Weaknesses in information security policies and practices at 24 major federal agencies continue to place the confidentiality, integrity, and availability of sensitive information and information systems at risk. Consistent with this risk, reports of security incidents from federal agencies are on the rise, increasing over 650 percent over the past 5 years. Each of the 24 agencies reviewed had weaknesses in information security controls. An underlying reason for these weaknesses is that agencies have not fully implemented their information security programs. As a result, they have limited assurance that controls are in place and operating as intended to protect their information resources, thereby leaving them vulnerable to attack or compromise. In reports for fiscal years 2010 and 2011, GAO and agency inspectors general have made hundreds of recommendations to agencies for actions necessary to resolve control deficiencies and information security program shortfalls. Agencies generally agreed with most of GAO's recommendations and indicated that they would implement them. OMB, agencies, and the National Institute of Standards and Technology took actions intended to improve the implementation of security requirements, but more work is necessary. Beginning in fiscal year 2009, OMB provided agencies with a new online tool to report their information security postures and, in fiscal year 2010, instituted the use of new and revised metrics. Nevertheless, OMB's guidance for those metrics did not always provide performance targets for measuring improvement. In addition, weaknesses were identified in the processes agencies used to implement requirements. Specifically, agencies did not always ensure (1) personnel with significant responsibilities received training; (2) security controls were monitored continuously; (3) weaknesses were remediated effectively; and (4) incidents were resolved in a timely manner, among other areas. Until hundreds of recommendations are implemented and program weaknesses are corrected, agencies will continue to face challenges in securing their information and information systems. What GAO Recommends GAO is recommending that the Director of OMB provide performance targets for metrics included in OMB's annual FISMA reporting instructions to agencies and inspectors general. OMB stated it was more appropriate for those targets to be included in the performance metrics that are now issued separately by the Department of Homeland Security. GAO agrees that this meets the intent of its recommendation.

gao_GAO-10-972

gao_GAO-10-972_0

The Baseline Capabilities define the capabilities needed to achieve a national, integrated network of fusion centers and detail the standards necessary for a fusion center to be considered capable of performing basic functions by the fusion center community. DHS also provides an unclassified network, the Homeland Security Information Network, which allows federal, state, and local homeland security and terrorism-related information sharing. Officials in all 14 of the centers we contacted stated that federal funding was critical to long-term sustainability and provided varying examples of the impact that not having federal grant funding would have on their fusion centers. The goal of the nationwide assessment, according to DHS senior officials, is to help enable both federal and fusion center representatives to (1) obtain more accurate information on the current status of centers’ abilities to meet the baseline capabilities, (2) help identify gaps between centers’ current operations and the capabilities, and (3) use this information to develop strategies and realign resources to support centers’ efforts to close those gaps going forward. DHS’s HSGP is the primary grant program through which fusion centers receive funding, but these grants are not specifically focused on, nor limited to, fusion centers. This process has generated long-standing concerns by the fusion center community about the lack of a longer-term, predictable funding source for the centers. Officials from 13 of the 14 centers we contacted cited a number of challenges with obtaining funding and the lack of a dedicated funding source, which affected their ability to plan long term or expand their operations. In addition, Fiscal Year 2012 implementation guidance for the ISE requires that, by October 29, 2010, DHS should develop and promulgate an annual common reporting process that will document the total operational and sustainment costs of each of the 72 fusion centers in the national network. Taking Steps to Implement Standard Performance Measures to Track the Results of Fusion Centers’ Efforts to Support Information Sharing Could Help Demonstrate Centers’ Value to the ISE If fusion centers are to receive continued financial support, it is important that centers are also able to demonstrate that they are providing critical information that is helping the federal government and state and local agencies protect against terrorist and homeland security threats. However, these officials stated that, while DHS has started collecting some information that will help in developing such measures, the agency is currently focusing on completing the nationwide assessment to gauge the capabilities and gaps across fusion centers. As such, these officials said that they have not defined next steps or target timeframes for designing and implementing these measures. By defining the steps it will take to design and implement a set of standard measures to track the results and performance across fusion centers and committing to a target timeframe for completion, DHS could help ensure that centers and federal agencies demonstrate the value of fusion centers’ operations to national information sharing goals and prioritize limited resources needed to achieve and maintain those functions deemed critical to support the national fusion center network. Federal Agencies Are Providing Technical Assistance and Training to Centers to Help Them Develop Privacy and Civil Liberties Policies and Protections, and DHS Is Assessing the Status of These Protections DHS and DOJ are providing technical assistance to assist fusion centers in developing privacy and civil liberties policies, and fusion centers nationwide are in varying stages of completing their policies. To ensure fusion centers comply with the certification requirements in DHS’s grant guidance, DHS and DOJ have established a joint process to review and certify fusion centers’ privacy and civil liberties policies. Fusion Center Officials We Interviewed Reported That DHS’s and DOJ’s Training on Privacy and Civil Liberties Protections Was Helpful and Would Like It Continued after Their Policies Are Developed The 9/11 Commission Act requires DHS to establish guidelines for fusion centers that include standards for fusion centers to provide appropriate privacy training for all state, local, tribal, and private sector representatives at the fusion center, in coordination with DHS’s Privacy Office and CRCL. Recommendation for Executive Action To enhance the ability to demonstrate the results fusion centers are achieving in support of national information sharing goals and help prioritize how future resources should be allocated, we recommend that the Secretary of Homeland Security direct the State and Local Program Office, in partnership with fusion center officials, to define the steps it will take to design and implement a set of standard performance measures to show the results and value centers are adding to the Information Sharing Environment and commit to a target timeframe for completing them.

Why GAO Did This Study Recent terrorist activity, such as the attempted Times Square bombing, underscores the need for terrorism-related information sharing. Since 2001, all 50 states and some local governments have established fusion centers, where homeland security, terrorism, and other intelligence information is shared. The federal government recognizes the importance of fusion centers; however, as GAO reported in October 2007, centers face challenges in sustaining their operations. GAO was asked to assess the extent to which (1) the Department of Homeland Security (DHS) has taken action to support fusion centers' efforts to maintain and grow their operations, and (2) DHS and the Department of Justice (DOJ) have supported fusion centers in establishing privacy and civil liberties protections. GAO reviewed relevant legislation and federal guidance; conducted interviews with 14 of 72 fusion centers, selected on the basis of location and time in operation, among other factors; and interviewed DHS and DOJ officials. The views of fusion center officials are not generalizable but provided insights What GAO Found Fusion centers have cited DHS grant funding as critical to achieving the baseline capabilities--the standards the government and fusion centers have defined as necessary for centers to be considered capable of performing basic functions in the national information sharing network, such as standards related to information gathering and intelligence analysis. However, DHS has not set standard performance measures for the centers. Fusion centers nationwide reported that federal funding accounted for about 61 percent of their total fiscal year 2010 budgets, but DHS's Homeland Security Grant Program (HSGP), the primary grant program through which fusion centers receive funding, is not specifically focused on, or limited to, fusion centers. Rather, states and local governments determine the amount of HSGP funding they allocate to fusion centers each year from among a number of competing homeland security needs. As a result, fusion centers continue to raise concerns about the lack of a longer-term, predictable federal funding source. DHS, in coordination with the Program Manager for the Information Sharing Environment and DOJ, has a nationwide assessment of centers' baseline capabilities under way. To be completed in October 2010, the goal of the assessment is to provide federal agencies and fusion centers with more accurate information on the status of centers' abilities, help identify gaps between centers' current operations and the baseline capabilities, and use this information to develop strategies and realign resources to close those gaps going forward. Recent federal guidance also requires that, by October 29, 2010, DHS should develop an annual reporting process that will document the total operational and sustainment costs of each of the 72 fusion centers in the national network so as to assess the adequacy of current funding mechanisms. If centers are to receive continued federal financial support, it is important that they are also able to demonstrate their impact and value added to the nation's information sharing goals. However, there are no standard performance measures across all fusion centers to do this. DHS has not started developing such measures because the agency is currently focusing on completing the nationwide assessment and compiling its results and, as such, has not defined next steps or target timeframes for designing and implementing these measures. Defining the steps it will take to design and implement a set of measures and committing to a target timeframe for their completion could better position DHS to demonstrate the value and impact of the national network of fusion centers. To help fusion centers develop privacy and civil liberties policies and protections, DHS and DOJ have provided technical assistance and training, including a template on which to base a privacy and civil liberties policy, and a joint process for reviewing fusion centers' policies to ensure they are consistent with federal requirements. The 14 centers GAO interviewed were at different stages of the policy review process, with 7 completed as of June 2010. Officials from all 14 of the fusion centers GAO interviewed stated that the guidance DHS and DOJ provided was helpful and integral in assisting them to draft their policies. What GAO Recommends GAO recommends that DHS define steps to develop and implement standard performance measures for centers and commit to a timeframe for completing them. DHS concurred and described steps it is taking to address the recommendation.

gao_GGD-99-98

gao_GGD-99-98_0

Scope and Methodology To describe IRS’ process for making abatements from initiation through final review in selected IRS locations, we talked to IRS National Office work groups that could make abatements and the IRS office that administers penalties. IRS did not have quantitative data on the details of the abatement process, even though IRS’ master files have data on the overall number and amount of abatements. An abatement is just one type of adjustment made to taxpayer accounts. IRS staff also adjust accounts to reflect the dates and amounts of various types of assessments, payments, and refunds. IRS cannot extract quantitative data about the abatement process from data on all types of adjustments. Determining the costs and benefits of collecting such data on the abatement process was beyond the scope of this report. According to IRS officials, the type, complexity, and source of the assessment being abated determine which IRS work group makes the abatement decision. Both Lower and Higher Graded Staff Can Make Abatement Decisions Various types and grades of IRS staff, ranging from clerks to mid-level staff, can make abatement decisions, depending on the type, complexity, and source of the assessment being abated. IRS’ Efforts to Improve the Abatement Process IRS’ efforts to improve the abatement process have involved task force studies that IRS initiated in response to specific concerns. Although they did not focus on abatements, the studies have produced some proposals that would affect the abatement process, such as the documentation required to support abatements. IRS did this study because of concerns about the inventory of tax debts—about 25 percent of IRS’ accounts receivable were being abated. IRS never formally released a final report on the study results. Separate offices in the service center managed the quality review programs. Type of abatement Audit reconsideration and audits Overstated income from false W-2s (Statement of Earnings) Category A claims and interest claims, substitute for return,offer-in-compromise, audit reconsideration Responses to IRS underreporter notices Taxpayer inquiries about assessments Claims on amended returns filed by taxpayers Substitute for return Credits on masterfile accounts Various types of abatements based on reviews of notices sent to taxpayers Various types of taxpayer claims that meet set criteria (e.g., problems not satisfactorily handled by other IRS groups) In the following, we briefly describe the types of abatements made at each of the work groups. The criteria for abatements are in the Internal Revenue Manual, chapter 21.

Why GAO Did This Study Pursuant to a congressional request, GAO described the Internal Revenue Service's (IRS) abatement process, focusing on IRS': (1) process for making abatements from initiation through final review in selected IRS locations; and (2) efforts to improve the abatement process. What GAO Found GAO noted that: (1) an abatement may be initiated by a request from a taxpayer or by IRS; (2) once initiated, IRS' abatement process depends on the type, complexity, and source of the assessment being abated; (3) according to IRS officials, these factors determine the IRS work group, such as those that audit tax returns or answer taxpayer inquiries, that makes the abatement decision; (4) the work group, in combination with the type and complexity of the assessment being abated, influence the type and grade level of staff making abatement decisions, the criteria and supervisory review used to guide decisions, and the quality review done after the decisions are made; (5) IRS does not have quantitative data on details of the abatement process; (6) an abatement is just one type of adjustment that IRS can make to taxpayer accounts; (7) for example, IRS staff also adjust accounts to reflect the dates and amounts of various types of assessments and payments; (8) although it has data on the number and amount of abatements, IRS cannot extract any quantitative data about the abatement process from data on all types of adjustments; (9) determining the costs and benefits of collecting data on just the abatement process is beyond the scope of this report; (10) IRS' recent efforts to improve the abatement process have generally involved task forces that have been studying various IRS concerns, including, for example, the administration of penalties and treatment of taxpayers; (11) although the studies have not focused on abatements, they have produced some proposals that would affect the abatement process, such as the documentation required to support abatements; (12) during 1993-1994, concerns about the inventory of tax debts prompted IRS to study abatements at its 10 service centers; (13) this study identified 259 problems and referred 158 to various IRS work groups for analysis and implementation of any needed changes; and (14) IRS never formally released a final study.

gao_AIMD-95-160

gao_AIMD-95-160_0

Scope and Methodology To determine whether EPA’s planned state emissions reporting requirements exceeded the agency’s actual program needs, we reviewed the Clean Air Act, and we analyzed various information reporting requirements of the 1990 amendments and EPA documents interpreting requirements of the amendments. Proposed Reporting Requirements Exceeded EPA Minimum Program Needs EPA’s draft regulation on states’ reporting of air pollution emissions exceeded what was needed by EPA to meet minimum agency air pollution program needs. EPA has suspended its promulgation of the regulation and has recently begun studying alternative reporting options. The states noted that additional resources to develop these databases were not available. When AIRS was originally designed, states were expected to be one of its primary users; however, most heavy emission states now use their own systems because these systems are more efficient and easier to use than AIRS. This is incorrect.

Why GAO Did This Study GAO reviewed selected data collection and reporting requirements of the 1990 Clean Air Act Amendments, focusing on whether: (1) the Environmental Protection Agency's (EPA) planned state emissions reporting requirements exceed its program needs; and (2) states use the EPA Aerometric Information Retrieval System (AIRS) to monitor emissions data. What GAO Found GAO found that: (1) EPA draft regulation would have required states to submit emissions data that exceeded its minimum air pollution program needs and to develop complicated pollutant databases that they could not afford; (2) EPA has since suspended the regulation and is considering alternative reporting options; (3) despite EPA intentions, 9 of the 10 heavy emission states use their own independently developed systems to track air pollution emissions; and (4) the state tracking systems are more efficient and easier to use than AIRS.

gao_AIMD-98-88

gao_AIMD-98-88_0

Our objective was to determine whether the District had implemented disciplined software acquisition processes for acquiring its new financial management system. The District has a policy on solicitation and the FMS project followed this policy. These include (1) having a written organizational policy for establishing and managing requirements allocated to software, (2) documenting plans for the development and management of requirements, (3) having documented processes for requirements development, including elicitation, analysis, and verification, (4) measuring and reporting on the status of requirements development and management activities to management, (5) appraising the impact on software of system-level requirements changes and (6) having a mechanism to ensure that contractor-delivered work products meet specified requirements. For example, the District does not have an organizational policy for establishing and managing software-related requirements, there is no clear assignment of responsibility for requirements development and management and no documented evidence exists to show either resource requirements or resources expended for requirements development activities. FMS Risk Management Processes Are Ineffective The FMS project had one strength for this KPA. However, the District is not performing any of the other practices to satisfy this KPA. While the District has many strengths in its acquisition processes for FMS, it also has many weaknesses that, overall, make its processes undisciplined and immature. Develop written policy for software acquisition risk management. As discussed in the report, significant improvements would be necessary to achieve the minimally acceptable level of maturity as defined by the Software Engineering Institute’s Software Acquisition Maturity Model to satisfy the intent of all the software acquisition key process areas.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed whether the District of Columbia had implemented disciplined software acquisition processes for its new financial management system (FMS). What GAO Found GAO noted that: (1) while the District has many strengths in its acquisition processes for FMS, it also has many weaknesses; (2) when compared to standards established by the Software Engineering Institute, the District's processes for software acquisitions are not mature; (3) of the six key process areas (KPA) evaluated for the repeatable level, the District fully satisfied only one--solicitation; (4) severe weaknesses were found in other critical key processes, including requirements development and management and evaluation; (5) for example, the District does not have a policy for establishing and managing software-related requirements, does not at present have adequate resources for requirements development, and has not formally designated responsibility for requirements development and management; (6) similarly, the District does not have an effective evaluation process, and is currently unable to objectively determine if the acquired systems will satisfy the contract requirement; (7) finally, the District has not satisfied the one KPA evaluated for the defined level of maturity, acquisition risk management; and (8) the FMS project does not have a risk management plan and does not track project risk.

gao_GAO-10-52

gao_GAO-10-52_0

Eligible countries may develop and propose projects, with guidance from MCC, with the goal of achieving economic growth and poverty reduction. First, the country must authorize an accountable entity to oversee the MCC program and its components, allocate resources, oversee and implement a financial plan, approve expenditures and procurements, and be accountable for MCC program results. MCA Fiscal Accountability Plans Had Gaps and Did Not Address Certain Key Controls During our review of the three MCAs we visited, we found that each entity had documented policies and procedures in their FAPs as required by MCC. For example, more specific or detailed guidance in payroll, travel, and inventory controls would have assisted the MCAs in developing comprehensive policies and procedures. To help address shortcomings in the FAPs, in November 2008, MCC developed a FAP template with suggested policies and procedures to help compact countries strengthen their FAPs. These control deficiencies and inadequate monitoring of the MCAs’ implementing entities, increase the risk of fraud, waste, and abuse of MCC program funding. MCC Has Decreased Its Level of Procurement Review; Countries Generally Adhered to MCC Requirements MCC has increased standardization of the MCA procurement guidelines, which were initially determined on a country-by-country basis. The MCAs we assessed generally adhered to MCC’s procurement guidelines, although they did not fully comply with some requirements, such as contractor eligibility and price reasonableness determinations. In addition, we found that when the MCAs delegated procurement responsibility to outside entities, the procedures used by these entities were generally consistent with MCC’s procurement framework. The MCAs in Honduras, Georgia, and Cape Verde all began their compacts using country-specific procurement guidelines. MCC Conducts Oversight, but Insufficient Planning of Projects during Compact Development Has Undermined Project Implementation Project status reports of MCC and MCA consultants indicate that the MCA projects have encountered problems, which include delays, scope reductions, and cost increases. Two of five roads in Cape Verde were eliminated from the contractor’s project scope due to increased costs. Insufficient Planning, Cost Escalation, and MCC’s Insufficient Design Review Have Contributed to the Need to Restructure Projects Our review of the three MCAs found that projects had to be redesigned and restructured due to insufficient planning before implementation, which led to delays in implementation. Cost escalation. For example, one of MCC’s consultants characterized its design review as “big picture in nature” and “not to be considered a detailed review,” stating specifically that “building drawings were not completed and not reviewed,” and that “the cost estimate was not reviewed.” In contrast, our review of industry leading practices indicates that a well-organized, detailed review can ensure that design plans and specifications are sufficient for construction and will provide the contractor with sufficient information to prepare a competitive and cost-effective bid. MCC also reviews key documents, such as bidding packages, contract documents, and technical project requirements. In some instances, the MCAs contracted with a commercial project management consultant to act as a project manager on the MCAs’ behalf. MCC also works with the MCAs’ supervisory boards to restructure projects when needed to keep them within their budgets and compact time frames. Finally, MCC is conducting oversight and has taken steps to advance planning for infrastructure projects. For the purpose of this initial engagement, we focused on financial controls and procurement practices for MCC compacts and on the development, implementation, and oversight of contracts and projects at MCC and its accountable entities. Performed tests of those control activities that we considered key in providing reasonable assurance that transactions were correct and proper, including segregation of duties related to the approval and authorization of payments: dividing key duties and responsibilities among different people to reduce the risk of error or fraud, adequate supporting documentation: supporting the disbursements through documentation to provide a basis for reconciling payment amounts and authorizations to disbursement of funds, proper execution of transactions and events: authorizing and executing transactions by persons acting within the scope of their authority to ensure that only valid transactions are initiated and approved, and physical control over assets: securing assets and periodically counting and comparing totals with control records.

Why GAO Did This Study Established in January 2004 with a mission to reduce poverty through economic growth, the Millennium Challenge Corporation (MCC) has committed $6.9 billion for compacts with 19 developing countries. MCC vests compact management with accountable entities in recipient countries, called Millennium Challenge Accounts (MCA). MCAs, with guidance from MCC, allocate resources, oversee and implement a financial plan, approve expenditures and procurements, and implement compact projects. This report, directed by the fiscal year 2008 Consolidated Appropriations Act, assesses MCC and MCA (1) financial controls; (2) procurement practices; and (3) development, implementation, and oversight of contracts and projects. GAO focused on financial and procurement transactions and projects at MCAs in Honduras, Georgia, and Cape Verde, countries with high disbursement totals as of the end of fiscal year 2008. What GAO Found As required by MCC guidelines, each of the three MCAs GAO reviewed had developed a Fiscal Accountability Plan (FAP) that documented policies and procedures related to internal control, such as funds control, documentation, and segregation of duties. However, each of the FAPs GAO reviewed, in place as of the end of fiscal year 2008, had gaps in certain areas, such as incomplete policies and procedures for some expenses. Although MCC agreements require that each country prepare a FAP, the initial guidance MCC provided to the three MCAs was general and did not contain sufficient information to help the countries develop sound internal control structures. For example, guidance stated that records must support transactions and that procedures must incorporate segregation of duties. However, specific guidance on payroll, travel, and inventory controls would have helped the MCAs develop comprehensive policies. To address this, MCC developed a FAP template in November 2008, but MCC allows the MCAs flexibility and does not require them to implement the template's policies and procedures. In addition, GAO identified a significant number of the transactions tested that lacked adequate supporting documentation or were not properly approved by management. These deficiencies increase the risk of fraud, waste, and abuse of MCC program funding. MCC has increased standardization of the MCA procurement guidelines, which were initially developed on a country-by-country basis. The MCAs GAO assessed generally adhered to MCC's procurement guidelines. GAO found that, in some cases, MCAs did not document a price reasonableness analysis of winning bids. GAO also found that when MCAs delegated procurement responsibility to outside entities, the procedures used by these entities were generally consistent with MCC's procurement framework. MCC conducts oversight of MCA infrastructure contracts and projects, but insufficient planning of projects during compact development and cost escalation has undermined project implementation. As a result of insufficient planning, designs had to be revised, and project scopes have been reduced. Significant delays to project schedules--the result of undertaking additional planning and design--further compounded the escalation in construction costs experienced on projects and contributed to the restructuring of projects. For example, two of five planned roads in Cape Verde were eliminated, in part due to insufficient design and cost increases. In addition, the schedule for construction of the remaining three roads was extended by 11 months. MCC has worked with the MCAs to significantly restructure projects to keep them within their budgets and 5-year compact time frames. MCC also has taken steps to provide increased assistance to MCAs to help them conduct better planning for projects. However, these changes alone will not address the problems projects encountered with design development and cost escalation. Industry best practices and past GAO work have shown that conducting design reviews and updating cost estimates prior to contract solicitation help to ensure that projects can be successfully bid and constructed.

gao_GAO-09-689

gao_GAO-09-689_0

The SFF candidates are those nursing homes with the 15 highest total scores in each state. The SFF methodology assigns points to deficiencies on standard surveys and complaint investigations, and to revisits associated with deficiencies cited on standard surveys, as follows: Deficiencies. Revisits. These 580 homes overlap somewhat with the 755 SFF Program candidates and the 136 nursing homes actually selected as SFFs. 2) and (2) 65 nursing homes that 31 states selected as SFFs from among the SFF Program candidates, or about half of the active SFFs as of February 2009. In addition, our estimate resulted in some states having fewer or more poorly performing homes than CMS currently allocates to states under the SFF Program. Eight states had no such nursing homes. CMS’s Application of the SFF Methodology Misses Many of the Nation’s Most Poorly Performing Nursing Homes CMS has structured the SFF Program so that every state (except Alaska) has at least one SFF, and therefore the agency applies the SFF methodology to identify the 15 worst performing nursing homes in each state, which are not necessarily the worst performing homes in the nation. We developed an estimate that identified homes with worse compliance histories—more deficiencies at the potential for more than minimal harm level or higher and more revisits—than SFF Program candidates by applying CMS’s SFF methodology on a nationwide basis and using statistical scoring thresholds. For example, the most poorly performing nursing homes averaged 46.5 percent more actual harm–level deficiencies and 19.5 percent more immediate jeopardy–level deficiencies, compared to the 755 SFF Program candidates. Absent a fixed number of homes per state, we developed statistical scoring thresholds because there was no natural break point delineating the most poorly performing nursing homes from all other homes. The two statistical scoring thresholds we used were conservative, because they focused on chronic poor performance and nonchronic, very poor performance. Our three refinements to CMS’s SFF methodology had a moderate effect on the composition of the list of homes we identified as the most poorly performing. Deficiency points. For example, in 2008, about 11.3 percent of deficiencies were at the immediate jeopardy level in one state, but less than 1.0 percent of deficiencies were cited at that level in 26 states. Key Characteristics, such as Chain Affiliation and For- Profit Status Differentiated the Most Poorly Performing Nursing Homes Compared to all other nursing homes, the most poorly performing nursing homes in the nation averaged notably more deficiencies at the D level or higher, more serious deficiencies, and more revisits. For example, in fiscal year 2008, about 33 percent of the most poorly performing homes may have been at risk of having at least one immediate sanction imposed, compared to about 4 percent for all other nursing homes. Beds and residents. We found that a larger percentage of the most poorly performing homes had more than 100 beds, compared to all other nursing homes. Furthermore, we believe that CMS’s SFF Program and the Five-Star System could be strengthened by incorporating the three enhancements we made to identify the most poorly performing homes nationwide: First, we adopted the deficiency points that CMS developed for its Five- Star System because they compensate somewhat for understatement and the interstate variation in the citation of serious deficiencies, an important consideration for our nationwide estimate of the most poorly performing nursing homes. 2. 3. Determining the Number and Comparing the Performance of the Most Poorly Performing Nursing Homes To determine the number of most poorly performing nursing homes in the nation and compare their performance to that of homes identified using the Centers for Medicare & Medicaid Services’ (CMS) approach, we began by interviewing agency officials about the Special Focus Facility (SFF) Program and methodology and by reviewing documentation related to the methodology. To ensure that we calculated the scores for each nursing home consistent with CMS’s SFF methodology, we obtained a copy of the computer programming that CMS used to score and rank nursing homes, verified that our use of CMS’s program generated results that were consistent with output on scores that CMS provided to states, and used the program as the basis for our estimate of the most poorly performing nursing homes in the United States. Additional points are assigned to deficiencies classified as substandard quality of care (SQC).

Why GAO Did This Study In 1998, CMS established the Special Focus Facility (SFF) Program as one way to address poor performance by nursing homes. The SFF methodology assigns points to deficiencies cited on standard surveys and complaint investigations, and to revisits conducted to ensure that deficiencies have been corrected. CMS uses its methodology periodically to identify candidates for the program--nursing homes with the 15 worst scores in each state--but the program is limited to 136 homes at any point in time because of resource constraints. In 2008, CMS introduced a Five-Star Quality Rating System that draws on the SFF methodology to rank homes from one to five stars. GAO assessed CMS's SFF methodology, applied it on a nationwide basis using statistical scoring thresholds, and adopted several refinements to the methodology. Using this approach, GAO determined (1) the number of most poorly performing homes nationwide, (2) how their performance compared to that of homes identified using the SFF methodology, and (3) the characteristics of such homes. What GAO Found According to GAO's estimate, almost 4 percent (580) of the roughly 16,000 nursing homes in the United States could be considered the most poorly performing. These 580 homes overlap somewhat with the 755 SFF Program candidates--the 15 worst homes in each state--and the 136 homes actually selected by states as SFFs. For example, GAO's estimate includes 40 percent of SFF Program candidates and about half of the active SFFs as of December 2008 and February 2009, respectively. Under GAO's estimate, however, the most poorly performing homes are distributed unevenly across states, with 8 states having no such homes and 10 others having from 21 to 52 such homes. CMS has structured the SFF Program so that every state (except Alaska) has at least one SFF even though the worst performing homes in each state are not necessarily the worst performing homes in the nation. To identify the worst homes in the nation, GAO applied CMS's SFF methodology on a nationwide basis using statistical scoring thresholds and made three refinements to that methodology, which strengthened GAO's estimate. The scoring thresholds were (1) necessary because there were no natural break points that delineated the most poorly performing homes from all other nursing homes and (2) conservative, focusing on chronic poor performance generally over a 2- or 3-year period or very poor performance over about 1 year. The most poorly performing homes identified by GAO averaged over 46 percent more serious deficiencies that caused harm to residents and over 19 percent more deficiencies that placed residents at risk of death or serious injury (immediate jeopardy), compared to the 755 SFF Program candidates identified by CMS's approach. GAO's three refinements to CMS's SFF methodology had a moderate effect on the composition of the list of homes that GAO identified as the most poorly performing. First, deficiency points from CMS's Five-Star Quality Rating System were used because they decreased the disparity between immediate jeopardy and lower-level deficiencies, such as those with the potential for more than minimal harm, which compensates somewhat for the understatement of serious deficiencies in some states. Second, homes received extra points when certain actual harm deficiencies occurred in standards areas that CMS categorizes as substandard quality of care, an important change because we found that many homes had at least one such deficiency. Third, the full deficiency history of homes was included. CMS recognizes that its methodology overlooks deficiencies for some homes, which almost always results in scores that are lower than if all deficiencies were included in the scores. GAO found that the most poorly performing nursing homes had notably more deficiencies with the potential for more than minimal harm or higher and more revisits than all other nursing homes. For example, the most poorly performing nursing homes averaged about 56 such deficiencies and 2 revisits, compared to about 20 such deficiencies and less than 1 revisit for all other homes. In addition, the most poorly performing homes tended to be chain affiliated and for-profit and have more beds and residents.

gao_GAO-15-621

gao_GAO-15-621_0

For example, several photograph management software programs can detect individuals, such as family members, which the user has asked to be identified. Secure access. Marketing and customer service. The Extent of Commercial Use of Facial Recognition Technology Is Not Fully Known Facial recognition technology is currently being used in a number of commercial applications in the United States, but the full extent of its present use is not known. In particular, concerns have been raised by the technology’s potential to identify and track individuals in public without their knowledge, and around the collection, use, and sharing of personal data associated with the technology. However, some industry stakeholders have argued that the technology does not present new or unusual privacy risks, or that such risks can be mitigated. Privacy Concerns Have Been Raised Related to the Ability to Identify and Track Individuals in Public While acknowledging the potential benefits of commercial use of facial recognition technology, government agencies, privacy advocacy organizations, academics, and others have raised a number of privacy concerns about the technology and its future direction. As noted earlier, facial recognition technology continues to rapidly improve in accuracy. Some privacy advocacy organizations and others have reported that, like other forms of personal data, information that is collected or associated with facial recognition technology could be used, shared, or sold in ways that consumers do not understand, anticipate, or consent to. Several Stakeholders Have Suggested Privacy Guidelines, and Company Privacy Policies Vary in Addressing Facial Recognition Several government, industry, and privacy organizations have proposed or are developing suggested privacy guidelines for commercial use of facial recognition technology. Among other things, the standards state that companies should disclose in privacy policies the data collected by digital signs and the purpose of the data; obtain affirmative consent before using facial recognition to identify an notify consumers at the physical location of the sign when using facial recognition (or other means) to collect other information about an individual, such as age range or gender; not share data for any uses incompatible with those specified in the allow consumers to submit complaints and request to access their data. Two companies operating social networking applications that use facial recognition technology expressly address how they use the technology in their privacy policies and associated documents. Some Federal Laws May Potentially Apply to Facial Recognition Technology, but Do Not Fully Address Stakeholder Privacy Issues Some federal laws may potentially be applicable to the commercial use of facial recognition technology, but these laws do not fully address the privacy concerns that have been raised about facial recognition technology by some stakeholders. Applicability to collection, use, and storage of personal information Governs the disclosure of individually identifiable health information collected by covered health care entities, and sets standards for data security. As previously discussed, no federal law expressly regulates commercial use of facial recognition technology. In our September 2013 report on personal information collected for marketing purposes, we suggested that Congress consider strengthening the consumer privacy framework to reflect the effects of changes in technology and the marketplace, a suggestion that is underscored by the privacy issues associated with facial recognition technology. We also found that gaps existed in federal privacy law because it had not adapted to new technologies. Federal law does not expressly address the circumstances under which commercial entities can use facial recognition technology to identify or track individuals, or when consumer knowledge or consent should be required for the technology’s use. However, views vary on the efficacy of voluntary and self-regulatory approaches versus legislation and regulation to protect privacy. The privacy issues stakeholders have raised about facial recognition technology and other biometric technologies serve as yet another example of the need to adapt federal privacy law to reflect new technologies. Agency Comments We provided a draft of this report for review and comment to the Department of Commerce and the Federal Trade Commission. Appendix I: Objectives, Scope, and Methodology This report examines (1) the uses of facial recognition technology for consumers and businesses, (2) privacy issues that have been raised in connection with commercial uses of facial recognition technology, (3) proposed best privacy practices and industry privacy policies related to facial recognition technology, and (4) privacy protections under federal law that may potentially apply to facial recognition technology. The scope of this report includes use of the technology by companies and other private entities and does not include use by federal, state, or local government agencies. Computer Fraud and Abuse Act.

Why GAO Did This Study Facial recognition technology—which can verify or identify an individual from a facial image—has rapidly improved in performance and now can surpass human performance in some cases. The Department of Commerce has convened stakeholders to review privacy issues related to commercial use of this technology, which GAO was also asked to examine. This report examines (1) uses of facial recognition technology, (2) privacy issues that have been raised, (3) proposed best practices and industry privacy policies, and (4) potentially applicable privacy protections under federal law. The scope of this report includes use of the technology in commercial settings but not by government agencies. To address these objectives, GAO analyzed laws, regulations, and documents; interviewed federal agencies; and interviewed officials and reviewed privacy policies and proposals of companies, trade groups, and privacy groups. Companies were selected because they were among the largest in industries identified as potential major users of the technology, and privacy groups were selected because they had written on this issue. What GAO Found Facial recognition technology can be used in numerous consumer and business applications, but the extent of its current use in commercial settings is not fully known. The technology is commonly used in software that manages personal photographs and in social networking applications to identify friends. In addition, several companies use the technology to provide secure access to computers, phones, and gaming systems in lieu of a password. Facial recognition technology can have applications for customer service and marketing, but at present, use in the United States of the technology for such purposes appears to be largely for detecting characteristics (such as age or gender) to tailor digital advertising, rather than identifying unique individuals. Some security systems serving retailers, banks, and casinos incorporate facial recognition technology, but the extent of such use at present is not fully known. Privacy advocacy organizations, government agencies, and others have cited several privacy concerns related to the commercial use of facial recognition technology. They say that if its use became widespread, it could give businesses or individuals the ability to identify almost anyone in public without their knowledge or consent and to track people's locations, movements, and companions. They have also raised concerns that information collected or associated with facial recognition technology could be used, shared, or sold in ways that consumers do not understand, anticipate, or consent to. Some stakeholders disagree that the technology presents new or unusual privacy risks, noting, among other things, that individuals should not expect complete anonymity in public and that some loss of privacy is offset by the benefits the technology offers consumers and businesses. Several government, industry, and privacy organizations have proposed or are developing voluntary privacy guidelines for commercial use of facial recognition technology. Suggested best practices vary, but most call for disclosing the technology's use and obtaining consent before using it to identify someone from anonymous images. The privacy policies of companies GAO reviewed varied in whether and how they addressed facial recognition technology. No federal privacy law expressly regulates commercial uses of facial recognition technology, and laws do not fully address key privacy issues stakeholders have raised, such as the circumstances under which the technology may be used to identify individuals or track their whereabouts and companions. Laws governing the collection, use, and storage of personal information may potentially apply to the commercial use of facial recognition in specific contexts, such as information collected by health care entities and financial institutions. In addition, the Federal Trade Commission Act has been interpreted to require companies to abide by their stated privacy policies. Stakeholder views vary on the efficacy of voluntary and self-regulatory approaches versus legislation and regulation to protect privacy. GAO has previously concluded that gaps exist in the consumer privacy framework, and the privacy issues that have been raised by facial recognition technology serve as yet another example of the need to adapt federal privacy law to reflect new technologies. What GAO Recommends GAO makes no recommendations in this report. However, GAO suggested in GAO-13-663 that Congress consider strengthening the consumer privacy framework to reflect changes in technology and the marketplace, and facial recognition technology is such a change. GAO maintains that the current privacy framework in commercial settings warrants reconsideration.

gao_GAO-03-724

gao_GAO-03-724_0

In 2002, about 6.8 million recipients were paid about $35 billion in SSI benefits. According to our own analysis of SSA’s data, residency overpayments appear to vary by geographic region, with the majority of overpayments having been detected in several large metropolitan areas. Moreover, of approximately 3,000 counties in the United States, 50 accounted for 77 percent of all residency overpayments detected by SSA during this time. Most Overpayments Were Made to Recipients Born outside the United States SSA’s data also show that individuals born outside the United States accounted for at least 87 percent of all SSI residency overpayments between 1997 and 2001. Reliance on Self- Reported Information and Other Vulnerabilities Impede SSA’s Ability to Detect and Deter Violations SSA’s ability to detect and deter residency violations is impeded by three kinds of weaknesses: dependence on self-reported information by clients, insufficient use of existing compliance tools, and a failure to pursue independent data sources for its verifications. First, the agency relies heavily on self-reported information from recipients to determine domestic residency, often without independently verifying such information. Finally, the agency has not employed the use of independent data sources from other federal agencies or private organizations to detect nonresidency of SSI recipients. SSA has used statistical risk analysis techniques for many years in the SSI program to identify recipients who are more likely to be overpaid. Thus, the agency’s approach to this problem has been generally ad hoc and restricted in scope. We recognize that the SSI program is complex to administer and residency requirements are particularly difficult to enforce because they can necessitate time-consuming, labor- intensive verification checks, such as home visits. However, SSA has not employed a systematic, comprehensive approach to this problem that would allow the agency to use its available systems and procedures more efficiently and reduce the program’s exposure to additional violations. For example, SSA noted that financial records may not be an accurate basis for identifying recipients who are outside the country for more than 30 days. Appendix I: Scope and Methodology This appendix provides additional details about our analysis of the Supplemental Security Income program’s (SSI) residency violations, including potential weaknesses in the Social Security Administration’s (SSA) policies and procedures. 1. 2.

Why GAO Did This Study The Supplemental Security Income (SSI) program paid about $35 million recipients in 2002. In recent years, the Social Security Administration (SSA) has identified a general increase in the amount of annual overpayments made to (1) individuals who are found to have violated program residency requirements or (2) recipients who leave the United States and live outside the country for more than 30 consecutive days without informing SSA. This problem has caused concern among both program administrators and policy makers. As such, GAO was asked to determine what is known about the extent to which SSI benefits are improperly paid to individuals who are not present in the United States and to identify any weaknesses in SSA's processes and policies that impede the agency's ability to detect and deter residency violations. What GAO Found Overpayments resulting from residency violations totaled about $118 million between 1997 and 2001. However, this figure, which represents only violations detected by SSA, likely understates the true level of the problem. Additionally, the extent of violations appears to vary by geographic region, with overpayments being more prevalent in several large metropolitan areas. GAO found that 54 percent of all overpayments detected by SSA during this period occurred in just 15 counties. In addition, GAO found that recipients born outside the United States accounted for at least 87 percent of all residency overpayments. SSA's ability to detect and deter residency violations is impeded by three kinds of weaknesses. First, the agency relies heavily on self-reported information from recipients to determine domestic residency, often without independently verifying such information. Second, SSA makes insufficient use of existing tools to detect violations, such as its "risk analysis" system, redeterminations, and home visits. Finally, the agency has not adequately pursued independent sources of information from other federal agencies or private organizations to detect nonresidency of SSI recipients. GAO recognizes that the SSI program is complex to administer, and residency requirements are particularly difficult to enforce because they can necessitate time-consuming, labor-intensive verification checks, such as home visits. However, SSA has not employed a systematic, comprehensive approach to this problem that would allow the agency to use its available systems and procedures more efficiently and reduce the program's exposure to additional violations.

gao_GAO-07-1253T

gao_GAO-07-1253T_0

WTC Federal Responder Screening Program Has Had Difficulties Ensuring the Availability of Screening Services, and NIOSH Has Considered Expanding the Program to Include Monitoring HHS’s WTC Federal Responder Screening Program has had difficulties ensuring the uninterrupted availability of services for federal responders. After resuming screening examinations in December 2005 and conducting them for about a year, HHS again placed the program on hold and suspended scheduling of screening examinations for responders from January 2007 to May 2007. This interruption in service occurred because there was a change in the administration of the WTC Federal Responder Screening Program, and certain interagency agreements were not established in time to keep the program fully operational. However, the program stopped scheduling and paying for these specialty diagnostic services in April 2006 because the program’s contract with a new provider network did not cover these services. In July 2007 we reported that NIOSH was considering expanding the WTC Federal Responder Screening Program to include monitoring examinations—follow-up physical and mental health examinations—and was assessing options for funding and delivering these services. If federal responders do not receive this type of monitoring, health conditions that arise later may not be diagnosed and treated, and knowledge of the health effects of the WTC disaster may be incomplete. NIOSH Has Not Ensured the Availability of Services for Nonfederal Responders Residing outside the NYC Metropolitan Area NIOSH has not ensured the availability of screening and monitoring services for nonfederal responders residing outside the NYC metropolitan area, although it recently took steps toward expanding the availability of these services. Mount Sinai’s subcontract with AOEC ended in July 2004, and from August 2004 until June 2005 NIOSH did not fund any organization to provide services to nonfederal responders outside the NYC metropolitan area. In June 2005, NIOSH began its second effort by awarding $776,000 to the Mount Sinai School of Medicine Data and Coordination Center (DCC) to provide both screening and monitoring services for nonfederal responders residing outside the NYC metropolitan area. DCC, however, had difficulty establishing a network of providers that could serve nonfederal responders residing throughout the country—ultimately contracting with only 10 clinics in seven states to provide screening and monitoring services. Lessons include the need to quickly identify and contact responders and others affected by a disaster, the value of a centrally coordinated approach for assessing individuals’ health, and the importance of addressing both physical and mental health effects. Concluding Observations Screening and monitoring the health of the people who responded to the September 11, 2001, attack on the World Trade Center are critical for identifying health effects already experienced by responders or those that may emerge in the future. NIOSH, the administrator of the program, has been considering expanding the program to include monitoring but has not done so. Therefore we recommended in July 2007 that the Secretary of HHS take expeditious action to ensure that health screening and monitoring services are available to all people who responded to the attack on the WTC, regardless of who their employer was or where they reside. As of September 2007 the department has not responded to this recommendation. Finally, important lessons have been learned from the WTC disaster. Consideration of these lessons by federal agencies is important in planning for the response to future disasters. Appendix I: Abbreviations Related GAO Products September 11: HHS Needs to Ensure the Availability of Health Screening and Monitoring for All Responders. GAO-07-892. Washington, D.C.: July 23, 2007.

Why GAO Did This Study Six years after the attack on the World Trade Center (WTC), concerns persist about health effects experienced by WTC responders and the availability of health care services for those affected. Several federally funded programs provide screening, monitoring, or treatment services to responders. GAO has previously reported on the progress made and implementation problems faced by these WTC health programs, as well as lessons learned from the WTC disaster. This testimony is based on previous GAO work, primarily September 11: HHS Needs to Ensure the Availability of Health Screening and Monitoring for All Responders ( GAO-07-892 , July 23, 2007). This testimony discusses (1) status of services provided by the Department of Health and Human Services' (HHS) WTC Federal Responder Screening Program, (2) efforts by the Centers for Disease Control and Prevention's National Institute for Occupational Safety and Health (NIOSH) to provide services for nonfederal responders residing outside the New York City (NYC) area, and (3) lessons learned from WTC health programs. For the July 2007 report, GAO reviewed program documents and interviewed HHS officials, grantees, and others. In August and September 2007, GAO updated selected information in preparing this testimony. What GAO Found In July 2007, following a reexamination of the status of the WTC health programs, GAO recommended that the Secretary of HHS take expeditious action to ensure that health screening and monitoring services are available to all people who responded to the WTC attack, regardless of who their employer was or where they reside. As of September 2007 the department has not responded to this recommendation. As GAO reported in July 2007, HHS's WTC Federal Responder Screening Program has had difficulties ensuring the uninterrupted availability of screening services for federal responders. From January 2007 to May 2007, the program stopped scheduling screening examinations because there was a change in the program's administration and certain interagency agreements were not established in time to keep the program fully operational. From April 2006 to March 2007, the program stopped scheduling and paying for specialty diagnostic services associated with screening. NIOSH, the administrator of the program, has been considering expanding the program to include monitoring--that is, follow-up physical and mental health examinations--but has not done so. If federal responders do not receive monitoring, health conditions that arise later may not be diagnosed and treated, and knowledge of the health effects of the WTC disaster may be incomplete. NIOSH has not ensured the availability of screening and monitoring services for nonfederal responders residing outside the NYC area, although it recently took steps toward expanding the availability of these services. In late 2002, NIOSH arranged for a network of occupational health clinics to provide screening services. This effort ended in July 2004, and until June 2005 NIOSH did not fund screening or monitoring services for nonfederal responders outside the NYC area. In June 2005, NIOSH funded the Mount Sinai School of Medicine Data and Coordination Center (DCC) to provide screening and monitoring services; however, DCC had difficulty establishing a nationwide network of providers and contracted with only 10 clinics in seven states. In 2006, NIOSH began to explore other options for providing these services, and in May 2007 it took steps toward expanding the provider network. However, as of September 2007 these efforts are incomplete. Lessons have been learned from the WTC health programs that could assist in the event of a future disaster. Lessons include the need to quickly identify and contact responders and others affected by a disaster, the value of a centrally coordinated approach for assessing individuals' health, and the importance of addressing both physical and mental health effects. Consideration of these lessons by federal agencies is important in planning for the response to future disasters.

gao_HEHS-99-31

gao_HEHS-99-31_0

Background Social Security is largely a pay-as-you-go, defined benefit system under which taxes collected from current workers are used to pay the benefits of current retirees. Social Security’s Disability Insurance program provides cash benefits to disabled workers and their dependents. Important Differences Exist Between Social Security and the Alternate Plans While Social Security and the Alternate Plans offer a similar package of benefits, there are a number of important differences between the two approaches in the calculation of benefits and scope of coverage. Retirement benefits under the Alternate Plans are thus based on contributions and investment returns and are not adjusted to provide proportionately larger benefits to low-income workers, as is the case with Social Security. Because Social Security is a defined benefit plan, it calculates benefits by formula. The Alternate Plans are defined contribution plans, so benefits are directly related to the capital accumulations in the beneficiaries’ retirement accounts. These lump sum payments can be used by the beneficiary to purchase a lifetime annuity. For example, certain features of Social Security, such as the tilt in the benefit formula and the allowance for spousal benefits, are important factors in providing larger benefits than the Alternate Plans for low-wage earners, single-earner couples, and those with dependents. Under the Alternate Plans, workers have assets that they may pass on to designated beneficiaries. Social Security Provides Higher Retirement Benefits for Most Low Wage Earners Our simulations comparing the retirement benefits for employees of the three Texas counties show that the benefits from Social Security and the Alternate Plans depend on the employee’s earnings, the number of years in the program, the presence of a spouse, the length of time in retirement, and the year the worker retires. 1 and 2). With the longer work history, initial individual benefits for low-wage workers would be higher under the Alternate Plans than under Social Security, although, if spousal benefits and joint and survivor annuities were considered, Social Security benefits would again be larger. 3 and 4.) After 7 years of retirement Social Security benefits would catch up to Alternate Plan benefits for median-wage earners retiring in 2008 after a 45-year career with the county assuming Social Security was indexed at 3.5 percent. It is also true that Social Security benefits are reduced on the death of the retired worker, while the joint and survivor annuity under the Alternate Plans could be structured to provide constant benefits. Alternate Plans Provide Higher Disability Benefits Because the Alternate Plans replace 60 percent of a disabled worker’s wage or salary and because disabled workers can also annuitize their account balances at the time of disability, the Alternate Plans often provide substantially better disability benefits than Social Security. In addition, when dependent children are involved, survivor benefits can be higher under Social Security. We believe that is a more accurate estimate.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on three Texas counties' employee retirement plans, known as Alternate Plans, focusing on: (1) comparing the principal features and benefits of these plans with those of social security; and (2) simulating the retirement, survivor, and disability benefits that individuals in varying circumstances might receive under the Alternate Plans and under social security. What GAO Found GAO noted that: (1) while social security and the Alternate Plans offer retirement, disability, and survivor benefits to qualified workers, there are fundamental differences in the purpose and structure of the two approaches; (2) Social Security is a social insurance program designed to provide a basic level of retirement income to help retired workers, disabled workers, and their dependents and survivors stay out of poverty; (3) Social Security benefits are tilted to provide relatively higher benefits to low-wage earners, and the benefits are fully indexed to protect against inflation; (4) social security is a pay-as-you-go system that is projected to produce a negative cash flow in 2013 and become insolvent by 2032; (5) the Alternate Plans are advance funded plans; the contributions made by workers and their employers, which total 13.915 percent of workers' pay, and the earnings made on those invested contributions are used to fund retirement benefits; (6) the Alternate Plans' benefits are directly linked to contributions, so that retirement income is based on accumulated contributions and the earnings thereon; (7) at retirement, the worker can take the money in the account as a lump sum or select from a number of monthly payout options, including the purchase of a lifetime annuity; (8) GAO found that certain features of social security, such as the progressive benefit formula and the allowance for spousal benefits, are important factors in providing larger benefits than the Alternate Plans for low-wage earners, single-earner couples, and individuals with dependents; (9) many median-wage earners, while initially receiving higher benefits under the Alternate Plans, would also have received larger benefits under social security after 4 and 12 years after retirement, because social security benefits are indexed for inflation; (10) the Alternate Plans provide larger benefits for higher-wage workers than social security would, but in some cases, such as when spousal benefits are involved, social security benefits could also exceed those of the Alternate Plans; (11) survivor benefits often would be greater under social security than under the Alternate Plans, especially when a worker died at a relatively young age and had dependant children; (12) with regard to disability benefits, all workers in GAO's simulations would receive higher initial benefits under the Alternate Plans; and (13) it is important to note that the Alternate Plans performance is not necessarily indicative of how well a proposed system of individual accounts with social security might perform.

gao_GAO-04-682

gao_GAO-04-682_0

Threat Information and Vulnerability of Potential Targets Inform National and Sector- or Location- Specific Threat Level Decisions In implementing the Homeland Security Advisory System, DHS assigns national threat levels and assesses the threat condition of specific geographic locations and industrial sectors. In addition, HSPD-3 states that the Homeland Security Advisory System should provide a comprehensive and effective means to disseminate information regarding the risk of terrorist acts to federal, state, and local authorities. Moreover, some states reported that their ability to provide credible information to state and local agencies and the public was hindered because they did not receive notification from DHS before the media reported on the threat level changes. Federal Agencies Reported Implementing Few New Protective Measures for Code- Orange Alerts because They Always Operate at High Security Levels, While States Varied Their Responses The majority of federal agencies responding to our questionnaire indicated that they maintain high security levels regardless of the national threat level and, as a result, they did not need to implement a substantial number of new or additional protective measures to respond to the three periods of code-orange alert from March 17 to April 16, 2003; May 20 to 30, 2003; and December 21, 2003, to January 9, 2004. Based on the information provided by federal agencies, total additional costs reported by federal agencies responding to our questionnaire for the March 17 to April 16, 2003, and May 20 to 30, 2003, code-orange alert periods were less than 1 percent of these agencies’ fiscal year 2003 homeland security funding, as reported to OMB. Some federal agencies responding to our questionnaire indicated they could not quantify these indirect costs. However, DHS has not yet officially documented its protocols for communicating changes in the national threat level, as well as guidance and threat information, to federal agencies and states. Risk communication experts suggest that warnings should include the following principles to provide for early, open, and comprehensive information dissemination and for informed decision making: (1) communication through multiple methods, (2) timely notification, and (3) specific information about the nature, location, and timing of the threat and guidance on actions to take. Recommendations for Executive Action We recommend that the Secretary of Homeland Security direct the Under Secretary for Information Analysis and Infrastructure Protection to take the following two actions: (1) document communication protocols for notifying federal agencies and states of changes in the national threat level and for providing guidance and threat information to these entities, including methods and time periods for sharing information, to better manage these entities’ expectations regarding the methods, timing, and content of information shared; and (2) incorporate risk communication principles into the Homeland Security Advisory System to assist in determining and documenting information to provide to federal agencies and states, including, to the extent possible, information on the nature, location, and time periods of threats and guidance on protective measures to take in response to those threats. See appendix V for additional information on cost information reported by federal agencies. We examined this information to identify the methods used by DHS to collect cost information from states and localities. However, this cost information does not represent all additional costs incurred by states and localities during code-orange alert periods. 5. Received? Received? Costs Incurred During the HSAS Code-Orange Alerts 20. 28. 56.

Why GAO Did This Study Established in March 2002, the Homeland Security Advisory System was designed to disseminate information on the risk of terrorist acts to federal agencies, states, localities, and the public. However, these entities have raised questions about the threat information they receive from the Department of Homeland Security (DHS) and the costs they incurred as a result of responding to heightened alerts. This report examines (1) the decision making process for changing the advisory system national threat level; (2) information sharing with federal agencies, states, and localities, including the applicability of risk communication principles; (3) protective measures federal agencies, states, and localities implemented during high (codeorange) alert periods; (4) costs federal agencies reported for those periods; and (5) state and local cost information collected by DHS. What GAO Found DHS assigns threat levels for the entire nation and assesses threat conditions for geographic regions and industrial sectors based on analyses of threat information and vulnerability of potential terrorist targets. DHS has not yet officially documented its protocols for communicating threat level changes and related threat information to federal agencies and states. Such protocols could assist DHS to better manage these entities' expectations about the methods, timing, and content of information received from DHS. To ensure early, open, and comprehensive information dissemination and allow for informed decisionmaking, risk communication experts suggest that warnings should include (1) multiple communication methods, (2) timely notification, and (3) specific threat information and guidance on actions to take. Federal agencies and states responding to GAO's questionnaires sent to 28 federal agencies and 56 states and territories generally indicated that they did not receive specific threat information and guidance, which they believe hindered their ability to determine and implement protective measures. The majority of federal agencies reported operating at heightened security levels regardless of the threat level, and thus, did not need to implement a substantial number of additional measures to respond to code-orange alerts. States reported that they varied in their actions during code-orange alerts. The costs reported by federal agencies, states, and selected localities are imprecise and may be incomplete, but provide a general indication of costs that may have been incurred. Additional costs reported by federal agencies responding to GAO's questionnaire were generally less than 1 percent of the agencies' fiscal year 2003 homeland security funding. DHS collected information on costs incurred by states and localities for critical infrastructure protection during periods of code-orange alert. However, this information does not represent all additional costs incurred by these entities during the code-orange alert periods.

gao_RCED-96-186

gao_RCED-96-186_0

As you requested, we have reviewed selected aspects of the act’s implementation by the Office of Management and Budget (OMB) and three agencies—the Internal Revenue Service (IRS), the Environmental Protection Agency (EPA), and the Occupational Safety and Health Administration (OSHA). We will also discuss some measurement issues Congress needs to consider as it assesses agencies’ progress in reducing paperwork burden. For example, the near tripling of the governmentwide burden-hour estimate during fiscal year 1989 was primarily because IRS changed the way it calculated its information collection burden, which increased its paperwork estimate by about 3.4 billion hours. Documents we reviewed and officials we talked to indicated that these increases occurred during this period because agencies were trying to get proposed information collections approved before the new act took effect on October 1, 1995. According to unpublished information we obtained from OIRA and the agencies, the weighted average of the agencies’ burden reduction projections is about 1 percent. Goals negotiated with some agencies may substantially exceed the Government-wide goal, while those negotiated with other agencies may be substantially less.” OIRA Did Not Keep Congress Informed In addition to setting goals for paperwork reduction, the act requires OIRA to “keep the Congress and congressional committees fully and currently informed of the major activities under this chapter.” However, as of May 31, 1996, the OIRA Administrator had not informed Congress or congressional committees (1) about why OIRA has not established any burden reduction goals to date and (2) that agency projections OIRA received at least 3 months ago indicated that the 10 percent governmentwide paperwork reduction goal called for in the act would not be achieved. Most or all of the burden-hour increase may have actually existed since 1980 when the original Paperwork Reduction Act became effective.

Why GAO Did This Study GAO discussed governmentwide implementation of the Paperwork Reduction Act of 1995, and three federal agencies' actions to implement the act. What GAO Found GAO noted that: (1) between 1980 and 1995, reported governmentwide paperwork burden hours increased from about 1.5 billion to 6.9 billion; (2) the Internal Revenue Service (IRS) accounts for most of the federal paperwork burden; (3) IRS accounted for a three-fold increase in 1989 because it changed the way it calculated its information collection burden; (4) governmentwide burden hours increased almost 8 percent in the month before the act's effective date because agencies were trying to get proposed information collection activities approved before that date; (5) as of May 1996, the Office of Management and Budget's Office of Information and Regulatory Affairs had not set burden reduction goals or kept Congress informed about implementation progress; (6) agencies' weighted average burden reduction is likely to be 1 percent for fiscal year (FY) 1996, but the act's FY 1996 reduction goal is 10 percent; (7) agencies believe that statutory mission-related requirements limit their ability to reduce paperwork burdens; and (8) Congress should consider several measurement issues, including counting adjustments toward or against reduction goals, the difference between measured and actual paperwork burdens, and potentially incomplete agency burden estimates.

gao_GAO-09-631T

gao_GAO-09-631T_0

Summary of GAO Findings Uses of Funds About 90 percent of the estimated $49 billion Recovery Act funding to be provided to states and localities in fiscal year 2009 will be through health, transportation and education programs. Within these categories, the three largest programs are increased Medicaid Federal Medical Assistance Percentage (FMAP) grant awards, funds for highway infrastructure investment, and the State Fiscal Stabilization Fund (SFSF). The 16 states and the District have drawn down approximately $7.96 billion in increased FMAP grant awards for the period October 1, 2008, through April 1, 2009. The increased FMAP is for state expenditures for Medicaid services. The receipt of this increased FMAP may reduce the state share for their Medicaid programs. States have reported using funds made available as a result of the increased FMAP for a variety of purposes. Highway Infrastructure Investment States are undertaking planning activities to identify projects, obtain approval at the state and federal level, and move them to contracting and implementation. Some state officials told us they were focusing on construction and maintenance projects, such as road and bridge repairs. Before they can expend Recovery Act funds, states must reach agreement with the Department of Transportation on the specific projects; as of April 16, 2009, two of the 16 states had agreements covering more than 50 percent of their states’ apportioned funds, and three states did not have agreement on any projects. While a few, including Mississippi and Iowa had already executed contracts, most of the 16 states were planning to solicit bids in April or May. Thus, states generally had not yet expended significant amounts of Recovery Act funds. State Fiscal Stabilization Fund The states and the District must apply to the Department of Education for SFSF funds. Education will award funds once it determines that an application contains key assurances and information on how the state will use the funds. As of April 20, applications from three states had met that determination-South Dakota, and two of GAO’s sample states, California and Illinois. The applications from other states are being developed and submitted and have not yet been awarded. The states and the District report that SFSF funds will be used to hire and retain teachers, reduce the potential for layoffs, cover budget shortfalls, and restore funding cuts to programs. Planning continues for the use of Recovery Act funds. State planning activities include appointing Recovery Czars, establishing task forces and other entities, and developing public websites to solicit input and publicize selected projects. Accountability Approaches We found that the selected states and the District are taking various approaches to ensure that internal controls are in place to manage risk up- front; they are assessing known risks and developing plans to address those risks. State auditors are also planning their work including conducting required single audits and testing compliance with federal requirements. Plans to Evaluate Impact An important objective of the Recovery Act is to preserve and create jobs and promote economic recovery. Officials in nine of the 16 states and the District expressed concern about determining jobs created and retained under the Recovery Act, as well as methodologies that can be used for estimation of each. Health, education, and transportation is estimated to account for approximately 90 percent of fiscal year 2009 Recovery Act funding for states and localities. In our sample of 16 states and the District, officials from 15 states and the District indicated that they had drawn down increased FMAP grant awards, totaling $7.96 billion for the period of October 1, 2008 through April 1, 2009—47 percent of their increased FMAP grant awards. The increased FMAP available under the Recovery Act is for state expenditures for Medicaid services. In our sample, individual states and the District reported that they would use the funds to maintain their current level of Medicaid eligibility and benefits, cover their increased Medicaid caseloads—which are primarily populations that are sensitive to economic downturns, including children and families, and to offset their state general fund deficits thereby avoiding layoffs and other measures detrimental to economic recovery. Nine states and the District reported using these funds to maintain benefits. State Fiscal Stabilization Fund The Recovery Act provided $53.6 billion in appropriations for the State Fiscal Stabilization Fund (SFSF) to be administered by the U.S. Department of Education. States’ Actions to Plan for Use of Recovery Act Funds Include New and Existing Entities and Processes All of the 16 selected states and the District reported taking action to plan for and monitor the use of Recovery Act funding. Selected States’ and Localities’ Internal Controls and Safeguards to Manage and Mitigate the Risk of Mismanagement, Waste, Fraud, and Abuse of Recovery Act Funds The selected states and the District are taking various approaches to ensure that internal controls are in place to manage risk up-front, rather than after problems develop and deficiencies are identified after the fact, and have different capacities to manage and oversee the use of Recovery Act funds. We Recommend: Given questions raised by many state and local officials about how best to determine both direct and indirect jobs created and retained under the Recovery Act, the Director of OMB should continue OMB’s efforts to identify appropriate methodologies that can be used to: assess jobs created and retained from projects funded by the Recovery Act; determine the impact of Recovery Act spending when job creation is indirect; identify those types of programs, projects, or activities that in the past have demonstrated substantial job creation or are considered likely to do so in the future. According to OMB, agencies must immediately post guidance to the Recovery Act web site and inform to the “maximum extent practical, a broad array of external stakeholders.” In addition, since nearly half of the estimated spending programs in the Recovery Act will be administered by non-federal entities, state officials have suggested opportunities to improve communication in several areas.

Why GAO Did This Study This testimony discusses GAO's work examining the uses and planning by selected states and localities for funds made available by the American Recovery and Reinvestment Act of 2009 (Recovery Act). The Recovery Act is estimated to cost about $787 billion over the next several years, of which about $280 billion will be administered through states and localities. Funds made available under the Recovery Act are being distributed to states, localities, and other entities and individuals through a combination of grants and direct assistance. As Congress may know, the stated purposes of the Recovery Act are to: (1) preserve and create jobs and promote economic recovery; (2) assist those most impacted by the recession; (3) provide investments needed to increase economic efficiency by spurring technological advances in science and health; (4) invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits; and (5) stabilize state and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases. As described in GAO's March testimony, the Recovery Act specifies several roles for GAO including conducting bimonthly reviews of selected states' and localities' use of funds made available under the act. This statement today is based on our report being released today, Recovery Act: As Initial Implementation Unfolds in States and Localities, Continued Attention to Accountability Issues Is Essential, which is the first in a series of bimonthly reviews we will do on states' and localities' uses of Recovery Act funding and covers the actions taken under the Act through April 20, 2009. Our report and our other work related to the Recovery Act can be found on our new website called Following the Money: GAO's Oversight of the Recovery Act, which is accessible through GAO's home page at www.gao.gov . Like the report, this statement discusses (1) selected states' and localities' uses of and planning for Recovery Act funds, (2) the approaches taken by the selected states and localities to ensure accountability for Recovery Act funds, and (3) states' plans to evaluate the impact of the Recovery Act funds they received. What GAO Found About 90 percent of the estimated $49 billion in Recovery Act funding to be provided to states and localities in FY2009 will be through health, transportation and education programs. Within these categories, the three largest programs are increased Medicaid Federal Medical Assistance Percentage (FMAP) grant awards, funds for highway infrastructure investment, and the State Fiscal Stabilization Fund (SFSF). The funding notifications for Recovery Act funds for the 16 selected states and the District of Columbia (the District) have been approximately $24.2 billion for Medicaid FMAP on April 3, $26.7 billion for highways on March 2, and $32.6 billion for SFSF on April 2. Fifteen of the 16 states and the District have drawn down approximately $7.96 billion in increased FMAP grant awards for the period October 1, 2008 through April 1, 2009. The increased FMAP is for state expenditures for Medicaid services. The receipt of this increased FMAP may reduce the state share for their Medicaid programs. States have reported using funds made available as a result of the increased FMAP for a variety of purposes. For example, states and the District reported using these funds to maintain their current level of Medicaid eligibility and benefits, cover their increased Medicaid caseloads-which are primarily populations that are sensitive to economic downturns, including children and families, and to offset their state general fund deficits thereby avoiding layoffs and other measures detrimental to economic recovery. States are undertaking planning activities to identify projects, obtain approval at the state and federal level and move them to contracting and implementation. For the most part, states were focusing on construction and maintenance projects, such as road and bridge repairs. Before they can expend Recovery Act funds, states must reach agreement with the Department of Transportation on the specific projects; as of April 16, two of the 16 states had agreements covering more than 50 percent of their states' apportioned funds, and three states did not have agreement on any projects. While a few, including Mississippi and Iowa had already executed contracts, most of the 16 states were planning to solicit bids in April or May. Thus, states generally had not yet expended significant amounts of Recovery Act funds. The states and D.C. must apply to the Department of Education for SFSF funds. Education will award funds once it determines that an application contains key assurances and information on how the state will use the funds. As of April 20, applications from three states had met that determination- South Dakota, and two of GAO's sample states, California and Illinois. The applications from other states are being developed and submitted and have not yet been awarded. The states and the District report that SFSF funds will be used to hire and retain teachers, reduce the potential for layoffs, cover budget shortfalls, and restore funding cuts to programs. Planning continues for the use of Recovery Act funds. State activities indlude appointing Recovery Czars; establishing task forces and other entities, and developing public websites to solicit input and publicize selected projects. GAO found that the selected states and the District are taking various approaches to ensuring that internal controls manage risk up-front; they are assessing known risks and developing plans to address those risks. State auditors are also planning their work including conducting required single audits and testing compliance with federal requirements. Nearly half of the estimated spending programs in the Recovery Act will be administered by non-federal entities. State officials suggested opportunities to improve communication in several areas. Officials in nine of the 16 states and the District expressed concern about determining the jobs created and retained under the Recovery Act, as well as methodologies that can be used for estimation of each.

gao_GAO-15-655T

gao_GAO-15-655T_0

The initial organizational changes also elevated the role of strategic planning and metrics and established a new policy and guidance unit. Counterterrorism Finance (CTF): entails programs and activities to build foreign partner capacity and to implement significant parts of the U.S. government’s strategy to cut off financial support to terrorists. Our preliminary analysis shows that, in addition to the foreign assistance programming that the CT Bureau oversees and manages, the bureau’s allocated resources include funding for the operations of the bureau. CT Bureau’s Authorized Staffing Has Increased since Fiscal Year 2011; Recent Efforts Have Been Made to Reduce Staffing Gap Our preliminary analysis indicates that the CT Bureau’s number of authorized full-time equivalent (FTE) positions has grown annually, and the bureau has recently undertaken efforts to reduce a persistent staffing gap. The bureau’s number of FTEs grew from 66 in fiscal year 2011 to 96 in fiscal year 2015, which is an increase of more than 45 percent. While the bureau’s current authorized level of FTEs for fiscal year 2015 is 96 positions, it had 22 vacancies as of October 31, 2014.analysis also shows that the percentage of vacancies in FTE positions in the bureau has ranged from 17 percent to 23 percent in fiscal years 2011 to 2015. According to the CT Bureau, these vacancies have included both staff-level and management positions. As of the end of May 2015, the number of FTE vacancies in the bureau had been reduced to 10 positions, most of which are in the Office of Programs, according to the CT Bureau. Our preliminary analysis indicates that the CT Bureau assessed its progress toward its foreign assistance-related goals but has not established time frames for addressing recommendations from program evaluations. It also reported results achieved for each indicator. In addition to having assessed its progress toward achieving its foreign assistance-related goals, our preliminary analysis shows that since being elevated to a bureau in fiscal year 2012, the CT Bureau has completed four evaluations of counterterrorism-related programs it oversees. In response to questions during the course of our review, CT Bureau officials developed action plans to describe the status of efforts to address the 60 recommendations.the basis of our review of these action plans, the CT Bureau reported having implemented about half of the recommendations (28 of 60) made On in the evaluations, as of April 2015. While the action plans are a positive first step to help the bureau monitor and track its progress in implementing recommendations, they do not address the need for the bureau to establish time frames for addressing recommendations from evaluations. CT Bureau Collaboration on CVE and CTF Programs Is Generally Consistent with Key Practices Our preliminary analysis shows that activities between the CT Bureau and other bureaus within State as well as with other U.S. government agencies on counterterrorism programs, specifically the Countering Violent Extremism (CVE) and Counterterrorism Finance (CTF) programs, were generally consistent with key practices that GAO has identified for interagency collaboration in the areas of (1) outcomes and accountability, (2) bridging organizational cultures, (3) leadership, (4) clarity of roles and responsibilities, (5) resources, and (6) written guidance and agreements. Our preliminary analysis shows that for CVE and to some extent CTF, officials at State and other U.S. government agencies were generally aware of the agency or individual with leadership responsibility for the particular counterterrorism program. Our preliminary analysis indicates that, in cases where the CT Bureau funded U.S. government agencies on CVE or CTF programming, the funding mechanism was clear and laid out in the interagency agreements.

Why GAO Did This Study Terrorism and violent extremism continue to pose a global threat, and combating these at home and abroad remains a top priority for the U.S. government. In 2010, the first Quadrennial Diplomacy and Development Review (QDDR), conducted at the direction of the Secretary of State, highlighted these global threats and, among other actions, recommended that State's Office of the Coordinator for Counterterrorism be elevated to bureau status. According to the 2010 QDDR report, the elevation of this office to a bureau would enhance State's ability to, among other things, counter violent extremism, build foreign partner capacity, and engage in counterterrorism diplomacy. In addition, the report stated that the bureau's new status would enable more effective coordination with other U.S. government agencies. On the basis of preliminary results of ongoing work that GAO is conducting for this subcommittee and other congressional requesters, this testimony provides observations on (1) how the bureau's staffing resources have changed since 2011, (2) the extent to which the bureau has assessed its performance since 2011, and (3) the extent to which the bureau's coordination with U.S. government entities on select programs is in line with key collaboration practices. To conduct this work, GAO reviewed and analyzed State and other U.S. government agency information and interviewed U.S. government officials in Washington, D.C. GAO expects to issue a final report on this work in July 2015, along with any related recommendations. What GAO Found GAO's preliminary analysis shows that the Department of State's (State) Bureau of Counterterrorism has had an annual increase in authorized full-time equivalent (FTE) positions since fiscal year 2011 and has recently undertaken efforts to reduce a persistent staffing gap. The number of FTEs for the bureau increased from 66 in fiscal year 2011 to 96 in fiscal year 2015, and over the same period the percentage of FTE vacancies ranged from 17 to 23 percent. The vacancies have included both staff-level and management positions. During GAO's ongoing work, the bureau indicated that the gaps between authorized and filled positions were due to several factors. These included an increase in FTEs that the bureau was authorized when it was established and postponement of some staffing decisions until the Coordinator for Counterterrorism, who assumed her position in 2014, had sufficient time to assess the bureau's needs and priorities. The bureau has recently made progress in filling vacant positions and reported having 10 FTE vacancies as of the end of May 2015. GAO's preliminary analysis has found that the bureau assessed its progress toward achieving its foreign assistance-related goals but has not established time frames for addressing recommendations from program evaluations. Specifically, the bureau established indicators and targets for its foreign assistance-related goals identified in the bureau's first multiyear strategic plan, and it reported results achieved toward each indicator. Since its elevation to a bureau in fiscal year 2012, the bureau has also completed four evaluations of counterterrorism-related programs it oversees, resulting in 60 recommendations. GAO's preliminary results show that the bureau had addressed about half of the recommendations (28 of 60) as of April 2015 but had not established time frames for addressing the remaining recommendations. GAO's preliminary analysis has also found that the bureau's coordination within State and with other federal agencies on the Countering Violent Extremism and Counterterrorism Finance programs generally reflects key practices for collaboration. For example, with regard to identifying resources, in cases where the bureau funded other U.S. agencies partnering on these programs, the funding mechanism was clear and laid out in interagency agreements.

gao_GAO-13-87

gao_GAO-13-87_0

Specifically, OMB requires 26 key federal departments and agencies to provide information to it related to their IT investments (called exhibit 53s) and capital asset plans and business cases (called exhibit 300s). a comparison of current performance with a pre-established cost areas for innovation in the areas of customer satisfaction, strategic and business results, and financial performance; indication if the agency revisited alternative methods for achieving the same mission needs and strategic goals; consideration of issues, such as greater utilization of technology or consolidation of investments to better meet organizational goals; an ongoing review of the status of the risks identified in the investment’s planning and acquisition phases; identification of whether there is a need to redesign, modify, or terminate the investment; an analysis on the need for improved methodology (i.e., better ways for the investment to meet cost and performance goals); lessons learned; cost or schedule variances; recommendations to redesign or modify an asset in advance of potential problems; and overlap with other investments. Federal Agencies’ Assessments of Major IT Steady State Investments Vary Significantly Although OMB guidance calls for agencies to develop an OA policy and perform such analyses annually, the extent to which the five federal agencies we reviewed carried out these tasks varied significantly. Specifically, DHS and HHS developed a policy and conducted OAs, but in doing so, they excluded key investments and assessment factors. DHS and HHS Developed an OA Policy and Performed OAs, but Did Not Address All Investments and Key Factors DHS and HHS had developed policies, which contained all performance factors identified in OMB’s guidance. Addressing these factors is important because they help agencies to, among other things, identify where cost-effective improvements can be made. With regard to why analyses were not performed on all investments and why those that were conducted did not fully address all factors, DHS and HHS attributed these shortfalls to the following: Officials from DHS’s Office of the CIO who are responsible for overseeing the performance of OAs department-wide told us the components only performed 16 of the 44 analyses and did not address all key factors (in the 16 OAs that were performed) because they were not consistently implementing department and OMB policy as they should have because it was not a priority. To address these shortfalls, the department recently took steps to make OAs a priority and to ensure consistent application of department and OMB policy. Until these agencies assess all steady state investments and ensure that they are fully assessed against factors, there is increased risk that these agencies will not know whether the multibillion dollar investments fully meet their intended objectives. DOD, Treasury, and VA Did Not Develop Policies or Perform OAs DOD, Treasury, and VA had not developed a policy for performing OAs and did not conduct OAs for their 23 steady state investments that have combined annual budgets of $2.1 billion. Regarding why DOD and VA had not developed policies and are not performing analyses, officials from those agencies stated that in lieu of conducting OAs, they assess the performance of steady state investments as part of developing their annual exhibit 300 submissions to OMB. Although OMB requires OAs for all steady state systems, its guidance does not provide a mechanism for ensuring they are completed and submitted to OMB for review. Treasury officials from the department’s office of the CIO told us they decided not to perform OAs in 2011 and instead decided to use the time to develop a policy. However, the officials stated that they did not anticipate the policy to be completed until the end of this calendar year. Taken together, these five agencies continue to invest billions of dollars each year on IT steady state investments without ensuring that they are continuing to meet agency needs and are delivering value. In addition, we recommend that the Secretaries of Homeland Security and Health and Human Services direct their Chief Information Officers to ensure OAs are performed annually on all major steady state investments and the assessments include all key factors. Further, to ensure that OA policies are developed and that annual analyses are conducted and to promote transparency into the results of these analyses, we recommend that the Director of OMB revise existing guidance to include directing agencies to report on the IT Dashboard the results from the OAs of their steady state investments. Agency Comments and Our Evaluation In commenting on a draft of this report, OMB and the five agencies agreed with our findings and recommendations. Appendix I: Objective, Scope, and Methodology Our objective was to determine the extent to which selected federal agencies assess the performance of steady state information technology (IT) investments in accordance with Office of Management and Budget (OMB) guidance. To accomplish our objective, we selected the five agencies (Departments of Defense (DOD), Health and Human Services (HHS), Homeland Security (DHS), the Treasury (Treasury), and Veterans Affairs (VA)) that have the largest budgets for major steady state IT investments; collectively, these investments accounted for approximately $37 billion annually or about 70 percent of all reported IT operations and maintenance (O&M) spending. No: if none of the aspects of the key factor were addressed.

Why GAO Did This Study Of the $79 billion federal agencies budgeted for IT in 2011, $54 billion (about 69 percent) was reported to have been spent on the operations and maintenance of existing legacy IT systems--commonly referred to as steady state investments. Given the size and magnitude of these investments, it is essential that agencies effectively manage them to ensure they continue to meet agency needs. As such, OMB directs agencies to periodically examine the performance of such investments against, among other things, established cost, schedule, and performance goals by performing annual OAs. GAO was asked to determine the extent to which federal agencies analyze the performance of steady state investments in accordance with OMB guidance. To do so, GAO (1) selected five agencies, DOD, HHS, DHS, Treasury, and VA, which reported spending $4.6 billion annually on major steady state investments; and (2) and compared their fiscal year 2011 OAs to OMB criteria. GAO also analyzed documents and interviewed agency officials regarding any variances as well as their causes. What GAO Found Federal agency assessments of the performance of information technology (IT) investments in operations and maintenance (O&M)--commonly referred to as operational analyses (OAs)--vary significantly. Office of Management and Budget (OMB) guidance calls for agencies to develop an OA policy and perform such analyses annually to ensure steady state investments continue to meet agency needs. The guidance also includes 17 key factors (addressing areas such as cost, schedule, customer satisfaction, and innovation) that are to be assessed. The five agencies GAO reviewed varied in the extent to which they carried out these tasks. The Departments of Homeland Security (DHS) and Health and Human Services (HHS) developed a policy which included all OMB assessment factors and performed OAs. However, they did not include all investments and key factors. In particular, DHS analyzed 16 of its 44 steady state investments, meaning 28 investments with annual budgets totaling $1 billion were not analyzed; HHS analyzed 7 of its 8 steady state investments. For OAs performed by DHS and HHS, both fully addressed approximately half of the key factors. With regard to the DHS and HHS investments that did not undergo an analysis or were not fully assessed against key factors, agency officials said this was due in part to program officials inconsistently applying OMB and agency guidance in conducting OAs and that OAs were not a priority. DHS and HHS have recently begun to take action to make OAs a priority and improve consistency. For example, DHS's chief information officer recently issued a directive requiring all steady state IT investments to conduct analyses annually and plans to assign staff in the office of the chief information officer to review them to ensure they are complete. The Departments of Defense (DOD), the Treasury (Treasury), and Veterans Affairs (VA) did not develop a policy and did not perform analyses on their 23 major steady state investments with annual budgets totaling $2.1 billion. DOD and VA officials said that they did not have a policy or perform analyses because they measure the performance of steady state investments via development of plans and business cases submitted to OMB (called exhibit 300s) as part of the budget process. While these can be helpful in managing performance and do address aspects of the 17 key factors, they do not address 11 of the key factors. For example, the exhibit 300 does not address reviewing strategic business results and making recommendations to modify or terminate an investment. Treasury officials stated that they did not to perform OAs in 2011 and instead decided to use the time to develop a policy. However, the officials stated that they did not anticipate the policy to be completed until the end of this calendar year. Overall, these five agencies have steady state investments with a fiscal year 2011 budget of over $3 billion which have not undergone needed analyses. While OMB requires agencies to perform OAs, its existing guidance does not provide mechanisms that ensure the OAs are completed and allow public transparency into the results of the assessments. Until agencies address these shortcomings, there is increased risk that these agencies will not know whether the multibillion dollar investments fully meet their intended objectives. What GAO Recommends GAO is recommending that DOD, Treasury, and VA develop an OA policy and conduct annual OAs; and that DHS and HHS ensure OAs are being performed for all investments and that all factors are fully assessed. GAO is also recommending that OMB revise its guidance to incorporate mechanisms to ensure OAs are completed and provide for increased transparency. In commenting on a draft of this report, OMB and the five agencies GAO reviewed agreed with its content and recommendations.

gao_GAO-08-752T

gao_GAO-08-752T_0

FERC’S Merger and Acquisition Review and Postmerger Oversight to Prevent Cross-subsidization in Utility Holding Company Systems Are Limited In February 2008, we reported that FERC had made few substantive changes to either its merger and acquisition review process or its postmerger oversight as a consequence of its new responsibilities and, as a result, does not have a strong basis for ensuring that harmful cross- subsidization does not occur. Specifically: Reviewing mergers and acquisitions. FERC-regulated companies that are proposing to merge with or acquire a regulated company must submit a public application for FERC to review and approve. FERC also requires company officials to attest that they will not engage in unapproved cross- subsidies in the future. On the basis of this information, FERC officials told us that they determine which, if any, existing or planned cross-subsidies to allow, then include this information in detail in the final merger or acquisition order. FERC’s postmerger oversight relies on its existing enforcement mechanisms—primarily self-reporting and a limited number of compliance audits. One company official noted that the threat of large fines may “chill” companies’ willingness to self-report violations. To augment self- reporting, FERC plans to conduct a limited number of compliance audits of holding companies each year, although at the time of our February 2008 report, it had not completed any audits to detect whether cross- subsidization is occurring. In 2008, FERC’s plans to audit 3 of the 36 companies it regulates—Exelon Corporation, Allegheny, Inc., and the Southern Company. We found that FERC does not use a formal risk-based approach to plan its compliance audits––a factor that financial auditors and other experts told us is an important consideration in allocating audit resources. We also recommended that FERC develop an audit reporting approach to clearly identify the objectives, scope and methodology, and the specific findings of the audit to improve public confidence in FERC’s enforcement functions and the usefulness of its audit reports. States Vary in Their Capacities to Oversee Utilities States utility commissions’ views of their oversight capacities vary, but many states foresee a need for additional resources to respond to changes from EPAct. The survey we conducted for our February 2008 report highlighted the following concerns: Almost all states have merger approval authority, but many states expressed concern about their ability to regulate the resulting companies. In recent years, the difficulty of regulating merged companies has been cited by two state commissions––one in Montana and one in Oregon––that denied proposed mergers in their states. Most states have authorities over affiliate transactions, but many states report auditing few transactions. Nationally, 49 states noted they have some type of affiliate transaction authority, and while some states reported that they require periodic, specialized audits of affiliate transactions, 28 of the 49 reporting states reported auditing 1 percent or fewer over the last five years. Although almost all states report they have access to financial books and records from utilities to review affiliate transactions, many states reported they do not have such direct access to the books and records of holding companies or their affiliated companies. While EPAct provides state regulators the ability to obtain such information, some states expressed concern that this access could require them to be extremely specific in identifying needed information, which may be difficult. All of the 49 states that responded to this survey question noted that they require utilities to provide financial reports, and 8 of these states require reports that also include the holding company or both the holding company and the affiliated companies. Specifically, 22 of the 50 states that responded to our survey said that they need additional staffing or funding, or both, to respond to the changes that resulted from EPAct. In conclusion, the repeal of PUHCA 1935 opened the door for needed investment in the utility industry; however, it comes at the potential cost of complicating regulation of the industry. As FERC and states approve mergers, the responsibility for ensuring that cross-subsidization will not occur shifts to FERC’s Office of Enforcement and state commission staffs. We continue to encourage the FERC Chairman to consider our recommendations.

Why GAO Did This Study Under the Public Utility Holding Company Act of 1935 (PUHCA 1935) and other laws, federal agencies and state commissions have traditionally regulated utilities to protect consumers from supply disruptions and unfair pricing. The Energy Policy Act of 2005 (EPAct) repealed PUHCA 1935, removing some limitations on the companies that could merge with or invest in utilities, and leaving the Federal Energy Regulatory Commission (FERC), which already regulated utilities, with primary federal responsibility for regulating them. Because of the potential for new mergers or acquisitions between utilities and companies previously restricted from investing in utilities, there has been considerable interest in whether cross-subsidization--unfairly passing on to consumers the cost of transactions between utility companies and their "affiliates"--could occur. GAO was asked to testify on its February 2008 report, Utility Oversight: Recent Changes in Law Call for Improved Vigilance by FERC (GAO-08-289), which (1) examined the extent to which FERC changed its merger review and post merger oversight since EPAct to protect against cross-subsidization and (2) surveyed state utility commissions about their oversight. In this report, GAO recommended that FERC adopt a risk-based approach to auditing and improve its audit reports, among other things. The FERC Chairman disagreed with the need for our recommendations, but GAO maintains that implementing them would improve oversight. What GAO Found In its February 2008 report, GAO reported that FERC had made few substantive changes to either its merger review process or its post merger oversight since EPAct and, as a result, does not have a strong basis for ensuring that harmful cross-subsidization does not occur. FERC officials told GAO that they plan to require merging companies to disclose any cross-subsidization and to certify in writing that they will not engage in unapproved cross-subsidization. After mergers have taken place, FERC intends to rely on its existing enforcement mechanisms--primarily companies' self-reporting noncompliance and a limited number of compliance audits--to detect potential cross-subsidization. FERC officials told us that they believe the threat of the large fines allowed under EPAct will encourage companies to investigate and self-report noncompliance. To augment self-reporting, FERC officials told us that, in 2008, they are using an informal plan to reallocate their limited audit staff to audit the affiliate transactions of 3 of the 36 holding companies it regulates. In planning these compliance audits, FERC officials told us that they do not formally consider companies' risk for noncompliance --a factor that financial auditors and other experts told us is an important consideration in allocating audit resources. Rather, they rely on informal discussions between senior FERC managers and staff. Moreover, we found that FERC's audit reporting approach results in audit reports that often lack a clear description of the audit objectives, scope, methodology, and findings--inhibiting their use to stakeholders. GAO's survey of state utility commissions found that states' views varied on their current regulatory capacities to review utility mergers and acquisitions and oversee affiliate transactions; however many states reported a need for additional resources, such as staff and funding, to respond to changes in oversight after the repeal of PUHCA 1935. All but a few states have the authority to approve mergers, but many states expressed concern about their ability to regulate the resulting companies. In recent years, two state commissions denied mergers, in part because of these concerns. Most states also have some type of authority to approve, review, and audit affiliate transactions, but many states review or audit only a small percentage of the transactions; 28 of the 49 states that responded to our survey question about auditing said they audited 1 percent or fewer transactions over the last five years. In addition, although almost all states reported that they had access to financial books and records from utilities to review affiliate transactions, many states reported they do not have such direct access to the books and records of holding companies or their affiliated companies. While EPAct provides state regulators the ability to obtain such information, some states expressed concern that this access could require them to be extremely specific in identifying needed information, thus potentially limiting their audit access. Finally, 22 of the 50 states that responded to our survey question about resources said that they need additional staffing or funding, or both, to respond to changes that resulted from EPAct, and 8 states have proposed or actually increased staffing since EPAct was enacted.

gao_AIMD-97-106

gao_AIMD-97-106_0

To assess DLA headquarters efforts to correct the Year 2000 computer problem, we (1) met with DLA’s Chief Information Officer (CIO), Deputy CIO, Chief of the Customer Support Team, headquarters Year 2000 lead official, and a headquarters Year 2000 Test and Evaluation Support Team official, (2) analyzed documents issued by these offices that describe organizational structure and responsibilities for carrying out DLA’s Year 2000 efforts, and analyzed business requirements, resource management, and DLA’s automated information systems, and (3) reviewed the DLA CIO’s Year 2000 compliance directive that provides guidance and direction and assigns responsibility to the DLA Systems Design Center and all other DLA components. The Department of Defense provided written comments on a draft of this report. The systems that interface with DLA systems are just as vulnerable to the Year 2000 problem as DLA’s own systems. The Center has taken the following actions as part of its efforts to address the Year 2000 problem: developed a detailed Year 2000 plan; conducted a Year 2000 impact assessment, which identified the number of systems owned by DLA and the lines of code associated with those systems; estimated which mainframe, mid-tier processors, and desktop computers would still be in use by the year 2000; conducted pilot projects with DLA’s major automated information systems, including SAMMS, MOCAS, Defense Integrated Subsistence Management System, and Defense Fuels Automated Management System, to assess potential Year 2000 impact on these systems; and developed Year 2000 policies, guidelines, standards, and recommendations for the agency. These include (1) ensuring consistency in handling date information passed among systems, (2) incorporating thousands of locally developed, unique applications in the Year 2000 systems inventory and assigning responsibility to the DLA Systems Design Center’s Year 2000 program office for ensuring that the unique applications are Year 2000 compliant, (3) prioritizing systems for correction, and (4) developing contingency plans. If these issues are not promptly addressed, DLA may well negate any success it may have in making systems within its control Year 2000 compliant, and it will hamper its ability to deal with unanticipated problems and delays. Because these systems are also vulnerable to Year 2000 problems, they can introduce and/or propagate errors into DLA systems. We believe that DLA needs to communicate its interface plans to its customers and contractors so that its data exchange partners will be aware of DLA’s plans and can alert the agency to possible conflicts with their own plans. DLA Has Not Prioritized Its Systems An important aspect of Year 2000 correction is prioritizing which systems have the highest impact on an agency’s mission and thus need to be corrected first. This helps an agency ensure that the most vital systems are not treated the same as systems that have little to do with the agency’s core business. While DLA has progressed in its Year 2000 effort, there is no guarantee that the initiative will be completed on time or be free of unforeseen problems. However, DLA is unnecessarily putting its Year 2000 strategy at risk of failure because it has not yet taken the fundamental steps associated with ensuring that the proper date information is passed between systems. DOD believes that DLA’s planning efforts and strategy for renovating its systems are adequate and that DLA has adequately prioritized its mission critical systems.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Defense Logistics Agency's (DLA) program for solving its Year 2000 computer problem, focusing on the: (1) status of DLA's efforts to correct its Year 2000 problems; and (2) appropriateness of DLA's strategy and actions for ensuring that the problem will be successfully addressed. What GAO Found GAO noted that: (1) DLA has recognized that the Year 2000 problem has the potential to be the largest information technology dilemma it has encountered to date and that if not successfully resolved, the supply, technical, logistics, and contract services that DLA provides to the military services could be severely disrupted; (2) to its credit, DLA has already: (a) assessed the Year 2000 impact on its operations; (b) inventoried its systems; (c) conducted pilot projects to determine Year 2000 effects on some of its major systems; and (d) developed and issued policies, guidelines, standards, and recommendations on Year 2000 correction for the agency; (3) these steps are consistent with GAO's guidelines and the Department of Defense's (DOD) five-phase approach for planning, managing, and evaluating Year 2000 programs; (4) however, DLA has not yet completed several critical steps associated with the assessment phase of Year 2000 correction that are designed to ensure the agency is well-positioned to deal with delays or other problems encountered in the remaining phases; (5) DLA has not been working enough with its customers and others who have established system connections or interfaces to ensure consistency in handling date information passed between systems; (6) the agency has not included thousands of field-developed, unique programs as part of its Year 2000 systems inventory or made these programs part of its Year 2000 program office's responsibility; (7) these unique programs can introduce errors into DLA's automated information systems just as easily as those systems that have external interfaces with DLA systems; (8) in addressing these two issues, DLA can help ensure the success of its efforts to correct the systems within its control; (9) DLA has not: (a) prioritized the 86 automated information systems that it plans on being operational in the year 2000 to ensure that the most mission critical systems are corrected first; or (b) developed contingency plans to establish the course of action that should be followed in the event that any of DLA's mission critical systems are not corrected on time; and (10) since DLA activities are critical to supporting military operations and readiness, GAO believes that the agency should begin prioritizing its systems and developing contingency plans so that logistics operations can continue even if unforeseen problems or delays in Year 2000 corrective actions arise.

gao_AIMD-98-107

gao_AIMD-98-107_0

Other databases, such as those containing land and mineral records, are to be integrated with GCDB. These management tools are essential to manage the remainder of the project, help ensure system availability and performance, and avoid security and operational problems. BLM has not yet developed a security architecture. We stated that BLM might not be able to maintain this schedule because it continued to allow insufficient time between critical milestones to deal with problems that were likely to arise. BLM is again revising its plans and milestones, but although it is planning to analyze human resource usage and task relationships in establishing milestones for deployment activities, it is not planning to do so for its schedule to complete, test, and certify ALMRS. Continuing delays in implementing ALMRS may place BLM at risk of losing information technology support for core business processes because of the imminent Year 2000 computer problem. Problems Encountered During Beta Testing The following problems emerged during the beta test of ALMRS. These two systems are to be replaced by ALMRS before the year 2000. Recommendation To reduce the risk that BLM will lose information technology support for core business processes, we recommend that the Director of the Bureau of Land Management (1) direct that the two mission-critical systems ALMRS is to replace be fully assessed to determine what actions are needed to ensure the continued use of these systems after January 1, 2000, and (2) develop a contingency plan to take those actions in the event that ALMRS is not fully deployed by that time. Objectives, Scope, and Methodology Our objectives were to assess BLM’s actions to address the recommendations contained in our March 1997 report and identify the status of BLM’s efforts to test, deploy, and implement ALMRS initial operating capability (IOC). To review BLM’s actions to address our recommendations (develop a credible project schedule, configuration management plan, security architecture and security plan, complete transition plans, and complete operations and maintenance plans), we reviewed the ALMRS Project Office’s project management and scheduling procedures; BLM’s National Configuration Management Board’s draft configuration management plan; BLM information technology security plans, ALMRS application security plan, and other security documentation; BLM’s Operations and Maintenance plan for the National IRM Center; and BLM’s Version 2.0 Transition and Deployment Plan and site-specific transition/deployment plans for New Mexico, Idaho, Arizona, and Colorado. 3. BLM has not done this. 4. 5. 6. 7. 8.

Why GAO Did This Study Pursuant to a congressional request, GAO provided a follow-up assessment of the Bureau of Land Management's (BLM) actions to address the recommendations contained in its March 1997 report, focusing on the status of BLM's efforts to test, deploy, and implement the automated land and mineral records system's (ALMRS) initial operating capability. What GAO Found GAO noted that: (1) BLM has not yet fully implemented GAO's recommendations to mitigate risks and help ensure a successful transition and operating environment for ALMRS; (2) specifically, BLM does not have a security architecture and sound security plan, complete transition plans, and complete operations and maintenance plans for ALMRS; (3) BLM has developed a draft configuration management plan and has been implementing a configuration management program; (4) however, BLM has not developed a credible project schedule; (5) these tools are essential to manage the remainder of the project, help ensure system availability and performance, and avoid security and operational problems; (6) during beta testing of the ALMRS initial operating capability and validation testing of converted data, BLM identified computer workstation configuration and software problems; (7) the testing also surfaced operation concerns that had not been adequately addressed, such as how ALMRS will support public information needs and data exchanges between BLM and other organizations; (8) BLM is revising its project plan and schedule to address these problems before entering the final testing and certification phase; (9) BLM may not be able to maintain the modified schedule, however, because it: (a) is being developed without analyzing human resource usage and task relationships for predevelopment activities; and (b) contains optimistic timeframes for completing activities, leaving little time to deal with unanticipated problems that are likely to arise; (10) recent and potential future delays in implementing ALMRS place BLM at risk that existing systems supporting mission-critical business processes, which are to be replaced by ALMRS, will be subject to the year 2000 computer problem; and (11) while BLM is planning to provide the upgrades necessary to allow for the continued use of these systems if ALMRS is not fully deployed by the year 2000, it has not yet completed the requisite assessment to determine how to do this.

gao_GAO-05-106

gao_GAO-05-106_0

Background As part of a multilayered defense strategy, MTSA required vessels and port facilities to have security plans in place by July 1, 2004, including provisions establishing and controlling access to secure areas of vessels and ports. Three Main Factors Caused TSA to Miss Its Initial Target Date for Issuing Worker Identification Cards Three main factors, all of which resulted in delays for testing the prototype card system, caused the agency to miss its initial August 2004 target date for issuing maritime worker identification cards. Working with DHS and OMB officials to identify additional information needed for a cost-benefit analysis and alternatives analysis required additional time, further delaying the prototype test. DHS has not determined when it may begin issuing cards under any of the three proposed program alternatives—the federal, decentralized, or TWIC programs. Using Established Planning and Management Practices Could Help TSA Address Challenges and Better Manage Risk TSA officials indicated that in the near future, as they move forward with developing and operating a maritime worker identification card program, they face a number of challenges, including resolving issues with stakeholders, such as how to share costs of the program, determining the fee for the maritime worker identification card, obtaining funding for the next phase of the program. Failure to develop these plans holds significant potential to adversely affect the card program, putting it at higher risk of cost overruns, missed deadlines, and underperformance. Lack of a Comprehensive Project Plan Could Limit TSA’s Ability to Complete Future Work According to TSA officials, the agency lacks an approved, comprehensive project plan to guide the remaining phases of the project, which include the testing of a maritime worker identification card system prototype and issuance of the cards. But, TSA has not developed such a strategy to address this specific risk. Recommendations for Executive Action To help ensure that TSA meets the challenges it is facing in developing and operating its maritime worker identification card program, we are recommending that the Secretary of Homeland Security direct the TSA Administrator to employ industry best practices for project planning and management, by taking the following two actions: Develop a comprehensive project plan for managing the remaining life of the project. Develop specific, detailed plans for risk mitigation and cost-benefit and alternatives analyses. Appendix I: Comments from the Department of Homeland Security

Why GAO Did This Study As part of a multilayered effort to strengthen port security, the Maritime Transportation Security Act (MTSA) of 2002 calls for the Department of Homeland Security (DHS) to issue a worker identification card that uses biological metrics, such as fingerprints, to control access to secure areas of ports or ships. Charged with the responsibility for developing this card, the Transportation Security Administration (TSA), within DHS, initially planned to issue a Transportation Worker Identification Credential in August 2004 to about 6 million maritime workers. GAO assessed what factors limited TSA's ability to meet its August 2004 target date for issuing cards and what challenges remain for TSA to implement the card. What GAO Found Three main factors, all of which resulted in delays for testing a prototype of the maritime worker identification card system, caused the agency to miss its initial August 2004 target date for issuing the cards: (1) officials had difficulty obtaining timely approval to proceed with the prototype test from DHS, (2) extra time was required to identify data to be collected for a cost-benefit analysis, and (3) additional work to assess card technologies was required. DHS has not determined when it may begin issuing cards. In the future, TSA will face difficult challenges as it moves forward with developing and operating the card program, for example, developing regulations that identify eligibility requirements for the card. An additional challenge--and one that holds potential to adversely affect the entire program--is that TSA does not yet have a comprehensive plan in place for managing the project. Failure to develop such a plan places the card program at higher risk of cost overruns, missed deadlines, and underperformance. Following established, industry best practices for project planning and management could help TSA address these challenges. Best practices suggest managers develop a comprehensive project plan and other, detailed component plans. However, while TSA has initiated some project planning, the agency lacks an approved comprehensive project plan to govern the life of the project and has not yet developed other, detailed component plans for risk mitigation or the cost-benefit and alternatives analyses.

gao_GAO-01-708T

gao_GAO-01-708T_0

Conclusions Every criminal justice system faces coordination challenges. However, the unique structure and funding of the D.C. criminal justice system, in which federal and D.C. jurisdictional boundaries and dollars are blended, creates additional challenges. CJCC has played a useful role in addressing such coordination challenges, especially in areas where agencies perceived a common interest. However, CJCC’s uncertain future could leave D.C. without benefit of an independent entity for coordinating the activities of its unique criminal justice system. Funding CJCC through any participating agency diminishes its stature as an independent entity in the eyes of a number of CJCC’s member agencies, reducing their willingness to participate. Without a requirement to report successes and areas of continuing discussion and disagreement to each agency’s funding source, CJCC’s activities, achievements, and areas of disagreement have generally been known only to its participating agencies. This has created little incentive to coordinate for the common good, and all too often agencies have simply “agreed to disagree” without taking action. Furthermore, without a meaningful role in cataloging multiagency initiatives, CJCC has been unable to ensure that criminal justice initiatives are coordinated among all affected agencies to help eliminate duplicative efforts and maximize their effectiveness.

What GAO Found Every criminal justice system faces coordination challenges. However, the unique structure and funding of the D.C. criminal justice system, in which federal and D.C. jurisdictional boundaries and dollars are blended, creates additional challenges. The Criminal Justice Coordinating Council (CJCC) has played a useful role in addressing such coordination challenges, especially in areas in which agencies perceived a common interest. However, CJCC's uncertain future could leave D.C. without benefit of an independent entity for coordinating the activities of its unique criminal justice system. Funding CJCC through any participating agency diminishes its stature as an independent entity in the eyes of several CJCC member agencies, reducing their willingness to participate. Without a requirement to report successes and areas of continuing discussion and disagreement to each agency's funding source, CJCC's activities, achievements, and areas of disagreement have generally been known only to its participating agencies. This has created little incentive to coordinate for the common good, and all too often agencies have simply "agreed to disagree" without taking action. Furthermore, without a meaningful role in cataloging multiagency initiatives, CJCC has been unable to ensure that criminal justice initiatives are coordinated among all affected agencies to help eliminate duplicative efforts and maximize their effectiveness. This testimony summarizes a March 2001 report (GAO-01-187).

gao_GAO-08-791

gao_GAO-08-791_0

During the transition period, the Secretary of Homeland Security, in consultation with the Secretaries of the Interior, Labor, and State, and the Attorney General, has the responsibility to establish, administer, and enforce a transition program to regulate immigration in the CNMI. New foreign investors can apply for U.S. nonimmigrant treaty investor status. Recent Legislation’s Potential Impact on CNMI Labor Market and Economy Will Depend Largely on Federal Decisions, but U.S. In particular, the interaction of DHS and DOL decisions about, respectively, the number of permits to allocate annually and whether and when to extend the permit program will significantly affect employers’ access to foreign workers. Further, the agencies have not yet identified an interagency process to coordinate such decisions. Given foreign workers’ prominence in key CNMI industries, any substantial and rapid decline in the availability of CNMI-only work permits for foreign workers would have a negative effect on the CNMI economy. At the same time, continuing declines in the garment industry, challenges to the tourism industry, and the scheduled increases in the minimum wage may reduce demand for foreign workers, lessening any potential adverse impact of the legislation on the economy. Although the legislation and the CNMI government have stated goals of preparing CNMI residents to replace foreign workers, factors such as the limited number of available CNMI residents may impede these efforts’ effectiveness. However, federal agencies may make more modest reductions in CNMI-only permits, resulting in minimal effects on the economy. Recent Legislation’s Possible Impact on CNMI Tourism Depends Largely on Federal Agency Decisions Any impact of the legislation on the CNMI’s tourism sector will depend largely on federal regulations specifying the countries to be included in the joint CNMI-Guam visa waiver program. For countries likely to be included in the joint visa waiver program because they currently are included in the Guam visa waiver program, such as Japan and South Korea, the impact is likely to be minimal. For countries that may not be part of the joint visa waiver program because they currently are not included in the Guam visa waiver program, possibly including China and Russia, applying for a visa from U.S. embassies or consulates will likely be more costly and more time-consuming than obtaining a visitor entry permit under CNMI immigration law. However, lack of data, such as data on overall foreign investment in the CNMI, makes it difficult to assess the likely impact of these decisions and may hamper DHS’s ability to make informed decisions. Moreover, any impact on foreign investment in the CNMI will likely affect the labor market and tourism sector, and any impact on the labor market and tourism sector may also affect foreign investment. Investment associated with foreign investor entry permits. However, if DHS extends the grandfathering provision to long-term business entry permit holders, many more investors will qualify. Conclusions The recent legislation applying U.S. immigration law to the CNMI provides federal agencies some flexibility in preserving the CNMI’s access to foreign workers, tourists, and foreign investors during the transition to the federal system. Because current data gaps limit federal agencies’ ability to make key implementation decisions to best meet the goals of the legislation, we recommend that the Secretary of Homeland Security and the Secretary of Labor take the following two actions: develop a strategy for obtaining critical data on the CNMI labor market that are not currently available on an ongoing basis, such as data on the wages, occupations, and employment status of CNMI residents and foreign workers; and develop a strategy for obtaining critical data on CNMI foreign investment, such as overall levels of foreign investment and the investment amounts associated with various types of foreign investor entry permits. Appendix I: Objectives, Scope, and Methodology This report examines the factors that will affect the impact of recent legislation applying U.S. immigration law to the Commonwealth of the Northern Mariana Islands (CNMI) on the CNMI economy, in particular the CNMI’s (1) labor market, including foreign workers; (2) tourism sector; and (3) foreign investment. Labor market. GAO-08-466.

Why GAO Did This Study The United States enacted legislation in May 2008 applying federal immigration law to the Commonwealth of the Northern Mariana Islands (CNMI) subject to a transition period. The CNMI is subject to most U.S. laws but has administered its own immigration system, including admitting foreign workers, tourists, and foreign investors. The Secretary of Homeland Security, in consultation with the Secretaries of the Interior, Labor, and State, and the Attorney General, has the responsibility to establish a transition program. GAO was asked to review how the legislation's implementation may affect the CNMI economy, in particular the CNMI's (1) labor market, including foreign workers; (2) tourism sector; and (3) foreign investment. This report is based on GAO's March 2008 report (GAO-08-466) and analysis of data on the CNMI's labor market, tourism sector, and foreign investment. What GAO Found The potential impact on the CNMI's labor market of the recent legislation applying U.S. immigration law will largely depend on decisions that the U.S. Departments of Homeland Security (DHS) and Labor (DOL) make in implementing a required permit program for foreign workers. The interaction of DHS and DOL decisions about, respectively, the number of permits to allocate annually and whether and when to extend the permit program past 2014 will significantly affect employers' access to foreign workers. However, federal agencies have not yet identified an interagency process to coordinate such decisions. Further, the agencies may have difficulty obtaining relevant data on the CNMI labor market. Given foreign workers' prominence in key CNMI industries, any substantial and rapid decline in permits for foreign workers would have a negative effect on the CNMI economy. However, federal agencies may reduce permits more modestly, resulting in minimal effects on the economy. At the same time, continuing declines in the garment industry, challenges to the tourism industry, and the scheduled increases in the minimum wage may reduce demand for foreign workers, lessening any potential adverse impact of the legislation on the economy. Although the legislation and the CNMI government have stated goals of preparing CNMI residents to replace foreign workers, factors such as the limited number of available CNMI residents may impede these efforts' effectiveness. Any impact of the recent legislation on the CNMI's tourism sector will depend largely on federal regulations specifying the countries to be included in a joint CNMI-Guam visa waiver program required by the legislation. For countries likely to be included in this program, such as Japan and South Korea, the impact is likely to be minimal. For countries that may not be part of the joint visa waiver program, possibly including China and Russia, applying for a visa from U.S. embassies or consulates will likely be more costly and more time-consuming than obtaining a visitor entry permit under CNMI immigration law. To the extent that any increase in the cost and time required to obtain a visa discourages tourists from visiting the CNMI, the legislation could negatively affect CNMI tourism. The recent legislation's impact on CNMI foreign investment will depend in part on DHS decisions regarding the application of U.S. nonimmigrant treaty investor status--"grandfathering"--for investors with CNMI foreign investor entry permits. However, lack of data on foreign investment in the CNMI makes it difficult to assess the likely impact of these decisions and may hamper DHS's ability to make informed decisions. Because long-term business entry permits account for a large proportion of CNMI foreign investor entry permits, more CNMI foreign investors will be grandfathered if DHS applies the status to these permit holders. Any impact on foreign investment in the CNMI will likely affect the labor market and tourism sector, and any impact on the labor market or tourism sector may also affect foreign investment.

gao_T-RCED-96-86

gao_T-RCED-96-86_0

FAA chose these states, in part, because they were diverse in their organization, staff size, budget, airport systems, and location. 1). 2). Such tasks include assisting with long-range airport planning, approving changes to airport layout plans to reflect future construction plans, and conducting environmental assessments. Safety and security inspections: The seven block grant states conduct safety inspections at small airports and investigate compliance issues and zoning concerns. The airport officials told us that they typically see state inspectors more frequently than FAA inspectors and believe that the state inspectors have more direct and current knowledge of individual airport’s needs. When New Jersey joined the pilot program, it had a relatively small state grant program and was not providing that same range of services to small airports as FAA had been providing. First, the program has expedited project approvals because the block grant states may now approve project scope’s and financing which formerly required FAA approval. FAA’s and States’ Purposes and Priorities Have Differed During the pilot program, FAA’s and the states’ views on the purpose of the state block grant pilot program have differed. In FAA’s view, however, according to the Director of FAA’s Office of Airport Planning and Programming, the state block grant program is a tool to develop a national system of airports and the priority system is one method to ensure the development of that system. Interested States Would Like More Autonomy to Manage AIP Funds Many of the interested states would be more inclined to participate in the block grant program if they could use their own methodology for selecting projects.

Why GAO Did This Study GAO discussed the Federal Aviation Administration's (FAA) state block grant pilot program, which is part of its Airport Improvement Program (AIP). What GAO Found GAO noted that: (1) the 7 states in the pilot program are providing a board range of services to small airports and performing many functions that FAA formerly performed, such as long-range planning assistance, grant administration, safety and security inspections, and technical assistance and oversight; (2) airport officials believe that the only differences between FAA and state services are that state inspectors visit more frequently and are more knowledgeable; (3) the states' success under the pilot program is due to their already established state-financed airport development and inspection programs, experience with planning and oversight functions, and experienced staff; (4) participants and FAA believe that the program has streamlined AIP project approval processes, reduced paperwork requirements, eliminated duplication, and enhanced FAA ability to shift resources to other high-priority tasks; (5) the states would rather use their own project criteria than FAA national criteria because they include more state-level factors, but FAA believes its criteria are more equitable and ensures the development of a national airport system; and (6) 80 percent of nonparticipating states would like to receive block grants and most could successfully administer the grants, but they are concerned about autonomy and the availability of administrative funds under the program.

gao_GGD-98-111

gao_GGD-98-111_0

These crimes ranged from stealing drugs and money from drug dealers to lying under oath about illegal searches. Moreover, drug-related police corruption was not found to be a systemic problem that infected entire departments or precincts. Our sources also identified differences between the pattern of drug-related police corruption and patterns of other types of police corruption. The commissions and academic experts reported that drug-related police corruption typically involved small groups of officers. Drug-related police corruption usually did not involve such non-drug-related patterns as (1) just a few isolated individuals within a department who engaged in illegal acts or (2) low-level corruption pervading entire departments or precincts. Some data on drug-related police corruption were available from federal agencies, such as the FBI, and local agencies. These data included public corruption cases involving illegal drug activities. However, he noted that drug-related corruption cases could not be identified for two reasons. These factors included (1) opportunities to commit illegal acts or crimes on the job—for example, the availability of large sums of money; (2) the maturity-level (age) and education-level of the officer; (3) inadequate training, particularly integrity training, in the police academies and on the job; (4) a police culture that supported or ignored corruption; (5) ineffective headquarters and field supervision; (6) management’s failure to enforce a code of integrity; (7) weaknesses in a police department’s internal investigative structure and practices; (8) involvement in police brutality; and (9) pressures arising from an officer’s personal neighborhood ties. In Chicago, for example, one researcher found that, while not all officers involved in police brutality were also engaged in drug-related police corruption, a number of police officers involved in drug-related corruption also had histories of the use of excessive force. Among the detection practices recommended and/or implemented were integrity testing, early warning systems to detect potential problem officers, and proactive investigations of individual officers or precincts with a high number of corruption-related complaints. In addition, we identified several federal initiatives that were directed toward assisting state and local governments in preventing police corruption. Objectives, Scope, and Methodology Congressman Charles B. Rangel requested that we conduct a study on the impact of drug trafficking on the corruption of police in large cities having a high incidence of drug trafficking and abuse. Therefore, we agreed to provide descriptive information on the (1) nature and extent of drug-related police corruption in certain large cities, (2) factors associated with drug-related police corruption, and (3) practices that have been recommended or implemented to prevent or detect drug-related police corruption. The FBI was able to provide us with limited data on FBI-led drug-related law enforcement corruption cases. However, they do not reflect the overall extent of drug-related police corruption. Regarding our third objective, to determine some of the practices recommended or adopted by city police departments to prevent and/or detect drug-related police corruption, as well as police corruption in general, we reviewed and summarized the findings and recommendations of the Mollen Commission and Chicago Commission reports; observations from academic sources; and information provided by federal law enforcement officials, the NYPD’s IAB, and the New York City Commission to Combat Police Corruption. 5-11. 6-10. 13-21.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the impact of drug trafficking on the corruption of police in large cities that have a high incidence of drug trafficking and drug abuse, focusing on the: (1) nature and extent of known drug-related police corruption in certain large cities; (2) factors associated with known drug-related police corruption; and (3) practices that have been recommended or implemented to prevent or detect drug-related police corruption. What GAO Found GAO noted that: (1) drug-related police corruption differs in a variety of ways from other types of police corruption; (2) in addition to protecting criminals or ignoring their activities, officers involved in drug-related corruption were more likely to be actively involved in the commission of a variety of crimes, including stealing drugs and money from drug dealers, selling drugs, and lying under oath about illegal searches; (3) although profit was found to be a motive common to traditional and drug-related police corruption, New York City's Mollen Commission identified power and vigilante justice as two additional motives for drug-related police corruption; (4) the most commonly identified pattern of drug-related police corruption involved small groups of officers who protected and assisted each other in criminal activities, rather than the traditional patterns of non-drug-related police corruption that involved just a few isolated individuals or systemic corruption pervading an entire police department or precinct; (5) federal agencies either do not maintain data specifically on drug-related police corruption or maintain data only on cases in which the respective agency is involved; (6) the Federal Bureau of Investigation (FBI) provided GAO with data on FBI-led drug-related corruption cases involving state and local law enforcement officers; (7) however, since the total number of drug-related police corruption cases at all levels of government is unknown, the proportion constituted by FBI cases also is unknown; (8) one commonly identified factor associated with drug-related corruption was a police culture that was characterized by a code of silence, unquestioned loyalty to other officers, and cynicism about the criminal justice system; (9) officers lacking in experience and some higher education were considered to be more susceptible to involvement in illicit drug-related activities; (10) GAO's sources also identified practices that they believed could prevent or detect drug-related police corruption; (11) these practices, although often directed toward combatting police corruption in general, also were viewed as effective steps toward specifically addressing drug-related police corruption; (12) the detection practices GAO's sources discussed included integrity testing, early warning systems to identify potential problem officers, and proactive investigations of individual officers or precincts with a high number of corruption complaints; and (13) lastly, GAO identified several federal initiatives that were directed toward assisting state and local governments in preventing and detecting police corruption.

gao_GAO-10-366T

gao_GAO-10-366T_0

NTSB Has Made Progress in All Management Areas, but Further Actions Are Needed to Fully Implement Some Recommendations Overall, NTSB has fully implemented or made significant progress in following leading management practices in all eight areas that our recommendations addressed in 2006 and 2008—communication, strategic planning, IT, knowledge management, organizational structure, human capital management, training, and financial management. Figure 1 summarizes NTSB’s progress in implementing our management recommendations. NTSB has also taken steps to implement all three of our IT-related recommendations: NTSB has fully implemented an IT strategic plan that addresses our comments. The most recent version of NTSB’s human capital plan establishes goals for recruiting, developing, and retaining a diverse workforce, and NTSB provided diversity training to 32 of its senior managers and office directors in May 2009. As the table shows, the percentages of NTSB’s fiscal year 2008 workforce that were women and minorities were lower than those of the federal government. 2). NTSB’s current workforce demographics may present the agency with an opportunity to increase the diversity of its workforce and management. NTSB Has Made Its Selection of Accident Investigations More Efficient, but Reporting Can Be Improved We previously made four recommendations to NTSB to improve the efficiency of its activities related to investigating accidents, such as identifying criteria for selecting which accidents to investigate and tracking the status of its recommendations, and increasing its use of safety studies (see fig. 3). 4). NTSB’s deployment of an agencywide electronic information system based on Microsoft SharePoint will allow NTSB to streamline and increase its use of technology in closing out recommendations and in developing reports. NTSB officials told us they would like to broaden the term “safety studies” to include not only the current studies of multiple accidents, but also the research done for the other, smaller safety-related reports and data inquiries. NTSB also developed new guidelines to address its completion of safety studies. The agency increased use of the center’s classroom space from 10 percent in fiscal year 2006 to 80 percent in fiscal year 2009. The agency’s actions to increase the center’s use also helped increase Training Center revenues from about $635,000 in fiscal year 2005 to about $1,771,000 in fiscal year 2009. Requested Changes in NTSB’s Authority Would Provide Statutory Authority to Investigate Incidents and Reduce Required Accident Investigations As part of the reauthorization process, NTSB has proposed both substantive and technical changes to its existing authorizing legislation. Other proposed substantive changes would reduce NTSB’s current requirements for investigating maritime and rail accidents. Giving NTSB expanded investigatory discretion with the explicit authority to investigate incidents without specific criteria, while simultaneously limiting requirements for rail and maritime investigations, would allow the agency to use its professional judgment to determine which investigations would have the greatest potential to improve safety and make the most effective use of its resources. Striking the right balance between discretionary and criteria based investigations will be important to ensure that NTSB’s resources can be used for the work with the greatest potential to enhance transportation safety. National Transportation Safety Board: Progress Made in Management Practices, Investigation Priorities, Training Center Use, and Information Security, but These Areas Continue to Need Improvement. National Transportation Safety Board: Observations on the Draft Business Plan for NTSB’s Training Center.

Why GAO Did This Study The National Transportation Safety Board (NTSB), whose reauthorization is the subject of today's hearing, plays a vital role in advancing transportation safety by investigating accidents, determining their causes, issuing safety recommendations, and conducting safety studies. To support the agency's mission, NTSB's Training Center provides training to NTSB investigators and others. NTSB's 2006 reauthorization legislation mandates an annual review by GAO, and from 2006 through 2008, GAO made 21 recommendations to NTSB that address its management, information technology (IT), accident investigation criteria, safety studies, and Training Center use. This testimony addresses NTSB's progress in implementing GAO's recommendations that it (1) follow leading management practices, (2) conduct aspects of its accident investigations and safety studies more efficiently, and (3) increase the use of its Training Center. The testimony also discusses (4) changes NTSB seeks in its 2010 reauthorization proposal. This testimony is based on GAO's assessment from July 2009 to January 2010 of plans and procedures NTSB developed to address these recommendations. NTSB provided technical comments that GAO incorporated as appropriate. What GAO Found NTSB has fully implemented or made significant progress in adopting leading management practices in all areas where GAO made prior recommendations. Since 2008, NTSB has revised several of its planning documents, including its agencywide strategic plan; improved information security; and obligated money to implement a full cost accounting system. NTSB has also taken steps to improve the diversity of its workforce and management. However, women and minorities were less well represented in NTSB's fiscal year 2008 workforce than in the federal government, and no minorities are among NTSB's 15 senior executives. A lack of diversity among top managers can limit the variety of perspectives and approaches to policy development and decision making at an agency. With the adoption of criteria for selecting highway and marine accidents to investigate, NTSB has established criteria for all transportation modes. NTSB is also streamlining and increasing its use of technology in closing out recommendations. NTSB has three safety studies in progress and would like to broaden the term "safety studies" to include not only its current studies of multiple accidents, but also the research it does for other, smaller safety-related reports and data inquiries. NTSB has continued to increase the use of its Training Center--from 10 percent in fiscal year 2006 to 80 percent in fiscal year 2009. As a result, revenues have increased and the center's overall deficit has declined from about $3.9 million in fiscal year 2005 to about $1.9 million in fiscal year 2009. In its 2010 reauthorization proposal, NTSB seeks substantive changes to its existing authorizing legislation, including explicit statutory authority to investigate incidents in all modes and reduced statutory requirements for investigating rail and maritime accidents. Both changes would increase NTSB's investigatory discretion. Such discretion would allow NTSB to select incidents with the greatest potential to improve safety, yet decisions based on discretion may be less transparent than those based on criteria. Striking the right balance between discretionary and criteria-based investigations will be important to ensure that NTSB's resources can be used for the work with the greatest potential to enhance transportation safety.

gao_GAO-02-709

gao_GAO-02-709_0

Electricity generating units that burn fossil fuels, along with other stationary sources (such as chemical manufacturers and petroleum refineries), and transportation sources (such as cars) emit one or all of these substances. Under the Clean Air Act, EPA establishes air quality standards and regulates emissions from a number of sources, including electricity generating units that burn fossil fuels. Units that Began Operation before 1972 Emitted More Sulfur Dioxide and Nitrogen Oxides per Unit of Electricity Produced than Newer Units In 2000, older units emitted more sulfur dioxide and nitrogen oxides—and about the same amount of carbon dioxide—per unit of electricity produced than newer units. Overall, while generating 42 percent of the electricity, older units emitted 59 percent of the sulfur dioxide, 47 percent of the nitrogen oxides, and 42 percent of the carbon dioxide from fossil-fuel units. Units that began operating in 1972 or after were responsible for the remainder of the emissions and electricity production. Of the older units, those in the Mid-Atlantic, Midwest, and Southeast released most of the emissions, and in disproportionate quantities for the amount of electricity they produced. Older units that burned coal released a disproportionate share of emissions for the electricity they produced, compared with units burning natural gas and oil. Emissions from Older Units Were Often Higher than the Emissions Standards for Newer Units Older units generally do not have to meet the standards applicable to newer units, and in 2000, many of the older units emitted sulfur dioxide and nitrogen oxides at levels higher than what is permitted under the standards applicable to newer units for one or both of the pollutants. In that year, 36 percent of older units emitted sulfur dioxide at levels above the new source standard for that pollutant, and 73 percent emitted nitrogen oxides at levels above the new source standard. The majority of these emissions—99 percent of the sulfur dioxide and 91 percent of the nitrogen oxides—were from coal units, while other fossil fuel-burning units accounted for the remainder.

What GAO Found Although fossil fuels--coal, natural gas, and oil--account for more than two thirds of the nation's electricity, generating units that burn these fuels are major sources of airborne emissions that pose health and environmental risks. To limit emissions and protect air quality, the Environmental Protection Agency regulates emissions of sulfur dioxide and nitrogen oxides from a variety of sources including electricity generating units that burn fossil fuels, other industrial sources, and automobiles. Older electricity generating units--those that began operating before 1972--emit 59 percent of the sulfur dioxide, 47 percent of the nitrogen oxides, and 42 percent of all electricity produced by fossil-fuel units. Units that began operating in or after 1972 are responsible for the remainder of the emissions and electricity production. For equal quantities of electricity generated, older units, in the aggregate, emitted twice as much sulfur dioxide and 25 percent more nitrogen oxides than newer units which must meet the new source standards for these substances. Older and newer units emitted about the same amount of carbon dioxide for equal quantities of electricity generated. Of the older units, those in the Mid-Atlantic, Midwest, and Southeast produced the majority of the emissions, and in disproportionate quantities for the amount of electricity they generated compared with units located in other parts of the country. Older units that burned coal released a disproportionate share of emissions for the electricity they produced compared with units burning natural gas and oil. Thirty-six percent of older units, in 2000, emitted sulfur dioxide at levels above the new source standards applicable to newer units, and 73 percent emitted nitrogen oxides at levels above the standards. These "additional" emissions--those above the standards for newer units--accounted for 34 percent of the sulfur dioxide and 60 percent of the nitrogen oxides produced by older units. Coal-burning units emitted 99 percent of the additional sulfur dioxide and 91 percent of the additional nitrogen oxides, while other fossil fuel-burning units accounted for the remainder.

gao_GAO-11-602

gao_GAO-11-602_0

Airlines Do Not Have Authority to Adopt a Preventative Role; the State Department and DHS Have Programs That Attempt to Prevent International Parental Child Abductions Airlines Do Not Have the Authority to Enforce Court and Custody Orders but Have Policies and Procedures for Boarding Children Traveling Alone As private sector entities, airlines in the United States do not have the authority to verify or enforce court and custody orders. The State Department Has Measures Related to the Issuance of Children’s Passports, while DHS Has Measures to Intercept an Abductor at the Airport The State Department has preventative measures that are focused outside of the airport environment, before a suspected abductor reaches an airport with a child, while DHS’s measures focus on preventing child abductions once an abductor reaches an airport with a child. Stakeholders Identified Two Additional Options— a Parental-Consent Letter Requirement and a High-Risk Abductor List—That May Help Prevent International Parental Child Abductions, but Cited Limitations Federal Agency Officials, Nongovernmental Organizations, and Others Identified Two Potential Options: a Parental- Consent Letter Requirement and a High- Risk Abductor List Concerns about increasing cases of international parental child abductions have led federal agency officials, nongovernmental organizations, and others to suggest a number of potential options aimed at preventing such abductions. A parental-consent letter requirement could specify that children traveling alone or without both parents on international flights be required to have a note of consent from the nonaccompanying parent(s) authorizing the child to travel. A program to identify adults at high risk for committing child abductions could operate similarly to DHS’s Prevent Departure program but would apply to U.S. citizens—such a program may require additional statutory authority. Stakeholder Views Indicate That Consent Letters May be Impractical, while a High-Risk Abductor List May Help Prevent Some Abductions Parental Consent Letters Appear Impractical Federal agency, airline, and nongovernmental organization stakeholders reported that the presence of some type of parental-consent letter requirement may be effective in deterring some parents from attempting to abduct their children abroad. Stakeholders, however, pointed out that the relatively difficult and time- consuming steps needed to place a child and potential abductor on this list may limit its effectiveness. Recommendation for Executive Action To further help prevent international parental child abductions involving airline flights, particularly for persons identified as high risk for attempting such abductions, we recommend that the Secretary of Homeland Security consider creating a program similar to the child abduction component of the Prevent Departure program that would apply to U.S. citizens. DHS concurred with our recommendation and agreed with our conclusions. However, while stating its commitment to working with the Department of State and other stakeholders to better prevent these abductions, DHS also discussed challenges, including "potential constitutional, operational, privacy, and resource issues," to viably implementing a high-risk abductor list for U.S. citizens. Appendix I: Scope and Methodology In response to your request, this report provides (1) information on policies and measures airlines, federal agencies, and other entities have to prevent international parental child abductions involving airline flights and (2) options federal agencies, nongovernmental organizations, airlines, and others could consider to prevent international parental child abductions involving airline flights, as well as the advantages and limitations of those options. Our focus was primarily on international parental child abductions that occur when a parent, family member, or person acting on behalf of the parent or family takes a child from the country violating the rights of the custodial parent or guardian left behind.

Why GAO Did This Study Since 2000, the annual number of new international parental child abduction cases reported to the Department of State--many of which likely involved air travel--has nearly tripled. Such abductions occur when a parent, family member, or person acting on behalf thereof, takes a child to another country in violation of the custodial parent's or guardian's rights. Once a child is abducted, the laws, policies, and procedures of the foreign country determine the child's return. Thus, preventing such abductions can help keep parents and children from being separated for a long period or indefinitely. As requested, this report addresses (1) the policies and measures airlines, federal agencies, and others have to prevent international parental child abductions on airline flights and (2) options federal agencies, airlines, and others could consider for helping prevent such abductions on airline flights, as well as the advantages and limitations of those options. To perform this work, GAO reviewed applicable laws and policies, interviewed government officials, and surveyed airlines and nonprofit associations. What GAO Found As private sector entities, airlines do not have the authority to verify or enforce court and custody orders in an effort to prevent international parental child abductions and thus, upon request, work in cooperation with law enforcement. The Department of State has measures such as a dual-signature passport requirement and a passport notification program that are focused on preventing abductions before abductors reach an airport. The Department of Homeland Security (DHS) has measures that are focused on prevention when abductors reach the airport, such as a Prevent Departure list which prevents non-U.S. citizens from departing on an international flight with a child of concern, if certain criteria are met. DHS also checks the National Crime Information Center Missing Persons File and has partnered with other agencies to distribute AMBER Alerts at airports if child abductions meet certain criteria. Two options--a parental-consent letter requirement and a high-risk abductor list--were cited by stakeholders (federal agency, airline, and nongovernmental organization officials) as having potential to prevent abductions, but consent letters may be impractical to adopt while a high-risk list may help prevent some abductions. A consent letter policy could require that children traveling alone, or without both parents, have a note of consent from the nonaccompanying parents authorizing the child to travel. Stakeholders GAO met with and surveyed noted that such consent letters may be effective in deterring some abductions, but the relative ease in forging a letter along with other significant issues indicate that such a requirement is not a practical option. A high-risk abductor list program could operate similarly to the Prevent Departure list program but would apply to U.S. citizens. While stakeholders pointed out certain limitations to such a high-risk abductor list--such as the relatively difficult and time-consuming steps needed to place a child and potential abductor on this list--such a list may be helpful in preventing abductions on airline flights. What GAO Recommends GAO recommends that DHS consider creating a program similar to the child abduction component of its Prevent Departure program that would apply to U.S. citizens. DHS concurred with the recommendation, but cited challenges toward implementing it, such as potential constitutional, operational, privacy, and resource issues.

gao_GAO-13-441

gao_GAO-13-441_0

VA Fee Basis Care Spending and Utilization Increased from Fiscal Year 2008 to Fiscal Year 2012, with the Majority of Spending and Utilization in Outpatient Care VA Fee Basis Care Spending and Utilization Increased from Fiscal Year 2008 to Fiscal Year 2012 VA’s fee basis care spending increased from about $3.04 billion in fiscal year 2008 to about $4.48 billion in fiscal year 2012. The slight decline in fee basis care spending between fiscal year 2011 and fiscal year 2012 is likely due to VA’s adoption of Medicare rates for its fee basis care program. According to VA officials, the increase in the number of unique veterans receiving care from fee basis providers from fiscal year 2008 to fiscal year 2012 was likely due to VA’s use of fee basis care to meet goals for the maximum amount of time veterans wait for VAMC-based appointments. Outpatient Services Accounted for the Majority of VA Fee Basis Care Spending and Utilization from Fiscal Year 2008 through Fiscal Year 2012 VA spent about $11.22 billion on outpatient fee basis care and about $9.07 billion on inpatient fee basis care from fiscal year 2008 through fiscal year 2012. Three Main Factors Influence Fee Basis Care Utilization, and VAMCs Reviewed Used Several Methods to Reduce Fee Basis Spending and Utilization During our review of six VAMCs, we identified three common factors that affected these facilities’ utilization of fee basis care—clinical service availability, veteran travel distances, and VA wait time goals. In order to allow VAMCs to reimburse additional veterans for travel, VA would need to revise its regulations to include additional categories of veterans. While serving veterans in a timely way is important and sending them to fee basis providers may provide veterans more timely service, VA does not track how long it takes veterans to be seen by fee basis providers at For example, officials from the Alexandria VAMC explained all VAMCs.that they often refer veterans to fee basis providers when the Alexandria VAMC’s wait times are too long, but fee basis providers in their community also face capacity limitations and may not be able to schedule appointments for veterans any sooner than the VAMC-based provider. Conclusions VA’s fee basis care program is a critical means for providing accessible health care to veterans. Analyze the amount of time veterans wait to see fee basis providers and apply the same wait time goals to fee basis care that are used as VAMC-based wait time performance measures. To ensure that VA Central Office effectively monitors fee basis care, we recommend that the Secretary of Veterans Affairs direct the Under Secretary for Health to take the following action: Ensure that fee basis data include a claim number that will allow for VA Central Office to analyze the episode of care costs for fee basis care. To address our second recommendation, VA noted that it is working to revise procedures for both its new fee basis care administration model, referred to as Non-VA Care Coordination, and the beneficiary travel program to ensure that the cost-effectiveness of a veterans’ travel to another VAMC or to a non-VA care provider is reviewed as part of the authorization of fee basis care and is included in standard operating procedures and training. GAO staff who made major contributions to this report are listed in appendix IV.

Why GAO Did This Study While VA treats the majority of veterans in VA-operated facilities, in some instances it must obtain the services of non-VA providers to ensure that veterans are provided timely and accessible care. These non-VA providers are commonly reimbursed by VA using a fee-for-service arrangement known as fee basis care. VA's fee basis care program has grown rapidly in recent years--rising from about 8 percent of VA's total health care services budget in fiscal year 2005 to about 11 percent in fiscal year 2012. GAO was asked to review fee basis care program spending and utilization and factors that influence VAMC fee basis utilization. This report examines how fee basis care spending and utilization changed from fiscal year 2008 to fiscal year 2012, factors that contribute to the use of fee basis care, and VA's oversight of fee basis care program spending and utilization. GAO reviewed relevant laws and regulations, VA policies, and fee basis spending and utilization data from fiscal year 2008 through fiscal year 2012. In addition, GAO reviewed the fee basis care operations of six selected VAMCs that varied in size, services offered, and geographic location. What GAO Found The Department of Veterans Affairs' (VA) fee basis care spending increased from about $3.04 billion in fiscal year 2008 to about $4.48 billion in fiscal year 2012. The slight decrease in fiscal year 2012 spending from the fiscal year 2011 level was due to VA's adoption of Medicare rates as its primary payment method for fee basis providers. VA's fee basis care utilization also increased from about 821,000 veterans in fiscal year 2008 to about 976,000 veterans in fiscal year 2012. GAO found that several factors affect VA medical centers' (VAMC) utilization of fee basis care--including veteran travel distances to VAMCs and goals for the maximum amount of time veterans should wait for VAMC-based appointments. VAMCs that GAO reviewed reported that they often use fee basis care to provide veterans with treatment closer to their homes--particularly for veterans who are not eligible for travel reimbursement. In addition, VAMC officials reported that veterans are often referred to fee basis providers to ensure that VAMC-based clinics that would otherwise treat them can meet established VA wait time goals for how long veterans wait for an appointment. However, GAO found that VA has not established goals for and does not track how long veterans wait to be seen by fee basis providers. VA's monitoring of fee basis care spending is limited because fee basis data do not currently include a claim number or other identifier that allows all charges from a single office visit with a fee basis provider or an inpatient hospital stay to be analyzed together. GAO found that without the ability to analyze spending in this way, VA is limited in its ability to assess the cost of fee basis care and verify that fee basis providers were paid appropriately. What GAO Recommends GAO recommends that VA revise its beneficiary travel regulations to allow reimbursement for veterans seeking similar care from a fee basis provider, apply the same wait time goals to fee basis care as VAMC-based care, and ensure fee basis data includes a claim number. VA generally concurred with GAO's conclusions and five recommendations.

gao_GAO-16-867T

gao_GAO-16-867T_0

In fiscal year 2015, VA spent about $20 billion on goods and services via contracts—more than a quarter of its discretionary budget. The Office of Acquisition and Logistics (OAL) is responsible for oversight of contracting across VA, including setting policy and issuing warrants to contracting officers. In July 2015, the Secretary of Veterans Affairs announced an organizational transformation for the department called MyVA. VA’s Complex Procurement Structure Creates Challenges for Users Given VA procurement’s highly decentralized structure, a given customer—such as a department in a medical center or a program office—may need to work with multiple contracting entities to meet its procurement needs. VA Procurement Policies Are Outdated and Not Always Cohesive and Effectively Communicated Key VA procurement policies are outdated and difficult for contracting officers to use. However, many of VA’s regulations and policies are outdated, most notably the VA Acquisition Regulation (VAAR), which has not been updated since 2008. Figure 3 illustrates the numerous sources that contracting officers must turn to for guidance. VA Can Improve Its Processes for Medical Supply Purchasing and Identify Other Cost Savings Opportunities VA medical centers use contractors called medical-surgical prime vendors to obtain many of the supplies they use on a daily basis, such as bandages and surgical sutures. Use of these national contracts is also required by VA policy and regulation. In our September 2016 report, we recommended that VA take steps to facilitate the transition to the new MSPV process, including ensuring that SAC collects data to monitor the use of national contracts in the new system, that SAC and VHA establish achievable time frames for eliminating Federal Supply Schedule items from the MSPV catalog once national contracts are in place, and that the new ordering interface clearly distinguish between items on national contracts and the 4,500 items on the Federal Supply Schedules. VA’s substantial buying power presents many opportunities for procurement cost savings, but the department has not consistently taken advantage of them. A key aspect of strategic sourcing is consolidating similar requirements to manage them collectively, reaping cost savings and efficiency gains. There are opportunities to better apply strategic sourcing principles at the regional level, as well. In our review of 37 selected contracts, we did find several instances of VISN and contracting officials consolidating requirements for greater efficiency and to obtain better pricing. 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 This testimony summarizes the information contained in GAO's September 2016 report, entitled Veterans Affairs Contracting: Improvements in Policies and Processes Could Yield Cost Savings and Efficiency ( GAO-16-810 ). What GAO Found GAO found opportunities for the Department of Veterans Affairs (VA) to improve the efficiency and effectiveness of its multi-billion dollar annual procurement spending in several areas including data systems, procurement policies and oversight, acquisition workforce, and contract management. Shortcomings in VA's recording of procurement data limit its visibility into the full extent of its spending. A recent policy directing that medical-surgical supply orders be captured in VA's procurement system is a step in the right direction, but proper implementation is at risk because procedures are not in place to ensure all obligations are recorded. VA's procurement policy framework is outdated and fragmented. As a result, contracting officers are unclear where to turn for current guidance. VA has been revising its overarching procurement regulation since 2011 but completion is not expected until 2018. Meanwhile, contracting officers must consult two versions of this regulation, as well as other policy related documents. Clear policies are key to ensuring VA conducts procurements effectively on behalf of veterans. The figure below depicts the various sources of regulations, policy, and guidance. Sources of Veterans Affairs (VA) Procurement Policy as of June 2016 Managing workload is a challenge for VA's contracting officers and their representatives in customer offices. A 2014 directive created contract liaisons at medical centers in part to address this issue, but medical centers have not consistently implemented this initiative, and VA officials have not identified the reasons for uneven implementation. VA can improve its procurement processes and achieve cost savings by complying with applicable policy and regulation to obtain available discounts when procuring medical supplies; leveraging its buying power through strategic sourcing; ensuring key documents are included in the contract file, as GAO found that more than a third of the 37 contract files lacked key documents; and ensuring that compliance reviews identify all contract file shortcomings.

gao_GGD-00-6

gao_GGD-00-6_0

Scope and Methodology To review the Bureau’s efforts to increase public participation in the census and to collect timely and accurate field data from nonrespondents, we examined documents that described the Bureau’s budget, plans, procedures, progress, and evaluations relating to these operations. Motivating Public Participation Will Be a Formidable Task Achieving the Bureau’s Mail Response Rate Objective Will Be Difficult Outreach and Promotion Program May Have Only a Modest Impact on the Public participation is critical to a successful census because it helps improve the accuracy and completeness of census information, while reducing the Bureau’s costly and time-consuming nonresponse follow-up workload. The mail response rate to the census questionnaire is the most commonly used indicator of the level of public participation.Unfortunately, as shown in figure 1, the mail response rate has declined with each decennial census since the Bureau first initiated a national mailout/mailback approach in 1970. According to the Bureau, this declining trend is due, in part, to various demographic, attitudinal, and other factors, such as concerns over privacy and mistrust of government. However, the dress rehearsal results suggest that even this goal may be optimistic. However, a key ingredient of these response rates was the Bureau’s use of a second, “replacement” questionnaire that was sent to all housing units located in mailout/mailback areas in South Carolina and Sacramento. However, the results of a subsequent Bureau study suggest that the second mailing during the dress rehearsal had an even greater impact on the mail response rate, and, as a result, the Bureau’s current 61-percent response rate objective could be optimistic. 2). 3). Completing Nonresponse Follow-up on Schedule Without Compromising Data Quality May Be Difficult For the 2000 Census, the Bureau has based its $1.5 billion nonresponse follow-up budget on the assumption that it will achieve a 61-percent mail response rate, which corresponds to a follow-up workload of about 46 million of the 119 million housing units estimated to comprise the nation. 4). Thus, to follow up on 46 million households within the 10-week time frame, the Bureau will need to complete over 657,000 cases each day for the entire 10-week period. For example, while the Bureau was generally successful in staffing its dress rehearsal and initial census operations and kept turnover rates to manageable levels, the larger number of people the Bureau needs to hire in 2000, combined with a tight labor market and other factors, could pose problems. The Bureau plans to fill about 860,000 positions for peak field operations, including 539,000 for nonresponse follow-up. GAO, seeking to do its part to help ensure a successful census, is participating in this initiative. Post-Census Day Coverage Improvement Procedures Offer Little Hope of Resolving the Undercount The Bureau’s post-census coverage improvement procedures planned for 2000, while designed to improve the census count, are similar to 1990 methods that had limited success. Conclusions With less than 4 months until Census Day, the Bureau faces some significant risks that, taken together, continue to jeopardize the success of the 2000 Census. Because of these combined risks, the 2000 Census may be less accurate than 1990. Additional funding will not by itself make up for a lower-than-expected mail response rate.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the Year 2000 census, focusing on: (1) the need to boost the declining level of public participation in the census; and (2) the Census Bureau's need to collect timely and accurate data from nonrespondents. What GAO Found GAO noted: (1) with less than 4 months remaining until Census Day, significant operational uncertainties continue to surround the Bureau's efforts to increase participation in the census and to collect timely and accurate field data from nonrespondents; (2) key to a successful census is the level of public participation, as measured by the questionnaire mail response rate; (3) however, the response rate has been declining since 1970, in part because of various demographic and attitudinal factors, such as more complex housing arrangements and public mistrust of government; (4) based on the 1998 dress rehearsal for the 2000 Census, the Bureau estimates a 61-percent mail response rate in 2000; (5) however, this goal may be optimistic because: (a) a key ingredient of the dress rehearsal mail response rate - a second "replacement" questionnaire - will not be used in 2000 because the Bureau is concerned that the questionnaire could confuse recipients, which could lead to duplicate responses, and (b) while the Bureau has instituted an extensive outreach and promotion effort to help it achieve its desired response rate, dress rehearsal results suggest the Bureau still has not resolved the long-standing challenge of motivating public participation in the census; (6) the Bureau's ability to complete its field operations on time without compromising data quality is another significant risk to a successful census; (7) past experience has shown that following up on nonresponding households is one of the most error-prone and costly of all census-taking activities, requiring the Bureau to fill about 860,000 positions and recruit up to 3.5 million people; (8) even if the Bureau achieves its 61-percent mail response rate objective, it will have a nonresponse follow-up workload of 46 million housing units; (9) to complete this workload in the 10-week time frame that the Bureau has allocated, it will need to close an average of 657,000 cases every day; (10) however, a lower-than-expected mail response rate, difficulties in recruiting a sufficient number of workers in a tight labor market, and a variety of other factors, could undermine the Bureau's efforts and result in higher costs and less accurate data; and (11) while the Bureau has established post-census coverage improvement procedures to improve the accuracy of the 2000 Census data, these procedures are similar to 1990 methods that had limited success.

gao_GAO-01-525

gao_GAO-01-525_0

Conclusions DOD does not have a financial management enterprise architecture, and it does not currently have the management structures and processes in place to effectively develop, implement, and maintain one. DOD has not applied recognized best practices: in particular, support and sponsorship by the head of the enterprise, and assignment of accountability and commensurate authority for developing, implementing, and maintaining a DOD-wide financial management enterprise architecture. Nevertheless, DOD’s various components are either spending or planning to spend billions of dollars to acquire new or modify existing financial management systems. If DOD continues down this road, it runs the serious risk that its components will spend billions of dollars modifying and modernizing financial management systems independently from one another, resulting in DOD perpetuating an existing systems environment that suffers from duplication of systems, limited interoperablity, and unnecessarily costly operations and maintenance. As part of its plans for investing in financial management systems modernization, DOD has taken some actions that appropriately exploit lessons learned from its Year 2000 program. DOD can build upon actions such as these and activities already underway to ensure that it employs recognized best practices for enterprise architecture management. DOD can thus position itself to cost effectively manage the billions of dollars it plans to spend to address its high-risk financial management operations. This approach will increase DOD’s chances of modernizing its financial management operations and supporting systems in a way that will optimize financial management performance and accountability. We further recommend that the Secretary immediately (1) issue a DOD policy that directs the development, implementation, and maintenance of a financial management enterprise architecture and (2) modify the Senior Financial Management Oversight Council’s charter to designate the Deputy Secretary of Defense as the Council chair and the Under Secretary of Defense (Comptroller) as the Council vice-chair; empower the Council to serve as DOD’s financial management enterprise architecture steering committee, giving it the responsibility and authority to ensure that a DOD financial management enterprise architecture is developed and maintained in accordance with the DOD C4ISR Architecture Framework; empower the Council to serve as DOD’s financial management investment review board, giving it the responsibility and authority to (1) select and control all DOD financial management investments and (2) ensure that its investment decisions treat compliance with the financial management enterprise architecture as an explicit condition for investment approval that can be waived only if justified by a compelling written analysis; and expand the role of the Council’s System Compliance Working Group to include supporting the Council in determining the compliance of each system investment with the enterprise architecture at key decision points in the system’s development or acquisition life cycle.

What GAO Found The Department of Defense (DOD) does not have a financial management enterprise architecture, and it does not have the management structures in place to effectively develop, implement, and maintain one. DOD has not applied recognized best practices--particularly support and sponsorship by the head of the enterprise and assignment of accountability and commensurate authority--to develop, implement, and maintain a DOD-wide financial management enterprise architecture. Nevertheless, DOD's various components are either spending or planning to spend billions of dollars to acquire new or modify existing financial management systems. In the absence of a complete, enforceable enterprise architecture, such investments are unwise. DOD runs the risk that its components will spend billions of dollars to modify and modernize financial management systems independently from one another, forcing DOD to maintain a system that suffers from duplication, limited interoperability, and unnecessarily costly operations and maintenance. As part of its plan to invest in financial management systems modernization, DOD has tried to use lessons learned from its Year 2000 program. DOD can build upon these actions to ensure that it uses recognized best practices for enterprise architecture management. This approach will allow DOD to position itself to cost effectively manage the billions of dollars it plans to spend on financial management operations. This approach will also increase the odds that DOD will modernize its financial management operations and supporting systems in a way that will optimize financial management performance and accountability.

gao_GAO-07-1247T

gao_GAO-07-1247T_0

DNDO conducted its formal tests in two phases. According to DNDO, these special tests were recommended by subject matter experts outside the ASP program to address the limitations of the original NTS test plan, including available time and funding resources, special nuclear material sources, and the number of test configurations that could be incorporated in the test plan, including source isotope and activity, shielding materials and thicknesses, masking materials, vehicle types, and measurement conditions. DNDO’s Test Methods Raise Concerns Regarding the Reliability of Test Results Based on our analysis of DNDO’s test plan, the test results, and discussions with experts from four national laboratories, we are concerned that DNDO used biased test methods that enhanced the performance of the ASPs. Specifically, we are concerned because almost all of the materials, and most combinations of materials, DNDO used in the formal tests were identical to those that the ASP contractors had specifically set their ASPs to identify during the dry runs and dress rehearsals. It is highly unlikely that such favorable circumstances would present themselves under real world conditions. Based on our analysis, the masking materials DNDO used at NTS did not sufficiently test the performance limits of the ASPs. DOE national laboratory officials raised similar concerns to DNDO after reviewing a draft of the test plan in November 2006. Yet, DNDO’s own test plan for “ASP Special Testing” states, “The DNDO ASP NTS Test Plan was designed to… measure capabilities and limitations in current ASP systems.” In addition, the NTS tests did not objectively test the ASPs against the currently deployed radiation detection system. DNDO did not include this critical step in its formal tests. In regards to the special tests DNDO conducted, based on what DNDO has told us and our own evaluation of the special test plan, we note that because DNDO did not consult NIST on the design of the blind tests, we do not know the statistical significance of the results, and the tests were not entirely blind because some of the nuclear materials used in the blind tests were also used to calibrate the ASPs on a daily basis. We raised our concerns about this issue and those of DOE and CBP to DNDO’s attention on multiple occasions. On August 30, 2007, the DHS Undersecretary for Management recommended that the Secretary of Homeland Security delay Secretarial Certification of ASPs for an additional two months. In our view, the tests conducted by DNDO at the Nevada Test Site between February and March 2007 used biased test methods and were not an objective assessment of the ASPs’ performance capabilities. As a result of DNDO’s test methods and the limits of the tests—including a need to meet a secretarial certification deadline and the limited configurations of special nuclear material sources, masking, and shielding materials used—we believe that the results of the tests conducted at the Nevada Test Site do not demonstrate a “significant increase in operational effectiveness” relative to the current detection system, and cannot be relied upon to make a full-scale production decision. Combating Nuclear Smuggling: DHS’s Cost-Benefit Analysis to Support the Purchase of New Radiation Detection Portal Monitors Was Not Based on Available Performance Data and Did Not Fully Evaluate All the Monitors’ Costs and Benefits. Ports of Entry.

Why GAO Did This Study The Department of Homeland Security's (DHS) Domestic Nuclear Detection Office (DNDO) is responsible for addressing the threat of nuclear smuggling. Radiation detection portal monitors are key elements in our national defenses against such threats. DHS has sponsored testing to develop new monitors, known as advanced spectroscopic portal (ASP) monitors. In March 2006, GAO recommended that DNDO conduct a cost-benefit analysis to determine whether the new portal monitors were worth the additional cost. In June 2006, DNDO issued its analysis. In October 2006, GAO concluded that DNDO did not provide a sound analytical basis for its decision to purchase and deploy ASP technology and recommended further testing of ASPs. DNDO conducted this ASP testing at the Nevada Test Site (NTS) between February and March 2007. GAO's statement addresses the test methods DNDO used to demonstrate the performance capabilities of the ASPs and whether the NTS test results should be relied upon to make a full-scale production decision. What GAO Found Based on our analysis of DNDO's test plan, the test results, and discussions with experts from four national laboratories, we are concerned that DNDO's tests were not an objective and rigorous assessment of the ASPs' capabilities. Our concerns with the DNDO's test methods include the following: (1) DNDO used biased test methods that enhanced the performance of the ASPs. Specifically, DNDO conducted numerous preliminary runs of almost all of the materials, and combinations of materials, that were used in the formal tests and then allowed ASP contractors to collect test data and adjust their systems to identify these materials. It is highly unlikely that such favorable circumstances would present themselves under real world conditions. (2) DNDO's NTS tests were not designed to test the limitations of the ASPs' detection capabilities--a critical oversight in DNDO's original test plan. DNDO did not use a sufficient amount of the type of materials that would mask or hide dangerous sources and that ASPs would likely encounter at ports of entry. DOE and national laboratory officials raised these concerns to DNDO in November 2006. However, DNDO officials rejected their suggestion of including additional and more challenging masking materials because, according to DNDO, there would not be sufficient time to obtain them based on the deadline imposed by obtaining Secretarial Certification by June 26. 2007. By not collaborating with DOE until late in the test planning process, DNDO missed an important opportunity to procure a broader, more representative set of well-vetted and characterized masking materials. (3) DNDO did not objectively test the performance of handheld detectors because they did not use a critical CBP standard operating procedure that is fundamental to this equipment's performance in the field. Because of concerns raised that DNDO did not sufficiently test the limitations of ASPs, DNDO is attempting to compensate for weaknesses in the original test plan by conducting additional studies--essentially computer simulations. While DNDO, CBP, and DOE have now reached an agreement to wait and see whether the results of these studies will provide useful data regarding the ASPs' capabilities, in our view and those of other experts, computer simulations are not as good as actual testing with nuclear and masking materials.

gao_RCED-98-1

gao_RCED-98-1_0

FEMA also pays for temporary housing and crisis counseling for eligible victims. Prior to the Northridge earthquake, FEMA used the Fast Track process for only one disaster—Hurricane Andrew in 1992. In the case of Northridge, FEMA concluded that the Fast Track process was essential to meet the needs of disaster victims expeditiously. The enormous number of disaster victims and their psychological and physical need for immediate assistance provided the rationale for implementing the Fast Track process. Northridge Experience Suggests Need for Fast Track Guidance In implementing the Fast Track process following the Northridge earthquake, FEMA experienced operational difficulties, including the inconsistent application of criteria when designating areas with the greatest estimated damage and constraints in its application processing software. These difficulties, combined with the logistical challenge of processing an enormous volume of applications for assistance, as well as FEMA’s decisions on the eligibility of housing assistance under both the regular and Fast Track processes, may have contributed to FEMA’s providing housing assistance in excess of actual needs. FEMA has not developed written guidance for implementing the Fast Track process, even though FEMA’s Inspector General recommended establishing formal procedures after its first use in 1992. Because of these errors, not all Northridge victims in similar circumstances were treated the same. (These nine ZIP codes account for about 4 percent of the payments that FEMA designated for recovery.) Fast Track Represents Trade-Off Between Expedited Assistance and Control of Federal Funds A principal advantage of the Fast Track process is that it hastens the distribution of temporary housing assistance grants to some applicants, facilitating a move into alternate housing more quickly than would the regular process. Also, according to FEMA officials involved in the response to the Northridge earthquake, Fast Track provided an intangible benefit by demonstrating to the victims and the general public that help was actually on the way. A principal disadvantage is the relative loss of control over the disbursement of federal funds and the subsequent need to recover ineligible payments. FEMA ultimately designated for recovery 6.7 percent ($9.6 million of $143 million) of the temporary housing assistance provided under the Fast Track process for 3,856 Northridge earthquake applicants. FEMA Relies on States to Ensure That Crisis-Counseling Funds Are Used Appropriately FEMA provides crisis-counseling funding for screening and diagnosing individuals, short-term crisis counseling, community outreach, consultation, and education services. For the distribution of funds provided after the Northridge earthquake, FEMA officials said that they visited all service providers, and CMHS officials evaluated the providers’ accounting procedures and controls and found them to be satisfactory. To examine FEMA’s experience with the Fast Track process in Northridge, including whether FEMA adopted its Inspector General’s previous recommendations on the Fast Track process and how FEMA determined the geographic areas included in Fast Track, we interviewed FEMA officials from FEMA’s headquarters; FEMA’s OIG office; the Disaster Finance Center and the National Processing Services Center at Mt. 2. 3. 4. 5.

Why GAO Did This Study Pursuant to a congressional request, GAO examined several issues pertaining to the Federal Emergency Management Agency's (FEMA) use of the Fast Track process and FEMA's crisis-counseling assistance to victims of the Northridge earthquake, focusing on: (1) the authority and rationale for the Fast Track process; (2) FEMA's experience with the Fast Track process in Northridge and whether the process was influenced by the Office of Inspector General's recommendations; (3) the advantages and disadvantages of the Fast Track process, including the amounts of payments that FEMA designated for recovery and subsequently recovered and the reasons for ineligibility; and (4) FEMA's criteria and process for providing crisis-counseling funds and ensuring their use for authorized purposes. What GAO Found GAO noted that: (1) the legislation authorizing FEMA's temporary housing assistance has no explicit provision for a process such as Fast Track; (2) however, as FEMA concluded, the act gives the agency wide latitude in providing expeditious assistance for disaster victims; (3) FEMA's rationale in implementing the Fast Track process following the Northridge earthquake was to assist the largest number of disaster victims in the shortest possible amount of time; (4) in implementing the process, FEMA experienced operational difficulties including the inconsistent application of criteria when designating zip codes; (5) because of these errors, not all Northridge victims in similar circumstances were treated the same; (6) FEMA also experienced constraints with the computer software used to process applications; (7) these difficulties, combined with an enormous volume of applications for assistance and FEMA's decisions on applicants' eligibility for payments made under both the regular and Fast Track processes, may have contributed to FEMA's provision of housing assistance beyond actual needs; (8) FEMA has not developed written guidance for implementing the Fast Track process, even though FEMA's Inspector General recommended establishing formal procedures after the Fast Track process's first (and only other) use in 1992; (9) a principal advantage of the Fast Track process is that it provides temporary housing assistance grants for some applicants more quickly than would the regular process; (10) according to FEMA officials involved in the response to the Northridge earthquake, Fast Track provided an intangible benefit by demonstrating to the victims and the general public that help was actually on the way; (11) a principal disadvantage to Fast Track is the relative loss of control over the disbursement of federal funds and the subsequent need to recover ineligible payments; (12) FEMA ultimately designated for recovery 6.7 percent ($9.6 million of $143 million) of the temporary housing assistance provided under the Fast Track process for 3,856 Northridge earthquake applicants; (13) FEMA provides crisis-counseling funding for screening and diagnosing individuals, short-term crisis counseling, community outreach, consultation, and educational services; and (14) for funds provided after the Northridge earthquake, FEMA officials said that they visited all service providers and that center officials evaluated their accounting procedures and controls and found them to be satisfactory.

gao_GAO-04-1054

gao_GAO-04-1054_0

The converged program, NPOESS, is considered critical to the United States’ ability to maintain the continuity of data required for weather forecasting and global climate monitoring. To plan for this shift, the program office developed a new program cost and schedule baseline. NPOESS Costs Have Increased, and Schedules Have Been Delayed The program office has increased the NPOESS life cycle cost estimate by $1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones— including the expected availability of the first NPOESS satellite, which was delayed by 20 months. The cost increases reflect changes to the NPOESS contract as well as increased program management funds. The contract changes include extension of the development schedule, increased sensor costs, and additional funds needed for mitigating risks. Increased program management funds were added for non-contract costs and management reserves. The schedule delays were the result of stretching out the development schedule to accommodate the change in the NPOESS funding stream. The program office attributed the $638 million cost increase to extending the development schedule to accommodate the changing funding stream, increased sensor costs, and additional funds needed for mitigating risks. Managing the risks associated with the development of VIIRS and CrIS, the integrated data processing system, and algorithm performance is of particular importance because these are to be demonstrated on the NPP satellite currently scheduled for launch in October 2006. Other factors could further affect the revised cost and schedule estimates. Specifically, the current shortfalls in performance targets indicate that the NPOESS contract will most likely be overrun by $500 million at completion in September 2011 and program risks could contribute to additional cost and schedule slips. The departments generally agreed with the report and provided written and oral technical corrections, which have been incorporated as appropriate. Objectives, Scope, and Methodology Our objectives were to (1) identify any cost or schedule changes as a result of the revised baseline and determine what contributed to these changes and (2) identify factors that could affect the program baseline in the future. We obtained comments on a draft of this report from officials at the Department of Defense (DOD), NOAA, and NASA, and incorporated these comments as appropriate.

Why GAO Did This Study Our nation's current operational polar-orbiting environmental satellite program is a complex infrastructure that includes two satellite systems, supporting ground stations, and four central data processing centers. In the future, the National Polar-orbiting Operational Environmental Satellite System (NPOESS) is to combine the two current satellite systems into a single state-of-the-art environment monitoring satellite system. This new satellite system is considered critical to the United States' ability to maintain the continuity of data required for weather forecasting and global climate monitoring through the year 2020. Because of changes in funding levels after the contract was awarded, the program office recently developed a new cost and schedule baseline for NPOESS. GAO was asked to provide an interim update to (1) identify any cost or schedule changes as a result of the revised baseline and determine what contributed to these changes and (2) identify factors that could affect the program baseline in the future. In commenting on a draft of this report, DOD, NOAA, and NASA officials generally agreed with the report and offered technical corrections, which we incorporated where appropriate. What GAO Found The program office has increased the NPOESS cost estimate by $1.2 billion, from $6.9 to $8.1 billion, and delayed key milestones, including the availability of the first NPOESS satellite--which was delayed by 20 months. The cost increases reflect changes to the NPOESS contract as well as increased program management costs. The contract changes include extension of the development schedule to accommodate changes in the NPOESS funding stream, increased sensor costs, and additional funds needed for mitigating risks. Increased program management funds were added for non-contract costs and management reserves. The schedule delays were the result of stretching out the development schedule to accommodate a change in the NPOESS funding stream. Other factors could further affect the revised cost and schedule estimates. First, the contractor is not meeting expected cost and schedule targets of the new baseline because of technical issues in the development of key sensors. Based on its performance to date, GAO estimates that the contractor will most likely overrun its contract at completion in September 2011 by at least $500 million. Second, the risks associated with the development of the critical sensors, integrated data processing system, and algorithms could also contribute to increased cost and schedule slips.

gao_HEHS-98-7

gao_HEHS-98-7_0

VETS provides states with grants for DVOP and LVER staff to provide veterans and eligible persons employment and training opportunities, with priority given to the needs of disabled veterans and veterans of the Vietnam era, through the states’ employment service systems established under the Wagner-Peyser Act. National Funding Trend for DVOP and LVER Grants Over a 10-year period, appropriations for VETS, adjusted for inflation, have declined 11 percent. 1.) Process Used to Allocate DVOP and LVER Funds to States States receive DVOP and LVER funding from VETS through multiyear grants, generally for a period of 2 to 5 years. When appropriations for the DVOP and LVER grants do not support the number of statutorily authorized positions, each state’s share of the appropriation is calculated on the basis of a proportionate reduction. 6 and 7.) Performance Measurements for DVOP and LVER Staffing Grants Performance standards for the DVOP and LVER grants are measured in terms of providing a higher level of service and achieving better results for veterans than is achieved by a state’s employment service system for its nonveteran applicants. In recent testimony, we criticized VETS’ current performance standards because they focus more on process than on results and noted that performance is evaluated only in relative, not absolute, terms. VETS would like to put greater emphasis on results, but VETS is uncertain whether it will develop measures based on absolute levels of service to veterans. DVOP and LVER Position Requirements Federal eligibility requirements for appointing LVER and DVOP staff are based on veteran status. 9.) Nearly all LVER staff were veterans (94 percent), and 62 percent were disabled veterans. 11.) 12.) 13.) 14.) Few Activities Predominate According to our survey, the two duties that both DVOP and LVER staff spent the most time on were (1) job search and referral and (2) intake and assessment. The DVOP and LVER staff also reported that they needed more time for employer outreach and individual case management. Additionally, although the law specifies that DVOP specialists provide assistance to veterans exclusively and VETS’ policy requires that LVER staff (except for half-time LVER staff) serve veterans exclusively, DVOP and LVER staff—about 8 percent of the sampled respondents—noted that they were required to provide employment services to nonveterans. We obtained information such as the salaries for DVOP and LVER staff, state qualification requirements for DVOP and LVER staff, state compliance with VETS performance standards, and state implementation of the memorandum of understanding between VETS and the Vocational Rehabilitation and Counseling Program (VR&C). To obtain information about the characteristics of DVOP and LVER staff and how they spend their time, we surveyed all DVOP and LVER staff. DVOP and LVER Authorized and Funded Positions, Fiscal Years 1990-97 Statutory Formula for DVOP Specialist Positions and Statutory Positions for Fiscal Year 1997 To determine the number of DVOP specialists authorized for each state, a sum is taken of (1) the number of veterans residing in a state who are Vietnam- and post-Vietnam-era veterans and (2) the state’s number of disabled veterans—those veterans residing in a state who are receiving either Department of Veterans Affairs (VA) compensation or military disability compensation through either a medical discharge or retirement. Minnesota had 31 LVER positions as of January 1, 1987.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the use of two grant funds, the Disabled Veterans' Outreach Program (DVOP) and the Local Veterans' Employment Representative (LVER), administered by the Department of Labor Veterans' Employment and Training Service (VETS), focusing on: (1) national funding trends for DVOP and LVER staff and how funds are allocated to the states; (2) how state performance is measured; (3) position requirements for DVOP and LVER staff and characteristics of DVOP and LVER staff; and (4) how DVOP and LVER staff spend their time and integrate their services with other veterans' employment service programs, such as the Vocational Rehabilitation and Counseling Program (VR&C) and the Transition Assistance Program (TAP) for separating service members. What GAO Found GAO noted that: (1) over a 10-year period, the appropriations for VETS, when adjusted for inflation, have declined by 11 percent; (2) since 1990, appropriations for the DVOP and LVER grants have not supported the number of positions authorized by the statutory funding formulas; (3) states receive their DVOP and LVER grant funding from VETS through multiyear grants, and funding is estimated by figuring the amount required to support the number of statutorily determined staff positions; (4) in allocating DVOP positions to states, the statutory formula provides one DVOP specialist for each 6,900 veterans in a state who are either Vietnam-era, post-Vietnam era, or disabled veterans; (5) the statutory LVER funding provides for a total of 1,600 full-time LVER staff, and allocation is primarily based on the number of LVER staff as of January 1, 1987, in each state; (6) when appropriations are not sufficient to support the number of positions authorized, VETS reduces each state's allocation proportionately; (7) VETS' performance measures for states' DVOP and LVER staffing grants focus more on process than results and require states to provide a higher level of service to veterans than nonveterans rather than establish goals for absolute levels of performance; (8) VETS is working to develop new performance measures under the Government Performance and Results Act of 1993 that will put greater emphasis on results, in addition to comparing services provided to veterans and nonveterans; (9) VETS is uncertain whether it will establish absolute levels for its performance measures; (10) federal law prescribes eligibility requirements for appointing LVER staff and DVOP specialists based on veteran status; (11) 95 percent of DVOP specialists and 62 percent of LVER staff were disabled veterans; (12) beyond veteran status, DVOP and LVER staff qualifications, including educational requirements, differ according to each state's civil service system requirement; (13) the law prescribes various duties for DVOP and LVER staff to provide veterans with job search plans and referrals and job training opportunities; (14) the duties both DVOP and LVER staff spent the most time on were job search and referral and intake and assessment; and (15) DVOP and LVER staff reported that they would like to spend more time performing job search and referral as well as employer outreach and individual case management.

gao_GAO-09-43

gao_GAO-09-43_0

First, we recommended that the administration better organize its efforts for performing PSI activities, including establishing clear PSI policies and procedures and indicators to measure the results of PSI activities. Appendix I: Objectives, Scope, and Methodology To examine U.S. agencies’ efforts to take a variety of actions to expand and strengthen the Proliferation Security Initiative (PSI), we assessed the (1) extent to which the administration issued a PSI directive, a sense of Congress provision in the law, and submitted to Congress required PSI- related reports; (2) steps U.S. agencies have taken to establish clear PSI policies and procedures, structures, budgets, and performance indicators; and (3) efforts U.S. agencies have made to increase cooperation and coordination with PSI countries and develop a strategy to resolve interdiction issues.

What GAO Found The President announced the Proliferation Security Initiative (PSI) in 2003 to enhance U.S. efforts to prevent the spread of weapons of mass destruction. In a 2006 classified report, GAO recommended that agencies establish clear PSI policies and procedures and performance indicators. In 2007, Congress enacted a law calling for the administration to expand and strengthen PSI and address GAO's prior recommendations. This report assesses (1) the extent to which the administration issued a PSI directive and submitted required PSI-related reports to Congress; (2) steps U.S. agencies have taken to establish clear PSI policies and procedures, structures, budgets, and performance indicators; and (3) U.S. agencies' efforts to increase cooperation and coordination with PSI countries and develop a strategy to resolve interdiction issues. GAO reviewed and analyzed agency documents and interviewed officials from the Departments of State (State), Defense (DOD), and other agencies with PSI responsibilitie

gao_GAO-15-255

gao_GAO-15-255_0

Figure 1 illustrates the flow of health care transactions that include ICD codes from the health care provider to payers, and identifies which types of organizations are and are not covered entities. In addition to the Cooperating Parties, other organizations are helping to prepare covered entities for the ICD-10 transition. CMS Developed Transition Educational Materials, Modified Medicare Systems, and Assisted Medicaid Agencies In preparation for the transition from ICD-9 to ICD-10 codes, CMS developed various educational materials, conducted outreach, and monitored the readiness of covered entities and the vendors that support them for the transition. In addition, the agency reported modifying its Medicare systems and policies. CMS also provided technical assistance to Medicaid agencies and monitored their readiness for the ICD-10 transition. For example, in 2013, CMS held two meetings with stakeholders that represented covered entities and vendors. In addition, CMS piloted a direct mail project to small primary care practices in four states—Arizona, Maryland, Ohio, and Texas—and CMS officials told us they planned to complete an assessment of the pilot in early December 2014. More recently, CMS has relied on its stakeholder collaboration meetings, focus group testing, and review of surveys conducted by the health care industry to gauge covered entities’ readiness for the transition, according to agency officials. Medicare fee-for-service (FFS) claims processing systems. CMS documentation states that the agency completed all ICD-10-related changes to its Medicare FFS claims processing systems as of October 1, 2014, and that the claims processing systems have been updated in response to the results of internal testing, but it is not yet known whether updates may be needed based upon the results of external testing. Additionally, CMS plans to conduct “end-to-end testing”—that is, testing to determine how claims submitted by providers and suppliers that contain ICD-10 codes would be adjudicated, and that accurate payments for these claims will be calculated—during three weeks in 2015 (in January, April, and July). According to CMS officials, as of October 2014, all states and the District of Columbia reported that they would be able to perform all of the activities that CMS has identified as critical to preparing for the ICD- 10 transition by the deadline. CMS officials stated that all Medicaid agencies must test each of the critical success factors and report back to However, as of November 26, 2014, CMS no later than June 30, 2015.not all Medicaid agencies had started to test their systems’ abilities to accept and adjudicate claims containing ICD-10 codes. Stakeholders Cited Testing Activities, Education, Outreach, and Provider Burden among Concerns; CMS Has Taken Steps to Address Concerns and Prepare for Transition Stakeholders we contacted identified several areas of concern about the ICD-10 transition, including that CMS needed to expand the number of ICD-10 testing activities, with some of those stakeholders commenting that CMS’s ICD-10 testing has not been sufficiently comprehensive. Eleven stakeholders we contacted expressed concerns about the extent to which the covered entities they represent were aware of and using the educational materials developed by CMS. In particular, while all 28 stakeholders we contacted indicated that CMS’s educational materials have been helpful to covered entities, some of them were concerned that the materials may not be reaching the covered entities most in need of them, such as solo or small physician practices, rural and critical access hospitals, nursing homes, and home health agencies. Specifically, CMS partnered with WEDI to create the “ICD-10 Implementation Success Initiative,” a partnership between payers, providers, coding organizations, and other organizations to promote awareness of the ICD-10 transition by directing users to available CMS and industry educational resources. Six stakeholders we contacted recommended that CMS expand its in-person training for physician practices to additional states. Officials said that where resources are not available for in-person training, CMS is reviewing options to offer more video training through the ICD-10 website. Develop additional specialty-specific materials. Specifically, stakeholders recommended that the agency communicate plans to ensure that Medicare FFS providers would be reimbursed in a timely manner; provide information on the effect of the ICD-10 transition on CMS’s quality measurement activities; contact providers through non- electronic methods, such as print media and mail; promote a greater sense of immediacy in preparing for the transition; provide information on alternative methods for Medicare claims submission; and make public CMS’s Medicare FFS contingency plans. Five stakeholders we contacted recommended that CMS do more to engage with covered entities through non-electronic methods. Beyond the agency’s electronic outreach efforts, CMS officials indicated that the agency employs various methods, including bi- weekly stakeholder collaboration meetings, in-person training, and print advertisements, to engage covered entities. Concluding Observations A successful transition to ICD-10 codes requires every health care provider, clearinghouse, and payer to prepare in advance of the October 1, 2015, transition deadline. Agency Comments We provided a draft of this report to HHS for comment. HHS concurred with our findings. HHS also provided technical comments, which we incorporated as appropriate.

Why GAO Did This Study In the United States, every claim submitted by health care providers to payers—including Medicare and Medicaid—for reimbursement includes ICD codes. On October 1, 2015, all covered entities will be required to transition to the 10th revision of the codes, requiring entities to develop, test, and implement updated information technology systems. Entities must also train staff in using the new codes, and may need to modify internal business processes. CMS has a role in preparing covered entities for the transition. GAO was asked to review the transition to ICD-10 codes. GAO (1) evaluated the status of CMS's activities to support covered entities in the transition from ICD-9 to ICD-10 coding; and (2) described stakeholders' most significant concerns and recommendations regarding CMS's activities to prepare covered entities for the ICD-10 transition, and how CMS has addressed those concerns and recommendations. GAO reviewed CMS documentation, interviewed CMS officials, and analyzed information from a non-probability sample of 28 stakeholder organizations representing covered entities and their support vendors, which GAO selected because they participated in meetings CMS held in 2013 or met GAO's other selection criteria. GAO provided a draft of this report to HHS. HHS concurred with GAO's findings and provided technical comments, which GAO has incorporated, as appropriate. What GAO Found The Centers for Medicare & Medicaid Services (CMS), within the Department of Health and Human Services (HHS), has undertaken a number of efforts to prepare for the October 1, 2015, transition to the 10th revision of the International Classification of Diseases (ICD-10) codes, which are used for documenting patient medical diagnoses and inpatient medical procedures. CMS has developed educational materials, such as checklists and timelines, for entities covered by the Health Insurance Portability and Accountability Act of 1996 (HIPAA)—that is, health care providers, clearinghouses, and health plans, which GAO refers to as “payers”—and their support vendors. In addition, CMS has conducted outreach to prepare covered entities for the transition by, for example, holding in-person training for small physician practices in some states. CMS officials have also monitored covered entity and vendor readiness through stakeholder collaboration meetings, focus group testing, and review of surveys conducted by the health care industry. CMS also reported modifying its Medicare systems and policies. For example, CMS documentation states that the agency completed all ICD-10-related changes to its Medicare fee-for-service (FFS) claims processing systems, which reflect the results of internal testing. At this time, it is not known what, if any, changes might be necessary based upon the agency's ongoing external testing activities. CMS has also provided technical assistance to Medicaid agencies and monitored their readiness for the transition. For example, all Medicaid agencies reported that they would be able to perform all of the activities that CMS has identified as critical by the transition deadline; however, as of November 2014, not all agencies have started to test their systems' abilities to accept and adjudicate claims containing ICD-10 codes. Stakeholder organizations identified several areas of concern about the ICD-10 transition and made several recommendations, which CMS has taken steps to address. For example, stakeholders expressed concerns that CMS's testing activities have not been comprehensive. In addition, while all 28 stakeholders GAO contacted indicated that CMS's educational materials have been helpful to covered entities, stakeholders were concerned about the extent to which those entities were aware of and using those materials. In response, CMS officials said that the agency has scheduled end-to-end testing with 2,550 covered entities during three weeks in 2015 (in January, April, and July), and has promoted awareness of its educational materials by, for example, partnering with payers, providers, and others to direct users to available CMS and industry educational resources. Stakeholders also recommended that CMS expand its in-person training and develop additional specialty-specific materials. CMS officials said the agency has added in-person training in additional states with plans to also offer more video trainings, and planned to develop additional specialty-specific materials. Additionally, stakeholders recommended that CMS do more to engage covered entities through non-electronic methods and to make its Medicare FFS contingency plans public. CMS officials indicated that the agency employs various methods to engage covered entities—including bi-weekly stakeholder collaboration meetings and print advertisements—and also conducted a direct mail pilot project to primary care practices in four states, and plans to expand the pilot. CMS officials also indicated the information in the agency's contingency plans that are relevant to providers is currently publicly available.

gao_GAO-04-97

gao_GAO-04-97_0

CMS also establishes regulatory requirements for the health professions eligible to receive payment under the Medicare physician fee schedule. Hospitals employ residents, international medical graduates, and all the types of nonphysician health professionals who perform the role. Hospital employees likely serve as assistants-at-surgery for a majority of the procedures for which the ACS says an assistant is “almost always” necessary. The number of assistant-at-surgery services performed by physicians and paid for under the physician fee schedule has declined, while the number of such services performed by nonphysician health professionals eligible to receive payment under the physician fee schedule has increased. Members of a Variety of Health Professions Serve as Assistants-at-Surgery Physicians, residents in training for licensure or board certification in a physician specialty, several different kinds of nurses, and members of several other health professions serve as assistants-at-surgery (see table 2). Hospitals Employ the Full Range of Health Professions Whose Members Serve as Assistants-at-Surgery Hospitals employ the gamut of health professionals who serve as assistants-at-surgery to perform the role. 1). Widely Accepted Professional Requirements for Assistants-at-Surgery Do Not Exist There is no widely accepted set of standards for the education and experience required to serve as an assistant-at-surgery. The health care professions whose members provide assistant-at-surgery services have varying educational requirements. No state licenses all the types of health professionals who serve as assistants-at-surgery. Furthermore, the certification programs developed by the various nonphysician health professional groups whose members assist at surgery differ. We found that there was insufficient information about the quality of care provided by assistants-at-surgery—either generally or by members of specific health professions—to assess the adequacy of the requirements for a particular profession. While Medicare Payments for Assistant-at-Surgery Services Have Flaws, Paying Hospitals for All These Services Would Correct Them There are three flaws in Medicare’s policies for paying assistants-at- surgery that prevent the payment system from meeting the program’s goals of making appropriate payment for medically necessary services by qualified providers. First, because Medicare pays for assistant-at-surgery services under both the hospital inpatient PPS and the physician fee schedule, and hospital payments for surgical care are not adjusted when an assistant receives payment under the physician fee schedule, Medicare may be paying too much for some hospital surgical care. Second, paying a health professional under the Medicare physician fee schedule to be an assistant-at-surgery, instead of including this payment in an all-inclusive payment, gives neither the hospital nor the surgeon an incentive to use an assistant only when one is medically necessary. Third, the distinctions between those health professionals eligible for payment as an assistant-at- surgery under the physician fee schedule and those who are not eligible are not based on surgical education or experience as an assistant. Criteria for determining who should be paid as assistants-at-surgery under the physician fee schedule do not exist. However, hospitals are responsible under health and safety rules to provide quality care for their patients. Paying for assistants under the physician fee schedule provides no such incentive.

Why GAO Did This Study Medicare pays for assistant-atsurgery services under both the hospital inpatient prospective payment system and the physician fee schedule. Payments under the physician fee schedule are limited to a few health professions. In 2001, Congress directed GAO to report on the potential impact on the Medicare program of allowing physician fee schedule payments to Certified Registered Nurse First Assistants for assistant-at-surgery services. This report examines: (1) who serves as an assistant-atsurgery, (2) whether health professionals who perform the role must meet a uniform set of professional requirements, and (3) whether Medicare's payment policies for assistants-at-surgery are consistent with the goals of the program and, if not, whether there are alternatives that would help attain those goals. GAO analyzed information provided by physician and other health professional associations and Medicare payment data. What GAO Found Members of a wide range of health professions serve as assistants-at-surgery, including physicians, residents in training for licensure or board certification in a physician specialty, several different kinds of nurses, and members of several other health professions. Hospitals employ all the types of nonphysician health professionals who perform the role. Hospital employees likely serve as assistants-at-surgery for a majority of the procedures for which the American College of Surgeons says an assistant is "almost always" necessary. The number of assistant-at-surgery services performed by physicians and paid under the Medicare physician fee schedule has declined, while the number of such services performed by nonphysician health professionals eligible to receive payment under the physician fee schedule has increased. There is no widely accepted set of uniform requirements for experience and education that the health professionals who serve as assistants-at-surgery are required to meet. The health professions whose members provide assistant-at-surgery services have varying educational requirements. No state licenses all the health professionals who serve as assistants-at-surgery. Furthermore, the certification programs developed by the various nonphysician health professional groups whose members assist at surgery differ. GAO found that there was insufficient information about the quality of care provided by assistants-at-surgery generally, or by a specific type of health professional, to assess the adequacy of the requirements for members of a particular profession to perform the role. There are three flaws in Medicare's policies for paying assistants-at-surgery that prevent the payment system from meeting the program's goals of making appropriate payment for medically necessary services by qualified providers. First, because Medicare pays for assistant-at-surgery services under both the hospital inpatient prospective payment system and the physician fee schedule, and hospital payments for surgical care are not adjusted when an assistant receives payment under the physician fee schedule, Medicare may be paying too much for some hospital surgical care. Second, paying a health professional under the physician fee schedule to be an assistant-at-surgery, instead of including this payment in an all-inclusive payment, gives neither the hospital nor surgeon an incentive to use an assistant only when one is medically necessary. Third, the distinctions between those health professionals eligible for payment as an assistant-at-surgery under the physician fee schedule and those who are not eligible are not based on surgical education or experience as an assistant. Criteria for determining who should be paid as assistants-at-surgery under the physician fee schedule do not exist. However, hospitals are responsible under health and safety rules to provide quality care for their patients.

gao_GAO-12-940

gao_GAO-12-940_0

The FEVS is a tool that measures employees’ perceptions of whether, and to what extent, conditions that characterize successful organizations are present in their agencies, according to OPM. DHS Employees Reported Lower Morale than the Rest of the Federal Government, but Morale Varied across DHS Components and Employee Groups Data from the 2011 FEVS show that DHS employees have lower average levels of job satisfaction and engagement overall and across most demographic groups available for comparison, such as pay grade, when compared with the average for the rest of the federal government. Levels of satisfaction and engagement vary across components, with some components reporting satisfaction or engagement above the average for the rest of the government. As shown in figure 2, comparisons of DHS with non-DHS employees by supervisory status, pay group, and tenure indicate that satisfaction and engagement are lower across many of the For DHS groups where statistically significant differences are evident.example, across pay categories DHS satisfaction and engagement were lower than the scores for the same non-DHS employee pay groups, with the exception of senior executives, senior leaders, employees with less than 1 year of tenure, and General Schedule pay grades 1-6.job satisfaction and engagement scores for DHS management and non- management employees were lower than for the same non-DHS employee groups. DHS Took Steps to Determine Root Causes of Morale Problems and Implemented Corrective Actions, but Could Strengthen Its Efforts DHS and the selected components have taken steps to understand morale problems, such as holding focus groups, implementing an exit survey, and routinely analyzing FEVS results. On the basis of FEVS results, DHS and the selected components planned actions to improve FEVS scores. In addition, according to DHS’s Integrated Strategy for addressing the implementing and transforming high risk area, DHS has begun implementing activities to address morale but has not yet improved DHS’s scores on OPM’s job satisfaction index or its ranking on the Partnership’s Best Places to Work in the Federal Government. According to our reviews of OCHCO’s analyses, OCHCO’s DHS-wide analyses did not include evaluations of demographic group differences on morale-related issues for the 2011 FEVS. However, the extent to which DHS and the components used root causes found through other analyses to inform their action plans, such as quarterly exit survey results or additional internal component surveys, was not evident in action plan documentation (see appendix IV for a description of these additional root cause analyses). Without a complete understanding of which issues are driving low employee morale, DHS risks not being able to effectively address the underlying concerns of its varied employee population. By not having specific metrics within the action plans that are clear and measurable, it will be more difficult for DHS to assess its efforts to address employee morale problems, as well as determine if changes should be made to ensure progress toward achieving its goals. Recommendations for Executive Action To strengthen DHS’s evaluation and planning process for addressing employee morale, we recommend that the Secretary of Homeland Security direct OCHCO and component human capital officials to take the following two actions: examine their root cause analysis efforts and, where absent, add the following: comparisons of demographic groups, benchmarking against similar organizations, and linkage of root cause findings to action plans; and establish metrics of success within the action plans that are clear and measurable. Morale Differences Between DHS Employees and Employees at Other Agencies One explanation for lower morale at DHS is that its employees could be members of demographic groups that typically have lower morale across all agencies. Components with lower morale include Federal Emergency Management Agency (FEMA), Immigration and Customs Enforcement (ICE), Intelligence and Analysis (IA), National Protection and Programs Directorate (NPPD), Science and Technology (ST), and the TSA. Components that existed prior to the creation of DHS may have had more time to develop successful cultures and management practices than components that policymakers created with the department in 2003. Appendix II: Scope and Methodology The objectives for this report were to evaluate (1) how DHS employee morale compares with that of other federal government employees and (2) to what extent DHS and its selected components determined the root causes of employee morale and developed action plans to improve morale. We selected the four DHS components based on their workforce size and how their 2011 job satisfaction and engagement index scores compare with the non-DHS average. Components Have Also Conducted Some Root Cause Analyses Using FEVS Results In addition to the DHS-wide efforts, the components we selected for review—ICE, TSA, the U.S. Coast Guard (Coast Guard), and CBP— conducted varying levels of analyses regarding the root causes of morale issues to inform agency action planning efforts. TSA scored 40 percentage points lower on pay satisfaction and 25 percentage points lower on performance appraisal satisfaction.

Why GAO Did This Study DHS is the third largest cabinet-level department in the federal government, employing more than 200,000 staff in a broad range of jobs. Since it began operations in 2003, DHS employees have reported having low job satisfaction. DHS employee concerns about job satisfaction are one example of the challenges the department faces implementing its missions. GAO has designated the implementation and transformation of DHS as a high risk area, including its management of human capital, because it represents an enormous and complex undertaking that will require time to achieve in an effective and efficient manner. GAO was asked to examine: (1) how DHS's employee morale compared with that of other federal employees, and (2) the extent to which DHS and selected components have determined the root causes of employee morale, and developed action plans to improve morale. To address these objectives, GAO analyzed survey evaluations, focus group reports, and DHS and component action planning documents, and interviewed officials from DHS and four components, selected based on workforce size, among other things. What GAO Found Department of Homeland Security (DHS) employees reported having lower average morale than the average for the rest of the federal government, but morale varied across components and employee groups within the department. Data from the 2011 Office of Personnel Management (OPM) Federal Employee Viewpoint Survey (FEVS)--a tool that measures employees' perceptions of whether and to what extent conditions characterizing successful organizations are present in their agencies--showed that DHS employees had 4.5 percentage points lower job satisfaction and 7.0 percentage points lower engagement in their work overall. Engagement is the extent to which employees are immersed in their work and spending extra effort on job performance. Moreover, within most demographic groups available for comparison, DHS employees scored lower on average satisfaction and engagement than the average for the rest of the federal government. For example, within most pay categories DHS employees reported lower satisfaction and engagement than non-DHS employees in the same pay groups. Levels of satisfaction and engagement varied across components, with some components reporting scores above the non-DHS averages. Several components with lower morale, such as Transportation Security Administration (TSA) and Immigration and Customs Enforcement (ICE), made up a substantial share of FEVS respondents at DHS, and accounted for a significant portion of the overall difference between the department and other agencies. In addition, components that were created with the department or shortly thereafter tended to have lower morale than components that previously existed. Job satisfaction and engagement varied within components as well. For example, employees in TSA's Federal Security Director staff reported higher satisfaction (by 13 percentage points) and engagement (by 14 percentage points) than TSA's airport security screeners. DHS has taken steps to determine the root causes of employee morale problems and implemented corrective actions, but it could strengthen its survey analyses and metrics for action plan success. To understand morale problems, DHS and selected components took steps, such as implementing an exit survey and routinely analyzing FEVS results. Components GAO selected for review--ICE, TSA, the Coast Guard, and Customs and Border Protection--conducted varying levels of analyses regarding the root causes of morale to understand leading issues that may relate to morale. DHS and the selected components planned actions to improve FEVS scores based on analyses of survey results, but GAO found that these efforts could be enhanced. Specifically, 2011 DHS-wide survey analyses did not include evaluations of demographic group differences on morale-related issues, the Coast Guard did not perform benchmarking analyses, and it was not evident from documentation the extent to which DHS and its components used root cause analyses in their action planning. Without these elements, DHS risks not being able to address the underlying concerns of its varied employee population. In addition, GAO found that despite having broad performance metrics in place to track and assess DHS employee morale on an agency-wide level, DHS does not have specific metrics within the action plans that are consistently clear and measurable. As a result, DHS's ability to assess its efforts to address employee morale problems and determine if changes should be made to ensure progress toward achieving its goals is limited. What GAO Recommends GAO recommends that DHS examine its root cause analysis efforts and add the following, where absent: comparisons of demographic groups, benchmarking, and linkage of root cause findings to action plans; and establish clear and measurable metrics of action plan success. DHS concurred with our recommendations.

gao_GAO-14-360

gao_GAO-14-360_0

In June 2013, State doubled the number of countries for which it required FACT training. Most State and USAID Assigned Personnel Completed FACT Training, but Gaps in State Department Data Prevent Compliance Assessment for Short-Term TDY Personnel Using data from multiple sources related to State and USAID assigned personnel, we determined that 675 of 708 State personnel and all of the 143 USAID personnel on assignments to the designated high-threat countries on March 31, 2013, were in compliance with the FACT training requirement. We found 33 State assigned personnel who were not in compliance with the mandatory training requirement. We were unable to assess compliance among short-term TDY personnel because of gaps in State’s data. According to GAO’s Standards for Internal Control in the Federal Government, program managers need operating information to determine whether they are meeting compliance requirements. First, State does not systematically maintain data on the universe of U.S. personnel on short-term TDY status in designated high- threat countries who are required to complete the training. State Department’s Guidance and Management Oversight of Compliance with FACT Training Requirement Has Weaknesses Several weaknesses in State oversight of personnel’s compliance with the FACT training requirement limit State’s ability to help ensure that all personnel subject to the requirement are prepared for service in high- threat countries. State’s Policy and Guidance on FACT Training Requirement Are Outdated, Inconsistent, or Unclear State has not updated the Foreign Affairs Manual to reflect changes made to the FACT training requirement in June 2013. Moreover, we found that State’s guidance regarding the required frequency of FACT training is unclear. State’s Foreign Affairs Manual Has Not Been Updated As of January 2014, State had not updated its Foreign Affairs Manual to reflect its policy change, announced in June 2013, that (1) increased the number of designated high-threat countries requiring FACT training from 9 to 18, (2) changed the cumulative-days threshold for the FACT training requirement from 30 or more cumulative days in one high-threat country to more than 45 cumulative days in one or more of the countries, and (3) described the conditions that indicate whether eligible family members must complete the course. State does not verify compliance for personnel assigned to the other designated high-threat countries (see fig. While State’s Foreign Affairs Manual notes that it is the employee’s responsibility to ensure compliance with the FACT training requirement, it also notes that agency management is responsible for ensuring adequate controls over all agency operations. To strengthen State’s ability to ensure that U.S. civilian personnel are in compliance with the FACT training requirement, we recommend that the Secretary of State identify a mechanism to readily determine the universe of assigned U.S. civilian personnel under chief-of-mission authority who are required to complete FACT training; identify a mechanism to readily determine the universe of short-term TDY U.S. civilian personnel who are required to complete FACT training—specifically, required personnel who have spent 45 days or more in the designated high-threat countries in a calendar year; ensure that eCC instructions regarding the documentation of the FACT training requirement for short-term TDY personnel are consistent for all designated high-threat countries; take steps to ensure that management personnel responsible for assigning personnel to designated high-threat countries consistently verify that all assigned U.S. civilian personnel under chief-of-mission authority who are required to complete FACT training have completed it before arrival in the designated high-threat countries; take steps to ensure that management personnel responsible for granting country clearance consistently verify that all short-term TDY U.S. civilian personnel under chief-of-mission authority who are required to complete FACT training have completed it before arrival in the designated high-threat countries; and monitor or evaluate overall levels of compliance with the FACT training requirement among U.S. civilian personnel under chief-of- mission authority who are subject to the requirement. State fundamentally concurred with our recommendations. Objective 2: State’s and USAID’s Oversight of Their Personnel’s Compliance with the FACT Training Requirement To assess State and USAID’s management oversight of assigned and short-term TDY personnel’s compliance with the FACT training requirement, we reviewed relevant documents from State and USAID, including State’s Foreign Affairs Manual, USAID’s Automated Directives System, and other standard operating procedures.

Why GAO Did This Study U.S personnel engaged in efforts overseas have faced numerous threats to their security. To mitigate these threats and prepare U.S. personnel for work in high-threat environments, State established a mandatory requirement that specified U.S. executive branch personnel under chief-of-mission authority and on assignments or short-term TDY complete FACT security training before arrival in a high-threat environment. This report examines (1) State and USAID personnel's compliance with the FACT training requirement and (2) State's and USAID's oversight of their personnel's compliance. GAO reviewed agencies' policy guidance; analyzed State and USAID personnel data from March 2013 and training data for 2008 through 2013; reviewed agency documents; and interviewed agency officials in Washington, D.C., and at various overseas locations. This public version of a February 2014 sensitive report excludes information that State has deemed sensitive. What GAO Found Using data from multiple sources, GAO determined that 675 of 708 Department of State (State) personnel and all 143 U.S. Agency for International Development (USAID) personnel on assignments longer than 6 months (assigned personnel) in the designated high-threat countries on March 31, 2013, were in compliance with the Foreign Affairs Counter Threat (FACT) training requirement. GAO found that the remaining 33 State assigned personnel on such assignments had not complied with the mandatory requirement. For State and USAID personnel on temporary duty of 6 months or less (short-term TDY personnel), GAO was unable to assess compliance because of gaps in State's data. State does not systematically maintain data on the universe of U.S. personnel on short-term TDY status to designated high-threat countries who were required to complete FACT training. This is because State lacks a mechanism for identifying those who are subject to the training requirement. These data gaps prevent State or an independent reviewer from assessing compliance with the FACT training requirement among short-term TDY personnel. According to Standards for Internal Control in the Federal Government , program managers need operating information to determine whether they are meeting compliance requirements. State's guidance and management oversight of personnel's compliance with the FACT training requirement have weaknesses that limit State's ability to ensure that personnel are prepared for service in designated high-threat countries. These weaknesses include the following: State's policy and guidance related to FACT training—including its Foreign Affairs Manual , eCountry Clearance instructions for short-term TDY personnel, and guidance on the required frequency of FACT training—are outdated, inconsistent, or unclear. For example, although State informed other agencies of June 2013 policy changes to the FACT training requirement, State had not yet updated its Foreign Affairs Manual to reflect those changes as of January 2014. The changes included an increase in the number of high-threat countries requiring FACT training from 9 to 18. State and USAID do not consistently verify that U.S. personnel complete FACT training before arriving in designated high-threat countries. For example, State does not verify compliance for 4 of the 9 countries for which it required FACT training before June 2013. State does not monitor or evaluate overall levels of compliance with the FACT training requirement. State's Foreign Affairs Manual notes that it is the responsibility of employees to ensure their own compliance with the FACT training requirement. However, the manual and Standards for Internal Control in the Federal Government also note that management is responsible for putting in place adequate controls to help ensure that agency directives are carried out. The gaps in State oversight may increase the risk that personnel assigned to high-threat countries do not complete FACT training, potentially placing their own and others' safety in jeopardy. What GAO Recommends GAO is making several recommen-dations to improve oversight of compliance with the FACT training requirement. These include identifying a mechanism to readily determine the universe of U.S. personnel subject to the requirement, updating State's policy manual to reflect changes made to the requirement in June 2013, consistently verifying that all U.S. civilian personnel have completed FACT training before arriving in designated high-threat countries, and monitoring compliance with the requirement. State concurred with the recommendations and stated that it will take steps to address them. USAID did not specifically agree or disagree but noted it plans to take additional steps.

gao_GAO-05-698T

gao_GAO-05-698T_0

In 1996, Amtrak executed contracts with train manufacturers Bombardier and Alstom to build 20 high-speed trainsets and 15 electric high- horsepower locomotives; construct three maintenance facilities; and provide maintenance services for the Acela trainsets. Significant Issues Have Impacted Acela Program Since Its Inception Significant issues and controversy have impacted the Acela program since its inception. What started out as a relatively simple procurement of train equipment evolved into a complex high-speed rail program, according to an Amtrak official. Among the issues that the Acela program has encountered since its creation are the following: Potential difficulties due to new technology. Manufacturing and production delays. In April 2005, Amtrak once again experienced unexpected problems with the trainsets due to equipment problems (cracks in brake assemblies). Concerns about the quality of the Consortium’s work and Amtrak’s withholding of payments for the Acela trainsets resulted in the parties suing each other, each seeking $200 million in damages. Amtrak and the Consortium reached a negotiated settlement in March 2004, ending their legal dispute surrounding the Acela trainsets. Achieving a successful transition is critical to the financial well-being of Amtrak given that the Acela program is such a significant source of its revenue. Key challenges include: Achieving trainset modifications and performance requirements. Obtaining technical expertise for maintenance and completing training. As a result of the current brake problem, Amtrak is reevaluating its training materials. Although the settlement agreement ensures that Amtrak will be protected by the extended trainset warranties and Amtrak has several methods of financial recourse, if the Consortium does not honor warranties, loss of revenue resulting from removal of trainsets from revenue service is not directly recoverable. Challenges In Managing Other Large-Scale Projects As we reported in February 2004, Amtrak did not effectively manage the entire NHRIP project, of which Acela was a part. Among the problems we found were that (1) Amtrak’s management of this project was not comprehensive but was focused on the short term; (2) project management focused on separate components of the project, such as electrification and acquisition of the high-speed trains, and not the project as a whole; and (3) did not sufficiently address major infrastructure improvements needed to attain project trip-time goals. The overall results of this poor management was that many critical elements of the project were not completed, project costs and schedules increased considerably, and the project goal (3-hour trip time from Boston to New York City) was not attained. We also have ongoing work for this committee on Amtrak’management and performance issues that we plan to report on later this year. Related GAO Products Intercity Passenger Rail: Issues Associated with the Recent Settlement between Amtrak and the Consortium of Bombardier and Alstom, GAO-05- 152 (Washington, D.C.: Dec. 1, 2004).

Why GAO Did This Study In 1996, the National Railroad Passenger Corporation (Amtrak) executed contracts to build high-speed trainsets (a combination of locomotives and passenger cars) as part of the Northeast High Speed Rail Improvement Project. Since that time, Amtrak has experienced multiple challenges related to this program, including recently removing all trains from service due to brake problems. Amtrak has struggled since its inception to earn sufficient revenues and depends heavily on federal subsidies to remain solvent. The April 2005 action to remove the Acela trainsets--Amtrak's biggest revenue source--from service has only exacerbated problems by putting increased pressure on Amtrak's ridership and revenue levels. This testimony is based on GAO's past work on Amtrak and focuses on (1) background on problems related to the development of the Acela program, (2) summary of issues related to lawsuits between Amtrak and the train manufacturers and the related settlement, (3) key challenges associated with the settlement, and (4) initial observations on possible challenges in Amtrak managing large-scale projects. What GAO Found Significant issues and controversy have impacted the Acela program since its inception. According to Amtrak, what started out as a simple procurement of train equipment evolved into a complex high-speed rail program. Acela has encountered numerous difficulties due to such things as new technology and production delays. Even after Acela service began, unexpected problems were encountered, which required Amtrak to remove the trainsets from service, resulting in lost revenue. Concerns about the quality of the Consortium of train manufacturers' (Bombardier and Alstom) work and Amtrak's withholding of payments for the Acela trainsets resulted in the parties suing each other, each seeking $200 million in damages. Amtrak and the Consortium reached a negotiated settlement in March 2004. Although the settlement agreement protects Amtrak through certain warranties, loss of revenue resulting from removal of trains from service is not directly recoverable. Under the settlement, Amtrak is conditionally scheduled to assume maintenance functions from the Consortium in October 2006. Aside from the current problems, Amtrak faces other risks and challenges to the recent settlement, including obtaining technical expertise and providing sufficient funding for maintenance. Achieving a successful transition is critical to Amtrak given the importance of the Acela program. The recent brake problems may impact the transition through such things as delayed management training. As GAO reported in February 2004, Amtrak had difficulties managing the Northeast High Speed Rail Improvement Project and many critical elements of the project were not completed and the project goal of a 3-hour trip time between Boston and New York City was not attained. GAO has ongoing work addressing Amtrak management and performance issues that GAO plans to report on later this year.

gao_GAO-05-230

gao_GAO-05-230_0

Other efforts have been initiated or are planned, such as enlisting the help of human capital experts and revising the acquisition strategy to update the space shuttle’s propulsion system prime contracts; however, actions taken thus far have been limited. NASA’s prime contractor for space shuttle operations has also taken some preliminary steps, but its ability to progress with these efforts is reliant on NASA making decisions that impact contractor requirements through the remainder of the program. The Space Shuttle Program Has Taken Preliminary Steps toward Developing a Strategy for Sustaining a Critically Skilled Workforce To begin its planning efforts for the space shuttle’s retirement, the program identified the lessons learned from the retirement of programs comparable to the space shuttle, such as the Air Force Titan IV Rocket Program, the Navy Base Realignment and Closure activity, and the NASA Industrial Facility closure. Officials said that they must understand the program’s hardware and facility needs before they can conduct an assessment of its workforce needs through retirement. While Other Efforts Have Been Initiated or Are Planned, Limited Actions Have Been Taken In addition to the Space Shuttle Program’s preliminary work to prepare for sustaining its workforce through retirement, the program has contracted with the National Academy of Public Administration (NAPA) to assist it in planning for the space shuttle’s retirement and transitioning to future programs. In addition, because the Space Shuttle Program is heavily reliant on its contractor workforce to support the space shuttle’s operations, NASA officials said that they could include provisions in future Space Shuttle Program contracts that require contractors to take steps to prepare for sustaining their workforces through the space shuttle’s retirement. The Potential Impact of Workforce Problems and Other Challenges the Space Shuttle Program Faces Highlight the Need for Workforce Planning Making progress toward developing a detailed strategy for sustaining a critically skilled space shuttle workforce through the program’s retirement will be important given the potential impact that workforce problems could have on NASA-wide goals. According to NASA officials, if the Space Shuttle Program faces difficulties in sustaining the necessary workforce, NASA-wide goals, such as implementing the Vision and proceeding with space exploration activities, could be impacted. One workforce issue that has already been identified that could impact the program’s ability to support space shuttle operations through retirement is an inadequate safety workforce. This would delay the program’s flight schedule. Additional challenges that could affect the program’s ability to support space shuttle operations include: Impact on the prime contractor for space shuttle operations. Given this, the agency may not be able to provide a sound and accurate business case to support the use of such tools. Several Factors Have Impeded Efforts to Develop a Long-Term Strategy to Sustain a Critically Skilled Space Shuttle Workforce While the Space Shuttle Program is still in the early stages of planning for the program’s retirement, its development of a detailed long-term strategy to sustain its future workforce is being hampered by several factors. These include (1) the program’s primary near-term focus on returning the space shuttle to flight and (2) uncertainties with respect to implementing the Vision. However, our prior work on strategic workforce planning has shown that there are steps that successful organizations take to better position themselves to address future workforce needs, even when faced with uncertainties.

Why GAO Did This Study The President's vision for space exploration (Vision) directs the National Aeronautics and Space Administration (NASA) to retire the space shuttle following completion of the International Space Station, planned for the end of the decade. The retirement process will last several years and impact thousands of critically skilled NASA civil service and contractor employees that support the program. Key to implementing the Vision is NASA's ability to sustain this workforce to support safe space shuttle operations through retirement. Because of the potential workforce issues that could affect the safety and effectiveness of operations through the space shuttle's retirement, GAO was asked to identify (1) the progress of efforts to develop a strategy for sustaining the space shuttle workforce through retirement and (2) factors that may have impeded these efforts. What GAO Found The Space Shuttle Program has made limited progress toward developing a detailed long-term strategy for sustaining its workforce through the space shuttle's retirement. The program has taken preliminary steps, including identifying the lessons learned from the retirement of programs comparable to the space shuttle, such as the Air Force Titan IV Rocket Program, to assist in its workforce planning efforts. Other efforts have been initiated or are planned, such as enlisting the help of human capital experts and revising the acquisition strategy for updating the space shuttle's propulsion system prime contracts; however, actions taken thus far have been limited. NASA's prime contractor for space shuttle operations has also taken some preliminary steps to begin to prepare for the impact of the space shuttle's retirement on its workforce, such as working with a consulting firm to conduct a comprehensive study of its workforce. However, its ability to progress with these efforts is reliant on NASA making decisions that impact contractor requirements through the remainder of the program. Making progress toward developing a detailed strategy, however, will be important given the potential impact that workforce problems would have on NASA-wide goals. For example, a delay to the space shuttle's schedule due to workforce problems would delay the agency's ability to proceed with space exploration activities. NASA and its prime contractor for space shuttle operations have already indicated that they could face challenges sustaining their critically skilled workforces if a career path beyond the space shuttle's retirement is not apparent. In addition, governmentwide fiscal realities call into question whether funding will be available to support the use of incentives, such as retention bonuses, that could help NASA sustain its space shuttle workforce. Several factors hamper the Space Shuttle Program's ability to develop a detailed long-term strategy to sustain the critically skilled workforce necessary to support safe space shuttle operations through retirement. For example, because of the program's near-term focus on returning the space shuttle to flight, other efforts, such as assessing hardware and facility needs that will ultimately aid the program in determining workforce requirements, are being delayed. In addition, program officials indicated that they are faced with uncertainties regarding the implementation of future aspects of the Vision and lack the requirements needed on which to base their workforce planning efforts. Despite these factors, our prior work on strategic workforce planning has shown that there are steps, such as scenario planning, that successful organizations take to better position themselves to address future workforce needs.

gao_GAO-12-55

gao_GAO-12-55_0

Absent a Strategy and Biosurveillance- Specific Capability Efforts, Existing Federal Activities Help Support State and Local Capabilities In the absence of a national biosurveillance strategy, the federal government has some efforts, including emergency preparedness, disease-specific surveillance, and laboratory enhancement programs, that provide resources and information that state and city officials say are critical to their efforts to build and maintain capabilities. The federal programs and initiatives that officials identified during interviews as useful for supporting their biosurveillance capabilities generally fell into four categories, which respondents to our follow-up questionnaire ranked in descending order of importance as follows: (1) grants and cooperative agreements, (2) nonfinancial technical and material assistance, (3) guidance, and (4) information sharing. Because the resources that constitute a national biosurveillance capability are largely owned by nonfederal entities, a national strategy that considers how to leverage existing efforts and resources in federal, state, tribal, local, and insular jurisdictions could improve efforts to build and maintain a national biosurveillance capability. State and City Officials Report Leadership and Planning Challenges That Could Be Considered in a National Biosurveillance Strategy The third set of challenges state and city officials that we interviewed reported included (1) difficulty planning for longer-term capability-building efforts because of uncertainty from year to year about whether project funds would be available; (2) difficulty planning to invest in basic capabilities for multiple disease threats because federal funding has focused on specific diseases rather than strategically building core capabilities; (3) limited leadership and planning—at all levels of the biosurveillance enterprise—to support regional and integrated disease data-surveillance approaches; and (4) differing priorities and other partnership issues. Federal Agencies Have Provided Financial and Technical Assistance That Can Support Tribal and Insular Capabilities According to federal and professional association officials that work with tribal and insular jurisdictions, federal agencies provide disease-specific funding and cooperative agreements, as well as training and technical assistance, to support public-health and animal-health surveillance capacity. Although federal, state, and local officials we interviewed generally agreed that a comprehensive national assessment may improve the nation’s ability to conduct biosurveillance, all the officials we interviewed acknowledged that such an assessment would be a complex undertaking. Until it conducts an assessment of nonfederal biosurveillance capabilities, the federal government will continue to lack key information about the baseline status, strengths, weaknesses, and gaps across the biosurveillance enterprise to guide development and maintenance of a national biosurveillance capability. A national strategy like the one we recommended in June 2010—one capable of guiding federal agencies and its key stakeholders to systematically identify risks, resources to address those risks, and investment priorities—may be better positioned to guide development and maintenance of the capability if it takes into account the particular challenges and opportunities inherent in partnering with nonfederal jurisdictions such as state, tribal, local, and insular governments. Moreover, efforts to build the capability would benefit from a framework that facilitates assessment of jurisdictions’ baseline capabilities and critical gaps across the entire biosurveillance enterprise. Recommendations for Executive Action In order to help build and maintain a national biosurveillance capability in a manner that accounts for the particular challenges and opportunities of reliance on state and local partnerships, we recommend the Homeland Security Council direct the National Security Staff to take the following action as part of its implementation of our previous recommendation for a national biosurveillance strategy:  Ensure that the national biosurveillance strategy (1) incorporates a means to leverage existing efforts that support nonfederal biosurveillance capabilities, (2) considers challenges that nonfederal jurisdictions face in building and maintaining biosurveillance capabilities, and (3) includes a framework to develop a baseline and gap assessment of nonfederal jurisdictions’ biosurveillance capabilities. Agency Comments and Our Evaluation We provided a draft of this report for review to the National Security Staff, DHS, HHS, DOI, USDA, the Department of Justice; and the state and city officials who contributed to our review. The National Security Staff acknowledged the accuracy of the information contained in the report but did not comment on the recommendation. We determined that because the federal government relies on nonfederal resources to support a national biosurveillance capability, our June 2010 findings about using the strategy to determine how to leverage resources, weigh the costs and benefits of investments, and define roles and responsibilities were particularly germane to the federal government’s efforts to partner with nonfederal biosurveillance enterprise partners to support a national biosurveillance capability.

Why GAO Did This Study The nation is at risk for a catastrophic biological event. The Implementing Recommendations of the 9/11 Commission Act directed GAO to report on biosurveillance--to help detect and respond to such events--at multiple jurisdictional levels. In June 2010, GAO recommended that the National Security Staff lead the development of a national biosurveillance strategy, which is now under development. This report focuses on nonfederal jurisdictions, which own many of the resources that support a national capability. It discusses (1) federal support for state and local biosurveillance; (2) state and local challenges; (3) federal support and challenges for tribal and insular areas and (4) federal assessments of nonfederal capabilities. To conduct this work, GAO interviewed select federal-agency, jurisdiction, and association officials and reviewed relevant documents. To collect information on federal efforts and challenges, we also sent standardized questionnaires to seven states and two cities. What GAO Found The federal government has efforts to support health preparedness that state and city officials identified as critical to their biosurveillance capabilities. The efforts these officials identified fell into four categories: (1) grants and cooperative agreements, (2) nonfinancial technical and material assistance, (3) guidance, and (4) information sharing. Within each of the categories, the officials identified specific federal efforts that were essential to their biosurveillance activities. For example, public-health officials described cooperative agreements from the Centers for Disease Control and Prevention that provided resources for disease investigation, as well as guidance on federal priorities. However, as with our June 2010 findings about federal biosurveillance, in the absence of a national strategy, these efforts are not coordinated or targeted at ensuring effective and efficient national biosurveillance capabilities. Because the resources that constitute a national biosurveillance capability are largely owned by nonfederal entities, a national strategy that considers how to leverage nonfederal efforts could improve efforts to build and maintain a national biosurveillance capability. State and city officials identified common challenges to developing and maintaining their biosurveillance capabilities: (1) state policies that restrict hiring, travel, and training in response to budget constraints; (2) ensuring adequate workforce, training, and systems; and (3) the lack of strategic planning and leadership to support long-term investment in cross-cutting core capabilities, integrated biosurveillance, and effective partnerships. A national biosurveillance strategy that considers planning and leadership challenges at all levels of the biosurveillance enterprise may help partners across the enterprise find shared solutions for an effective national biosurveillance capability. The federal government provides some resources to help control disease in humans and animals in tribal and insular areas, but there are no specific efforts to ensure these areas can contribute to a national biosurveillance capability. Resources include cooperative agreements, disease-specific funding, training, and technical assistance. Surveillance capacity varies among tribes and insular areas, but common challenges include limited health infrastructure including human- and animal-health professionals and systems. The federal government has not conducted a comprehensive assessment of state and local jurisdictions' ability to contribute to a national biosurveillance capability, as called for in presidential directive. According to federal, state, and local officials, the magnitude and complexity of such an assessment is a challenge. Until it conducts such an assessment, the federal government will lack key information to support a national biosurveillance capability. A national strategy like the one we previously recommended--one capable of guiding federal agencies and its key stakeholders to systematically identify gaps, resources to address those gaps, and investment priorities--would benefit from an assessment of jurisdictions' baseline capabilities and critical gaps across the entire biosurveillance enterprise. What GAO Recommends GAO recommends that the National Security Staff ensure the strategy considers (1) existing federal efforts, (2) challenges, and (3) assessment of nonfederal capabilities. GAO provided a draft of this report to the National Security Staff, and the federal, state and city officials who contributed information. The National Security Staff acknowledged the accuracy of the report, but did not comment on the recommendation.

gao_GAO-03-150

gao_GAO-03-150_0

DOD Revised Section 845 Guide as Recommended In December 2000, the Under Secretary of Defense for Acquisition and Technology issued a revised guide that sets out the conditions and framework for using Section 845 agreements. The guide is effective for all solicitations issued after January 5, 2001, and provides a useful framework for tailoring the terms and conditions appropriate for each agreement. DOD agreements officers view the new guide as a significant improvement over the prior version. Number of Nontraditional Contractors Is Captured as a Performance Metric After exploring a number of performance indicators for Section 845 agreements, DOD selected one quantitative performance metric—the extent of nontraditional contractor participation—which is tracked by the Office of Defense Procurement. Because information on nontraditional participants—DOD’s key performance metric—is not summarized, it is difficult for Congress to assess how successful DOD has been in achieving this metric. DOD also is not regularly reporting on or assessing the benefits derived from completed Section 845 agreements. DOD officials commented that the law only requires them to report on projects awarded in the previous fiscal year. Further, in the absence of regular assessments of the benefits derived from completed projects, DOD and the Congress lack vital information on the results the government is deriving from this flexible procurement strategy. The experience that DOD has gained from the use of Section 845 authority can be useful to Congress as it makes decisions about subsequent extensions of this authority to DOD and in future congressional deliberations. To determine whether Congress is receiving adequate information on the number of nontraditional defense contractors participating in Section 845 agreements and whether DOD is assessing the benefits derived from completed projects, we reviewed the Section 845 portion of the annual reports for fiscal years 1999 through 2001 and the supplemental reports provided to Congress in fiscal years 1999 and 2000. Appendix I: Comments from the Department of Defense Appendix II: Report of Other Transactions for Prototype Projects

What GAO Found In April 2000, GAO reported on the Department of Defense's (DOD) use of Section 845 agreements, also referred to as "other transactions" for prototype projects. These are transactions other than contracts, grants, or cooperative agreements that generally are not subject to federal laws and regulations applicable to procurement contracts. In December 2000, DOD revised its Section 845 guide. The guide specifies when Section 845 agreements may be used and provides criteria for tailoring terms and conditions for each agreement. Officials from the military services and defense agencies have found the new guide useful and a significant improvement over the prior version. The Secretary of Defense has required a metric--the number of participating nontraditional defense contractors--which is measurable and directly related to each agreement. This metric is tracked and reported internally. DOD explored additional metrics, but concluded that the number of nontraditional contractors was the only one that was quantifiable and tied directly to Section 845 outcomes. DOD's annual report to Congress on Section 845 agreements consists of summaries on each agreement. However, the key metric--the number of nontraditional contractors--is not clearly presented in these reports, making it difficult to gauge DOD's progress in achieving success on this objective. Further, DOD is not regularly assessing reporting on the benefits derived from completed Section 845 projects. In the absence of such assessments, congressional and DOD decision makers lack a vital piece of information that would help them determine whether this flexible procurement authority is achieving expecting results.

gao_GAO-11-417T

gao_GAO-11-417T_0

We reported in April 2010 on several challenges that affected DOD’s responsiveness to urgent needs. Additional information is provided in our April 2010 report. Training—We found challenges in training personnel that process urgent needs requests. For example, we found that while the Army required selected officers to attend training on how to address requirements and identify resources for Army forces, officers at the brigade level responsible for drafting and submitting Army and joint urgent needs requests—and those at the division level responsible for reviewing the requests prior to submission for headquarters approval—were not likely to receive such training. Funding—We found that funding was not always available when needed to acquire and field solutions to joint urgent needs. This result occurred in part because the Office of the Secretary of Defense had not given any one organization primary responsibility for determining when to implement the department’s statutory rapid acquisition authority or to execute timely funding decisions. Technical maturity and complexity—We found that attempts to meet urgent needs with immature technologies or with solutions that are technologically complex could lead to longer time frames for fielding solutions to urgent needs. Also, we found that DOD guidance was unclear about who is responsible for determining whether technologically complex solutions fall within the scope of DOD’s urgent needs processes. In June 2010, the Senate Armed Services Committee urged DOD to address these shortcomings that we identified “as quickly as possible.” DOD’s Urgent Needs Processes Need a More Comprehensive Approach and Evaluation for Potential Consolidation In our report being released today, we identified cases of fragmentation, overlap, and potential duplication of efforts of DOD’s urgent needs processes and entities. However, the department is hindered in its ability to identify key improvements to its urgent needs processes because it does not have a comprehensive approach to manage and oversee the breadth of its efforts. The following summarizes our key findings and recommendations, which are provided in more detail in the report we publicly release today. Fulfillment of Urgent Needs Involves a Number of Entities and Processes, Resulting in Fragmentation, Overlap, and Potential Duplication of Efforts Over the past two decades, the department has established many entities that develop, equip, and field solutions and critical capabilities in response to the large number of urgent needs requests submitted by the combatant commands and military services. Many of these entities were created, in part, because the department had not anticipated the accelerated pace of change in enemy tactics and techniques that ultimately heightened the need for a rapid response to the large number of urgent needs requests submitted by the combatant commands and military services. While many entities started as ad hoc organizations, several have been permanently established. DOD Does Not Have Comprehensive Guidance and Full Visibility to Effectively Manage and Oversee Its Urgent Needs DOD has taken some steps to improve its fulfillment of urgent needs. These steps include developing policy to guide joint urgent need efforts, establishing a Rapid Fielding Directorate to rapidly transition innovative concepts into critical capabilities, and working to establish a senior oversight council to help synchronize DOD’s efforts. Despite these actions, the department does not have a comprehensive approach to manage and oversee the breadth of its activities to address capability gaps identified by warfighters in-theater. Opportunities Exist for Consolidating Urgent Needs Processes and Entities In addition to not having a comprehensive approach for managing and overseeing its urgent needs efforts, DOD has not conducted a comprehensive evaluation of its urgent needs processes and entities to identify opportunities for consolidation. Given the overlap and potential for duplication we identified, coupled with similar concerns raised by other studies, there may be opportunities for DOD to further improve its urgent needs processes through consolidation. GAO Recommends That DOD Establish Comprehensive Guidance and Evaluate Potential Options for Consolidation In the report we publicly release today, we make several recommendations to promote a more comprehensive approach to planning, management, and oversight of DOD’s fulfillment of urgent needs. In summary, we are recommending that: DOD develop and promulgate DOD-wide guidance across all urgent needs processes that establishes baseline policy for the fulfillment of urgent needs, clearly defines common terms, roles, responsibilities, and authorities, designates a focal point to lead DOD’s urgent needs efforts, and directs the DOD components to establish minimum urgent needs processes and requirements; and DOD’s Chief Management Officer evaluate potential options for consolidation to reduce overlap, duplication, and fragmentation, and take appropriate action. Concluding Remarks Over the past several years we have identified significant challenges affecting DOD’s ability to rapidly respond to urgent needs of the warfighter and effectively manage and oversee the breadth of its urgent needs processes. Given the magnitude of the financial resources at stake, coupled with the need to field urgent need solutions as rapidly as possible to prevent loss of life or mission failure, it is imperative that DOD’s senior leadership make it a top priority to reform its urgent needs process. In addition, contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement.

Why GAO Did This Study This testimony discusses the challenges that the Department of Defense (DOD) faces in fulfilling urgent operational needs identified by our warfighters. Over the course of the wars in Iraq and Afghanistan, U.S. forces have encountered changing adversarial tactics, techniques, and procedures, which challenged DOD to quickly develop and provide new equipment and new capabilities to address evolving threats. Further, U.S. troops faced shortages of critical items, including body armor, tires, and batteries. DOD's goal is to provide solutions as quickly as possible to meet urgent warfighter needs to prevent mission failure or loss of life. To meet its urgent needs, DOD had to look beyond traditional acquisition procedures, expand the use of existing processes, and develop new processes and entities designed to be as responsive as possible to urgent warfighter requests. In addition to requests for equipment from DOD's existing stocks, warfighters have requested new capabilities, such as: technology to counter improvised explosive devices (IED); technology related to intelligence, surveillance, and reconnaissance (ISR) to provide increased situational awareness; and equipment related to command and control to enhance operations on the battlefield. In meeting urgent needs, it is important for DOD to efficiently use the department's financial resources. DOD has spent billions of dollars over the past several years to address urgent warfighter needs. Our past work on weapons acquisition has shown that the department has often pursued more programs than its resources can support. Additionally, our past work also has shown that DOD has had difficulty translating needs into programs, which often has led to cost growth and delayed delivery of needed capabilities to the warfighter. Today, we are publicly releasing a report that addresses (1) what entities exist within DOD for responding to urgent operational needs, and the extent to which there is fragmentation, overlap, or duplication; (2) the extent to which DOD has a comprehensive approach for managing and overseeing its urgent needs activities; and (3) the extent to which DOD has evaluated the potential for consolidations of its various activities and entities. This statement will first briefly discuss challenges we reported in April 2010 that affected the overall responsiveness of DOD's urgent needs processes and then highlight the key findings and recommendations of today's report. Today's report contributed to our findings in another report being released today that addresses opportunities to reduce potential duplication in government programs. What GAO Found We reported in April 2010 on several challenges that affected DOD's responsiveness to urgent needs: (1) Training: We found challenges in training personnel that process urgent needs requests. For example, we found that while the Army required selected officers to attend training on how to address requirements and identify resources for Army forces, officers at the brigade level responsible for drafting and submitting Army and joint urgent needs requests--and those at the division level responsible for reviewing the requests prior to submission for headquarters approval--were not likely to receive such training.(2) Funding: We found that funding was not always available when needed to acquire and field solutions to joint urgent needs. This result occurred in part because the Office of the Secretary of Defense had not given any one organization primary responsibility for determining when to implement the department's statutory rapid acquisition authority or to execute timely funding decisions. (3) Technical maturity and complexity: We found that attempts to meet urgent needs with immature technologies or with solutions that are technologically complex could lead to longer time frames for fielding solutions to urgent needs. Also, we found that DOD guidance was unclear about who is responsible for determining whether technologically complex solutions fall within the scope of DOD's urgent needs processes. In our report being released today, we identified cases of fragmentation, overlap, and potential duplication of efforts of DOD's urgent needs processes and entities. However, the department is hindered in its ability to identify key improvements to its urgent needs processes because it does not have a comprehensive approach to manage and oversee the breadth of its efforts. Many of these entities were created, in part, because the department had not anticipated the accelerated pace of change in enemy tactics and techniques that ultimately heightened the need for a rapid response to the large number of urgent needs requests submitted by the combatant commands and military services. While many entities started as ad hoc organizations, several have been permanently established. DOD has taken some steps to improve its fulfillment of urgent needs. These steps include developing policy to guide joint urgent need efforts, establishing a Rapid Fielding Directorate to rapidly transition innovative concepts into critical capabilities, and working to establish a senior oversight council to help synchronize DOD's efforts. Despite these actions, the department does not have a comprehensive approach to manage and oversee the breadth of its activities to address capability gaps identified by warfighters in-theater. In addition to not having a comprehensive approach for managing and overseeing its urgent needs efforts, DOD has not conducted a comprehensive evaluation of its urgent needs processes and entities to identify opportunities for consolidation. Given the overlap and potential for duplication we identified, coupled with similar concerns raised by other studies, there may be opportunities for DOD to further improve its urgent needs processes through consolidation. In the report we publicly release today, we make several recommendations to promote a more comprehensive approach to planning, management, and oversight of DOD's fulfillment of urgent needs. In summary, we are recommending that: (1) DOD develop and promulgate DOD-wide guidance across all urgent needs processes that establishes baseline policy for the fulfillment of urgent needs, clearly defines common terms, roles, responsibilities, and authorities, designates a focal point to lead DOD's urgent needs efforts, and directs the DOD components to establish minimum urgent needs processes and requirements; and (2) DOD's Chief Management Officer evaluate potential options for consolidation to reduce overlap, duplication, and fragmentation, and take appropriate action.