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gao_GAO-03-1023

gao_GAO-03-1023_0

Weaknesses in Data Preclude Determinations of Compliance in Prior- Years Report DOD’s prior-years report for fiscal years 2001 and 2002 as submitted to the Congress shows the Departments of the Army and Navy to be below the 50-percent funding limitation on private sector workloads for both years. The net effects of correcting for the errors and omissions we identified would increase the percentages of workload going to the private sector and move each department closer to the contract limit. Overall, however, recurring weaknesses in DOD’s data gathering, reporting processes, and financial systems prevented us from determining with precision whether the services were in compliance with the 50-50 requirement for fiscal years 2001 and 2002. For example, as in past years, the Army underreported public and private sector depot-level maintenance work at field locations as it continues unfinished efforts to consolidate maintenance activities and better control the proliferation of depot-level tasks at nondepot locations. Other Army work was not reported because some commands did not receive 50-50 instructions and others misapplied the guidance. These two examples would add about $401 million to the private sector workloads in fiscal year 2002. Correcting for the errors we found substantially increases the private sector percentage share in fiscal year 2002 from 42.6 percent to 46.9 percent, a gain of over 4 percent. Future-Year Projections Are Not Reasonable and Not Very Useful Because of the changing nature of budget projections and supporting data deficiencies, the future-years report does not provide reasonable estimates of public and private sector depot maintenance funding allocations for fiscal years 2003 through 2007. Finally, there are opportunities to improve the data development process. Streamlining the 50-50 Report As previously discussed, the future-years dataparticularly that estimated for the years beyond the current year and budget yeardo not provide a reasonable estimate of the future balance of funding for depot maintenance between the public and private sectors. Participation of Service Audit Agencies While we continue to believe that the service audit agencies could help the military departments improve 50-50 reporting, their future involvement is uncertain. However, this year the Air Force Audit Agency did not participate; while the Army did participate, some of the errors they identified were not corrected in the reports to the Congress; and the Navy audit was not done in time to result in changes to the 50-50 data submitted to the Congress. Notwithstanding these constraints, opportunities still exist to improve the reporting, including continued use of the audit services and renewed efforts to ensure guidance is appropriately disseminated and staff trained in its use. Appendix I: GAO Adjustments for Errors, Omissions, and Inconsistencies in Military Departments 50-50 Data for Fiscal Year 2002 Our review of the data supporting the Department of Defense’s (DOD) prior-years report identified errors, omissions, and inconsistencies that, if corrected, would revise the total workloads and increase the private- sector allocations for each of the military departments. Errors we found included the following examples: Unreported depot work on nuclear aircraft carriers. GAO Comments 1. 2. 2466(e) and 10 U.S.C. Depot Maintenance: Status of the Navy’s Pearl Harbor Project.

Why GAO Did This Study Under 10 U.S.C. 2466, not more than 50 percent of each military department's annual depot maintenance funding can be used for work done by private-sector contractors. The Department of Defense (DOD) also must submit two reports to the Congress annually on the division of depot maintenance funding between the public and private sectors--one about the percentage of funds spent in the previous 2 fiscal years (prior-years report) and one about the current and 4 succeeding fiscal years (future-years report). As required, GAO reviewed the two DOD reports submitted in early 2003 and is, with this report, submitting its views to the Congress on whether (1) the military services met the so-called "50-50 requirement" for fiscal years 2001-2 and (2) the projections for fiscal years 2003-7 are reasonable estimates. GAO also identified opportunities to improve the reporting process. What GAO Found Continuing weaknesses in DOD's data gathering, reporting processes, and financial systems prevented GAO from determining with precision if the military services complied with the 50-50 requirement in fiscal years 2001-2. DOD data show all the services, except the Air Force in fiscal year 2001, to be below the 50-percent funding limit on private sector work. However, as before, GAO found errors in the data that, if corrected, would overall increase funding of the private sector and move each service closer to the contract limit. For example, for fiscal year 2002, the Navy did not include about $401 million in private sector maintenance work on aircraft carriers and surface ships. Correcting for these and other errors would increase the Navy's percentage of private sector depot maintenance funds for that year from the 42.6 percent reported to 46.9 percent. Such data weaknesses show that prior-years reports do not precisely measure the division of maintenance funding. At best, over time these results provide rough approximations and indicate trends that may be useful to decision makers. Because of data deficiencies and changing budget projections, the futureyears report does not provide reasonable estimates of public and private sector maintenance funding for fiscal years 2003-7 and limits its usefulness to decision makers. GAO reported this shortcoming in the past, and problems continue. For example, the Army underreported maintenance work at nondepot locations as it continues to consolidate the work and better control it at such locations. Other Army work was not reported because some commands did not receive guidance and others misapplied it. These errors would add about $200 million annually to the Army's future estimate and increase the percent of projected funding in the private sector. Opportunities still exist for improvements, including for streamlining the 50- 50 reports, continued service audit agency support, and data development. Streamlining the 50-50 reports could help address problems caused by, among other factors, inexact program estimates. Second, although DOD is concerned that recent revisions to federal audit standards could keep service auditors from further participation in the 50-50 process, GAO believes that a way can be developed to enable auditors' continued support yet ensure their independence. Third, data development could be helped by better disseminating guidance and training participating personnel.

gao_GAO-09-926T

gao_GAO-09-926T_0

Background In March 2009, $26.7 billion of Recovery Act funding was apportioned to all 50 states and the District for activities allowed under the Federal-Aid Highway Surface Transportation Program, including restoration, repair, and construction of highways, and for other eligible surface transportation projects. States Have Used a Substantial Portion of Highway Funds, with Funded Projects Focusing on Pavement Improvements As of July 17, 2009, $16.8 billion of the apportioned funds had been obligated for over 5,700 projects nationwide, including $9.8 billion that had been obligated for over 2,900 projects in the 16 states and the District that are the focus of our review. About half of Recovery Act highway obligations nationwide have been for pavement improvements. Specifically, $8.2 billion is being used for projects such as reconstructing or rehabilitating deteriorated roads. In addition, about $2.8 billion, or about 17 percent of Recovery Act funds nationally, has been obligated for pavement-widening projects, and around 12 percent has been obligated for the replacement and improvement of existing bridges, and the construction of new bridges. DOT officials told us that although funding has been obligated for more than 5,000 projects, it may be months before contractors mobilize and begin work. States Have Generally Complied with Program Requirements Funds appropriated for highway infrastructure spending must be used as required by the Recovery Act. Give priority to projects that can be completed within 3 years and to projects located in economically distressed areas, as defined by the Public Works and Economic Development Act of 1965, as amended. Certify that the state will maintain the level of spending for the types of transportation projects funded by the Recovery Act that it planned to spend the day the Recovery Act was enacted. All states have met the first Recovery Act requirement that 50 percent of their apportioned funds are obligated within 120 days. While officials from almost all of the states said that they considered project readiness, including the 3-year completion requirement, when making project selections, there was substantial variation in the extent to which states prioritized projects in economically distressed areas and how they identified these areas. Due to the need to select projects and obligate funds quickly, many states first prioritized projects based on other factors and only later identified whether these projects fulfilled the requirement to give priority to projects in economically distressed areas. We also found some instances of states developing their own eligibility requirements for economically distressed areas using data or criteria not specified in the Public Works and Economic Development Act. In each of the cases we identified, the states informed us that FHWA approved the state's use of alternative criteria. However, FHWA did not consult with or seek the approval of the Department of Commerce, and it is not clear under what authority FHWA approved these criteria. With one exception, the states have completed these certifications, but they face challenges. GAO Has Ongoing and Related Work on Transportation Programs Funded under the Recovery Act We will continue to monitor states’ and localities’ use of Recovery Act funds for transportation programs and their compliance with program rules. We also plan to examine the use of Recovery Act funds for the Federal Transit Administration’s Transit Capital Assistance program—the transit program receiving the most recovery act funding—in selected states. We reported that DOT followed key elements of federal guidance in developing selection criteria for awarding grants under this $1.5 billion dollar program. We also found that FRA’s strategic plan for high-speed rail outlines, in general terms, how the federal government may invest Recovery Act funds for high-speed rail development but that it does not establish clear goals or a clear role for the federal government in high-speed rail.

Why GAO Did This Study The American Recovery and Reinvestment Act of 2009 (Recovery Act) included more than $48 billion for the Department of Transportation's (DOT) investment in transportation infrastructure, including highways, rail, and transit. This testimony--based on GAO report GAO-09-829 , issued on July 8, 2009 and updated with more recent data, in response to a mandate under the Recovery Act--addresses (1) the uses of Recovery Act transportation funding including the types of projects states have funded, (2) the steps states have taken to meet the act's requirements, and (3) GAO's other work on transportation funding under the Recovery Act. In GAO-09-829 , GAO examined the use of Recovery Act funds by 16 states and the District of Columbia (District), representing about 65 percent of the U.S. population and two-thirds of the federal assistance available through the act. GAO also obtained data from DOT on obligations and reimbursements for the Recovery Act's highway infrastructure funds. What GAO Found A substantial portion of Recovery Act highway funds have been obligated, with most funded projects focusing on pavement improvements. In March 2009, $26.7 billion was apportioned to 50 states and the District for highway infrastructure and other eligible projects. As of July 17, 2009, $16.8 billion of the apportioned funds had been obligated for over 5,700 projects nationwide. About half of the funds has been obligated for pavement improvements such as reconstructing or rehabilitating roads; 17 percent has been obligated for pavement-widening projects; and about 12 percent has been obligated for bridge projects. Remaining funds were obligated for the construction of new roads and safety projects, among other things. States have generally complied with the act's three major requirements on the use of transportation funds: (1) Fifty percent of funds must be obligated within 120 days of apportionment. All states have met this requirement. (2) Priority for funding must be given to projects that can be completed within 3 years and are located in economically distressed areas, as defined by the Public Works and Economic Development Act. Officials from almost all of the states included in GAO's review said they considered project readiness, including the 3-year completion requirement, when making project selections. However, due to the need to select projects and obligate funds quickly, many states first selected projects based on other factors and only later identified whether these projects fulfilled the economically distressed area requirement. Additionally, some states identified economically distressed areas using data or criteria not specified in the Public Works or Recovery Act. In each of these cases, states told us that DOT's Federal Highway Administration (FHWA) approved the use of alternative criteria but it is not clear under what authority it did so as FHWA did not consult with or seek the approval of the Department of Commerce. (3) State spending on transportation projects must be maintained at the level the state had planned to spend as of the day the Recovery Act was enacted. With one exception, the states have certified that they will maintain their level of spending. GAO will continue to monitor states' use of Recovery Act funds for transportation programs and their compliance with program rules. In the next report, in September 2009, GAO plans to provide information on the use of Recovery Act funds for transit programs and for highway programs. Previous GAO work on the act has addressed other transportation issues. For instance, GAO's work on discretionary transportation grants found that DOT followed key elements of federal guidance in developing selection criteria for awarding these grants, and GAO's work on intercity rail funding found that although DOT's strategic plan for high-speed rail generally outlines how the act's funds may be invested for high-speed rail development, the plan does not establish clear goals or a clear role for the federal government.

gao_GAO-08-1153T

gao_GAO-08-1153T_0

Provide Insight into Pressing National Issues The next Congress and new administration will confront a set of pressing issues that will demand urgent attention and continuing oversight to ensure the nation’s security and well-being. A few examples follow: Oversight of financial institutions and markets: As events over the past few days have underscored, oversight over the U.S. housing and financial markets will certainly be among the priority matters commanding the attention of the new administration and the 111th Congress. Our transition work will highlight the major implementation issues that need to be addressed to ensure accountability and assess progress regardless of what policies are pursued. Soon after taking office, the new administration will face decisions that will shape the outcome of this central effort. While facing pressing issues, the next Congress and new administration also inherit the federal government’s serious long-term fiscal challenge— driven on the spending side by rising health care costs and changing demographics. Ultimately, however, the new administration and Congress will need to develop a strategy to address the federal government’s long-term unsustainable fiscal path. Our transition work will highlight challenges the new Congress and next administration face in devising integrated solutions to such multi-dimensional problems. Strengthen the capacity to manage contractors and recognize related risks and challenges: Enhancing acquisition and contracting capability will be a critical challenge for many agencies in the next administration in part because many agencies (for example, DOD, DHS, the Department of Energy, and the Centers for Disease Control and Prevention) are increasingly reliant on contractors to carry out their basic operations. It also has provided the impetus for the creation of several statutory management reforms. The support of this Subcommittee and others in Congress has been especially important to the success of this program. Monitor the Implementation of the Presidential Transition Act Provisions and Identify Potential Improvements for Future Transitions The world has obviously changed a great deal since the Presidential Transition Act of 1963. In summary, our goal will continue to be to provide congressional and executive branch policy makers with a comprehensive snapshot of how things are working across government and to emphasize the need to update some federal activities to better align them with 21st century realities and bring about government transformation. In keeping with our role, we will be providing Congress and the executive branch with clear facts and constructive options and suggestions that our elected officials can use to make policy choices in this pivotal transition year. The nation’s new and returning leaders will be able to use such information to help address both the nation’s urgent issues and long-term challenges so that our nation stays strong and secure now and for the next generation.

Why GAO Did This Study The upcoming 2009 transition will be a unique and critical period for the U.S. government. It marks the first wartime presidential transition in 40 years. It will also be the first administration change for the relatively new Department of Homeland Security operating in the post 9/11 environment. The next administration will fill thousands of positions across government; there will be a number of new faces in Congress as well. Making these transitions as seamlessly as possible is pivotal to effectively and efficiently help accomplish the federal government's many essential missions. While the Government Accountability Office (GAO), as a legislative branch agency, has extensive experience helping each new Congress, the Presidential Transition Act points to GAO as a resource to incoming administrations as well. The Act specifically identifies GAO as a source of briefings and other materials to help presidential appointees make the leap from campaigning to governing by informing them of the major management issues, risks, and challenges they will face. GAO has traditionally played an important role as a resource for new Congresses and administrations, providing insight into the issues where GAO has done work. This testimony provides an overview of GAO's objectives for assisting the 111th Congress and the next administration in their all-important transition efforts. What GAO Found GAO will highlight issues that the new President, his appointees, and the Congress will confront from day one. These include immediate challenges ranging from national and homeland security to oversight of financial institutions and markets to a range of public health and safety issues. GAO will synthesize the hundreds of reports and testimonies it issues every year so that new policy makers can quickly zero in on critical issues during the first days of the new administration and Congress. GAO's analysis, incorporating its institutional memory across numerous administrations, will be ready by the time the election results are in and transition teams begin to move out. GAO will provide congressional and executive branch policy makers with a comprehensive snapshot of how things are working across government and emphasize the need to update some federal activities to better align them with 21st century realities and bring about government transformation. In keeping with its mission, GAO will be providing Congress and the executive branch with clear facts and constructive options and suggestions that elected officials can use to make policy choices in this pivotal transition year. GAO believes the nation's new and returning leaders will be able to use such information to help meet both the nation's urgent issues and long-term challenges so that our nation stays strong and secure now and for the next generation. GAO's transition work also will highlight the need to modernize the machinery of government through better application of information technology, financial management, human capital, and contracting practices. GAO also will underscore the need to develop strategies for addressing the government's serious long-term fiscal sustainability challenges, driven on the spending side primarily by escalating health care costs and changing demographics.

gao_GAO-12-94

gao_GAO-12-94_0

MetLife’s Office of Federal Employees’ Group Life Insurance (OFEGLI) adjudicates claims under the FEGLI program and makes payments to FEGLI beneficiaries. However, as the FEGLI Fund balance has grown over time, OPM officials noted, the need for an insurer and reinsurers to assume the program’s risk of loss has diminished. First, FEGLI’s statute requires enrolled federal employees to pay two-thirds of the premium rate for their Basic life insurance coverage, while employers in the private sector generally cover the full cost of their employees’ basic coverage. In addition, for certain individuals, FEGLI Basic coverage may appear more costly than private sector basic life insurance. The possibility that FEGLI coverage may appear more costly than private sector alternatives to relatively younger or healthier federal employees is mitigated to some extent by the extra amount of coverage FEGLI provides federal employees under age 45. While these disclosures are useful, they do not make employees aware of some FEGLI benefits and features that could affect their decision to participate in the program. This averaging can be of great benefit to some, especially those who may not be able to obtain coverage elsewhere. In Overseeing FEGLI, Processes for Setting Premium Rates Could Be Improved OPM Performs Many of FEGLI’s Administrative and Operational Functions and Works Closely with MetLife According to OPM officials, OPM performs many FEGLI administrative and operational functions, including collecting premiums, overseeing FEGLI’s claims settlement process (which MetLife administers), and publishing FEGLI’s regulations and disclosures. The legislation that created FEGLI intended the program to offer a low- cost insurance benefit to federal employees and their families. In addition, OPM officials noted that key FEGLI characteristics such as coverage levels, the portion of the cost paid by federal employees, and the structure of Basic premiums are determined by FEGLI’s statute, and as a result, changing the program can involve statutory changes that require congressional action. However, OPM does not appear to have a documented process providing guidance on what to include in the annual actuarial reviews and recommendations to management. RAAs Are No Longer the Default Settlement Option, but Better Disclosures Are Needed RAAs Were the Default Option from 1994 to 2011 RAAs had been the default method used from 1994 until February 2011 for many FEGLI beneficiaries to receive their life insurance settlements. While deciding how to use the funds, beneficiaries with RAAs receive a guaranteed minimum interest rate on their RAA account. In addition to concerns about RAA disclosures, some industry participants and a federal regulator expressed concern about the kinds of protections that apply to RAAs and how well beneficiaries understand them. For example, they indicated that while RAAs are not insured by the Federal Deposit Insurance Corporation (FDIC), the use of drafts that closely resemble checkbooks offered by banks could give the appearance that FDIC insurance protects RAAs. An insurance industry expert explained that beneficiaries who have RAA assets that exceed state guaranty fund limits may not be fully protected. Because OPM contracts with MetLife for settlement services, RAAs funded with FEGLI claims payments are established and operated by MetLife. As a result, employees may be unaware that their premiums may be higher than those of group plans that do not offer such coverage. While OPM has conducted some periodic comparisons of FEGLI benefits and premiums with those found in other group life plans, without formal, documented processes for these comparisons, OPM risks that FEGLI may not meet employees’ needs, that its premiums may exceed prices charged for similar benefits in the private sector, or even that it may be offering features that it does not need to offer to be competitive with private sector group plans. OPM has recently revised its disclosures to beneficiaries to provide more information on RAAs, but the disclosures still do not contain some important information. Recommendations for Executive Action To help better ensure that federal employees have all the information they need when deciding whether to purchase life insurance through FEGLI, we recommend that the Director of the Office Personnel Management take steps to ensure that FEGLI disclosures include complete and accurate information on key benefits and features, including the program’s postretirement coverage, composite rates, and level-premium structure. To help ensure that FEGLI provides relevant benefits that meet the needs of federal employees at a reasonable and appropriate cost, we recommend that the Director of the Office of Personnel Management develop and implement a more structured process for comparing FEGLI with private sector group life insurance plans and for documenting OPM actuaries’ rate recommendations and any management decisions concerning those recommendations. Interviews with OPM and MetLife officials provided additional information on FEGLI operations, including the program’s coverage options; how the government, MetLife, and reinsurers bear insurance risk; and how the Employees’ Life Insurance Fund—FEGLI’s main financial fund—is used for paying life insurance claims and other program costs. To describe and evaluate OPM’s oversight of the FEGLI program, we (1) reviewed FEGLI’s authorizing statute and regulations, including the LIFAR, (2) reviewed OPM’s program monitoring, reporting, and other oversight activities, (3) interviewed OPM and MetLife officials, and (4) met with industry association representatives.

Why GAO Did This Study The Federal Employees' Group Life Insurance program (FEGLI), administered by the Office of Personnel Management (OPM), insures over 4 million federal employees and annuitants in the event of an enrollee's death. As a result, it is important that the program is clearly explained and properly overseen. However, some aspects of FEGLI, such as program disclosures and the use of retained asset accounts (RAA)--financial accounts used to settle life insurance claims--have raised questions about the program's operations. GAO was asked to describe and evaluate (1) the FEGLI program's structure and operations, (2) OPM's administration and oversight of the program, and (3) the use of RAAs in FEGLI claims payments. To address these objectives, GAO reviewed FEGLI law and regulations, interviewed OPM, Metropolitan Life Insurance Company (MetLife), and state insurance officials, and met with insurance industry experts. What GAO Found OPM, by directing the funding of the Employees' Life Insurance Fund, has effectively allowed the FEGLI program to assume the risk of loss, while MetLife provides administrative services for the program. FEGLI has some insurance coverage features that most private sector group life plans do not, but a lack of disclosure in certain areas may make it difficult for employees to make fully informed decisions about buying coverage. Generally with private group plans the employer pays the full premium for a set amount of basic coverage, but the statute that created FEGLI requires that enrolled employees contribute two-thirds of the premium for Basic coverage. In addition, FEGLI premiums include the cost of a portion of retirement coverage, a feature generally not found in private sector alternatives, and which can make FEGLI coverage more costly than those alternatives. Further, for Basic coverage, FEGLI premiums are level over employees' working lives, so that early on premiums may be higher than the actual cost of coverage, while later they may be lower. This feature can make FEGLI coverage appear to be more costly than private individual plans for certain employees. However, the materials that FEGLI provides to employees do not disclose either the retirement coverage costs or the level premiums. Employees, particularly those who might leave government service or stop participating in FEGLI before realizing the benefits of these features, may find such disclosures important when deciding whether to purchase the insurance. OPM oversees FEGLI's provision of life insurance, but certain processes for reviewing program benefits and premiums could be improved. OPM administers basic FEGLI functions such as determining and collecting premiums, publishing program regulations, and overseeing the claims payment processes of MetLife, the insurer contracted to provide claims services. Because the program was intended to provide a low-cost benefit to federal employees, OPM has periodically conducted informal comparisons of FEGLI costs and benefits to those of private group life plans. In addition, to better ensure that the program charges appropriate premium rates, OPM actuaries conduct annual reviews and may recommend rate changes. However, OPM does not have documented processes for conducting its comparisons or for documenting any recommended rate changes. The lack of documented processes in both areas creates a risk that FEGLI benefits may not be meeting the needs of federal employees and could be priced at inappropriate rates. From the mid 1990s until early 2011, RAAs were the default settlement option for many FEGLI beneficiaries. While RAAs offer some benefits to FEGLI beneficiaries, OPM does not provide beneficiaries with some important information on RAA operations and protections. According to OPM and some industry officials, RAAs can reduce administrative costs, provide guaranteed interest rates, and allow beneficiaries time to decide how to use settlement funds. But other industry participants and a federal regulator said that beneficiaries might not be fully aware of their settlement options or that RAAs are not insured by the Federal Deposit Insurance Corporation. OPM has recently improved FEGLI disclosures for RAAs, and RAAs are no longer the default settlement option. However, the disclosures still lack information on how the accounts are established and regulated, and how certain protections differ across states. Without this information, beneficiaries may not be able to make fully informed decisions when choosing a settlement option for their FEGLI claims payment. What GAO Recommends GAO recommends that OPM (1) improve disclosures on important FEGLI features, (2) develop and implement a more structured process for reviewing the FEGLI program and premium rates, and document review outcomes, and (3) improve disclosures on RAA protections and regulation. OPM concurred with these recommendations.

gao_RCED-97-11

gao_RCED-97-11_0

PHAs have partnered or entered into business-like arrangements with other PHAs to share resources or to consolidate management in which one PHA manages several others; residents, social service agencies, and community groups to provide employment and other services to residents; nonprofit organizations and state governments to develop low-income housing and affordable housing; and state and local governments to obtain lower cost goods and services. These four types of partnerships or arrangements are summarized below. In this way, the board would still have policymaking authority for its PHA. Social service partners have expertise in areas such as providing counseling or health care that PHA employees may not have. Descriptions of Partnerships in Public Housing We contacted 29 public housing authorities (PHA) about their use of partnerships and other business-like arrangements with state and local governments and entities. We found that the partnerships and arrangements could be grouped according to four purposes, which were to (1) share resources or consolidate management among public housing authorities; (2) provide services, training, and employment to residents; (3) develop affordable housing by leveraging staff and financial resources; and (4) obtain goods and services at lower costs by taking greater advantage of state and local programs. As a result of the program, the union obtains the benefit of increasing its membership, the housing authority has provided a resident with a job, and the resident gains a salary along with medical and health insurance benefits. In addition, he explained that the cost of vandalism at the housing authority has been reduced from $89,000 per year to $5,000 per year.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on partnerships and other business-like arrangements that public housing authorities (PHA) have made with public and private-sector groups to provide residents with needed services and to supplement traditional PHA funding sources, focusing on: (1) four types of such arrangements; and (2) PHA officials' views on the benefits of these arrangements. What GAO Found GAO found that: (1) in its discussions with housing authorities, GAO found that to leverage their resources, enhance their ability to deliver services, and reduce their costs, they have established four basic types of partnerships or arrangements; (2) the authorities partnered and worked with: (a) other housing authorities to take advantage of economies of scale in purchasing items such as large appliances or in consolidating their management activities; (b) their residents and various community and nonprofit groups to provide social services such as health and child care, job training, and employment for residents; (c) state, local, and commercial entities to develop and finance affordable housing for low-income families; and (d) state and local governments to acquire goods and services such as insurance at lower costs; and (3) although about one-third of the officials at the housing authorities that GAO contacted could quantify the cost savings that have resulted from their partnerships, in general PHA officials who GAO contacted agreed that the nonmonetary benefits--including training, an improved quality of life, and certain social services--were significant and would not have been obtained without the shared experience of the partnership.

gao_HEHS-96-133

gao_HEHS-96-133_0

However, the experiences of Germany and Sweden show that return-to-work strategies are applicable to a population with a wide range of work histories, job skills, and disabilities. These efforts include intervening as soon as possible after a disabling event occurs, helping the worker set return-to-work goals, providing the services the worker needs to return to work, and offering incentives that encourage return to work. To develop this information, we (1) identified key practices used by U.S. private sector companies to return disabled workers to the workplace and (2) obtained examples of how other countries’ social insurance programs approach returning people with disabilities to work (discussed in chs. We selected disability programs in Germany and Sweden for review because (1) both countries have political structures and standards of living, including the use of technology, similar to those in the United States, and (2) their disability programs have policies and practices that have been identified by the U.S. private sector and other experts as being key to disability management: early intervention and an emphasis on return to work through the provision and management of services, incentives, and rehabilitation. Most individuals who apply to SSA for disability benefits are not working, but SSA’s focus is not on returning them to work. As mentioned, the respondents indicated they believe it is highly important to structure cash benefits to provide an incentive to return to work; however, we noted that their mean rating for this practice was slightly lower than the mean ratings they gave to other return-to-work practices they considered important, such as maintaining communication, setting return-to-work expectations as early as possible, ensuring that medical service providers understand essential job functions, and providing transitional work opportunities. In line with placing greater emphasis on return to work, we recommend that the Commissioner develop a comprehensive return-to-work strategy that integrates, as appropriate, earlier intervention, earlier identification and provision of necessary return-to-work assistance for applicants and beneficiaries, and changes in the structure of cash and medical benefits.

Why GAO Did This Study Pursuant to a congressional request, GAO identified: (1) key private-sector practices to return disabled workers to the workplace; and (2) other countries' return-to-work strategies for workers with disabilities. What GAO Found GAO found that: (1) U.S. private-sector and foreign return-to-work programs emphasize early intervention to increase workers' motivation to work, setting work goals soon after the disabling event, providing timely rehabilitation services, and having the employer communicate early and often with disabled employees to encourage them to return to work; (2) for individuals who might return to work, disability managers identify and provide specific return-to-work assistance, use case management techniques where appropriate, and ensure that medical personnel are aware of the disabled worker's job functions and the employer's work accommodations; (3) limiting cash benefits and linking retention of medical benefits to employment provides an incentive for disabled persons to return to work; (4) disability managers believe that these return-to-work strategies work most effectively when integrated into a comprehensive program; (5) in contrast, the Social Security Administration (SSA) emphasizes establishing applicants' eligibility for benefits rather than their potential for returning to work and structures cash and medical benefits as disincentives to returning to work; (6) the return-to-work strategies reviewed can be applied to a broad and diverse population with widely varying work histories, job skills, and disabilities; and (7) return-to-work successes could generate significant program savings.

gao_GAO-12-918

gao_GAO-12-918_0

Cost and Schedule of Portfolio Remains Unknown Because of Outdated Baselines and Uncertainty Surrounding Affordability Outdated acquisition program baselines and uncertainty surrounding the affordability of the Coast Guard’s acquisition portfolio continue to limit visibility into the current cost and schedule of the Coast Guard’s major acquisitions. Program has changed in scope, which could have cost and/or schedule implications, but its DHS-approved baseline does not reflect these changes. DHS concurred, but has not yet fully implemented this recommendation. While Coast Guard officials acknowledged that baselines for many of its major acquisitions do not reflect the current status of the programs, even using the approved program baselines as of July 2012 and total program cost for programs with no planned funding beyond fiscal year 2014, the estimated total acquisition cost of Coast Guard major acquisitions could be as much as $35.3 billion. This is about $10 billion more than original baselines which totaled $25.1 billion and represents an increase of approximately 41 percent. Upcoming Budget Decisions Will Likely Have Portfolio-wide Implications The mismatch we reported in July 2011 between resources needed to support all approved program baselines and expected funding levels continues to affect the Coast Guard, requiring it to make decisions about which programs to fund and which programs not to fund as part of the annual budget formulation process. Both DHS and the Coast Guard have acknowledged this resource challenge, but efforts to address these challenges have not resulted in a clear strategy for moving forward. Opportunities Exist to Address Affordability through the Requirements Process Opportunities exist for the Coast Guard to address the affordability of the fleet and major cutters through the requirements process, which takes broad mission and capability needs and converts them to system-specific The Coast Guard completed two efforts to reassess the mix capabilities.of assets but both efforts only used its program of record, based upon the 2005 Mission Need Statement, as the basis of the analysis and did not consider realistic fiscal constraints. Although Coast Guard officials stated the way in which teams are expected to interact with one another is still formalizing, we found that the following examples illustrate that the Executive Oversight Council oversees the acquisition governance framework and is well-positioned to delegate tasks to the other teams or pull information from them as needed to assist in the management of acquisitions or solve problems related to acquisitions: At a June 2011 Executive Oversight Council meeting to discuss the Patrol Boat and Medium Endurance Cutter Sustainment programs, the Council tasked the Cutter Resource Council to provide recommendations for unobligated Patrol Boat project funds. Our best practices work has found that successful commercial companies assess product investments collectively from an enterprise level, rather than as independent and unrelated initiatives, and prioritize investments by integrating the requirements, acquisition, and budget processes. As we reported in April 2011, Coast Guard officials told us that as it began assuming the system integrator function from the Deepwater contractor in 2007, it believed it needed a forum to make trade-offs and other program decisions especially in a constrained budget environment and established We did identify instances in which the the Executive Oversight Council.Executive Oversight Council was presented with opportunities to manage its acquisitions as a portfolio, but tasks were not completed or no action was taken: At the request of the Executive Oversight Council, in September 2010, the Systems Integration Team briefed the Council on strategic courses of action to revise acquisition program baselines under a budget constraint, but officials from the Systems Integration Team stated that the briefing led to no decisions or further taskings.Guard officials stated that the briefing was also given to the Deputy Commandant for Mission Support and the Deputy Commandant for Operations. However, the Coast Guard’s current approach of relying on the budget process to manage the affordability of its portfolio has proven ineffective. The preparation of the annual budget request involves immediate trade-offs, but does not provide the best environment to make decisions to develop a balanced, long-term portfolio. Conclusions The Coast Guard has made progress in improving its acquisition management capabilities. To strengthen the Coast Guard’s acquisition governance framework and better prepare the Coast Guard in a constrained fiscal environment, we recommend that the Commandant of the Coast Guard identify the Executive Oversight Council as the governing body to oversee the Coast Guard’s acquisition enterprise with a portfolio management approach. The Executive Oversight Council should supplement individual program reviews with portfolio-wide reviews to make performance and affordability trade-off decisions that will help ensure the Coast Guard is acquiring a balanced portfolio to meet mission needs, given the Coast Guard is not currently on a path to achieve several capabilities identified in the 2005 Mission Need Statement. To assess the steps the Coast Guard has recently taken to develop an affordable portfolio through its requirements process, we obtained and analyzed Fleet Mix Analysis Phase One, Fleet Mix Analysis Phase Two, and the DHS Cutter Study. To examine the Offshore Patrol Cutter’s requirements development process, we reviewed the Coast Guard’s Major Systems Acquisition Manual and Requirements Guidance and interviewed officials in the capabilities directorate to discuss the process and to identify key documents and studies that guided this process. To assess the extent to which Coast Guard is using cross-directorate teams to provide oversight and inform acquisition decisions, we interviewed officials from the acquisition and resource directorates to identify what teams the Coast Guard has established as part of an acquisition governance framework.

Why GAO Did This Study The Coast Guard is in the process of acquiring a multi-billion dollar portfolio of systems intended to conduct missions that range from marine safety to defense readiness. GAO has reported extensively on the Coast Guard's significant acquisition challenges, including those of its former Deepwater program, as well as areas in which it has strengthened its acquisition management capabilities. For this report, GAO assessed (1) the planned cost and schedule of the Coast Guard's portfolio of major acquisitions; (2) the steps the Coast Guard has recently taken to develop an affordable portfolio through its requirements process; and (3) the extent to which the Coast Guard is using cross-directorate teams to provide oversight and inform acquisition decisions. To conduct this work, GAO reviewed the Coast Guard's Major Systems Acquisition Manual, acquisition program baselines, capital investment plans, fleet mix analyses, and cross-directorate teams' charters and meeting documentation, and interviewed relevant Coast Guard and DHS officials. What GAO Found The planned cost and schedule of the Coast Guard's portfolio of major acquisitions is unknown because of outdated acquisition program baselines and uncertainty surrounding affordability. The Coast Guard's approved baselines, which reflect cost and schedule estimates, indicate the estimated total acquisition cost of Coast Guard major acquisitions could be as much as $35.3 billion--an increase of approximately 41 percent over the original baselines. However, the approved baselines for 10 of 16 programs do not reflect current cost and schedule plans because programs have breached the cost or schedule estimates in those baselines, changed in scope, or do not expect to receive funding to execute baselines as planned. Furthermore, a continued mismatch between resources needed to support all approved baselines and expected funding levels has required the Coast Guard to make decisions about which programs to fund and which programs not to fund as part of its annual budget process. Both DHS and the Coast Guard have acknowledged this resource challenge, but efforts to address this challenge have not yet resulted in a clear strategy for moving forward. The Coast Guard has taken steps through its requirements process--a process that takes mission needs and converts them to specific capabilities--to address affordability, but additional efforts are required. For example, in an effort to consider affordability, the Coast Guard made some capability trade-offs when developing requirements for its largest acquisition, the Offshore Patrol Cutter. But whether the cutter ultimately will be affordable depends on some key assumptions in the cost estimate that are subject to change. At the fleet level, the Coast Guard completed two efforts to reassess what mix of assets it requires to meet mission needs, but neither effort used realistic fiscal constraints or considered reducing the number of assets being pursued. The mix of assets the Coast Guard is acquiring is based upon needs identified in 2005, but the Coast Guard may not be on a path to meet these needs and it has not re-examined the portfolio in light of affordability. The Coast Guard has established an acquisition governance framework that includes the following cross-directorate teams: the Executive Oversight Council, the Systems Integration Team, and Resource Councils. The Executive Oversight Council--composed of admirals and senior executives--is well-positioned to delegate tasks to the other teams or obtain information as needed to assist in managing acquisitions. This Council has been active in meeting to discuss individual acquisitions; however, it has not met to discuss the portfolio as a whole. Coast Guard officials told us it manages portfolio affordability through the budget process. GAO's best practices work has found that successful commercial companies assess product investments collectively from an enterprise level, rather than as independent and unrelated initiatives. The Coast Guard's current approach of relying on the annual budget process to manage portfolio affordability involves immediate trade-offs but does not provide the best environment to make decisions to develop a balanced long-term portfolio. What GAO Recommends GAO recommends that the Commandant of the Coast Guard conduct a comprehensive portfolio review to develop revised acquisition program baselines and identify the Executive Oversight Council as the governing body to oversee acquisitions with a portfolio management approach to help ensure the Coast Guard acquires a balanced mix of assets. DHS concurred with both recommendations and noted planned actions to address the recommendations.

gao_GAO-17-113

gao_GAO-17-113_0

1). OMB’s Uniform Guidance establishes several requirements for competitive grant awards, including that federal awarding agencies: (1) notify the public of the grant opportunity through an announcement, or public notice, which includes providing the applicant with sufficient information to help them make a decision about whether to submit an application and the criteria used to evaluate the application; (2) establish a merit-review process for competitive grants; and (3) develop a framework for risk assessment of applicants for competitive grants. 2). The Uniform Guidance directs that agencies disclose in their public notice the relative weights or point values assigned to the merit based criteria, providing applicants with information about how the criteria will be applied. Council on Financial Assistance Reform In 2011, OMB created COFAR, an interagency council charged with providing policy-level leadership for the grants community and implementing reforms to improve the effectiveness and efficiency of federal grants. 3). The Extent to Which Selected Subagencies Followed Certain Required and Recommended Practices for Evaluating Competitive Grant Awards Varied Most Selected Subagencies Included Evaluation Criteria and Related Scoring in Their Merit-Review Process, but the Selected Interior Subagencies Did Not The Uniform Guidance gives agencies flexibility to design their merit- review process but states that all criteria used to influence final award decisions should be clarified in the public notice for applicants, and public notices should include the relative weights the agency will apply to these criteria. In contrast, the public notices for grant programs at the two selected Interior subagencies discussed cost sharing and matching but did not clarify when or how this factor would influence the subagency’s final grant award decisions. While OMB’s Uniform Guidance does not direct agencies to review applicants for duplicative or overlapping funding, federal standards for internal control state that management should use quality information to achieve objectives, including relevant data from reliable internal and external sources. Internal control standards also state that management should document its policies. However, our previous work has pointed to potential risks that can arise—such as awarding duplicative grants—when agencies do not have written guidance in place to direct staff to check for duplication when making competitive award decisions. Two Selected Subagencies Had Guidance and a Formal Process to Identify Potential Duplication and Overlap of Grant Funding We found that two of the selected subagencies in our review, NIH within HHS, and NIFA within USDA, had guidance in place instructing grant management staff to review applicants for potential duplication and overlap prior to making a grant award. Four Selected Subagencies Rely Primarily on Informal Processes for Identifying Potential Duplication and Overlap in Grant Funding Four of the six selected subagencies we reviewed relied on informal mechanisms to identify duplication and overlap of grant funding rather than establish guidance for a formal process, but officials from these subagencies acknowledged the importance of trying to identify potentially duplicative and overlapping grant funding. COFAR Has Updated Its Priorities but Has Made Limited Progress in Planning, Coordination, and Communication COFAR has made limited progress in developing an implementation schedule for achieving its priorities, articulating roles and responsibilities for its council members, and developing a strategy for communicating with stakeholders as we recommended in 2013. We recommended that the director of OMB, along with COFAR, develop and make publicly available an implementation schedule of the COFAR priorities, clarify roles and responsibilities for COFAR members, and improve efforts to develop an effective two-way communication strategy with the grant recipient community. Although COFAR released its updated priorities for fiscal years 2016 through 2017, it continues to face the same challenges that we identified in our 2013 report. We interviewed officials from associations representing the grantee community, state and local governments, universities, and nonprofit recipients about their two-way communication with COFAR or FACE. Achievement of these objectives is in part dependent on effective implementation of merit-based processes for grantee selection. In 2013, we identified certain challenges related to COFAR’s priorities and its lack of an implementation schedule. To improve transparency in the grant merit-review process, we recommend that the Secretary of the Department of the Interior direct the Fish and Wildlife Service to issue written guidance to require all competitive grant programs to clarify in the public notice of funding opportunity all review criteria, including cost sharing factors as relevant, and their related scores to be used to make final award decisions. 2. 3. 4. All the agencies agreed with the recommendations made to them. We are sending copies of this report to the heads of the Departments of Health and Human Services, Interior, Agriculture and OMB, as well as interested congressional committees and other interested parties. To establish a competitive grants program to provide funding for fundamental and applied research, extension, and education to address food and agricultural sciences.

Why GAO Did This Study To improve the effectiveness and efficiency of grant-making in the federal government, in 2011 OMB created COFAR, and in 2014 OMB's Uniform Guidance came into effect. This included requirements for federal agencies to establish a merit-based review process for competitive grants and to assess grant applicants' risk. GAO was asked to review the design and implementation of merit-based grant award selection. GAO reviewed the extent to which (1) selected subagencies followed certain required and recommended practices for evaluating competitive awards; (2) selected subagencies had processes to identify duplicative grant funding; and (3) COFAR has made progress in developing an implementation schedule for achieving its priorities. GAO assessed OMB and agency grant guidance for 19 grant programs at 6 subagencies—selected in part based on grant outlays in fiscal year 2014—and interviewed officials from these agencies and OMB as well as from associations representing different types of grantees. GAO's findings are not generalizable. What GAO Found GAO found that all 6 selected subagencies in the Departments of the Interior (Interior), Health and Human Services (HHS), and Agriculture (USDA) applied a risk assessment review before making final grant award decisions for the 19 grant programs examined, as required by the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). GAO also found that while selected HHS and USDA subagencies generally followed certain other required and recommended practices established in the Uniform Guidance for providing specific information in their notices of public funding opportunity (public notices) announcing grants, selected Interior subagencies did not. Specifically, the Uniform Guidance recommends that public notices include (1) the merit-based criteria that will be used to assess grant applications, (2) the relative weights that will be applied to those assessment criteria, and requires (3) whether and how cost sharing will be used as a factor in assessing an application. GAO found that for several grant programs in selected Interior subagencies, public notices either did not state merit-based selection criteria, did not state the relative weights assigned to selection criteria, or did not clarify how cost sharing would be used to assess an application. Omitting this information from the public notices limits transparency for potential applicants. OMB's Uniform Guidance does not direct agencies to review applicants for duplicative funding, but federal standards for internal control state that management should use quality information to achieve objectives and that management should document its policies. GAO found that only 2 of the 6 selected subagencies (1 in HHS and 1 in USDA) had developed formal processes and guidance for identifying potentially duplicative funding. GAO's previous work has pointed to potential risks that can arise—such as awarding duplicative grants—when agencies do not have guidance in place to direct staff to check for duplication when making competitive award decisions. Officials from the other 4 subagencies (in HHS, USDA, and Interior) that relied primarily on informal processes for identifying potentially duplicative grant funding acknowledged the importance of identifying information about applicants' other funding before making final grant award decisions. The Council on Financial Assistance Reform (COFAR) updated its priorities for fiscal year 2016 but has made limited progress in planning, coordinating, and communicating its priorities. COFAR is an interagency council established by OMB to provide policy-level leadership for the grants community and to support reforms to improve the effectiveness and efficiency of federal grants. In 2013, GAO identified challenges related to COFAR's priorities and its lack of a plan to achieve implementation of these priorities and GAO recommended that OMB provide an implementation schedule for COFAR, clarify roles and responsibilities of COFAR members, and improve two-way communication with stakeholders. However, in this review GAO found that COFAR's challenges remain and it has still not (1) released an implementation schedule that includes performance targets and evaluation mechanisms; (2) established roles and responsibilities for its members; or (3) made progress in developing effective two-way communication with the grant recipient community and other stakeholders. What GAO Recommends GAO is making four recommendations to address the concerns identified at the specific subagencies, such as including required and recommended information in public notices for grant opportunities and developing guidance on reviewing applicants for potentially duplicative funding. All agencies agreed with the recommendations.

gao_GAO-10-402

gao_GAO-10-402_0

There are two types of authorized civilian providers—network and nonnetwork providers. Implementation of DOD’s 2008 Beneficiary and Provider Surveys Followed OMB Survey Standards and Generally Addressed Requirements Outlined in the NDAA 2008 In implementing the first year of the beneficiary and provider surveys, TMA followed the OMB standards for statistical surveys that we reviewed. In addition, TMA generally addressed the requirements outlined in the NDAA 2008 for both of its surveys but did not give a high priority to selecting areas with a high concentration of Selected Reserve servicemembers. TMA plans to cover the entire United States at the end of the 4-year survey period, which will include any locations with higher concentrations of Selected Reserve servicemembers. According to a TMA official responsible for implementing the surveys, TMA did not give a high priority to areas where higher concentrations of Selected Reserve servicemembers live, as specified in the mandate, because it decided to randomly select the areas to be surveyed in order to produce results that can be generalized to the populations from which the survey samples are selected. 2008 Survey Results Indicate That a Higher Percentage of Nonenrolled Beneficiaries in Prime Service Areas Experienced Problems Accessing Care from Primary Care Physicians or Nurses Than Those in Non-Prime Service Areas Based on our analysis of the 2008 survey results, we estimated that a higher percentage of nonenrolled beneficiaries in surveyed Prime Service Areas experienced problems accessing care from network or nonnetwork primary care physicians or nurses than nonenrolled beneficiaries in surveyed non-Prime Service Areas. Nonenrolled Beneficiaries in Prime Service Areas and Non-Prime Service Areas Surveyed in 2008 Rated Satisfaction with Their Health Care Similarly to Each Other and to Beneficiaries of Commercial Health Care Plans Despite differences in the percentage of beneficiaries in surveyed Prime and non-Prime Service Areas reporting problems accessing care from primary care physicians or nurses, our analysis showed that nonenrolled beneficiaries’ ratings for several categories of health care were similar in the surveyed Prime Service Areas and non-Prime Service Areas. 2008 Provider Survey Results Are Not Representative of All Providers in Surveyed Areas but Provide Limited Information That Indicates Differences among Respondents’ Awareness and Acceptance of TRICARE Although the first year’s results of TMA’s 4-year provider survey are not representative of all providers in the areas surveyed, the results we analyzed do provide information about access to care based on the specific views of the respondents. According to a TMA official, generalizability of provider survey results to the entire country will likely be possible at the end of the 4-year survey period. Additionally, there were differences between the responding physicians (primary care physicians and specialists) and mental health providers (psychiatrists, certified clinical social workers, clinical psychologists, and others) regarding their awareness and acceptance of TRICARE. For example, 81 percent of the physicians who responded reported that they would accept new TRICARE patients, if they were accepting any new patients at all, compared to 50 percent of the mental health providers who responded. Agency Comments We received comments on a draft of this report from DOD. DOD concurred with our overall findings and provided technical comments, which we incorporated where appropriate. Appendix I: Selected Office of Management and Budget Standards for Statistical Surveys The National Defense Authorization Act for Fiscal Year 2008 (NDAA 2008) directed the Department of Defense (DOD) to determine the adequacy of the number of health care and mental health care providers that currently accept nonenrolled beneficiaries as patients under TRICARE, DOD’s health care program. Beneficiary and Provider Survey Content The NDAA 2008 required that the beneficiary survey include questions to determine whether TRICARE Standard and Extra beneficiaries have had difficulties finding physicians and mental health providers willing to provide services under TRICARE Standard or TRICARE Extra. For the purpose of this report, we refer to beneficiaries who are not enrolled in TRICARE Prime—that is, those who use TRICARE Standard, TRICARE Extra, or TRICARE Reserve Select—as nonenrolled beneficiaries.

Why GAO Did This Study The Department of Defense (DOD) provides health care and mental health care through its TRICARE program. Under TRICARE, beneficiaries may obtain care through TRICARE Prime, an option that includes the use of civilian provider networks and requires enrollment. TRICARE beneficiaries who do not enroll in this option may obtain care from nonnetwork providers through TRICARE Standard, or from network providers through TRICARE Extra. In addition, qualified National Guard and Reserve servicemembers may purchase TRICARE Reserve Select, a plan whose care options are similar to those of TRICARE Standard and TRICARE Extra. We refer to servicemembers who use TRICARE Standard, TRICARE Extra, or TRICARE Reserve Select as nonenrolled beneficiaries. The National Defense Authorization Act for Fiscal Year 2008 directed GAO to analyze the adequacy of DOD's surveys of TRICARE beneficiaries and providers and report what the surveys' results indicate about access to care for nonenrolled beneficiaries. To do so, GAO evaluated the surveys' methodology by interviewing DOD officials and reviewing relevant documentation, including the Office of Management and Budget's (OMB) survey standards. GAO also assessed the surveys' results by interviewing DOD officials, obtaining relevant documentation, and analyzing the response rates and data for both surveys. What GAO Found DOD's implementation of beneficiary and provider surveys for 2008, the first of a 4-year survey effort, followed the OMB survey standards for survey design, data collection, and data accuracy. In addition, DOD generally addressed the survey requirements outlined in the mandate in implementing its 2008 beneficiary and provider surveys but did not give a high priority to selecting geographic areas with a high concentration of Selected Reserve servicemembers. Instead, for both of its surveys, DOD randomly selected areas to produce results that can be generalized to the populations from which the survey samples were drawn. DOD plans to cover the entire United States at the end of the 4-year survey period, which will include any locations with higher concentrations of Selected Reserve servicemembers. In its analysis of the 2008 beneficiary survey data, GAO estimated that a higher percentage of nonenrolled beneficiaries in surveyed areas where TRICARE Prime is offered (Prime Service Areas) experienced problems accessing care from network or nonnetwork primary care providers than beneficiaries in surveyed areas where TRICARE Prime is not offered (non-Prime Service Areas)--30 percent and 24 percent, respectively. GAO also found that beneficiaries in the surveyed areas most often experienced access problems related to providers' willingness to accept TRICARE payments, regardless of whether they lived in a Prime or non-Prime Service Area. Additionally, GAO's comparison of this survey data to related data from a 2008 Department of Health and Human Services' survey showed that beneficiaries in the surveyed Prime and non-Prime Service Areas rated their health care satisfaction similarly to each other and to beneficiaries of commercial health care plans, but slightly lower than Medicare beneficiaries. GAO found that the results for the 2008 provider survey are not representative of all physicians and mental health providers in the geographic areas surveyed, but the results do provide information about access to care based on the specific views of the respondents. According to a DOD official, generalizability of provider survey results to the entire country will likely be possible at the end of the 4-year survey period. GAO's review of the 2008 provider survey results indicates that a lower percentage of respondents in Prime Service Areas reported awareness and acceptance of TRICARE than respondents in non-Prime Service Areas. Additionally, there were differences between responding physicians and responding mental health providers, such as psychiatrists and clinical psychologists, regarding their awareness and acceptance of TRICARE. For example, 81 percent of physicians who responded reported that they would accept new TRICARE patients, if they were accepting any new patients at all, compared to 50 percent of mental health providers who responded. In commenting on a draft of this report, DOD concurred with GAO's overall findings and provided technical comments, which GAO incorporated as appropriate.

gao_GAO-04-700

gao_GAO-04-700_0

Webcasting, also called Internet streaming, is the process of transmitting digitized audio or video content over the Internet. The act did not set new royalty rates but instead allowed small webcasters and copyright owners another opportunity to negotiate an agreement on royalty rates for the period beginning October 28, 1998, through December 31, 2004. We interviewed 30 of these webcasters. Other less commonly reported arrangements with third parties included those with companies that help small webcasters manage or obtain advertising, such as companies that insert ads either on the Web site or into the webcast, and companies that sell advertising based on the aggregate audience of multiple webcasters. Arrangements with Bandwidth Providers and Advertisers are Most Common Fifty-two, or 91 percent, of the small webcasters that we interviewed reported having had arrangements with bandwidth providers during the year 2003. Available Data Suggest the Effects of Economic Relationships between Small Webcasters and Third Parties on Royalties Have Been Minimal to Date Data obtained from small webcasters that agreed to the terms of the small webcaster agreement suggest that to date the overall effect of their economic arrangements with third parties on royalties owed to copyright owners has been minimal. Nineteen, or 70 percent, of the 27 small webcasters that provided us with financial information reported revenue and expense estimates that were below the levels that would result in royalty payments above the minimum fee for one or both of the time periods for which payments were to be made—the historical period, which began on October 28, 1998, and ended on December 31, 2002, and 2003 (see table 2). We found limited evidence to suggest that small webcasters might not be reporting revenues and expenses as agreed. Effect of Economic Arrangements May Change As Industry Evolves Although the majority of small webcasters that we interviewed reported revenues and expenses that were substantially below the levels required to pay a royalty above the minimum fee, this may change as the industry matures.Revenues and expenses of small webcasters might increase as they attract more listeners, and advertising opportunities and rates may also increase as the webcasting industry matures and advertisers rely more on the Internet as part of their advertising efforts. Industry analysts expect this growth to continue. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. Copyright Office in the Library of Congress to determine (1) the economic arrangements between small commercial webcasters and third parties and (2) how those arrangements affect royalties due to copyright owners and performers. Data are not reported due to unreliability. Don’t do and don’t intend to in future (N=20) Did not sign small webcaster agreement (N=16) Sold by an advertising agency Sold by owners or employees of the station Sold by owners or employees of parent company Sold through a coalition of webcasters Other ways (N=39) Sold by an advertising agency Sold by owners or employees of the station Sold by owners or employees of parent company Sold through a coalition of webcasters Other ways 2.56 Q13: Percentage of Webcasters Who Had Economic Transactions With Different Types Type of business Ad insertion company Advertising agency Audience aggregator for advertisers Bandwidth provider (i.e., an ISP) A music content provider A corporate sponsor A coalition of webcasters A parent or sister company Suppliers of merchandise (e.g., T-shirts) Other types of businesses (N=22) (N=21) (N=47) Type of business Ad insertion company Advertising agency Audience aggregator for advertisers Bandwidth provider (i.e., an ISP) A music content provider A corporate sponsor A coalition of webcasters A parent or sister company Suppliers of merchandise (e.g., T-shirts) Other types of businesses (N=29) (N=24) (N=57) 50.88 Q14: Percentage of Webcasters Using Different Methods to Pay for Goods and Services Method of payment Direct payment, that is, with cash or a check Commissions Revenue or profit sharing Barter or other noncash exchange Other ways (N=22) (N=21) (N=47) Method of payment Direct payment, that is, with cash or a check Commissions Revenue or profit sharing Barter or other noncash exchange Other ways (N=29) (N=24) (N=57) 3.51 Q15: Percentage of Webcasters Who Reported Receiving Different Types of Goods and Goods and services Free bandwidth Reduced-price bandwidth Free or reduced-price advertising for your webcasting service Other goods (N=22) (N=21) (N=47) Goods and services Free bandwidth Reduced-price bandwidth Free or reduced-price advertising for your webcasting service Other goods (N=28) (N=24) (N=56) Goods and services Advertising Cash donations Noncash donations Merchandise sales Other sources (N=21) (N=21) (N=46) Goods and services Advertising Cash donations Noncash donations Merchandise sales Other sources (N=28) (N=24) Q17: Webcasters’ Estimates of Their Gross Revenue (N=20) (N=19) (N=41) (N=27) (N=22) Q18: Webcasters’ Estimates of Their Expenses (N=20) (N=18) (N=40) (N=27) (N=21) (N=50) Q.19: Percentage of Webcasters Who Participated in the Negotiations That Led to the Small Webcaster Settlement Act (N=28) (N=24) (N=56) Q20: Percentage of Webcasters Who Elected to Pay Royalties to Performers Under the Terms of the Small Webcaster Agreement (N=28) (N=23) (N=55) Q21: Month and Year Election Forms Submitted to SoundExchange.

Why GAO Did This Study The emergence of webcasting as a means of transmitting audio and video content over the Internet has led to concerns about copyright protection and the payment of royalties to those who own the recording copyrights. Arriving at an acceptable rate for calculating royalties has been particularly challenging. Under the Small Webcaster Settlement Act of 2002, small commercial webcasters reached an agreement with copyright owners that included the option of paying royalties for the period of October 28, 1998, to December 31, 2004, on the basis of a percentage of their revenues, expenses, a combination of both, or a minimum fee rather than paying the royalty rates set by the Librarian of Congress. During debate on the act, copyright owners raised concerns that small webcasters might have arrangements with other parties, such as advertisers, that could produce revenues or expenses that might not be included in their royalty calculations. In this context, the Congress mandated that GAO, in consultation with the Register of Copyrights, prepare a report on the (1) economic arrangements between small webcasters and third parties and (2) effect of those arrangements on the royalties that small webcasters might owe copyright owners. What GAO Found Small webcasters have a variety of economic arrangements with third parties, the most common being agreements with bandwidth providers and advertisers. Almost all of the webcasters that we interviewed reported arrangements with bandwidth providers, and many reported arrangements with advertisers. Less commonly reported arrangements included those with merchandise suppliers and companies that help small webcasters manage or obtain advertising for their Web sites, such as by inserting ads on the Web site or into the webcast itself or selling advertising based on the aggregate audiences of multiple webcasters. Third-party economic arrangements have had a minimal effect to date on royalties owed by small webcasters to copyright owners. Of the 27 small webcasters we interviewed that had agreed to the terms of the small webcaster agreement and provided us with financial data, 19 reported revenue and expense estimates below the levels that would result in royalty payments greater than the minimum fee. We found limited evidence to suggest that small webcasters may not be reporting revenues and expenses as required by the small webcaster agreement. Specifically, 2 of the 13 small webcasters who reported receiving free or reduced-price items did not report the value of these items as revenue for calculating royalties. However, the data we obtained in our survey may not reflect conditions that could develop as the webcasting industry matures. According to industry analysts, revenues of small webcasters are likely to increase as they attract more listeners and advertisers rely more on the Internet to reach customers.

gao_GAO-15-745T

gao_GAO-15-745T_0

As we previously found, recent increases in U.S. crude oil production have lowered the cost of some domestic crude oils. In 2014, prices for these benchmark crude oils narrowed as global oil prices declined, and WTI averaged $52 from January through May 2015, while Brent averaged $57. The development of U.S. crude oil production has created some challenges for crude oil transportation infrastructure because some production has been in areas with limited linkages to refining centers. According to EIA, these infrastructure constraints have contributed to discounted prices for some domestic crude oils. Light crude oil differs from the crude oil that many U.S. refineries are designed to process. Removing Crude Oil Export Restrictions Is Expected to Increase Domestic Crude Oil Prices and Could Decrease Consumer Fuel Prices In our September 2014 report, we reported that according to the studies we reviewed and the stakeholders we interviewed, removing crude oil export restrictions would likely increase some domestic crude oil prices, but could decrease consumer fuel prices, although the extent of consumer fuel price changes are uncertain and may vary by region. According to these studies, by removing the export restrictions, these domestic crude oils could be sold at prices closer to international prices, reducing the price differential and aligning the price of domestic crude oil with international benchmarks. Specifically, estimates in these studies of the increase in domestic crude oil prices due to removing crude oil export restrictions ranged from about $2 to $8 per barrel. In addition, NERA Economic Consulting found that removing export restrictions would have no measurable effect in a case that assumes a low future international oil price of $70 per barrel in 2015 According to the NERA Economic rising to less than $75 by 2035.Consulting study, current production costs are close to these values, so that removing export restrictions would provide little incentive to produce more light crude oil. Regarding consumer fuel prices, such as gasoline, diesel, and jet fuel, the studies we reviewed and most of the stakeholders we interviewed suggested that consumer fuel prices could decrease as a result of removing crude oil export restrictions. If domestic crude oil exports caused international crude oil prices to decrease, consumer fuel Table 2 shows that the estimates of the prices could decrease as well. price effects on consumer fuels varied in the four studies we reviewed. Price estimates ranged from a decrease of 1.5 to 13 cents per gallon. In addition, NERA Economic Consulting found that removing export restrictions would have no measurable effect on consumer fuel prices when assuming a low future world crude oil price. Removing Crude Oil Export Restrictions Is Expected to Increase Domestic Production and Have Other Implications The studies we reviewed for our September 2014 report, generally suggested that removing crude oil export restrictions may increase domestic crude oil production and may affect the environment and the economy: Crude oil production. Removing crude oil export restrictions may increase domestic crude oil production. Projections of this increase varied in the studies we reviewed—from a low of an additional 130,000 barrels per day on average from 2015 through 2035, according to the ICF International study, to a high of an additional 3.3 million barrels per day on average from 2015 through 2035 in NERA Economic Consulting’s study.almost 40 percent of production in April 2014. The stakeholders who raised concerns about the effect of removing the restrictions on crude oil exports on the environment identified risks including those related to the quality and quantity of surface and groundwater sources; increases in greenhouse gas and other air emissions, and increases in the risk of spills from crude oil transportation. Three of the studies projected that removing export restrictions would lead to additional investment in crude oil production and increases in employment. This growth in the oil sector would—in turn—have additional positive effects in the rest of the economy.

Why GAO Did This Study After decades of generally falling U.S. crude oil production, technological advances in the extraction of crude oil from shale formations have contributed to increases in U.S. production. In response to these and other market developments, some have proposed removing the 4 decade old restrictions on crude oil exports, underscoring the need to understand how allowing crude oil exports could affect crude oil prices, and the prices of consumer fuels refined from crude oil, such as gasoline and diesel. This testimony discusses what is known about the pricing and other key potential implications of removing crude oil export restrictions. It is based on GAO's September 2014 report ( GAO-14-807 ), and information on crude oil production and prices updated in June 2015. For that report, GAO reviewed four studies issued in 2014 on crude oil exports; including two sponsored by industry and conducted by consultants, one sponsored by a research organization and conducted by consultants, and one conducted at a research organization. Market conditions have changed since these studies were conducted, underscoring some uncertainties surrounding estimates of potential implications of removing crude oil export restrictions. For its 2014 report, GAO also summarized the views of a nongeneralizable sample of 17 stakeholders including representatives of companies and interest groups with a stake in the outcome of decisions regarding crude oil export restrictions, as well as academic, industry, and other experts. What GAO Found In September 2014, GAO reported that according to studies it reviewed and stakeholders it interviewed, removing crude oil export restrictions would likely increase domestic crude oil prices, but could decrease consumer fuel prices, although the extent of price changes are uncertain and may vary by region. The studies identified the following implications for U.S. crude oil and consumer fuel prices: Crude oil prices . The four studies GAO reviewed estimated that if crude oil export restrictions were removed, U.S. crude oil prices would increase by about $2 to $8 per barrel—bringing them closer to international prices. Prices for some U.S. crude oils have been lower than international prices—for example, one benchmark U.S. crude oil averaged $52 per barrel from January through May 2015, while a comparable international crude oil averaged $57. In addition, one study found that, when assuming low future crude oil prices overall, removing export restrictions would have no measurable effect on U.S. crude oil prices. Consumer fuel prices. The four studies suggested that U.S. prices for gasoline, diesel, and other consumer fuels follow international prices. If domestic crude oil exports caused international crude oil prices to decrease, consumer fuel prices could decrease as well. Estimates of the consumer fuel price implications in the four studies GAO reviewed ranged from a decrease of 1.5 to 13 cents per gallon. In addition, one study found that, when assuming low future crude oil prices, removing export restrictions would have no measurable effect on consumer fuel prices. Some stakeholders cautioned that estimates of the price implications of removing export restrictions are subject to several uncertainties, such as the extent of U.S. crude oil production increases, and how readily U.S. refiners are able to absorb such increases. Some stakeholders further told GAO that there could be important regional differences in the price implications of removing export restrictions. The studies GAO reviewed and the stakeholders it interviewed generally suggested that removing crude oil export restrictions may also have the following implications: Crude oil production . Removing export restrictions may increase domestic production—over 8 million barrels per day in April 2014—because of increasing domestic crude oil prices. Estimates ranged from an additional 130,000 to 3.3 million barrels per day on average from 2015 through 2035. Environment . Additional crude oil production may pose risks to the quality and quantity of surface groundwater sources; increase greenhouse gas and other emissions; and increase the risk of spills from crude oil transportation. The economy . Three of the studies projected that removing export restrictions would lead to additional investment in crude oil production and increases in employment. This growth in the oil sector would—in turn—have additional positive effects in the rest of the economy, including for employment and government revenues.

gao_GAO-02-784T

gao_GAO-02-784T_0

Over the past 12 years, the department has initiated several broad-based departmentwide reform efforts intended to fundamentally reform its financial operations as well as other key business areas, including the Defense Reform Initiative, the Defense Business Operations Fund, and the Corporate Information Management initiative. These elements, which we believe are key to any successful approach to financial management reform, include addressing the department’s financial management challenges as part of a comprehensive, integrated, DOD-wide business reform; providing for sustained leadership by the Secretary of Defense and resource control to implement needed financial management reforms; establishing clear lines of responsibility, authority, and accountability for such reform tied to the Secretary; incorporating results-oriented performance measures and monitoring tied to financial management reforms; providing appropriate incentives or consequences for action or inaction; establishing and implementing an enterprise architecture to guide and direct financial management modernization investments; and ensuring effective oversight and monitoring.

What GAO Found The Department of Defense (DOD) faces complex financial and management problems that are deeply rooted in DOD's business operations and management culture. During the past 12 years, DOD has begun several broad-based departmentwide reform efforts to overhaul its financial operations and other key business areas. These efforts have been unsuccessful. GAO identified several key elements that are essential to the success of any DOD financial management reform effort. These include (1) addressing the department's financial management challenges as part of a comprehensive, integrated, DOD-wide business reform; (2) providing for sustained leadership and resource control to implement needed reforms; (3) establishing clear lines of responsibility, authority, and accountability for such reform; (4) incorporating results-oriented performance measures and monitoring tied to the reforms; (5) providing appropriate incentives or consequences for action or inaction; (6) establishing and implementing an enterprise architecture to guide and direct financial management and modernization investments, and (7) ensuring effective oversight and monitoring.

gao_GAO-10-18

gao_GAO-10-18_0

Principals and Teachers Used a Variety of Instructional Practices to Help Students Meet Standards, and Many of These Practices Were Used More Frequently at Schools with Higher Proportions of Low- Income and Minority Students According to our analysis of NLS-NCLB data from Education, most principals reported their schools focused on multiple instructional practices in their voluntary school improvement efforts. Likewise, the survey of math teachers in California, Georgia, and Pennsylvania indicates teachers were using many different instructional practices in response to their state tests, and teachers at high-poverty and high-minority schools were more likely than teachers at low-poverty and low-minority schools to have been increasing their use of some of these practices. Some researchers we spoke with suggested that differences in the use of these instructional practices exist because schools with low- poverty or low-minority student populations might generally be meeting accountability standards and, therefore, would need to try these strategies less frequently. Most Math Teachers in Three Surveyed States Have Increased Their Use of Certain Instructional Practices in Response to State Tests, especially in High-Poverty and High- Minority Schools The RAND survey of elementary and middle school math teachers in California, Georgia and Pennsylvania showed that in each of the three states at least half of the teachers reported increasing their use of certain instructional practices in at least five areas as a result of the statewide math test (see fig. For example, most teachers in Pennsylvania responded that due to the state math test they: (1) focused more on standards, (2) emphasized assessment styles and formats, (3) focused more on subjects tested, (4) searched for more effective teaching methods, and (5) spent more time teaching content. Research Shows That Standards-based Accountability Systems Can Influence Instructional Practices through Standards and Assessments in Both Positive and Negative Ways Research shows that using a standards-based curriculum that is aligned with corresponding instructional guidelines can positively influence teaching practices. However, some studies indicated that teachers’ practices did not always reflect the principles of standards-based instruction and that current accountability policies help contribute to the difficulty in aligning practice with standards. Another key element of a standards-based accountability system is assessments, which help measure the extent to which schools are improving student learning through assessing student performance against the standards. Some researchers note that assessments are powerful tools for managing and improving the learning process by providing information for monitoring student progress, making instructional decisions, evaluating student achievement, and evaluating programs. Research Highlights Some Potentially Successful Practices for Improving Student Achievement, although Experts Contend That Methodological Issues Constrain Reaching Definitive Conclusions about What Works Our literature review found some studies that pointed to instructional practices that appear to be effective in raising student achievement. Some of the practices identified by both the studies and a few experts as those with potential for improving student achievement were: Differentiated instruction. These kinds of learning processes are important for higher-order thinking. To determine the types of instructional practices schools and teachers are using to help students achieve state academic standards and whether those practices differ by school characteristics, we used two recent surveys of principals and teachers. From these sources, we identified 251 studies that were relevant to our study objectives about the effect of standards-based accountability systems on instructional practices and instructional practices there are effective in raising student achievement.

Why GAO Did This Study The federal government has invested billions of dollars to improve student academic performance, and many schools, teachers, and researchers are trying to determine the most effective instructional practices with which to accomplish this. The Conference Report for the Consolidated Appropriations Act for Fiscal Year 2008 directed GAO to study strategies used to prepare students to meet state academic achievement standards. To do this, GAO answered: (1) What types of instructional practices are schools and teachers most frequently using to help students achieve state academic standards, and do those instructional practices differ by school characteristics? (2) What is known about how standards-based accountability systems have affected instructional practices? (3) What is known about instructional practices that are effective in improving student achievement? GAO analyzed data from a 2006-2007 national survey of principals and 2005-2006 survey of teachers in three states, conducted a literature review of the impact of standards-based accountability systems on instructional practices and of practices that are effective in improving student achievement, and interviewed experts. What GAO Found Nationwide, most principals focused on multiple strategies to help students meet academic standards, such as using student data to inform instruction and increasing professional development for teachers, according to our analysis of data from a U.S. Department of Education survey. Many of these strategies were used more often at high-poverty schools--those where 75 percent or more of the students were eligible for the free and reduced-price lunch program--and high-minority schools--those where 75 percent or more of students were identified as part of a minority population, than at lower poverty and minority schools. Likewise, math teachers in California, Georgia, and Pennsylvania increased their use of certain instructional practices in response to their state tests, such as focusing more on topics emphasized on assessments and searching for more effective teaching methods, and teachers at high-poverty and high-minority schools were more likely than teachers at lower-poverty schools and lower-minority schools to have made these changes, according to GAO's analysis of survey data collected by the RAND Corporation. Some researchers suggested that differences exist in the use of these practices because schools with lower poverty or lower minority student populations might generally be meeting accountability requirements and therefore would need to try these strategies less frequently. Research shows that standards-based accountability systems can influence instructional practices in both positive and negative ways. For example, some research notes that using a standards-based curriculum that is aligned with corresponding instructional guidelines can facilitate the development of higher order thinking skills in students. But, in some cases, teacher practices did not always reflect the principles of standards-based instruction, and the difficulties in aligning practice with standards were attributed, in part, to current accountability requirements. Other research noted that assessments can be powerful tools for improving the learning process and evaluating student achievement, but assessments can also have some unintended negative consequences on instruction, including narrowing the curriculum to only material that is tested. Many experts stated that methodological issues constrain knowing more definitively the specific instructional practices that improve student learning and achievement. Nevertheless, some studies and experts pointed to instructional practices that are considered to be effective in raising student achievement, such as differentiated instruction. Professional development for teachers was also highlighted as important for giving teachers the skills and knowledge necessary to implement effective teaching practices.

gao_GAO-14-696T

gao_GAO-14-696T_0

The preauthorization process is initiated by a VA provider who submits a request for non-VA medical care to the VA facility’s non-VA medical care unit, which is an administrative department within each VA facility that processes VA providers’ non-VA medical care requests and verifies that non-VA medical care is necessary. 1.) Criteria for VA Coverage of Emergency Care from Non-VA Providers For claims that are emergent in nature and therefore would not have gone through the traditional VA preauthorization process, VA is authorized to pay claims for emergency care from non-VA providers under certain conditions, which vary depending on whether the care was related to the veteran’s service-connected disability. 2.) VA Lacks Critical Data on Wait Times and Cost-Effectiveness of Non-VA Medical Care Critical data limitations related to the wait times veterans face in obtaining care from non-VA providers and the cost-effectiveness of such services limit VA’s efforts to oversee the Non-VA Medical Care Program in an effective manner. We previously reported that the amount of time veterans wait for appointments in VA facilities influenced VA’s utilization of non-VA medical care. In our May 2013 report, we found that VA lacked a data system to group medical care delivered by non-VA providers by episode of care—a combined total of all care provided to a veteran during a single office visit or inpatient stay. Without cost-effectiveness data, VA is unable to efficiently compare VA and non-VA options for delivering care in areas with high utilization and spending for non-VA medical care. With respect to establishing a mechanism to analyze the episode of care costs for non-VA medical care, VA officials explained that they are in the process of fully implementing this recommendation by (1) improving existing data systems to systematically audit claims that include billing codes typically included in bundled payments while the claims are in a pre-payment status and to require VA facilities to review these claims prior to payment, and by (2) making improvements to its Non-VA Medical Care Program data that would allow all non-VA medical care data to be analyzed on an episode of care basis. Selected VA Facilities Failed to Comply with Applicable Millennium Act Claims Processing Requirements, and Weaknesses Were Identified in VA’s Oversight of Claims Processing Activities In March 2014, we reported that four VA facilities we visited had patterns of noncompliance with VA claims processing requirements, which led to the inappropriate denial of some Millennium Act emergency care claims and the failure to notify some veterans that their claims had been denied. We also found that VA’s existing oversight mechanisms for non- VA medical care claims processing were not sufficiently focused on whether VA facilities were inappropriately approving or denying claims. We determined that about 20 percent of the claims we examined had been denied inappropriately, and almost 65 percent of the claims we examined lacked documentation showing that the veteran was notified that their claim was denied. As a result of our review, these four VA facilities reconsidered and paid 25 claims that they had inappropriately denied. VA concurred with these recommendations and detailed its plans to address them. Veterans Lack Knowledge about Millennium Act Emergency Care Eligibility, and Selected Non-VA Providers Have Reported Communication Challenges with VA In March 2014, we found that despite VA’s communication efforts with veterans and non-VA providers, knowledge gaps exist for veterans about eligibility for Millennium Act emergency care, and communication weaknesses exist between VA and non-VA providers. VA primarily educates veterans about their eligibility for non-VA medical care through patient orientation sessions and written materials, such as the Veteran Health Benefits Handbook. Alternatively, we found that without knowledge of specific criteria for VA payment of non-VA medical care, specifically Millennium Act emergency care, veterans may seek treatment in situations where the Department cannot pay. However, VA staff reviewing the claim may decide that the condition does not meet the prudent layperson standard for emergency care and deny payment.

Why GAO Did This Study Due to serious and longstanding problems with the timely scheduling of veterans' appointments in VA facilities, VA recently announced that it will allow additional veterans to be treated through its Non-VA Medical Care Program. This testimony is based on two GAO reports and addresses the extent to which (1) VA collects reliable information on wait times and cost-effectiveness of the Non-VA Medical Care Program; (2) VA facilities comply with Millennium Act claims processing requirements and VA oversees claims processing activities; and (3) VA educates veterans about eligibility for Millennium Act emergency care and communicates with non-VA providers. For both reports, GAO reviewed relevant requirements and visited 10 VA facilities. For its report on the oversight and management of the Non-VA Medical Care Program, GAO reviewed non-VA medical care spending and utilization data from fiscal year 2008 through fiscal year 2012. For its report on the Millennium Act emergency care benefit, GAO reviewed 128 denied Millennium Act claims to determine the accuracy of processing decisions. GAO made numerous recommendations to VA in the two prior reports related to improving (1) data on wait times and cost-effectiveness for non-VA medical care; (2) compliance with claims processing requirements; and (3) veterans' knowledge of non-VA medical care eligibility. VA agreed with these recommendations but has yet to fully implement them. What GAO Found GAO's May 2013 report on the oversight and management of the Non-VA Medical Care Program found that the Department of Veterans Affairs (VA) does not collect data on wait times veterans face in obtaining care from non-VA providers. The lack of data on wait times limits VA's efforts to effectively oversee the Non-VA Medical Care Program because it is not possible for VA to determine if veterans who receive care from non-VA providers are receiving that care sooner than they would in VA facilities. In addition, GAO found that VA cannot assess the cost-effectiveness of non-VA medical care because it cannot analyze data on all services and charges for an episode of care, which is a combined total of all care provided to a veteran during a single office visit or inpatient stay. As a result, VA cannot determine whether delivering care through non-VA providers is more cost-effective than augmenting its own capacity in areas with high utilization of non-VA medical care. GAO's March 2014 report found patterns of noncompliance with applicable requirements for processing emergency care claims covered under the Veterans Millennium Health Care and Benefits Act (Millennium Act) at each of the four VA facilities visited. This led to the inappropriate denial of some claims and the failure to notify veterans that their claims had been denied at these facilities. The Millennium Act authorizes VA to cover emergency care for conditions not related to veterans' service-connected disabilities when veterans who have no other health plan coverage receive care at non-VA providers and meet other specified criteria. Specifically, GAO determined that about 20 percent of the 128 claims it reviewed had been denied inappropriately, and almost 65 percent of the reviewed claims lacked documentation showing that the veterans were informed their claims were denied and explained their appeal rights. As a result of GAO's review, the VA facilities reconsidered and paid 25 claims that they initially had inappropriately denied. GAO also found that there is significant risk that these patterns of noncompliance will continue because VA's existing oversight mechanisms do not focus on whether VA facilities appropriately approve or deny non-VA medical care claims or fail to notify veterans that their claims have been denied. GAO also reported in March 2014 that gaps exist in veterans' knowledge about eligibility criteria for Millennium Act emergency care, and communication weaknesses exist between VA and non-VA providers. Specifically, GAO found that veterans' lack of understanding about their emergency care benefits under the Millennium Act presents risks for potentially negative effects on veterans' health because they may forgo treatment at non-VA providers, and on veterans' finances because they may assume VA will pay for care in situations that do not meet VA criteria. Despite VA's efforts to improve communications, some non-VA providers reported instances in which VA facilities' claims processing staff were unresponsive to their questions about submitted claims.

gao_GGD-98-164

gao_GGD-98-164_0

Objectives, Scope, and Methodology Objectives The objectives of this report are (1) to identify policy-related information needs for immigration flow and other key demographic concepts that are relevant to migration; (2) to identify federal statistics on the flow of immigrants (and information gaps) and to determine what is known about the quality of existing statistics on flow; (3) to identify federal statistics relevant to other key demographic categories and to determine what is known about their quality; and (4) to identify strategies for improving immigration statistics. Policy-Related Information Needs A basic typology of policy-relevant statistical information on the resident foreign-born population can be defined by combining two dimensions: one consisting of four demographic concepts that are relevant to migration (flow, size of the foreign-born population, net change in size, and emigration) and the other consisting of legal statuses (legal permanent residents, refugees and asylees, persons permitted to reside here on a temporary basis, illegal immigrants, and naturalized citizens). • Administrative data undercount persons granted asylum as well as those attaining naturalized citizenship. The INS Yearbook also discusses the sources of these data and some of their limitations. Conclusions For informed decisions on immigration issues, policymakers need information on immigration flow, by legal status. INS records that are maintained for administrative purposes describe the number of new legal permanent residents (green-card holders), new refugees and asylees, and new naturalized citizens. As reported in the Yearbook, however, these statistics are limited by (1) conceptual problems and confused reporting, (2) undercounts, and (3) information gaps. • The number of new asylees is an undercount, because the Yearbook tally omits certain categories of persons, such as those who are granted asylum on appeal. Turning to relevant demographic concepts other than flow, statistics are reported in a more scattered fashion; indeed, a variety of INS and Bureau of the Census publications, including the INS Web page, must be accessed. INS has made efforts to fill gaps for some legal statuses by using the limited data that are available and creating assumption-based models. We identified or developed strategies that might improve immigration statistics. Specifically, we devised a new method for collecting survey data on the legal status of foreign-born respondents. We also identified strategies for evaluating survey data on the foreign- born. To reduce the uncertainty associated with statistical estimates of relevant demographic concepts other than immigration flow, fill information gaps for specific legal statuses, and address fragmented reporting, we recommend that the Commissioner of INS and the Director of the Bureau of the Census together • devise a plan of joint research for evaluating the quality of census and survey data on the foreign-born; further develop, test, and evaluate the three-card method that we devised for surveying the foreign-born about their legal status; and • either publish a joint report or closely coordinate reports that present information on population size, net change, and emigration.

Why GAO Did This Study Pursuant to a congressional request, GAO identified: (1) policy-related information needs for immigration statistics; (2) federal statistics (and information gaps) on the full range of demographic concepts relevant to immigration policy decisions, including what is known about the quality of those statistics; and (3) strategies for improving statistics. What GAO Found GAO noted that: (1) Congress periodically makes decisions about numerous immigration policies; (2) thus, informed decisionmaking by congressional committees and members of Congress as well as interested members of the general public, requires information on immigration flow, by legal status; (3) Congress also decides on the eligibility of the foreign-born for government benefits and services--with different benefits typically allowed or restricted for different categories of the foreign-born population; (4) GAO identified 33 discrete categories of demographic information that could be relevant to congressional decisionmaking; (5) information on immigration flow is reported in annual Immigration and Naturalization Service (INS) Statistical Yearbooks; (6) statistics on demographic categories other than flow are reported in a more scattered fashion; indeed, a variety of INS and Bureau of the Census publications, including the INS Web page, must be accessed in order to retrieve basic information; (7) INS records that are maintained for administrative purposes are the basis for most federal statistics on flow; (8) these statistics describe the number of new legal permanent residents, new refugees and asylees, and new naturalized citizens; (9) as reported in the INS Yearbook, however, these statistics are limited by conceptual problems and confused reporting, undercounts, and information gaps; (10) the number of new asylees--persons granted asylum--and the number of persons granted citizenship are undercounted in the Yearbook tallies because the data omit certain groups of persons; (11) statistics for other demographic categories are not available; (12) while Census provides some information on the size of the resident foreign-born population, annual net change in size, and emigration, Census has not quantitatively evaluated these data with respect to coverage, accuracy of reported place of birth, or nonresponse rates; (13) there are no separate Census data on legal status because none of the surveys ask questions about legal status; (14) INS has made efforts to fill information gaps for some legal statuses by using the limited data that are available and creating assumption-based models; (15) GAO attempted to identify existing strategies or develop new ones to improve immigration statistics; (16) GAO devised a new method for collecting survey data on the legal status of foreign-born respondents; and (17) GAO also identified strategies for evaluating survey data on the foreign-born.

gao_GAO-12-414

gao_GAO-12-414_0

The bankruptcy court judge overseeing the liquidation rules on a customer’s objections after holding a hearing on the matter. Having a documented, formal outreach process would allow SEC to better assess whether SIPC’s outreach efforts are sufficient for ensuring that SIPC is identifying the optimal pool of candidates. SIPC and SEC Have Supported, and Courts Have Affirmed, the Trustee’s Use of the Net Investment Method In valuing customer claims filed as part of the Madoff liquidation, the Trustee selected NIM, which determines the amounts that customers are owed as the amounts they invested less amounts withdrawn. SIPC and SEC Both Supported Use of NIM, Although SEC Considered Alternatives Like the Trustee, SIPC quickly concluded that NIM was the appropriate method for determining customer claims, because of the fraud in the case and because using FSM would effectively sanction Madoff’s activities. Over the course of 2009, SEC staff conducted various analyses of past cases and alternative approaches for valuing customer claims. The use of NIM, rather than relying on final statement amounts, makes determination of customer net equity a more expensive process, SIPC senior management and SEC officials told us. Following disclosure of a conflict of interest by a former SEC official in February 2011, SEC has plans to reconsider its position on supporting adjusting customer accounts for inflation. The SEC Chairman has directed commission staff to review whether commissioners should readopt the constant dollar approach. Cost of the Madoff Liquidation Will Be the Largest to Date, with Efforts to Recover Assets Driving Costs Through October 31, 2011, the Trustee reported spending of $451.8 million for liquidation activities, with final costs expected to exceed $1 billion through 2014. According to SIPC senior management, the considerable expenses of the actions have been worthwhile, as the Trustee has produced $8.7 billion in recoveries for customers thus far. customers in completed SIPC cases. Finally, SIPC senior management said that the results the Trustee has produced to date support the costs incurred. First, while SIPC seeks to identify potential trustees for its liquidations, it lacks a formal, documented outreach procedure for identifying those candidates. Recommendations for Executive Action To help ensure that the pool of providers that could be employed in SIPC liquidations is as broad as reasonably possible, and to improve the transparency of SIPC’s selection of trustee and trustee’s counsel for liquidations, the SEC Chairman should take the following two actions: 1. Advise SIPC to document its procedures for identifying candidates for trustee or trustee’s counsel, and in so doing, to assess whether additional outreach efforts should be adopted and incorporated. Advise SIPC to document its procedures and criteria for appointment of a trustee and trustee’s counsel for its cases. In their comments, SEC and SIPC concurred with our recommendations. Appendix I: Objectives, Scope, and Methodology This report discusses (1) how the Trustee and trustee’s counsel were selected for the Bernard L. Madoff Investment Securities, LLC liquidation; (2) the process and reasoning for the selection of “net investment method” (NIM) in determining customer claims arising from the Madoff fraud; (3) the costs of the subsequent liquidation of the Madoff firm; and (4) the information that the Trustee has disclosed about his investigation and activities. To examine how the Trustee and trustee’s counsel were selected for the Madoff liquidation, we reviewed the requirements of the Securities Investor Protection Act (SIPA) for the selection of a trustee, plus court filings, correspondence and records of the Securities Investor Protection Corporation (SIPC), Standards for Internal Control in the Federal Government, the Internal Control – Integrated Framework of the Committee of Sponsoring Organizations of the Treadway Commission, biographical information for the Trustee, and relevant portions of the Bankruptcy Code. We also interviewed SIPC senior management, officials of the Securities and Exchange Commission (SEC) and the SEC Office of Inspector General (SEC IG), and the Trustee and members of the trustee’s counsel law firm. We examined information the Trustee has made public about the investigation, including material on his website. Appendix II: Securities Investor Protection Corporation Fund Assessments and Balances, 1990 to 2010 Since 1990, the Securities Investor Protection Corporation (SIPC) has assessed its member broker-dealers varying rates to support the fund used to protect customers of failed securities firms. SIPC and the Securities and Exchange Commission (SEC) both supported the Trustee’s selection of NIM. Ultimately, however, upon a thorough and comprehensive analysis of the plain meaning and legislative history of the statute, controlling Second Circuit precedent, and considerations of equity and practicality, the Court endorses the Trustee’s Net Investment Method.” Specifically, the court agreed with the Trustee that sections 16(11) and 8(b) of the act must be read together, so that net equity can be based on “securities positions” only to the extent that securities positions are “ascertainable from the books and records of the debtor” or “otherwise established to the satisfaction of the trustee.” The court further agreed that in a Ponzi scheme case like the Madoff fraud, where no securities were ever ordered or acquired, securities positions did not exist, and the Trustee cannot satisfy claims by relying upon fictitious account statements that provided fictitious securities positions.

Why GAO Did This Study With the collapse of Bernard L. Madoff Investment Securities, LLC—a broker-dealer and investment advisory firm with thousands of clients—Bernard Madoff admitted to reporting $57.2 billion in fictitious customer holdings. The Securities Investor Protection Corporation (SIPC), which oversees a fund providing up to $500,000 of protection to qualifying individual customers of failed securities firms, selected a trustee to liquidate the Madoff firm and recover assets for its investors. The method the Trustee is using to determine how much a customer filing a claim could be eligible to recover—an amount known as “net equity”—has been the subject of dispute and litigation. This report discusses (1) how the Trustee and trustee’s counsel were selected, (2) why the method for valuing customer claims was chosen, (3) costs of the liquidation, and (4) disclosures the Trustee has made about its progress. GAO examined the Securities Investor Protection Act; court filings and decisions; and SIPC, Securities and Exchange Commission (SEC), and Trustee reports and records. GAO analyzed cost filings and interviewed SIPC, SEC, and SEC Inspector General officials, and the Trustee and his counsel. What GAO Found The Securities Investor Protection Corporation (SIPC) generally followed its past practices in selecting the trustee for the Madoff liquidation. SIPC maintains a file of trustee candidates from across the country, but given the anticipated complexities of the case, officials said the field of potential qualified trustees was limited. SIPC has sole discretion to appoint trustees and, wanting to act quickly, SIPC senior management considered four trustee candidates. After three of the four candidates were eliminated for reasons including having a conflict of interest or ongoing work on a large financial firm failure, SIPC selected Irving H. Picard, who has considerable securities and trustee experience. However, SIPC has not documented a formal outreach procedure for identifying candidates for trustee and trustee’s counsel, or documented its procedures and criteria for selecting persons for particular cases, as internal control standards recommend. Having such documented procedures could allow SIPC to better assess whether it has identified an optimal pool of candidates, and to enhance the transparency of its selection decisions. A key goal of broker-dealer liquidations is to provide customers with the securities or cash they had in their accounts. However, because the Trustee determined that amounts shown on Madoff customers’ statements reflected years of fictitious investments and profits, he chose to determine customers’ net equity using the “net investment method” (NIM), which values customer claims based on amounts invested, less amounts withdrawn. SIPC senior management and officials of the Securities and Exchange Commission (SEC)—which oversees SIPC—initially agreed on the appropriateness of NIM. Over the course of 2009, however, SEC officials continued to consider alternative approaches for reimbursing customers. Although some customers have challenged the Trustee’s use of NIM, two courts have held that the Trustee’s approach is consistent with the law and with past cases, with both courts indicating that using the values shown on customers’ final statements would effectively sanction the Madoff fraud and produce “absurd” results. In November 2009, SEC commissioners voted to support the use of NIM, but with an adjustment for inflation, in an approach known as the “constant dollar” method. However, after an SEC official’s conflict of interest was made public in February 2011, the SEC Chairman directed SEC staff to review whether the commission should revote on the constant dollar approach. The matter is currently pending. As of October 2011, costs of the Madoff liquidation reached more than $450 million, and the Trustee estimates the total costs will exceed $1 billion by 2014. Legal costs, which include costs for the Trustee and the trustee’s counsel, are the largest category. While the estimated total cost for the Madoff liquidation is double the total for all completed SIPC cases to date, the Trustee, SIPC, and SEC note that the costs reflect the unprecedented size, duration, and complexity of the Madoff fraud. SIPC senior management also said the liquidation costs are justified, as litigation the trustee has pursued has produced $8.7 billion in recoveries for customers to date. Through various reports, court filings, and a website, the Trustee has disclosed information about the status of the liquidation. SIPC senior management, SEC officials, and the U.S. Bankruptcy Court have concluded that the Trustee’s disclosures sufficiently address the requirements for disclosure under the Bankruptcy Code and the Securities Investor Protection Act. What GAO Recommends SEC should advise SIPC to (1) document its procedures for identifying candidates for trustee or trustee’s counsel, and in so doing, to assess whether additional outreach efforts should be incorporated, and (2) document a process and criteria for appointment of a trustee and trustee’s counsel. SEC and SIPC concurred with our recommendations.

gao_GAO-14-341

gao_GAO-14-341_0

Background Federal laws authorize both state and federal entities to protect the Medicaid program from fraud, waste, and abuse. State and Federal Program Integrity Entities A variety of entities are engaged in Medicaid program integrity activities. States Have Focused on FFS Claims and Have Not Closely Examined Medicaid Managed Care Program Integrity State PI unit officials from five of the seven states in our study and MFCU officials from four of the study states told us they primarily focus their program integrity efforts on Medicaid FFS claims. These officials said they have not begun to closely examine program integrity in Medicaid managed care, which is a growing portion of overall Medicaid State PI units and MFCUs are responsible for ensuring expenditures.Medicaid program integrity, part of which includes monitoring managed care program integrity. Federal Entities Have Taken Few Steps to Address Medicaid Managed Care Program Integrity Similar to states, federal entities—CMS and HHS-OIG—have taken few steps to address Medicaid managed care program integrity. This contractual requirement also appears in CMS’s regulations, although CMS does not require states to conduct such audits. Fragmentation Exists and Coordination Efforts Raise Benefits and Challenges The involvement of multiple state and federal entities in similar activities— post-payment reviews, audits, and investigations—has resulted in fragmented program integrity activities. Typically, as we have found in past work, coordinating activities can alleviate many of the problems created by fragmentation, allowing entities to avoid unnecessary duplication and overlap. State program integrity officials we interviewed told us that coordination efforts helped them avoid unnecessary duplication, but presented additional challenges. The involvement of multiple federal and state entities in audits leads to fragmentation. Conclusions GAO identified a gap between state and federal efforts to ensure Medicaid managed care program integrity. Federal laws require the states and CMS to ensure the integrity of the Medicaid program, including payments under Medicaid managed care. However, CMS has largely delegated managed care program integrity activities to the states. Without adequate federal support and guidance on ways to prevent or identify improper payments in a managed care setting, states are neither well-positioned to identify improper payments made to MCOs, nor are they able to ensure that MCOs are taking appropriate actions to identify, prevent, or discourage improper payments. Such efforts take on greater urgency as states that choose to expand their Medicaid programs under PPACA are likely to do so with managed care arrangements, receiving a 100 percent federal match for newly eligible individuals from 2014 through 2016. Unless CMS takes a larger role in holding states accountable, and provides guidance and support to states to ensure adequate program integrity efforts in Medicaid managed care, the gap between state and federal efforts to monitor managed care program integrity leaves a growing portion of federal Medicaid dollars vulnerable to improper payments. As implemented across the states, newer program integrity efforts—such as RACs and MICs—may improve states’ efforts to identify and recover improper payments; however, they will also increase the need for coordination to ensure maximum program coverage and minimum duplication and overlap of program integrity activities. Given that combined federal and state efforts have recovered only a small portion of the estimated improper payments, it will be important to continue to monitor federal and state program integrity efforts in Medicaid as a means of assessing whether the current structure is effective. Recommendations for Executive Action In order to improve the efficiency and effectiveness of Medicaid program integrity efforts, we recommend that the Administrator of CMS take the following three actions: 1. hold states accountable for Medicaid managed care program integrity by requiring states to conduct audits of payments to and by managed care organizations; 2. update CMS’s Medicaid managed care guidance on program integrity practices and effective handling of MCO recoveries; and 3. provide the states with additional support in overseeing Medicaid managed care program integrity, such as the option to obtain audit assistance from existing Medicaid integrity contractors. In its written comments, HHS stated that the Department concurred with two of our recommendations, and stated that our first recommendation— to hold states accountable for Medicaid managed care program integrity by requiring states to conduct audits of payments to and by managed care organizations—was unclear. In response to this recommendation, HHS listed current CMS activities that the Department believes address the first recommendation.

Why GAO Did This Study In fiscal year 2013, the Medicaid program covered about 71.7 million individuals at a cost of $431.1 billion, of which CMS estimated that $14.4 billion (5.8 percent) were improper payments. Multiple state and federal entities are involved in program integrity efforts, such as payment review, auditing, and investigating fraud. GAO was asked to examine how these entities ensure comprehensive Medicaid program integrity. This report examines state and federal roles and responsibilities to identify potential (1) gaps in efforts to ensure Medicaid program integrity coverage; and (2) fragmentation, overlap, or duplication of program integrity efforts, and efforts to coordinate activities. GAO examined relevant federal laws and regulations, CMS guidance, and state program integrity reviews. GAO also interviewed officials from CMS and HHS's Office of Inspector General, as well as PI unit and MFCU officials from seven states. What GAO Found GAO identified a gap in state and federal efforts to ensure Medicaid managed care program integrity. Federal laws require the states and the Centers for Medicare & Medicaid Services (CMS) to ensure the integrity of the Medicaid program, including payments under Medicaid managed care, which are growing at a faster rate than payments under fee-for-service (FFS). However, five state program integrity (PI) units and four Medicaid Fraud Control Units (MFCU) from the seven states included in GAO's review said they primarily focus their efforts on Medicaid FFS claims and have not begun to closely examine program integrity in Medicaid managed care. In addition, federal entities have taken few steps to address Medicaid managed care program integrity. CMS, the federal agency within the Department of Health and Human Services (HHS) that oversees Medicaid has largely delegated managed care program integrity oversight activities to the states, but has not updated its program integrity guidance since 2000. Additionally, CMS does not require states to audit managed care payments, and state officials GAO interviewed said they require additional CMS support, such as additional guidance and the option to obtain audit assistance from existing Medicaid integrity contractors in overseeing Medicaid managed care program integrity. The involvement of multiple entities in conducting post-payment reviews, audits, and investigations has resulted in fragmented program integrity efforts; yet the effects of fragmentation are unclear. As GAO has found in past work, coordinating activities can alleviate many problems created by fragmentation, thus allowing entities to avoid unnecessary duplication and overlap. Most of the program integrity officials from the seven states GAO included in this review said that coordination efforts helped them manage overlap and avoid unnecessary duplication; however some officials said that coordination presented additional challenges for time and staff resources. Given that combined federal and state efforts have recovered only a small portion of the estimated improper payments, continued monitoring of federal and state program integrity efforts in Medicaid will be an important means of assessing whether the current structure is effective. Because of the gap GAO identified between state and federal program integrity efforts in managed care, neither state nor federal entities are well positioned to identify improper payments made to managed care organizations (MCOs), nor are they able to ensure that MCOs are taking appropriate actions to identify, prevent, or discourage improper payments. Improving federal and state efforts to strengthen Medicaid managed care program integrity takes on greater urgency as states that choose to expand their Medicaid programs under the Patient Protection and Affordable Care Act are likely to do so with managed care arrangements, and will receive a 100 percent federal match for newly eligible individuals from 2014 through 2016. Unless CMS takes a larger role in holding states accountable, and provides guidance and support to states to ensure adequate program integrity efforts in Medicaid managed care, the gap between state and federal efforts to monitor managed care program integrity will leave a growing portion of federal Medicaid dollars vulnerable to improper payments. What GAO Recommends GAO recommends that CMS increase its oversight of program integrity efforts by requiring states to audit payments to and by MCOs; updating its guidance on Medicaid managed care program integrity; and providing states additional support for managed care oversight, such as audit assistance from existing contractors. In its comments, HHS asked for clarification on the first recommendation and concurred with the other two. In response, GAO clarified its first recommendation—that CMS take the added step of requiring states to audit the appropriateness of payments to and by MCOs to better ensure Medicaid program integrity.

gao_GAO-06-352

gao_GAO-06-352_0

Four Key Factors Contributed to Early Cleanup Four key factors contributed to the early completion of the physical cleanup of Rocky Flats: (1) DOE and the contractor overcame several major challenges identified in GAO’s 2001 report on the Rocky Flats cleanup, (2) DOE and the site’s regulatory agencies agreed to use an accelerated process to clean up the site, (3) a number of site-specific characteristics combined to limit the scope and complexity of the cleanup effort, and (4) DOE offered the contractor $560 million in total incentive fees to finish the cleanup ahead of schedule and under cost. Cleanup of Rocky Flats Is Complete at a Cost of about $10 Billion, but Key Steps Remain Before the Planned Wildlife Refuge Will Open The physical cleanup at Rocky Flats is complete, at a total cost (including long-term costs) of about $10 billion; however, several regulatory steps remain before land can be transferred to the Department of the Interior for establishment of the wildlife refuge planned for the site. In December 2005, after reviewing cleanup documentation, doing a final walk-through of the site, and ensuring that the contractor had completed the remaining items, DOE agreed that the contractor had fulfilled all of the cleanup actions specified in the contract and the cleanup was complete. DOE anticipates that long-term costs will exceed $1.3 billion. Numerous Measures Were Taken to Assess the Cleanup’s Sufficiency, but DOE Could Improve Its Oversight of Data Quality and Clarify Its Verification Policy Numerous measures were and are being taken to assess the sufficiency of the cleanup; although these measures appear adequate, DOE did not carry out some aspects of its oversight responsibilities. Nevertheless, DOE did not independently review the quality of these data. Because the data from the accelerated actions are crucial to the regulatory agencies’ final decision on the sufficiency of the cleanup, we reviewed the controls in place to ensure the quality of these data. The regulatory agencies’ approval meant that the cleanup was sufficient and that no further accelerated action was needed. Without independent assessments of the contractor’s data quality control measures, DOE had no assurance that the controls were working as intended. Although DOE captured and implemented at other sites some of the lessons it learned at Rocky Flats, others risk being lost. As a result, DOE stands to lose the benefits that such lessons have to offer. Objectives, Scope, and Methodology Our review objectives were to determine the (1) factors that contributed to the early completion of the physical cleanup at Rocky Flats; (2) work remaining as well as total project costs, including long-term costs; (3) measures in place to assess whether the cleanup achieved a level of protection of public health and environment consistent with the Rocky Flats Cleanup Agreement; and (4) lessons the Rocky Flats project may hold for other Department of Energy (DOE) cleanup projects. In conducting our work, we visited the Rocky Flats site and reviewed documents and data prepared by DOE, the Environmental Protection Agency (EPA), the Colorado Department of Public Health and Environment (Colorado), the Department of the Interior’s Fish and Wildlife Service (FWS), the contractor, and various scientific organizations. 5.

Why GAO Did This Study In 2001, when GAO reported on the cleanup of the Department of Energy's (DOE) Rocky Flats site, a former nuclear weapons production facility, the cleanup was behind schedule and over cost. In October 2005, the contractor declared that it had completed the cleanup much earlier and at less cost than DOE and the contractor had anticipated 5 years earlier. GAO was asked to determine the (1) factors that contributed to the cleanup's early completion, (2) remaining work and total costs, (3) measures to assess whether the cleanup achieved a level of protection of public health and environment consistent with the cleanup agreement, and (4) lessons the Rocky Flats cleanup may offer for other DOE cleanup projects. What GAO Found Four factors contributed to the early completion of Rocky Flats' cleanup: (1) DOE's and the contractor's ability to overcome numerous challenges, (2) the use of an accelerated cleanup process, (3) site-specific characteristics that limited the scope of the contamination, and (4) the contractor's financial incentive to finish the work quickly and safely. Although the cleanup is complete, its sufficiency has not yet been ascertained; key steps remain before the planned Rocky Flats National Wildlife Refuge that will occupy the site can open to the public. For example, in about November 2006, the regulatory agencies--the Environmental Protection Agency (EPA) and the Colorado Department of Public Health and Environment--plan to issue their joint final decision on the sufficiency of the cleanup and any risk posed by residual contaminants. The total cost of the cleanup, since 1995, is about $10 billion in constant 2005 dollars. This cost includes contract costs of about $7.7 billion (including contractor fees of about $630 million), long-term stewardship and pension liabilities estimated at about $1.3 billion, and other costs of nearly $1 billion. Although numerous measures in place to assess the cleanup appear adequate to judge the sufficiency of the cleanup, DOE did not effectively carry out some aspects of its oversight responsibilities. Among the assessment measures are completion of the regulatory process, activities undertaken to verify remedial actions, and reviews by independent and federal entities. The regulatory agencies have approved the cleanup of 360 areas of known or suspected contamination at the site. Data supporting the cleanup of these areas form the basis of regulatory decisions regarding the cleanup's sufficiency. Accordingly, we reviewed the contractor's controls intended to ensure the quality of these data and found them to be robust. However, DOE lacked assurance that the controls were working as intended because it did not independently assess the quality of these key data. One official told us that DOE was involved daily in reviewing documents and discussed with the contractor any data quality issues that arose. DOE has identified and implemented at other sites some lessons from Rocky Flats, but DOE has not systematically tracked lessons learned at all of its cleanup sites, thus potentially losing the benefits of such lessons.

gao_GAO-04-172T

gao_GAO-04-172T_0

These negotiations resulted in China’s commitments to open and liberalize its economy and offer a more predictable environment for trade and foreign investment in accordance with WTO rules. The United States and other WTO members have stated that China’s membership in the WTO provides increased opportunities for foreign companies seeking access to China’s market. Scope and Complexity of China’s WTO Commitments Present Challenges for Ensuring Compliance China’s accession agreement is the most comprehensive of any WTO member’s to date, and, as such, verifying China’s WTO compliance is a challenging undertaking for two main reasons. The first reason is the scope of the agreement: The more than 800-page document spans eight broad areas and sets forth hundreds of individual commitments on how China’s trade regime will adhere to the organization’s agreements, principles, and rules and allow greater market access for foreign goods and services. The second reason is the complexity of the agreement: Interrelated parts of the agreement will be phased in at different times, and some commitments are so general in nature that it will not be immediately clear whether China has fully complied with its obligations in some cases. 1.) Sustained Effort from Key Players Required to Ensure China’s Compliance, but First- year Experience Demonstrates Challenges Because China is such an important trading partner, ensuring China’s compliance with it s commitments is essential and requires a sustained effort on the part of the executive branch, Congress, the private sector, and the WTO and its other members. 2.) However, the U.S.’s first-year experience showed that it takes time to organize these structures to effectively carry out their functions and that progress on the issues can be slow. In addition to the executive branch’s efforts, Congress has enacted legislation, provided resources, and established new entities to increase oversight of China’s compliance. The private sector also has undertaken a wide range of efforts that provide on-the-ground information on the status of China’s compliance efforts and input to the executive branch and to Congress on priorities for compliance efforts. Finally, the WTO has existing mechanisms as well as a new, China-specific mechanism created as a means for WTO members to annually review China’s implementation of its commitments. Private Sector Plays Key Role in Monitoring China’s Compliance U.S. businesses operating in China provide valuable assistance in monitoring the status of China’s implementation of its WTO commitments, and, as such, effective coordination between the U.S. government and the private sector is essential.

Why GAO Did This Study China's accession to the World Trade Organization (WTO) in December 2001 created substantial opportunities for U.S. companies seeking to expand into China's market. In joining the WTO, China agreed to liberalize its trade regime and open its markets to foreign goods and services. However, the U.S. government has become concerned about ensuring that China honors its commitments to offer a more predictable environment for trade. GAO was asked to describe (1) the monitoring of compliance challenges associated with the scope and complexity of China's WTO commitments and (2) the efforts to date of the key players involved in ensuring China's compliance: the executive branch, Congress, the private sector, the WTO and its other members. GAO's observations are based on its prior analysis of China's WTO commitments, its previous survey of and interviews with private sector representatives, and its examination of first-year efforts to ensure China's WTO compliance. What GAO Found The scope and complexity of China's WTO commitments present two main challenges to verifying China's compliance with its WTO accession agreement. First, the agreement is very broad: It encompasses more than 800 pages, spans eight broad areas, and sets forth hundreds of individual commitments on how China's trade regime will adhere to the WTO's agreements, principles, and rules and allow greater market access. Second, the agreement is complicated: Interrelated parts will be phased in at different times, and some commitments are so general in nature that it may not be immediately clear whether China has fully complied with its obligations. Each of the key players involved in ensuring China's compliance--the executive branch, Congress, the private sector, and the WTO and its members--has made efforts to ensure China's compliance. However, the first-year experience in this regard has demonstrated that these efforts will need to be sustained over a long period. The executive branch has applied additional resources and new intra-agency teams to these efforts, but it takes time to organize these activities. Congress has enacted legislation and established new entities to increase oversight of China's compliance. The private sector also has provided information to the executive branch and to Congress on the status of China's compliance efforts. And, within the WTO, a China-specific mechanism was established as a means for WTO members to annually review China's implementation of its commitments. Nonetheless, GAO's analysis indicates that a sustained approach is needed to ensure China's compliance.

gao_GAO-17-312

gao_GAO-17-312_0

For example, STCs indicate for what populations and services funds can be spent. Demonstration Spending Limits CMS policy requires that section 1115 demonstrations be budget neutral to the federal government—that is, the federal government should spend no more under a state’s demonstration than it would have spent without the demonstration. 1.) 2.) 3.) CMS’s Monitoring of Demonstration Spending Lacked Consistency We found that CMS took a number of steps to monitor demonstration spending in our selected states. CMS did not consistently assess compliance with the spending limit in all our selected states. These inconsistencies may have resulted, in part, from CMS’s lack of written, standard operating procedures for monitoring spending under demonstrations. For example, CMS does not have internal guidance on the elements that must be included in reporting requirements for states. CMS officials told us that they are developing protocols for monitoring state demonstration programs and state compliance with demonstration spending limits. As such, it was unclear, for example, whether the procedures and new system would include mechanisms to ensure that STCs consistently require states to report the information needed for CMS to assess compliance with the spending limits. Without standard procedures for monitoring demonstration spending and documenting those efforts, CMS faces the risk of continued inconsistencies in monitoring and the risk that it may not identify cases where states may be inappropriately using federal funds or exceeding spending limits. CMS Is Implementing a Revised Policy for Applying Spending Limits, but the Extent to Which It Will Effectively Control Costs Is Unclear CMS’s policy for applying demonstration spending limits has allowed our selected states to accrue unused spending authority under the demonstration spending limit (referred to in this report as unspent funds) and use it to expand demonstrations to include new costs. CMS allowed New York to use $8 billion in accrued unspent federal funds from previous demonstration periods to expand its demonstration by including a new supplemental payment pool for incentive payments to Medicaid providers, costs that would not have been eligible for federal matching funds outside of the demonstration. In May 2016, CMS communicated to states that the budget neutrality policy had been revised to, among other things, restrict the accrual of unspent funds to better control demonstration costs. CMS released a slide presentation on the revised policy during a teleconference with all states but has not issued formal guidance. Inconsistent tracking of unspent funds. It is too soon to determine if these procedures will ensure consistent tracking of unspent funds because, as we noted earlier, there was no documentation of the agency’s plans for these procedures as of December 2016. Federal internal control standards require that federal agencies should design control activities to achieve objectives. Control activities like formal guidance and standard procedures that clarify the application of agency policies help ensure that those policies—such as the revised budget neutrality policy—are consistently carried out in achieving cost control objectives. Recommendations for Executive Action To improve consistency in CMS oversight of federal spending under section 1115 demonstrations, we recommend that the Secretary of Health and Human Services require the Administrator of CMS to take the following two actions: 1. Develop and document standard operating procedures for monitoring a. 2. HHS did not explicitly agree or disagree with the second recommendation that the agency should issue formal guidance on the revised budget neutrality policy and how it will be applied.

Why GAO Did This Study As of November 2016, 37 states had demonstrations under section 1115 of the Social Security Act, under which the Secretary of HHS may allow costs that Medicaid would not otherwise cover for state projects that are likely to promote Medicaid objectives. By policy, demonstrations must be budget neutral; that is, the federal government should spend no more for a state's Medicaid program than it would have spent without the demonstration. CMS is responsible for monitoring spending and assessing compliance with demonstration terms and conditions for how funds can be spent and applying spending limits to maintain budget neutrality. GAO was asked to examine federal spending for demonstrations and CMS's oversight of spending. This report examines (1) federal spending over time, (2) CMS's monitoring process, and (3) CMS's application of spending limits. GAO reviewed federal expenditure data for fiscal years 2005-2015, relevant documentation for 4 states, selected based on variation among their demonstrations, and federal internal control standards, and also interviewed CMS and state Medicaid officials. What GAO Found Over the last decade, federal spending under Medicaid section 1115 demonstrations, which allow states flexibility to test new approaches for delivering Medicaid services, has increased significantly. The Centers for Medicare & Medicaid Services (CMS), within the Department of Health and Human Services (HHS), took a number of steps to monitor demonstration spending in GAO's 4 selected states. However, GAO also found inconsistencies in CMS's monitoring process. For example, CMS did not consistently require selected states to report the information needed to assess compliance with demonstration spending limits. The inconsistencies may have resulted from a lack of written standard procedures. CMS officials told GAO that CMS was developing procedures to better standardize monitoring, but did not have detailed plans for doing so. Thus, it is too soon to determine whether these efforts will address the inconsistencies GAO found. Federal standards require that federal agencies design control activities to achieve objectives. Without standard, documented procedures, CMS may not identify cases where states are inappropriately using federal funds or exceeding spending limits. In applying demonstration spending limits, CMS allowed states to accrue unspent funds (more specifically, unused spending authority) when state spending is below the limit and use them to finance expansions of the original demonstration. For example, CMS allowed New York to use $8 billion in unspent federal funds to expand its demonstration to include an incentive payment pool for Medicaid providers. In May 2016, CMS released a slide presentation outlining new restrictions on the accrual of unspent funds. Per federal standards, formal guidance helps ensure that policies are consistently carried out. However, CMS has not issued formal guidance on the policy and does not consistently track unspent funds under the spending limit, raising questions as to whether the revised policy will be effective in better controlling costs. What GAO Recommends GAO recommends that CMS (1) develop and document standard operating procedures for sufficient reporting requirements and to require consistent monitoring and (2) issue formal guidance on its revised policy for restricting accrual of unspent funds. HHS agreed with GAO's first recommendation and neither agreed nor disagreed with GAO's second recommendation.

gao_GAO-11-508T

gao_GAO-11-508T_0

CBP Reported Some Success in Stemming Illegal Activity, but Improvements to Operations and Infrastructure Could Help Enforce Security Closer to the U.S. Border CBP has increased personnel—by 17 percent over its 2004 levels—and resources for border security at the POEs and reported some success in interdicting illegal cross-border activity. At the POEs, for example, CBP reported that deployment of imaging technology had increased seizures of drugs and other contraband. Between the POEs, Border Patrol reported that increased staffing and resources have resulted in some success in reducing the volume of illegal migration and increasing drug seizures. However, weaknesses in POE traveler inspection procedures and infrastructure increased the potential that dangerous people and illegal goods could enter the country, and that currency and firearms could leave the country. DHS is developing a new methodology and performance measures for border security and plans to implement them in fiscal year 2012. Border Patrol Reported Some Success in Reducing Illegal Migration, but Challenges Remained in Stemming Cross-Border Smuggling of Illegal Drugs between the POEs CBP reported that $3.6 billion was appropriated in fiscal year 2010 for border security efforts between the POEs, and that the Border Patrol is better staffed now than at any time in its 86-year history, having doubled the number of agents from 10,000 in fiscal year 2004 to more than 20,500 in fiscal year 2010. DHS Performance Measures Show Response to Illegal Border Activity Most Often Occurs after Entry into the United States As of fiscal year 2011, CBP no longer has externally reported performance goals or measures that reflect its overall success in detecting illegal entries and contraband at and between the POEs, but the measures for fiscal year 2010 showed few land border miles are at a level of control where deterrence or apprehensions of illegal entries occurs at the immediate border. DHS Law Enforcement Partners Reported Improved Results for Interagency Coordination and Oversight of Border Security Intelligence and Enforcement Operations but Gaps Remained Federal, state, local, tribal, and Canadian law enforcement partners reported improved DHS coordination to secure the border. For example, interagency forums were beneficial in establishing a common understanding of border security threats, while joint operations helped to achieve an integrated and effective law enforcement response. However, critical gaps remained in sharing information and resources useful for operations, such as daily patrols in vulnerable areas, including National Parks and Forests. Our past work has shown that additional actions to improve coordination could enhance border security efforts on the southwest and northern borders, including those to deter alien smuggling. Border Patrol Moving Ahead with New Technology Deployment Plan to Secure the Border, but Cost and Operational Effectiveness and Suitability Are Not Yet Clear In January 2011, the Secretary of Homeland Security announced a new direction in deploying technology to assist in securing the border, ending the SBInet program as originally conceived because it did not meet cost- effectiveness and viability standards. As part of her decision to end SBInet, the Secretary of Homeland Security directed CBP to proceed with a new plan to deploy a mix of technology to protect the border called Alternative (Southwest) Border Technology. Under this plan, CBP is to focus on developing terrain- and population- based solutions utilizing existing, proven technology, such as camera- based surveillance systems, for each border region. To arrive at an appropriate mix of technology in its plan, DHS performed an Analysis of Alternatives (AOA). In March 2011, we provided preliminary observations regarding this analysis. The cost and effectiveness uncertainties noted above raise questions about the decisions that informed the budget formulation process. We are continuing to assess this issue for the House Homeland Security Committee and will report the final results later this year. Secure Border Initiative: DHS Needs to Strengthen Management and Oversight of Its Prime Contractor. U.S. Customs and Border Protection: Border Security Fencing, Infrastructure and Technology Fiscal Year 2010 Expenditure Plan.

Why GAO Did This Study As part of its mission, the Department of Homeland Security (DHS), through its U.S. Customs and Border Protection (CBP) component, is to secure U.S borders against threats of terrorism; the smuggling of drugs, humans, and other contraband; and illegal migration. At the end of fiscal year 2010, DHS investments in border security had grown to $11.9 billion and included more than 40,000 personnel. To secure the border, DHS coordinates with federal, state, local, tribal, and Canadian partners. This testimony addresses DHS (1) capabilities to enforce security at or near the border, (2) interagency coordination and oversight of information sharing and enforcement efforts, and (3) management of technology programs. This testimony is based on related GAO work from 2007 to the present and selected updates made in February and March 2011. For the updates, GAO obtained information on CBP performance measures and interviewed relevant officials. What GAO Found CBP significantly increased personnel and resources for border security at and between the ports of entry (POE), and reported some success in interdicting illegal cross-border activity; however, weaknesses remain. At the POEs, for example, CBP reported that deployment of imaging technology to detect stowaways or cargo had increased seizures of drugs and other contraband, and between the POEs, increased staffing, border fencing, and technology have resulted in some success in reducing the volume of illegal migration and increasing drug seizures. However, as GAO reported from 2007 through 2011, weaknesses in POE traveler inspection procedures and infrastructure increased the potential that dangerous people and illegal goods could enter the country; and that currency and firearms could leave the country and finance drug trafficking organizations and sponsors of terrorism. CBP used a performance measure to reflect results of its overall border enforcement efforts, which showed few land border miles where they have the capability to deter or apprehend illegal activity at the immediate border in fiscal year 2010. DHS is developing a new methodology and performance measures for border security and plans to implement them in fiscal year 2012. As GAO reported in 2010, federal, state, local, tribal, and Canadian law enforcement partners reported improved DHS coordination to secure the border, but critical gaps exist. For example, interagency forums helped in establishing a common understanding of border security threats, while joint operations helped to achieve an integrated and effective law enforcement response. However, significant gaps remained in sharing information and resources useful for operations, such as daily patrols in vulnerable areas, like National Parks and Forests. As GAO reported, and made related recommendations, improved coordination provides opportunity to enhance border security efforts on the southwest and northern borders, including those to deter alien smuggling. CBP's Border Patrol component is moving ahead with a new technology deployment plan to secure the border, but cost and operational effectiveness and suitability are not yet clear. In January 2011, the Secretary of Homeland Security announced a new direction to deploying technology to assist in securing the border. The decision ended the Secure Border Initiative Network technology program--one part of a multiyear, multibillion dollar effort aimed at securing the border through technology such as radar, sensors, and cameras and infrastructure such as fencing. Under a new plan, called Alternative (Southwest) Border Technology, Border Patrol is to develop terrain- and population-based solutions using existing proven technology, such as camera-based surveillance systems. However, the analysis DHS performed to arrive at an appropriate mix of technology in its new plan raises questions. For example, the analysis cited a range of uncertainties in costs and effectiveness, with no clear-cut cost effective technology alternative among those considered, as GAO reported in preliminary observations in March 2011. GAO will continue to assess this issue and report its results later this year. What GAO Recommends GAO is not making any new recommendations in this testimony. However, GAO has previously made recommendations to DHS to strengthen border security, including enhancing measures to protect against the entry of terrorists, inadmissible aliens, and contraband; improving interagency coordination; and strengthening technology acquisition and deployment plans. DHS generally concurred with these recommendations and has actions underway or planned in response.

gao_GAO-06-1096T

gao_GAO-06-1096T_0

Background The Homeland Security Act established the Office of National Capital Region Coordination within the Department of Homeland Security. One of the ONCRC mandates is to coordinate with federal, state, local, and regional agencies and the private sector in NCR on terrorism preparedness to ensure adequate planning, information sharing, training, and execution of domestic preparedness activities among these agencies and entities. In advance of our March 2006 testimony, Office of the National Capital Region Coordination officials provided us with several documents that they said when taken as a whole constituted the basic elements of NCR’s strategic plan, such as a November 2005 document containing information on NCR strategic goals, objectives, and initiatives and February and March 2006 documents related to homeland security grant program funding. The NCR Strategic Plan Contains Desirable Characteristics, but Additional Information Could be Provided The plan’s structure contains the six characteristics and related elements that we identified in earlier work as desirable in a national strategy that would also be useful for a regional approach to homeland security strategic planning. The core plan includes information on purpose, scope, and methodology; goals and objectives; problem definition and risk assessment; implementation and sustainment of the strategic plan, including organizational roles, responsibilities, and coordination; and alignment with other strategies and planning efforts. However, the substance of the information within several of the six characteristics could be further strengthened as the plan is reviewed and revised to enable the NCR jurisdictions set clear priorities and sustain their collaborative efforts. As I will point out, several of our observations regarding improvements are the same as those we provided in our March 2006 testimony. Other sources of information for the strategic planning included the National Capital Region Program and Capability Enhancement Plan, the Nationwide Plan Review, and the National Preparedness Goal and related target capabilities. In revising the plan, NCR officials might consider two observations. First, although the plan recognized the importance of the Nationwide Plan Review’s specific phase 2 findings for the NCR emergency plans and the status of catastrophic and evacuation planning, it did not reflect specific NCR findings. The NCR homeland security strategic plan includes the region’s four long- term homeland security strategic goals and related objectives for the next 3 to 5 years. The NCR plan defines objectives as being key, measurable milestones along the path toward reaching each goal. Many objectives include language such as “strengthen,” “enhance,” “increase,” “improve,” and “expand.” These objective statements have their own measures to define performance. Our earlier testimony also stated that a strategic plan could be improved by (1) expanding the use of outcome measures and targets in the plan to reflect the results of its activities and (2) limiting the use of other types of measures. For example, initiative milestones for objective 1 under goal 1 (planning and decisionmaking) reflect actions to be taken before September 2006 when the new plan was approved. The plan itself notes that the priorities for preparedness in the homeland security plans for Virginia, Maryland, and the District of Columbia reflect unique assessments of the threats and vulnerabilities across each jurisdiction and have varying strategic plan priorities. The NCR has made considerable progress in developing its first strategic plan. Although we have noted some remaining limitations and areas of potential improvement, the NCR strategic plan provides the basic foundation for regional preparedness, including what is in case of a catastrophic event. Now, the challenge is ensuring that initiatives to implement the goals and objectives are funded, completed, and appropriately assessed to determine if they have achieved the NCR’s strategic goals while continually monitor the plan’s implementation to determine what adjustments are needed for continuing improvement.

Why GAO Did This Study Among other things, the Office of National Capital Region Coordination is to coordinate efforts within the National Capital Region (NCR) to ensure execution of domestic preparedness activities. In our May 2004 report and June 2004 testimony before the House Government Reform Committee, GAO recommended that the NCR develop a strategic plan to establish and monitor the achievement of regional goals and priorities for emergency preparedness and response. GAO subsequently testified on the status of the NCR's strategic planning efforts before the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia in July 2005 and March 2006. The Subcommittee asked GAO to provide comments on the NCR's strategic plan, which the NCR partners approved in September 2006. In this testimony, GAO discusses its assessment of the recently completed NCR homeland security strategic plan and the extent to which the new plan includes desirable strategic plan characteristics and how the substance of the plan might be further strengthened when the plan is reviewed and possibly revised. What GAO Found A coordinated strategic plan to establish and monitor the achievement of regional goals and priorities is fundamental to implementing a coordinated approach to enhancing emergency preparedness and response capacities in the NCR. In March 2006, GAO observed that the NCR's strategic plan could benefit from addressing all six characteristics GAO considers to be desirable for a regional homeland security strategy. These characteristics were used to evaluate the final plan. These include, for example, goals, subordinate objectives, activities, and performance measures; resources, investments, and risk management; and organizational roles, responsibilities, and coordination. The NCR approved its strategic plan in September 2006. The NCR homeland security strategic plan includes all six characteristics we consider desirable for a regional homeland security strategy. To illustrate, the plan includes regional priorities and presents the rationale for the goals and related objectives and initiatives. This includes information on how the plan addresses national priorities and targeted capabilities from the National Preparedness Goal, an Emergency Management Accreditation Program assessment of local and regional preparedness and emergency management capabilities against recognized national standards, and the Department of Homeland Security's Nationwide Plan Review of emergency plans. The plan structure is more streamlined, containing an overview, core plan, and detailed appendix with information on factors such as risks, costs, and roles and responsibilities. However, the substance of the information within these six characteristics could be improved to guide decision makers. Two examples: (1) the plan does not reflect a comprehensive risk assessment for the region, which, when completed, may result in changes in some of the priorities in the current plan; and (2) although the NCR plan defines objectives as being key, measurable milestones for reaching each goal, many objectives include language such as "strengthen," "enhance," "increase," "improve," and "expand" rather than more specific performance measures and targets. Several of our observations regarding potential plan substance are the same as those we provided in our March 2006 testimony. The NCR has made considerable progress in developing its first strategic plan. Although GAO has noted some remaining limitations and areas of potential improvement, the NCR strategic plan provides the basic foundation for regional preparedness, including what is needed in case of a catastrophic event. Now, the challenge is ensuring that initiatives to implement the goals and objectives are funded, completed, and appropriately assessed to determine if they have achieved the NCR's strategic goals while continually monitor the plan's implementation to determine what adjustments are needed for continuing improvement.

gao_GAO-12-258

gao_GAO-12-258_0

NRC Methods to Ensure That Licensees Provide Reasonable Assurance of Adequate Decommissioning Funds NRC periodically reviews licensees’ decommissioning funds and related licensee data to determine if licensees have provided reasonable assurance that they will accumulate adequate funds for decommissioning. According to NRC guidance, the amount of funds that is considered adequate is established by NRC’s decommissioning formula, which represents the bulk of the funds needed to decommission a specific reactor and is not an estimate of the actual cost. NRC requires licensees to submit DFS reports at least every 2 years while a reactor is operating, and every year once a reactor is within 5 years of permanent shutdown through license termination. If the licensee’s balance is greater than or equal to the estimated amount needed for decommissioning, an NRC reviewer makes a determination of reasonable assurance. For reactors that are not owned by public utilities, NRC regulations set investment standards specifying, for example, that the funds must be held by an independent trustee who adheres to a standard of care required by state or federal law or, in the absence of any such standard, to a prudent investor standard as defined by FERC; investments may not be made in any reactor licensee or in a mutual fund in which 50 percent or more of the fund is invested in the nuclear power industry; and no more than 10 percent of the funds can be indirectly invested in securities of any entity owning or operating a reactor. NRC Has Strengthened Its Oversight of Decommissioning Funds, but Several Weaknesses Remain In response, in part, to GAO’s and the NRC OIG’s recommendations, NRC has taken actions to strengthen its oversight of licensees’ decommissioning funds, including creating guidance for reviewing DFS reports, reevaluating the decommissioning funding formula, and requiring licensees currently decommissioning their reactors to report to NRC the actual costs of decommissioning. However, remaining weaknesses in NRC’s oversight may limit the agency’s ability to ensure that licensees have provided reasonable assurance that they will have adequate funds to decommission their reactors. NRC Has Taken Actions to Strengthen Its Oversight NRC has taken steps to identify and resolve decommissioning funding shortfalls by creating guidance and other documentation related to criteria for reviewing DFS reports and by using its enforcement process when deficiencies are identified. In addition, in response to an NRC OIG recommendation, NRC has conducted reviews at licensee offices to verify that the amounts licensees reported to NRC in DFS reports as fund balances match the amounts stated in licensees’ year-end bank statements. Specifically, NRC has not (1) clearly defined what the agency means by the “bulk” of the funds licensees will likely need to decommission and the decommissioning funding formula may not reliably estimate adequate decommissioning costs, (2) always clearly or consistently documented its fund balance review results and may discontinue these reviews, and (3) reviewed licensees’ compliance with investment standards. When we compared decommissioning funding formula estimates provided by NRC for 12 reactors with licensees’ site-specific cost estimates calculated for the same reactors, we found that the NRC formula captured from 57 to 103 percent of the costs reflected in each reactor’s site-specific estimate, with 5 of the 12 capturing 76 percent or less (see table 1). The results of more than one-third of the 136 fund balance reviews that NRC staff performed from April 2008 to October 2010 to verify the amounts in DFS reports were not always clearly or consistently documented. In other cases, the results were not consistently documented, with some reviewers providing general information on their forms, such as writing “no problem,” while others provided more detailed information, such as providing both the balance in the year-end bank statement and in the DFS report. As of October 2011, NRC did not have written procedures describing the steps that staff should take in analyzing licensee documentation and documenting review results on the one-page form, which likely contributed to NRC staff not always documenting the results of the reviews clearly or consistently. As a result, NRC cannot confirm that licensees are avoiding conditions described in the standards, such as investing in other licensees. Without awareness of the nature of licensees’ investments, NRC cannot determine whether it needs to take action to enforce the standards. Specifically, NRC agreed with our recommendations that the agency (1) document procedures describing the steps that staff should take in their reviews analyzing licensee documentation and verifying that the amounts licensees report to NRC in their DFS reports match the balances on their year-end bank statements; (2) continue these reviews of fund balances in a way that is most efficient and effective for the agency; and (3) consider reviewing a sample of licensees’ investments to determine if licensees are complying with decommissioning investment standards and determine whether action should be taken to enforce these standards. We also reviewed GAO and NRC Office of the Inspector General (OIG) reports on decommissioning funding assurance and interviewed NRC officials from the Office of Nuclear Reactor Regulation and OIG to better understand the agency’s oversight of decommissioning funds.

Why GAO Did This Study About 20 percent of U.S. electricity is generated by 104 nuclear reactors. NRC, which regulates reactors, requires their owners (licensees) to reduce radioactive contamination after reactors permanently shut down. This process, called decommissioning, costs hundreds of millions of dollars per reactor. NRC requires licensees to provide reasonable assurance that they will have adequate funds to decommission, in part, by accumulating funds that are greater than or equal to NRC’s decommissioning funding formula. GAO and NRC’s OIG have identified concerns about NRC’s oversight of decommissioning funds. GAO was asked by Representative Markey in his former capacity as Chairman of the House Subcommittee on Energy and Environment to (1) describe how NRC ensures that licensees provide reasonable assurance of adequate decommissioning funds and (2) identify any improvements or weaknesses in NRC’s oversight of this area. GAO analyzed NRC’s formula and reviews of licensee information and interviewed NRC officials, licensees, and others. What GAO Found The Nuclear Regulatory Commission (NRC) periodically reviews licensees’ decommissioning funds and related licensee data to determine if licensees have provided reasonable assurance that they will accumulate adequate funds for decommissioning. For example, licensees must submit estimates to NRC of decommissioning costs throughout the life of the reactor and submit fund status reports at least every 2 years while the reactor is operating. Licensees typically accumulate such funds over time through trust fund investments. The minimum amount of funds considered adequate is established by NRC’s decommissioning funding formula, which is based on information collected more than 30 years ago. NRC has taken actions to strengthen its oversight of licensees’ decommissioning funds by (1) creating guidance and other documents related to criteria for reviewing licensees’ 2-year reports and by using its enforcement process when deficiencies are identified, (2) conducting reviews at licensee offices to verify that fund balances licensees reported in their 2-year reports match their year-end bank statements in response to a 2006 NRC Office of the Inspector General (OIG) recommendation, (3) reevaluating the decommissioning funding formula to determine if it should be updated, and (4) improving decommissioning planning. However, several weaknesses may limit NRC’s ability to ensure that licensees have provided reasonable assurance. Specifically: NRC’s formula may not reliably estimate adequate decommissioning costs. According to NRC, the formula was intended to estimate the “bulk” of the decommissioning funds needed, but the term “bulk” is undefined, making it unclear how NRC can determine if the formula is performing as intended. In addition, GAO compared NRC’s formula estimates for 12 reactors with these reactors’ more detailed site-specific cost estimates calculated for the same period. GAO found that for 5 of the 12 reactors, the NRC formula captured 57 to 76 percent of the costs reflected in each reactor’s site-specific estimate; the other 7 captured 84 to 103 percent. The results of more than one-third of the fund balance reviews that NRC staff performed from April 2008 to October 2010 to verify that the amounts in the 2-year reports match year-end bank statements were not always clearly or consistently documented. As an example of inconsistent results, some reviewers provided general information, such as “no problem,” while others provided more detail about both the balance in the year-end bank statement and the 2-year report. As of October 2011, NRC did not have written procedures describing the steps that staff should take for conducting these reviews, which likely contributed to NRC staff not always documenting the results of the reviews clearly or consistently. NRC has not reviewed licensees’ compliance with the investment standards the agency has set for decommissioning trust funds. These standards specify, among other things, that fund investments may not be made in any reactor licensee or in a mutual fund in which 50 percent or more of the fund is invested in the nuclear power industry. As a result, NRC cannot confirm that licensees are avoiding conditions described in the standards that may impair fund growth. Without awareness of the nature of licensees’ investments, NRC cannot determine whether it needs to take action to enforce the standards. What GAO Recommends GAO recommends, among other things, that NRC define what it means by the “bulk” of the funds needed for decommissioning and consider reviewing a sample of licensees’ investments to determine if they comply with standards. NRC agreed to consider reviewing a sample of investments, but disagreed that defining bulk is needed because of the comprehensiveness of NRC’s regulatory system. GAO continues to believe that this definition is needed.

gao_GAO-12-641

gao_GAO-12-641_0

TIFIA Projects Are Mostly Large Highway Projects; Performance Measures Are Needed to Better Evaluate Program Outcomes TIFIA Projects Are Concentrated in Five States and Tend to Be Large Highway Projects Since the TIFIA program was created in 1998, DOT has executed 27 credit agreements for 26 projects. 4.) According to DOT data, TIFIA credit agreements have been used mostly for large, high-cost highway projects. Overall, DOT has provided TIFIA assistance to 17 highway projects. As of April 2012, DOT reported that it has provided nearly $9.1 billion— $8.5 billion through direct loans and $600 million in loan guarantees—to projects at a budgetary cost of about $654 million. TIFIA Program Could Benefit from Use of Performance Measures to Evaluate Progress toward Goals While DOT tracks certain aspects of a project, such as monitoring whether the project is meeting its construction timeline and comparing actual and projected receipts of the revenue pledged to repay TIFIA assistance, the agency does not systematically assess whether its portfolio as a whole is achieving the program’s goals of leveraging federal funds and encouraging private co-investment. DOT Used a Competitive Process to Evaluate Projects, but This Process Could Benefit from Increased Transparency DOT Developed a Competitive, Two-Step Process to Evaluate and Select Projects Using the Statutory Criteria In response to increased program demand and the uncertain budget environment, DOT used a competitive, two-step process to assess LOIs and select projects to apply for credit assistance in fiscal years 2010 and 2011. DOT’s process for competitively selecting amongst LOIs involved two steps; first, DOT convened a multimodal team to assess, score, and group projects using statutory criteria, and second, DOT used a team of senior-level staff—called the executive leadership team—to review the multimodal team’s assessments and invite select project sponsors to submit an application for credit assistance (see fig. DOT officials said it did so as part of its efforts to improve its communication of the criteria and selection process to applicants through the funding notices over time. Since many of DOT’s changes to the selection process occurred in the fiscal year 2012 TIFIA solicitation, it is too soon to know whether these changes will address the transparency and uncertainty concerns raised by recent applicants and financial and legal advisors. A Number of Factors Influence whether States and Sponsors Seek TIFIA Assistance As shown in table 5, most recent applicants we surveyed cited TIFIA’s repayment terms and options, low interest rate, and ability to serve as subordinate debt as very or somewhat important in their decision to seek assistance in fiscal years 2010 and 2011. However, our survey also indicated that some states have neither sought nor plan to seek TIFIA assistance. In addition, most of these state DOTs indicated that changes to the program—such as making more funds available for the program or increasing the portion of project costs that TIFIA assistance could cover—would have somewhat or little to no increase on the likelihood that they would seek TIFIA assistance. For the last 3 fiscal years, sponsors submitted LOIs for credit assistance totaling more than 10 times what the program’s current budget authority can support. Two other factors will influence the demand for TIFIA assistance. Options Proposed to Modify the TIFIA Program With the pending reauthorization of the surface transportation programs, the tight budgetary environment, and the increase in demand for TIFIA, government and industry officials have proffered options to modify the program. Each option has advantages and disadvantages, and thus implementing any of these options would require policy trade-offs. Given these complexities, this option may be difficult to implement, though it could be done relatively quickly. Recommendations for Executive Action To improve the implementation of the TIFIA program and enable Congress and DOT to better assess program performance, we recommend that the Secretary of Transportation further develop and define performance measures to monitor and evaluate progress toward meeting the program’s goals and objectives. Appendix I: Scope and Methodology To address our objectives, we reviewed Department of Transportation (DOT) program guidance for the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, relevant legislation and regulations, and DOT’s biennial reports to Congress on the TIFIA program. In addition, we interviewed legal and financial advisors that help sponsors apply for TIFIA credit assistance and private concessionaires that invest in large infrastructure projects to learn about their experiences with the TIFIA program, including the selection process. The survey was administered to the state DOTs in all 50 states, the District of Columbia, and Puerto Rico, as well as to all recent applicants that submitted an LOI to the TIFIA program in fiscal years 2010 and 2011.The survey population consisted of four unique groups of respondents: state DOTs from states from which no sponsor had ever applied to the TIFIA program; state DOTs from states from which a sponsor had applied to the TIFIA program but not in recent years—that is, 2010 and 2011; state DOTs who had recently applied to the TIFIA program; and other, non-state DOT organizations who had recently applied to the TIFIA program. Appendix II: Projects Receiving TIFIA Credit Assistance DOT has awarded 27 TIFIA credit agreements to projects through 26 loans and one loan guarantee. The TIFIA eligibility requirements are (1) the project shall be consistent with the state transportation plan, if located in a metropolitan area shall be included in that area’s metropolitan transportation plan, and shall appear in an approved state transportation improvement program before the DOT and the project sponsor execute a term sheet or credit agreement that results in the obligation of funds; (2) the state, local servicer, or other entity undertaking the project shall submit a project application to the Secretary of Transportation; (3) a project shall have eligible project costs that are reasonably anticipated to equal or exceed the lesser of $50 million or 33 1/3 percent of the amount of federal aid highway funds apportioned for the most recently completed fiscal year to the state in which the project is located (in the case of a project principally involving the installation of intelligent transportation systems (ITS), eligible project costs shall be reasonably anticipated to equal or exceed $15 million); (4) project financing shall be repayable, in whole or in part, from tolls, user fees or other dedicated revenue sources; and (5) in the case of a project that is undertaken by an entity that is not a state or local government or an agency or instrumentality of a state or local government, the project that the entity is undertaking shall be included in the state transportation plan and an approved State Transportation Improvement Program.

Why GAO Did This Study Created in 1998, the TIFIA program is designed to fill market gaps and leverage substantial nonfederal investment by providing federal credit assistance to help finance surface transportation projects including highway, transit, rail, and intermodal projects. Since 2008, demand for the program has surged, annually exceeding budget resources for the program by a factor of more than 10 to 1. Given the increased demand and recent proposals to expand and modify the program, GAO was asked to review (1) the characteristics of TIFIA projects and how DOT tracks progress toward the program’s goals, (2) the process DOT used to evaluate and select projects that submitted LOIs to apply for credit assistance in fiscal years 2010 and 2011, (3) the factors that affect project sponsors’ decisions about whether to seek TIFIA credit assistance, and (4) the options proposed to modify the program. GAO reviewed laws and program guidance; interviewed DOT officials, project sponsors, and advisors involved in procuring credit assistance; and surveyed all state departments of mtransportation and other recent applicants about the TIFIA program. What GAO Found Projects that received credit assistance through the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, administered by the Department of Transportation (DOT), tend to be large, high-cost highway projects. As of April 2012, DOT has executed 27 TIFIA credit agreements for 26 projects with project sponsors such as state DOTs and transit agencies. Overall, DOT has provided nearly $9.1 billion in credit assistance through 26 loans and one loan guarantee. By mode, there are 17 highway, 5 transit, and 4 intermodal projects. Most projects have a total cost of over $1 billion. DOT monitors individual credit agreements but does not systematically assess whether its TIFIA portfolio as a whole is achieving the program’s goals of leveraging federal funds and encouraging private co-investment. DOT has identified goals and objectives for the TIFIA program, but its limited use of performance measures makes it difficult to determine the degree to which the program is meeting these goals and objectives. Given that DOT already collects project data, it could use these data to better evaluate the program’s overall progress toward meeting its goals. In fiscal years 2010 and 2011, DOT used a competitive two-step process to evaluate and invite projects to apply for TIFIA credit assistance to address the considerable increase in demand for the program. First, a multimodal team scored and grouped letters of interest (LOI) using statutory criteria. Second, a group of senior DOT staff reviewed the LOIs based on the criteria and other factors, like available budget authority, and invited a subset to apply—the next step in securing TIFIA assistance. While recent applicants were satisfied with many aspects of the process, they also indicated, along with legal and financial advisors, that the selection process lacks transparency and creates uncertainty in their ability to implement projects. For example, some recent applicants told us it is difficult to understand what characteristics DOT uses to measure how well a project meets each criterion. DOT officials said the agency is taking steps to improve its evaluation process, but since many of the changes were initiated in 2012, it is too soon to tell if they will address recent applicants’ concerns. Several factors influence whether project sponsors seek TIFIA assistance. More than 30 of 36 recent applicants we surveyed cited TIFIA’s repayment options (like deferring repayments for 5 years after project completion), low interest rate, and flexible structure (i.e., ability to subordinate TIFIA repayment) as important in their decision to seek assistance. To date, sponsors from 17 states have never sought TIFIA assistance. State DOT respondents from these states cited various reasons for this, including lack of eligible projects and state-imposed borrowing restrictions. Many of these state DOTs indicated that regardless of options for modifying the program, they have no plans to seek TIFIA assistance. Several options to change the TIFIA program have been proposed by, among others, Congress and DOT; these options include increasing the program’s funding, increasing the portion of costs that may be covered by TIFIA from 33 percent to 49 percent of project costs, and modifying the selection process. Each option has advantages and disadvantages and, if adopted, some could alter the original goals of the program—to leverage public funds and encourage private co-investment. What GAO Recommends GAO recommends that DOT develop and use program performance measures to better assess progress in meeting TIFIA’s goals and objectives. DOT should better disclose information on how it selects projects to apply for TIFIA assistance through program guidance or other means to help ensure that the program is more transparent to Congress, applicants, and the public. DOT said it would consider the study’s results.

gao_GAO-03-46

gao_GAO-03-46_0

Natural Gas Supplies Were Constrained because of Low Storage Levels and Delays in Newly Produced Gas Reaching the Market Based on our analysis of EIA data and interviews with EIA and other energy analysts, constrained natural gas supplies, caused by unusually low levels of gas in storage on the part of gas utilities and gas marketers, and the considerable time required for gas from new production to reach the marketplace, contributed to the increases in natural gas prices in 2000- 2001. Natural Gas Market Supply and Demand Characteristics Cause Price Spikes Natural gas price volatility, as occurred during the winter of 2000-2001, is driven by inelastic supply and demand, which means neither can quickly nor easily adjust to meet changes in the natural gas market. FERC staff found that published natural gas price data are susceptible to manipulation and cannot be independently validated. In addition, CTFC—the federal agency responsible for fostering competitive commodity futures markets—generally does not have regulatory authority over trading in the OTC derivatives markets. However, until CFTC’s investigation is complete, it is unknown, what role, if any, these markets may have played in the 2000-2001 natural gas price spike, or what, if any, enforcement or other actions may result. Hedging does not, however, ensure that a utility company will pay the lowest possible price for future natural gas purchases: it simply provides stable gas prices and protection against price spikes such as the one that occurred in 2000-2001. This recent price spike increased the importance of price stability for those gas utilities that serve residential customers and the regulatory agencies that oversee this service. According to our survey of state regulatory agencies, most allow the gas utilities under their jurisdiction to use hedging techniques when they purchase gas for their residential customers. However, at this date, the federal government faces major challenges in meeting its role of ensuring that natural gas prices are determined by supply and demand factors in a competitive and informed marketplace. FERC recognizes that it needs to improve its market oversight and is reviewing its statutory authority and market monitoring tools. VI), and noted that it previously lacked an adequate regulatory and oversight approach to monitor a restructured natural gas industry. Appendix I: Objectives, Scope, and Methodology In our study of the natural gas market, we addressed (1) the factors that influence price volatility and, in particular, the high prices that occurred during the winter of 2000-2001; (2) the federal government’s role in ensuring that natural gas prices are determined in a competitive and informed marketplace; and (3) choices available to gas utility companies that want to mitigate the effects of future price spikes on their residential gas customers.

Why GAO Did This Study During the winter of 2000-2001, the wholesale price of natural gas peaked at a level four times greater than its usual level. Responding to the congressional interest and concern caused by these high prices, GAO undertook a study to address the (1) factors that influence natural gas price volatility and the high prices of 2000-2001; (2) federal government's role in ensuring that natural gas prices are determined in a competitive, informed marketplace; and (3) choices available to gas utility companies that want to mitigate the effects of price spikes on their residential customers. GAO surveyed a nationwide sample of gas utilities and staff of state utility regulatory agencies. What GAO Found Price spikes occur periodically in natural gas markets because supplies cannot quickly adjust to demand changes. In 2000-2001 for example, natural gas supplies were constrained and demand skyrocketed, leading to the perfect environment for the price spike shown below. While market forces make natural gas prices susceptible to price volatility, investigations are underway to determine if natural gas prices were manipulated in the Western United States during the winter of 2000-2001. Federal agencies face major challenges in ensuring that natural gas prices are determined in a competitive and informed marketplace. The Federal Energy Regulatory Commission lacks an adequate regulatory and oversight approach and is reviewing its statutory authority and market monitoring tools. The Commodity Futures Trading Commission does not have regulatory authority for over-the-counter derivatives markets. It does have antimanipulation authority and is currently investigating what role, if any, these markets played in the natural gas price spike of 2000-2001. Finally, the Energy Information Administration has an outdated natural gas data collection program, but has made efforts to reassess its data needs to provide more useful information. Gas utility companies can protect their residential customers against price spikes such as the one that occurred in 2000-2001. For example, using various hedging techniques, utilities can lock in prices for future gas purchases. Continuing volatility in natural gas prices, especially the price spike of 2000-2001, has increased the importance of price stability for gas utility companies. Agencies that commented on this report generally agreed with its conclusions.

gao_GAO-05-1056

gao_GAO-05-1056_0

Background In general, safeguards are temporary import restrictions that provide an opportunity for domestic industries to adjust to increasing imports. Its provisions contain a transitional product-specific safeguard that permits WTO members, including the United States, to take measures to address disruptive import surges from China alone. Under the terms of China’s WTO accession agreement, members may use the China safeguard until 2013. Second, Chinese imports are subject to a U.S. global safeguard that applies to all WTO members. U.S. Law Establishes Three-Step Process for China Safeguard Decisions In the United States, the China safeguard is implemented under section 421 of the Trade Act of 1974, as amended, which Congress enacted as part of the legislation authorizing the President to grant China permanent normal trade relations status. Under section 421, U.S. firms may petition the government to apply a China safeguard. This three-step process involves ITC, USTR, and the President, and it results in determinations about whether import surges from China have caused market disruption and whether a remedy is in the national economic interest or, in extraordinary circumstances, would cause serious harm to national security. The entire process takes approximately 150 days (see fig. 1). Section 421 states: “the President shall provide import relief… unless the President determines that provision of such relief is not in the national economic interest of the United States or, in extraordinary cases, that the taking of action… would cause serious harm to the national security of the United States.” Although the law does not define “national economic interest,” it further states that the President may determine “that providing import relief is not in the national economic interest of the United States only if finds that the taking of such action would have an adverse impact on the United States economy clearly greater than the benefits of such action.” Finally, section 421 requires the President to publish his decision and the reasons for it in the Federal Register. The success rate for China safeguard petitions is similar to communist country safeguard petitions, but differs from that of global safeguard petitions. 2). ITC Found Market Disruption in Three of Five Cases ITC made negative determinations in two of five completed China safeguard cases. USTR staff then drafted a recommendation in a memorandum to the U.S. Trade Representative, who assessed the various options. President Decided Not to Apply the China Safeguard The President declined to provide relief in all three cases. Of those cases where ITC found the industry was injured by imports, the President denied relief in all but one of the China and communist country safeguard cases. The President Has Exercised His Broad Discretion in Deciding Not to Apply Relief The President’s decisions not to impose relief in the three China safeguard cases in which ITC found market disruption have been criticized. This broad discretion was upheld by the U.S. Court of International Trade. If the ITC makes an affirmative determination on market disruption, there would be a presumption in favor of providing relief. Thus, ITC did not weigh the interests of other groups such as consumers and downstream industries against potential benefits to the domestic industry when developing its recommendations for the President to consider. President Cites Third Country Imports When Denying Relief The President has considered whether relief would benefit the producers involved in every case. In contrast, under the global safeguard, imports from other countries generally cannot diminish the potential benefits of import relief. However, one consistent factor has been that the China and communist country safeguards, respectively, are limited in scope to products from one or a few countries; this allows other foreign sources to gain market share of the product and reduce the potential benefit of the safeguard to the domestic producers. Agency Comments and Our Evaluation We provided ITC and USTR a draft of this report for their review and comment. Both agencies chose to provide technical comments from their staff. We modified the report in response to their suggestions. Appendix I: Objectives, Scope, and Methodology To address our objectives, we reviewed U.S. laws and procedures as well as relevant World Trade Organization (WTO) agreements and China’s accession agreement. To ensure our understanding of relevant laws, procedures, and agreements, we spoke with officials from the Office of the United States Trade Representative (USTR) and the International Trade Commission (ITC).

Why GAO Did This Study In joining the World Trade Organization (WTO) in December 2001, China agreed to a number of mechanisms to allow other WTO members to address disruptive import surges from that country. Among these was a transitional product-specific safeguard. In general, safeguards are temporary import restrictions of limited duration that provide an opportunity for domestic industries to adjust to increasing imports. U.S. law includes a number of other safeguards including a communist country safeguard, known as "section 406," and a global safeguard, known as "section 201," which have both applied to China. In light of increased concern about Chinese trade practices and the U.S. government response to them, the conference report on fiscal year 2004 appropriations requested that GAO review the efforts of U.S. government agencies responsible for ensuring free and fair trade with that country. In this report, which is one of a series, GAO (1) describes the China safeguard, (2) describes how it has been used thus far, and (3) examines issues related to the President's discretion to apply the safeguard. Other safeguards provide context to understand this mechanism. We provided ITC and USTR a draft of this report for their review and comment. Both agencies chose to provide technical comments from their staff. We incorporated their suggestions as appropriate. What GAO Found The China safeguard permits WTO members, including the United States, to address disruptive import surges from China. In the United States, the China safeguard is implemented under section 421 of the Trade Act of 1974, which allows U.S. firms to petition for relief and establishes a three-step process. This process involves the International Trade Commission (ITC), Office of the U.S. Trade Representative (USTR), and the President and determines whether Chinese imports are causing market disruption to domestic producers and whether a remedy is in the national economic interest. The entire process takes about 150 days. Under the terms of China's WTO accession agreement, WTO members may use the China safeguard until 2013. To date, the United States has not applied the China safeguard in five cases brought by domestic producers. In a sixth case, ITC has not yet reached a decision. In two cases, ITC found no market disruption. In three cases, ITC found market disruption and USTR evaluated the pros and cons of various options and made a recommendation to the President. In all three cases, the President declined to provide relief to the domestic industry after he found it would not be in the national economic interest because the costs would outweigh the benefits. The success rate for China safeguard petitions is similar to communist country safeguard petitions, but differs from that of global safeguard petitions. The President's decisions not to provide import relief after ITC found market disruption generated controversy, including a lawsuit claiming that he exceeded his authority. The relevant House committee intended that the law create a presumption in favor of relief upon an ITC injury finding. Nonetheless, the U.S. Court of International Trade found the President has broad discretion not to apply a China safeguard. Moreover, the President considers the question of whether to provide relief from a broader perspective than ITC. The President weighs the benefits of relief against the costs and considers factors such as the effect on consumers and downstream users, which ITC does not. The President cited third-country imports in all his decisions denying relief under both the Chinese and communist country safeguards. Under the global safeguard, third-country imports generally cannot diminish the potential benefits of import relief to the domestic industry and the President has often provided relief, especially since 1988 when U.S. trade laws were revised.

gao_GAO-11-73

gao_GAO-11-73_0

Background CBP Is the Lead Federal Agency Responsible for Stemming the Flow of Bulk Cash Leaving the U.S. at Land Ports of Entry CBP is the lead federal agency charged with securing our nation’s borders while facilitating legitimate travel and commerce. While CBP does not know the number of travelers that leave the United States through land ports of entry, it estimates that it inspected over 360 million travelers who entered the country in fiscal year 2009 through land, air, and sea ports of entry. CBP’s Process for Inspecting Travelers Leaving the Country The process used by CBP to inspect travelers leaving the country differs from the inspection process for those entering the United States at land ports of entry. Within FinCEN, the Regulatory Policy and Programs Division is responsible for, among other things, BSA compliance in the financial industry and for issuing regulations for U.S. financial institutions. CBP Has Established an Outbound Enforcement Program, but Further Actions Are Needed to Address Program Challenges CBP Has Created an Outbound Enforcement Program and Seized about $41 Million in Bulk Cash Leaving the Country Since March 2009 In March 2009, CBP reestablished an Outbound Enforcement Program within its Office of Field Operations (OFO). As a result of its outbound enforcement activities, CBP seized about $41 million in illicit bulk cash leaving the country at land ports of entry from March 2009 through June 2010. Stemming the Flow of Bulk Cash Is a Challenging Task CBP has succeeded in establishing an Outbound Enforcement Program, but the program is in its early phases and there is a general recognition by CBP managers and officers that the agency’s ability to stem the flow of bulk cash is limited because of the difficulty in detecting bulk cash. For example, our investigators tested outbound operations at three ports of entry on the southwest border. Had the 9/11 terrorists used prepaid cards to cover their expenses, none of these financial footprints would have been available.” FinCEN Does Not Require MSBs to Report Suspicious Transactions Involving Stored Value While depository institutions are required to file suspicious activity reports (SAR) for stored value transactions, FinCEN does not require MSBs to do so.82,,83 84 Although some MSBs may file SARs related to stored value as part of their anti-money laundering programs or on a voluntary basis, the fact that suspicious activity involving stored value does not have to be reported by all financial institutions heightens the risk that cross-border currency smuggling or the illegal use of stored value may go undetected or unreported. Efforts Are Under Way to Address Regulatory Gaps Related to Stored Value, but Much Work Remains FinCEN Is in the Process of Developing and Issuing Regulations that Require Anti-Money Laundering Practices for Stored Value At the time of our review, FinCEN was in the process of developing and issuing regulations, as required by the Credit CARD Act, to address the risk associated with the illicit use of stored value. § 5316 which applies to the transport of monetary instruments. A project management plan that is consistent with best practices could help FinCEN better manage its rulemaking effort. More Work Remains to Ensure Agencies Enforce Cross-Border Currency Smuggling and Industry Complies with the Final Rule While issuing the final rule on stored value will be a major step toward addressing regulatory gaps, much work remains to ensure enforcement by law enforcement agencies to identify cross-border currency smuggling with the use of stored value and to ensure issuers, sellers, and redeemers of such devices implement anti-money laundering requirements after the final rule is issued. Beyond these tasks, federal law enforcement agencies and FinCEN face other challenges as well. Among other things, FinCEN faces challenges in areas such as monitoring MSBs, addressing gaps in anti-money laundering practices of off-shore issuers and sellers of stored value, and educating industry about the new anti- money laundering requirements. FinCEN has not set a date for completion of this effort as its plans have not been finalized. By developing a management plan with timelines for issuing final rules, FinCEN could be better positioned to manage its rulemaking efforts and to reduce the risk of cross-border smuggling and other illicit uses of stored value by drug trafficking organizations and others. Develop a performance measure that informs CBP management, Congress, and other stakeholders about the extent to which the Outbound Enforcement Program is effectively stemming the flow of bulk cash, weapons, and other goods that stem from criminal activities by working with other federal law enforcement agencies involved in developing assessments on bulk cash and other illegal goods leaving the country.

Why GAO Did This Study U.S. Customs and Border Protection (CBP) is the lead federal agency responsible for inspecting travelers who seek to smuggle large volumes of cash--called bulk cash--when leaving the country through land ports of entry. It is estimated that criminals smuggle $18 billion to $39 billion a year in bulk cash across the southwest border. The Financial Crimes Enforcement Network (FinCEN) is responsible for reducing the risk of cross-border smuggling of funds through the use of devices called stored value, such as prepaid cards. GAO was asked to examine (1) the extent of actions taken by CBP to stem the flow of bulk cash leaving the country and any challenges that remain, (2) the regulatory gaps, if any, of cross-border reporting and other anti-money laundering requirements of stored value, and (3) if gaps exist, the extent to which FinCEN has addressed them. To conduct its work, GAO observed outbound operations at five land ports of entry. GAO also reviewed statutes, rules, and other information for stored value. This is a public version of a law enforcement sensitive report that GAO issued in September 2010. Information CBP deemed sensitive has been redacted. What GAO Found In March 2009, CBP created an Outbound Enforcement Program aimed at stemming the flow of bulk cash leaving the country, but further actions could be taken to address program challenges. Under the program, CBP inspects travelers leaving the country at all 25 land ports of entry along the southwest border. On the Northern border, inspections are conducted at the discretion of the Port Director. From March 2009 through June 2010, CBP seized about $41 million in illicit bulk cash leaving the country at land ports of entry. Stemming the flow of bulk cash, however, is a difficult and challenging task. For example, CBP is unable to inspect every traveler leaving the country at land ports of entry and smugglers of illicit goods have opportunities to circumvent the inspection process. Other challenges involve limited technology, infrastructure, and procedures to support outbound operations. CBP is in the early phases of this program and has not yet taken some actions to gain a better understanding of how well the program is working, such as gathering data for measuring program costs and benefits. By gathering data for measuring expected program costs and benefits, CBP could be in a better position to weigh the costs of any proposed expansion of the outbound inspection program against likely outcomes. Regulatory gaps of cross-border reporting and other anti-money laundering requirements exist with the use of stored value. For example, travelers must report transporting more than $10,000 in monetary instruments or currency at one time when leaving the country, but FinCEN does not have a similar requirement for travelers transporting stored value. Similarly, certain anti-money laundering regulations, such as reports on suspicious activities, do not apply to the entire stored value industry. The nature and extent of the use of stored value for cross-border currency smuggling and other illegal activities remains unknown, but federal law enforcement agencies are concerned about its use. FinCEN is developing regulations, as required by the Credit CARD Act of 2009, to address gaps in regulations related to the use of stored value for criminal purposes, but much work remains. FinCEN has not developed a management plan that includes, among other things, target dates for completing the regulations. Developing such a plan could help FinCEN better manage its rulemaking effort. When it issues the regulations, law enforcement agencies and FinCEN may be challenged in ensuring compliance by travelers and industry. For example, FinCEN will be responsible for numerous tasks including issuing guidance for compliance examiners, revising the way in which it tracks suspicious activities related to stored value, and addressing gaps in anti-money laundering regulations for off-shore entities that issue and sell stored value. What GAO Recommends GAO recommends that CBP, among other things, gather data on program costs and benefits and that FinCEN develop a plan, including target dates, to better manage its rulemaking process. CBP and FinCEN concurred with these recommendations.

gao_GAO-17-673

gao_GAO-17-673_0

RPS produce electrical power by converting the heat generated by the natural radioactive decay of Pu-238. NASA Selects RPS to Power Missions Based on the Agency’s Scientific Objectives and Mission Destinations, and Power Source Selections are Made Early in NASA’s Mission Review Process According to the NASA officials we interviewed, NASA selects RPS to power its missions based on the agency’s scientific objectives and mission destinations. Prior to the establishment of DOE’s Supply Project in fiscal year 2011, mission selections were influenced by the limited amount of available Pu-238, NASA officials said. Multiple Factors Could Affect Demand for RPS and Pu-238 Costs Associated with RPS and Missions Can Affect RPS Demand NASA officials we interviewed said that the demand for RPS is driven by a mission’s cost. For example, these officials said that they are reviewing a modular RPS device. DOE Has Made Progress Reestablishing Pu- 238 Production but Faces Challenges that Could Affect Its Ability to Meet RPS and Pu-238 Demand DOE has made progress reestablishing Pu-238 production to meet NASA’s RPS demand, is in position to support NASA’s current plans for solar system exploration, and anticipates being able to support two to three RPS-powered missions per decade using new Pu-238 expected from the Supply Project. DOE Has Made Progress Reestablishing Pu-238 Production to Meet NASA’s RPS Demand DOE has made progress reestablishing Pu-238 production to meet NASA’s future demand for Pu-238 to fuel RPS. DOE Faces Challenges with Key Aspects of Pu- 238 and RPS Production DOE officials from INL, LANL, and ORNL identified several challenges that need to be overcome for DOE to be able to meet its projected Supply Project goal of 1.5 kg per year of Pu-238 by 2026, at the latest. According to DOE officials, DOE is still in the experimental stage and has not perfected the chemical processing required to extract new Pu-238 isotope from the irradiated targets, which creates a bottleneck in the Supply Project and puts production goals at risk. DOE officials stated that ATR must be used, as projected in DOE’s initial plans, to reach the production goal of 1.5 kg of Pu-238 per year. However, DOE does not yet have an implementation plan under the new constant GPHS production rate approach with milestones and interim steps for the Supply Project or for RPS production that can be used to show progress toward implementing efforts, show how risk is being addressed or mitigated, or make adjustments to those efforts when necessary. In addition, DOE’s new approach still does not improve the agency’s ability to assess the long-term effects of the challenges associated with Pu-238 and RPS production, such as chemical processing, availability of reactor positions, target design and qualification, and prioritizing Pu-238 at PF-4. In addition, Standards for Internal Control in the Federal Government states that agency management should use quality information to achieve the entity’s objectives and communicate quality information externally through reporting lines so that external parties can help the entity achieve its objectives and address related risks. In addition, DOE has identified key challenges to the Supply Project—such as scaling up chemical processing and qualifying targets—that put achieving Supply Project production goals at risk. However, DOE has not fully assessed the potential long-term effects of these challenges on production goals. While DOE officials anticipate that their new approach to managing RPS and Pu-238 production will better help address these challenges, DOE is in the very early stages of implementing this approach and has not identified details, including milestones and interim steps, for how it would address them. Recommendations for Executive Action To help ensure the availability of Pu-238 and RPS for space exploration, we recommend that the Secretary of Energy take the following three actions: develop an implementation plan with milestones and interim steps for the department’s management approach for Pu-238 and RPS production; assess the long-term effects that known challenges may have on production quantities, time frames, or required funding, and communicate these potential effects to NASA; and develop a more comprehensive system to track more systemic risks, beyond the specific technical risks identified by individual laboratories. Appendix I: Objectives, Scope, and Methodology This report examines the National Aeronautics and Space Administration’s (NASA) process for considering and selecting power sources for missions, in particular the use of radioisotope power systems (RPS), and the Department of Energy’s (DOE) ability to maintain the necessary infrastructure and workforce for RPS and plutonium-238 (Pu- 238) production. Our objectives were to (1) describe how NASA selects RPS for missions and what factors affect RPS and Pu-238 demand; and (2) evaluate DOE’s progress in meeting NASA’s RPS and Pu-238 demand and what challenges, if any, DOE faces in meeting the demand.

Why GAO Did This Study NASA uses RPS to generate electrical power in missions in which solar panels or batteries would be ineffective. RPS convert heat generated by the radioactive decay of Pu-238 into electricity. DOE maintains a capability to produce RPS for NASA missions, as well as a limited and aging supply of Pu-238 that will be depleted in the 2020s, according to NASA and DOE officials and documentation. With NASA funding, DOE initiated the Pu-238 Supply Project in 2011, with a goal of producing 1.5 kg of new Pu-238 per year by 2026. Without new Pu-238, future NASA missions requiring RPS are at risk. GAO was asked to review planned RPS and Pu-238 production to support future NASA missions. This report (1) describes how NASA selects RPS for missions and what factors affect RPS and Pu-238 demand; and (2) evaluates DOE's progress and challenges in meeting NASA's RPS and Pu-238 demand. GAO reviewed NASA mission planning and DOE program documents, visited two DOE national laboratories involved in making new Pu-238 or RPS work, and interviewed agency officials. What GAO Found The National Aeronautics and Space Administration (NASA) selects radioisotope power systems (RPS) for missions primarily based on the agency's scientific objectives and mission destinations. Prior to the establishment of the Department of Energy's (DOE) Supply Project in fiscal year 2011 to produce new plutonium-238 (Pu-238), NASA officials said that Pu-238 supply was a limiting factor in selecting RPS-powered missions. After the initiation of the Supply Project, however, NASA officials GAO interviewed said that missions are selected independently of decisions on how to power them. Once a mission is selected, NASA considers power sources early in its mission review process. Multiple factors could affect NASA's demand for RPS and Pu-238. For example, high costs associated with RPS and missions can affect the demand for RPS because, according to officials, NASA's budget can only support one RPS mission about every 4 years. Expected technological advances in RPS efficiency could reduce NASA's demand for RPS and Pu-238. DOE has made progress in reestablishing Pu-238 production to meet NASA's future demand to fuel RPS and has identified challenges to meeting its production goals. Specifically, since the start of the Supply Project, DOE has produced 100 grams of Pu-238 and expects to finalize production processes and produce interim quantities by 2019. However, DOE has also identified several challenges to meeting the Supply Project goal of producing 1.5 kilograms (kg) of new Pu-238 per year by 2026. DOE officials GAO interviewed said that DOE has not perfected the chemical processing required to extract new Pu-238 from irradiated targets to meet production goals. These officials also said that achieving the Pu-238 production goal is contingent on the use of two reactors, but only one reactor is currently qualified for Pu-238 production while the second reactor awaits scheduled maintenance. Moreover, while DOE has adopted a new approach for managing the Supply Project and RPS production—based on a constant production approach—the agency has not developed an implementation plan that identifies milestones and interim steps that can be used to demonstrate progress in meeting production goals and addressing previously identified challenges. GAO's prior work shows that plans that include milestones and interim steps help an agency to set priorities, use resources efficiently, and monitor progress in achieving agency goals. By developing a plan with milestones and interim steps for DOE's approach to managing Pu-238 and RPS production, DOE can show progress in implementing its approach and make adjustments when necessary. Lastly, DOE's new approach to managing the Supply Project does not improve its ability to assess the potential long-term effects of challenges DOE identified, such as chemical processing and reactor availability, or to communicate these effects to NASA. For example, DOE officials did not explain how the new approach would help assess the long-term effects of challenges, such as those related to chemical processing. Under Standards for Internal Control in the Federal Government , agencies should use quality information to achieve objectives and to communicate externally, so that external parties can help achieve agency objectives. Without the ability to assess the long-term effects of known challenges and communicate those effects to NASA, DOE may be jeopardizing NASA's ability to use RPS as a power source for future missions. What GAO Recommends GAO is making three recommendations, including that DOE develop a plan with milestones and interim steps for its Pu-238 and RPS production approach, and that DOE assess the long-term effects of known production challenges and communicate these effects to NASA. DOE concurred with GAO's recommendations.

gao_GAO-09-987

gao_GAO-09-987_0

The Burmese Jadeite and Ruby Trades Are Distinctly Different, and Significantly Involve China and Thailand Burmese-Origin Jadeite Is Primarily Purchased, Processed, and Consumed by China According to foreign jewelry industry representatives, jadeite generally is mined in the northern Kachin state of Burma (fig. Burmese-Origin Rubies Are Largely Smuggled into Thailand, Yielding Little Revenue to the Burmese Regime, and Are Significantly Processed There In contrast to jadeite, rough Burmese ruby stones are relatively small and thus easy to transport and smuggle. Agencies Have Taken Steps to Prohibit Imports of Burmese-Origin Rubies, Jadeite, and Related Jewelry, but Have Not Shown That They Are Effectively Targeting These Imports Agencies Held Outreach Meetings with U.S. Agencies Have Made No Discernible Progress in Gaining International Support to Prevent Global Trade in Burmese Gemstones Strong Support and Cooperation of China and Thailand Are Important to Restrict Global Trade in Burmese-Origin Jadeite, Rubies, and Related Jewelry, but Highly Unlikely China’s support and cooperation are critical if the United States government hopes to prohibit international trade in Burmese jadeite and jadeite jewelry. While agencies have published an interim final rule, they have not developed specific audit guidance or initiated any postentry reviews of importers’ records. In addition, there is little guidance to importers on what constitutes verifiable evidence. Additional steps to implement this rule, along with further improvements in the data collected on imported rubies and jadeite, could contribute to an understanding of whether import restrictions are effectively targeting Burmese-origin goods. With regard to the goal of restricting worldwide trade, the Department of State submitted a required 60-day report to Congress, but the report had little information on progress or the challenges involved in gaining international support. Since that report, USTR has not requested a WTO waiver and State has made no discernible progress in introducing a UN resolution or negotiating a Kimberley-like process. Recommendations for Executive Action In order to effectively implement the sections of the JADE Act prohibiting the importation of Burmese-origin rubies, jadeite, and related jewelry while allowing imports of non-Burmese-origin goods, we recommend that DHS, in consultation with relevant agencies, develop and implement guidance to conduct postentry reviews of importers’ records and provide improved guidance to importers on the standards of verifiable evidence needed to certify articles are of non-Burmese origin. 110-286), we assessed (1) the key characteristics of the trade of Burmese-origin jadeite and Burmese-origin rubies; (2) the progress U.S. agencies have made to restrict imports of Burmese-origin jadeite, rubies, and related jewelry into the U.S. market; and (3) the progress U.S. agencies have made in pursuing international actions, including (a) seeking a World Trade Organization (WTO) waiver, (b) securing a United Nations (UN) resolution, and (c) working to negotiate an international arrangement—similar to the Kimberley Process—to prevent global trade in Burmese-origin jadeite, rubies, and related jewelry. The JADE Act also requires GAO to submit a report to Congress assessing the effectiveness of the implementation of this section of the act, including any recommendations for improving its administration.

Why GAO Did This Study Congress passed the Tom Lantos Block Burmese JADE Act in 2008 prohibiting the import of Burmese-origin jadeite, rubies, and related jewelry and calling for certain international actions. The act also requires GAO to assess the effectiveness of the implementation of this section of the act. This report assesses (1) key characteristics of the trade of Burmese-origin jadeite and rubies; (2) progress agencies have made to restrict imports of Burmese-origin jadeite, rubies, and related jewelry; and (3) the progress agencies have made in pursuing international actions. GAO reviewed and analyzed policy guidance, reports, and trade data and interviewed officials from the Departments of State (State), Homeland Security (DHS), other U.S. agencies, as well as U.S. and foreign jewelry industry representatives and foreign government officials. What GAO Found The Burmese jadeite and ruby trades are very different from one another and significantly involve China and Thailand. Burmese-origin jadeite is primarily purchased, processed, and consumed by China. Burmese-origin rubies are reportedly largely smuggled into Thailand, yielding little revenue to the Burmese regime, and are significantly processed there. U.S. agencies have taken some steps but have not shown that they are effectively restricting imports of Burmese-origin rubies, jadeite, and related jewelry while allowing imports of non-Burmese-origin goods. Some U.S. jewelry representatives said import restrictions constrain legitimate ruby imports. Agencies published an interim final rule, but DHS has not developed specific audit guidance or conducted any postentry reviews of importers' records. In addition, there is little guidance to importers on what constitutes verifiable evidence of non-Burmese-origin. Although agencies have begun to collect data on ruby and jadeite imports, further efforts could contribute to an understanding of whether restrictions are effectively targeting Burmese-origin imports. Agencies sent a required 60-day report to Congress, but it had little information on progress and challenges related to gaining international support to prevent trade in Burmese-origin rubies, jadeite, and related jewelry. Agencies have made no discernible progress in gaining such international support. Strong support and the cooperation of China and Thailand are important to restrict trade in these items, but highly unlikely. The Office of the United States Trade Representative has not requested a World Trade Organization waiver and State has not introduced a United Nations resolution, noting a number of countries would likely oppose a resolution. Finally, there have been no international meetings to negotiate a global arrangement restricting trade in Burmese rubies and jadeite similar to the Kimberley Process for restricting trade in conflict diamonds. Agency officials cited serious impediments to establishing such a framework.

gao_RCED-99-93

gao_RCED-99-93_0

In 1976, there were 30 independent Class I railroad systems (comprised of 63 Class I railroads); by early 1999, there were 9 railroad systems (comprised of 9 Class I railroads) and half of that reduction was due to consolidations. The Senators asked us to report on (1) how the environment within which rail rates are set has changed since 1990; (2) how rates for users of rail transportation have changed since 1990; (3) how railroad service quality has changed since 1990; and (4) what actions, if any, the Board and others have taken (or propose to take) to address rail rate and service quality issues. Industry and Other Factors Have Influenced the Rate-Setting Environment Since 1990 Railroads’ rate setting since 1990 has increasingly been influenced by ongoing industry and economic changes such as continued rail industry consolidation, which has concentrated the industry into fewer and bigger railroads, and the need for investment capital to address infrastructure constraints. Rail rates are also a function of market competition. The number of independent Class I railroad systems has decreased from 13 in 1990 to 9 in early 1999. In 1990, the five largest railroads accounted for about 74 percent of total rail industry operating revenue. Railroad Financial Health Has Improved, but Most Railroads Do Not Earn the Industry Cost of Capital One important factor that has played a role in how railroads set their rates has been the financial health of the railroad industry. However, most railroads have been determined by the Board to be “revenue inadequate”—that is, their earnings were less than the railroad industry’s cost of capital. 2.5.) 2.6.) As we reported in 1990, revenue inadequacy affects the ability of a railroad to attract and/or retain capital. In addition, in other cases, such as long-distance wheat shipments from Montana and North Dakota to west coast destinations for export, real rail rates have stayed about the same as, or were slightly higher than, they were in 1990. However, the decreases were not uniform. 3.5.) 3.7.) Among the problems cited by shippers were an insufficient supply of railcars when and where needed, inconsistent pickup and delivery of cars, and longer than necessary transit times to a destination. Chemicals and plastics shippers were among the most dissatisfied with the overall quality of their rail service—approximately 80 percent of these shippers indicated that the overall quality of rail service they received in 1997 was somewhat or much worse than in 1990. This was particularly true in 1997 compared with 1990. Shippers have also attributed service problems to a lack of competitive alternatives to rail transportation. However, these measures are not enough to conclude that service has improved overall. 4.1.) Despite Recent Actions to Address Service Issues, Concerns Continue Federal agencies and railroads have taken a number of actions to address the service problems that originated in the Houston/Gulf Coast area in 1997 during the implementation of the Union Pacific/Southern Pacific merger as well as service issues that are more longstanding and widespread.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on: (1) the environment within which railroad rates have been set since 1990; (2) how railroad rates have changed since 1990; (3) how railroad service quality has changed since 1990; and (4) actions taken by the Surface Transportation Board and others to address railroad service quality problems. What GAO Found GAO noted that: (1) the environment in which railroads set their rates has been influenced by ongoing industry consolidation, competitive conditions, and railroads' financial health; (2) as a result of mergers, bankruptcies, and the redefinition of what constitutes a major railroad, the number of independent Class I railroad systems has been reduced from 30 in 1976 to 9 in early 1999, with the 5 largest Class I railroads accounting for 94 percent of industry operating revenue; (3) this increased concentration has raised concerns about potential abuse of market power in some areas due to railroads' use of market-based pricing; (4) under market-based pricing, rail rates in markets with less effective competition may be higher than in markets that have greater competition from railroads or other modes of transportation; (5) railroads' financial health has also improved since 1990; (6) however, despite these improvements, the Board has determined that most Class I railroads are revenue inadequate because they do not generate enough revenue to cover the industry's cost of capital; (7) although such determinations are sometimes controversial, revenue inadequacy affects the ability of a railroad to attract or retain capital and remain financially viable; (8) railroad rates have generally decreased since 1990; (9) the decrease has not been uniform, and in some cases, rail rates have stayed the same as, or are higher than, they were in 1990; (10) this was particularly true on selected long distance rail shipments of wheat from northern plains states like Montana and North Dakota to west coast destinations; (11) rail routes with effective competitive alternatives--either from railroads or from trucks and barges--experienced greater decreases in rail rates; (12) as the rail industry has consolidated, shippers have complained that service quality has deteriorated; (13) shippers' complaints have included a lack of railcars when and where they were needed and inconsistent pickup and delivery of cars; (14) roughly 60 percent of the coal, grain, chemicals, and plastics shippers responding to GAO's survey said that their service was somewhat or much worse in 1997 than it was in 1990; (15) the overall quality of rail service cannot be measured; (16) federal agencies and railroads have taken a number of actions to address rail service problems; and (17) although these actions are expected to yield benefits, they do not address some shippers' belief that greater competition in the rail industry is needed to improve service.

gao_GAO-05-677

gao_GAO-05-677_0

Further, TSA has no policies on accounting for or tracking documents designated as SSI. Once a document is designated SSI, it can remain designated as SSI in perpetuity unless a FOIA request or other request for disclosure outside of TSA results in removal of its SSI status. TSA lacks adequate internal controls to provide reasonable assurance that its SSI designation process is being consistently applied across TSA and for monitoring compliance with the regulations governing the SSI designation process, including ongoing monitoring of the process. This office, which was established in February 2005, will also develop and implement all TSA policies concerning SSI handling, training, and protection. Specifically, TSA currently does not have written policies formalizing the office’s role, responsibilities, and authority. While TSA has provided a training briefing on SSI regulations to certain staff such as the FOIA staff and other units within TSA, it does not have specialized training in place to instruct employees on how to consistently designate information as SSI. Recommendations To help bring clarity, structure, and accountability to TSA’s SSI designation process, we recommend that the Secretary of the Department of Homeland Security direct the Administrator of the Transportation Security Administration to take the following four actions establish clear guidance and procedures for using the TSA regulations to determine what constitutes SSI, establish clear responsibility for the identification and designation of information that warrants SSI protection, establish internal controls that clearly define responsibility for monitoring compliance with regulations, policies, and procedures governing the SSI designation process and communicate that responsibility throughout TSA, and establish policies and procedures within TSA for providing specialized training to those making SSI designations on how information is to be identified and evaluated for protected status. Appendix I: Briefing Slides Transportation Security Administration’s Objectives Our objectives were to assess: 1. the Transportation Security Administration’s (TSA) procedures for determining whether information should be protected under the Sensitive Security Information (SSI) designation, as well as procedures for determining if and when the designation should be removed; 2. internal control procedures in place to ensure that TSA consistently complies with laws and regulations governing the designation of information as SSI and how TSA oversees the process to ensure that it is consistently applied; and 3. Background (continued) SSI constitutes one category of “Sensitive But Unclassified” (SBU) information—information generally restricted from public disclosure but that is not classified national security information.3 SSI is an SBU category specifically required by statute (other examples include Protected Critical Infrastructure Information and Privacy Act information). Background (continued) Congressional concern has arisen about whether TSA is applying the designation criteria consistently and appropriately. Results in Brief (continued) Objective 1—SSI Designation and Removal Process TSA does not have clear policies and procedures, beyond the SSI regulations, to provide to its employees for determining what constitutes SSI or who can make the designation. TSA officials were unable to determine either the number of TSA employees actually designating information as SSI or the number of documents designated SSI. Objective 2—Monitoring Controls Are Weak (continued) However, our review of TSA’s oversight activities noted weaknesses in each of these areas: First, TSA officials told us that the new SSI Program Office will ultimately be responsible for ensuring that staff are consistently applying SSI designations. More detailed information on how this office’s activities will be operationalized was not yet available. Moreover, TSA has no written policies identifying who is responsible for ensuring that employees comply with the SSI training requirements. TSA provides no written guidance, classification guide.

Why GAO Did This Study Concerns have arisen about whether the Transportation Security Administration (TSA) is applying the Sensitive Security Information (SSI) designation consistently and appropriately. SSI is one category of "sensitive but unclassified" information--information generally restricted from public disclosure but that is not classified. GAO determined (1) TSA's SSI designation and removal procedures, (2) TSA's internal control procedures in place to ensure that it consistently complies with laws and regulations governing the SSI process and oversight thereof, and (3) TSA's training to its staff that designate SSI. What GAO Found TSA does not have guidance and procedures, beyond its SSI regulations, providing criteria for determining what constitutes SSI or who can make the designation. Such guidance is required under GAO's standards for internal controls. In addition, TSA has no policies on accounting for or tracking documents designated as SSI. As a result, TSA was unable to determine either the number of TSA employees actually designating information as SSI or the number of documents designated SSI. Further, apart from Freedom of Information Act (FOIA) requests or other requests for disclosure outside of TSA, there are no written policies and procedures or systematic reviews for determining if and when an SSI designation should be removed. TSA also lacks adequate internal controls to provide reasonable assurance that its SSI designation process is being consistently applied across TSA. Specifically, TSA has not established and documented policies and internal control procedures for monitoring compliance with the regulations, policies, and procedures governing its SSI designation process, including ongoing monitoring of the process. TSA officials told us that its new SSI Program Office will ultimately be responsible for ensuring that staff are consistently applying SSI designations. This office, which was established in February 2005, will also develop and implement all TSA policy concerning SSI handling, training, and protection. More detailed information on how this office's activities will be operationalized was not yet available. Specifically, TSA officials provided no written policies formalizing the office's role, responsibilities, and authority. TSA has not developed policies and procedures for providing specialized training for all of its employees making SSI designations on how information is identified and evaluated for protected status. Development of such training for SSI designations is needed to help ensure consistent implementation of the designation authority across TSA. While TSA has provided a training briefing on SSI regulations to certain staff, such as the FOIA staff, it does not have specialized training in place to instruct employees on how to consistently designate information as SSI. In addition, TSA has no written policies identifying who is responsible for ensuring that employees comply with SSI training requirements.

gao_GAO-07-54

gao_GAO-07-54_0

DTC advertising includes, for example, broadcast advertisements (such as those on television and radio), print advertisements (such as those in magazines and newspapers), and Internet advertisements (such as consumer advertising on drug companies’ Web sites). In January 2002, at the direction of the Deputy Secretary of HHS, FDA implemented a policy change requiring OCC to review and approve all regulatory letters prior to their issuance, including letters drafted by the DTC Review Group, to ensure “legal sufficiency and consistency with agency policy.” In its written comments on a draft of our 2002 report, FDA stated that, prior to the policy change, there had been complaints that FDA would not follow up on many of its regulatory letters, and that the goal of the policy change was to promote voluntary compliance by ensuring that drug companies who receive a regulatory letter understand that the letter has undergone legal review and the agency is prepared to go to court if necessary. Drug Company Spending on DTC Advertising Has Increased More Rapidly Than Spending on Promotion to Physicians or Research and Development The amount that drug companies spend on DTC advertising increased twice as fast as spending on promotion to physicians or on research and development. The studies we reviewed also suggest that DTC advertising increases prescribing by prompting some consumers to request the drugs from their physicians, and that physicians are generally responsive to the patient requests. In contrast, other research suggests that DTC advertising can have negative effects, such as encouraging increases in prescriptions for advertised drugs when alternatives may be more appropriate. FDA Reviews a Small Portion of DTC Materials and Cannot Ensure It Is Reviewing the Highest-Priority Materials FDA reviews a small portion of the increasingly large number of DTC materials it receives. However, FDA does not apply these criteria systematically to the materials it receives. As a result, the agency cannot ensure that it is identifying or reviewing the materials that are the highest priority. FDA officials told us that, to target available resources, the agency prioritizes the review of the DTC advertising materials that have the greatest potential to impact public health. Since the 2002 Policy Change, FDA’s Process for Issuing Regulatory Letters Has Taken Longer and the Agency Has Issued Fewer Letters Since the 2002 policy change requiring legal review by OCC of all draft regulatory letters, the agency’s process for drafting and issuing letters has taken longer and FDA has issued fewer regulatory letters per year. 2.) For letters issued from 2002 through 2005, once DDMAC began drafting a letter for violative DTC materials it took an average of about 4 months to issue the letter. In comparison, for regulatory letters issued from 1997 through 2001, it took an average of 2 weeks from drafting to issuance. 3.) Effectiveness of FDA Regulatory Letters at Halting Dissemination of Violative DTC Materials Has Been Limited FDA regulatory letters have been limited in their effectiveness at halting the dissemination of false and misleading DTC advertising materials. By the time these letters were issued, drug companies had already discontinued more than half of the cited materials. For the materials that were still being disseminated, drug companies removed the cited materials in response to FDA’s letter. Despite halting the dissemination of both cited and other violative materials at the time the letter was issued, FDA’s issuance of these letters did not always prevent drug companies from later disseminating similar violative materials for the same drugs. From 2004 through 2005, FDA issued regulatory letters citing DTC materials an average of about 8 months after the violative materials were first disseminated. Recommendations for Executive Action To improve FDA’s processes for identifying and reviewing final and draft DTC advertising materials, we recommend that the Acting Commissioner of the Food and Drug Administration take the following three actions: document criteria for prioritizing materials that it receives for review, systematically apply its documented criteria to all of the materials it track which materials have been reviewed. Delays in issuing regulatory letters limit FDA’s effectiveness in overseeing DTC advertising and in reducing consumers’ exposure to false or misleading advertising. To examine the relationship between DTC advertising and prescription drug spending and utilization, we conducted a literature review. We examined the content of FDA’s most recent regulatory letters—the 19 regulatory letters, 6 warning letters and 13 untitled letters, FDA issued from 2004 through 2005—in order to determine the types of violations that FDA identified and the actions that the agency requested the drug companies to take.

Why GAO Did This Study The Food and Drug Administration (FDA) is responsible for overseeing direct-to-consumer (DTC) advertising of prescription drugs. If FDA identifies a violation of laws or regulations in a DTC advertising material, the agency may issue a regulatory letter asking the drug company to take specific actions. GAO was asked to discuss (1) trends in drug company spending on DTC advertising and other activities; (2) what is known about the relationship between DTC advertising and drug spending and utilization; (3) the DTC advertising materials FDA reviews; (4) the number of regulatory letters that cited DTC materials and FDA's process for issuing those letters; and (5) the effectiveness of these letters at limiting the dissemination of violative DTC advertising. GAO reviewed research literature, analyzed FDA's processes, and examined FDA documentation. What GAO Found Drug company spending on DTC advertising--such as that on television and in magazines--of prescription drugs increased twice as fast from 1997 through 2005 as spending on promotion to physicians or on research and development. Over this period, drug companies spent less each year on DTC advertising ($4.2 billion in 2005) than on promotion to physicians ($7.2 billion in 2005) or research and development ($31.4 billion in 2005). Studies GAO reviewed suggest that DTC advertising has contributed to increases in drug spending and utilization, for example, by prompting consumers to request the advertised drugs from their physicians, who are generally responsive to these requests. Evidence suggests that the effect of DTC advertising on consumers can be both positive, such as encouraging them to talk to their doctors, and negative, such as increased use of advertised drugs when alternatives may be more appropriate. FDA reviews a small portion of the DTC materials it receives. To identify materials that have the greatest potential to impact public health, FDA has informal criteria to prioritize materials for review. However, FDA has not documented these criteria, does not apply them systematically to all of the materials it receives, and does not track information on its reviews. As a result, the agency cannot ensure that it is identifying or reviewing those materials that it would consider to be the highest priority. FDA has taken longer to draft and review regulatory letters and the agency has issued fewer letters per year since 2002, when legal review of all draft regulatory letters was first required. From 2002 through 2005, from the time FDA began drafting a regulatory letter for a violative DTC material, it took the agency an average of 4 months to issue a regulatory letter, compared with an average of 2 weeks from 1997 through 2001. FDA has issued about half as many regulatory letters per year since the 2002 policy change. The effectiveness of FDA's regulatory letters at halting the dissemination of violative DTC materials has been limited. The 19 regulatory letters FDA issued in 2004 and 2005 were issued an average of 8 months after the materials were first disseminated. By the time FDA issued these letters, companies had already discontinued use of more than half of the violative materials. When the cited materials were still being disseminated, drug companies complied with FDA's requests to remove the materials, and identified and removed other materials with similar claims. FDA's issuance of regulatory letters did not always prevent drug companies from later disseminating similar violative materials for the same drugs. These issues are not new. In 2002, GAO reported that, by delaying the issuance of regulatory letters, the 2002 policy change had adversely affected FDA's ability to enforce compliance. At that time, GAO recommended, and FDA agreed, that letters be issued more quickly. GAO continues to believe this is necessary in order to limit consumers' exposure to false or misleading advertising.

gao_AIMD-98-164

gao_AIMD-98-164_0

The federal financial accounting standard defines the full costs of an entity’s outputs as “the sum of (1) the costs of resources consumed by the segment that directly or indirectly contribute to the output, and (2) the costs of identifiable supporting services provided by other responsibility segments within the reporting entity, and by other reporting entities.” As we reported in 1996, applying these definitions of full cost, the full cost of the power marketed by the PMAs includes all direct and indirect costs incurred by the operating agencies to produce the power, the PMAs to market and transmit the power, and any other agencies to support the operating agencies and PMAs. Federal Energy Regulatory Commission The Secretary of Energy has delegated to FERC the responsibility for reviewing and approving the final rates of the three PMAs. Ineffective Monitoring System Has Resulted in Financial Loss to the Federal Government Audits by external auditors and GAO have identified various unrecovered power-related costs that have resulted in financial loss to the federal government. Until an effective monitoring system is implemented, the federal government will continue to be exposed to financial loss due to the under-recovery of costs. Unrecovered costs that have been identified relate to federal employee CSRS pension, postretirement health benefits, life insurance benefits, workers’ compensation benefits, and certain interest expenses related to federal appropriations. 4. Cumulatively, for fiscal years 1992 through 1996, we estimated that the net cost, in constant 1996 dollars, was about $192 million ($110 for Bonneville and $82 million for the other three PMAs). Other instances of under-recovery could exist which we did not identify as a result of the limited scope of our work. Thus, the full magnitude of the unrecovered costs is unknown. Current Monitoring Activities Are Less Extensive Than Those Performed in Prior Years The current activities for monitoring the repayment of power-related costs and debt are less extensive than those performed in prior years. For several years prior to 1984, DOE’s Office of Power Marketing Coordination (OPMC) monitored the PMAs’ activities and reviewed their rate proposals. FERC’s review of Bonneville’s rate proposals was similarly broader before the passage of the Northwest Power Act. According to former OPMC officials, including the former director of that office, OPMC’s monitoring practices included reviewing the PMAs’ rate proposals and power repayment studies before they were sent to FERC. As previously discussed, the act limits the scope of FERC’s review of Bonneville’s rates. We do not agree. However, as our report demonstrates, progress toward resolving some of the cost recovery issues has been slow. Objectives, Scope, and Methodology We were asked by the Chairmen of the House Budget Committee and the Subcommittee on Water and Power Resources, House Resources Committee, to examine the monitoring of the repayment of the power-related costs and debt of the Department of Energy’s (DOE) Power Marketing Administrations (PMA). Specifically, the Chairmen asked us to determine (1) if DOE or the Department of the Treasury actively monitors the amounts of debt to be repaid and the appropriateness of the annual payments and (2) if there is a potential for financial loss to the federal government due to lack of such monitoring. Assessing Monitoring Effectiveness and the Potential for Financial Loss to the Federal Government To determine if current monitoring activities ensure that all repayments were accurate, complete, and timely, we first determined who has the legal responsibility for ensuring that the PMAs recover all power-related costs and repay debt and then obtained an understanding of the current system for monitoring the repayment. 3. 5.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the monitoring of the repayment of the power-related costs and debt of four of the Department of Energy's (DOE) power marketing administrations (PMA), focusing on determining whether: (1) DOE or the Department of the Treasury actively monitors the amount of debt to be repaid and the appropriateness of the annual payments; and (2) there is a potential for financial loss to the federal government as a result of any lack of such monitoring of the repayment. What GAO Found GAO noted that: (1) current monitoring activities do not ensure that the federal government recovers the full cost of its power-related activities from the beneficiaries of federal power; (2) the full cost of the power-related activities includes all direct and indirect costs incurred by the federal government in producing, transmitting, and marketing federal power; (3) audits by external auditors and GAO's own work have identified various unrecovered power-related costs that resulted in financial loss; (4) progress toward resolving cost recovery issues has been slow or nonexistent; (5) unrecovered power-related costs relate to: (a) Civil Service Retirement System (CSRS) pensions and post-retirement health benefits; (b) life insurance benefits; (c) workers' compensation benefits; and (d) interest on some of the federal appropriations used to construct certain projects; (6) GAO estimated that the federal government's unrecovered costs for CSRS pensions and post-retirement health benefits were about $37 million for fiscal year (FY) 1996 and about $192 million for FY 1992 through FY 1996; (7) the full magnitude of the under-recovery of power-related costs is unknown; (8) until an effective monitoring system is implemented, the federal government will continue to be exposed to financial loss to the under-recovery of power-related costs; (9) the current activities for monitoring the repayment of power-related costs and debt are less extensive than those undertaken in prior years; (10) previously, DOE's Office of Power Marketing Coordination (OPMC) monitored repayment and reviewed rate proposals before they were sent to the Federal Energy Regulatory Commission (FERC) for review; however, DOE disbanded OPMC in 1984 and its monitoring duties generally were not assigned to another entity; (11) OPMC assessed whether appropriate costs were included in rates, but did not review the PMAs' power repayment studies in detail; (12) the scope of FERC's review of the three PMAs' rates was limited by the Secretary of Energy's 1983 revision to the delegation order under which FERC carries out that function; (13) the scope of FERC's review of Bonneville's rates was limited by the passage of the Pacific Northwest Electric Power Planning and Conservation Act; and (14) the review procedures previously performed by DOE's OPMC and FERC provided greater assurance that repayment amounts were accurate, complete, and timely.

gao_GAO-07-373

gao_GAO-07-373_0

CMS used QMs both to provide the public with information on nursing home quality of care and to help evaluate QIO efforts to address quality-of- care issues, such as pressure ulcers. 3). QIOs Generally Had a Choice among Homes That Volunteered but Did Not Target Assistance to Low-Performing Homes Although QIOs generally had a choice of homes to select for intensive assistance because more homes volunteered than CMS expected QIOs to assist, QIOs typically did not target the low-performing homes that volunteered. Most QIOs reported in our Web-based survey that they did not have difficulty recruiting homes, and their primary consideration in selecting homes from the pool of volunteers was that the homes be committed to working with the QIOs. In the 7th SOW, CMS did not specify recruitment and selection criteria for intensive participants, leaving the development of guidelines to the QIO support contractor, which encouraged QIOs to select homes that seemed committed to quality improvement and to exclude homes with a high number of survey deficiencies, high management turnover, or QM scores that were too good to improve significantly. The stakeholders we interviewed—including officials of state survey agencies and nursing home trade associations—generally believed QIOs’ resources should be targeted to low-performing homes. Nationwide, the homes in the intensive participant group were less likely than other homes in their state to be low-performing in terms of the number, scope, and severity of deficiencies for which they were cited in surveys during that time frame. QIO Contract Flexibility Resulted in Variation in Assistance Provided to Intensive Participants The 7th SOW contracts allowed QIOs flexibility in the QMs they focused on and the interventions they used, and while the majority of QIOs selected the same QMs and most used the same interventions to assist homes statewide, the interventions for intensive participants and staffing to accomplish program goals varied. Most intensive participants worked on a subset of the QMs selected by their QIO—chronic pain and pressure ulcers (see fig. Statewide Interventions Less Variable Than Those for Intensive Participants The terms of the QIO contract with CMS allowed QIOs to determine the kinds of quality improvement interventions they offered to homes, and those selected by QIOs were consistent with an approach recommended by the QIO support contractor: QIOs generally relied most on conferences and the distribution of educational materials to assist homes statewide and on on-site visits to assist intensive participants. For homes statewide, most QIOs (54 percent) reported that conferences were their most effective intervention, followed by distribution of educational materials and on-site visits. Of the 15 QIOs that said they would change their approach with these homes, most (60 percent) would make on-site visits their primary intervention, while fewer would rely on small group meetings, conferences, and other interventions. Homes also found particular types of assistance less helpful. QIOs’ Impact on Quality Is Not Clear, but Staff at Homes We Contacted Attributed Some Improvements to QIOs Although the QIOs’ impact on the quality of nursing home care cannot be determined from available data, staff we interviewed at most nursing homes attributed some improvements in the quality of resident care to their work with the QIOs. Nursing homes’ QM scores generally improved enough for the QIOs to surpass by a wide margin the modest contract performance targets set by CMS; however, the overall impact of the QIOs on the quality of nursing home care cannot be determined from these data because of the shortcomings of the QMs as measures of nursing home quality and because confounding factors make it difficult to attribute quality improvements solely to the QIOs. Subsequently, HHS’s Office of General Counsel determined that QIO program regulations prohibited QIOs from providing to CMS the identities of intensive participants. Identify a broader spectrum of measures than QMs to evaluate changes in nursing home quality. Analysis of State Survey Data To assess the characteristics of the nursing homes that were selected by the QIOs for intensive assistance from among the homes that volunteered, we analyzed 3 years of standard state survey data on deficiencies cited at nursing homes and compared the results for homes that were assisted intensively with results for homes that were not; we used this information to address our first objective. Based on these rankings, we identified homes in the bottom and top quartile in each state in each survey.

Why GAO Did This Study In 2002, CMS contracted with Quality Improvement Organizations (QIO) to help nursing homes address quality problems such as pressure ulcers, a deficiency frequently identified during routine inspections conducted by state survey agencies. CMS awarded $117 million over a 3-year period to the QIOs to assist all homes and to work intensively with a subset of homes in each state. Homes' participation was voluntary. To evaluate QIO performance, CMS relied largely on changes in homes' quality measures (QM), data based on resident assessments routinely conducted by homes. GAO assessed QIO activities during the 3-year contract starting in 2002, focusing on (1) characteristics of homes assisted intensively, (2) types of assistance provided, and (3) effect of assistance on the quality of nursing home care. GAO conducted a Web-based survey of all 51 QIOs, visited QIOs and homes in five states, and interviewed experts on using QMs to evaluate QIOs. What GAO Found Although more homes volunteered to work with the QIOs than CMS expected them to assist intensively, QIOs typically did not target their assistance to the low-performing homes that volunteered. Most QIOs' primary consideration in selecting homes was their commitment to working with the QIO. CMS did not specify selection criteria for intensive participants but contracted with a QIO that developed guidelines encouraging QIOs to select committed homes and exclude those with many survey deficiencies or QM scores that were too good to improve significantly. Consistent with the guidelines, few QIOs targeted homes with a high level of survey deficiencies, and eight QIOs explicitly excluded these homes. GAO's analysis of state survey data confirmed that selected homes were less likely than other homes to be low-performing in terms of identified deficiencies. Most state survey and nursing home trade association officials interviewed by GAO believed QIO resources should be targeted to low-performing homes. QIOs were provided flexibility both in the QMs on which they focused their work with nursing homes and in the interventions they used. Most QIOs chose to work on chronic pain and pressure ulcers, and most used the same interventions⎯conferences and distribution of educational materials⎯to assist homes statewide. The interventions used to assist individual homes intensively varied and included on-site visits, conferences, and small group meetings. Just over half the QIOs reported that they relied most on on-site visits to assist intensive participants. Sixty-three percent said such visits were their most effective intervention. Of the 15 QIOs that would have changed the interventions used, most would make on-site visits their primary intervention. Homes indicated that they were less satisfied with the program when their QIO experienced high staff turnover or when their QIO contact possessed insufficient expertise. Shortcomings in the QMs as measures of nursing home quality and other factors make it difficult to measure the overall impact of the QIOs on nursing home quality, although staff at most of the nursing homes GAO contacted attributed some improvements in the quality of resident care to their work with the QIOs. The extent to which changes in homes' QM scores reflect improvements in the quality of care is questionable, given the concerns raised by GAO and others about the validity of the QMs and the reliability of the resident assessment data used to calculate them. In addition, quality improvements cannot be attributed solely to the QIOs, in part because the homes that volunteered and were selected for intensive assistance may have differed from other homes in ways that would affect their scores; these homes may also have participated in other quality improvement initiatives. Ongoing CMS evaluation of QIO activities for the contract that began in August 2005 is being hampered by a 2005 Department of Health and Human Services decision that QIO program regulations prohibit QIOs from providing to CMS the identities of homes being assisted intensively.

gao_GAO-04-564

gao_GAO-04-564_0

I for a map of total SARS cases and deaths.) WHO’s Response to SARS Was Extensive, but Was Delayed by an Initial Lack of Cooperation from China and Challenged by Limited Resources WHO’s actions to respond to the SARS outbreak were extensive, but its response was delayed by an initial lack of cooperation from officials in China and challenged by limited resources. There were two primary aspects to WHO’s activities during the SARS outbreak: One was the direct deployment of public health specialists from around the world to affected Asian governments to provide technical assistance; the other was the formation of three virtual networks of laboratory specialists, clinicians, and epidemiologists who pooled their knowledge, expertise, and resources to collect and develop the information WHO needed to issue its guidance and communications about SARS. WPRO also facilitated the deployment of an additional 80 public health specialists to SARS-affected areas. U.S. Government Had Key Role in Response to SARS, but Efforts Revealed Problems in Ability to Respond to Emerging Infectious Diseases CDC, as part of HHS, and State played major roles in responding to the SARS outbreak, but their actions revealed limits in their ability to address emerging infectious diseases. CDC worked with WHO and Asian governments to identify and respond to the disease and helped limit its spread into the United States. However, State encountered multiple difficulties in helping to arrange medical evacuations for U.S. citizens infected with SARS overseas. After Initial Struggle, Asian Governments Brought SARS Outbreak under Control The Asian governments we studied initially struggled to respond to SARS but ultimately brought the outbreak under control. Improved screening, rapid isolation of suspected cases, enhanced hospital infection control, and quarantine of close contacts ultimately helped end the outbreak. In the aftermath of SARS, efforts are under way to improve public health capacity in Asia to better deal with SARS and other infectious disease outbreaks. An Initial Lack of Effective Leadership and Coordination in SARS- Affected Areas in Asia Hindered Response As acknowledged by government officials, a lack of effective leadership and coordination within the governments of China, Hong Kong, and Taiwan early in the outbreak hindered attempts to organize an effective response to SARS. Dampened consumer confidence from SARS also had negative impacts on retail sales and foreign trade and investment, according to anecdotal evidence. Member states will have to resolve at least five important issues, regarding (1) scope of coverage, (2) WHO’s authority to conduct investigations in countries absent their consent, (3) the public health capacity of developing country members, (4) an enforcement mechanism to resolve compliance issues, and (5) how to ensure public health security without unnecessary interference with travel and trade. It also revealed limitations in the International Health Regulations. To assess the role of the U.S. government in responding to SARS in Asia and limiting its spread into the United States, we analyzed program documents and interviewed officials from the Departments of Health and Human Services, State, Defense, and Homeland Security, and the U.S. Centers for Disease Control and Prevention (CDC). Finally, to examine the status of efforts to update the International Health Regulations, we reviewed the current International Health Regulations, a draft of WHO’s proposed revision of the regulations, the initial U.S. government response to the proposed revisions, and the WHO constitution. WHO activates its global influenza laboratory network and calls for heightened global surveillance.

Why GAO Did This Study Severe acute respiratory syndrome (SARS) emerged in southern China in November 2002 and spread rapidly along international air routes in early 2003. Asian countries had the most cases (7,782) and deaths (729). SARS challenged Asian health care systems, disrupted Asian economies, and tested the effectiveness of the International Health Regulations. GAO was asked to examine the roles of the World Health Organization (WHO), the U.S. government, and Asian governments (China, Hong Kong, and Taiwan) in responding to SARS; the estimated economic impact of SARS in Asia; and efforts to update the International Health Regulations. What GAO Found WHO implemented extensive actions to respond to SARS, but its response was delayed by an initial lack of cooperation from officials in China and challenged by limited resources for infectious disease control. WHO activated its global infectious disease network and deployed public health specialists to affected areas in Asia to provide technical assistance. WHO also established international teams to identify the cause of SARS and provide guidance for managing the outbreak. WHO's ability to respond to SARS in Asia was limited by its authority under the current International Health Regulations and dependent on cooperation from affected areas. U.S. government agencies played key roles in responding to SARS in Asia and controlling its spread into the United States, but these efforts revealed limitations. The Centers for Disease Control and Prevention supplied public health experts to WHO for deployment to Asia and gave direct assistance to Taiwan. It also tried to contact passengers from flights and ships on which a traveler was diagnosed with SARS after arriving in the United States. However, these efforts were hampered by airline concerns and procedural issues. The State Department helped facilitate the U.S. government's response to SARS but encountered multiple difficulties when it tried to arrange medical evacuations for U.S. citizens infected with SARS overseas. Although the Asian governments we studied initially struggled to recognize the SARS emergency and organize an appropriate response, they ultimately established control. As the governments have acknowledged, their initial response to SARS was hindered by poor communication, ineffective leadership, inadequate disease surveillance systems, and insufficient public health capacity. Improved screening, rapid isolation of suspected cases, enhanced hospital infection control, and quarantine of close contacts ultimately helped end the outbreak. The SARS crisis temporarily dampened consumer confidence in Asia, costing Asian economies $11 billion to $18 billion and resulting in estimated losses of 0.5 percent to 2 percent of total output, according to official and academic estimates. SARS had significant, but temporary, negative impacts on a variety of economic activities, especially travel and tourism. The SARS outbreak added impetus to the revision of the International Health Regulations. WHO and its member states are considering expanding the scope of required disease reporting to include all public health emergencies of international concern and devising a system for better cooperation with WHO and other countries. Some questions are not yet resolved, including WHO's authority to conduct investigations in countries absent their consent, the enforcement mechanism to resolve compliance issues, and how to ensure public health security without unduly interfering with travel and trade.

gao_AIMD-96-81

gao_AIMD-96-81_0

Little Assurance That Defense Made Proper System Selection Decisions Defense has little assurance that its transportation system selections are cost-effective. In some cases, Defense selected migration systems that will lose money if implemented as migration systems. Specifically: For all system selections, Defense did not consider developing new systems or contracting for services as required by Office of Management and Budget, General Services Administration, and Defense directives. To its credit, Defense reviewed commercial off-the-shelf transportation software products for some transportation business areas while making its migration system selections. However, this review was inadequate because it did not analyze the degree to which unmodified software could meet unique Defense requirements, identify the expected cost to make necessary software modifications, determine the time required to make modifications, and provide for a hands-on view of the software in operation. JTCC’s Migration Systems Selection Analysis Had Defense followed its own regulations and calculated investment returns, it would have found—based on data available when the migration systems were selected—that two of the selected systems would lose money if implemented as migration systems. GAO Comments 1. 2. 3.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Defenses' (DOD) transportation migration systems. What GAO Found GAO found that DOD: (1) has little assurance that its transportation migration systems are cost-effective; (2) selected its transportation migration systems without fully evaluating government or commercial alternatives; (3) relied on incomplete and unverified cost data in making its selections; (4) selected migration systems that will lose money if implemented; (5) did not consider developing new systems or contracting for services; (6) made some of its selection decisions based on the judgement of transportation experts; (7) reviewed commercial off-the-shelf transportation software products while making migration system selections; (8) did not analyze the extent to which unmodified software could meet its requirements, identify software modification costs, or provide a hands-on view of the software in operation; (9) did not assess how changes to its transportation operations would affect the migration systems; and (10) did not ensure that the new migration system would yield savings.

gao_GAO-03-911T

gao_GAO-03-911T_0

Background The government has been providing housing assistance in rural areas since the 1930s. At that time, most rural residents worked on farms, and rural areas were generally poorer than urban areas. Accordingly, the Congress authorized housing assistance specifically for rural areas and made USDA responsible for administering it. Although the physical condition of rural housing has greatly improved over time, it still lags somewhat behind that of urban housing. Housing programs were moved to the newly created RHS in the new Rural Development mission area which was tasked with helping improve the economies of rural communities. Changes in the Rural Housing Environment Raise Questions About the Need to Maintain Separately Operated Rural Housing Programs Given the diminished distinctions between rural and urban areas today, improvements in rural housing quality and access to credit, and RHS’s increasing reliance on guaranteed lending and public/private partnerships, our September 2000 report found the federal role in rural housing is at a crossroads. We listed arguments for and against fundamentally changing the programs’ targeting, subsidy levels, and delivery systems, as well as merging RHS’s programs with HUD’s or other agencies’ comparable programs. Arguments For and Against Separately Operated Programs A number of arguments have been presented to support continuing RHS’s housing programs separately from HUD and other agencies or for maintaining a separate system for delivering these programs, including the following: Some rural residents need the close supervision offered by RHS local offices because they do not have access to modern telecommunications or other means of obtaining information on affordable housing opportunities; Rural borrowers often need a local service office familiar with their situation in the first year of a loan; Rural areas could lose their federal voice in housing matters; Rural areas could lose the benefits of the lower rates and terms RHS’s direct and guaranteed loan programs currently offer; and HUD and other potential partners have not focused on rural areas. Without a mechanism to prioritize the portfolio’s rehabilitation needs, including a process for ensuring the adequacy of individual property reserve accounts, RHS cannot be sure it is spending its limited rehabilitation funds as effectively as possible and cannot tell Congress how much funding it will need to cover the portfolio’s long-term rehabilitation costs. As a result, RHS cannot be sure that it is spending these funds as cost-effectively as possible.

Why GAO Did This Study Federal housing assistance in rural America dates back to the 1930s, when most rural residents worked on farms. Without electricity, telephone service, or good roads connecting residents to population centers, residents were comparatively isolated and their access to credit was generally poor. These conditions led Congress to authorize separate housing assistance for rural residents, to be administered by USDA. Over time, the quality of the housing stock has improved and credit has become more readily available in rural areas. Also, advances in transportation, computer technology, and telecommunications have diminished many of the distinctions between rural and urban areas. These changes call into question whether rural housing programs still need to be maintained separately from urban housing programs, and whether RHS is adapting to change and managing its resources as efficiently as possible. What GAO Found Our testimony is based on two reports--the September 2000 report on rural housing options and May 2002 report on multifamily project prepayment and rehabilitation issues. GAO found that while RHS has helped many rural Americans achieve homeownership and has improved the rural rental housing stock, it has been slow to adapt to changes in the rural housing environment. Also, RHS has failed to adopt the tools that could help it manage its housing portfolio more efficiently. Specifically, dramatic changes in the rural housing environment since rural housing programs were first created raise questions as to whether separately operated rural housing programs are still the best way to ensure the availability of decent, affordable rural housing. Overlap in products and services offered by RHS, HUD, and other agencies has created opportunities for merging the best features of each. Even without merging RHS's programs with HUD's or those of other agencies, RHS could increase its productivity and lower its overall costs by centralizing its rural delivery structure. RHS does not have a mechanism to prioritize the long-term rehabilitation needs of its multifamily housing portfolio. As a result, RHS cannot be sure it is spending limited rehabilitation funds as effectively as possible and cannot tell Congress how much funding it will need in the future.

gao_GAO-08-701T

gao_GAO-08-701T_0

Background FDA is responsible for overseeing the safety and effectiveness of human drugs that are marketed in the United States, whether they are manufactured in foreign or domestic establishments. FDA uses multiple databases to manage its foreign drug inspection program. DRLS contains information on foreign and domestic drug establishments that have registered with FDA to market their drugs in the United States. In November 2007, we testified on preliminary findings that identified weaknesses in FDA’s program for inspecting foreign establishments manufacturing drugs for the U.S. market. We also testified that FDA inspected relatively few foreign establishments. However, FDA could not provide an exact number of foreign establishments that had never been inspected. We also testified that FDA’s foreign inspection process involves unique circumstances that are not encountered domestically. Recent Initiatives May Help FDA Select Foreign Establishments for Inspection, but Weaknesses in Its Foreign Drug Inspection Program Are Not Fully Addressed FDA has initiated several recent changes to its foreign drug inspection program, but the changes do not fully address the weaknesses that we previously identified. FDA is also pursuing initiatives that could address some of the challenges that we identified as being unique to foreign inspections, but implementation details and timeframes associated with these initiatives are unclear. FDA Initiatives Could Improve Its Data, but Will Not Ensure an Accurate Count of Foreign Establishments Subject to Inspection FDA has initiatives underway to reduce inaccuracies in its databases, but actions taken thus far will not ensure that the agency has an accurate count of establishments subject to inspection. In addition to changes to improve DRLS, FDA has supported a proposal that has the potential to address weaknesses in OASIS, but FDA does not control the implementation of this change. FDA Initiatives to Obtain Information on Foreign Establishments May Have Limited Impact on Its Selection of Establishments to Inspect FDA has taken steps to help it select establishments for inspection by obtaining information on foreign establishments from regulatory bodies in other countries, despite encountering difficulties in fully utilizing these arrangements in the past. FDA officials stated that, in the past, they encountered difficulties using inspection reports from other countries that were not readily available in English. However, the agency still inspected less than 11 percent of the foreign establishments on the prioritized list that it used to plan its fiscal year 2007 GMP surveillance inspections. FDA officials estimated that the agency conducted about 30 such inspections in fiscal year 2007 and plans to conduct at least 50 in fiscal year 2008. In fiscal year 2007, FDA dedicated about $10 million to inspections of foreign establishments. Initially, FDA plans to establish a foreign office in China with three locations—Beijing, Shanghai, and Guangzhou—comprised of a total of eight FDA employees and five Chinese nationals. While the establishment of both a foreign inspection cadre and offices overseas have the potential for improving FDA’s oversight of foreign establishments and providing the agency with better data on foreign establishments, it is too early to tell whether these steps will be effective or will increase the number of foreign drug inspections. Agreements with foreign governments, such as one recently reached with China’s State Food and Drug Administration, may help the agency address certain logistical issues unique to conducting inspections of foreign establishments. Given the growth in foreign drug manufacturing for the U.S. market and the current large gaps in FDA’s foreign drug inspections, FDA will need to devote considerable resources to this area if it is to increase the rate of inspections.

Why GAO Did This Study The Food and Drug Administration (FDA) is responsible for overseeing the safety and effectiveness of human drugs that are marketed in the United States, whether they are manufactured in foreign or domestic establishments. FDA inspects foreign establishments to ensure that they meet the same standards required of domestic establishments. Ongoing concerns regarding FDA's foreign drug inspection program recently were heightened when FDA learned that contaminated doses of a common blood thinner had been manufactured at a Chinese establishment that the agency had never inspected. FDA has announced initiatives to improve its foreign drug inspection program. In November 2007, GAO testified on weaknesses in FDA's foreign drug inspection program (GAO-08-224T). This statement presents preliminary findings on how FDA's initiatives address the weaknesses GAO identified. GAO interviewed FDA officials and analyzed FDA's initiatives. GAO examined reports and proposals prepared by the agency, as well as its plans to improve databases it uses to manage its foreign drug inspection program. What GAO Found Recent FDA initiatives--some of which have been implemented and others proposed--could strengthen FDA's foreign drug inspection program, but these initiatives do not fully address the weaknesses that GAO previously identified. GAO testified in November 2007 that FDA's databases do not provide an accurate count of foreign establishments subject to inspection and do provide widely divergent counts. Through one recent initiative, FDA has taken steps to improve its database intended to include foreign establishments registered to market drugs in the United States. This initiative may reduce inaccuracies in FDA's count of foreign establishments. However, these steps will not prevent foreign establishments that do not manufacture drugs for the U.S. market from erroneously registering with FDA. Further, to reduce duplication in its import database, FDA has supported a proposal that would change the data it receives on products entering the United States. However, the implementation of this proposal is not certain and would require action from multiple federal agencies, in addition to FDA. Efforts to integrate these databases have the potential to provide FDA with a more accurate count of establishments subject to inspection, but it is too early to tell. GAO testified that gaps in information weaken FDA's processes for prioritizing the inspection of foreign establishments that pose the greatest risk to public health. While FDA recently expressed interest in obtaining useful information from foreign regulatory bodies that could help it prioritize foreign establishments for inspections, the agency has faced difficulties fully utilizing these arrangements in the past. For example, FDA had difficulties in determining whether the scope of other countries' inspection reports met its needs and these reports were not always readily available in English. GAO also testified that FDA inspected relatively few foreign establishments each year. FDA made progress in inspecting more foreign establishments in fiscal year 2007, but the agency still inspects far fewer of them than domestic establishments. FDA dedicated about $10 million to foreign drug inspections in fiscal year 2007 and plans to dedicate about $11 million to such inspections in fiscal year 2008. Finally, GAO testified that FDA faced certain logistical and staffing challenges unique to conducting foreign inspections. FDA is pursuing initiatives that could address some of the challenges that we identified as being unique to foreign inspections, such as volunteer inspection staff and lack of translators. FDA has proposed establishing a dedicated cadre of staff to conduct foreign inspections, but the timeframe associated with this initiative is unclear. FDA plans to open an office in China and is considering establishing offices in other countries, but the impact that this will have on the foreign drug inspection program is unknown.

gao_GAO-13-720

gao_GAO-13-720_0

Almost All Railroads Are Installing PTC Overlay Systems but Face Challenges in Meeting the 2015 Implementation Deadline Railroads Are Generally Implementing PTC as an Overlay System for Feasibility Reasons Although there are two primary types of PTC systems—overlay and standalone— that functionally meet the PTC requirements in RSIA, almost all railroads required to install PTC are installing overlay systems. FRA has reported that in order to implement PTC, railroads must design, produce, and install more than 20 major components such as data radios for locomotive communication, locomotive management computers, and back office servers. In May 2013, AAR reported that by the end of 2012, railroads had spent about $2.8 billion on PTC implementation. Despite the billions railroads have invested, much of the work to implement PTC remains to be done. For example, AAR reported that as of the end of 2012, about a third of wayside interface units— which are needed to communicate data—had been installed. In addition, AAR reported that as of the end of 2012, less than 1 percent of locomotives needing upgrades had been fully equipped. Most Railroads Report They Will Miss the 2015 PTC Implementation Deadline Due to a Number of Challenges Most railroads report they will not complete PTC implementation by the 2015 deadline due to numerous interrelated challenges caused by the breadth and complexity of PTC. Both AAR and FRA have reported that most railroads will not have PTC fully implemented by the deadline. Of the four major freight railroads we included in our review, BNSF is the only railroad expecting to meet the 2015 deadline. Of the three remaining freight railroads we spoke to, representatives believe they will likely have PTC fully implemented by 2017 or later. Commuter railroads generally must wait to equip their locomotives until freight railroads and Amtrak equip the rail lines that commuter railroads generally operate on. Four of the seven commuter railroads we included in our review reported that they will be unable to meet the 2015 PTC implementation deadline. For instance, many of the PTC components had not been developed before RSIA was enacted, and some continue to be in various stages of development. To ensure successful integration, railroads must conduct multiple phases of testing—first in a laboratory environment, then in the field—before installation across the network. FRA resources. In addition, according the American Public Transportation Association (APTA), commuter railroads face competing expenses such as state of good repair upgrades, leaving them with limited funding to implement PTC. According to APTA, collectively, PTC implementation will cost commuter railroads a minimum of $2 billion. Finally, commuter railroads report that obtaining radio frequency spectrum—essential for PTC communications—can be a lengthy and difficult process. By attempting to implement PTC by the 2015 deadline while key components are still in development, railroads may be making choices that could introduce financial and operational risks to PTC implementation. FRA officials told us that if Congress chooses to amend RSIA, additional authority to extend the deadline on certain rail lines, grant provisional certification of PTC systems and approve the use of alternative safety technologies in lieu of PTC would help them to conduct oversight more effectively by providing FRA flexibility in overseeing PTC. Flexibility in extending the deadline for certain railroads acknowledges these differences and also may help FRA better manage limited resources by, for example, preventing a potential review backlog resulting from final safety plans being submitted at the same time—a concern raised by freight railroads and FRA. Matters for Congressional Consideration To help ensure that the Federal Railroad Administration manages its limited resources and provides flexibility to railroads in implementing PTC, Congress should consider amending RSIA as requested in the FRA’s August 2012 PTC Implementation Status Report to Congress, including granting FRA the authority to: extend the deadline on individual rail lines—when the need to do so can be demonstrated by the railroad and verified by FRA—to grant railroads incremental deadlines based on a case-by-case basis; grant provisional certification of PTC systems under controlled conditions before final system completion; and approve the use of alternative safety technologies in lieu of PTC to allow railroads to improve safety and meet many of the functions of PTC through other means. DOT provided technical comments, which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology This report discusses (1) how railroads are implementing positive train control (PTC) and the challenges, if any, to meeting the PTC implementation deadline; and (2) FRA’s estimates of the benefits and costs of PTC and the extent to which railroads might be able to leverage PTC technology to achieve business benefits. We also reviewed PTC development and implementation requirements in the Rail Safety Improvement Act of 2008 and FRA regulations; FRA’s 2012 report to Congress on Positive Train Control Implementation Status, Issues, and Impacts; and prior GAO reports.

Why GAO Did This Study In the wake of a 2008 commuter train collision that resulted in 25 fatalities, RSIA was enacted. It requires major freight railroads, Amtrak, and commuter railroads to install PTC on many major routes by the end of 2015. PTC implementation, overseen by FRA, is a complex endeavor that touches almost every aspect of train operations on major lines. According to FRA, 37 railroads are required to implement PTC. GAO was asked to examine the status of PTC implementation. This report discusses, among other things, railroads' implementation of PTC to date and the challenges, if any, to meeting the 2015 deadline. GAO interviewed representatives from Amtrak, the four largest freight railroads, and seven commuter railroads, selected to represent a mix of locations, ridership levels, and PTC implementation status. GAO also interviewed PTC experts and suppliers, and reviewed FRA's PTC regulatory impact analyses. What GAO Found To install positive train control (PTC)--a communications-based system designed to prevent certain types of train accidents caused by human factors-- almost all railroads are overlaying their existing infrastructure with PTC components; nonetheless, most railroads report they will miss the December 31, 2015, implementation deadline. Both the Association of American Railroads (AAR) and the Federal Railroad Administration (FRA) have reported that most railroads will not have PTC fully implemented by the deadline. Of the four major freight railroads included in GAO's review, only one expects to meet the 2015 deadline. The other three freight railroads report that they expect to have PTC implemented by 2017 or later. Commuter railroads generally must wait until freight railroads and Amtrak equip the rail lines they operate on, and most of the seven commuter railroads included in this review reported that they do not expect to meet the 2015 deadline. To implement PTC systems that meet the requirements of the Rail Safety Improvement Act of 2008 (RSIA), railroads are developing more than 20 major components that are currently in various stages of development, integrating them, and installing them across the rail network. AAR recently reported that by the end of 2012, railroads had spent $2.8 billion on PTC implementation. To implement PTC, AAR estimates that freight railroads will spend approximately $8 billion in total while the American Public Transportation Association (APTA) estimates that commuter railroads will spend a minimum of $2 billion. Much of the work to implement PTC remains to be done. For example, AAR reported that as of the end of 2012, about a third of wayside interface units, which are needed to communicate data, had been installed and that less than 1 percent of locomotives needing upgrades had been fully equipped. Most railroads report they will not complete PTC implementation by the 2015 deadline due to a number of complex and interrelated challenges. Many PTC components continue to be in various stages of development, and in order to ensure successful integration of these components, railroads must conduct multiple phases of testing before components are installed across the network. Also, some railroads raised concerns regarding FRA's limited staff resources in two areas: verification of field tests and timely certification of PTC systems. Commuter railroads face additional challenges such as obtaining radio frequency spectrum, which is essential for PTC communications. By attempting to implement PTC by the 2015 deadline while key components are still in development, railroads could be introducing financial and operational risks. For example, officials from railroads and FRA said that without adequate testing, PTC systems might be more prone to reliability issues. To mitigate risks, provide flexibility in meeting the PTC deadline, and better manage limited resources, FRA has requested that Congress amend RSIA to provide additional authorities in implementing PTC. Specifically, FRA requested authority to extend the deadline on certain rail lines, grant provisional certification of PTC systems, and approve the use of alternative safety technologies in lieu of PTC. Flexibility in extending the deadline for certain railroads acknowledges differences in railroads' implementation schedules and may also help FRA better manage its limited resources by, for example, preventing a potential review backlog resulting from most of the railroads' submitting final safety plans at the same time--a concern raised by both freight railroads and FRA. What GAO Recommends Given the implementation challenges railroads face in meeting the deadline, and to help FRA manage its limited resources, Congress should consider amending RSIA as FRA has requested. Specifically, Congress should consider granting FRA the authority to extend the deadline on certain rail lines on a case-by-case basis, grant provisional certification of PTC systems, and approve the use of alternative safety technologies in lieu of PTC to improve safety. DOT reviewed a draft of this report and provided technical comments, which were incorporated as appropriate.

gao_GAO-09-720

gao_GAO-09-720_0

Under the traditional training strategy, all training was focused on a unit’s primary missions and units were to be deployed to perform their primary missions. The Army Faces Challenges in Executing Its Reserve Component Training Strategy The Army is able to effectively execute the portion of its reserve component training strategy that calls for training units on their assigned missions, but faces challenges in effectively executing the portion of the strategy that calls for training units on their primary missions. Conditions for Effective Unit Training Occur Late in the Cycle The Army currently prioritizes its available training resources and time to support units that are preparing to deploy for ongoing operations. As a result, unit training for assigned missions, which is conducted in the later stages of the Army’s 5-year training cycle, is generally effective. Third, units that are training for primary missions during the early stages of the cycle also experience personnel and equipment shortages, often because they are tasked to give up personnel and equipment to support deploying units. Furthermore, training support is limited during the early years of the cycle. DOD’s Mobilization Policy Has Presented Challenges as the Army Trains and Deploys Its Reserve Component Forces While DOD’s 12-month mobilization policy has not hindered the Army’s overall ability to train its reserve component forces and has reduced the length of deployments, it has not fully achieved its intended purpose of reducing stress on the force by providing predictability. While the policy has led to shorter deployments, it has also caused units to mobilize and deploy more frequently, and units are also spending more time away from home in training when not mobilized. Because units must spend part of their mobilization periods training for their assigned missions, they are actually deployed for only part of the time that they are mobilized. It shows that 12-month deployments, which were typical under the previous policy, result in 3 deployments over a 36-month period. More Deployments Result in Less Time at Home to Conduct Training As previously noted, the Army’s reserve component strategy calls for reserve component units to have 4 years of training between deployments, but the 12-month mobilization policy, with its associated shorter deployments and more frequent mobilizations, has led to situations where units do not have 4 years available to conduct training. The Air Force deployment model groups occupational specialties into 5 different “tempo bands” based on ongoing operational requirements. The Air Force expects this model to increase predictability for its forces. Reserve Component Forces Assigned Missions in Support of Ongoing Operations Have Access to the Training Needed, But Constraints Delay and Limit Training Opportunities for Some Forces In accordance with DOD Directive 1200.17, which directs the Secretaries of the military departments to ensure that facilities and training areas are available to support reserve component training requirements, reserve component forces are generally receiving the access to training facilities that is necessary to prepare them for their assigned missions. In addressing its capacity shortages, the Army has given priority access to personnel and units that have established mobilization dates or assigned missions. As a result, active and reserve component forces without assigned missions often experience delays in gaining access to training needed to prepare them for their primary missions. For example: The Army has developed a database, which is intended to account for both active and reserve component individual training facilities under a “One Army School” system. Recommendations for Executive Action To improve the Army’s training strategy and DOD’s mobilization policy for Army reserve component personnel, we recommend that the Secretary of Defense take the following three actions: To better ensure the Army has an executable strategy for effectively training its reserve component forces, we recommend the Secretary of Defense direct the Secretary of the Army to reevaluate and adjust its reserve component training strategy to fully account for the factors that limit the effectiveness of unit training for primary missions in the early years of the 5-year cycle. To assess the extent to which mobilization and deployment laws, regulations, goals, and policies impact the Army’s ability to train and employ Reserve Component forces, we reviewed laws, regulations, goals, and policies that impact the way the Army trains and employs its reserve component forces such as relevant sections of Titles 10 and 32 of the U.S. Code and DOD’s January 2007 mobilization policy.

Why GAO Did This Study The Army's strategy for training its reserve component calls for units to conduct training on the primary missions for which they were organized and designed as well as the missions units are assigned in support of ongoing operations. The training is to be conducted over a 5-year cycle with a focus on primary missions during the early years and assigned missions during the later years. In response to mandates, GAO assessed the extent to which (1) the Army is able to execute its strategy for training reserve component forces for their primary and assigned missions; (2) mobilization and deployment laws, regulations, goals, and policies impact the Army's ability to train and employ these forces; and (3) access to military schools and skill training facilities and ranges affects the preparation of reserve component forces. To address these objectives, GAO analyzed relevant training strategies and policies, laws, and data and surveyed 22 Army reserve component units returning from deployments in the past 12 months. What GAO Found The Army is able to execute the portion of its reserve component training strategy that calls for units to effectively train for their assigned missions in support of ongoing operations, but faces challenges in executing the portion of the strategy that calls for units to effectively train on primary missions. Unit training for assigned missions, which is conducted in the later years of the 5-year training cycle, is generally effective because the Army prioritizes its available resources to support units that are preparing to deploy for ongoing operations--units receive increased training time; mission requirements and personnel levels are stabilized; and personnel and equipment shortages are addressed while support is increased. Conversely, units training for their primary missions in the early years of the cycle receive less time to train and experience equipment and personnel shortages, which adversely affect teamwork and unit cohesion. Also, support for their training is limited. These challenges limit the effectiveness of primary mission training and could impact their ability to conduct their primary missions within the current strategy's time frames. While DOD's current 12-month mobilization policy has not hindered the Army's overall ability to train its reserve component forces and has reduced the length of deployments, it has not fully achieved its intended purpose of reducing stress on the force by providing predictability to soldiers. Because units must spend part of their mobilization periods in training, they are actually deploying for about 10 months under this 12-month mobilization policy, whereas they typically deployed for periods of 12 to 15 months under the previous policy. Under the current policy, the Army's reserve component forces are deploying more frequently and spending more time away from home in training when they are not mobilized. Moreover, unit leaders and personnel GAO interviewed said that the 12-month mobilization policy has decreased predictability and increased stress for individuals. GAO noted alternate approaches that can improve predictability. For example, the Air Force recently developed a deployment model categorizing five grouped occupational specialties based on operational requirements and length of time home between deployments. The model is intended to increase predictability for its forces and thus reduce their stress. Reserve component forces are generally receiving access to training facilities necessary to prepare them for their assigned missions, but the Army lacks capacity to prepare all of its forces for the full range of training requirements. In addressing capacity shortages, the Army has given priority to deploying units and personnel. As a result, active and reserve component forces without assigned missions often experience delays in accessing training for their primary missions. Although the Army is reviewing some aspects of its training capacity, it has not fully identified its training requirements and capacity and therefore will not have a sound basis for prioritizing available resources and cannot be assured that the initiatives it has under way will fully address gaps in its training capacity.

gao_GAO-02-896

gao_GAO-02-896_0

Most of the $62.3 million in contracts for creating the marketing program and advertisements was used for a $40.5 million national advertising campaign featuring George Washington that was designed to build public awareness, generate acceptance, and encourage the new dollar coin’s use. The Mint also worked with contractors to stimulate the new dollar coin’s use in state and local government operations and used its own staff for marketing activities in federal government facilities. According to the Mint, from January 2000 to December 2001, it released approximately 1.1 billion new dollar coins into circulation that generated approximately $968 million in seigniorage after subtracting costs. Public Resistance Is the Greatest Barrier to Increased Use of the New Dollar Coin The Mint faces a number of barriers in its efforts to increase public use of the new dollar coin, the most substantial of which is the widespread use of the dollar bill in everyday transactions and public resistance to start using the dollar coin. Other barriers that hinder wider circulation of the new dollar coin by the public include potentially negative public perceptions of a dollar coin after two failed introductions, insufficient public understanding of dollar coin savings to the government and other advantages of the dollar coin’s use, and the weight and bulk of the coin. In general, the Mint did not track the costs for the use of its own staff for marketing efforts to federal government agencies. As is consistent with previous studies, the Mint plan also notes that successfully achieving widespread use of the new dollar coin will be difficult if it cocirculates with the dollar bill. Objectives, Scope, and Methodology In studying the United States Mint’s marketing of the new dollar coin, our objectives were to (1) describe the Mint’s new dollar coin marketing program costs, the contracts and promotional programs in which the Mint engaged, and the revenues that were generated; (2) assess the barriers the Mint faces in increasing the public’s use of the new dollar coin; (3) describe the Mint’s future plans to promote the new dollar coin and the extent that these plans address the barriers; and (4) assess the extent that the Mint’s 2001 and 2002 reports to Congress on the marketing of the new dollar coin fully and accurately described the marketing programs, the results obtained, and the problems encountered.

What GAO Found If the public used the dollar coin rather than the dollar note, the government could potentially save up to $500 million annually. The Mint spent $67.1 million to promote the new dollar coin from 1998 to 2001, including expenditures for a marketing and advertising program; public relations and publicity programs; 23 partnerships with banking, entertainment retail, grocery and restaurant chains; and promotional events with transit agencies. Most of the $67.1 million was used for a national advertising campaign to build public awareness, generate acceptance, and encourage use of the new dollar coin. The Mint also worked with contractors to stimulate the new dollar coin's use in state and local government operations and used its own staff for marketing activities in federal government facilities, but it did not track the costs for the use of Mint staff. According to the Mint, between January 2000 and December 2001, the new dollar coin had generated $1.1 billion in revenue and $968 million in seigniorage. The Mint faces several barriers in its efforts to increase the new dollar coin. The most substantial barrier is the current widespread use of the dollar bill in everyday transactions and public resistance to begin using the new dollar coin. Other barriers that hinder wider circulation include (1) negative perceptions the public may have of the coin after two failed introductions, (2) lack of public information about the savings to the government from using the new coin, (3) lack of public awareness about the comparative advantages of the dollar coin over the dollar bill, and (4) the idea that the ease of carrying the bill is more beneficial than the durability of the dollar coin. In general, the Mint's marketing plan describes a program that is much smaller in scope than the marketing campaign used to launch the new dollar coin in 2000. The Mint plans to address some, but not all, of the barriers to increasing use and recognizes that successfully achieving widespread use of the new dollar coin will be difficult if the dollar bill cocirculates with the new dollar coin. The Mint's 2001 report to Congress did not fully and accurately describe the costs of the marketing campaign, the results obtained, and problems encountered. The 2002 report gave more details on marketing costs and a fuller description of the problems encountered.

gao_AIMD-99-129

gao_AIMD-99-129_0

Scope and Methodology To determine (1) INS’ overall fiscal condition, and (2) how factors such as overhiring and a decline in Examinations Fee applications have affected INS’ fiscal situation, we interviewed officials in INS’ Offices of Budget, Personnel, Facilities, and Field Operations. As discussed below, this policy, combined with other fiscal pressures, resulted in most INS programs having less discretionary funding in fiscal year 1999 than in fiscal year 1998. The Border Patrol program accounted for most of the projected deficit. To successfully implement the policy of hiring up to funded levels during fiscal year 1998, INS had to commit a larger share of its budget to pay for personnel costs. Although, overall, the Office of Field Operations received more discretionary funds than in fiscal year 1998, some programs within the Office of Field Operations received less. Declines in Examinations Fee Revenues and Delays in Detecting the Declines Added to INS’ Fiscal Stress In formulating its fiscal year 1999 budget, INS projected in November 1997 that it would receive 6.9 million Adjudications and Naturalization applications, and that these would produce $862 million in revenues for its Examinations Fee account. INS overestimated the number of applications—in particular, the number of naturalization applications--that would be submitted to INS, and because of computer problems, it was not able to detect the downturn in applications in a timely fashion. In August 1998, DOJ submitted a reprogramming request for $171 million, of which $88 million was to help cover the decline in Examinations Fee revenues. However, it turned out that CBOs were not stockpiling naturalization applications, and the expected surge did not occur. For several reasons, Justice officials said, it is difficult to accurately project rent costs, and the shortfall in INS’ funds for rent is not inconsistent with what it has incurred in prior years.

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the fiscal year (FY) 2000 budget request for the Immigration and Naturalization Service (INS), focusing on: (1) INS' overall fiscal condition in FY 1999; and (2) how factors such as overhiring and a decline in Examinations Fee applications have affected INS' fiscal situation. What GAO Found GAO noted that: (1) after discussions with officials in INS, the Department of Justice, and the Office of Management and Budget, and based on GAO's analysis of INS budget documents, GAO concluded that INS is not experiencing an overall budget shortfall at this time; (2) the hiring policy that INS followed in FY 1998 in an attempt to meet congressional and administrative expectations resulted in INS having to commit a greater share of its FY 1999 budget to salaries and benefits than in prior years; (3) overall, however, INS has more discretionary funds than it had in FY 1998; (4) with respect to the Examinations Fee account, INS overestimated the number of applications it would receive and did not detect the consequent revenue shortfall for months because of computer programming errors; (5) when it became apparent that the anticipated revenues would not be realized, INS decided to seek reprogramming of funds from other accounts to cover the costs; (6) the overhiring and reduced Examinations Fee revenues contributed to most INS programs having less discretionary funding in FY 1999 than in FY 1998; and (7) although INS has not experienced an overall budget shortfall, the combination of higher personnel costs, declining Examinations Fee revenues, and the resultant need to reduce discretionary funding allocations to most programs has created fiscal stress for the agency.

gao_GAO-10-542

gao_GAO-10-542_0

DOT, FAA, airlines, and airports all affect the efficiency of national airspace system operations. Flight Delays Have Declined since 2007, Largely because of Fewer Flights, but Some Airports Still Experience and Contribute Substantial Delays to the System Flight Delays Have Decreased across the National Airspace System since 2007 The percentage of delayed arrivals has decreased systemwide since 2007, according to ASQP data. As shown in figure 2, in 2009, about 21 percent of flights were delayed systemwide—that is, arrived at least 15 minutes late at their destination or were canceled or diverted—representing a decrease of 6 percentage points from 2007. In addition, these delayed arrivals had average delay times of almost an hour or more. FAA measures delays within the air traffic control system to assess its performance because an inefficient air traffic control system contributes to higher levels of delayed flights. Actions Could Reduce Delays, but FAA Lacks Airport-Specific On-Time Performance Targets, Limiting Its Ability to Prioritize Actions and Demonstrate Benefits FAA’s Actions to Reduce Delays Are Generally Being Implemented at the Most Congested Airports, but Many Actions Face Implementation Challenges FAA’s actions have the potential to reduce delays in the next 2 to 3 years and are generally being implemented at airports that experience and contribute substantial delays to the system, including the 7 airports that are the source of a majority of the delays in the system (Newark, LaGuardia, Atlanta, JFK, Philadelphia, Chicago O’Hare, and San Francisco). FAA also assessed capacity and delay reduction benefits for some air traffic management improvements. FAA’s Use of Average On- Time Performance Masks Variations in Airport Performance and Limits FAA’s Ability to Prioritize Its Actions to Reduce Delays Although FAA’s target of 88 percent on-time arrival performance provides a measure of the agency’s overall goal to provide efficient air traffic control services, it masks the wide variation in airport performance, making it difficult to understand how individual airport performance relates to the overall target. For example, in fiscal year 2009, Newark had an on-time arrival rate of only 72 percent, while St. Louis easily exceeded the target with 95 percent on-time performance. For example, reducing delays at the airports that currently impose approximately 80 percent of all departure delays within the air traffic control system could not only have a measurable benefit at these airports, but could also improve performance of the overall national airspace system. Moreover, although NextGen will keep delays at many airports from getting worse than would be expected without NextGen, FAA’s NextGen modeling indicates that even if all ongoing and planned NextGen technologies are implemented, a few airports, such as Atlanta, Washington Dulles, and possibly Philadelphia, may not be able to meet the projected increases in demand, and if market forces do not dampen that demand, additional actions may be required at these airports. However, without airport-specific targets, FAA cannot determine what additional actions might be required to achieve a targeted level of performance at these airports. Appendix I: Objectives, Scope, and Methodology In this report, we examined the extent to which (1) delays in the U.S. national aviation system have changed since 2007 and the factors contributing to these changes, and (2) actions by the Department of Transportation (DOT) and the Federal Aviation Administration (FAA) are expected to reduce delays in the next 2 to 3 years. To determine how delays have changed, we analyzed DOT and FAA data on U.S. passenger airline flight delays by airport and for the entire aviation system through 2009. We focused on these 34 OEP airports because they serve major metropolitan areas located in the continental United States and handled more than 70 percent of passengers in the system in 2008; additionally, much of the current delays in air traffic can be traced to inadequate capacity relative to demand at these airports, according to FAA. In addition to being implemented at the most delayed airports, many of these actions are also available at other OEP airports across the national airspace system.

Why GAO Did This Study Flight delays have beset the U.S. national airspace system. In 2007, more than one-quarter of all flights either arrived late or were canceled across the system, according to the Department of Transportation (DOT). DOT and its operating agency, the Federal Aviation Administration (FAA), are making substantial investments in transforming to a new air traffic control system--the Next Generation Air Transportation System (NextGen)--a system that is expected to reduce delays over the next decade. This requested report explains the extent to which (1) flight delays in the U.S. national airspace system have changed since 2007 and the contributing factors to these changes, and (2) actions by DOT and FAA are expected to reduce delays in the next 2 to 3 years. We analyzed DOT and FAA data for FAA's Operational Evolution Partnership (OEP) airports because they are in major metropolitan areas, serving over 70 percent of passengers in the system. We reviewed agency documents and interviewed DOT, FAA, airport, and airline officials and aviation industry experts. What GAO Found Flight delays have declined since 2007, largely because fewer flights have been scheduled by airlines as a result of the economic downturn, but some airports still experience and contribute substantial delays to the system. The percentage of flights that were delayed--that is, arrived at least 15 minutes after their scheduled time or were canceled or diverted--decreased 6 percentage points from 2007 to 2009, according to DOT data. Even with this decrease in delays, during 2009, at least one in four U.S. passenger flights arrived late at 5 airports--Newark Liberty International (Newark), LaGuardia, John F. Kennedy (JFK), Atlanta Hartsfield International (Atlanta), and San Francisco International--and these late arrivals had an average delay time of almost an hour or more. In addition to these airports having the highest percentage of flights with delayed arrivals, these 5 airports, along with Chicago O'Hare International and Philadelphia International (Philadelphia), were also the source of most of the departure delays within FAA's air traffic control system. FAA measures delays within the air traffic control system to assess its performance because an inefficient air traffic control system contributes to higher levels of delayed flights. An FAA air traffic control tower or other facility may delay flights departing from or destined to an airport because of inclement weather or heavy traffic volume at that airport. In 2009, of the 34 OEP airports in GAO's analysis, about 80 percent of departure delays occurring at airports across the national airspace system were the result of conditions affecting air traffic at just these 7 airports. DOT's and FAA's actions--including near-term elements of NextGen and other air traffic management improvements--could help reduce delays over the next 2 to 3 years and are generally being implemented at the airports that contribute to the most delays in the system. However, the extent to which these actions will reduce delays at individual airports or contribute to the agency's overall target is unclear. FAA has an 88 percent on-time arrival performance target for the national airspace system to measure how its actions help to improve systemwide on-time performance. This target, however, masks the wide variation in airport performance. For example, in fiscal year 2009, Newark had an on-time arrival rate of 72 percent, while St. Louis International exceeded the target with 95 percent. FAA has not established airport-specific performance targets, making it difficult to assess whether FAA's actions will lead to the desired on-time performance at these airports or whether further actions are required to improve performance, especially at airports affecting delays systemwide. Also, FAA's modeling indicates that even if all ongoing and planned NextGen and other improvements are implemented, a few airports, such as Atlanta, Washington Dulles International, and Philadelphia, may not be able to meet the projected increases in demand, and if market forces do not dampen that demand, additional actions may be required at these airports. However, without airport-specific targets, FAA cannot determine what additional actions might be required to achieve a targeted level of performance at these airports.

gao_GAO-06-28

gao_GAO-06-28_0

The PART Encourages a Focus on Performance Measurement and Program Review The PART process has aided OMB’s oversight of agencies, and has focused agencies’ efforts to improve performance measurement. PART Remains a Labor- Intensive Process at OMB and Agencies Although the PART has enhanced the focus on performance, this has not come without a cost. Improving managers’ ability to assess program outcomes, identify information gaps, and assess next steps are necessary first steps on the path to long-term program improvement, but are not expected to result in observable program improvement in the short term. Moreover, as of February 2005—the date of the most recent available OMB data—the majority of the PART recommendations have not yet been fully implemented. Consequently, there is limited evidence to date of outcome-based program results. Lastly, OMB has used the PART as a framework for several crosscutting reviews, but these generally do not include all tools, such as tax expenditures, that contribute to related goals. Greater focus on selecting related programs and activities for concurrent review would improve their usefulness. 1 for examples of follow-on actions). Because OMB has chosen to assess nearly all federal programs, resources are diffused across multiple areas instead of concentrated on those areas of highest priority both within agencies and across the federal government. This strategy is likely to lengthen the time it will take to observe measurable change. The PART-GPRA Relationship Does Not Adequately Consider the Different Needs of the Budget and Planning Processes and Their Various Stakeholders Although both the PART and GPRA aim to improve the focus on program results, the different purposes and time frames they serve continue to create tensions. We remain concerned that the focus of agency strategic planning is shifting from long-term goal setting to short- term budget and planning needs. In response to our January 2004 report on the first year of implementing the PART, OMB said that it was working to “generate, early in the PART process, an ongoing, meaningful dialogue with congressional appropriations, authorization, and oversight committees about what they consider to be the most important performance issues and program areas warranting review.” Although OMB uses a variety of methods to communicate the PART assessment results, congressional committee staff said these methods have not facilitated this early consultation on the PART. Most congressional staff reported that they would more likely use the PART results to inform their deliberations if OMB (1) consulted them early in the PART process regarding the selection and timing of programs to assess, (2) explained the methodology and evidence used or to be used to assess programs, and (3) discussed how the PART information can best be communicated and leveraged to meet their needs. Although Congress currently has a number of opportunities to provide its perspective on specific performance issues and performance goals, opportunities also exist for Congress to enhance its institutional focus to enable a more systematic assessment of key programs and performance goals. Many had concerns about the goals and measures used to assess program performance. It is important that Congress take full advantage of the benefits arising from the reform agenda under way in the executive branch. In addition, we also examined relevant OMB and agency documents to help determine how recommendations are tracked and their impact evaluated by OMB and the selected agencies. Performance Budgeting: OMB's Program Assessment Rating Tool Presents Opportunities and Challenges for Budget and Performance Integration. Executive Guide: Effectively Implementing the Government Performance and Results Act.

Why GAO Did This Study GAO was asked to examine (1) the Office of Management and Budget's (OMB) and agency perspectives on the effects that the Program Assessment Rating Tool (PART) recommendations are having on agency operations and program results; (2) OMB's leadership in ensuring a complementary relationship between the PART and the Government Performance and Results Act of 1993 (GPRA); and (3) steps OMB has taken to involve Congress in the PART process. To do this, we also followed up on issues raised in our January 2004 report on the PART. What GAO Found The PART process has aided OMB's oversight of agencies, focused agencies' efforts to improve program management, and created or enhanced an evaluation culture within agencies. Although the PART has enhanced the focus on performance, the PART remains a labor-intensive process at OMB and agencies. Most PART recommendations are focused on improving outcome measures and data collection, and are not designed to result in observable short-term performance improvements. Since these necessary first steps on the path to long-term program improvement do not usually lead to improved short-term results, there is limited evidence to date of the PART's influence on outcome-based program results. Moreover, as of February 2005--the date of the most recent available OMB data--the majority of follow-on actions have not yet been fully implemented. By design OMB has not prioritized them within or among agencies. Because OMB has chosen to assess nearly all federal programs, OMB and agency resources are diffused across multiple areas instead of concentrated on those areas of highest priority both within agencies and across the federal government. This strategy is likely to lengthen the time it will take to observe measurable change compared with a more strategic approach. OMB has used the PART as a framework for several crosscutting reviews, but these have not always included all relevant tools, such as tax expenditures, that contribute to related goals. Greater focus on selecting related programs and activities for concurrent review would improve their usefulness. OMB has taken some steps to clarify the PART-GPRA relationship but many agencies still struggle to balance the differing needs of the budget and planning processes and their various stakeholders. Unresolved tensions between GPRA and the PART can result in conflicting ideas about what to measure and how to measure it. Finally, we remain concerned that the focus of agencies' strategic planning continues to shift from long-term goal setting to short-term executive budget and planning needs. OMB uses a variety of methods to communicate PART results, but congressional committee staff we spoke with had concerns about the tool itself, how programs were defined, and the usefulness of goals and measures. Most said that the PART would more likely inform their deliberations if OMB consulted them early on regarding the selection and timing of programs; the methodology and evidence to be used; and how PART information can be communicated and presented to best meet their needs. It is also important that Congress take full advantage of the benefits arising from the executive reform agenda. While Congress has a number of opportunities to provide its perspective on specific performance issues and performance goals, opportunities also exist for Congress to enhance its institutional focus to enable a more systematic assessment of key programs and performance goals.

gao_GAO-02-392T

gao_GAO-02-392T_0

Since our report of July 2001, DOD has revised its plans. Together, they provide for (1) economically justifying proposed projects on the basis of reliable analyses of expected life-cycle costs, benefits, and risks; and (2) using these analyses throughout a project’s life-cycle as the basis for investment selection, control, and evaluation decisionmaking, and doing so for large projects (to the maximum extent practical) by dividing them into a series of smaller, incremental subprojects or releases and individually justifying investment in each separate increment on the basis of costs, benefits, and risks. (See table 2 for a summary of the department’s progress against commitments.) Rather, the objective was simply to acquire and deploy the system. For programs such as SPS, DOD required this cost, schedule, and performance information to be reported quarterly to ensure that programs did not deviate significantly from expectations. Third, not all defense components have agreed to adopt SPS.

Why GAO Did This Study The Department of Defense (DOD) lacks management control of the Standard Procurement System (SPS). DOD has not (1) ensured that accountability and responsibility for measuring progress against commitments are clearly understood, performed, and reported; (2) demonstrated, on the basis of reliable data and credible analysis, that the proposed system solution will produce economic benefits commensurate with costs; (3) used data on progress against project cost, schedule, and performance commitments throughout a project's life cycle to make investment decisions; and (4) divided this large project into a series of incremental investment decisions to spread the risks over smaller, more manageable components. What GAO Found GAO found that DOD lacks the basic information needed to make informed decisions on how to proceed with the project. Nevertheless, DOD continues to push forward in acquiring and deploying additional versions of SPS. This testimony summarizes a July report (GAO-01-682).

gao_GAO-09-341

gao_GAO-09-341_0

Methadone Is Regulated as a Controlled Substance and Subject to Additional Requirements When Used for Addiction Treatment Methadone is regulated as a controlled substance, under federal and state laws and regulations, when used for pain management and addiction treatment. For addiction treatment, however, federal and state laws and regulations impose additional requirements that are specific to the use of methadone. When Used for Pain Management, Methadone Is Regulated as a Controlled Substance under Federal and State Laws and Regulations The use of methadone for pain management is regulated under federal and state laws and regulations that apply to controlled substances generally and that do not impose requirements unique to methadone. Increased Availability Combined with Lack of Knowledge and Abuse of Diverted Methadone Have Contributed to Increasing Methadone- Associated Overdose Deaths Although information on methadone-associated overdose deaths is limited, available data suggest that methadone’s growing use for pain management has increased availability of the drug, therefore contributing to the rise in methadone-associated overdose deaths. State data and research support the idea that lack of knowledge and abuse of diverted methadone contributed to deaths, but also suggest that the specific circumstances of these deaths are variable. Similarly, data from IMS Health, a private company that tracks prescription drug trends, showed that from 1998 through 2006 the number of annual prescriptions of methadone for pain increased by about 700 percent, from about 531,000 in 1998 to about 4.1 million in 2006. Lack of Knowledge about Methadone by Practitioners and Patients Has Also Contributed to Methadone-Associated Overdose Deaths Lack of knowledge about the unique pharmacological properties of methadone by both practitioners and patients has also been identified as a factor contributing to methadone-associated overdose deaths. In addition, data and research from the five states we reviewed show that methadone is often found in combination with other drugs or alcohol, suggesting a lack of knowledge about the dangers of combining methadone with other drugs or that people are abusing methadone. Education, Safety, and Monitoring Efforts to Prevent Methadone- Associated Overdose Deaths Have Been Implemented by Government Agencies and Other Organizations Education, safety, and monitoring efforts have been implemented to prevent methadone abuse and methadone-associated overdose deaths— either specifically or as part of broader efforts to prevent prescription drug abuse and deaths—by various federal agencies, states, and other organizations. Some officials and experts we spoke with cautioned that methadone is part of a larger problem of prescription drug abuse, and that prevention efforts focused on methadone alone might have the unintended consequence of shifting similar problems to a different drug—much like what occurred with methadone following reports of abuse and diversion of OxyContin. In November 2006, FDA approved a revised label for methadone 5 mg and 10 mg tablets that included new safety information regarding using methadone for pain, such as warnings about life-threatening adverse events and modified dosage instructions. HHS also reiterated that FDA recently sent letters to the manufacturers of certain opioid drug products, including methadone, indicating that these drugs will be required to have a Risk Evaluation and Mitigation Strategy to ensure that the benefits of the drug continue to outweigh the risks. Both HHS and the Department of Justice provided technical comments on a draft of this report, which we incorporated as appropriate. Appendix I: Scope and Methodology To examine the regulation of methadone for pain management and addiction treatment, we reviewed relevant codified federal statutes and regulations pertaining to the prescribing, administering, or dispensing of methadone for pain management and addiction treatment. Our review was limited to relevant provisions of the Controlled Substances Act and implementing regulations, including Department of Justice, Drug Enforcement Administration (DEA), and Substance Abuse and Mental Health Services Administration (SAMHSA) regulations. In addition, we interviewed pain management, addiction treatment, and forensic science experts. In addition, we interviewed officials in our five selected states’ medical examiners’ offices about the factors contributing to the increase in methadone-associated overdose deaths in their states.

Why GAO Did This Study Prescription drug abuse is a growing public health problem. In particular, methadone-associated overdose deaths--those in which methadone may have caused or contributed to the death--have risen sharply. Before the late 1990s, methadone was used mainly to treat opioid addiction but has since been increasingly prescribed to manage pain. Taken too often, in too high a dose, or with other drugs or alcohol, methadone can cause serious side effects and death. Methadone-associated overdose deaths can occur under several different scenarios, including improper dosing levels by practitioners, misuse by patients who may combine methadone with other drugs, or abuse--using the drug for nontherapeutic purposes. This report examines the regulation of methadone, factors that have contributed to the increase in methadone-associated overdose deaths, and steps taken to prevent methadone-associated overdose deaths. GAO reviewed documents, laws and regulations, data, and research from relevant state and federal agencies, including the Drug Enforcement Administration (DEA) and the Substance Abuse and Mental Health Services Administration (SAMHSA). GAO also interviewed federal officials, officials in five selected states, officials from professional associations and advocacy groups, and experts in pain management, addiction treatment, and forensic sciences. What GAO Found Methadone is regulated as a controlled substance, under federal and state laws and regulations, when used for pain management and addiction treatment. When methadone is used for pain management, it is regulated under federal and state laws and regulations that apply to controlled substances generally and that do not impose requirements unique to methadone. For addiction treatment, however, federal and state laws and regulations impose additional requirements that are specific to the use of methadone in opioid treatment programs (OTP), which treat and rehabilitate people addicted to heroin or other opioids. GAO, however, only reviewed relevant state laws and regulations for five selected states. Although information on methadone-associated overdose deaths is limited, available data suggest that methadone's growing use for pain management has made more of the drug available, thus contributing to the rise in methadone-associated overdose deaths. Methadone prescriptions for pain management grew from about 531,000 in 1998 to about 4.1 million in 2006--nearly eightfold. Methadone has unique pharmacological properties that make it different from other opioids, and as a result, a lack of knowledge about methadone among practitioners and patients has been identified as a factor contributing to these deaths. DEA data suggest that abuse of methadone diverted from its intended purpose has also contributed to the rise in overdose deaths as the number of methadone drug items seized by law enforcement and analyzed in forensic laboratories increased 262 percent, from 2,865 in 2001 to 10,361 in 2007. Nonetheless, data and research from five states GAO reviewed suggest that the specific circumstances of these deaths are variable because of drug combinations and unknown sources of methadone. GAO identified selected efforts to prevent methadone abuse and overdose deaths that focused on education, safety, and monitoring. For example, to educate practitioners about using methadone for pain management and addiction treatment, SAMHSA is establishing a physician clinical support system for methadone. To improve safety, in 2006, the Food and Drug Administration (FDA) approved a revised label for methadone tablets that included new safety information regarding the use of methadone for pain and modified dosage instructions for those beginning pain management treatment with methadone. Additionally, to prevent diversion and abuse of controlled substances such as methadone, DEA reports that as of February 2009, 31 states have established prescription monitoring programs. Some officials and experts cautioned that any prevention efforts focused on methadone alone might unintentionally shift similar problems to a different drug. GAO received comments from the Department of Health and Human Services stating that FDA recently notified manufacturers of certain opioid drug products, such as methadone, that they must take certain steps to ensure that the benefits of these drugs continue to outweigh the risks. The Department of Justice provided GAO with technical comments.

gao_GAO-03-1028

gao_GAO-03-1028_0

In fiscal year 2003, Interior invested over $850 million in IT—about 6 percent of its total budget. While the Secretary of the Interior has the ultimate responsibility for managing these investments—including overseeing and guiding the development, management, and use of information resources and information technology throughout the department—Interior’s CIO is responsible for providing leadership and oversight for IT investment management processes throughout the agency. Reviews Identified Need for Improving IT Investment Management Prior reviews of IT projects performed at Interior over the past decade—by GAO and the Office of Management and Budget (OMB) as well as Interior’s Office of the Inspector General (OIG)—have revealed significant weaknesses in IT investment management practices at both the department and the bureau levels. In addition, the department’s ability to oversee the successful implementation and execution of the required practices is limited, although a number of initiatives have been undertaken to address this issue. If Interior’s bureaus do not have investment management processes in place that adequately support the department’s investment management process, its CIO must take action to ensure that the department is expending funds on IT investments that will fulfill its mission needs. In multitiered organizations, information from an IT project and system inventory should be accessible and relevant to the decision processes of boards at all levels of the organization that are responsible for ITIM activities. These achievements notwithstanding, the department has yet to implement most key practices—such as using established criteria to analyze each investment and prioritizing these investments accordingly. To its credit, Interior has taken several crucial initial steps to make this possible; it conducted a study of existing organizational structures, issued a secretarial order providing broad authorities to its CIOs, and issued a capital planning and investment control guide that provided a conceptual framework for improvements to the IT investment management process. The Department of the Interior has indicated that it intends to create a comprehensive reform plan with target goals and measurement criteria, but this plan has not been fully developed. The department has recognized that it needs to oversee bureau activities, and it has begun to establish the authority of bureau CIOs to manage IT investments and to implement certification of standard investment processes in the bureaus. However, until the department is able to ensure mature investment management capabilities at all levels, its ability to wisely select and effectively manage IT investments will be limited. Recommendations To strengthen Interior’s capabilities for IT investment management and address the weaknesses discussed in this report, we recommend that the Secretary of the Interior direct Interior’s CIO to do the following: Develop a unified, comprehensive plan for implementing departmentwide improvements to the IT investment management process that are based on the Stage 2 and Stage 3 critical processes of our ITIM framework.

Why GAO Did This Study The Department of the Interior is responsible for diverse and complex missions ranging from managing America's public lands, mineral and water resources, and wildlife to providing satellite data to the military and scientific communities. To fulfill these responsibilities, Interior invests over $850 million annually--about 6 percent of its total annual budget--in communications and computing projects and systems. Interior's Office of the Secretary and its Chief Information Officer (CIO) are responsible for overseeing processes for managing these investments to ensure that funds are expended in the most cost-effective way in support of the agency's mission needs. GAO was asked to evaluate (1) departmental capabilities for managing the agency's information technology (IT) investments and (2) the department's actions and plans to improve these capabilities. What GAO Found The Department of the Interior has limited capability to manage its IT investments. Based on GAO's IT Investment Management (ITIM) Framework, which measures the maturity of an organization's investment management processes, the department is carrying out few of the activities that support critical foundational processes. As an initial step to improve its investment management capability, the department has issued a Capital Planning and Investment Control Guide, which describes its approach to IT investment management. However, it has thus far implemented few of the processes described in its own guide. In addition, it has yet to develop an adequate approach to identify existing projects and systems. In order to ensure strong investment management at all levels, the department has also specified a requirement for certifying bureau-level investment processes, but certification has not yet begun. Finally, in order to strengthen the CIO's ability to manage IT investments at all levels, the Secretary of the Interior has issued an order establishing the authority of the bureau-level CIOs; however, the order has not been fully implemented. In order to improve investment management processes, an organization needs to develop and implement a coherent plan, supported by senior management, which defines and prioritizes enhancements to its investment processes. While Interior has undertaken a number of initiatives designed to improve its investment management processes, the department has not yet developed a unified, comprehensive plan to achieve its objective of establishing effective investment management processes, nor has it committed the resources to successfully implement the necessary reforms. Without a well-defined process improvement plan and controls for implementing it, Interior will continue to be challenged in its ability to make informed and prudent investment decisions.

gao_GAO-15-658

gao_GAO-15-658_0

The IPA Determined That the Navy Provided Sufficient Documentation to Support the Navy’s Schedule of Military Pay Activity for April 2013 Based on documentation provided by the Navy and the results of the IPA’s audit procedures, the IPA concluded that information reported on the Navy’s schedule of military pay activity for April 2013 (April 2013 schedule) reconciled to a complete and valid population of transactions. Based on our review, nothing came to our attention that raised concerns regarding the adequacy of the Navy’s documentation supporting military pay transactions reflected in its April 2013 schedule beyond those identified by the IPA. The Navy’s Military Pay Assertion and Validation Efforts Identified Risks to Future Audit Readiness While the IPA determined that the Navy provided sufficient documentation to support its April 2013 schedule, the IPA also assessed the effectiveness of 34 internal controls supporting the Navy’s assertion and determined that 14 were either not designed effectively or not operating effectively. However, because the Navy limited the scope of the IPA examination to focus on a 1-month schedule of activity, its ability to achieve auditability of a full year of activity, as required in future Schedules of Budgetary Activity and SBRs, was not fully assessed. Further, because of the volume of transactions during a 12-month period of activity, obtaining supporting documentation may be more challenging than supporting transactions limited to a 1- month period of time. For example, preparing financial statements involves additional financial reporting processes, such as reconciling the Navy’s Fund Balance with Treasury, performing funds receipt and distribution activities, and recording certain journal vouchers. However, the Navy’s assurance regarding the audit readiness of these other key processes is limited. In December 2014, the Navy reported extensive deficiencies in controls associated with these activities. Navy Coordination with the IPA, OIG, and DFAS Was Not Always Effective Management Representation Letter Although the IPA completed its fieldwork in September 2014, its examination report was not issued until January 2015, in part because of the lack of effective coordination between the Navy and the IPA to ensure that adequate management representations were provided to the IPA in a timely manner. Without effective internal controls and systems, auditors will likely be required to perform additional, more costly procedures to obtain required assurance in future financial statement audits, and the Navy’s ability to consistently produce timely, reliable financial information will remain at risk. An audit of the Navy’s fiscal year 2015 Schedule of Budgetary Activity, for which military pay activity represents a significant portion of obligations and outlays, is currently under way and is expected to provide feedback on efforts necessary to achieve DOD’s goal of financial statement auditability department-wide by September 30, 2017. While this audit provides a milestone for measuring progress, we continue to stress the importance of addressing fundamental systems and control deficiencies, which will lead to lasting financial management improvements and, as a result, provide greater assurance of future audit readiness. We recommend that the Secretary of the Navy direct the Assistant Secretary of the Navy (Financial Management and Comptroller) to establish a policy to coordinate with auditors concerning the dating of management representation letters and when they need to be provided to auditors in future audits consistent with DOD FMR requirements and establish milestones for assessing and effectively implementing certain complementary controls identified by DFAS to help the Navy achieve its military pay-related control objectives. Appendix I: Objectives, Scope, and Methodology The objectives of our review were to determine the extent to which (1) the Navy was able to provide sufficient documentation to support a complete and valid population of detailed transactions reconcilable to its schedule of military pay activity for April 2013, and (2) the Navy’s military pay assertion and validation efforts, which include the IPA’s examination, contribute to future audit readiness. To address our second objective, we reviewed documentation provided by the Navy concerning (1) the Navy’s internal controls supporting its military pay audit readiness assertion; (2) the status of the Navy’s actions to address identified military pay-related internal control and information technology system deficiencies; (3) audit readiness efforts of selected military pay-related areas the Navy identified as outside of the scope of its military pay audit readiness assertion; and (4) the Navy’s coordination with the IPA, the DOD Office of Inspector General, and service providers on selected matters, such as the management representation letter and complementary controls, to identify areas where further improvements can be made to contribute to future audit readiness.

Why GAO Did This Study DOD continues to work toward achieving auditability of its financial statements. As part of that effort, the Navy in March 2013 asserted audit readiness of its military payroll activity, which represents a significant portion of its expenditures. Based on its examination, an IPA found that the Navy's assertion, which focused in part on a 1-month schedule of military pay activity, was fairly stated. GAO was asked to assess the Navy's military pay audit readiness efforts. This report examines the extent to which (1) the Navy was able to provide sufficient documentation to support a complete and valid population of detailed transactions reconcilable to its schedule of military pay activity for April 2013 and (2) the Navy's military pay assertion and validation efforts contribute to future audit readiness. GAO reviewed the IPA's audit documentation and analyzed documentation that the Navy provided to the IPA; reviewed documentation on identified military pay control deficiencies and the status of the Navy's actions to address them; and interviewed Navy, IPA, and DFAS officials. What GAO Found Based on documentation provided by the Navy and the results of audit procedures, an independent public accountant (IPA) concluded that information reported on the Navy's schedule of military pay activity for April 2013 reconciled to a complete population of pay transactions that were adequately supported and valid. GAO reviewed the Navy's documentation and the IPA's related audit documentation. Nothing came to GAO's attention that raised concerns regarding the adequacy of the Navy's documentation beyond those the IPA identified and determined to be immaterial. Both the IPA's examination and the Navy's assertion and validation efforts identified additional risks to the Navy's future audit readiness. For example, the IPA found that 14 of 34 military pay controls it examined were either not designed effectively or not operating effectively. Further, the Navy limited the scope of the IPA's examination to focus on 1 month of activity to address any deficiencies identified prior to the audit of its fiscal year 2015 Statement of Budgetary Activity, which is currently under way. However, because of the volume of transactions during a 12-month period, obtaining supporting documentation may be more challenging than supporting transactions limited to a 1-month period. In addition, the Navy identified extensive deficiencies in six personnel and other key systems it relies on to process and report military pay activity. Navy officials acknowledge that additional efforts are needed to fully address these deficiencies. Questions also exist regarding the audit readiness of certain related activities beyond the scope of the Navy's military pay activities—such as financial reporting controls related to reconciling the Navy's Fund Balance with Treasury—because of extensive deficiencies or because they have not been independently examined. Achieving audit readiness also requires coordination with the IPA, the Department of Defense (DOD) Office of Inspector General, and service providers; however, the Navy did not always effectively coordinate these activities. For example, GAO found that the Navy did not (1) establish milestones to assess the effectiveness of certain of its controls associated with payroll services provided by the Defense Finance and Accounting Service (DFAS) and (2) effectively coordinate efforts to ensure that the required management representation letter was provided to the IPA in a timely manner. The audit of the Navy's fiscal year 2015 Schedule of Budgetary Activity, of which military pay activity represents a significant portion of reported obligations and outlays, is intended to help identify areas for additional focus, and facilitate efforts to achieve DOD's goal of financial statement auditability department-wide by September 30, 2017. However, without reliable controls and systems, auditors will likely need to perform additional, more costly procedures to obtain assurance in future audits, and the reliability of financial information for day-to-day decision making will remain at risk. GAO continues to stress the importance of addressing fundamental systems and control deficiencies, which will lead to lasting financial management improvements and, as a result, provide greater assurance of future audit readiness. What GAO Recommends GAO recommends that the Navy establish (1) milestones for assessing and implementing certain controls associated with payroll services provided by DFAS and (2) a policy to coordinate with auditors on providing required management representation letters in a timely manner. The Navy agreed with GAO's recommendations and described actions taken or under way to address them.

gao_GAO-06-1116T

gao_GAO-06-1116T_0

Another trend we reported is that selected executive-level pay rates have not kept pace with the growth of wages from 1970 to 2006. To measure the growth of wages, we used the Bureau of Economic Analysis’s National Income and Product Accounts wage index for private industries. Specifically, wages grew at nearly double the rate of basic pay for Executive Schedule level I positions, such as cabinet secretaries, and the Chief Justice. Total compensation includes elements such as cash—basic pay, locality pay, cash awards/bonuses; noncash benefits—annual and sick leave, health insurance; and deferred benefits—retirement (i.e., pension and health), life insurance. Organizations, including the federal government, may need to be flexible in the balance between cash and benefits that comprise the total compensation offered to employee groups in order to remain competitive in the market. Executive and judicial pay plans should be sensitive to hiring and retention trends—actual trends, such as demographic, workforce, and economic trends and their effects on the federal government’s ability to hire and retain high-quality persons for these positions are considered; reflective of responsibilities, knowledge and skills, tenure, and contributions—the positions are appropriately compensated to reflect these differences both within and across executive-level pay plans; transparent—Congress, leadership, and the public can easily understand the value of the compensation and contributions; market-sensitive—the compensation of the relevant markets (e.g., private or nonprofit sectors) is appropriately considered; flexible to economic change—changes in the nation’s economy, such as extraordinary economic circumstances or severe budgetary constraints, can be accommodated; sustainable—over the longer term, given known cost trends and risks and future fiscal imbalances, executive-level pay plans are financially sustainable; and competitive—reasonable total compensation and other elements necessary to attract and retain leadership can help ensure the optimum use of taxpayers’ dollars and make the most efficient allocation between cash and noncash benefits. Conclusions As I have discussed, leading organizations understand that they must often change their culture to successfully transform themselves, and that such a change starts with top leadership. However, any restructuring of executive and judicial pay should consider basic pay received by executive-level positions as one part of the total compensation package. Moving forward, a commission may be an option for reexamining executive and judicial pay and compensation to ensure that the federal government’s total compensation is both reasonable and competitive in order for the government to obtain and retain the top talent it needs to address current and emerging 21st century challenges in a responsible and sustainable manner.

Why GAO Did This Study People are critical to the success of the federal government's overall transformation effort. Yet the government has not transformed, in many cases for decades, how it classifies, compensates, develops, and motivates its employees to achieve maximum results with available resources and existing authorities. This is especially the case with the federal government's top leadership and federal justices and judges. Leading organizations understand that they must often change their culture to successfully transform themselves, and that such a change starts with top leadership. Most importantly, senior leaders who are drivers of continuous improvement are needed to stimulate and support efforts to facilitate change and achieve related transformation efforts for the federal government. At the Chairman's request, we recently reported on executive and judicial pay--Human Capital: Trends in Executive and Judicial Pay (GAO-06-708). This testimony highlights information from that report. What GAO Found The pay rates for selected executive-level positions have not kept pace with the growth of wages from 1970 to 2006, as measured by the National Income and Product Accounts wage index for private industries. Wages grew at nearly double the rate of basic pay for Executive Schedule level I positions, such as cabinet secretaries, and the Chief Justice. To remain competitive in the market, organizations, including the federal government, may need to be flexible in the balance between cash and benefits that comprise the total compensation offered to employees. Total compensation includes elements such as cash--basic pay, locality pay, cash awards/bonuses; noncash benefits--annual and sick leave, health insurance; and deferred benefits--retirement (i.e., pension and health), life insurance. Any restructuring of executive and judicial pay should consider basic pay received as one part of the total compensation package. While the types of experiences, responsibilities, required knowledge and skills, type of appointment, and length of service vary both within and across executive-level positions, moving forward, a commission may be an option for reexamining executive and judicial pay and compensation to ensure that the federal government's total compensation is both reasonable and competitive in order for the government to obtain and retain the top talent it needs to address current and emerging 21st century challenges in a responsible and sustainable manner.

gao_AIMD-99-10

gao_AIMD-99-10_0

Objectives, Scope, and Methodology Our objectives were to evaluate and report on the general computer controls over key financial systems maintained and operated by FMS and its contractors. Information in FMS’ Systems Is at Significant Risk Because of Serious General Control Weaknesses Our review of FMS’ general computer controls identified numerous weaknesses that place FMS’ financial systems at significant risk of unauthorized access, improper modification, loss, and disclosure. These weaknesses include inappropriate access to computer programs, data, and equipment; inadequate segregation of duties; improper application and systems software development and change control procedures; and incomplete or untested service continuity and contingency plans. Our review of FMS’ access controls identified a number of weaknesses at all of the sites we visited. Entitywide Computer Security Planning and Management Program Is Not Effective The overriding reason general control problems existed at FMS was because it does not have an effective entitywide computer security planning and management program to oversee organizationwide security efforts, ensure that adequate controls are established, and ensure that computer security receives adequate attention. Because of the large volume of transactions, the significance of the related amounts involved, and the number of weaknesses identified at the FMS data centers we visited, we consider FMS’ general computer control problems a material weakness. Moreover, FMS has not instituted a proactive approach for identifying, deterring, and responding to computer control weaknesses in a timely manner. Work with other appropriate assistant commissioners to ensure that an effective entitywide security planning and management program is in place.

Why GAO Did This Study Pursuant to a legislative requirement, GAO reviewed the effectiveness of general computer controls over key financial systems used by the Financial Management Service (FMS). What GAO Found GAO noted that: (1) general computer control weaknesses at FMS and its contractor data centers place the data maintained in its financial systems at significant risk of unauthorized modification, disclosure, loss, or impairment; (2) because of the large volume of transactions, the significance of the related amounts involved, and the number of weaknesses identified at the FMS data centers visited, GAO considers FMS' general computer control problems a material weakness; (3) the general control weaknesses GAO found included: (a) inappropriate access to computer programs, data, and equipment; (b) inadequate segregation of duties; (c) improper application software development and change control procedures; and (d) incomplete or untested service continuity and contingency plans; (4) ineffective general computer control weaknesses place billions of dollars of payments and collections at risk of fraud; (5) these weaknesses existed primarily because FMS does not have an effective entitywide computer security planning and management program to ensure that: (a) computer controls are working and are reliable; (b) established policies and procedures are followed; (c) identified deficiencies are timely corrected; and (d) errors or fraudulent transactions are timely detected; (6) FMS has already corrected some of the weaknesses that GAO identified; (7) although FMS management is continuing to correct weaknesses GAO identified, FMS cannot ensure on an ongoing basis that weaknesses will be timely detected and corrected until it has an effective entitywide security management program; and (8) such a program, if implemented effectively across the organization, would go a long way in helping FMS to identify and promptly address its computer control weaknesses.

gao_GAO-15-466

gao_GAO-15-466_0

First, DOD plans more weapons acquisition programs than it can afford. Organizations that follow these practices assess product investments collectively from an enterprise level, rather than as independent and unrelated initiatives; continually make go/no-go decisions through a gated review process to rebalance portfolios based on investments that add the most value; use an integrated approach to prioritize needs and allocate resources in accordance with strategic goals; rank and select investments using a disciplined process to assess the costs, benefits, and risks of alternative products; empower leadership to make investment decisions and hold leadership accountable for investment outcomes; and provide sustained leadership for portfolio management. Portfolio Reviews Portfolio management best practices and the Project Management Institute’s portfolio management standards also state that organizations should conduct regular reviews to adjust to strategic changes or changes in the mix of products within a portfolio, among other reasons. DOD Is Not Using an Integrated Portfolio Management Approach to Optimize Its Weapon System Investments at the Enterprise Level DOD is not using an integrated portfolio management approach to optimize its weapon system investments at the enterprise level, as called for in best practices. DOD lacks the governance structure, sustained leadership, and policy to do so. DOD has numerous enterprise-level processes, organizations, and decision makers to oversee its weapon system investments, which generally operate as stove-pipes, not as an integrated whole. DOD has taken some steps to integrate its requirements, acquisition, and budget processes. DOD Lacks a Portfolio Management Policy That Reflects Best Practices DOD does not have a policy to guide portfolio management across the department that fully reflects key best practices. The policy is also not current and DOD is not implementing it, but it has not been rescinded. In the policy, DOD also did not identify an office to be responsible for its overall implementation. Perceived Lack of Enterprise-Level Decision- Making Authority over the Services Is an Impediment to Portfolio Management Enterprise-level involvement is important to optimize investments collectively across the military because the military services tend to focus on optimizing their own investments. Lack of Resources and Analytical Tools Limits DOD’s Ability to Effectively Conduct Portfolio Reviews The Joint Staff, AT&L, and CAPE reported that resource limitations have affected their ability to regularly conduct portfolio reviews. Joint Staff officials said that past efforts relied on repeated data calls, which were a drain on resources and time consuming. However, these reviews also lacked some of the key acquisition, requirements, and funding information that would better position the services to conduct sound investment planning. The military services have used portfolio reviews and other assessments to reduce redundancies, realign resources, produce more analytically rigorous budget proposals, and plan for budget uncertainty. Key elements of this recommendation would include designating the Deputy Secretary of Defense or some appropriate delegate responsibility for implementing the policy and overseeing portfolio management in DOD; requiring annual enterprise-level portfolio reviews that incorporate key portfolio review elements, including information from the requirements, acquisition, and budget processes; directing the Joint Staff, AT&L, and CAPE to collaborate on their data needs and develop a formal implementation plan for meeting those needs either by building on the database the Joint Staff is developing for its analysis or investing in new analytical tools; and incorporating lessons learned from military service portfolio reviews and portfolio management activities, such as using multiple risk and funding scenarios to assess needs and re-evaluate priorities. Second, to help ensure the military services’ portfolio reviews are conducted regularly and effectively integrate information from the requirements, acquisition, and budget communities, the Secretary of Defense should direct the Secretaries of the Army, Navy, and Air Force to update or develop policies that require them to conduct annual portfolio reviews that incorporate key portfolio review elements, including information from the requirements, acquisition, and budget processes. In its written comments, which are reprinted in full in appendix IV, DOD partially concurred with our two recommendations. However, as discussed below, DOD’s planned actions will not fully address the issues we raised in this report. Key contributors to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our objectives were to assess the extent to which (1) the Department of Defense (DOD) uses portfolio management to optimize its weapon system investments, (2) DOD conducts integrated portfolio reviews at the enterprise level to optimize their weapon system investments, and (3) the military services conduct integrated portfolio reviews to optimize their weapon system investments and their experiences offer potential lessons for DOD.

Why GAO Did This Study DOD's weapon system acquisition programs have a total estimated acquisition cost of over $1.4 trillion. Portfolio management is an approach used by organizations to evaluate, select, prioritize, and allocate resources to projects that best accomplish strategic or organizational goals. In March 2007, GAO recommended that DOD implement a department-wide portfolio management approach for weapon system investments. Senate Report 113-44 accompanying the National Defense Authorization Act for Fiscal Year 2014 included a provision that GAO review DOD processes for identifying duplicative and inefficient acquisitions. This report assesses the extent to which (1) DOD uses portfolio management to optimize weapon system investments; (2) DOD conducts integrated portfolio reviews; and (3) the military services conduct portfolio reviews. GAO compared DOD and military service policies and portfolio reviews with best practices and standards for portfolio management. What GAO Found The Department of Defense (DOD) is not effectively using portfolio management to optimize its weapon system investments, as evidenced by affordability challenges in areas such as shipbuilding and potential duplication among some of its programs. Best practices recommend assessing investments collectively from an enterprise-wide perspective and integrating requirements, acquisition, and budget information, but several factors inhibit DOD's ability to do so. Fragmented governance: DOD has numerous processes, organizations, and decision makers to oversee weapon system investments that operate in stove-pipes, not as an integrated whole. The requirements and acquisition processes also focus on individual programs rather than assessing investments collectively, as best practices recommend. Lack of sustained leadership and policy: DOD stopped implementing its portfolio management efforts and policy, in part due to changes in leadership. DOD's policy is also dated, does not fully reflect best practices, and does not identify an office with sufficient authority to implement it. Perceived lack of decision-making authority: Enterprise-level involvement is key to optimizing investments across DOD because the military services prioritize needs and optimize investments within their services rather than across the military. Title 10, which gives the services responsibility over equipping the force, does not preclude enterprise-level influence over service investment decisions, but some DOD officials said it limits their influence. DOD's enterprise-level requirements, acquisition, and budgeting communities, meaning those at the at the Office of the Secretary of Defense, Joint Chiefs of Staff, and Joint Staff level, are not consistently conducting portfolio reviews or collaborating to integrate key information. As a result, DOD may be missing opportunities to better leverage its resources and identify investment priorities that best reflect DOD-wide needs. Best practices and portfolio management standards state that organizations should conduct regular reviews to adjust to strategic changes, among other reasons. The Joint Staff, which is responsible for validating warfighting needs, has taken the most concrete actions to conduct portfolio reviews, but even these efforts did not integrate key requirements, acquisition, and budget information. Requirements and acquisition officials said they lacked the resources, readily accessible data, and analytical tools to effectively conduct reviews. For example, the Joint Staff lacks a database that pulls together current information to help it manage its portfolios and has to rely on repeated data calls, which are inefficient and time consuming. The military services have conducted reviews more consistently than the enterprise level and their experiences at the service level may offer lessons for DOD. They have used the reviews to reduce redundancies, plan for budget uncertainty, and realign resources. Nevertheless, their reviews lack some of the key information needed to provide an integrated assessment of needs, investments, and resources and are limited to the services' own programs. A more integrated approach to portfolio reviews at both the enterprise and military-service levels would better position DOD to conduct sound investment planning. What GAO Recommends GAO recommends that DOD update its portfolio management policy, designate a senior official responsible for its implementation; conduct annual portfolio reviews that integrate key information from the requirements, acquisition, and budget processes; and invest in analytical tools to support its portfolio management efforts. DOD partially concurred with the recommendations. However, as discussed in the report, DOD's planned actions will not fully address the issues GAO identified.

gao_GAO-15-349

gao_GAO-15-349_0

The Army Does Not Know the Extent It Used Borrowed Military Personnel or if Its Use Impacted Training and Readiness during Fiscal Years 2013 and 2014 The Army does not know the extent to which it used borrowed military personnel during fiscal year 2013 and fiscal year 2014 because it is unable to distinguish borrowed military personnel from the larger category of special duty in its monthly special duty reports, and the Army did not collect complete and accurate data on special duty use, including borrowed military personnel use, through its reporting mechanisms at that time. In addition, because of these shortcomings in its data on borrowed military personnel, the Army does not know the extent to which the use of borrowed military personnel impacted readiness and training. However, without a requirement and oversight to help ensure that the use of borrowed military personnel is tracked and reported and that the data collected are complete and accurate, the Army will continue to have limited information and may be unable to identify any potential problems with this use of personnel, including the full extent of any effects on training and readiness. Terminating the exception means that conventional DOD and Army policies on special duty, including Army Regulation 570-4—which limits borrowed military personnel duration to 90 days in most circumstances—are in effect as of the beginning of fiscal year 2015. In addition, these officials stated that they used borrowed military personnel in various capacities including as gate guards, lifeguards, grounds maintenance, and gym attendants. 1.) Officials from Selected Installations Did Not Consider Full Costs in Fiscal Years 2013 and 2014 When Deciding to Use Borrowed Military Personnel, and Army Oversight of Cost Reporting Was Limited Officials from Army installations we visited did not consider the full costs of using borrowed military personnel during fiscal years 2013 and 2014. In addition, the Army did not provide the oversight that was necessary to ensure that commanders documented and reported the full costs of using borrowed military personnel in these years. The Army Did Not Provide Sufficient Oversight to Help Ensure Commanders Documented and Reported Comprehensive Data during Fiscal Years 2013 and 2014 on the Full Cost of Using Borrowed Military Personnel The Army did not provide sufficient oversight to help ensure commanders at installations documented or reported costs in monthly special duty reports when making decisions to use borrowed military personnel. In addition to the March 2012 memorandum directing commanders to consider the full costs of personnel in accordance with DOD’s cost- estimation guidance, the Secretary of the Army issued a memorandum in March 2013, directing installations to document the costs of borrowed military personnel. However, we reviewed data reported in February 2014, and none of the 13 commands and installations whose data we reviewed comprehensively reported the full cost of special duty personnel data, including borrowed military personnel, to the Army. DOD cost-estimating guidance provides installations with guidance for estimating full personnel cost comparisons of military, civilian, and contractor support. Furthermore, without oversight of the full costs for the use of borrowed military personnel, collected in a uniform manner across commands, the Army will not have a comprehensive picture of these personnel costs, which may negatively affect its ability to make informed strategic decisions about workforce requirements. Recommendations for Executive Action To better position the Army to determine the extent to which it is continuing to use borrowed military personnel and to enhance the Army’s ability to utilize its total workforce efficiently and effectively as it moves forward, we are making the following four recommendations to the Secretary of the Army: Establish a requirement for collecting, tracking, and reporting data on the use of borrowed military personnel and provide guidance to ensure that data collected are complete and accurate; if other special duty data are included, ensure that the tool contains a method to distinguish borrowed military personnel from other special duty data. Agency Comments and Our Evaluation In commenting on a draft of this report, the Army concurred with three recommendations and partially concurred with one recommendation. Specifically, the Army stated that the OSD definition is the use of military personnel to replace or convert functions that were previously performed by civilians or contractors. However, the Army recognizes that soldiers performing work outside their military occupational specialties for extended periods of time negatively impacts a soldier’s career, readiness and morale. While not generalizable, the information obtained from these site visits provided perspectives about the factors that affect use of borrowed military personnel at the local level.

Why GAO Did This Study To mitigate the effects of budget uncertainty, the Army uses borrowed military personnel to perform tasks previously performed by civilians or contractors. Under Army Regulation 570-4, this use is generally restricted to a limited time and to duties deemed military essential or filling critical requirements, and can be in or outside of a soldier's military occupation. Due to the sequestration of budgetary resources in fiscal year 2013, the Army expected an increased use of these personnel, suspended some requirements in the Army regulation, and required monthly usage reports. House Report 113-102 included a provision for GAO to review the Army's use of borrowed military personnel. This report examines the extent to which the Army, during fiscal years 2013 and 2014, (1) used borrowed military personnel, and what is known about any readiness and training impacts and (2) considered costs when making decisions for this use. GAO reviewed relevant DOD and Army documents, analyzed cost data, and interviewed cognizant officials. GAO visited selected installations and while not generalizable, information obtained from these site visits provided insight into the use of borrowed military personnel. What GAO Found The Army does not know the extent to which it used borrowed military personnel during fiscal years 2013 and 2014 because (1) it is unable to distinguish borrowed military personnel from the larger category of special duty personnel in its monthly special duty reports and (2) the Army did not collect complete and accurate data on special duty use through its reporting mechanisms at that time. In addition, because of these shortcomings in its data on borrowed military personnel, the Army does not know the extent to which the use of borrowed military personnel affected readiness and training. An Army regulation requires borrowed military personnel assignments normally should be limited to 90 days, but temporary guidance provided during fiscal years 2013 and 2014 was unclear with respect to any limitation in length. The Army did not track the actual amount of time soldiers served in this temporary status, thereby limiting its ability to monitor this usage. Further, borrowed military personnel were used in various capacities outside of their Military Occupational Specialty including as lifeguards, grounds maintenance personnel, and gym attendants because the Army did not provide specific guidance on what functions it considered appropriate to fill with borrowed military personnel. The Army's monthly reporting requirement on use of borrowed personnel expired at the beginning of fiscal year 2015, so the Army does not now have a requirement to monitor this usage even though Army officials said this usage of borrowed military personnel would continue. Without a continued requirement and clear guidance for identifying and monitoring the extent to which borrowed military personnel are used, the Army risks allocating its resources inefficiently and ineffectively and may be unable to identify any potential problems with this use of personnel, including any impacts on training and readiness. The Army did not consider full costs in fiscal years 2013 and 2014 when deciding to use borrowed military personnel and the Army did not provide the oversight that was necessary to ensure that commanders documented and reported the full costs of using borrowed military personnel in these years. This is important because the full costs of borrowed military personnel can be greater than civilian personnel performing the same function. GAO reviewed special duty data reported in February 2014, and found that none of the 13 commands and installations reviewed reported the full costs for all military, civilian, and contractor personnel. In March 2013, in addition to Department of Defense (DOD) guidance, the Secretary of the Army directed installations using borrowed military personnel to report the full costs of military personnel in accordance with DOD's cost-estimating policy. However, the Army did not provide sufficient oversight to help ensure commanders documented and reported the full costs of borrowed military personnel. Without Army oversight to help ensure the full costs for the use of borrowed military personnel are considered, documented, and reported, the Army will not have a comprehensive picture of these personnel costs, which may negatively affect its ability to make informed strategic decisions about workforce requirements. What GAO Recommends GAO recommends that the Army establish a requirement and guidance for monitoring the use of borrowed military personnel and improve oversight of cost reporting. DOD concurred with three recommendations and partially concurred with one. DOD also raised a definitional issue which GAO addresses in this report.

gao_GAO-05-688T

gao_GAO-05-688T_0

In fiscal years 2003, 2004, and 2005, Congress earmarked a total of $15 million for soft target protection each year, particularly to address security vulnerabilities at overseas schools. State Lacks a Strategy to Cover Soft Target Areas; Key Issues Need to Be Resolved State has a number of programs and activities designed to protect U.S. officials and their families outside the embassy, including security briefings, protection at schools and residences, and surveillance detection. However, State has not developed a comprehensive strategy that clearly identifies safety and security requirements and resources needed to protect U.S. official and their families. They said that providing U.S. government funds to protect U.S. officials and their families at private sector locations or places of worship was unprecedented and raised a number of legal and financial challenges—including sovereignty and separation of church and state— that have not been resolved by the department. State Has Not Fully Implemented ARB Training and Accountability Recommendations to Improve Security for Embassy Personnel To identify vulnerabilities in State’s soft target protection, and determine if State had corrected these vulnerabilities, we reviewed the ARB reports conducted after U.S. officials were assassinated outside the embassy. Despite State’s assurances to Congress that it would implement recommendations aimed at reducing these vulnerabilities, we found that State’s hands-on training course is still not mandatory, and procedures to monitor compliance with security requirements have not been fully implemented. We also found that ambassadors, deputy chiefs of mission, and regional security officers were not trained in how to implement embassy procedures intended to protect U.S. officials outside the embassies. Senior DS officials said they recognize that security briefings are no longer adequate to protect against current terrorist threats. In response to a 2003 ARB, State took a number of steps to improve compliance with State’s personal security procedures for officials outside the embassy. State Develops Soft Targets Program for Schools, but Scope Is Not Yet Fully Defined In response to several congressional committee reports, State began developing a “Soft Targets” program in 2003 to help protect overseas schools against terrorism. In anticipation of any future phases of the Soft Targets program, RSOs have been asked to identify other facilities and areas that Americans frequent, beyond schools and off-compound employee association facilities, that may be vulnerable to a terrorist attack. Issues Related to the Protection of U.S. Officials and Their Families at Residences against Terrorist Threats State has a responsibility for providing a secure housing environment for U.S. officials and their families overseas. However, we found that State’s primary program in place to protect U.S. officials and their families at residences, the Residential Security program, is principally designed to deter crime, not terrorism. The program includes basic security hardware and guard service; and as the crime threat increases, the hardware and guard services can be correspondingly increased at the residences. State officials said that while the Residential Security program, augmented by the local guard program, provides effective deterrence against crime, it could provide limited or no deterrence to minimize the risk and consequences of a residential terrorist attack. To provide greater protection against terrorist attacks, most posts we visited used surveillance detection teams in the residential areas.

Why GAO Did This Study U.S. government officials working overseas are at risk from terrorist threats. Since 1968, 32 embassy officials have been attacked--23 fatally--by terrorists outside the embassy. As the State Department continues to improve security at U.S. embassies, terrorist groups are likely to focus on "soft" targets--such as homes, schools, and places of worship. GAO was asked to determine whether State has a strategy for soft target protection; assess State's efforts to protect U.S. officials and their families while traveling to and from work; assess State's efforts overseas to improve security at schools attended by the children of U.S. officials; and describe issues related to protection at their residences. What GAO Found State has a number of programs and activities designed to protect U.S. officials and their families outside the embassy, including security briefings, protection at schools and residences, and surveillance detection. However, State has not developed a comprehensive strategy that clearly identifies safety and security requirements and resources needed to protect U.S. officials and their families abroad from terrorist threats outside the embassy. State officials raised a number of challenges related to developing and implementing such a strategy. They also indicated that they have recently initiated an effort to develop a soft targets strategy. As part of this effort, State officials said they will need to address and resolve a number of legal and financial issues. Three State initiated investigations into terrorist attacks against U.S. officials outside of embassies found that the officials lacked the necessary hands-on training to help counter the attack. The investigations recommended that State provide hands-on counterterrorism training and implement accountability measures to ensure compliance with personal security procedures. After each of these investigations, State reported to Congress that it planned to implement the recommendations, yet we found that State's hands-on training course is not required, the accountability procedures have not been effectively implemented, and key embassy officials are not trained to implement State's counterterrorism procedures. State instituted a program in 2003 to improve security at schools, but its scope has not yet been fully determined. In fiscal years 2003 and 2004, Congress earmarked $29.8 million for State to address security vulnerabilities against soft targets, particularly at overseas schools. The multiphase program provides basic security hardware to protect U.S. officials and their families at schools and some off-compound employee association facilities from terrorist threats. However, during our visits to posts, regional security officers were unclear about which schools could qualify for security assistance under phase three of the program. State's program to protect U.S. officials and their families at their residences is primarily designed to deter crime, not terrorism. The Residential Security program includes basic security hardware and local guards, which State officials said provide effective deterrence against crime, though only limited deterrence against a terrorist attack. To minimize the risk and consequences of a residential terrorist attack, some posts we visited limited the number of U.S. officials living in specific apartment buildings. To provide greater protection against terrorist attacks, some posts we visited used surveillance detection teams in residential areas.

gao_GAO-12-277T

gao_GAO-12-277T_0

Agencies with these programs also face counterparty risk. The Fund’s Financial Condition Continues 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).the Fund, the capital ratio fell from about 7 percent in 2006 to 3 percent in 2008 and 0.5 percent in 2009 (see fig. 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. Given the uncertainty that always surrounds estimates of future economic activity, the report we issued last year recommended that HUD require the actuarial review contractor to use stochastic simulation of future economic conditions, including house prices and interest rates, to estimate the Fund’s capital ratio and include the results of this analysis in FHA’s annual report to Congress on the financial status of the Fund. FHA Has Taken Steps to Address Risks, but Has Yet to Implement a Comprehensive Risk-Assessment Strategy FHA faces risks resulting from its operations. 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, 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. Therefore, we recommended that FHA (1) integrate the internal quality control initiative of the Office of Single Family Housing into the operational risk processes of the Office of Risk Management, (2) conduct an annual risk assessment, and (3) establish ongoing mechanisms—such as use of the report templates from the 2010 consultant’s report—to anticipate and address risks that might be caused by changing conditions. FHA Has Taken Steps to Address Counterparty Risks, but Continues to Face Human Capital Challenges With growth in loan volume, the number of lenders and appraisers (or counterparties) participating in FHA’s single-family programs also has grown. FHA also has revised its approach for overseeing appraisers. While FHA has taken some steps to address succession planning, they have been limited. The second initiative also began in 2010. FHA agreed, stating that it would develop a formal workforce plan and had efforts underway to develop a succession plan. Ginnie Mae’s Risk Management and Cost Modeling Require Continuing Attention We released a report today about Ginnie Mae, which has experienced a substantial increase in the volume of its business since 2007 as the volume of federally insured or guaranteed mortgages increased.

Why GAO Did This Study The Federal Housing Administration (FHA) has helped millions purchase homes by insuring private lenders against losses from defaults on single-family mortgages. In recent years, FHA has experienced a dramatic increase in its market role due, in part, to the contraction of other mortgage market segments. The increased reliance on FHA mortgage insurance highlights the need for FHA to ensure that it has the proper controls in place to minimize financial risks while meeting the housing needs of borrowers. This statement discusses (1) changes in the financial condition of FHA's fund used to insure mortgages--the Mutual Mortgage Insurance Fund (Fund)--and the budgetary implications of these changes; (2) how FHA evaluates the financial condition of the Fund; and (3) steps FHA has taken to assess and manage risks. This statement is drawn from a recent report on FHA's oversight capacity (GAO-12-15) as well as a report issued in September 2010 on the financial condition of the Fund (GAO-10-827R). GAO also obtained updated information on the status of the Fund from the recently issued actuarial report on the Fund. What GAO Found For the third consecutive year, FHA reported that the Fund's capital ratio (the ratio of economic value to insurance-in-force) has not met the 2 percent statutory minimum (see below). 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, FHA's insurance-in-force, has grown 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 enhanced methods for assessing the Fund's financial condition but has not yet 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. An approach that would simulate hundreds of economic paths for house prices and interest rates would improve the reliability of its capital ratio estimates. FHA has taken or plans a number of 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 charter committees to evaluate risks at enterprise-wide and programmatic levels. It began a quality control initiative in the Office of Single Family Housing, in which program and field offices assess and report on risks. FHA also 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, the Office of Single Family Housing has not annually updated assessments since 2009 as required. Without integrated and updated risk assessments that identify emerging risks, FHA lacks assurance it has identified all its risks. GAO previously made recommendations on modeling the Fund's financial condition, risk assessments, and human capital. FHA agreed with these recommendations and told GAO they have efforts underway to implement them.

gao_GAO-08-427

gao_GAO-08-427_0

Since the closure of the Navy Ship Repair Facility, Guam, the Navy and MSC have relied on four different sources to provide voyage repairs in Guam. Navy Has Not Identified Future Voyage Ship Repair Requirements at Guam although Some information is Available for Use in Planning The Navy has not identified voyage ship repair requirements for 2012 and beyond for surface vessels operating at or near Guam, although some information is available on which to base estimated requirements to support planning efforts. First, the Navy has not fully identified its future Pacific force structure or finalized operational plans. Second, the Marine Corps’ plans for additional vessels, if any, and operations at Guam are still evolving. Estimation of requirements is a prerequisite for assessing each option’s ability to address those requirements in a cost- effective and timely fashion. MSC also expects changes to its force structure operating near Guam, but the timeline for these changes is uncertain. Specifically, the Navy knows the history of voyage repairs conducted on Guam; it can identify vessels likely to operate near Guam, based on planned force structure realignments in the 2006 Quadrennial Defense Review; and it can identify ship repair capabilities available at other strategic locations in the area, including Pearl Harbor, and Yokosuka, Japan. Third, the Navy could develop a new repair facility, which would entail significant planning, repair of existing infrastructure, and possibly new military construction. Fourth, the Navy could contract out the work to either or both of the existing private ship repair providers or to any other contractor that might choose to locate at Guam. Naval shipyards. If the lease on the property at the former Naval Ship Repair Facility, Guam, is allowed to expire, establishing a new Navy-owned ship repair capability at that location would require the Navy to address infrastructure, equipment, and personnel requirements to create the capability needed to meet surface voyage repair requirements on Guam. However, Navy officials have stated that they do not intend to develop plans for a voyage ship repair capability on Guam until preparations for the 2012 budget cycle begin. Without performing an assessment of the viability of each of the options for voyage repairs in a timely manner to support planning and budgeting of critical tasks, the Navy risks not having adequate voyage repair capabilities in place when needed to support operations in the Pacific Ocean, and as time passes, limits the options that could be available to it by 2012. Recommendations for Executive Action To ensure that adequate voyage repair capabilities are available for ships operating near Guam, and recognizing the lead time required to implement options, we recommend that the Secretary of Defense direct the Secretary of the Navy to estimate requirements for repairs for surface vessels operating at or near Guam based on data determined to be most appropriate by the Secretary of the Navy; assess the benefits and limitations of each of the options for providing repairs to ships operating near Guam, and perform an assessment of anticipated costs and risks associated with each option; and select the best option or combination of options for providing repair capabilities to support surface ships operating near Guam, and develop a plan and schedule for implementing a course of action to ensure that the required ship repair capability will be available by October 2012. However, at the time of our exit briefing with the Navy in January, the Navy did not inform us of this plan. Appendix I: Scope and Methodology To determine the extent to which the Navy has identified future ship repair requirements for ships operating in the Guam area and assessed options to address those requirements, we reviewed documents related to ship maintenance. In addition, we interviewed officials responsible for force structure planning, contracting for repairs on vessels belonging to the U.S. Navy and Military Sealift Command, and performing repairs on vessels belonging to the Navy and Military Sealift Command on Guam as well as related organizations in Hawaii, and on the west coast of the United States.

Why GAO Did This Study Unscheduled ship maintenance, known as voyage repairs, is a high priority for the U.S. Navy. Such repairs are sometimes beyond the capability of the ship's crew to perform; cannot be deferred; and must be made at a remote location. After the 1995 Base Realignment and Closure Commission recommended closing the former Naval Ship Repair Facility, Guam, the Navy leased the property at that facility to the Guam Economic Development and Commerce Authority, which sub-leased the property to a private shipyard. DOD has since begun planning for a military buildup on Guam. In January 2007 the Navy recommended allowing the private shipyard's lease on Navy land to expire in 2012. Consequently, the House Armed Services Committee asked GAO to determine the extent to which the Navy has (1) identified future ship repair requirements at Guam, and (2) identified and assessed options to address those requirements. GAO reviewed documents related to ship maintenance and interviewed officials affiliated with private contractors, the Guam government, the Marine Corps, Military Sealift Command, and the Navy in conducting this review. What GAO Found The Navy has not identified voyage surface ship repair requirements for 2012 and beyond for vessels operating near Guam, although some information is available on which to base estimated requirements for planning. Navy officials stated that they cannot estimate such requirements because the Navy expects to change its force structure, the Marine Corps has not finalized its plans for any additional vessels associated with the buildup, and Military Sealift Command expects changes to its force structure at Guam. Although the Navy, Marine Corps, and Military Sealift Command have not made final force structure decisions or operational plans for vessels operating at or near Guam, information is available to support an estimation of ship repair requirements as part of the multiyear planning and budgeting process. Specifically, the Navy (1) knows the history of voyage repairs conducted on Guam; (2) can identify vessels likely to operate near Guam based on planned force structure realignments in the 2006 Quadrennial Defense Review; and (3) can identify ship repair capabilities available at other strategic locations in the Pacific area, including Yokosuka, Japan. Developing requirements is a prerequisite for planning, and without developing estimated repair requirements the Navy cannot adequately evaluate options for meeting them. Navy officials identified potential options for providing repairs in Guam, but have not fully assessed their viability or identified time-critical planning tasks. According to Navy officials, once the Navy identifies voyage ship repair requirements for the Guam area, they will choose from four options or a combination of options for providing voyage repairs. First, the Navy could try to expand existing organic repair capabilities to conduct voyage repairs. However, the existing ship maintenance capabilities and facilities have little excess capacity without augmentation, limiting their ability to perform additional work. Second, the Navy could rely on repair teams flown in from naval shipyards in the United States. Third, the Navy could build a new Navy ship repair facility, though that could require years of planning and new funding. Fourth, the Navy could contract out work to either or both of the private ship repair providers now operating in Guam, or to any other private ship repair facility that might choose to locate in Guam. Three of these options might require building new facilities or expanding existing facilities. Officials said they would not begin planning until preparations begin for submissions to the President's budget for fiscal year 2012. However, lead time is required to perform planning tasks necessary to provide repair capabilities from the Navy's suggested options. Without assessing the viability of each option for voyage repairs in a timely manner, the Navy increases the risk that voyage repair capabilities for ships operating in the Pacific may not be available when needed, potentially undermining ships' ability to accomplish their missions.

gao_T-RCED-97-112

gao_T-RCED-97-112_0

Ongoing Efforts to Enhance Minority Farmers’ Participation in Farm Programs FSA’s efforts to achieve equitable treatment for minority farmers are overseen by the agency’s Civil Rights and Small Business Development Staff through three separate activities. During fiscal years 1995 and 1996, the Staff closed 28 cases in which discrimination was alleged on the basis of race or national origin. In 26 of these cases, the Staff found no discrimination. At the time of review, USDA had not resolved how it would deal with the employees and compensate the affected farmers. Second, the Staff conducts management evaluations of FSA’s field offices to ensure that procedures designed to protect civil rights are being followed. About half of the FSA employees have been trained, according to the Staff, and all are scheduled to complete this training by the end of 1997. Employment of Minority Staff in County Offices and Representation of Minority Farmers on County Committees In the 101 counties with the highest numbers of minority farmers, representing 34 percent of all minority farmers in the nation, FSA employees and county committee members were often members of a minority group. Minority Employment in County Offices As of October 1996, 32 percent of FSA’s employees serving the 101 counties were members of a minority group. Moreover, 89 percent of these minority employees were either county executive directors or program assistants. Minority farmers make up about 17 percent of the farmer population in these 101 counties. Minority Representation on County Committees We found that for the 101 counties with the highest numbers of minority farmers, 36 had at least one minority farmer on the county committee. Reasons Provided for Disapprovals of ACP and Direct Loan Applications According to FSA’s data, applications for the ACP for fiscal year 1995 and for the direct loan program from October 1994 through March 1996 were disapproved at higher rates nationwide for minority farmers than for nonminority farmers. To assess the differences in disapproval rates, we examined the direct loan applications for fiscal years 1995 and 1996 at five district loan offices. Our review of the direct loan program files in these locations showed that FSA’s decisions to approve and disapprove applications appeared to follow USDA’s established criteria. These criteria were applied to the applications of minority and nonminority farmers in a similar fashion and were supported by materials in the files. In the five district loan offices we visited, 22 of the 115 applications from minority farmers were disapproved. Finally, the amount of time FSA takes to process applications from minority and nonminority farmers is about the same.

Why GAO Did This Study GAO discussed its work on the U.S. Department of Agriculture's (USDA) efforts to achieve equitable treatment of minority farmers, focusing on the: (1) Farm Service Agency's (FSA) efforts to treat minority farmers in the same way as nonminority farmers in delivering program services; (2) representation of minorities in county office staffing and on county committees in the counties with the highest number of minority farmers; and (3) disposition of minority and nonminority farmers' applications for participation in the Agricultural Conservation Program (ACP) and the direct loan program at the national level and in five county and five district loan offices for fiscal years 1995 and 1996. What GAO Found GAO noted that: (1) FSA's Civil Rights and Small Business Development Staff oversees the agency's efforts to achieve fair treatment for minority farmers; (2) in fiscal years 1995 and 1996, the Staff closed 28 complaints of discrimination against farmers on the basis of race or national origin and found discriminatory practices in 2 of the 28 cases; (3) the Staff also conducted 13 management reviews of field offices and found no evidence of unfair treatment; (4) finally, according to the Staff, they are in the midst of training all FSA personnel on civil rights matters and the Staff projects that this training will be completed by the end of 1997; (5) GAO did not evaluate the quality and thoroughness of the Staff's activities; (6) with respect to the representation of minority employees in FSA's field offices, USDA's database showed that, as of October 1996, 32 percent of the employees serving the 101 counties with the highest number of minority farmers are members of a minority group; (7) moreover, for the same period, 89 percent of these minority employees were either county executive directors or program assistants; (8) minority farmers makeup about 17 percent of the farmer population in these counties; (9) furthermore, in 36 of the 101 counties, at least one minority farmer is a member of the county committee; (10) the applications of minority farmers for ACP for fiscal year 1995 and for the direct loan program from October 1994 through March 1996 were disapproved at a higher rate nationwide than for nonminority farmers; (11) GAO found that disapproval rates for minority farmers were also higher at three of the five county offices and three of the five district loan offices it visited; and (12) however, GAO's review of the information in the application files at these offices showed that decisions to approve or disapprove applications were supported by information in the files and that decisionmaking criteria appeared to be applied to minority and nonminority applicants in a similar fashion.

gao_GAO-11-751

gao_GAO-11-751_0

Smart cards are plastic devices that are about the size of a credit card and contain an embedded integrated circuit chip capable of storing and processing data. HSPD-12 Requires Standardized Agency ID and Credentialing Systems In August 2004, the President issued HSPD-12, which directed Commerce to develop a new standard for secure and reliable forms of ID for federal employees and contractor personnel by February 27, 2005. OMB did not implement this recommendation. OMB and Agencies Have Made Progress but Have Not Yet Fully Implemented Homeland Security Presidential Directive 12 Overall, OMB and federal agencies have made mixed progress in implementing HSPD-12 requirements aimed at establishing a common identification standard for federal employees and contractor personnel. Lastly, agencies have made minimal progress in achieving the goal of interoperability among agencies, having generally not established systems and procedures for universally reading and electronically validating PIV cards issued by other federal agencies. The Federal CIO Council, OMB, and NIST Have Taken Steps to Promote Full Implementation of HSPD-12 While early HSPD-12 guidance from OMB focused on completion of background investigations and issuance of PIV cards, beginning in 2008 the federal CIO Council, OMB, and NIST took actions to more fully address HSPD-12 implementation, including focusing on the use of the electronic capabilities of the cards for physical and logical access control. According to DHS officials, the agency has conducted an assessment of all its facilities in the National Capitol region to determine what method of authentication was being used for physical access and to develop a strategy to implement PIV-based electronic authentication at each facility. Agencies Have Made Limited Progress in Implementing the Electronic Capabilities of the PIV Credentials for Logical Access to Federal Information Systems HSPD-12 requires agencies to use PIV credentials for access to federal information systems. Agencies Face Obstacles in Fully Implementing Homeland Security Presidential Directive 12 Agencies reported that their mixed progress in issuing PIV credentials and using them for electronic authentication of individuals accessing federal facilities and information systems can be attributed to several major management and technical obstacles. Several Agencies Reported Logistical Difficulties Associated with Issuing Credentials to Employees in Remote Locations OMB’s August 2005 guidance specifies that HSPD-12 credentials are to be issued to all employees and contractor personnel in executive branch agencies who require long-term access to federally controlled facilities or information systems. Several Agencies Have Not Put a Priority on Implementing the Electronic Capabilities of the PIV Credentials for Physical Access to Their Major Facilities HSPD-12 required the use of the PIV credential for access to federal facilities. Agency officials reported that they were working on solutions to this problem. Nevertheless, agencies have made minimal progress in implementing access control systems that can accept and validate PIV cards issued by other agencies. Conclusions Agencies have made substantial progress in issuing PIV cards to employees and contractor personnel and have begun using the electronic capabilities of the cards for physical and logical access but have made less progress in using the credentials for access to federal facilities and information systems. Agencies have established policies and procedures for accepting credentials from other agencies only in limited circumstances, in part because OMB only began requiring that agency systems accept credentials from other agencies in 2009. Until such mechanisms are in place, agencies are likely to continue to make slow progress in achieving interoperability. We are sending copies of this report to other interested congressional committees; the Secretaries of the Departments of Agriculture, Commerce, Homeland Security, Housing and Urban Development, the Interior, and Labor; the Administrators of the General Services Administration and National Aeronautics and Space Administration; the Chairman of the Nuclear Regulatory Commission; and the Director of the Office of Management and Budget. Appendix II: Requirements and Components of PIV-II The requirements of PIV-II include the following: specifications for the components of the PIV system that employees and contractor personnel will interact with, such as PIV cards, card and biometric readers, and personal identification number (PIN) input devices; security specifications for the card issuance and management provisions;  a suite of authentication mechanisms supported by the PIV card and requirements for a set of graduated levels of identity assurances; specifications for the physical characteristics of PIV cards, including requirements for both contact and contactless interfaces and the ability to pass certain durability tests; and  mandatory information that is to appear on the front and back of the cards, such as a photograph, cardholder name, card serial number, and issuer identification.

Why GAO Did This Study To increase the security of federal facilities and information systems, the President issued Homeland Security Presidential Directive 12 (HSPD-12) in 2004. This directive ordered the establishment of a governmentwide standard for secure and reliable forms of ID for employees and contractors who access government-controlled facilities and information systems. The National Institute of Standards and Technology (NIST) defined requirements for such personal identity verification (PIV) credentials based on "smart cards"--plastic cards with integrated circuit chips to store and process data. The Office of Management and Budget (OMB) directed federal agencies to issue and use PIV credentials to control access to federal facilities and systems. GAO was asked to determine the progress that selected agencies have made in implementing the requirements of HSPD-12 and identify obstacles agencies face in implementing those requirements. To perform the work, GAO reviewed plans and other documentation and interviewed officials at the General Services Administration, OMB, and eight other agencies. What GAO Found Overall, OMB and federal agencies have made progress but have not fully implemented HSPD-12 requirements aimed at establishing a common identification standard for federal employees and contractors. OMB, the federal Chief Information Officers Council, and NIST have all taken steps to promote full implementation of HSPD-12. For example, in February 2011, OMB issued guidance emphasizing the importance of agencies using the electronic capabilities of PIV cards they issue to their employees, contractor personnel, and others who require access to federal facilities and information systems. The agencies in GAO's review--the Departments of Agriculture, Commerce, Homeland Security, Housing and Urban Development, the Interior, and Labor; the National Aeronautics and Space Administration; and the Nuclear Regulatory Commission--have made mixed progress in implementing HSPD-12 requirements. Specifically, they have made substantial progress in conducting background investigations on employees and others and in issuing PIV cards, fair progress in using the electronic capabilities of the cards for access to federal facilities, and limited progress in using the electronic capabilities of the cards for access to federal information systems. In addition, agencies have made minimal progress in accepting and electronically authenticating cards from other agencies. The mixed progress can be attributed to a number of obstacles agencies have faced in fully implementing HSPD-12 requirements. Specifically, several agencies reported logistical problems in issuing credentials to employees in remote locations, which can require costly and time-consuming travel. In addition, agencies have not always established effective mechanisms for tracking the issuance of credentials to federal contractor personnel--or for revoking those credentials and the access they provide when a contract ends. The mixed progress in using the electronic capabilities of PIV credentials for physical access to major facilities is a result, in part, of agencies not making it a priority to implement PIV-enabled physical access control systems at all of their major facilities. Similarly, a lack of prioritization has kept agencies from being able to require the use of PIV credentials to obtain access to federal computer systems (known as logical access), as has the lack of procedures for accommodating personnel who lack PIV credentials. According to agency officials, a lack of funding has also slowed the use of PIV credentials for both physical and logical access. Finally, the minimal progress in achieving interoperability among agencies is due in part to insufficient assurance that agencies can trust the credentials issued by other agencies. Without greater agency management commitment to achieving the objectives of HSPD-12, agencies are likely to continue to make mixed progress in using the full capabilities of the credentials. What GAO Recommends GAO is making recommendations to nine agencies, including OMB, to achieve greater implementation of PIV card capabilities. Seven of the nine agencies agreed with GAO's recommendations or discussed actions they were taking to address them; two agencies did not comment.

gao_HEHS-98-208

gao_HEHS-98-208_0

With respect to tax law, beyond the Internal Revenue Service (IRS) at the federal level, a number of state agencies are involved. Many Federal and State Laws Cover California Manufacturing Firms To conduct business in California, a manufacturing firm must comply with numerous federal and state laws and regulations dealing with labor, tax, and environmental concerns. Table 1 broadly summarizes significant labor, tax, and environmental requirements that apply to California manufacturing firms and sets forth specific federal and state legal requirements that affect firms with different numbers of employees. For example, state law prohibits sexual harassment in firms of any size, and racial or sexual discrimination at all firms with at least five employees. Interrelationships of Federal and California State Requirements Add Complexity and Stringency to Labor, Tax, and Environmental Regulation Both federal and state governments play active roles in the regulation of the workplace, taxes, and the environment. In addition, some areas of state regulation have no federal counterpart. In California, the net effect of these combined federal and state labor law requirements is that California manufacturing firms must, in many cases, meet higher labor standards than those required by the federal government. Many Sources of Information Are Available to Help Firms Identify Applicable Laws California and federal agencies have taken proactive steps to inform manufacturers about employers’ duties under existing laws and regulations as well as about proposed changes in those requirements. However, California manufacturing employers cannot rely on a single governmental source or focal point to provide them with a comprehensive understanding of the many federal and state workplace, tax, and environmental laws that apply to them and must seek out information from the public agency responsible for enforcing the law. Advocacy and Trade Associations Also Help Manufacturers With Laws and Changes California’s Chamber of Commerce has a number of resources available to manufacturers, most of which must be purchased, that can help businesses learn about and comply with many California and federal laws applicable to them. Electronics and Aerospace Firms Have Developed Strategies to Comply With Laws Related to Human Resource Operations but Have Concerns About Some Requirements The firms we visited have devised different strategies to ensure compliance with those legal requirements related to their human resource operations—in general, the workplace and tax requirements listed in appendixes II and III. Responsibility for understanding and complying with legal requirements related to human resource operations at these firms was focused largely in the human resource departments but overlapped into other parts of the firms’ organization. Employers Had Varied Concerns About Regulatory Requirements During our in-depth discussions with managers from the firms visited, each expressed some frustration about certain governmental requirements imposed on them, although there was little pattern in their complaints. Companies Identified Some Areas in Which Regulation Was Beneficial Although the firms’ managers had many specific concerns about regulations affecting human resources, they also cited some areas in which they believed regulations had helped to improve the workplace. Employers must comply with applicable restrictions in the wage-hour laws on the use of child labor. Comparable state law: None. Table IV.3: Hazardous Substance Control —Manufacturers or importers of more than 10,000 lbs. Each day, GAO issues a list of newly available reports and testimony.

Why GAO Did This Study Pursuant to a congressional request, GAO compiled a list of the federal and state laws that apply to California businesses of different sizes, and selected two industries within that state to illustrate compliance with selected laws, focusing on the: (1) requirements of federal and state laws affecting the workplace, tax-related, and environmental practices of California manufacturing firms of different sizes; (2) assistance available to firms to help identify applicable laws and understand their implications on operations; and (3) impact workplace and tax laws have had on the human resource operations at firms in the high-tech electronics and aerospace industries. What GAO Found GAO noted that: (1) both federal and state laws impose a number of requirements affecting the workplace, tax-related, and environmental practices of California manufacturing firms; (2) as employers, firms must comply with federal and state laws; (3) firms also must report income resulting from their operations and pay taxes to the federal and California state governments; (4) in addition, as firms manufacture goods and dispose of their waste, they must comply with state and federal environmental laws regulating use, storage, and disposal of hazardous substances and releases into the air; (5) although a number of laws take effect as firms hire more employees, particularly those laws that are workplace-related, most laws have at least some requirements for all firms, regardless of the number of employees; (6) the interrelationships between federal and state laws in the different areas of regulation vary; (7) in many cases, California law sets more comprehensive standards with which businesses must comply than federal law does; (8) many sources of information are available to help firms identify and meet the legal requirements imposed on them; (9) although no one public agency--either federal or state--coordinates or produces a complete resource guide identifying all legal requirements that apply to California manufacturers, many California and federal agencies have individually sponsored activities to assist firms in complying with legal requirements; (10) however, company managers GAO spoke with seemed unwilling to rely on information provided by state or federal agency staff or to invest the time required to access, research, and understand the available information; (11) instead, these managers rely on trade or business organizations and outside experts to help them understand and remain abreast of new developments in federal and state laws and regulations; (12) managers overseeing human resource operations at the seven California manufacturing firms GAO visited have implemented a variety of approaches to meet their regulatory obligations; (13) while each of the firms had developed strategies to comply with the laws, each was concerned that certain requirements involved excessive complexity, paperwork, or cost, although there was little pattern in the firms' areas of complaint; (14) in general, managers expressed frustration with never being sure they were in complete compliance with all applicable requirements; and (15) notwithstanding these concerns, managers also cited areas in which they believed regulations helped to improve the workplace.

gao_GAO-08-738T

gao_GAO-08-738T_0

NARA Is Working to Overcome ERA Schedule Delays through Parallel Development Projects, but Uncertainties Remain In response to the delays that occurred in 2007 and their effect on the Archives’ readiness to receive the presidential records of the Bush Administration in January 2009, NARA developed a two-pronged strategy for continuing ERA development. First, it has developed plans to achieve IOC by June 2008 with somewhat reduced capabilities from those that had been planned; it refers to the system to be delivered at IOC as the “base” ERA system. Second, it is planning to pursue a parallel development of another part of the ERA system that is to be dedicated initially to presidential records from the Bush Administration; this part of ERA, which is being developed using a different architecture from that of the base system, is referred to as the “EOP (Executive Office of the President) system.” When these developments are complete, NARA plans to merge the two architectures into one ERA system. Officials also stated that the contractor was independently funding research on issues related to preservation, whose results would be applied to future work. NARA officials remain confident that their testing will be completed and necessary fixes made in time for IOC at the end of June. Unforeseen problems uncovered through testing could lead to further delays. According to NARA, it is mitigating the risk of delays by paying close and continuing attention to the testing process, through such actions as the weekly meetings of NARA’s test team. EOP System Is Being Developed, but Completing the Development in Time for the Presidential Transition Is Uncertain In September 2007, the contractor demonstrated to NARA a prototype for the EOP system, designed to show the ability to address basic requirements for processing presidential electronic records, such as rapid ingest of records and ability to search content. Although the development is continuing, challenges remain. In particular, because NARA and the contractor are still negotiating the detailed development plans and specific system requirements, the IOC date for the EOP system and specific details regarding functionality remain uncertain. The scope of work and requirements for the EOP are not settled. After review, NARA asked the contractor to respond to over 200 comments and provide a revised proposal. Among the difficulties of finalizing the negotiations are uncertainties regarding the exact nature of the presidential records that will be transferred to NARA in 2009. Although NARA and the Administration have held meetings on this topic, according to NARA, the Administration has not yet provided NARA with specific information required for it to plan for reliable ingest, indexing, and accessing of the electronic records involved. According to NARA, if it cannot ingest the electronic classified and unclassified records from the Bush Administration in a way that supports the search, processing, and retrieval of records immediately after the presidential transition, it will not be able to meet the requirements of the Congress, the former and incumbent Presidents, and the courts for information in these records in a timely fashion. In summary, NARA has developed a strategy to overcome the earlier ERA schedule delays: it has developed the software and begun testing for the base system, and it has begun development of the EOP system. However, in the near term it faces the challenge of completing the testing of the base system and the larger challenge of defining the requirements and scope of the EOP system and completing its development. In the long term, NARA also plans to merge the two architectures of the ERA base and EOP systems into a coordinated whole. Continuing careful oversight by NARA and the Congress will be important in achieving the ultimate aims for the ERA system: to automate NARA’s records management and archiving life cycle and preserve and provide access to all types and formats of electronic records.

Why GAO Did This Study Since 2001, the National Archives and Records Administration (NARA) has been working to develop a modern Electronic Records Archives (ERA) system, a major information system that is intended to preserve and provide access to massive volumes of all types and formats of electronic records. The system is being developed incrementally over several years; the first system increment is to provide an initial set of functions, with additional capabilities to be added in future increments. However, in 2007, NARA's contractor acknowledged that it would not be able to meet the planned date for the initial operational capability of the first ERA increment. GAO was asked to provide information on the steps that NARA has taken to respond to the delays encountered in the development. To prepare this testimony, GAO reviewed its previous work in this area, as well as the preliminary results of an ongoing performance audit. For this ongoing audit, GAO analyzed NARA reports, contract documents, and other material related to the ERA development project, and interviewed agency and contractor officials. What GAO Found NARA is working to overcome the ERA schedule delays that occurred in 2007 by changing to a two-pronged development strategy, but uncertainties remain. First, NARA developed plans to achieve an initial operational capability for the ERA system in June 2008 with somewhat reduced capabilities from those that had been planned. For this initial system, known as the "base" system, software development deadlines have been met, and testing began on schedule. However, NARA has extended some test periods beyond what was originally planned, leaving less time at the end of the schedule for completing final activities. Although officials remain confident that the schedule changes will not affect the date of the initial operational capability, problems uncovered through testing could lead to its delay. Archives officials said they are mitigating the risk of delays by closely monitoring the testing process. Second, the development delays of 2007 put at risk NARA's plan to use ERA to receive the presidential records of the Bush Administration in January 2009. In response to this risk, NARA and its contractor are pursuing a parallel development of a separate part of the system that is to be dedicated initially to the Bush records; this part of ERA--referred to as the "EOP (Executive Office of the President) system"--uses a different architecture from that of the base system: it is being built on a commercial product that can provide basic requirements for processing presidential electronic records, such as rapid ingest of records and ability to search content. Pursuing this as a separate development decouples the EOP system from dependence on the base system. However, completing the EOP system in time for the presidential transition remains uncertain, primarily because NARA and its contractor are still negotiating the precise scope of work and system requirements. These negotiations are challenging because, among other things, NARA does not know the exact nature of the presidential records that it is to receive in 2009. Although NARA and Bush Administration officials have held meetings on this topic, according to NARA officials, the Administration has not yet provided specific information on the volume and types of data to be transferred. System development is nonetheless proceeding based on NARA's volume estimates and the information available so far. According to NARA, developing the EOP system in time for the presidential transition is critical so that it can respond in a timely fashion to the information requirements of the Congress, the former and incumbent Presidents, and the courts. Challenges remain for the ERA program in both the near and long term. In the near term, NARA has to finish testing the base system, define the scope and requirements of the EOP system, and complete its development. In the long term, it plans to merge the two architectures of these systems into an integrated whole. Meeting these challenges will be important to achieving NARA's ultimate aims for the ERA system: preserving and providing access to all types and formats of electronic records.

gao_GAO-06-546

gao_GAO-06-546_0

The Integrated Deepwater System acquisition program, which the Coast Guard began developing in 1996, is its major effort to replace or modernize these aircraft and vessels. The Deepwater program represents a unique approach to a major acquisition in that the Coast Guard is using a prime contractor—the system integrator—to identify and deliver the assets needed to meet a set of mission requirements the Coast Guard has specified. To reflect added homeland security responsibilities based on the terrorist attacks of September 11, 2001, the August 2005 revision and February 2006 update to the Deepwater implementation plan change the balance of upgraded legacy versus new assets, the delivery schedules, and program costs from the original 2002 plan. Coast Guard officials caution, however, that this 25-year program is heavily dependent on receiving the anticipated budget amount each fiscal year. Delivery Schedules for Deepwater Assets Have Changed Estimated delivery schedules for the Deepwater assets have changed. Beyond the increases related solely to vessels, upgrades to the C4ISR and maritime domain awareness capabilities to improve interoperability between the Coast Guard and other Department of Homeland Security components, as well as with the Department of Defense, account for the second largest category of cost increases—increasing by $1.1 billion in the 2005 revised plan, and by $663 million in the 2006 plan. In contrast, because the revised plans include upgrading the HC-130 aircraft and the HH-60 helicopter rather than replacing them as called for in the original plan and for scaling back on the number of unmanned aerial vehicles to be acquired, costs for Deepwater aircraft decreased from the original plan to the revised plan. Further, a Department of Defense review board facilitated accreditation of the model and another group with expertise in this type of modeling has studied the Coast Guard’s approach and concluded that it is reliable. Because the model has proved useful for guiding Coast Guard decisions on the proper asset mix for enhancing the mission performance of the Deepwater assets, the Coast Guard is considering ways to expand the model to guide decisions on meeting its Coast Guard-wide Government Performance and Results Act (GPRA) performance goals. This strategy was deemed by the Coast Guard to be the most cost-effective solution for meeting Deepwater mission requirements. During our 2005 review, we determined that the Coast Guard had addressed and fully implemented 2 of these 11 recommendations. Recommendation status: The Coast Guard’s steps, combined with DHS’s oversight requirements, should be sufficient to resolve this issue. Further, a project of this magnitude will likely continue to experience other concerns and challenges beyond those that have emerged so far. Appendix I: Objectives, Scope, and Methodology This report, which focuses on the Coast Guard’s Deepwater management challenges, provides details on three issues: (1) a comparison of the revised Deepwater implementation plan issued in August 2005 with the original (August 2002) plan in terms of cost, time frames, and the balance of legacy and replacement assets; (2) an assessment of the degree to which the operational effectiveness model and other analytical methods used by the Coast Guard to develop the revised Deepwater asset mix are sound and appropriate for such a purpose; and (3) an assessment of the progress made in implementing our prior recommendations regarding Deepwater program management. In assessing the Coast Guard’s modeling and other analytical methods used for developing the revised Deepwater asset mix, we paid particular attention to the most recent performance gap analysis (PGA) study (PGA IV), which compared the projected performance of the revised Deepwater asset mix to that of the original Deepwater asset mix—so that we could gain a better understanding of how these results were used in developing the revised Deepwater asset mix.

Why GAO Did This Study The Deepwater program was designed to produce aircraft and vessels that would function in the Coast Guard's traditional at-sea roles. After the terrorist attacks of September 11, 2001, however, the Coast Guard began taking on additional homeland security missions, and so it revised the Deepwater implementation plan to provide assets that could better meet these new responsibilities. While many acknowledge that the Coast Guard's aging assets need replacement or renovation, concerns exist about the approach the Coast Guard adopted in launching the Deepwater program. The subsequent changes in the program's asset mix and delivery schedules only increased these concerns. This report (1) compares the revised Deepwater implementation plans with the original plan in terms of the assets to be replaced or modified, and the time frames and costs for doing so; (2) assesses the degree to which the operational effectiveness model and other analytical methods used by the Coast Guard to develop the revised Deepwater asset mix are sound and appropriate for such a purpose; and (3) assesses the progress made in implementing GAO's prior recommendations regarding program management. GAO is not making any new recommendations in this report. What GAO Found The revised Deepwater implementation plans change the balance between new and legacy assets, alter the delivery schedule for some assets, lengthen the overall acquisition schedule by 5 years, and increase the projected program cost from $17 billion to $24 billion. The higher cost generally relates to upgrading assets to reflect added homeland security mission requirements. Upgrades to vessels account for the single largest area of increase; with upgrades to the command, control, communications and other capabilities being second highest. In contrast, because the revised plans upgrade rather than replace most legacy aircraft and reduce the number of unmanned aircraft, the cost for Deepwater aircraft drops. The revised plans, like the original plan, are heavily dependent on receiving full funding each year. Coast Guard officials state that a shortfall in funding in any year could substantially increase total costs. The Coast Guard's analytical methods were appropriate for determining if the revised asset mix would provide greater mission performance and whether the mix is appropriate for meeting Deepwater missions. GAO and other independent experts found the Coast Guard's methods were reliable for assessing the effects of changing the asset mix and a Department of Defense review board facilitated accreditation of the Coast Guard's approach. Because the model has proved useful for guiding Coast Guard decisions on the proper asset mix for achieving Deepwater performance goals, the Coast Guard is considering ways to expand the model to guide decisions on meeting its Coast Guard-wide performance goals. Actions by the Coast Guard and the system integrator have fully implemented three of the eight GAO recommendations that were not fully addressed during GAO's review in 2005, and three more recommendations appear to be nearly implemented. The remaining two have unresolved concerns, but the Coast Guard is taking steps to resolve them. A program of this size, however, will likely experience other challenges beyond those that have emerged so far, making continued monitoring by the Coast Guard important.

gao_GAO-02-900T

gao_GAO-02-900T_0

Additionally, the proposal to establish the DHS calls for coordination with nonfederal entities and directs the new Secretary to reach out to state and local governments and the private sector in order to: ensure that adequate and integrated planning, training, and exercises occur, and that first responders have the equipment they need; coordinate and, as appropriate, consolidate the federal government’s communications systems relating to homeland security with state and local governments’ systems; direct and supervise federal grant programs for state and local emergency distribute or, as appropriate, coordinate the distribution of warnings and information to state and local government personnel, agencies and authorities, and the public. Many aspects of the proposed consolidation of homeland security programs are in line with previous recommendations and show promise towards reducing fragmentation and improving coordination. In addition, the recent proposal for establishing DHS should not be considered a substitute for, nor should it supplant, the timely issuance of a national homeland security strategy. In areas ranging from fire protection to drinking water to port security, the new threats are prompting a reassessment and shift of longstanding roles and responsibilities. However, proposed shifts in roles and responsibilities are being considered on a piecemeal and ad hoc basis without benefit of an overarching framework and criteria to guide this process. A national strategy could provide such guidance by more systematically identifying the unique capacities and resources of each level of government and matching them to the job at hand. The challenges posed by the new threats are prompting officials at all levels of government to rethink long standing divisions of responsibilities for such areas as fire services, local infrastructure protection and airport security. The nation does not have a baseline set of performance goals and measures upon which to assess and improve preparedness. Appropriate Tools Need to Be Selected For Providing Assistance The choice and design of the policy tools the federal government uses to engage and involve other levels of government and the private sector in enhancing homeland security will have important consequences for performance and accountability. The choice of policy tools will affect sustainability of efforts, accountability and flexibility, and targeting of resources. The DHS will clearly have a central role in the success of efforts to strengthen homeland security, but it is a role that will be made stronger within the context of a larger, more comprehensive and integrated national homeland security strategy.

What GAO Found The challenges posed by homeland security exceed the capacity and authority of any one level of government. Protecting the nation against these threats calls for a truly integrated approach, bringing together the resources of all levels of government. The proposed Department of Homeland Security will have a central role in efforts to enhance homeland security. The proposed consolidation of homeland security programs has the potential to reduce fragmentation, improve coordination, and clarify roles and responsibilities. However, formation of a department should not be considered a replacement for the timely issuance of a national homeland security strategy to guide implementation of the complex mission of the department. Appropriate roles and responsibilities within and between the government and private sector need to be clarified. New threats are prompting a reassessment and shifting of long-standing roles and responsibilities, but these shifts are being considered on a piecemeal and ad hoc basis without benefit of an overarching framework and criteria. A national strategy could provide guidance by more systematically identifying the unique capacities and resources at each level of government to enhance homeland security and by providing increased accountability within the intergovernmental system. The nation does not yet have performance goals and measures upon which to assess and improve preparedness and develop common criteria that can demonstrate success; promote accountability; and determine areas in which resources are needed, such as improving communications and equipment interoperability. A careful choice of the most appropriate tools is critical to achieve and sustain national goals. The choice and design of policy tools, such as grants, regulations, and tax incentives, will enable all levels of government to target areas of highest risk and greatest need, promote shared responsibilities, and track and assess progress toward achieving preparedness goals.

gao_NSIAD-98-155

gao_NSIAD-98-155_0

Objectives, Scope, and Methodology In response to requests from the Chairman and Ranking Minority Member of the Senate Armed Services Committee and the Chairman of the House Budget Committee, we assessed whether (1) the QDR’s force structure and modernization assessments examined alternatives to the planned force and (2) opportunities exist to improve the structure and methodology of future QDRs. Force Structure Assessments Tested Limited Alternatives The QDR’s major theater war assessment, smaller-scale contingency war game series, and future regional great power assessment used some analytical tools different from those used in the Bottom-Up Review to analyze a broader range of military operations and conduct greater analysis of some key assumptions. Furthermore, none of the assessments fully examined the impact of evolving technologies and operational concepts on future force size and structure. As part of the QDR force assessment analysis, DOD modeled the sufficiency of U.S. forces to fulfill this requirement. OSD and Joint Staff officials stated that they did not analyze the effects of new technologies or concepts because the TACWAR model is not sensitive enough to do so. While this assessment provided several insights into how forces were allocated to a wide range of operations, it did not evaluate alternative force structures to identify the force best suited to meet the demands of the defense strategy. 2.1.) Modernization Review Did Not Reflect a Mission-Oriented Approach DOD’s modernization review examined some variations of the services’ planned modernization programs but did not reflect a thorough, mission-oriented approach to assessing the mix of capabilities the United States will need to counter future threats. As a result, the QDR did not sufficiently examine linkages and trade-offs between force structure and modernization decisions. Planning for the Next QDR Can Help Provide for a More Thorough Review of Defense Needs DOD can enhance the value of the next QDR by providing formal oversight of QDR preparation efforts, improving models and other analytical tools, and considering changes to the QDR’s structure and design. Changing the timing of the panels’ work, building greater collaboration among some panels, and delaying the QDR until later in the new administration’s term may also provide a more thorough review. DOD has some initiatives underway that could help it prepare for its next review. Moreover, DOD’s force structure and modernization panels completed their analyses separately and did not model trade-offs between modernization and force structure.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed whether: (1) the Quadrennial Defense Review's (QDR) force structure and modernization assessments examined alternatives to the planned force; and (2) opportunities exist to improve the structure and methodology of future QDRs. GAO did not evaluate the rationale for the Department of Defense's (DOD) proposed defense strategy. What GAO Found GAO noted that: (1) QDR did not examine alternatives that would provide greater assurance that it identified the force structure that is best suited to implement the defense strategy; (2) the QDR's force assessments built on DOD's Bottom-Up Review analysis by examining requirements for a broader range of military operations beyond major theater wars, and by analyzing the potential impact of some key assumptions; (3) only one of the three major force assessments modeled any force structure alternatives; (4) the assessment did not examine alternatives that involved targeted changes because DOD officials foresaw problems in obtaining service consensus and DOD's models are not sensitive enough to assess the effects of some types of force structure changes; (5) although some technologies consistent with Joint Vision 2010 were modeled, none of the assessments fully examined the potential effects of new technologies and war-fighting concepts on DOD's planned force structure; (6) DOD's modernization review examined some variations of the services' procurement plans but did not include a thorough, mission-oriented review of the mix of capabilities the United States will need to counter future threats; (7) DOD divided responsibility for analyzing major procurement programs and investment issues among 17 task forces; (8) this approach did not always provide a mission focus that examined trade-offs or facilitated a fundamental reassessment of modernization needs in light of emerging threats and technological advances; (9) the modernization and force assessment panels conducted most of their work independently and concurrently, which hampered their ability to explore linkages and trade-offs between force structure and modernization alternatives; (10) DOD can provide a more thorough review of U.S. defense needs in the next QDR by preparing early, improving its analytical tools, and considering changes to the structure and design of the QDR process; (11) DOD has not yet developed a formal process to prepare for and coordinate activities related to the next QDR; and (12) delaying the start of the next QDR until later in the next Presidential administration may also facilitate a more thorough review.

gao_GAO-12-975

gao_GAO-12-975_0

Acting under this authority, Congress enacted CNRA in 2008 to apply federal immigration laws to the CNMI; in November 2009, the U.S. government began its application of immigration laws to the CNMI. CNRA required that the Secretary of Homeland Security establish a transitional work permit program for foreign workers in the CNMI during the initial 5-year transition period. DOL. CNMI Transitional Work Permit Program Has Been Established, and Federal Decisions Affecting Future Access to Foreign Workers Are Pending DHS Issued Final Rule to Implement Transitional Work Permit Program That Addresses Key CNRA Requirements On September 7, 2011, DHS issued a final rule to implement a CNMI transitional work permit program, as required by CNRA, for foreign workers who would not otherwise be admissible under federal law. As of July 2012, USCIS had requested additional evidence for 3,200 petitions, or more than half of the CW-1 petitions submitted in fiscal year 2012. Agency Decisions on Fiscal Year 2013 Permit Allocation and Any Extension of Transition Period Are Pending DHS officials stated that they are working to determine the permit allocation for fiscal year 2013 and will announce the allocation in the Federal Register by October 1, 2012. DOL officials told us that, as of July 2012, the department had not decided whether or when it will extend the transition period. Officials said the department does not expect to announce a decision before the end of 2012 and pointed out that DOL is not required by CNRA to make its determination until July 5, 2014. DHS Has One Data Source for Pending Decision but Has Not Made Public Its Methodology, while DOL Has Identified Multiple Data Sources and Methodology DHS has identified a single source of CNMI workforce data that it intends to use for its annual allocation of transitional work permits and has not made public the types of information, such as its methodology, that it will publish with future permit allocations. In contrast, DOL has identified multiple sources of data on the CNMI labor market and plans to conduct a number of analyses of these data in making its determination of whether and when to extend the transition period. However, the source does not provide numbers of U.S. and foreign workers by industry, which could help DHS predict future demand for foreign workers. DOL plans to estimate changes in employment and in the GDP in each CNMI industry sector that might result from a reduction in the number of foreign workers. Specifically, members said that uncertainty has caused them to limit their plans for future investments. Federal Agencies Have Provided Funds for CNMI Worker Training, and Some Information Is Available on DOL and DOI Efforts DOL, DOI, and DHS Have Funded CNMI Worker Training Programs with Varying Reporting Requirements DOL, DOI, and DHS have made available a combined total of about $6.5 million for worker training in the CNMI in fiscal years 2010 through 2012 (see table 2). According to a senior DHS official, DHS will continue to collect and transfer these funds to the CNMI Treasury until the end of the transition period. DOL. According to DOL officials, information on the performance of this grant is available to Congress on request. DHS. Making this information available could help allay CNMI businesses’ uncertainty regarding the unknown impact of DHS’s pending decision on their future access to foreign workers and help mitigate the effect of such uncertainty on CNMI businesses’ investment plans. Recommendations for Executive Action We recommend that the Secretary of Homeland Security take the following two actions: 1. to help ensure that CNMI’s businesses are better able to plan for future permit allocations, provide, when publishing DHS’s annual permit allocation, the methodology it used and the factors it considered to determine the number of permits allocated; and 2. to help ensure that DHS has the information it needs to assess the needs of the CNMI workforce as it decides on future permit allocations, use Department of Labor analyses of economic data on the labor needs of the CNMI as a factor in deciding on future permit allocations. To provide the status of federal efforts to support worker training in the CNMI, we obtained information on the Department of Labor’s (DOL) Workforce Investment Act (WIA) grant, such as the grant’s terms and conditions, performance and financial reports, and notice of obligations; the Department of Interior (DOI) technical assistance grant that provides funding for worker training programs, such as grant terms and conditions, the most recent performance report submitted for the grant, and federal award amounts; and DHS information on the amount of funds DHS had collected from its transitional work permit program transferred to the CNMI Treasury to support CNMI vocational curricula and program development. 1101 (a)(17)), to apply to the Commonwealth of the Northern Mariana Islands (referred to in this subtitle as the “Commonwealth”), with special provisions to allow for— A. the orderly phasing-out of the nonresident contract worker program of the Commonwealth; and B. the orderly phasing-in of Federal responsibilities over immigration in the Commonwealth; and 2. to minimize, to the greatest extent practicable, potential adverse economic and fiscal effects of phasing-out the Commonwealth's nonresident contract worker program and to maximize the Commonwealth's potential for future economic and business growth by— A. encouraging diversification and growth of the economy of the Commonwealth in accordance with fundamental values underlying Federal immigration policy; B. recognizing local self-government, as provided for in the Covenant To Establish a Commonwealth of the Northern Mariana Islands in Political Union With the United States of America through consultation with the Governor of the Commonwealth; C. assisting the Commonwealth in achieving a progressively higher standard of living for citizens of the Commonwealth through the provision of technical and other assistance; D. providing opportunities for individuals authorized to work in the United States, including citizens of the freely associated states; and E. providing a mechanism for the continued use of alien workers, to the extent those workers continue to be necessary to supplement the Commonwealth's resident workforce, and to protect those workers from the potential for abuse and exploitation.

Why GAO Did This Study In November 2009, the United States applied U.S. immigration law to the CNMI, as required by CNRA. To minimize the potential for adverse effects on the CNMI economy, CNRA established a 5-year transition period scheduled to end in 2014. CNRA required DHS to establish a transitional work permit program for foreign workers in the CNMI and annually reduce the number of permits issued, reducing them to zero by the end of the transition period. CNRA also required DOL to determine whether to extend the transition period past 2014, based on an assessment of the CNMI's labor needs. CNRA further required GAO to report on the implementation and economic impact of federal immigration law in the CNMI. This report (1) assesses the status of federal implementation of the transitional work permit program, (2) examines economic implications for the CNMI of pending federal actions, and (3) provides the status of federal efforts to support worker training in the CNMI. GAO reviewed CNRA, U.S. regulations, and information from federal agencies and the CNMI government; and interviewed U.S. government officials and private sector representatives. What GAO Found On September 7, 2011, the Department of Homeland Security (DHS) issued a final rule establishing a transitional work permit program in the Commonwealth of the Northern Mariana Islands (CNMI) for foreign workers not otherwise admissible under federal law. The final rule addressed key requirements of the Consolidated Natural Resources Act of 2008 (CNRA); for example, the rule sets the permit allocations for fiscal years 2011 and 2012. As of July 2012, DHS had processed about half of the petitions for work permits that employers submitted in fiscal year 2012. The DHS decision on its permit allocation for fiscal year 2013 and a Department of Labor (DOL) decision on whether and when to extend the transition period, both required by CNRA, are both pending. DHS plans to announce the permit allocation for fiscal year 2013 by the end of September 2012. DHS has identified one source of CNMI workforce data that it intends to use for its annual work permit allocations. However, the data source does not provide numbers of U.S. and foreign workers by industry, which could help DHS predict future demand for foreign workers. According to a senior DHS official, DHS has not made public the types of information, including its methodology, that it will publish with future permit allocations. Knowledge of DHS's methodology could help allay any public uncertainty regarding future access to foreign workers in the CNMI. DOL has not determined whether to extend the transition period, according to DOL officials, and is not required to do so until July 2014. DOL has identified multiple sources of data on the CNMI labor market, including a source that provides the number of workers in the CNMI by citizenship and industry. DOL has also identified the methodology it plans to use in making its determination. According to DOL officials, DOL plans to estimate changes in CNMI employment and gross domestic product that might result from a reduction in foreign workers. These data sources and analyses could help DHS assess workforce needs and determine its annual permit allocation. Uncertainty about the impact of the pending DHS and DOL decisions on access to foreign workers may be limiting business investment in the CNMI. Foreign workers made up more than half of the CNMI workforce in 2012, and CNMI businesses reported challenges in finding replacements for foreign workers. Some CNMI businesses indicated that uncertainty over pending federal actions has caused them to limit their plans for future investments in the CNMI. DOL, the Department of the Interior (DOI), and DHS made available a combined total of about $6.5 million to train workers in the CNMI in fiscal years 2010 through 2012. DOL provided annual grants that support worker services. DOI provided a grant in 2011 to support on-the-job training programs, in response to CNRA requirements. As of July 2012, DHS had transferred to the CNMI Treasury about $1.8 million it had collected through its permit program for CNMI vocational educational curricula and program development, as required by CNRA. Information on the use of DOL and DOI grants is available to Congress on request, but DHS does not collect information on the use of funds it transfers to the CNMI Treasury. What GAO Recommends GAO recommends that the Secretary of Homeland Security (1) provide, on publication of its permit allocations, the methodology used and (2) use DOL analyses as a factor in deciding future permit allocations. DHS agreed to publish its methodology but will wait to review DOL analyses until they are available before deciding to use them.

gao_GGD-98-197

gao_GGD-98-197_0

Objectives, Scope, and Methodology To achieve our first objective—examine the extent to which INS’ methodology for computing the proposed fees complied with federal user fee requirements and used generally accepted statistical sampling procedures—we examined whether INS (1) followed legislative requirements and federal guidance in setting application fees and (2) used generally accepted social science techniques for statistical sampling in its fee study. To the Extent It Was Able, INS Followed Federal User Fee Guidance On the basis of its study, INS is revising the fees for 30 types of applications for immigration and naturalization services. Conclusions On the basis of our discussions with OMB staff and our review of INS’ efforts to identify the costs associated with processing applications, we believe that INS complied, to the extent it was able, with available OMB user fee guidance that requires agencies to recover the full costs of providing services. However, according to its 1997 fee study, INS was unable to determine its full costs for processing applications because (1) INS’ financial management information system does not provide actual cost data, including such items as depreciation and support service costs from other INS functions, and (2) INS excluded certain cost items, such as unfunded pension liability and postretirement life insurance and health benefits costs, because it lacked guidance on how to treat them. Had INS been able to determine these costs and included them in its fee computation, the revised fees could have been set at a higher level. INS’ initial plan for sampling the processing of applications at regional service centers and selected district offices and by selected processing personnel to determine how long it took to process various applications incorporated generally accepted statistical sampling procedures. However, some of the changes INS made for operational reasons to its planned statistical sample during implementation undermined scientific sampling principles and adversely affected INS’ ability to project the study’s results to all application processing sites. We are unable, however, to determine the impact of these changes on the revised user fees. INS is reengineering the way it processes naturalization applications. Changes to the naturalization process are intended to improve the integrity of the process and make it more efficient and customer oriented. Since these changes took place after INS’ fee study, the fee revisions do not recognize these changes, and INS does not know what affect these changes will have on the user fee schedule. INS officials said INS is planning to initiate the next IEFA user fee review early in fiscal year 1999.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Immigration and Naturalization Service's (INS) fee increase proposal, focusing on: (1) the extent to which INS' methodology for computing the proposed application fees complied with federal user fee requirements and used generally accepted statistical sampling procedures; and (2) whether INS recognized implemented and proposed changes to the naturalization process in its application fees. What GAO Found GAO noted that: (1) on the basis of its user fee study, INS revised the fees it charges for 30 types of immigration and naturalization applications; (2) GAO believes, on the basis of its discussions with Office of Management and Budget (OMB) staff and its review of INS' efforts to identify the costs associated with processing applications, that INS complied, to the extent it was able, with OMB user fee guidance; (3) OMB guidance requires agencies to recover, whenever possible, the full cost of providing their services; (4) however, according to its 1997 fee study report, INS was unable to determine its full cost for processing applications because: (a) INS' financial management information system does not provide actual cost data, including items such as depreciation and support service costs from other INS functions; and (b) INS excluded certain cost items because INS said it lacked guidance on how to treat them; (5) had INS been able to determine these costs and include them in its fee computation, the revised fees could have been set at a higher level; (6) INS' initial plan for sampling the processing of applications at regional service centers and selected district offices and by selected personnel to determine how long it took to process various applications incorporated generally accepted statistical sampling procedures; (7) however, some of the changes INS made for operational reasons to its planned statistical sample during implementation undermined scientific sampling principles and adversely affected INS' ability to project the study's results to all application processing sites; (8) GAO is unable to determine the impact of these changes on the revised user fees; (9) INS is reengineering the way it processes naturalization applications; (10) changes to the naturalization process are intended to improve the integrity of the process and make it more efficient and customer oriented; (11) since these changes took place after INS' fee study, the fee revisions do not recognize these changes; and (12) INS officials said INS is planning to initiate the next Immigration Examination Fee Account user fee review early in fiscal year 1999 and, at that time, the study will recognize any naturalization process or other process changes that have taken place.

gao_GAO-15-345

gao_GAO-15-345_0

Description of BMDS Elements The BMDS is comprised of several systems, which MDA calls elements or programs. MDA Conducted Several Key Tests and Continued to Deliver Assets, but Did Not Achieve All Planned Goals for Fiscal Year 2014 MDA made progress, but did not achieve all of its planned test and asset delivery goals for fiscal year 2014, and has not fully met its test goals since first reporting baselines in its 2010 BAR. However, despite testing delays, shortfalls, and failures, MDA has continued to deliver assets. MDA conducted two intercept and three non-intercept flight tests in fiscal year 2014 that demonstrated an increased capability for the Aegis BMD and the GMD programs. However, some of these assets were delivered without completing planned testing, which increases risks for an individual system and the BMDS as a whole. Even with the risk reduction efforts, the agency’s acquisition outcomes may be on a similar trajectory to that of prior years because it missed some risk reduction opportunities in fiscal year 2014. However, opportunities remain for MDA to reduce risk in these future planned efforts, which would help the agency achieve its acquisition goals. Aegis BMD: Opportunity Exists to Insert an Additional Flight Test to Assess Redesigned Component for the SM-3 Block IB Prior to a Multiyear Procurement Decision Aegis BMD is currently redesigning a key component of its SM-3 Block IB interceptor to address prior test failures, but has no plans to flight test it before incorporating it into the interceptor. MDA Provides Limited Insight Into the Overall BMDS Integrated Capability Goals The NDAA for fiscal year 2012 requires MDA to report capability delivery goals and progress at the element level, which enables Congress to track acquisition plans and progress of individual BMDS elements, including those at high risk of cost and schedule growth. However, this law does not require MDA to externally report key aspects of integrating two or more elements and delivering integrated BMDS capabilities, which allow the BMDS to achieve performance levels not realized by individual elements working independently. Table 5 below illustrates how reporting on MDA's progress in achieving capabilities that hinge on integration is fairly limited, particularly when compared to our analysis of MDA’s systems engineering documents. 1. To ensure that future efforts are aligned with a sound acquisition approach, which includes robust systems engineering and testing, we recommend that the Secretary of Defense direct the following two actions: a) For Aegis BMD SM-3, DOD conduct a flight test to increase confidence that the redesigned SM-3 Block IB third-stage rocket motor component works as intended prior to inserting it into the SM-3 Block IB production line. To ensure MDA makes sound investment decisions on improving homeland ballistic missile defense, the Secretary of Defense should direct MDA to make the department’s analysis of alternatives an integral part of its planning effort and delay any decisions to begin development of the new GMD Redesigned Kill Vehicle until: a) the department’s analysis of alternatives is completed and identifies the best solution to pursue; and b) Congressional and DOD decision makers have been provided the results of that analysis. In responding to a draft of this report, DOD partially concurred with our first two recommendations regarding Aegis SM-3 Block IB and GMD and concurred with our third recommendation to report to Congress its annual progress towards planned integrated BMDS-level capabilities. As we found in this report, such an approach has proven very costly for MDA. MDA uses baselines to monitor the progress of its programs and report them to Congress annually in the BMDS Accountability Report. MDA is also preparing to award a production contract in fiscal year 2015. Once the redesigned interceptor’s performance has been demonstrated through flight tests the program office may also better understand the costs needed to incorporate those changes into the ongoing production, in addition to if any other design changes are necessary. Consequently, the production strategy is at risk for cost growth and schedule delays. Appendix V: Aegis Ballistic Missile Defense Standard Missile-3 (SM-3) Block IIA The program completed its system-level review of the interceptor’s design and is transitioning to product development to further refine and mature the design and manufacturing processes. It also processes ballistic missile tracks, and reports these tracks to Ballistic Missile Defense System (BMDS) shooters, such as Ground-based Midcourse Defense (GMD), Aegis BMD, Terminal High-Altitude Area Defense (THAAD), and Patriot, which then use their own command and control, and mission planning tools for stand-alone engagements. The Missile Defense Agency (MDA) is developing and delivering capability upgrades before the next version is available in 2017. 2. The Targets program has flown targets in non-intercept tests that can reduce risks, but it continues to use new targets in more expensive and higher risk intercept tests The Targets program successfully flew a new medium-range target during a non-intercept flight test in October 2014 that may enable the program to reduce risks associated with this target prior to its use in an intercept flight test in fiscal year 2015.

Why GAO Did This Study Since 2002, MDA has spent approximately $105 billion, and it plans to spend about $38 billion more by 2019, to defend against enemy ballistic missiles. MDA is developing a BMDS comprised of a command and control system, sensors that identify incoming threats, and intercepting missiles. For over a decade, GAO has reported on MDA's progress and challenges in developing and fielding the BMDS. GAO is mandated by law to assess the extent to which MDA has achieved its acquisition goals and objectives, as reported through its acquisition baselines, and to report on other acquisition issues as appropriate. This, GAO's 12th annual report, examines progress and challenges in fiscal year 2014 associated with MDA's: (1) individual element testing and asset delivery goals, (2) efforts to reduce acquisition risks, and (3) reporting on the BMDS integrated capability. GAO examined MDA's acquisition reports and assessed them against GAO's acquisition best practices, analyzed baselines reported to discern progress, and interviewed DOD and MDA contractor officials. What GAO Found In fiscal year 2014, the Missile Defense Agency (MDA) made some progress in achieving its testing and delivery goals for individual elements of the Ballistic Missile Defense System (BMDS), but was not able to complete its planned fiscal year goals for testing. MDA conducted two intercept tests demonstrating an increased capability. However, it did not complete six planned flight tests for a variety of reasons, including test delays and retests to address previous failures, which limit the knowledge gained in fiscal year 2014. Additionally, several BMDS elements delivered assets in fiscal year 2014 without completing planned testing, which increases cost and schedule risks for an individual system and the BMDS as a whole. In one instance, the Terminal High Altitude Area Defense element delivered assets although its capability has not been demonstrated through flight testing. Potential also exists to reduce acquisition risks for several MDA efforts that are pursuing high-risk approaches that do not adhere to an approach which encourages accumulating more knowledge before program commitments are made and conducting testing before production is initiated. Specifically: Aegis Ballistic Missile Defense (BMD)—MDA demonstrated that it had matured the Aegis Standard Missile-3 (SM-3) Block IIA interceptor's design prior to starting production, a best practice. However, Aegis BMD is still addressing issues in the Aegis SM-3 Block IB interceptor revealed through prior test failures and is planning to award a multiyear procurement contract prior to flight testing the final design. If design changes are later needed, the cost, schedule, and performance impact could be significant. Ground-based Midcourse Defense (GMD) system—MDA reduced risk by adding a non-intercept flight test in fiscal year 2015 which allows the program to collect valuable data on redesigned components. However, GMD increased risk to the warfighter by prioritizing new interceptor production over fixing previously deployed interceptors and resolving known issues. In addition, MDA has decided to redesign the GMD kill vehicle prior to determining whether the effort is the most cost-effective solution. Unless MDA aligns its future efforts for Aegis and GMD with acquisition best practices, the agency's acquisition outcomes may be on a similar trajectory to that of prior years, incurring both cost growth and schedule delays. MDA is working to increase the extent to which the various elements of the BMDS are capable of working as one integrated system, but the agency reports limited information to Congress regarding its integration goals and its progress against these goals. Integration of the BMDS is important because it improves the system performance beyond the abilities of individual elements. Although MDA is not required to provide this information in its reports and briefings to Congress, congressional decision makers have limited insight into the planned BMD system-level capabilities, the supporting element-level upgrades, and how element-level efforts are synchronized to ensure timely delivery. What GAO Recommends GAO recommends that, in order to reduce acquisition risk, MDA align future efforts for Aegis BMD and GMD with GAO's knowledge-based acquisition practices. GAO also recommends that the Secretary of Defense direct MDA to report annually to Congress and DOD on the progress it has made in achieving an integrated capability. DOD concurred or partially concurred with all of our recommendations. GAO continues to believe the recommendations are valid as discussed in this report.

gao_GAO-16-498

gao_GAO-16-498_0

The program allows eligible nationals from the 38 VWP countries to travel to the United States for 90 days or less for business or pleasure without a visa and requires that VWP countries extend reciprocal privileges to U.S. citizens. All VWP Countries Have Entered into Required Agreements or Equivalents, but Not All Are Sharing Information through Two Agreements All 38 countries participating in the VWP have entered into the three types of required information-sharing agreements, or their equivalents, with the United States, but not all countries are sharing information through two of the agreements. Also, about a third of VWP countries had not yet shared criminal history information through PCSC agreements. The remaining VWP countries had not shared such information through the agreements. Previously, in accordance with U.S. law, DHS required VWP countries to enter into the arrangements and agreements but did not require the countries to implement them in order to participate in the program. However, contrary to standard program management practices, DHS did not establish time frames for instituting the new requirements. Time frames for working with VWP countries to institute the requirement to implement the HSPD-6 arrangements and PCSC agreements could help DHS ensure that countries meet all legal criteria for participating in the VWP—including the December 2015 law requiring them to fully implement their agreements—and could help DHS protect against threats to the United States or its citizens. Interests but Has Not Provided Required Reports to Congress on a Timely Basis Our analysis of a nongeneralizable sample of 12 internal VWPO evaluation reports on VWP countries found that VWPO assessed the effect of the countries’ participation in the program on U.S. law enforcement and security interests, including immigration enforcement, as required by federal law. However, almost one-quarter of DHS’s most recent reports to Congress regarding whether VWP countries should continue to participate in the program were submitted, or remained outstanding, 5 or more months after the dates when DHS had determined that, under U.S. law, they were due. As a result, Congress may lack timely information that it needs to conduct oversight of the VWP. U.S. law requires DHS to submit a written report to Congress for each VWP country not less than once every 2 years. DHS’s timeliness in reporting to Congress about VWP countries has improved since 2011, when we found that the department had not completed half of its recent VWP congressional reports in a timely manner and that many of the reports were more than a year past due. Recommendations for Executive Action To strengthen DHS’s ability to fulfill legislative requirements for the VWP and protect the security of the United States and its citizens, we are making the following two recommendations to the Secretary of Homeland Security: Specify time frames for working with VWP countries to institute the additional VWP security requirements, including the requirement that the countries fully implement agreements to share information about known or suspected terrorists through the countries’ HSPD-6 arrangements and PCSC agreements with the United States. Take steps to improve DHS’s timeliness in reporting to Congress, within the statutory time frame, the department’s determination of whether each VWP country should continue participating in the program and any effects of the country’s participation on U.S. law enforcement and security interests. To determine the extent to which DHS has evaluated VWP countries’ effect on U.S. security and law enforcement interests, including immigration enforcement, we selected and analyzed a nongeneralizable sample of 12 internal DHS reports evaluating VWP countries. We selected these reports on the basis of a number of factors chosen to identify countries where concerns might exist regarding foreign terrorist fighters traveling to the United States—for example, high estimated numbers of foreign terrorist fighters; border security and counterterrorism capacity concerns; a high number of ESTA denials; number of travelers to the United States, including the percentage that traveled under the VWP; relative population size (e.g., large or small); date of entry into the VWP (i.e., pre-2000, 2001-2010, 2010-the present); geographic variation (e.g., Western Europe, Eastern Europe, the Asia Pacific region); and status of VWP information-sharing agreements as characterized by U.S. agencies (i.e., whether agreements had been signed, were ratified, and were in force and whether sharing had occurred).

Why GAO Did This Study The Visa Waiver Program allows nationals from the 38 VWP countries to travel to the United States for tourism or business for up to 90 days without a visa. To help prevent terrorists and others who present a threat from travelling to the United States, DHS requires VWP countries to, among other things, enter into information-sharing agreements with the United States. In addition, U.S. law requires DHS to evaluate, at least once every 2 years, the effect of each VWP country's participation on U.S. law enforcement, security, and immigration enforcement interests; determine whether the country should continue in the program; and report on its determination to Congress. GAO was asked to review the VWP. In this report, GAO examines the extent to which VWP countries have implemented the required agreements. GAO also examines the extent to which DHS evaluated VWP countries and reported to Congress as required. GAO reviewed documents related to the VWP, including a sample of DHS reports. In addition, GAO interviewed U.S. officials in Washington, D.C., and U.S. and foreign officials in four VWP countries selected on the basis of factors such as high estimated numbers of foreign terrorist fighters. This is a public version of a classified report GAO issued in January 2016. What GAO Found All 38 countries participating in the Visa Waiver Program (VWP) have entered into required agreements, or their equivalents, to (1) report lost and stolen passports, (2) share identity information about known or suspected terrorists, and (3) share criminal history information. However, not all countries have shared information through the agreements. The Department of Homeland Security (DHS) reported that all VWP countries have reported passport information through the first agreement, but more than a third of VWP countries are not sharing terrorist identity information through the second agreement and more than a third of the countries have not yet shared criminal history information through the third agreement. While VWP countries may share information through other means, U.S. agency officials told GAO that information sharing through the agreements is essential for national security. In August 2015, DHS decided to require VWP countries to implement agreements to share terrorist identity and criminal history information; previously, VWP countries were required to enter into, but not to implement, these agreements. However, contrary to standard program management practices, DHS did not establish time frames for instituting the amended requirements. In December 2015, Congress passed a law requiring that VWP countries fully implement information-sharing agreements in order to participate in the program. Time frames for working with VWP countries to implement their agreements could help DHS enforce U.S. legal requirements and could strengthen DHS's ability to protect the United States and its citizens. GAO's analysis of a nongeneralizeable sample of 12 internal DHS reports, each evaluating one VWP country, found the reports assessed the effects of the countries' participation on U.S. law enforcement, security, and immigration enforcement interests, as required by U.S. law. Since 2011, when GAO last reviewed the VWP, DHS has improved its timeliness in reporting to Congress at least once every 2 years its determinations of whether countries should continue in the program. Nonetheless, as of October 31, 2015, GAO found that about a quarter of DHS's most recent VWP congressional reports were submitted, or remained outstanding, 5 or more months past the statutory deadlines (see figure). As a result, Congress may lack timely information needed to conduct oversight of the VWP and assess whether further modifications are necessary to prevent terrorists from exploiting the program. What GAO Recommends DHS should (1) specify time frames for working with VWP countries on the requirement to implement information-sharing agreements and (2) take steps to improve its timeliness in reporting to Congress on whether VWP countries should continue in the program. DHS concurred with the recommendations.

gao_GAO-09-257

gao_GAO-09-257_0

DOD, DOE, and State are responsible specifically for the overseas programs. 1.) To that end, in 2005, DNDO identified critical gaps in domestic efforts to prevent and detect radiological and nuclear smuggling, including, but not limited to: (1) land border areas between ports of entry into the United States, (2) aviation, and (3) small maritime craft. However, DNDO is still in the early stages of developing initiatives to address these vulnerabilities, and it has not clearly articulated a long-term plan for how to achieve its goal of closing these gaps by expanding radiological and nuclear detection capabilities in the time frames identified. Assuming no further schedule and technological delays, the radiation detection equipment to help secure the U.S. land border areas between ports of entry may not be fully in place until fiscal year 2012. According to DNDO officials, such efforts are being included in the strategy for the first time. CBP uses this sample to routinely test equipment. Small maritime vessels. To address one of the vulnerabilities, DNDO has been working since 2005 with multiple federal agencies, including the Coast Guard and CBP, as well as state and local agencies, to develop and expand capabilities to detect radiological and nuclear materials that could be smuggled on small maritime craft. For example, in Puget Sound, the majority of the law enforcement personnel and equipment available for radiological and nuclear detection belong to the 15 state, tribal, and local agencies participating in the pilot. However, DNDO has not established criteria for assessing the success of this pilot effort to help determine whether it should be expanded to other locations. DNDO Has Limited Role in Influencing U.S. Efforts to Combat Radiologi and Nuclear Smuggling Ov lthough DNDO has no authority over other federal agencies’ programs to A combat radiological and nuclear smuggling overseas, it has exchanged lessons learned with DOD, DOE, and State and provided technical expertise on radiological and nuclear detection equipment. Howeve r, most of DNDO’s efforts are modest in scope and reflect the fact that DOD, DOE, and State have well-established programs to combat nuclear smuggling overseas. DOE officials OE. DNDO is working with State on the Global Initiative to Combat S Nuclear Terrorism—which provides 75 countries with an opportunity t integrate resources and share information and expertise on nuclear o smuggling prevention, detection, and response—to develop model guidelines that other countries can use to establish their own nucle detection strategies. Amounts Budgeted for Programs to Combat Nuclear Smuggling Overseas and to Detect Nuclear Materials Primarily at U.S. Bo and Ports of Entry Were Nearly the Same According to our analysis of DNDO’s data, of the approximately $2.8 billion agencies budgeted in fiscal year 2007, about 39 percen t went to combat nuclear smuggling overseas, while 41 percent went to programs to detect and secure radiological and nuclear materials at and within U.S. borders; another 20 percent went to programs that cut across foreign an domestic activities. borders. DNDO’s Joint Annual Interagency Report Is Not Used for Analysis or to Focus Nuclear Detection Priorities In July 2007, Congress passed the “Implementing Recommendations of the 9/11 Commission Act of 2007,” which required DHS, DOD, DOE, the Department of Justice, and the Director of National Intelligence to coordinate the preparation of a Joint Annual Interagency Review of the Global Nuclear Detection Architecture. It also has made some progress in developing and supporting initiatives to close these gaps. In addition, the report identified some of DNDO’s accomplishments in specific areas, such as working with the other agencies to develop new radiation detection technologies. Finally, where appropriate, we have incorporated a variety of technical comments provided by DHS to better characterize DNDO’s role and accomplishments, and the challenges it faces in developing a global nuclear detection strategy to combat nuclear smuggling. GAO Comments 1. 2. 3. However, DNDO is responsible for enhancing and coordinating federal, state, and local efforts to combat nuclear smuggling domestically and overseas. Radiation Detection Programs Overseas Combating Nuclear Smuggling: Challenges Facing U.S. Efforts to Deploy Radiation Detection Equipment in Other Countries and in the United States. Homeland Security: Limited Progress in Deploying Radiation Detection Equipment at U.S.

Why GAO Did This Study In April 2005, the Domestic Nuclear Detection Office (DNDO) was established within the Department of Homeland Security (DHS) to enhance and coordinate federal, state, and local efforts to combat nuclear smuggling domestically and overseas. DNDO was directed to develop, in coordination with the departments of Defense (DOD), Energy (DOE), and State (State), a global strategy for nuclear detection--a system of radiation detection equipment and interdiction activities domestically and abroad. GAO was asked to examine (1) DNDO's progress in developing programs to address critical gaps in preventing nuclear smuggling domestically, (2) DNDO's role in supporting other agencies' efforts to combat nuclear smuggling overseas, and (3) the amount budgeted by DHS, DOD, DOE, and State for programs that constitute the global nuclear detection strategy. To do so, GAO analyzed agency documents; interviewed agency, state, and local officials; and visited select pilot program locations. What GAO Found DNDO has made some progress in strengthening radiation detection capabilities to address critical gaps and vulnerabilities in combating nuclear smuggling, which include the land border area between ports of entry into the United States, aviation, and small maritime vessels. However, DNDO is still in the early stages of program development, and has not clearly developed long term plans, with costs and time frames, for achieving its goal of closing these gaps by expanding radiological and nuclear detection capabilities. For example, DNDO and Customs and Border Protection have been collaborating on radiological and nuclear detection options to better secure the land borders between ports of entry. However, DNDO-sponsored field evaluations to test radiation detection equipment are still not complete and DNDO and CBP may not have all radiation detection equipment in place until 2012. In addition, DNDO is in the first year of a 3-year maritime pilot program, working with the Coast Guard and local law enforcement agencies in the Puget Sound, Washington, area to field test equipment and to develop radiological and nuclear screening procedures. However, DNDO has made little progress in (1) developing criteria for assessing the success of the pilot to help determine whether it should be expanded to other locations, and (2) resolving some of the challenges it faces in the pilot program, such as technological limitations of the detection equipment and sustaining current detection efforts. Although DNDO has no authority over other federal agencies' programs to combat radiological and nuclear smuggling overseas, it has worked with DOD, DOE, and State to provide subject matter expertise and exchange lessons learned on radiological and nuclear detection. However, most of DNDO's efforts are modest in scope, reflecting the fact that these agencies have well-established programs to combat nuclear smuggling. For example, DNDO has been working with State's Global Initiative to Combat Nuclear Terrorism to develop model guidelines that other nations can use to establish their own nuclear detection programs. According to DNDO, approximately $2.8 billion was budgeted by DHS, DOD, DOE, and State in fiscal year 2007 for programs included in the global strategy for nuclear detection. Of this amount, approximately $1.1 billion was budgeted for programs to combat nuclear smuggling overseas, $1.1 billion was budgeted for nuclear detection programs at the U.S. border and within the United States, and approximately $577 million was budgeted to fund cross-cutting activities, such as providing technical support to users of the radiation detection equipment. DNDO collected budget data and published them in the Joint Annual Interagency Review, an annual report required by Congress. DOD, DOE, and State officials told GAO that this information is used primarily as a status report of individual programs to combat nuclear smuggling. It is not used as a tool to help plan for or inform the future direction of the strategy or to help establish current or future priorities.

gao_HEHS-96-152

gao_HEHS-96-152_0

Recent Legislation On May 24, 1996, the Commissioner of Social Security sent draft legislation to the Congress. The legislation would authorize the Commissioner to enter into agreements with willing state and local “correctional facilities.” Under these agreements, the Commissioner would pay the facility for each report of a newly admitted inmate who has been a Social Security or SSI beneficiary but is not, as a prisoner, entitled to payments. Incidence of Prisoners Receiving SSI Is Widespread Overall, in the jail systems we reviewed, we detected a total of $5 million in erroneous SSI payments to prisoners. Erroneous payments to individual prisoners ranged from less than $100 to over $17,000. We determined that 136 prisoners received in excess of $5,000, including 19 who received more than $10,000. SSA Field Offices Are Not Obtaining Prisoner Information From County and Local Jails At the start of our review, we contacted 23 county and local jail systems to determine if they were regularly providing prisoner information to SSA. It has relied primarily on (1) the recipients or their representative payees to voluntarily report incarceration and (2) redeterminations. Recommendations In order to identify SSI recipients who have been erroneously paid in prior years, we recommend that the Commissioner of SSA direct SSA field offices to obtain information from county and local jails on former prisoners.

Why GAO Did This Study Pursuant to a congressional request, GAO determined whether the Social Security Administration (SSA) is making erroneous supplemental security income (SSI) payments to prisoners in county and local jail systems. What GAO Found GAO found that: (1) a total of $5 million has been erroneously paid to prisoners in local and county jail systems; (2) these erroneous payments are the result of SSA field offices' inability to obtain prisoner information on a regular basis, SSI recipients' failure to report their incarceration, and SSA inability to verify recipients' eligibility for SSI; (3) the Commissioner of Social Security has sent draft legislation to Congress that would authorize payment to each correctional facility reporting newly admitted SSI beneficiaries; (4) erroneous payments to individual prisoners range from $100 to more than $17,000; (5) 136 prisoners have received more than $5,000 in erroneous SSI payments and 19 prisoners have received more than $10,000 in erroneous SSI payments; and (6) SSA is requesting its field offices to obtain prisoner information from both county and local jail systems and emphasizing the importance of monitoring field offices' compliance with this procedure.

gao_GAO-09-404

gao_GAO-09-404_0

Three pandemic coordinators did not know whether their employees had been notified. Only One Agency Reported Testing Its Information Technology Capabilities to a Great Extent Many of the agencies’ pandemic influenza plans rely on social distancing strategies, primarily telework, to carry out the functions of the federal government in the event of a pandemic outbreak. However, BOP officials said that there are many situations in which close contact is inevitable between correctional workers and inmates and where personal protective equipment, such as gloves and masks, would not be feasible. Pandemic Planning for Air Traffic Controllers DOT and FAA pandemic plans and guidance provide the basis for the air traffic management facility pandemic plans. The Air Traffic Organization (ATO), FAA’s line of business responsible for the air traffic management services that air traffic controllers provide, had not yet directed facilities, such as its air route traffic control centers, to develop pandemic-specific plans or incorporate these pandemic plans into their all-hazards contingency plans. The survey results from the 24 CFO Act agency pandemic coordinators, as well as information from the case study agencies, indicate that a wide range of pandemic planning activities are under way and that all of the agencies are taking steps to some degree to protect their workers in the event of a pandemic. The HSC, as noted earlier, had requested that agencies certify that they were addressing the applicable elements of a pandemic checklist in their plans in late 2006 and again in late 2008. We have previously reported on the importance of internal control monitoring to assess the quality of performance over time. Without appropriately designed monitoring and reporting, the President and the Congress cannot fully assess the ability of the agencies to continue their operations while protecting federal employees in the event of a pandemic. Although the council had asked agencies to certify that they were addressing the applicable elements of a pandemic planning checklist, the process did not include any assessment of, or reporting on, agencies’ progress as was the case for the action items in the plan. Having DHS monitor and report on the status of agencies’ pandemic plans to protect the safety and health of their employees while maintaining essential operations could enhance agencies’ accountability for this responsibility and serve as an effective way of tracking agencies’ progress in making their pandemic plans operational by planning for the protection of their workforce. Recommendation for Executive Action To ensure agencies’ greater accountability in developing operational plans that will protect their workforce in the event of a pandemic, we recommend that the HSC request that the Secretary of Homeland Security monitor and report to the Executive Office of the President on the readiness of agencies to continue their operations while protecting their workers during an influenza pandemic. GAO staff who made major contributions to this report are listed in appendix V. Appendix I: Chief Financial Officers Act Agencies Appendix II: Objectives, Scope, and Methodology Our objectives were to determine (1) the extent to which federal agencies have reported plans under way to protect their workforce should an influenza pandemic occur and have reported identifying essential functions, other than first response, that cannot be accomplished remotely in the event of pandemic influenza; (2) the plans selected agencies have established for certain occupations performing essential functions other than first response; and (3) the opportunities to improve federal agencies’ planning enabling them to protect their workforce while maintaining their essential functions in the event of a pandemic. Our case studies included correctional workers from the Department of Justice’s Bureau of Prisons (BOP); production staff responsible for disbursing federal payments from the Department of the Treasury’s Financial Management Service (FMS); and air traffic controllers from the Department of Transportation’s Federal Aviation Administration (FAA).

Why GAO Did This Study Protecting federal workers essential to ensuring the continuity of the country's critical operations will involve new challenges in the event of a pandemic influenza outbreak. This requested report discusses (1) the extent to which agencies have made pandemic plans to protect workers who cannot work remotely and are not first responders, (2) the pandemic plans selected agencies have for certain occupations performing essential functions other than first response, and (3) the opportunities to improve agencies' workforce pandemic plans. GAO surveyed pandemic coordinators from 24 agencies and selected three case study occupations for review: federal correctional workers, staff disbursing Treasury checks, and air traffic controllers. What GAO Found The Homeland Security Council's (HSC) 2006 National Strategy for Pandemic Influenza Implementation Plan required federal agencies to develop operational pandemic plans, and responses from the pandemic coordinators of the 24 agencies GAO surveyed indicate that a wide range of pandemic planning activities are under way. However, the responses also showed that several agencies had yet to identify essential functions during a pandemic that cannot be performed remotely. In addition, although many of the agencies' pandemic plans rely on telework to carry out their functions, several agencies reported testing their information technology capability to little or no extent. GAO's three case study agencies also showed differences in the degree to which their individual facilities had operational pandemic plans. The Bureau of Prisons' correctional workers had only recently been required to develop pandemic plans for their correctional facilities. Nevertheless, the Bureau of Prisons has considerable experience limiting the spread of infectious disease within its correctional facilities and had also made arrangements for antiviral medications for a portion of its workers and inmates. The Department of the Treasury's Financial Management Service, which has production staff involved in disbursing federal payments such as Social Security checks, had pandemic plans for its four regional centers and had stockpiled personal protective equipment such as respirators, gloves, and hand sanitizers at the centers. Air traffic control management facilities, where air traffic controllers work, had not yet developed facility pandemic plans or incorporated pandemic plans into their all-hazards contingency plans. The Federal Aviation Administration had recently completed a study to determine the feasibility of the use of respirators by air traffic controllers and concluded that their long-term use during a pandemic appears to be impractical. There is no mechanism in place to monitor and report on agencies' workforce pandemic plans. Under the National Strategy for Pandemic Influenza Implementation Plan, the Department of Homeland Security (DHS) was required to monitor and report on the readiness of agencies to continue operations while protecting their employees during an influenza pandemic. The HSC, however, informed DHS in late 2006 or early 2007 that no specific reports on this were required to be submitted. Rather, the HSC requested that agencies certify to the council that they were addressing in their plans the applicable elements of a pandemic checklist in 2006 and again in 2008. This process did not include any assessment or reporting on the status of agency plans. Given agencies' uneven progress in developing their pandemic plans, monitoring and reporting would enhance agencies' accountability to protect their employees in the event of a pandemic. GAO has previously reported on the importance of internal control monitoring to assess the quality of performance over time. Without appropriately designed monitoring and reporting, the President and the Congress cannot fully assess the ability of the agencies to continue their operations while protecting their federal employees in the event of a pandemic.

gao_GAO-17-31

gao_GAO-17-31_0

In these plans, states are required to include career pathways strategies, which help job seekers obtain employment or education, and sector partnership strategies, which engage employers in the workforce system. States are also required to identify regions that will implement regional planning strategies to coordinate local services, among other activities. Career pathways strategies align and integrate education, job training, counseling, and support services to help individuals obtain postsecondary education credentials and employment in in-demand occupations. Selected States Reported Building on Experience, Increasing Stakeholder Involvement, and Using Multiple Sources of Labor Market Information as Approaches to Develop Flexible Plans The five states we selected as case studies reported using three main approaches to develop plans for implementing WIOA provisions related to career pathways, sector partnerships, and regional planning. All Five States Reported Building on Prior Experience to Expand Their Efforts under WIOA Each of the five selected states had experience with career pathways, sector partnerships, or both prior to the enactment of WIOA, and officials in these states told us that WIOA provided an opportunity to enhance the strategies they already had in place. Similarly, Pennsylvania’s state plan proposes building on over 10 years of experience with sector partnerships by increasing technical assistance and seeking additional funding for these partnerships, and exploring the development of a certification program for such partnerships. In Ohio, officials said they involved the state agency that oversees the Vocational Rehabilitation program and advocates for individuals with disabilities in planning efforts for the first time, which helped identify opportunities to better serve these individuals through the workforce system. For example, these officials said that including these stakeholders led them to train staff at all of their one-stop centers on disability awareness. Some Selected States Reported That Supplementing Traditional Labor Market Information Better Aligned Strategies with Employer Needs and Helped Define Regions Each of the five selected states consulted multiple sources of labor market information (LMI), which helped officials in some states better align career pathways strategies with employer needs, and helped officials in all five states draw regional boundaries and assign local workforce areas to those proposed regions. In Colorado, officials said one example is that when they asked employers to review projections that the state would experience a shortage of workers in the medical industry over the next 10 years, employers said they actually would need more workers over a shorter time period. Officials then used this information to focus their career pathways strategies on preparing individuals to fill the jobs projected to have worker shortages by identifying entry-level jobs that could eventually lead to these higher-level jobs. Selected States Reported Addressing Challenges in Designating Regions and Creating Incentives for Regional Collaboration Officials in the selected states reported facing challenges establishing regions, which they addressed by revising their regional boundaries or increasing the number of regions and by providing incentives for future regional collaboration or innovation. As a result, in three states officials told us they revised regional boundaries or increased the number of regions in response to feedback or appeals from local areas. Officials said that one local area requested it be assigned to a different region due to commuting patterns and its existing relationships with community colleges. In addition, a Kentucky official said the state is also using a private grant to fund regional efforts to develop career pathways and sector partnership strategies and ensure that they help job seekers obtain credentials that are valued by employers. Both departments provided technical comments, which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology We examined 1) the approaches selected states have taken to develop plans for implementing Workforce Innovation and Opportunity Act (WIOA) provisions related to career pathways, sector partnerships, and regional planning, and 2) the related planning challenges, if any, these states have encountered and how they have addressed them. To address both objectives, we reviewed relevant federal laws, regulations, and guidance; conducted case studies in five states; and interviewed federal Department of Labor (DOL) and Department of Education (Education) officials. To select states that had various levels of experience with these three strategies, we considered input from national associations and reviewed relevant reports. The information we obtained from state officials provides in-depth examples but is not generalizable to all states. Appendix II: Changes to Colorado’s Regions after the Department of Labor Reviewed the Initial State Plan According to Colorado state workforce board officials, they proposed dividing a large local workforce area that covers most of the state into four different regions to align with regional economies.

Why GAO Did This Study Enacted in 2014, WIOA aims, in part, to increase coordination among federal workforce development programs, which are administered primarily by DOL and Education. GAO was asked to review selected states' approaches for addressing certain WIOA provisions in their state workforce plans. GAO examined 1) approaches selected states have taken to develop plans for implementing career pathways, sector partnerships, and regional planning strategies, and 2) related planning challenges these states have encountered and how they have addressed them. GAO reviewed relevant federal laws, regulations, and guidance. GAO also conducted case studies in five states (California, Colorado, Kentucky, Ohio, and Pennsylvania). GAO selected these states based on input from national associations about their level of experience with career pathways, sector partnerships, and regional planning strategies, and GAO's review of relevant reports. In these states, GAO interviewed state workforce board officials and agency officials who were involved in developing the state plan. The information GAO obtained provides in-depth examples but is not generalizable to all states. GAO also reviewed state plans and other relevant documentation. In addition, GAO interviewed DOL and Education officials. What GAO Found Officials in five selected states reported using three main approaches to develop plans for implementing career pathways, sector partnerships, and regional planning strategies under the Workforce Innovation and Opportunity Act (WIOA). GAO selected states that had various levels of experience with these strategies. Specifically, as a condition of receiving funding, federal agencies require state plans under WIOA to include career pathways strategies, which align education, job training, and support services to help job seekers obtain employment. These plans must also include sector partnership strategies, which help employers in an industry address shared goals and hiring needs. In addition, states are required to establish regions, which may be made up of multiple local workforce areas. According to the Department of Labor (DOL), these regions are intended in part to align workforce activities with regional economies. To address these requirements, officials in each of the five states reported: Building on prior experience to enhance career pathways, sector partnerships, or both strategies . For example, Pennsylvania's state plan proposes building on over 10 years of experience with sector partnerships by increasing technical assistance for them and exploring the development of a certification program for these partnerships. Increasing the involvement of stakeholders, which uncovered ways to enhance services in most selected states . For example, Ohio officials said they involved the state agency that oversees employment services for individuals with disabilities and advocates for these individuals in planning efforts for the first time, which led them to provide training on disability awareness for staff at all local workforce centers. Using multiple sources of labor market information, which helped better align career pathways strategies with employer needs in some selected states . For example, Colorado officials said they asked employers to review projected worker shortages in the medical industry over the next 10 years, and employers said they would need more workers over a shorter period of time. Officials used this information to focus their career pathways strategies on preparing individuals to eventually fill the jobs that were projected to have worker shortages. Officials in four of the states GAO selected reported facing challenges establishing regions due to local areas' concerns, which they addressed by revising regional boundaries or increasing the number of regions and by providing incentives for regional collaboration or innovation. In three states, officials said they revised their regions in response to local concerns. For example, California officials said they redrew regional boundaries after a local area requested that it be assigned to a different region based on commuting patterns, among other factors. In addition, to encourage regional collaboration or innovation, officials in four states reported providing financial incentives. For example, a Kentucky official said the state is using a private grant to fund regional efforts to develop career pathways and sector partnership strategies. Additionally, DOL and Department of Education (Education) officials told us that they plan to support states with related technical assistance. What GAO Recommends GAO is not making recommendations in this report. DOL and Education provided technical comments on a draft of this report, which GAO incorporated as appropriate.

gao_GAO-12-439

gao_GAO-12-439_0

Background Individuals who buy coverage directly from a health insurer are often denied coverage due to a pre-existing condition. Rating restrictions prohibit insurers in the individual market from adjusting an individual’s health insurance premiums based on an individual’s health status. Hypertension, Mental Health Disorders, and Diabetes Were the Most Commonly Reported Conditions among Adults, with Average Annual Expenditures for Cancer Nearly $9,000 Hypertension was the most commonly reported medical condition among adults during 2009 that could result in a health insurer denying coverage, requiring higher-than-average premiums, or restricting coverage with an exclusionary rider. Our analysis of MEPS data found that about 33.2 million adults age 19-64 years old, or about 18 percent, reported hypertension in 2009. Individuals with hypertension reported average annual expenditures of $650 related to treating the condition, though the maximum expenditures reported were $61,540. Mental health disorders and diabetes were the second and third most commonly reported medical conditions by adults age 19-64 years old. Cancer was the condition with the highest average annual treatment expenditures, nearly $9,000 per adult. Between 36 and 122 Million Adults in 2009 Reported Pre-Existing Conditions, Depending on the Conditions Included in the Estimates Depending on the list of conditions used to define pre-existing conditions in each of five estimates, we found that between 36 million and 122 million adults (age 19-64) reported having medical conditions in 2009 that could result in a health insurer denying coverage, requiring higher- than-average premiums, or restricting coverage with an exclusionary rider (see fig. 1). This represents from 20 to 66 percent of the adult population, with a midpoint estimate of 32 percent. The differences among the estimates can be attributed to the number and type of conditions included in the different lists of pre-existing conditions. For example, estimate 1, which is the lowest estimate, includes adults reporting that they had ever been told they had 1 or more of 8 conditions. All 8 conditions were designated as priority conditions by AHRQ because of the conditions’ prevalence, expense, or relevance to policy.Estimate 3, the midpoint estimate, includes any individual who had one of over 60 conditions commonly used to determine eligibility in state high- risk pools. Estimate 5, the highest estimate, includes any individual reporting they had experienced any condition considered chronic during 2009. The list of chronic conditions used for this estimate included 417 separate conditions. Pre-Existing Conditions Are Common across States and Demographic Groups, but Prevalence Is Higher for Certain Populations The number of adults with pre-existing conditions varies by state, but most individuals with pre-existing conditions live in states that report not having insurance protections similar to PPACA. Compared to others, adults with pre-existing conditions spend thousands of dollars more annually on health care, but pre-existing conditions are common across all family income levels. We estimate that 88-89 percent of adults with pre-existing conditions live in states without insurance protections similar to the PPACA provisions, which will become effective in 2014. Appendix III shows the various state protections for individuals with pre-existing conditions in the 50 states and the District of Columbia. 3). 5). Agency Comments We provided a draft of this report to HHS for comment, but in its written response HHS said that it had no substantive or technical comments. Identifying the Most Common Medical Conditions and Estimating Treatment Costs To estimate the number of adults (age 19 to 64) with medical conditions that would cause an insurance company to restrict or deny insurance coverage and the average expenditures related to these conditions, we analyzed MEPS data on medical conditions and expenditures.

Why GAO Did This Study Individuals who buy coverage directly from a health insurer are often denied coverage due to a pre-existing condition during a process called medical underwriting, which assesses an applicant’s health status and other risk factors. Beginning January 1, 2014, the Patient Protection and Affordable Care Act (PPACA) prohibits health insurers in the individual market from denying coverage, increasing premiums, or restricting benefits because of a pre-existing condition. GAO was asked to examine the effect of this provision on adults who are 19-64 years old. GAO examined (1) the most common medical conditions that would cause an insurance company to restrict or deny insurance coverage for adults and the average annual costs associated with these conditions, (2) estimates of the number of adults with pre-existing conditions, and (3) the geographic and demographic profile of adults with pre-existing conditions. To address these three issues, GAO (1) identified four recent studies that narrowly or more broadly identified five lists of conditions likely to result in restricted coverage in the individual insurance market and (2) used the 2009 Medical Expenditure Panel Survey to generate five separate estimates, referred to as estimates 1 through 5. There is no commonly accepted list of pre-existing conditions because each insurer determines the conditions it will use for medical underwriting. We also contacted state insurance department officials in all 50 states and the District of Columbia to confirm information about state insurance protections that currently limit or prohibit medical underwriting. What GAO Found Hypertension was the most commonly reported medical condition among adults that could result in a health insurer denying coverage, requiring higher-than-average premiums, or restricting coverage. GAO’s analysis found that about 33.2 million adults age 19-64 years old, or about 18 percent, reported hypertension in 2009. Individuals with hypertension reported average annual expenditures related to treating the condition of $650, but maximum reported expenditures were $61,540. Mental health disorders and diabetes were the second and third most commonly reported conditions among adults. Cancer was the condition with the highest average annual treatment expenditures—about $9,000. Depending on the list of conditions used to define pre-existing conditions in each of the five estimates, GAO found that between 36 million and 122 million adults reported medical conditions that could result in a health insurer restricting coverage. This represents between 20 and 66 percent of the adult population, with a midpoint estimate of about 32 percent. The differences among the estimates can be attributed to the number and type of conditions included in the different lists of pre-existing conditions. For example, estimate 1, which is the lowest estimate, includes adults reporting that they had ever been told they had 1 or more of 8 conditions. Estimate 3, the midpoint estimate, includes any individual reporting they had one of over 60 conditions. Estimate 5, the highest estimate, includes any individual reporting a chronic condition in 2009. The estimated number of adults with pre-existing conditions varies by state, but most individuals, 88-89 percent depending on the list of pre-existing conditions included, live in states that do not report having insurance protections similar to those in PPACA. Compared to others, adults with pre-existing conditions spend thousands of dollars more annually on health care, but pre-existing conditions are common across all family income levels. The Department of Health and Human Services reviewed a draft of this report and had no substantive or technical comments.

gao_GAO-08-1178T

gao_GAO-08-1178T_0

Ports of Entry Is Likely to Cost About $3 Billion As we discuss in our report, our independent cost estimate suggested the total cost of DNDO’s program to equip U.S. ports of entry with radiation detection equipment will likely be about $3.1 billion, but could range between $2.6 billion and $3.8 billion. We based our estimate on the anticipated costs of DNDO implementing its 2006 project execution plan, the most recent official documentation of the radiation portal monitor project’s objectives, scope, schedule, costs, and funding requirements. DNDO’s estimate of $2.1 billion to deploy radiation detection equipment (submitted as part of its budget request to OMB in March 2008) is unreliable because it omits major project costs and relies on flawed methodology. (We used the 2006 project execution plan because it is the agency’s only official plan for ASP deployment.) DNDO’s estimate considers only 8 years rather than 10 years, the operational life expected by the manufacturer of sodium iodide crystals, a key ASP component. Furthermore, several official DNDO documents specify that multiple versions of ASPs will be deployed. We found that from 2008 to 2017 the total program cost for buying and deploying standard cargo portals would likely be about $2 billion, but could range from about $1.7 billion to $2.3 billion. Our report recommended that the Secretary of Homeland Security direct the Director of DNDO to (1) work with the Commissioner of CBP to update the project execution plan to guide the entire radiation detection program at U.S. ports of entry, (2) revise DNDO’s estimate of the program’s cost and ensure that the estimate considers all the costs associated with its project execution plan, and (3) communicate this revised estimate to the Congress so that it is fully apprised of the program’s scope and funding requirements. Preliminary Observations of Ongoing Testing of ASPs We are currently reviewing the ongoing 2008 ASP testing program and process leading to a decision by the Secretary of Homeland Security on certification of ASPs, and we plan to issue a final report in November 2008, prior to the Secretary’s decision on certification. Our work to date shows that DNDO has made progress in addressing a number of problems we identified in previous rounds of ASP testing. Despite these improvements, we have identified potential areas of concern based on our ongoing review. These criteria appear to set a low bar for improvement. Most notably, the criteria for primary screening require ASPs to perform at least as well as current generation equipment when special nuclear material or medical or industrial isotopes are present in cargo, but they do not specify an actual improvement. We recently requested additional information from DNDO about the rationale behind these criteria, particularly in light of seemingly stricter criteria found in other documents such as the ASP performance specification, which requires an 80 percent probability of detection, at a 95 percent confidence, of government-designated representative threat objects. While the performance testing at Nevada Test Site could provide a useful comparison of the performance of the ASPs and current generation equipment for both primary and secondary screening given the improvements described above, DNDO does not plan to complete “injection studies” that could provide additional data on ASP performance prior to ASP certification. The test schedule leading up to certification is highly compressed and is running at least 8 weeks behind the schedule DNDO provided to us in May 2008, leaving limited time for analysis and review of test results. Assuming that DHS addresses these concerns—for example, by clarifying the criteria for significant increase in operational effectiveness, performing the injection studies, and delaying a Secretarial decision on certification—the 2008 round of testing could provide an objective basis for comparing ASPs with current generation equipment. However, consistent with our March 2006 recommendation that DHS analyze the benefits and costs of deploying ASPs to determine whether any additional detection capability provided by ASPs is worth the cost, we would still question the replacement of current generation equipment with ASPs, particularly considering the gaps identified by DNDO in the global nuclear detection architecture—essentially, an integrated system of radiation detection equipment and interdiction activities to combat nuclear smuggling in foreign countries, at the U.S. border, and inside the United States.

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, to replace radiation detection equipment currently being used at ports of entry. ASPs may offer improvements over current generation portal monitors, particularly the potential to identify as well as detect radioactive material and thereby minimize both missed threats and false alarms. However, ASPs cost significantly more than current generation portal monitors, and testing of ASPs' capabilities needs to be more objective and rigorous. Due to concerns about ASPs' cost and performance, Congress has required that the Secretary of DHS certify that ASPs will provide a significant increase in operational effectiveness before obligating funds for full-scale ASP procurement. DHS is currently testing ASPs and anticipates a decision on certification in November 2008. This testimony addresses (1) the highlights of GAO's September 2008 report on the life cycle cost estimate to deploy ASPs (GAO-08-1108R), and (2) preliminary observations from ongoing work reviewing the current program of ASP testing. What GAO Found GAO's independent cost estimate suggested that from 2007 through 2017 the cost of DNDO's program to equip U.S. ports of entry with radiation detection equipment will likely be about $3.1 billion, but could range from $2.6 billion to $3.8 billion. GAO's estimate was based on the anticipated costs of DNDO implementing its 2006 project execution plan, the most recent official documentation of the program. DNDO's cost estimate of $2.1 billion to implement its project execution plan is unreliable because it omits major project costs, such as maintenance, and relies on a flawed methodology. For example, although the normal life expectancy of the standard cargo ASP is about 10 years, DNDO's estimate considers only 8 years. According to DNDO officials, the agency is now following a scaled-back ASP deployment strategy rather than the 2006 project execution plan, and a senior DNDO official told GAO the ASP deployment strategy could change dramatically depending on the outcome of ongoing testing. GAO's analysis indicated the cost to implement the scaled-back plans over the period 2008 through 2017 will be about $2 billion, but could range from $1.7 billion to $2.3 billion. However, frequent changes in DNDO's deployment strategy make it difficult to assess ASP program costs. GAO's recent report recommended that the Secretary of Homeland Security direct DNDO to update the project execution plan, revise its cost estimate, and communicate the revised estimate to the Congress so that it is fully apprised of the program's scope and funding requirements. DHS agreed with the recommendations. DNDO has made progress in addressing a number of problems GAO identified in previous rounds of ASP testing. However, GAO's ongoing review of the 2008 ASP testing program identified several potential areas of concern. First, the DHS criteria for "significant increase in operational effectiveness" appear to set a low bar for improvement--for example, by requiring ASPs to perform at least as well as current generation equipment when nuclear material is present in cargo but not specifying an actual improvement. GAO recently requested additional information from DNDO about the rationale behind these criteria, particularly in light of seemingly stricter criteria found in other documents. Second, the ASP certification schedule does not allow for completion of computer simulations that could provide additional data on ASP performance. While these computer simulations may have limitations, they also could provide useful data on ASP capabilities prior to the Secretary's decision on certification. Finally, the test schedule is highly compressed and is running at least 8 weeks behind, leaving limited time for analysis and review of test results. Assuming that DHS addresses these concerns, the 2008 round of testing could provide an objective basis for comparing ASPs with current generation equipment. However, GAO recommended in March 2006 that DHS analyze the benefits and costs of deploying ASPs to determine whether any additional detection capability provided by ASPs is worth the cost, and would still question the replacement of current generation equipment with ASPs until DNDO demonstrates that any additional increase in security would be worth the ASPs' much higher cost.

gao_GAO-09-511T

gao_GAO-09-511T_0

In 2008, SSA’s administrative budget for managing its operations was $11.1 billion. Measuring Performance SSA measures its performance in managing its workloads in various ways. SSA Has Faced Challenges with Disability Claims Backlogs and Field Office Service Delivery SSA has experienced increased backlogs and processing times associated with disability claims in recent years, as well as declines in measures of field office service. For example, the number of initial applications for DI and SSI benefits increased by 21 percent overall from fiscal years 1997 to 2006, contributing to the claims backlog and adding additional pressures to field office personnel who initially review these claims. Field Office Service Delivery Challenges In addition to disability claims backlogs and increased processing times, other aspects of SSA’s service delivery at field offices have declined in recent years. In fiscal year 2008, more than 3 million customers waited for over 1 hour to be served. From fiscal year 2005 to 2008, SSA experienced a 2.9 percent reduction in total employees and a 4.4 percent reduction in field office employees. Future Workload and Staffing Challenges SSA projects an increase in disability claims and other workloads over the coming years while at the same time anticipates the retirement of many experienced workers. SSA Continues to Take Steps to Address Disability Claims Backlogs and Service Delivery Challenges SSA continues to take steps to address disability claims backlogs and service delivery challenges, including efforts to improve its disability claims process, redistribute workloads across field offices, and develop a plan for addressing future growth in disability and retirement claims. Some of these efforts have been hampered by poor planning while others are too recent to evaluate. SSA’s efforts to reduce the hearings backlog may be supported by additional funds through recent legislation. As part of this review, we will (1) examine the plan’s potential to eliminate the hearings-level backlog, (2) determine the extent to which the plan includes components of sound planning, and (3) identify potential unintended effects of the plan on hearings level operations and other aspects of the disability process. Shifting Workloads and Maintaining Staffing Levels To address overall workloads and maintain customer service, SSA is shifting workloads to less busy offices. Specifically, SSA has focused on field office work it considers essential to its “core workloads,” such as processing new claims for Social Security benefits and issuing Social Security cards, while deferring other types of work including changes of address, changes to direct deposit information, and reviews to determine beneficiaries’ continuing eligibility for DI and SSI benefits. Reviews of continuing eligibility, however, are key activities in ensuring payment accuracy. However, in the past, SSA has encountered obstacles that delay hiring. While a consolidated planning document will better reflect the variety of planning efforts SSA has to improve its operations, it remains unclear how SSA will manage growing workloads with its current infrastructure of approximately 1,300 field offices, while minimizing the deferral of its workloads and declines in customer service. Over the years and across many fronts, SSA has taken numerous and varied steps to address its backlog of disability claims and its service delivery challenges, but often with mixed results or at the expense of some other key services. Social Security Administration: Service Delivery Plan Needed to Address Baby Boom Retirement Challenges (GAO-09-24, January 9, 2009). Social Security Disability: Better Planning, Management, and Evaluation Could Help Address Backlogs (GAO-08-40, December 7, 2007).

Why GAO Did This Study For years, the Social Security Administration (SSA) has experienced challenges managing a large disability workload and making timely decisions. In fiscal year 2006, SSA made about 3.7 million disability claims decisions, while over a million were awaiting a decision. Further, SSA has faced staffing challenges and difficulties managing its workloads at its network of approximately 1,300 field offices, where millions of people go to apply for disability and retirement benefits, to obtain Social Security cards, and for a host of other services. The Subcommittees on Income Security and Family Support, and on Social Security, House Committee on Ways and Means, asked GAO to address (1) key service delivery challenges facing SSA, particularly with respect to the backlog of disability claims, and (2) steps SSA is taking to address these challenges. This testimony is based primarily on reports assessing trends in disability claims processing and backlogs, steps SSA is taking to reduce the backlog, and other challenges SSA faces in meeting future service delivery needs. Certain information was updated to reflect recent legislative changes. What GAO Found In recent years, SSA has experienced a growing backlog of disability claims and deteriorating customer service at field offices. SSA's total backlog of disability claims doubled from 1997, reaching 576,000 in 2006, which has resulted in claimants waiting longer for final decisions. The backlog was particularly acute at the hearings level. SSA also experienced declines in field office service delivery, with average customer wait times in field offices increasing by 40 percent from 2002 to 2006, and over 3 million customers waiting more than 1 hour to be served in 2008. Two key factors likely contributed to the backlog and service delivery challenges: (1) staffing reductions or turnover of field office staff and key personnel involved in the disability claims process, and (2) increased workloads. In particular, initial applications for disability benefits grew by more than 20 percent over the past 10 years. SSA projects further increases in workloads as the baby boom generation reaches its disability-prone years and retires. SSA has taken steps to improve its disability claims process, reduce the claims backlog, and manage its field office workloads, but some efforts were hampered by poor planning and execution while others are too recent to evaluate. In 2006, SSA introduced a comprehensive set of reforms to improve the efficiency, accuracy and timeliness of the disability claims process. However, this initiative produced mixed results and many aspects were suspended to focus on the hearings backlog and other priorities. While final decisions regarding many aspects of this reform are pending, SSA outlined a new plan in 2007 that concentrates on clearing out backlogged cases at the hearings level. GAO is currently reviewing this plan as part of its ongoing work. To address overall workloads and maintain customer service, SSA has shifted workloads to less busy offices and deferred workloads it deemed lower priority. However, deferring certain workloads, such as continuing eligibility reviews, can result in beneficiaries receiving payments who no longer qualify. In response to a recent GAO recommendation, SSA agreed to develop a single service delivery plan to help it better manage future service delivery challenges. However, it remains unclear how SSA will address current and future challenges given its current service delivery infrastructure and resource constraints.

gao_GAO-04-526

gao_GAO-04-526_0

About 44 percent, or $2.8 trillion, was held by federal government accounts with investment authority, such as the Social Security trust funds, the Civil Service Retirement and Disability Trust Fund (Civil Service fund), the Exchange Stabilization Fund (ESF), and the Government Securities Investment Fund of the Federal Employees’ Retirement System (G-Fund). During that period, Treasury took several actions that were similar to those discussed later in this report. Redemption of obligations held by the Civil Service fund. For example, subsection 8348(e) of title 5, United States Code, authorizes the Secretary of the Treasury to invest surplus Civil Service funds in other interest-bearing obligations of the United States or obligations guaranteed as to both principal and interest by the United States, if the Secretary of the Treasury determines that the purchases are in the public interest. Objectives, Scope, and Methodology develop a chronology of significant events related to the 2003 debt evaluate the actions taken during the 2003 debt issuance suspension period in relation to the normal policies and procedures Treasury uses for investments and redemptions for major federal government accounts with investment authority, analyze the financial aspects of Treasury’s actions taken during the 2003 debt issuance suspension period and assess the legal basis of these actions, and analyze the impact of the policies and procedures Treasury used to manage the debt during the 2003 debt issuance suspension period. On May 27, 2003, when the debt ceiling was raised, Treasury fully invested the G-Fund’s receipts and on May 28, 2003, fully restored the lost interest on the G-Fund’s uninvested funds. The Secretary of the Treasury is not authorized by law to restore these losses. Civil Service Fund Losses Associated with Early Redemptions and Suspended Investments Restored When the Secretary of the Treasury redeems obligations earlier than normal or refrains from promptly investing Civil Service fund receipts because of debt ceiling limitations, the Secretary is required by subsection 8348(j)(3) of title 5, United States Code, to immediately restore, to the maximum extent practicable, the Civil Service fund’s obligation holdings to the proper balances when a debt issuance suspension period ends and to restore lost interest on the next normal interest payment date. Effects of Exchange of Debt Obligations between the Civil Service Fund, FFB, and Treasury During fiscal year 2003, Treasury initiated the following actions involving the Civil Service fund, FFB, and the Treasury general fund related to its efforts to (1) address FFB cash flow issues resulting from previously issued FFB 9(a) obligations to the Civil Service fund and (2) manage the amount of debt subject to the debt ceiling: On October 18, 2002, FFB redeemed prior to maturity $15 billion in FFB 9(a) obligations held by the Civil Service fund. In some cases, we have been able to quantify the gains or losses that have occurred or can be expected to occur that relate to the fiscal year 2003 transactions. However, in other cases, the information needed to understand the potential consequences of the actions taken on March 5 and June 30, 2003, will not be available for a number of years, and we are unable to determine the potential impacts at this time. Treasury lacks the statutory authority to restore such losses and has not developed the documented policies and procedures that can be used to minimize such losses in future exchanges between FFB and federal government accounts with investment authority, such as the Civil Service fund. For example, during the 1985 debt ceiling crisis, Treasury was granted the authority to restore the majority of interest losses associated with its actions to avoid exceeding the debt ceiling.

Why GAO Did This Study GAO is required to review the steps taken by the Department of the Treasury (Treasury) to avoid exceeding the debt ceiling during the 2003 debt issuance suspension period. The committee also directed GAO to determine whether all major accounts that were used for debt ceiling relief have been properly credited or reimbursed. Accordingly, GAO determined whether Treasury followed its normal investment and redemption policies and procedures for the major federal government accounts with investment authority, analyzed the financial aspects of actions Treasury took during this period, and analyzed the impact of policies and procedures Treasury used to manage the debt during the period. What GAO Found On February 20, 2003, Treasury determined that a debt issuance suspension period was in effect. A debt issuance suspension period is any period for which the Secretary of the Treasury has determined that obligations of the United States may not be issued without exceeding the debt ceiling. During this period, which lasted until May 27, 2003, the Secretary took actions related to the Government Securities Investment Fund of the Federal Employees' Retirement System (the G-Fund), the Civil Service Retirement and Disability Fund (the Civil Service fund), and the Exchange Stabilization Fund (ESF) to avoid exceeding the debt ceiling. Also, during fiscal year 2003, the Secretary initiated several actions involving the Civil Service Fund, FFB, and the Treasury general fund that related to Treasury's efforts to manage the amount of debt subject to the debt ceiling. The Secretary took other actions to avoid exceeding the debt ceiling, such as suspending the sales of State and Local Government Series Treasury obligations and recalling noninterest- bearing deposits held by commercial banks as compensation for banking services provided to Treasury. The actions taken, which were consistent with legal authorities provided to the Secretary and related to the G-Fund, the Civil Service fund, and ESF, initially resulted in interest losses to the G-Fund and ESF and principal and interest losses to the Civil Service fund. When the debt ceiling was increased to $7.4 trillion on May 27, 2003, the Secretary fully invested the G-Fund's investments and on May 28, 2003, fully restored the interest losses, as required by law. On June 30, 2003, the Secretary fully compensated the Civil Service fund for principal and interest losses, as required by law. The losses related to ESF could not be restored without special legislation. As a result, related ESF losses of $3.6 million were not restored. The actions initiated by Treasury in fiscal year 2003 that involved the early redemption of FFB debt obligations held by the Civil Service fund and exchanges of obligations among the Civil Service fund, FFB, and the Treasury general fund resulted in all three parties realizing gains or incurring losses. In some cases, GAO has been able to quantify the gains or losses that occurred as a result of these transactions. For example, according to FFB estimates, the Civil Service fund lost more than $1 billion in interest because of FFB's redemption of FFB obligations held by the Civil Service fund before their maturity date and unforeseen interest rate changes. In other cases, however, information needed to understand the potential consequences of these actions will not be available for a number of years. The Secretary currently lacks the statutory authority to restore such losses and has not developed documented policies and procedures that can be used to minimize such losses in future actions that may be taken by Treasury that involve FFB and an account with investment authority such as the Civil Service fund.

gao_HEHS-98-36

gao_HEHS-98-36_0

2). State Funds Target Poor Students in Most States Regardless of whether a state’s school finance system explicitly targeted poor students, the effect was to target more state funds to poor students in 43 of the 47 states in our analysis. Federal Funds Were More Targeted Than State Funds in Most States Federal funding was more targeted to poor students than state funding in 45 of the 47 states. On average, for every $1 of federal funding districts received for each student, they received an additional $4.73 in federal funding per poor student. In 37 states, high-poverty districts had less local funding per weighted pupil than low-poverty districts. A substantial number of poor students lived in these 21 states, however. Although targeting poor students helped reduce the total funding gap, the percentage of total education funding provided by state and federal governments was more important in reducing the gap. 3). State and Federal Funding Reduced or Eliminated Funding Gaps in Most States Combined state and federal funding had the effect of eliminating the funding gap in 16 of the 37 states where the local funding per weighted pupil was less in high- than low-poverty districts. Changes in State and Federal Targeting Since School Year 1991-92 We contacted state school finance officials in the 47 states to determine whether school finance systems had changed in ways that would affect the funding patterns of school year 1991-92. Scope and Methodology Overview The objectives of this study were to determine (1) the extent to which state and federal funding is targeted to poor students and (2) the effect of state and federal funding on the amount of funds available to high-poverty compared with low-poverty districts. V): the combined additional state and federal funding targeted to districts on the basis of the district’s number of poor students, the extent to which state funding is targeted to low tax base districts, combined state and federal funding as a percentage of total funding, the tax effort of low-poverty compared with high-poverty districts in a state, and the tax base of low-poverty compared with high-poverty districts in a state (as measured by income per pupil). At the high end, for every $1 of state aid provided for each student, New Hampshire provided an extra $6.69 per poor student; at the low end, four states (Montana, Nevada, New Mexico, and New York) provided no additional funding on the basis of the number of poor students. Louisiana’s targeting efforts and state share of total funding reduced the local funding gap between the lowest and highest poverty groups from about 15 percent to about 11 percent. Nevada’s state funding had the effect of providing districts with no additional funding per poor student for every $1 provided to each student.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed state and federal efforts to target poor students and the funding gaps between districts with high and low proportions of poor students, focusing on: (1) the extent to which state and federal funding is targeted to districts on the basis of the number of poor students; and (2) the effect of state and federal funding on the amount of funds available to high-poverty compared with low-poverty districts. What GAO Found GAO noted that: (1) school finance systems in over 90 percent of the states had the effect targeting more state funds to districts with large numbers of poor students in school year 1991-92, regardless of whether the system explicitly intended to do so; (2) the extent of the targeting varied widely, however; (3) New Hampshire targeted poor students the most, providing an additional $6.69 per poor student for every $1 provided to each student; school finance systems in four states (Montana, Nevada, New Mexico, and New York) had the effect of targeting no additional funding per poor student; (4) the national average was $.62 in additional state funding; (5) federal funding was more targeted than state funding, providing an average of $4.73 in additional federal funding per poor student nationwide for every $1 provided for each student; (6) because federal funds were more targeted than state funds, the combination of federal and state funding increased the average additional funding per poor student from $.62 to $1.10 nationwide for every $1 provided for each student; (7) reported changes in federal education programs and state school finance systems since school year 1991-92 would probably result in federal funds being more targeted than state funds; (8) state and federal funding reduced but did not eliminate the local funding gap between high- and low-poverty districts in many states; (9) high-poverty districts had less local funding per weighted pupil in 37 of the 47 states GAO analyzed; (10) when GAO added state and federal funds to local funds for GAO's analysis, only 21 states still had such funding gaps, and these gaps were smaller in each state; (11) nevertheless, about 64 percent of the nation's poor students live in these 21 states; (12) nationwide, total funding levels in low-poverty districts were about 15 percent more than those in high-poverty districts; (13) although targeting helped close the funding gap, the percentage of total funding from state and federal sources was more important in reducing the gap; and (14) gaps were smaller in states whose combined state and federal share of total funding was relatively high.

gao_GAO-09-579

gao_GAO-09-579_0

Thus, the government bears the risk of cost overruns. The act also specifies that DOD’s revised regulation shall ensure that the procedures applicable to T&M contracts for commercial services may be used only for the following: services procured for support of a commercial item; emergency repair services; any other commercial services only to the extent that the head of the agency approves a determination in writing by the contracting officer that the services to be acquired are commercial services; the offeror has submitted sufficient information to evaluate the price reasonableness of the services, if they are not offered and sold competitively in substantial quantities in the commercial marketplace; such services are commonly sold to the general public through use of T&M or labor-hour contracts; and the use of a T&M or labor-hour contract type is in the best interest of the government. From February 12, 2007, when the FAR change that allowed T&M acquisitions for commercial services was implemented, to December 31, 2008, $4.4 billion—less than 1 percent of total federal obligations for services—was reported. From February 2007 to December 2008, approximately $6 billion of the $47.6 billion in obligations coded as T&M contracts were through the GSA schedule program, in addition to the $3.1 billion that had been miscoded as having used FAR Part 12. Agencies reported purchasing a variety of commercial services using T&M contracts and orders during this time period. When we raised this confusion about contract type with officials from the Office of Federal Procurement Policy (OFPP), they agreed that clarification to the contracting community on what constitutes a fixed price versus a labor hour contract would be beneficial. Of the 149 contracts and orders in our sample, 82 were subject to this D&F requirement. We found a general lack of awareness of the Part 12 D&F requirement at the agencies in our review. We raised this issue with officials from OFPP, who were concerned at the general lack of compliance with this key safeguard pertaining to T&M contracts for commercial services. In some cases, contracting officers had incorrectly concluded that a D&F was not necessary. The D&F stated that the market research had identified an 8(a) company to provide the services. When awarding a contract for consulting services, a contracting officer from that office prepared a Part 12 D&F in the file, but it did not address all of the required elements. One contract file contained a partial Part 12 D&F, one contained a Part 16 D&F, which is less rigorous, and the third had no D&F. FAR Part 12 Safeguards Have Not Been Applied to GSA Schedules Program The vast majority of reported obligations for commercial services acquired through T&M contracts went through GSA’s schedules program from February 2007 to December 2008, but the FAR Part 12 D&F requirement has not been applied to the use of schedule contracts. . . it very difficult to ensure that prices are fair and reasonable.” GSA stated, however, that it “has exercised the agency’s authority over the Schedules program to create safeguards so as to mitigate the issues presented by T&M commercial services contracts” and that existing provisions in the GSA Acquisition Regulation (GSAR) and FAR Subpart 8.4 “satisfy any concerns about the use of T&M orders in the Schedules program.” It is not apparent to us that the regulations cited by GSA provide the government with risk mitigation equivalent to that provided by the Part 12 D&F requirement that T&M contracts will only be used when no other contract type is suitable. Further, we note that in section 8002(d) of FASA, as amended, there is no indication that the D&F requirement cannot apply to the purchase of any commercial item or service to include items or services available for purchase under the GSA schedules program. Recommendations for Executive Action To help ensure that the risks associated with T&M contracts are understood and that safeguards are followed and to ensure consistency in the use of T&M contracts regardless of which part of the FAR authorizes their use, we recommend that the Administrator of the Office of Federal Procurement Policy take the following three actions: amend FAR Subpart 16.6 (T&M, Labor-Hour and Letter Contracts) and FAR Subpart 16.2 (Fixed-Price Contracts) to make it clear that contracts with a fixed hourly rate and an estimated ceiling price are T&M or labor-hour contracts, not fixed-price-type contracts and amend FAR Subpart 8.4 (pertaining to the GSA schedules program) to explicitly require the same safeguards for commercial T&M services—i.e., the FAR Part 12 D&F and the justification for changes to the ceiling price—-that are required in FAR section 12.207. Appendix I: Scope and Methodology The objectives of this review were to assess (1) the extent to which agencies have reported using time-and-materials (T&M) contracts and General Services Administration (GSA) schedule T&M orders for commercial services and what they are acquiring using this contract type, (2) the degree to which agencies complied with the FAR Part 12 safeguards and (3) the applicability of these safeguards to the GSA schedule program.

Why GAO Did This Study Federal agencies have used time-and-materials (T&M) contracts to purchase billions of dollars in services. These contracts are risky because the government bears the risk of cost overruns. Effective February 2007, the Federal Acquisition Regulation (FAR) was revised, pursuant to a statutory change, to allow T&M contracts to be used to acquire commercial services under FAR Part 12, which uses a streamlined procurement process. Certain safeguards were included in FAR Part 12, including a requirement that contracting officers prepare a detailed determination and findings (D&F) that no other contract type is suitable. Based on a mandate to review the use of T&M contracts for commercial services, we assessed (1) agencies' reported use of such contracts and what they acquired, (2) the degree to which agencies complied with the new safeguards, and (3) the applicability of the safeguards to General Services Administration (GSA) schedule contracts. GAO reviewed contracts and orders at DOD and civilian agencies and spoke with contracting officials. What GAO Found From February 2007 to December 2008, agencies reported using commercial item procedures under FAR Part 12 to buy a variety of services through T&M contracts; examples include emergency nursing services on Indian reservations and gunsmith services for the FBI. The reported value of these contracts was $4.4 billion--or less than 1 percent of the total federal dollars obligated for services during this period. Of the $4.4 billion, $3.1 billion had gone through GSA's schedules program. GAO identified about another $6 billion, in addition to the $3.1 billion, in T&M obligations for commercial services under GSA schedule contracts. The reliability of the data reported as T&M contracts using FAR Part 12 procedures is questionable. Of the 149 contracts GAO reviewed, 28 had been miscoded as acquiring commercial services or as T&M contracts. Another issue that indicates a potential underreporting of T&M contracts for commercial services is that contracting officials across the agencies had the mistaken impression that the fixed labor rate in T&M contracts makes these contracts fixed-price. GAO raised this issue with officials from the Office of Federal Procurement Policy (OFPP)--chair of the federal acquisition regulatory council--who agreed that clarification on what constitutes a fixed-price versus labor hour contract would be beneficial. Further, GAO found that contracting officials had different opinions of what generally constitutes a commercial service. Some viewed services intended to meet a specific government requirement as noncommercial, while others viewed similar services as commercial. The Part 12 D&F was rarely used for the contracts GAO reviewed. The D&F must incorporate four elements, such as a description of the market research conducted. Of 82 contracts reviewed that were explicitly subject to this D&F requirement, only 5 included all the required elements, and 9 partially met the requirement. Of the remaining contracts, 33 had no D&F at all and 35 included the less stringent D&F applicable to noncommercial T&M services. GAO found a general lack of awareness of the Part 12 D&F requirement at the agencies in this review. Agencies' internal management and legal reviews generally did not detect the failure to include the D&F. OFPP officials expressed concern about the lack of compliance with the D&F requirement. The Part 12 D&F requirement has not been applied to the GSA schedules program. GSA officials stated that the GSA Administrator has discretion about what procedures apply to the program. In a legal opinion to GAO on whether the statutory changes regarding T&M contracts for commercial services apply to the schedules program, GSA concluded that the applicability is uncertain but stated that existing regulations satisfy concerns about use of T&M under the schedules program. GAO notes that these regulations do not require the same level of detailed analysis as does the Part 12 D&F. Further, there is no indication that the statutory requirements cannot apply to items or services under the schedules program. GSA officials said they are in the process of developing a Part 12 D&F for the entire schedules program, but it is not clear how this D&F will act as a safeguard when T&M orders are used.

gao_RCED-99-31

gao_RCED-99-31_0

In particular, the 1996 amendments required that EPA complete the development of most of the regulations that were in process at the time of reauthorization. The states are now required to develop statewide source water assessment programs that identify sources of public drinking water and show how the states will determine the sources’ vulnerability to contamination. EPA issued its final regulations on consumer confidence reports on August 19, 1998, and water systems are required to issue their first reports in October 1999. The states were required to (1) prepare, periodically update, and submit to the EPA Administrator a list of water systems with histories of significant noncompliance; (2) have the legal authorities and other means to ensure that new water systems have the technical, financial, and managerial capability to comply with drinking water regulations; (3) develop and implement a strategy for capacity development to assist existing systems in acquiring and maintaining capacity; (4) report to the EPA Administrator and the states’ governors on the success of their capacity development programs; and (5) certify the operators of community and nontransient noncommunity public water systems. Both EPA and the states have made considerable progress in launching the Drinking Water State Revolving Fund program. The 1996 amendments took important steps to address this problem; they substantially increased program grants for the states and provided access to revolving loan fund money to pay for program administration. Yet the statute also increased EPA’s and the states’ responsibilities in new ways. The net effect of these changes on the capacity of EPA and the states to implement the drinking water program has yet to be determined. Impact on the States’ Capacity EPA and state officials agree that the 1996 amendments have gone a long way toward putting the drinking water program on a sounder footing. Observations EPA and the states have made progress in meeting the initial requirements of the Safe Drinking Water Act Amendments of 1996. For their part, the states have made important strides in addressing one of their most important initial objectives—setting up their drinking water revolving funds—and are working to meet other initial requirements to prepare needed strategies and programs. Yet as noteworthy as these initial efforts have been, the most difficult challenge deals with the longer-term question of implementation—implementation of the new contaminant standards (including monitoring water systems’ compliance with the standards), the new requirements to augment consumer awareness, the provisions to ensure the viability of thousands of smaller water systems, and the numerous other requirements associated with this complex statute. Meeting these longer-term challenges will call for a sustained effort by EPA, the states, and the nation’s public water systems and will warrant continuous oversight by the Congress.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the: (1) status of efforts and progress made by the Environmental Protection Agency (EPA) and the states in addressing the Safe Drinking Water Act Amendments of 1996; and (2) future challenges facing EPA and the states in their efforts to do so. What GAO Found GAO noted that: (1) EPA and the states have made progress in meeting the initial requirements of the Safe Drinking Water Act Amendments of 1996; (2) EPA has met all of its statutory requirements to develop regulations and guidelines; (3) the states have made important strides in setting up their drinking water revolving funds and are working to meet other initial requirements to prepare needed strategies and programs; (4) yet, the most difficult challenge deals with the longer-term question of implementation-- implementation of the new contaminant standards (including monitoring water systems' compliance with the standards), the provisions to ensure the viability of thousands of smaller water systems, and the numerous other requirements associated with this complex statute; (5) meeting these longer-term challenges will call for a sustained effort by EPA, the states, and the nation's public water systems and will warrant continuous oversight by Congress; (6) EPA is working to meet the amendments' requirements to complete many contaminant standards that were in process at the time of reauthorization, including standards for arsenic and radon; (7) the states are presently working to develop statewide source water assessment programs that identify sources of public drinking water and show how a state will determine the vulnerability of the sources to contamination; (8) EPA issued regulations on August 19, 1998, that call on public water systems to issue annual consumer confidence reports; (9) the states have made progress in implementing the capacity development requirements for new systems and in reporting on existing systems with a history of noncompliance; (10) both EPA and the states have made progress in launching the Drinking Water State Revolving Fund program; (11) the 1996 amendments took important steps to address serious resource shortages affecting EPA's and the states' capacity to meet basic program needs--steps that EPA and state officials agree have helped to put the program on a sounder footing; (12) the statute substantially increased the state program grants and provided the states with access to money from the revolving fund for program administration; and (13) the net effect of these changes on their capacity to implement the drinking water program has yet to be determined.

gao_GAO-01-951

gao_GAO-01-951_0

Many persons, including grantee heirs, scholars, and legal experts, still claim that the United States failed to uphold the provisions of the Treaty of Guadalupe Hidalgo to protect the property of Mexican-Americans and their descendants. The Concept of Common Lands Defines Community Land Grants Land grant documents contain no direct reference to “community land grants” nor do Spanish and Mexican laws define or use this term. Scholars, land grant literature, and popular terminology use the phrase “community land grants” to denote land grants that set aside common lands for the use of the entire community. We adopted this broad definition for the purposes of this report. In 78 of the community land grants, the common lands formed part of the grant according to the grant documentation. From our review of grant documents, Spanish and Mexican law, New Mexican law, and grant literature, as well as interviews with grant heirs, scholars, legal experts, and others, common lands were part of the original grant in the following three instances: The grant document itself declares that part of the land be made available for communal use, using such terms as “common lands” or “pasturage and water in common.” We identified 29 grants that contain this or similar language. We analyzed land grants in New Mexico for which we could find evidence to identify community land grants. We also found that Spain issued land grants to indigenous pueblo cultures already resident in the colonial territories. Spanish Government in New Mexico.

What GAO Found Until the mid-nineteenth century, Spain made land grants to towns and individuals to promote development in the frontier lands that now constitute the American Southwest. Under the Treaty of Guadalupe Hidalgo, which ended the Mexican-American War, the United States agreed to recognize ownership of property of every kind in the ceded areas. Many people, including grantee heirs, scholars, and legal experts, still claim that the United States did not protect the property of Mexican-Americans and their descendants, particularly the common lands of community grants. Land grant documents contain no direct reference to "community land grants," nor do Spanish and Mexican laws define or use this term. GAO did find, however, that some grants refer to lands set aside for general communal use or for specific purposes, including hunting, pasture, wood gathering, or watering. Scholars, the land grant literature, and popular terminology commonly use the phrase "community land grants" to denote land grants that set aside common lands for the use of the entire community. GAO adopted this broad definition in determining which Spanish and Mexican land grants can be identified as community land grants. GAO identified 154 community land grants out of the total of 295 land grants in New Mexico. Seventy-eight were grants in which the shared lands formed part of the grant according to the original grant documentation; 53 were grants that scholars, grantee heirs, or others believed to contain common lands; and 23 were grants extended to the indigenous Pueblo cultures in New Mexico.

gao_GAO-03-178

gao_GAO-03-178_0

Fiscal year 2003 formula calculations used population estimates for 1998 through 2000 derived from the 2000 census. Most of Population Difference Between 1999 and 2000 Resulted from Correction of Errors That Occurred During 1990s The difference between the 2000 census count and the 1999 postcensal population estimate was 3.2 percent, which is large compared with the 1 percent average annual growth rate estimated over the preceding decade. Every state’s population growth was underestimated and needed correction, but the correction amounts varied widely. Correcting Errors in Population Estimates Accounted for Three- Quarters of the Difference Between 1999 to 2000 The 2000 census count of 281.4 million people as reported by the Census Bureau exceeded the 1999 postcensal population estimate by 8.7 million people, or 3.2 percent. The District of Columbia and Nevada had the largest percentage corrections in their population estimates, 10.2 percent and 7.5 percent, respectively. Twenty-eight states had a lower- than-average percentage difference, and 23 states had a greater-than- average percentage difference (see fig. 2000 Census Correction of Population Estimates Redistributes an Estimated $380 Million Among States for Four Formula Grant Programs The correction to the population estimates generally redistributes federal funding for the four programs we analyzed from the states with the smallest corrections to those having the largest. Most of the change in funding is concentrated in states with larger populations. A number of high-income states, including California and New York, are largely unaffected by the correction in their populations because their matching rates for the Medicaid, Foster Care, and Adoption Assistance programs cannot decrease below the minimum 50 percent matching rate. While the redistribution of funding in the four programs began to occur in fiscal year 2002, almost all of it occurs in fiscal year 2003, when the 2000 census data are used to determine federal matching rates in the three open-ended entitlement programs. We estimate that the funding for the 28 states that had below-average corrections in their populations decreases by a total of $380.3 million. Conversely, funding for the 23 states that had above- average corrections in their populations increases by an estimated $388.8 million (see table 4). Medicaid Accounts for Most of the Change in Program Funding Most of the change in funding resulting from the corrections in population estimates is the result of changes in Medicaid funding. Agency Comments We provided the Department of Commerce a draft of this report for comment. Analysis of Funding Changes for Foster Care and Adoption Assistance for Fiscal Year 2003 The effects on the funding for Foster Care and Adoption Assistance are similar to the effects on the Medicaid programs because these programs use the same matching rates. Social Services Block Grant The fiscal year 2002 formula allocations for the SSBG are based on the April 1, 2000, decennial census population counts.

Why GAO Did This Study In fiscal year 2000, about $283 billion in federal grant money was distributed to state and local governments by formula, about half of it through four formula grant programs--Medicaid, Foster Care Title IV-E, Adoption Assistance, and the Social Services Block Grant (SSBG). States receive money based in part on factors such as annual population estimates derived from the previous decennial census, which is conducted by the Department of Commerce, Bureau of the Census. GAO was asked to measure the effect that using the 2000 census data has on redistributing funding for federal formula grant programs. To do this, GAO analyzed the change in the U.S. and state populations between 1999 and 2000 that was the result of correcting prior population estimates and estimated for the four programs the extent of any redistribution of federal funding among states. What GAO Found The 2000 census count of 281.4 million people exceeded the 1999 population estimate by 8.7 million people, or 3.2 percent. Three-quarters of this 1-year population increase, 6.8 million people, was the result of correcting errors in population estimates over the preceding decade; the remaining portion of the increase, 1.9 million people, was the result of population growth from 1999 to 2000. Every state's population had been underestimated during the 1990s, but the extent varied, from the smallest correction in West Virginia--0.3 percent--to the largest in the District of Columbia--10.2 percent. Twenty-eight states had a correction below the national average of 2.5 percent, and 23 states had a correction above the national average. Correcting population estimates for the 2000 census redistributes among states about $380 million in federal grant funding for Medicaid, Foster Care, Adoption Assistance, and SSBG. Funding for the 28 states that had below-average corrections to their populations decreases by an estimated $380.3 million; funding for the 23 states that had above-average corrections increases by an estimated $388.8 million. Most of the change in funding is concentrated in states with larger populations. However, changes in funding are smaller in several large states because the matching rates for Medicaid, Foster Care, and Adoption Assistance are limited by statute--matching rates cannot fall below 50 percent. Some higher-income states would receive matching rates below 50 percent if not for this limitation. Most of the shift in funding occurs in fiscal year 2003 when federal matching rates for the Medicaid, Foster Care, and Adoption Assistance programs are based on population estimates derived from the 2000 census. A small portion of the shift occurred in fiscal year 2002 because that is when the SSBG began using the 2000 census counts. The Department of Commerce provided technical comments on a draft of this report.

gao_GAO-06-310

gao_GAO-06-310_0

Background IRS is currently replacing its antiquated tax administration and financial systems. This effort, as we have reported numerous times, has suffered delays and cost overruns due to a number of reasons, including inadequate development and management of requirements. BSM Lacks Policies and Procedures for Requirements Management BSM does not yet have adequate policies and procedures in place to guide its systems modernization projects in developing and managing requirements. In January 2006, the RMO developed a set of draft policies that address key areas of requirements development and management; these policies are to serve as interim guidance while the final policies and processes are being developed. At the conclusion of our review, the RMO provided us the draft policies and a high-level plan that includes milestones for completing these policies. Since critical BSM projects continue to be pursued and completion of the policies and procedures is not expected until March 2007, it is critical that BSM immediately implement the draft policies and continue to develop the final policies. This raises the risk of cost overruns, schedule delays, and reduction of functionality. BSM Projects Have Not Consistently Followed Disciplined Requirements Development and Management Practices As a result of the lack of policies and procedures, BSM projects varied in the extent to which they followed disciplined requirements practices. For example, all three projects had a change management process in place that requires approvals and impact assessments to be completed when changes are made to requirements. BSM project teams did not have a clear, consistent, and documented method of eliciting requirements for the projects. Therefore, projects need to manage these changes to requirements in a structured way. Conclusions BSM lacks policies and procedures to develop and manage requirements for their systems modernization projects. Scope and Methodology The objectives of our review were to assess (1) whether the Requirements Management Office (RMO) has established adequate requirements development and management policies and procedures and (2) whether the Business Systems Modernization (BSM) has effectively used requirements development and management practices for key systems development efforts. Project Descriptions The following are descriptions of the three projects we selected to review: Modernized e-File (MeF) release 3.2, Filing and Payment Compliance (F&PC) release 1.1, and Customer Account Data Engine (CADE) release 1.1.

Why GAO Did This Study The Internal Revenue Service's (IRS) effort to modernize its tax administrative and financial systems--Business Systems Modernization (BSM)--has suffered delays and cost overruns due to a number of factors, including inadequate development and management of requirements. Recognizing these deficiencies, IRS created a Requirements Management Office (RMO) to establish policies and procedures for managing requirements. GAO's objectives were to assess (1) whether the office has established adequate requirements development and management policies and procedures and (2) whether BSM has effectively used requirements development and management practices for key systems development efforts. What GAO Found BSM does not yet have adequate policies and procedures in place to guide its systems modernization projects in developing and managing requirements. In January 2006, the RMO developed a set of draft policies that address some key areas of requirements development and management; these policies are to serve as interim guidance while the final policies and processes are being developed. At the conclusion of GAO's review, the RMO also provided a high-level plan that includes milestones for completing these policies. Since critical BSM projects continue to be pursued and completion of the policies and procedures is not expected until March 2007, it is critical that BSM immediately implement the draft policies and continue to develop the final policies. As a result of the lack of policies and procedures, the one ongoing project--Modernized e-File (MeF)--and the two completed projects--Filing and Payment Compliance (F&PC) and Customer Account Data Engine (CADE)--GAO reviewed did not consistently follow disciplined practices for systems development and management. For example, all three projects had a key element of managing requirements--a change management process that requires approvals and impact assessments to be completed when there are changes to requirements--but none met all of the practices needed for effective requirements management. In addition, two projects did not have a clear, consistent way to elicit (gather) requirements, two did not have fully documented requirements, and two could not produce fully traceable requirements (i.e., the requirements could not be tracked through development and testing), which is another key element of managing requirements. Unless IRS takes the steps needed to develop and institutionalize disciplined requirements development and management processes and implements draft policies in the interim to cover key areas of requirements development and management, it will continue to face risks, including cost overruns, schedule delays, and performance shortfalls.

gao_GAO-07-1043T

gao_GAO-07-1043T_0

In addition, the BEACH Act required EPA to (1) complete studies on pathogens in coastal recreational waters and how they affect human health, including developing rapid methods of detecting pathogens by October 2003, and (2) publish new or revised water quality criteria by October 2005, to be reviewed and revised as necessary every 5 years thereafter. EPA Has Implemented Some But Not All of the BEACH Act Provisions EPA has made progress implementing the BEACH Act’s provisions but has missed statutory deadlines for two critical requirements. Of the nine actions required by the BEACH Act, EPA has taken action on the following seven: Propose water quality standards and criteria—The BEACH Act required each state with coastal recreation waters to incorporate EPA’s published criteria for pathogens or pathogen indicators, or criteria EPA considers equally protective of human health, into their state water quality standards by April 10, 2004. EPA initiated marine studies in Biloxi, Mississippi, in the summer of 2005, 3 years past the statutory deadline for beginning this work, but the work was interrupted by Hurricane Katrina. EPA initiated two additional marine water studies in the summer of 2007. However, since EPA has not completed the studies on which these criteria were to be based, this task has been delayed. EPA’s BEACH Grant Formula Does Not Adequately Reflect States’ Monitoring Needs While EPA distributed approximately $51 million in BEACH Act grants between 2001 and 2006 to the 35 eligible states and territories, its grant distribution formula does not adequately account for states’ widely varied beach monitoring needs. EPA determined that initially $2 million would be distributed equally to all eligible states to cover the base cost of developing water quality monitoring and notification programs. Consequently, we recommended that if current funding levels remain the same, that the agency should revise the formula for distributing BEACH Act grants to better reflect the states’ varied monitoring needs by reevaluating the formula factors to determine if the weight of the beach season factor should be reduced and if the weight of the other factors, such as beach use and beach miles should be increased. Experiences of the Great Lakes and Other Eligible States in Implementing BEACH Act Grants States’ use of BEACH Act grants to develop and implement beach monitoring and public notification programs has increased the number of beaches being monitored and the frequency of monitoring. However, states vary considerably in the frequency in which they monitor beaches, the monitoring methods used, and the means by which they notify the public of health risks. Specifically, 34 of the 35 eligible states have used BEACH Act grants to develop beach monitoring and public notification programs; and the remaining state, Alaska, is in the process of setting up its program. However, these programs have been implemented somewhat inconsistently by the states which could lead to inconsistent levels of public health protection at beaches in the United States. In addition, while the Great Lakes and other eligible states have been able to increase their understanding of the scope of contamination as a result of BEACH Act grants, the underlying causes of this contamination usually remain unresolved, primarily due to a lack of funding. Some Great Lakes states are monitoring their high-priority beaches almost daily, while other states monitor their high- priority beaches as little as one to two times per week. Public notification. For example, we determined that local officials at 67 percent of Great Lakes’ beaches did not know the sources of bacterial contamination causing water quality standards to be exceeded during the 2006 beach season and EPA officials confirmed that the primary source of contamination at beaches nationwide is reported by state officials as “unknown.” For example, because state and local officials in the Great Lakes states do not have enough information on the specific sources of contamination and generally lack funds for remediation, most of the sources of contamination at beaches have not been addressed. Local officials from these states indicated that they had taken actions to address the sources of contamination at an estimated 14 percent of the monitored beaches. EPA has concluded that BEACH Act grant funds generally may be used only for monitoring and notification purposes.

Why GAO Did This Study Waterborne pathogens can contaminate water and sand at beaches and threaten human health. Under the Beaches Environmental Assessment and Coastal Health (BEACH) Act, the Environmental Protection Agency (EPA) provides grants to states to develop water quality monitoring and public notification programs. This statement summarizes the key findings of GAO's May 2007 report, Great Lakes: EPA and the States Have Made Progress in Implementing the BEACH Act, but Additional Actions Could Improve Public Health Protection. In this report GAO assessed (1) the extent to which EPA has implemented the Act's provisions, (2) concerns about EPA's BEACH Act grant allocation formula, and (3) described the experiences of the Great Lakes states in developing and implementing beach monitoring and notification programs using their grant funds. What GAO Found EPA has taken steps to implement most BEACH Act provisions but has missed statutory deadlines for two critical requirements. While EPA has developed a national list of beaches and improved the uniformity of state water quality standards, it has not (1) completed the pathogen and human health studies required by 2003 or (2) published the new or revised water quality criteria for pathogens required by 2005. EPA stated that the required studies are ongoing, some studies were initiated in the summer of 2005, but the work was interrupted by Hurricane Katrina. EPA subsequently initiated two additional water studies in the summer of 2007. According to EPA, completion of the studies and development of the new criteria may take an additional 4 to 5 years. Further, although EPA has distributed approximately $51 million in BEACH Act grants from 2001-2006, the formula EPA uses to make the grants does not accurately reflect the monitoring needs of the states. This occurs because the formula emphasizes the length of the beach season more than the other factors in the formula--beach miles and beach use. These other factors vary widely among the states, can greatly influence the amount of monitoring a state needs to undertake, and can increase the public health risk. Thirty-four of the 35 eligible states have used BEACH Act grants to develop beach monitoring and public notification programs. Alaska is still in the process of developing its program. However, because state programs vary they may not provide consistent levels of public health protection nationwide. GAO found that the states' monitoring and notification programs varied considerably in the frequency with which beaches were monitored, the monitoring methods used, and how the public was notified of potential health risks. For example, some Great Lakes states monitor their high-priority beaches as little as one or two times per week, while others monitor their high-priority beaches daily. In addition, when local officials review similar water quality results, some may choose to only issue a health advisory while others may choose to close the beach. According to state and local officials, these inconsistencies are in part due to the lack of adequate funding for their beach monitoring and notification programs. The frequency of water quality monitoring has increased nationwide since passage of the Act, helping states and localities to identify the scope of contamination. However, in most cases, the underlying causes of contamination remain unknown. Some localities report that they do not have the funds to investigate the source of the contamination or take actions to mitigate the problem, and EPA has concluded that BEACH Act grants generally may not be used for these purposes. For example, local officials at 67 percent of Great Lakes beaches reported that, when results of water quality testing indicated contamination at levels exceeding the applicable standards during the 2006 beach season, they did not know the source of the contamination, and only 14 percent reported that they had taken actions to address the sources of contamination.

gao_PEMD-95-2

gao_PEMD-95-2_0

Background The Department of Energy’s multiprogram laboratories have had missions that are national in scope since their inception during World War II. These laboratories account for over half (59.3 percent) of the total national laboratory research budget that is spent on basic research. Table 3 shows that, across a 4-year period, most of the laboratories’ outputs were publications and reports. This finding was expected because reports and publications are the primary mechanisms for diffusion of R&D findings, and they are prepared at all stages of the R&D process. Laboratories’ Potential for Commercial Product Development We looked at three indicators of the national laboratories’ potential for commercial product development: (1) formation of cooperative research and development agreements; (2) proportion of R&D expenditures in critical technology areas; and (3) research program managers’ judgments about their programs’ outputs. Almost three-fourths of the laboratories’ effort was devoted to research in critical technology areas, but achievement of commercial application will not be known for several years. Applied Research: meet a recognized need. 1989 to 1992? 5. 8. We found that the 10 laboratories produced many more publications and reports (21,593) than they did outputs related to commercial product development (2,510) in fiscal year 1992. 9. 6-7.) GAO Comments 1. The purpose of this study was to examine the extent to which the national laboratories are engaged in basic and applied research or research related to commercial product development. We defined development as having “some type of product as the output goal (emphasis added),” but concluding “with a prototype rather than a usable good.” Further, we point out that “Additional time, research, and testing are required to convert the prototype to a weapon or commercially viable product.” The definitions of outputs related to commercial product development, including those for precompetitive commercial products and processes, state that these outputs tend (emphasis added) to arise from development work, but that “they will require a substantial additional investment before they are ready to market.” The conclusion, moreover, reiterates that these outputs are “precursors to marketable goods,” and that, for this reason, “it is too early to determine whether this activity will produce technologies with commercial uses.” We also examined the assumption that R&D is a linear process, with all commercial product-related outputs arising from development, and found that our data did not support it.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the extent that the Department of Energy's national laboratories are engaged in basic and applied research or in research related to commercial product development. What GAO Found GAO found that: (1) the laboratories devoted more than half of their research and development (R&D) funds to commercial product development during fiscal year (FY) 1992; (2) most of the laboratories' development work was devoted to defense research; (3) less than half of the laboratories' resources were spent on basic and applied research in FY 1992; (4) the laboratories produced 21,593 publications and reports and 2,510 products related to commercial product development in FY 1992; (5) publications and reports are the primary mechanism for disseminating the results of R&D activities; (6) although the potential exists for the laboratories to develop commercial product-related outputs, it is unknown whether the laboratories will achieve commercial applications for their outputs because they are still several years away from market entry; (7) cooperative R&D agreements between the laboratories and industry are increasing, with 17 agreements in FY 1989 and 196 agreements in FY 1992; (8) 74.1 percent of the laboratories' R&D expenditures in FY 1992 were for technologies identified as vital to national needs; (9) Congress has formed a panel to identify critical technologies essential for the nation's long-term security; and (10) over half of the commercial product development program managers expect clear evidence of the potential for commercial product development to emerge by FY 1997.

gao_GAO-12-878

gao_GAO-12-878_0

These practices include determining the best mix of decentralized and centralized training, considering government-wide reforms when identifying their training needs, and measuring employee satisfaction with training, among other things. However, many CHCOs reported that they are not implementing the leading practices that would allow them to make more cost-effective training decisions, such as having an agency-wide process for prioritizing training investments so that the most important training needs are addressed first and comparing the merits of different delivery mechanisms (e.g. OPM is piloting GEAR at five agencies—the Housing and Urban Development, the DOE, the Coast Guard, OPM and VA. Have Criteria for Determining Whether to Design Training and Development Programs in- house or to Obtain These Services from a Contractor or Other External Source Many of the CHCOs in our review reported having criteria for this purpose. However, according to OPM officials, they consider the data to be unreliable because they are incomplete. We believe that the current reliability of agency training investment data is unknown because OPM officials have not internally assessed improvements in the completeness of the data over the last 3 years or the quality of the data in the six years that agencies have been required to submit it. The TED group provides guidance and assistance to agencies in evaluating training programs through three of its guides and in workshops. OPM defines a business case as a method for projecting and documenting the benefits to be gained as a result of investing resources in a training intervention. TED officials agreed that they do not provide guidance or assistance to agencies on this practice. According to OPM officials, while HR University primarily serves the needs of the HR community, OPM would support using the HR University model to centralize training in other occupations or functional areas. Because many CHCOs do not have the information that they need from component or subagency leaders regarding the level of training investments and mechanisms for setting priorities agency-wide, their agencies are duplicating some internal training investments and missing opportunities to leverage economies of scale and share the most effective training across their agencies. Federal agencies and OPM also need reliable information on how much agencies spend on training and for what purposes, in order to make effective training investment decisions. However, at present many agencies independently purchase or develop training for the same government-wide mandated courses. Agency leaders and OPM recognize that this has led to redundant and inefficient federal training investments. In line with statutory and regulatory provisions on maintenance and reporting of training information, work with the CHCO Council to improve the reliability of agency training investment information by: ensuring that agencies are familiar with and follow guidance outlined in OPM’s Guide for the Collection and Management of Training Information regarding which training events should be documented as training and reported to OPM; developing policies to strengthen the utilization of Standard Form- 182 to document and report training costs; encouraging agencies through guidance and technical assistance, to develop policies that require consistent reporting of training data to their learning management systems; and encouraging each agency to assess its existing training information system(s) and identify whether it is providing complete and reliable data and, if not, to develop approaches to improve the system(s), in order to do so. OPM, DOI, and VA provided technical comments, which we incorporated into our report, as appropriate. DOE and DHS had no comments. OPM partially concurred with our fifth recommendation that it should, in collaboration with the CHCO and CLO Councils, identify the best existing courses that fulfill government-wide training requirements, such as mandatory Equal Employment Opportunity training, or training in common federal occupations, such as basic training in financial management, and offer them to all agencies through HR University or another appropriate platform to reduce costly and duplicative federal training investments. Accordingly, this review assesses the extent to which (1) chief human capital officers (CHCOs) of selected federal agencies have established processes to set and prioritize training investments that are aligned with leading practices; and (2) OPM’s guidance and assistance for developing training investment strategies align with these leading practices. In addition, based on the responses to the questionnaire and workforce size, we selected four agencies (the Department of Homeland Security, Department of Veterans Affairs, Department of the Interior, and Department of Energy) from which to obtain illustrative examples of how they implemented the training investment practices identified in the questionnaire.

Why GAO Did This Study OPM and agency CHCOs play an important role in ensuring that federal training dollars are invested effectively. GAO was asked to review the extent to which: (1) CHCOs of selected federal agencies have established processes to set and prioritize training investments that are aligned with leading practices; and (2) OPM’s guidance and assistance for developing training investment strategies align with these leading practices. GAO obtained information from 27 CHCOs on their training investment practices through a questionnaire, and selected four agencies—the Departments of Energy (DOE), Homeland Security (DHS), the Interior (DOI) and Veterans Affairs (VA)—to provide illustrative examples. We compared both CHCO and OPM practices to leading practices, identified through past GAO and expert studies. What GAO Found Many Chief Human Capital Officers (CHCOs) reported that they are implementing several leading practices important to making strategic decisions about training delivery, such as determining the best mix of decentralized and centralized training and considering government-wide reform when planning training. However, many CHCOs reported they are not implementing some practices that support making more cost-effective training investment decisions, such as prioritizing training so that the most important needs are met first and evaluating the benefits of training. In addition, many CHCOs do not have information from component or sub-agency leaders regarding their level of investments and priorities. Consequently, some agencies are duplicating internal across their agencies. Federal agencies also need reliable information on how much they spend on training and for what purposes. However, several CHCOs reported they do not completely and reliably track training costs agency-wide. The Office of Personnel Management (OPM) provides guidance and assistance to agencies on a number of the leading practices, such as evaluating the benefits of training in three of its guides and in workshops. In some practice areas thatare challenges to agencies, such as prioritization of investments and determining whether to design training and development programs in-house or obtain these services from a contractor, guidance is minimal or absent. OPM also requires agencies to submit training investment data and provides guidance on how to do so, but considers this data to be unreliable because it is incomplete. However, OPM officials have not internally assessed improvements in the completeness of the data over the last 3 years or the quality of the data in the six years that agencies have been required to submit it, and have only provided agencies with one summary of their data for correction. Agencies and OPM reported there are also opportunities for OPM to help agencies reduce duplicative investments across agencies. For example, currently, agencies independently purchase or develop training for the same mandated or common occupational training. Agency leaders and OPM recognize that this has led to redundant and inefficient federal training investments. According to OPM officials, HR University—which is a website currently administered by OPM to provide training for the HR community—has already resulted in a cost savings of $14.5 million as a result of sharing the best HR training government-wide. Several agencies and OPM officials reported that HR University could be expanded to provide mandatory mtraining and serve as a model for centralizing training in other occupations or functional areas, which could save millions more and help standardize training. What GAO Recommends GAO recommends, among other things, that OPM improve guidance and assistance to agencies inestablishing a process for setting and prioritizing training investments; improve the reliability of agency training investment information; and identify the best existing courses that fulfill governmentwide training requirements, and offer them to all agencies through the HR University or other appropriate platforms. OPM fully or partially concurred with four recommendations and did not concur with a portion of another. OPM, DOI and VA provided technical comments, which GAO incorporated, as appropriate, into the report. DOE and DHS had no comments.

gao_GGD-96-137

gao_GGD-96-137_0

Today, cognitive-behavioral approaches predominate. Given the widely varying levels of detail provided in the research reviews, we could not always determine whether reference was being made to a study of sex offender treatment or to other types of studies on sex offenders (e.g., recidivism studies on untreated offenders and studies attempting to identify sex offender characteristics). Research Reviews Identified Methodological Limitations in Evaluating Treatment Effectiveness The research reviews found that conclusions about the effectiveness of treatment programs were impeded by methodological weaknesses in the implementation and reporting of the studies. Studies reported recidivism rates after 3 months, 1 year, 4 years, 15 years, etc. Limitations in Recidivism Measures Used The validity of conclusions about treatment effectiveness is greatly affected by which data sources are used to measure outcome. As a result, it was difficult to determine whether, and by how much, sex offender treatment reduced recidivism. The most optimistic reviews concluded that some treatment programs showed promise for reducing deviant sexual behavior. However, nearly all reported that definitive conclusions could not be drawn because methodological weaknesses in the research made inferences about what works uncertain.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed research results on the effectiveness of sex offender treatment programs in reducing recidivism. What GAO Found GAO noted that: (1) all of the research studies reviewed provided qualitative and quantitative summaries of sex offender treatment programs; (2) nearly all of the studies identified limitations in evaluating treatment effectiveness; (3) there was no consensus as to which treatment reduces recidivism; (4) the cognitive-behavioral treatment approach works well in treating child molesters and exhibitionists, but treatment effectiveness depends on the type of offender and treatment setting; (5) researchers did not engage in comparison studies to measure recidivism rates because of the studies' inconsistent measurements; (6) the research reports lacked sufficient descriptive information on how program participants are selected and recidivism measured; and (7) definitive conclusions could not be drawn about deviant sexual behavior because certain methodological weaknesses have underscored inferences.

gao_T-GGD-99-93

gao_T-GGD-99-93_0

The agencies indicated in the preambles that they had conducted federalism assessments for 5 of these 11,414 rules—2 in 1996 and 3 in 1997. Of the 11,414 final rules that nonindependent agencies issued between April 1996 and December 1998, 117 of them were identified as “major” rules by the agencies and OMB. rules they issued between April 1996 and December 1998 (about 25 percent of the total). The agencies did not indicate that any other assessments had been prepared, and generally said that their rules did not have sufficient federalism implications to trigger the executive order’s requirements. Selected Agencies Have Taken Some Actions to Implement Executive Order 12612 Federal departments and agencies are primarily responsible for implementing Executive Order 12612. Section 6 of the executive order delineates the agencies’ responsibilities, requiring them to (1) designate an official to be responsible for ensuring implementation of the order, (2) have the designated official determine which proposed regulations have sufficient federalism implications to warrant the preparation of a federalism assessment, and (3) send each federalism assessment to OMB as a part of the regulatory review package sent pursuant to Executive Order 12866. Agencies Have Written Guidance and Designated Officials or Offices Each of the three agencies we visited—EPA, HHS, and USDA—has some kind of written guidance on how to implement Executive Order 12612. OMB Has Taken Little Specific Action to Ensure Implementation of Executive Order 12612 Section 7 of Executive Order 12612 indicates that, in implementing Executive Order 12866, OMB should, to the extent permitted by law, “take action to ensure that the policies of Executive departments and agencies are consistent with the principles, criteria, and requirements” of the federalism executive order. The fact that agencies have prepared federalism assessments for only 5 of the more than 11,000 final rules issued in recent years suggests that the agencies are not implementing the order as vigorously as they could.

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the implementation of Executive Order 12612 on federalism, focusing on: (1) how often the preambles to covered agencies' final rules issued between April 1, 1996, and December 31, 1998, mentioned Executive Order 12612 and how often they indicated that the agencies had conducted federalism assessments under the order; (2) what selected agencies have done to implement the requirements of Executive Order 12612; and (3) what the Office of Management and Budget (OMB) has done to oversee federal agencies' implementation of Executive Order 12612 in the rulemaking process. What GAO Found GAO noted that: (1) federal agencies covered by Executive Order 12612 mentioned the order in about 27 percent of the more than 11,000 final rules they issued between April 1996 and December 1998; (2) the agencies indicated, however, that they had prepared federalism assessments for only five of these rules; (3) of the 117 major rules issued by these agencies during this period, the preambles indicated that only 1 had a federalism assessment; (4) state and local representatives that GAO consulted said that certain federal agencies should have done assessments for more of these major rules; however, the agencies said that their rules did not have sufficient federalism implications to trigger the executive order's requirements; (5) all three of the federal agencies GAO visited had some kind of written guidance on the executive order and had designated an official or office responsible for ensuring its implementation; (6) however, the methods the agencies use to determine whether federalism assessments are needed varied among the agencies; and (7) OMB officials told GAO that they have taken no specific actions to implement the executive order, but said the order is considered along with other requirements as part of their regulatory review process under Executive Order 12866.

gao_RCED-95-77

gao_RCED-95-77_0

Moreover, records of actual and projections of future icebreaker use suggest that a fifth icebreaking vessel may not be needed. NSF justifies the proposed vessel on the grounds that (1) Arctic research needs are increasing and (2) the United States does not have a vessel dedicated to Arctic research. To determine icebreaker requirements, the 1990 study quantified operational and research mission needs. Coast Guard’s Shortcomings Not Compelling Justification for Vessel, Given Recent Improvements Many in the Arctic scientific community justify the acquisition of the proposed vessel on the grounds that the Coast Guard, because it has multiple missions, does not possess the desire, skills, or facilities to provide adequate support for Arctic science. In addition, according to the Coast Guard, the Healy will serve primarily as an Arctic research vessel. 3. The proposed vessel is an icebreaker. 4. The 1993 U.S. Arctic Research Plan mentions the Coast Guard role of supporting Arctic research and describes an Arctic research vessel (the proposed vessel) but does not demonstrate a need for the vessel.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the justification for the National Science Foundation's (NSF) proposed procurement of an icebreaking research vessel. What GAO Found GAO found that: (1) NSF and the scientific community have not demonstrated an increase in icebreaker requirements since 1990 to sufficiently justify a fifth icebreaker vessel; (2) the three icebreakers currently in operation are underutilized and no research cruises in the Arctic region are planned for 1995 or 1996; (3) a fourth icebreaker is being built for the Coast Guard to serve as an Arctic research vessel; and (4) many Arctic scientists justify the acquisition of the proposed vessel on the grounds that the Coast Guard is unwilling and unable to provide reliable support to Arctic research activities, although the Coast Guard's commitment to Arctic research has recently improved.

gao_GAO-17-668

gao_GAO-17-668_0

As noted previously, a 2016 Defense Science Board study defined the IoT as the set of Internet Protocol-addressable devices that interact with the physical environment, noting that “IoT devices typically contain elements for sensing, communications, computational processing, and actuation.” The study identified that IoT devices span a range of complexity and size, including thermostats, traffic lights, televisions, mini-drones, and full-size vehicles. DOD Has Identified Security Risks with IoT Devices and Begun to Examine Them in Its Assessments, but Operations Security Surveys Are Not Being Conducted DOD Has Identified Security Risks with IoT Devices and Developed Notional Threat Scenarios DOD documents and officials identified numerous security risks with IoT devices—as highlighted in table 1—that can generally be divided into risks with the devices themselves and risks with the devices’ operational implications. Many of these devices are insecure because of a limited ability to patch and upgrade devices, or due to poor security design. Some of these assessments can be used to identify and examine security risks related to IoT devices. This could potentially include information collected by IoT devices. DOD Has Policies and Guidance for IoT Devices DOD has issued a number of policies and guidance for IoT devices, including personal wearable fitness devices, portable electronic devices, smartphones, and infrastructure devices associated with industrial control systems. Policies and Guidance Do Not Address Certain DOD-acquired IoT Devices and Applications DOD officials told us that existing DOD policies and guidance do not clearly address security risks relating to smart televisions, and particularly smart televisions in unsecure areas. These risks include rogue applications and the unauthorized communication of data to third parties. Although the procedures were found to be effective, DOD does not have a policy that directs the implementation of these procedures throughout the department, according to DOD officials. DOD has made some progress in addressing the security challenges we identify in this report, including: (1) identifying a number of IoT security risks and notional threat scenarios; (2) examining security risks of IoT devices by conducting assessments on critical infrastructure; (3) developing policies and guidance for IoT devices; and (4) establishing ongoing efforts, such as research programs, to mitigate the security risks with these devices. The Principal Cyber Advisor, in coordination with the DOD Chief Information Officer; the Under Secretaries of Defense for Policy; Intelligence; Acquisition, Technology, and Logistics; and Personnel and Readiness; and with military service and agency stakeholders, should Review and assess existing departmental security policies and guidance—on cybersecurity, operations security, physical security, and information security—that may affect IoT devices; and Identify areas where new DOD policies and guidance may be needed—including for specific IoT devices, applications, or procedures—and where existing security policies and guidance can be updated to address IoT security concerns. DOD concurred with our recommendation to conduct operations security surveys that identify IoT security risks and protect DOD information and operations, in accordance with DOD guidance, or address operations security risks posed by IoT devices through other DOD risk assessments. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to (1) address the extent to which Department of Defense (DOD) has identified and assessed security risks related to Internet of Things (IoT) devices; (2) assess the extent to which DOD has developed policies and guidance related to IoT devices; and (3) describe other actions DOD has taken to address security risks related to IoT devices.

Why GAO Did This Study Congress included provisions in reports associated with two separate statutes for GAO to assess the IoT-associated security challenges faced by DOD. This report (1) addresses the extent to which DOD has identified and assessed security risks related to IoT devices, (2) assesses the extent to which DOD has developed policies and guidance related to IoT devices, and (3) describes other actions DOD has taken to address security risks related to IoT devices. GAO reviewed reports and interviewed DOD officials to identify risks and threats of IoT devices faced by DOD. GAO also interviewed DOD officials to identify risk assessments that may address IoT devices and examined their focus areas. GAO further reviewed current policies and guidance DOD uses for IoT devices and interviewed officials to identify any gaps in policies and guidance where security risks may not be addressed. What GAO Found The Internet of Things (IoT) is the set of Internet-capable devices, such as wearable fitness devices and smartphones, that interact with the physical environment and typically contain elements for sensing, communicating, processing, and actuating. Even as the IoT creates many benefits, it is important to acknowledge its emerging security implications. The Department of Defense (DOD) has identified numerous security risks with IoT devices and conducted some assessments that examined such security risks, such as infrastructure-related and intelligence assessments. Risks with IoT devices can generally be divided into risks with the devices themselves and risks with how they are used. For example, risks with the devices include limited encryption and a limited ability to patch or upgrade devices. Risks with how they are used—operational risks—include insider threats and unauthorized communication of information to third parties. DOD has developed IoT threat scenarios involving intelligence collection and the endangerment of senior DOD leadership—scenarios that incorporate IoT security risks (see figure). Although DOD has begun to examine security risks of IoT devices through its infrastructure-related and intelligence assessments, the department has not conducted required assessments related to the security of its operations. DOD has issued policies and guidance for IoT devices, including personal wearable fitness devices, portable electronic devices, smartphones, and infrastructure devices associated with industrial control systems. However, GAO found that these policies and guidance do not clearly address some security risks relating to IoT devices. First, current DOD policies and guidance are insufficient for certain DOD-acquired IoT devices, such as smart televisions in unsecure areas, and IOT device applications. Secondly, DOD policies and guidance on cybersecurity, operations security, information security, and physical security do not address IoT devices. Lastly, DOD does not have a policy directing its components to implement existing security procedures on industrial control systems—including IoT devices. Updates to DOD policies and guidance would likely enhance the safeguarding and securing of DOD information from IoT devices. This is an unclassified version of a sensitive report GAO issued in June 2017. What GAO Recommends GAO recommends that DOD (1) conduct operations security surveys that could address IoT security risks or address operations security risks posed by IoT devices through other DOD risk assessments; and (2) review and assess its security policies and guidance affecting IoT devices and identify areas, if any, where new DOD policies may be needed or where guidance should be updated. DOD reviewed a draft of this report and concurs with GAO's recommendations.

gao_NSIAD-99-59

gao_NSIAD-99-59_0

For example, it was unable to follow up on more than 1,200 toll-free calls received on DOD’s hot line with Gulf War veterans. Specifically, we were asked to (1) describe DOD’s progress in establishing an organization to address Gulf War illnesses issues and (2) evaluate the thoroughness of OSAGWI’s investigations into and reporting on veterans’ potential exposure to chemical or biological agents during the Gulf War. In addition, OSAGWI is actively engaged in identifying improvements DOD needs to make to protect servicemembers on contaminated battlefields. Our review confirmed that OSAGWI has made significant progress in establishing communications with veterans and others. OSAGWI also publishes a bimonthly newsletter called GulfNEWS. OSAGWI is presently working with DOD agencies to implement the lessons learned. OSAGWI generally followed its investigation methodology and used appropriate investigative procedures and techniques. Also, OSAGWI did not use DOD or Department of Veterans Affairs medical databases on Gulf War illnesses in conducting any of the six investigations. In three of the six case narratives, we found investigative problems such as failures to (1) follow up with appropriate individuals to confirm key evidence, (2) identify or ensure the validity of key physical evidence, (3) include important information, and (4) interview key witnesses. During our review, OSAGWI found a printout from one of these tests in its files, but it was negative for chemical agent. Despite the investigation’s shortcomings, we believe that OSAGWI’s assessment of “likely” exposure to a chemical warfare agent in this case is reasonable. Our Review of OSAGWI’s Investigation OSAGWI overlooked a key piece of evidence and did not report other significant information in its case narrative. However, this information was not reported in OSAGWI’s narrative. In our opinion, the lack of effective quality assurance policies and practices within OSAGWI contributed to the weaknesses we noted. Recommendations To ensure that OSAGWI’s case narratives contain all relevant facts, we recommend that the Secretary of Defense direct the Special Assistant for Gulf War Illnesses to revise the Marine Minefield Breaching, Exposure to Mustard Agent, and Al Jubayl, Saudi Arabia, case narratives to reflect the new and/or unreported information noted in our report and examine whether it should change its conclusion about the likelihood of the presence of chemical warfare agents in the Marine Minefield Breaching case from “unlikely” to “indeterminate” in light of the additional information now known about this case. To enhance the thoroughness of OSAGWI’s investigative and reporting practices, we recommend that the Secretary of Defense direct the Special Assistant for Gulf War Illnesses to use the DOD and VA Gulf War clinical databases to assist in designing the nature and scope of all OSAGWI investigations; include relevant medical information in its case narratives where it is needed to fully explain incidents of possible exposure to chemical agents or other potential causes of Gulf War illnesses; and ensure that its internal review procedures provide that (1) those reviewing an investigation and related report are independent of the team investigating the incident and (2) steps are in place that will lead the reviewers to thoroughly check that all relevant information obtained by the investigation teams has been included in the case narrative reports, all conclusions have been fully substantiated by the facts, and that all logical leads have been pursued.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the: (1) Department of Defense's (DOD) progress in establishing an organization to address Gulf War illnesses issues; and (2) thoroughness of DOD's Office of the Special Assistant for Gulf War Illnesses' (OSAGWI) investigations into and reporting on incidents of veterans' potential exposure to chemical or biological warfare agents during the Gulf War. What GAO Found GAO noted that: (1) DOD has made progress in carrying out its mandate to comprehensively address Gulf-War illnesses-related issues; (2) it has assisted veterans through its outreach program by clearing large backlogs of veterans' inquiries, using a toll-free hot line, setting up a Web site, and publishing a newsletter; (3) in addition, it has assisted veterans in obtaining medical examinations and other services at DOD and Department of Veterans Affairs (VA) facilities; (4) through the course of its investigations and other work, OSAGWI has identified needed improvements in DOD's equipment, policies, and procedures and has worked with various DOD agencies to implement changes designed to provide better protection to U.S. servicemembers on a contaminated battlefield; (5) OSAGWI generally applied appropriate investigative procedures and techniques in conducting its work; (6) however, GAO found that three of the six case narratives it reviewed contained weaknesses such as failures to follow up with appropriate individuals to confirm key evidence, to identify or ensure the validity of some evidence, to include some important information, and to interview some key witnesses; (7) in the remaining three cases, OSAGWI conducted its investigations without evidence of these weaknesses; (8) in all six cases, OSAGWI missed an opportunity to perform more complete investigations because it did not take advantage of potentially valuable sources of relevant information in DOD and VA clinical databases; (9) GAO does not know whether the investigatory and reporting weaknesses it found in its review of these six cases might also exist in the cases that OSAGWI later investigated; (10) despite these weaknesses, GAO agreed with OSAGWI's conclusions about the likelihood of the presence of chemical warfare agents in five of the six cases it reviewed; (11) the one exception involved a potential exposure of U.S. Marine Corps personnel to a chemical warfare agent during a minefield breaching operation; (12) OSAGWI concluded that exposure in this case was unlikely; (13) however, GAO found that OSAGWI had overlooked some information it had in its possession and also did not include all relevant information in its case narrative; (14) after reviewing the overlooked information and considering all relevant information OSAGWI had in its files, GAO believes that OSAGWI should reassess the likelihood of exposure in this case; and (15) GAO believes that the lack of effective quality assurance policies and practices in OSAGWI's investigating and reporting processes contributed to the weaknesses noted.

gao_GAO-17-614

gao_GAO-17-614_0

Background OPM collects and maintains personal information on millions of individuals, including sensitive security clearance data. OPM Has Made Progress in Improving Its Security to Prevent, Mitigate, and Respond to Breaches, but Efforts Are Not Complete Since the 2015 data breaches, OPM has made progress in improving its security to prevent, mitigate, and respond to data breaches involving sensitive personal records and background investigations information. For the remaining 8 recommendations, actions for 4 were still in progress. In addition, OPM’s policy requires that scheduled completion dates be included in the plan. OPM Made Progress Addressing Policies and Practices Associated with Key Government-wide Initiatives and Requirements, but Had Not Fully Implemented All of Them OMB’s CSIP and CAP Goals require federal agencies, including OPM, to take specific cybersecurity actions to bolster their system security. Until OPM completes implementation of the government-wide requirements, its systems are at greater risk than they need be. OPM had developed, documented, and implemented an information security policy for identifying its high value assets. Due to the sensitive nature of the recommendation and the actions needed to implement it, these details are provided in a separate report with limited distribution. For example, OPM’s information security handbook states that signatures related to malware should be updated. However, OPM did not consistently assess the security controls at defined frequencies for the three selected systems we reviewed. OPM’s Procedures for Overseeing the Security of its Contractor-Operated Systems Did Not Ensure that Controls Were Comprehensively Tested OPM has implemented elements of contractor oversight such as recording security assessment findings for contractor-operated systems in remediation plans, but it did not ensure that system security assessments involved comprehensive testing. The agency requires ISSOs to conduct quality assurance reviews that include reviewing security assessments of contractor-operated systems; however, its policy did not include detailed guidance on how the reviews are to be conducted. Therefore, the agency will have less assurance that the security controls for its contractor-operated systems are comprehensively assessed. The agency did not concur with our recommendation. Therefore, we believe the recommendation is warranted. In a separate report with limited distribution, we are making nine recommendations to the Acting Director to improve upon actions taken to implement the recommendations made by US-CERT and to further implement government-wide requirements. Effective implementation of these actions and our recommendations is essential to ensuring that sufficient security controls are in place and operating as intended. Appendix I: Objectives, Scope, and Methodology Our objectives were to evaluate the Office of Personnel Management’s (OPM) 1) actions since the 2015 data breaches to prevent, mitigate, and respond to data breaches involving sensitive personnel records and information; 2) information security policies and practices as they relate to selected government-wide initiatives and requirements; and 3) procedures for overseeing the security of OPM information maintained by contractors providing information technology services. To address the first objective, we assessed the extent to which the agency had implemented 19 recommendations that the United States Computer Emergency Response Team (US-CERT) made in its 2015 breach investigation report. We interviewed officials from OPM’s Office of the Chief Information Officer (OCIO) and reviewed the agency’s information security documentation, to include policies, plans, and procedures.

Why GAO Did This Study OPM collects and maintains personal data on millions of individuals, including data related to security clearance investigations. In 2015, OPM reported significant breaches of personal information that affected 21.5 million individuals. The Senate report accompanying the Financial Services and General Government Appropriations Act, 2016 included a provision for GAO to review information security at OPM. GAO evaluated OPM's (1) actions since the 2015 reported data breaches to prevent, mitigate, and respond to data breaches involving sensitive personnel records and information; (2) information security policies and practices for implementing selected government-wide initiatives and requirements; and (3) procedures for overseeing the security of OPM information maintained by contractors providing IT services. To do so, GAO examined policies, plans, and procedures and other documents; tested controls for selected systems; and interviewed officials. This is a public version of a sensitive report being issued concurrently. GAO omitted certain specific examples due to the sensitive nature of the information. What GAO Found Since the 2015 data breaches, the Office of Personnel Management (OPM) has taken actions to prevent, mitigate, and respond to data breaches involving sensitive personal and background investigation information, but actions are not complete. OPM implemented or made progress towards implementing 19 recommendations made by the United States Computer Emergency Readiness Team (US-CERT) to bolster OPM's information security practices and controls in the wake of the 2015 breaches. GAO determined that the agency completed actions for 11 of the recommendations and took actions for the remaining 8, with actions for 4 of these 8 requiring further improvement (see table). In addition, OPM did not consistently update completion dates for outstanding recommendations and did not validate corrective actions taken to ensure that the actions effectively addressed the recommendations. OPM also made progress in implementing information security policies and practices associated with selected government-wide initiatives and requirements. However, it did not fully implement all of the requirements. For example, OPM identified its high value assets, such as systems containing sensitive information that might be attractive to potential adversaries, but it did not encrypt stored data on one selected system and did not encrypt transmitted data on another. Until OPM completes implementation of government-wide requirements, its systems are at greater risk than they need be. OPM's procedures for overseeing the security of its contractor-operated systems did not ensure that controls were comprehensively tested. Although the agency has implemented elements of contractor oversight such as recording security assessment findings for contractor-operated systems in remediation plans, it did not ensure that system security assessments involved comprehensive testing. The agency requires information system security officers to conduct quality assurance reviews that include reviewing security assessments of contractor-operated systems; however, its policy did not include detailed guidance on how the reviews are to be conducted. Until such a procedure is clearly defined and documented, OPM will have less assurance that the security controls intended to protect OPM information maintained on contractor-operated systems are sufficiently implemented. What GAO Recommends GAO is making five recommendations to improve OPM's security. OPM concurred with four of these and partially concurred with the one on validating its corrective actions. GAO continues to believe that implementation of this recommendation is warranted. In GAO's limited distribution report, GAO made nine additional recommendations.

gao_GAO-10-53

gao_GAO-10-53_0

SBA’s Lender Risk Rating System Uses Some of the Same Types of Data That Federal Financial Regulators and Selected Lenders Rely on to Conduct Off-Site Monitoring SBA’s lender risk rating system uses some of the same types of data that federal financial regulators and selected lenders rely on for off-site monitoring. Like federal financial regulators and large lenders, SBA uses performance data and prospective measures to calculate lender risk ratings. Usefulness of SBA’s Lender Risk Rating System Has Been Limited because SBA Does Not Ensure That Its Contractor Follows Sound Validation Techniques The effectiveness of SBA’s lender risk rating system has been limited because the agency’s contractor does not follow sound validation practices. For example, changes in economic conditions and industry trends can affect model outcomes. SBA Does Not Use Its Own Data to Assess or Supplement the Contractor’s Validation of the Lender Risk Rating System In addition to not ensuring that its contractor follows sound validation techniques, SBA does not conduct its own analysis of data to supplement the contractor’s validation of the lender risk rating system. However, we found that SBA data could be useful for developing alternate measures of lender performance in order to independently validate the lender risk rating system’s results. Further, SBA could use its own data to develop alternate measures, such as currency rates, as performance benchmarks. SBA Does Not Use Lender Risk Ratings to Target Lenders for On-Site Review or Tailor the Scope of the Reviews SBA Has Used the Lender Risk Rating System to Conduct Some Off-Site Monitoring of Lenders and Their Portfolios SBA uses its lender risk rating system to conduct off-site monitoring of lenders and their portfolios. Lender Risk Ratings Do Not Inform the Scope of SBA’s On-Site Reviews, and Reviews Do Not Include an Assessment of Lenders’ Credit Decisions Unlike federal financial regulators, SBA does not rely on its lender risk ratings to help focus the scope of on-site reviews, and the reviews do not include an assessment of the lenders’ credit decisions. The federal financial regulators we interviewed rely on results from their off-site monitoring systems to identify which areas of a bank’s operations they should review more closely. They are then able to use the results to inform their off-site monitoring systems. According to SBA officials, the file reviews focus on compliance with SBA policy because it is not SBA’s role to evaluate lenders’ credit decisions. Because SBA officials choose not to rely on lender risk ratings to inform file reviews conducted during on-site reviews or assess lenders’ credit decisions during the reviews, the agency does not have the type of information related to the quality of the underwriting standards and practices of lenders that is necessary to understand the risks that banks pose to SBA’s portfolio. SBA did not require its contractor to ensure that personnel other than the staff who developed the model validated it or to routinely reassess the factors used in the system as part of its validations. As a result, we found that SBA conducted on-site reviews of only 3 percent of the lenders that the lender risk rating system identified as high risk in 2008. These revised policies and procedures could require staff to (1) use lender risk ratings to tailor the scope of file reviews performed during on-site reviews to areas that pose the greatest risk, (2) incorporate an assessment of lenders’ credit decisions in file reviews, and (3) use the results of expanded file reviews to identify information, such as emerging lending trends, that could be incorporated into its lender risk rating system. Key contributors to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology In this report, we examined (1) how the Small Business Administration’s (SBA) risk rating system compares with the off-site monitoring tools used by federal financial regulators and lenders and the system’s usefulness for predicting lender performance and (2) how SBA uses the lender risk rating system in its lender oversight activities. We interviewed officials from three federal financial regulators—the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (the Federal Reserve), and the Federal Deposit Insurance Corporation (FDIC)—five of the largest 7(a) lenders, and the five largest 504 lenders. We assessed SBA’s lender risk rating system against common industry standards and our internal control standards. Using SBA’s data, we undertook a number of evaluative steps to test the agency’s model.

Why GAO Did This Study The Small Business Administration (SBA) guarantees individual loans that lenders originate. The agency uses its Loan and Lender Monitoring System (L/LMS) to assess the individual risk of each loan, and SBA's contractor developed a lender risk rating system based on L/LMS data. However, questions have been raised about the extent to which SBA has used its lender risk rating system to improve its oversight of lenders. The Government Accountability Office (GAO) was asked to examine (1) how SBA's risk rating system compares with those used by federal financial regulators and lenders and the system's usefulness for predicting lender performance and (2) how SBA uses the lender risk rating system in its lender oversight activities. To meet these objectives, GAO reviewed SBA documents; interviewed officials from three federal financial regulators and 10 large SBA lenders; analyzed SBA loan data; and interviewed SBA officials. What GAO Found SBA's lender risk rating system uses some of the same types of information that federal financial regulators and selected large lenders use to conduct off-site monitoring, but its usefulness has been limited because SBA has not followed common industry standards when validating the system--that is, assessing the system's ability to accurately predict outcomes. Like the federal financial regulators and 10 large lenders GAO interviewed, SBA's contractor developed lender risk ratings based on loan performance data and prospective, or forward-looking, measures (such as credit scores). Using SBA data, GAO undertook a number of evaluative steps to test the lender risk rating system's predictive ability. GAO found that the system was generally successful in distinguishing between higher- and lower-risk lenders, but it better predicted the performance of larger lenders. However, the system's usefulness was limited because the contractor did not follow validation practices, such as independent and ongoing assessments of the system's processes and results, consistent with those recommended by federal financial regulators and GAO's internal control standards. For example, the agency did not require a party other than the one who developed the system to perform the validation, and SBA's contractor did not routinely reassess the factors used in the system as part of its validations. Further, SBA does not use its own data to develop alternate measures of lender performance that could be used to independently assess or supplement the risk ratings, citing resource constraints. Because SBA does not follow sound validation practices or use its own data to independently assess the risk ratings, the effectiveness of its lender risk rating system--the primary system SBA relies on to monitor and predict lender performance--may deteriorate as economic conditions and industry trends change over time. Although SBA's lender risk rating system has enabled the agency to conduct some off-site monitoring of lenders, the agency does not use the system to target lenders for on-site reviews or to inform the scope of the reviews. Unlike the Federal Deposit Insurance Corporation and the Federal Reserve, which use their off-site monitoring tools to target lenders for on-site reviews, SBA targets for review those lenders with the largest SBA-guaranteed loan portfolios. As a result of this approach, 97 percent of the lenders that SBA's risk rating system identified as high risk in 2008 were not reviewed. Further, GAO found that the scope of the on-site reviews that SBA performs is not informed by the lenders' risk ratings, and the reviews do not include an assessment of lenders' credit decisions. The federal financial regulators use the results of off-site monitoring to identify which areas of a bank's operations they should review more closely. Moreover, their reviews include an assessment of the quality of the lenders' credit decisions. Federal financial regulators are able to use review results to update their off-site monitoring systems with data on emerging lending trends. Regardless of the lender's risk rating, SBA relies on a standard on-site review form that includes an assessment of lenders' compliance with SBA policies and procedures but not an assessment of lenders' credit decisions. According to SBA officials, it is not the agency's role to assess lenders' credit decisions. Without targeting the most risky lenders for on-site reviews or gathering information related to lenders' credit decisions, SBA cannot effectively assess the risk posed by lenders or ensure that its lender risk rating system incorporates updated information on emerging lending trends.

gao_GAO-05-58

gao_GAO-05-58_0

Background In 1994, the Congress established NRCS and gave it jurisdiction over programs of the former Soil Conservation Service, as well as other USDA financial or technical assistance programs for natural resource conservation and rural development. NRCS’s Technical Assistance Cost Estimates Differ from Actual Costs Reported by NRCS NRCS tested cost estimates from its model for fiscal years 2002 and 2003 by comparing them with the agency’s actual costs. Our analysis of these comparisons shows that program-by-program estimates from NRCS’s model vary considerably from the agency’s actual costs as shown in table 1. These results do not meet the agency’s goal of achieving a difference of no more than 10 percent between estimates and reported costs. Of the remaining program estimates for 2003, six were higher than the actual cost data by 17 percent to 50 percent, and three were lower by 16 percent to 60 percent. Altogether, NRCS estimated its technical assistance costs for 10 Farm Bill conservation programs would be about $295 million, about 15 percent higher than its actual costs of about $257 million. According to NRCS officials, as a result, less technical assistance work was performed than the estimates reflected. Second, NRCS’s model includes costs for work performed by partners’ staff and paid for by the partner organizations, while the actual cost data generally contains only the costs for the work of NRCS’s staff. This is likely to have contributed to differences between estimates and actual costs reported by NRCS. Actual Timing of NRCS Work Differed from Timing Assumed When Estimating Costs In several instances, NRCS performed technical assistance work at different times than NRCS originally assumed it would when estimating technical assistance costs. Time Per Task Data Used in the Model Are Based on Inaccurate Assumptions NRCS’s estimates of technical assistance costs for 10 Farm Bill conservation programs are developed, in part, using time per task data that are based on inaccurate assumptions. First, estimating staff are to assume that all NRCS staff are fully trained. NRCS’s overall technical assistance cost estimate for 10 Farm Bill conservation programs for fiscal year 2003 is closer to the reported cost than the estimate was for fiscal year 2002, but too much variation is evident on a program-by-program basis in both years. Recommendations To improve the accuracy, and therefore the usefulness of NRCS’s program cost estimating, we are recommending that the Secretary of Agriculture direct the Chief of NRCS to take the following three actions: clearly identify nonreimbursable costs incurred by NRCS’s partners when presenting estimates of NRCS’s costs, ensuring that its model’s estimates are comparable with actual data; change the assumptions used for developing time per task data for the model so that they better reflect actual work conditions; and pilot test the feasibility of proposed changes in the development of the time per task data, including changes in development of typical work descriptions in several diverse areas of the country before proceeding with another nationwide workload analysis. Objectives, Scope, and Methodology Our objectives were to (1) review the technical assistance cost estimates produced by the model and (2) identify the sources of differences that may occur between the estimates and NRCS’s reported costs.

Why GAO Did This Study The U.S. Department of Agriculture's (USDA) Natural Resources Conservation Service (NRCS), working with state and local partners, provides landowners with technical assistance for multiple programs to plan and implement conservation measures that protect soil, water, and wildlife. For years, the Congress has been seeking detailed cost information on this assistance as it examined USDA budget requests. In part, because NRCS's financial system was not designed for estimating future budgets, in 1998 NRCS began developing additional cost data and a computer model for estimating future technical assistance costs. GAO was asked to (1) review NRCS's technical assistance cost estimates and (2) identify causes of any differences between the estimates and actual costs ultimately reported by NRCS. What GAO Found In 2003, NRCS started testing its computer model by comparing estimates of technical assistance costs for 10 Farm Bill conservation programs, with actual costs reported by NRCS. GAO's analysis of these comparisons shows that NRCS's model made estimates, program-by-program, which varied considerably from the agency's actual costs. For fiscal year 2003, for example, NRCS's model estimated that the technical assistance costs for seven Farm Bill programs would be higher by 9 to 50 percent, than NRCS ultimately incurred. For three other Farm Bill programs, the estimates were lower than the agency incurred by 16 to 60 percent. Most of the estimates fell outside NRCS's goal of estimating to within 10 percent of the agency's actual costs. In addition, for the 10 Farm Bill conservation programs combined, NRCS estimated its technical assistance costs at $295 million for fiscal year 2003, which is about 15 percent more than the $257 million that NRCS incurred. NRCS officials generally agreed with this analysis. GAO identified several reasons for the differences between the cost estimates and the actual costs. First, some of NRCS's technical assistance work was delayed, occurring later than NRCS assumed when it estimated its costs. This contributed to some overestimation by the model, according to NRCS officials. Second, NRCS's estimates include costs incurred by NRCS's partners. Such costs are generally not included in the actual costs reported by NRCS. Third, some data NRCS uses in its model are based on inaccurate assumptions. For example, when developing estimates about the time it takes NRCS staff to perform technical assistance tasks for use in the model, NRCS assumes, among other things, that its staff are fully trained and perform technical assistance work without interruption. These assumptions do not reflect actual workplace conditions and lead to underestimates. NRCS officials said they would reconsider these and other assumptions.

gao_GGD-98-92

gao_GGD-98-92_0

The hearing raised concerns about how VHA manages the performance of its senior executives and deals with instances of poor performance and misconduct, particularly at the 173 medical centers. Our purpose in interviewing the network directors was to (1) determine whether they believed some triad members were not performing to the Fully Successful level, despite what their official ratings showed; (2) identify what actions, if any, were taken to deal with the triad members whom they believed performed at a less than Fully Successful level; and (3) get their views on the effectiveness of the actions in dealing with the performance problems. The network directors’ avoidance of the formal system to address less than Fully Successful performance is not unique to them. Formal Performance Management System Was Not Used to Identify and Deal With Poor Performers Our review of VHA performance appraisal data revealed that none of the 477 management triad members received a rating lower than Fully Successful during the 1994 through 1996 rating periods. Use of Informal Means to Address Poor or Marginal Performance Carries Certain Risks for the Agency Because none of the triad members identified by the network directors or VHA headquarters as poor or marginal performers had been officially rated as such, it made it more difficult for the network directors and other VHA senior managers to take certain formal, performance-based actions against the employees in dealing with the performance problems. OPM’s strategic plan for fiscal years 1997 through 2002, in part, calls for continuing its efforts to improve the capacity of managers to identify and resolve performance problems effectively. The network directors frequently emphasized in the interviews that the reduction in the number of triad members for whom they were responsible significantly improved their ability to gauge and manage performance. Disciplinary Actions Taken for Misconduct, but Not Without Controversy VHA network directors did not consider misconduct to be a widespread problem within the management triad at VHA medical centers, although some directors acknowledged that instances of misconduct had occurred. OPM’s CPDF showed that during this same 3-year period, a total of 11 actions were taken governmentwide, excluding VA. Rather, VHA network directors responsible for triad members acknowledged that the record of performance ratings did not capture the actual performance of all triad members and that poor performers did exist. But the network directors collectively held that identifying poor performers in official ratings is not an effective way to address the problem because, among other things, it necessitates formal actions that they perceived to be time-consuming, burdensome, and unlikely to produce the desired results. Instead, the network directors believed they had effectively managed poor performance through informal means. Comments From the Office of Personnel Management Disposition of Misconduct Charges Involving VHA Management Triad Members—Fiscal Years 1994 Through 1996 Admonishment was issued citing poor judgment in installing camera.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed how the Department of Veterans Affairs (VA) manages the performance of senior executives and deals with instances of poor performance and misconduct, focusing on the Veterans Health Administration (VHA) during fiscal years 1994 through 1996. What GAO Found GAO noted that: (1) none of the 477 management triad members received a performance appraisal of less than Fully Successful during the 1994 through 1996 rating periods; (2) this is not much different from how other executive agencies rated their senior management employees during this 3-year period; (3) the network directors acknowledged in interviews, however, that the record of the performance appraisals did not capture the actual performance appraisals of all the management triad members; (4) most network directors agreed that they did not identify poor or marginal performance in the performance appraisals, because those ratings necessitate formal actions to remedy performance problems; (5) the network directors perceived those actions as time-consuming and distracting, burdensome, and unlikely to produce a desired result; (6) although network directors did not use formal means to deal with poor or marginal performers, they said they effectively managed poor performers through informal means; (7) the network directors' propensity to use informal, rather than formal, means to address performance problems is not unique to them; (8) prior studies by GAO and the Merit Systems Protection Board have shown that managers and supervisors governmentwide have avoided taking formal actions against less than satisfactory performers for some of the very same reasons cited by the network directors; (9) in its oversight capacity for federal personnel issues, the Office of Personnel Management (OPM) has included in its strategic plan for fiscal years 1997 through 2002 efforts to improve the capacity of managers to identify and resolve performance problems; (10) the network directors were nearly unanimous in asserting that the changes VHA recently implemented, particularly the reduction in the number of triad members for whom they were responsible, were helping them to identify and deal with poor performance; (11) most network directors did not consider misconduct to be a widespread problem among management triad officials, although they did acknowledge that instances of misconduct by employees at that level have occurred; (12) disciplinary actions that VHA took to address the misconduct created some controversy that primarily revolved around one sexual harassment case; and (13) the controversy about how VHA handled this case as well as concerns about the effectiveness of VA's zero tolerance policy for sexual harassment and employment discrimination led to administrative and statutory changes.

gao_GAO-02-37

gao_GAO-02-37_0

It replaced the individual entitlement to benefits under the 61-year-old AFDC program with TANF block grants to the states and emphasized the transitional nature of assistance and the importance of reducing welfare dependence through employment, among other goals. Furthermore, to avoid financial penalties, states must ensure that a steadily rising specified minimum percentage of adult recipients are participating in work or work-related activities each year. The proportion of TANF recipients with impairments is almost three times as high as adults with impairments in the U.S. non- TANF population. Counties Are Screening TANF Recipients for Impairments, but Recipients May Not Be Receiving Services to Move Them Toward Employment Most counties reported they are screening TANF recipients for impairments that may interfere with their ability to work, primarily through recipients’ self-disclosure, a method that may not ensure that all impairments, particularly “hidden” disabilities, are accurately identified.In addition, about half of the counties did not know the number of TANF recipients they had with impairments, with nearly all of these counties saying they did not have the information. About 63 percent of counties exempted TANF recipients with impairments from the work requirements. This in turn could help states and localities have the research and technical assistance needed to meet the needs of TANF recipients with impairments. Appendix I: Scope and Methodology To develop estimates of the number of Temporary Assistance for Needy Families (TANF) recipients with impairments, we analyzed the Census Bureau’s Survey of Income and Program Participation (SIPP) data for 1994, 1997, and 1999. Washington, D.C.: Department of Health and Human Services, Administration for Children and Families, undated.

What GAO Found The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 significantly changed federal welfare policy for low-income families with children. The act eliminated eligible families' legal entitlement to cash assistance and created Temporary Assistance for Needy Families (TANF) block grants to states. TANF emphasizes the importance of work and personal responsibility rather than dependence on government benefits. To avoid financial penalties, states must demonstrate yearly that an ever-increasing proportion of adults receiving TANF are working or engaged in work-related activities. The U.S. Census Bureau's Survey of Income and Program Participation (SIPP) for 1999 show that 44 percent of TANF recipients nationwide had physical or mental impairments, a proportion almost three times as high as among adults in the non-TANF population. The percentages of TANF adults with impairments from 1994 can not be compared to later years because Census broadened its measurements of mental impairments starting with its 1997 SIPP data. Most of the counties that screen for impairments rely on recipients' self-disclosure, which may not ensure the identification of some impairments that could interfere with employment. Still, for the one-third of counties that reported service data, fewer than half of recipients with impairments were receiving services to move them toward employment. This situation may be explained by the fact that many recipients were exempted from program work requirements. Federal agencies, including the Departments of Health and Human Services, Labor, and Education, have many research and technical assistance initiatives underway to facilitate state and local efforts to help TANF recipients with impairments become employed.

gao_GAO-02-292

gao_GAO-02-292_0

Along with establishing a single policy framework for federal management of information resources and formalizing the institutionalization of IRM as the approach governing information activities, the Paperwork Reduction Act (PRA) in 1980 created OIRA to develop IRM policy and oversee its implementation, at the same time giving it oversight responsibilities in specific IRM functional areas. Information Policy and Technology is responsible for information dissemination, records management, privacy and security, and IT. PRA requires OIRA to develop and maintain a governmentwide strategic IRM plan to describe how the federal government will apply information resources to improve agency and program performance. The CIO Council Strategic Plan Does Not Meet Most PRA Requirements While a robust document for the Council, this plan does not constitute an effective governmentwide strategic IRM plan under PRA. Statistical Policy. Records Management. Information Technology. However, OIRA has not established an effective governmentwide strategic IRM plan to accomplish this. We performed a rigorous analysis of the documents cited by OMB during our review and compared their contents against the requirements of the PRA. Our primary finding was that these documents do not, separately or collectively, meet the requirements for a governmentwide plan. Appendix I: Scope and Methodology To evaluate the adequacy of OIRA’s strategic planning efforts, we performed a content analysis of the Federal Chief Information Officers (CIO) Council Strategic Plan for fiscal years 2001–2002—which OIRA officials identified as the governmentwide IRM plan—and compared it with specific PRA requirements (S 3505 A).

Why GAO Did This Study Congress passed the Paperwork Reduction Act (PRA) to establish a single, overarching policy framework for the management of government information resources. The act established information resources management (IRM) as an approach governing the collection, dissemination, security, privacy, and management of information. The act also created the Office of Information and Regulatory Affairs (OIRA) to provide leadership, policy direction, and oversight of governmentwide IRM. It further required OIRA to develop and maintain a governmentwide strategic IRM plan and charged that office with responsibilities for general IRM policy and information technology. Although OIRA designated the Chief Information Officers Council's strategic plan for fiscal years 2001-2002 as the governmentwide strategic IRM plan required by the PRA, this does not constitute an effective and comprehensive strategic vision. OIRA has issued policy and implementing guidance, conducted oversight activities, and taken various steps in each of the functional areas. What GAO Found GAO found that the documents cited by OMB during it's review did not, separately or collectively, meet the requirements for a governmentwide strategic IRM plan established by PRA.

gao_RCED-98-220

gao_RCED-98-220_0

As agreed with their offices, this report describes (1) the human activities that may have contributed to the high turbidity levels in five western Oregon municipal watersheds during and following the storm and (2) the efforts under way by federal, state, local, and private land managers and owners, as well as the affected cities, to ensure safe drinking water during future storms. Human Activities Contribute to Increased Turbidity During Large Storms Our review of scientific studies and other documents showed that human activities—timber harvests and related roads as well as agricultural, industrial, urban, and residential development—can contribute to elevated sediment levels during large storms. These activities result in soil that is compacted, paved, covered, or cleared of most vegetation. Rain falling on such soil and surfaces can run off into streams, carrying with it eroded topsoil. This sediment from human activities in a municipal watershed, combined with the accelerated erosion that naturally occurs during storms, can shut down a municipality’s water treatment system, as occurred in Salem in February 1996. During storms, this increased runoff moves across barren or disturbed soil, eroding the soil, which can then be transported into streams. However, according to Salem officials, the type of fine sediments after the February 1996 flood would still result in a “treatment challenge” and “may result in finished water exceeding drinking water standards for turbidity.” Progress Has Been Made to Ensure Safe Drinking Water During Future Storms Ongoing federal and nonfederal efforts have made significant progress in (1) mitigating the impact of human activities on water quality and in ensuring safe drinking water for cities in the Willamette and Lower Columbia river basins and (2) involving more key landowners and other stakeholders in discussing, understanding, and addressing watershed issues and concerns and in implementing restoration plans. Nevertheless, some key landowners have not been included in coordination efforts, and many efforts could benefit from a better understanding of, and data on, the condition of the watersheds.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on five municipal watersheds in Oregon and the activities that contribute to increased turbidity during large storms, focusing on the: (1) human activities that may have contributed to the high turbidity levels in western Oregon's municipal watersheds in February 1996; and (2) efforts under way by federal, state, local, and private land managers and owners, as well as the affected cities, to ensure safe drinking water during future storms. What GAO Found GAO noted that: (1) human activities--timber harvests and related roads as well as agricultural, industrial, urban, and residential development--can contribute to elevated sediment levels during large storms; (2) these activities result in soil that is compacted, paved, covered, or cleared of most vegetation; (3) rain falling on compacted or cleared soil can run off into streams, carrying with it eroded topsoil; (4) in addition, rain falling on roofs, paved roads and parking lots, and other covered surfaces does not penetrate into the ground, thereby increasing the runoff that moves across barren or disturbed soil and eroding topsoil; (5) this sediment can then be transported into streams; (6) the sediment from human activities in a municipal watershed, combined with the accelerated erosion that naturally occurs during storms, can shut down a municipality's water treatment system, as occurred in Salem in February 1996; (7) ongoing federal and nonfederal efforts have made significant progress in: (a) mitigating the impact of human activities on water quality and ensuring safe drinking water to cities in the Willamette and Lower Columbia river basins; and (b) involving more key landowners and other stakeholders in discussing, understanding, and addressing watershed issues and concerns and in implementing restoration plans; and (8) nevertheless, some key landowners have not been included in coordination efforts, and many efforts could benefit from a better understanding of, and data on, the condition of the watersheds.

gao_GAO-15-707

gao_GAO-15-707_0

According to DHS’s U.S. Customs and Border Protection (CBP), the number of UAC from any country apprehended at the border climbed from nearly 28,000 in fiscal year 2012 to more than 42,000 in fiscal year 2013, and to more than 73,000 in fiscal year 2014. In addition to the problems within these countries, children who migrate illegally can encounter other risks during the journey to the United States. A number of U.S. agencies provide assistance to the three countries. The administration has taken several recent actions related to these three countries. Agencies Seek to Address Causes of UAC Migration with Recently Developed and Long-standing Efforts Agency officials noted that the rapid increase in UAC migration is due to several emergent factors, including the proliferation of human smugglers, or coyotes. Coyotes have also intentionally spread rumors and misinformation about U.S. immigration policy. As of June 2015, State officials in Washington D.C. reported that the program had received 1,385 applications. Agencies’ Long-standing Efforts Have Sought to Address Persistent Conditions Identified as Contributors to Migration USAID, State, IAF, and MCC programs have long sought to address what officials have identified as underlying causes of migration, including persistent development challenges such as violence, poverty, and lack of educational opportunities. However, officials also indicated that they have made some adjustments and plan to locate more programs in communities with high levels of UAC migration. Most Agencies Have Some Evaluation Processes in Place, but Weaknesses Exist in Performance Measurement of Some Antismuggling Programs Most agencies have established evaluation processes to measure progress of programs identified as addressing causes of UAC migration. DHS Has Not Established Performance Targets against Which to Assess Progress of Transnational Criminal Investigative Units DHS/ICE has established performance indicators for its TCIUs, but has not established performance targets, making it difficult to track progress of these units’ efforts to combat UAC smuggling and other priorities. DHS and State Have Not Consistently Evaluated Public Information Campaigns DHS has not evaluated all of its public information campaigns intended to reduce migration. Collecting this sort of performance information on media campaigns can provide value in informing future campaign efforts, particularly given DHS’s desire to launch a new campaign early next year. State concurred with the one recommendation directed to it, and DHS concurred with both recommendations. Specifically, State concurred with our recommendation that DHS and State integrate evaluation into their planning for, and implementation of, future public information campaigns intended to dissuade migration. Appendix I: Objectives, Scope, and Methodology In this report, we reviewed (1) U.S. assistance in El Salvador, Guatemala, and Honduras addressing agency-identified causes of unaccompanied alien child (UAC) migration, (2) how agencies have determined where to locate these assistance efforts, and (3) the extent to which agencies have developed processes to assess the effectiveness of programs seeking to address UAC migration. We also discussed these DHS data with U.S. agency officials in Washington and Central America. To address our third objective, on the extent to which agencies have developed performance indicators to assess the effectiveness of efforts responsive to UAC migration, we reviewed agency documents on programs agencies identified as responsive to the rapid increase in UAC migration, including agency evaluation policies and guides, country strategy and planning documents for each country, monitoring and evaluation plans, standard operating procedures, program evaluations, and quarterly and other progress reports. Appendix II: Agency Funding to El Salvador, Guatemala, and Honduras Overall and for Programs Addressing Child Migration Agencies we reviewed, including the U.S. Agency for International Development (USAID), the Departments of State (State) and Homeland Security ( DHS), and the Inter-American Foundation (IAF), identified overall funding allocated for programs in El Salvador, Guatemala, and Honduras for fiscal years 2012 through 2014 (see table 2).

Why GAO Did This Study According to DHS, the number of UAC apprehended at the U.S.-Mexican border climbed from nearly 28,000 in fiscal year 2012 to more than 73,000 in fiscal year 2014, with nearly three-fourths of those apprehended nationals of El Salvador, Guatemala, and Honduras. Children from these three countries face a host of challenges, such as extreme violence and persistent poverty. Those who migrate can encounter even more dangers, such as robbery and abuse. GAO was asked to review issues related to UAC migration. In February 2015, GAO reported on U.S. assistance to Central America addressing the rapid increase in UAC migration. This report reviews (1) U.S. assistance in El Salvador, Guatemala, and Honduras addressing agency-identified causes of UAC migration; (2) how agencies have determined where to locate these assistance efforts; and (3) the extent to which agencies have developed processes to assess the effectiveness of programs seeking to address UAC migration. GAO reviewed agency documents and interviewed officials in Washington, D.C., and in Central America. What GAO Found U.S. agencies have sought to address causes of unaccompanied alien child (UAC) migration through recent programs, such as information campaigns to deter migration, developed in response to the migration increase and other long-standing efforts. The recent migration increase was likely triggered, according to U.S. officials, by several emergent factors such as the increased presence and sophistication of human smugglers (known as coyotes) and confusion over U.S. immigration policy. Officials also noted that certain persistent conditions such as violence and poverty have worsened in certain countries. In addition to long-standing efforts, such as U.S. Agency for International Development (USAID) antipoverty programs, agencies have taken new actions. For example, Department of Homeland Security (DHS)-led investigative units have increasingly sought to disrupt human smuggling operations. U.S. agencies have located programs based on various factors, including long-term priorities such as targeting high-poverty and -crime areas, but have adjusted to locate more programs in high-migration communities. For example, Department of State (State) officials in Guatemala said they moved programs enhancing police anticrime capabilities into such communities, and USAID officials in El Salvador said they expanded to UAC-migration-affected locations. Most agencies have developed processes to assess the effectiveness of programs seeking to address UAC migration, but weaknesses exist in these processes for some antismuggling programs. For example, DHS has established performance measures, such as arrests, for units combating UAC smuggling, but has not established numeric or other types of targets for these measures, which would enable DHS to measure the units' progress. In addition, DHS and State have not always evaluated information campaigns intended to combat coyote misinformation. DHS launched its 2013 campaign in April, but launched its 2014 campaign in late June after migration levels peaked. Neither agency evaluated its 2014 campaign. Collecting performance information on media campaigns can have value in informing future campaign efforts to reduce child migration. What GAO Recommends GAO recommends that DHS and State take steps to integrate evaluations into their planning for, and implementation of, future information campaigns intended to deter migration. GAO also recommends that DHS establish performance targets for its investigative units. DHS concurred with both recommendations, and State concurred with the one recommendation directed to it.

gao_GAO-02-899T

gao_GAO-02-899T_0

Additionally, the proposal to establish the DHS calls for coordination with nonfederal entities and directs the new Secretary to reach out to state and local governments and the private sector in order to: ensure that adequate and integrated planning, training, and exercises occur, and that first responders have the equipment they need; coordinate and, as appropriate, consolidate the federal government’s communications systems relating to homeland security with state and local governments’ systems; direct and supervise federal grant programs for state and local emergency distribute or, as appropriate, coordinate the distribution of warnings and information to state and local government personnel, agencies and authorities, and the public. Many aspects of the proposed consolidation of homeland security programs are in line with previous recommendations and show promise towards reducing fragmentation and improving coordination. In addition, the recent proposal for establishing DHS should not be considered a substitute for, nor should it supplant, the timely issuance of a national homeland security strategy. In areas ranging from fire protection to drinking water to port security, the new threats are prompting a reassessment and shift of longstanding roles and responsibilities. However, proposed shifts in roles and responsibilities are being considered on a piecemeal and ad hoc basis without benefit of an overarching framework and criteria to guide this process. A national strategy could provide such guidance by more systematically identifying the unique capacities and resources of each level of government and matching them to the job at hand. The challenges posed by the new threats are prompting officials at all levels of government to rethink long standing divisions of responsibilities for such areas as fire services, local infrastructure protection and airport security. The nation does not have a baseline set of performance goals and measures upon which to assess and improve preparedness. Appropriate Tools Need to Be Selected For Providing Assistance The choice and design of the policy tools the federal government uses to engage and involve other levels of government and the private sector in enhancing homeland security will have important consequences for performance and accountability. The choice of policy tools will affect sustainability of efforts, accountability and flexibility, and targeting of resources. The DHS will clearly have a central role in the success of efforts to strengthen homeland security, but it is a role that will be made stronger within the context of a larger, more comprehensive and integrated national homeland security strategy.

What GAO Found The challenges posed by homeland security exceed the capacity and authority of any one level of government. Protecting the nation against these threats calls for a truly integrated approach, bringing together the resources of all levels of government. The proposed Department of Homeland Security will have a central role in efforts to enhance homeland security. The proposed consolidation of homeland security programs has the potential to reduce fragmentation, improve coordination, and clarify roles and responsibilities. However, formation of a department should not be considered a replacement for the timely issuance of a national homeland security strategy to guide implementation of the complex mission of the department. Appropriate roles and responsibilities within and between the government and private sector need to be clarified. New threats are prompting a reassessment and shifting of long-standing roles and responsibilities, but these shifts are being considered on a piecemeal and ad hoc basis without benefit of an overarching framework and criteria. A national strategy could provide guidance by more systematically identifying the unique capacities and resources at each level of government to enhance homeland security and by providing increased accountability within the intergovernmental system. The nation does not yet have performance goals and measures upon which to assess and improve preparedness and develop common criteria that can demonstrate success; promote accountability; and determine areas where resources are needed, such as improving communications and equipment interoperability. A careful choice of the most appropriate tools is critical to achieve and sustain national goals. The choice and design of policy tools, such as grants, regulations, and tax incentives, will enable all levels of government to target areas of highest risk and greatest need, promote shared responsibilities, and track and assess progress toward achieving preparedness goals.

gao_GAO-10-809

gao_GAO-10-809_0

Federal Agencies Largely Used Existing Contracts and Awarded Most New Recovery Act Contracts Competitively More than two-thirds of the $26 billion that had been obligated on federal contracts through May 2010 was obligated on contracts that were already in place before the Recovery Act. For these orders and modifications on existing contracts, the decisions to compete or not compete the underlying contracts predated the Recovery Act. Selected Federal Agencies Focused On Expediency When Choosing Contracting Approaches for Recovery Act Programs Officials at the five federal agencies we reviewed told us that they chose their contracting approaches to meet their primary goals of obligating Recovery Act funds quickly and to high-priority projects, which sometimes led to using noncompetitive contract actions. the funds were available for obligation. Whether an existing contract had been competed originally did not influence decisions about which of these contracts to use since the level of competition had already been established prior to the availability of Recovery Act funds. Federal Agencies Provided Varying Degrees of Additional Contract Oversight, While IGs Focused On Higher-Risk Areas The selected agencies added additional review processes, internal reporting, and coordination steps in response to the Recovery Act. Table 1 shows the funding provided to the IGs for the five selected agencies. These states rely on their pre-Recovery Act contracting policies and procedures, which generally require competition. However, the states do not routinely provide state-level oversight of contracts awarded at the local level, where a portion of the Recovery Act contracting occurs. State Audit Organizations Might Address Recovery Act Contracting through Annual Single Audits or Program Reviews Representatives of the five states’ audit organizations said that their organizations could provide additional oversight of the states’ use of Recovery Act contracting funds through the internal control work performed as part of the states’ Single Audits, and some explained that this could also be done through separate programmatic reviews if contracting is identified as an area of risk. First, the 8(a) program accounts for the overwhelming majority of noncompetitive contract obligations under the Recovery Act. We did not intend to suggest that there was anything improper with agencies deciding to use the 8(a) program in implementing the Recovery Act. We are sending copies of this report to interested congressional committees, as well as the Secretaries of the Departments of Defense, Energy, and Health and Human Services; the Administrators of the National Aeronautics and Space Administration and the Small Business Administration; and the Inspectors General of these five agencies. Approximately 17 percent of obligations on new contracts were obligated to noncompetitively awarded contracts, most of which were awarded to 8(a) program small businesses. Most of SBA’s Recovery Act contract dollars were obligated on contracts to 8(a) program businesses. Appendix III: Objectives, Scope, and Methodology Objectives GAO was asked to examine noncompetitive contract awards under the American Recovery and Reinvestment Act of 2009 (Recovery Act). In response, we conducted a review to determine: the extent to which Recovery Act funding was spent using contracts, and to what extent these contract actions were awarded noncompetitively; the reasons selected federal agencies awarded noncompetitive Recovery Act contracts; the extent of oversight of Recovery Act contract actions at selected federal agencies; and state officials’ level of insight into the use of noncompetitive Recovery Act contracts within selected states. To determine the level of insight that state officials have into the use of noncompetitive Recovery Act contracts, we selected five states— California, Colorado, Florida, New York, and Texas—based on the amount of Recovery Act funds reported as being awarded via contracts on www.Recovery.gov and our goal of providing information on a variety of geographic locations.

Why GAO Did This Study The American Recovery and Reinvestment Act of 2009 (Recovery Act), estimated to cost $862 billion over 10 years, is intended to stimulate the economy and create jobs. The Recovery Act provides funds to federal agencies and states, which in turn may award contracts to private companies and other entities to carry out the purposes of the Recovery Act. Contracts using Recovery Act funds are required to be awarded competitively to the maximum extent practicable. GAO was asked to examine the use and oversight of noncompetitive Recovery Act contracts at the federal and state levels. GAO determined (1) the extent that federal contracts were awarded noncompetitively; (2) the reasons five selected federal agencies (the Departments of Defense, Energy, and Health and Human Services; the National Aeronautics and Space Administration; and the Small Business Administration (SBA)) awarded noncompetitive contracts; (3) the oversight these agencies and their inspectors general (IG) provide for Recovery Act contracts; and (4) the level of insight five selected states (California, Colorado, Florida, New York, and Texas) have into the use of noncompetitive Recovery Act contracts. What GAO Found More than two-thirds of the $26 billion obligated for Recovery Act federal contract actions through May 2010 were on contracts that were in place before the enactment of the Recovery Act. Most of these contracts had been awarded competitively. For new federal Recovery Act contract actions, 89 percent of the dollars were obligated on competed actions. Most of the Recovery Act dollars obligated noncompetitively on new contract actions went to socially and economically disadvantaged small businesses under SBA's 8(a) program. The goal of using Recovery Act funds quickly on high-priority projects drove the contracting approaches of the five federal agencies, particularly their use of existing contracts. Officials explained that whether an existing contract had been competed originally did not influence the decision to use a pre-existing contract because the level of competition had been established before Recovery Act funds were available. The selected federal agencies implemented additional review processes, internal reporting, and coordination efforts for the Recovery Act. Some IGs for these agencies focused initial Recovery Act oversight on areas the IGs considered to be higher risk than contracts, such as grant programs. The IG reviews to date have not focused specifically on contracting, including the use of noncompetitive awards to 8(a) program businesses. GAO's recent reviews of the 8(a) program, however, have found that safeguards for ensuring that only eligible firms receive 8(a) contracts may not be working as intended. The five states varied on the type and amount of data routinely collected on noncompetitive Recovery Act contracts. GAO could not determine the full extent to which such contracts are being used. The states generally rely on their pre-Recovery Act contracting policies and procedures, which generally require competition. The states do not routinely provide state-level oversight of contracts awarded at the local level, where a portion of Recovery Act contracting occurs. Officials from the selected states' audit organizations said that if they were to address Recovery Act contracting issues, it could be done through the annual Single Audit or other reviews of programs that involve Recovery Act funds. What GAO Recommends GAO recommends that the five IGs assess the need to allocate audit resources to noncompetitive 8(a) Recovery Act contracts. The IGs concurred or had no comment.

gao_GAO-08-367

gao_GAO-08-367_0

Prior to this change, eligible taxpayers could claim up to the fair market value of the donated vehicle as a deduction on their tax returns. For any vehicles donated to a charity on January 1, 2005, or later with a claimed value that exceeds $500, taxpayers can only claim the lesser of the vehicle’s fair market value or gross proceeds of the sale as a deduction on their tax returns unless the charity’s intended use of the donated vehicle meets one of the three exceptions to the gross proceeds of the sale rule. Table 1 summarizes the amount donors could deduct for charitable contributions of vehicles before and after the changes in the rules for such deductions. Some Selected Charities Reported Substantial Declines in Number of Vehicles Donated and Had Varied Experiences with the Quality of Vehicles Donated For the 10 charities covered in our in-depth interviews, 6 reported decreases from 2003 to 2006 in the number of vehicles donated, 3 reported increases and 1 did not provide data, as shown in table 2; however, the latter reported that the number of donated vehicles is about the same since the rule change. Three of the 10 charities reported an increase in quality, 3 charities reported a decrease in quality, and 4 charities reported no change in the quality of vehicles donated. Some Selected Charities Reported Decreases in Vehicle Donation Revenue Officials we interviewed from 6 of the 10 charities reported a decrease in vehicle donation revenue from 2003 to 2006, 3 reported an increase, and 1 did not provide data but reported that the rule changes had no effect on vehicle donations or revenue. We did not find a consistent pattern when comparing the number of vehicles donated with the revenue from the vehicle donation program or the charity’s overall revenue. Some of the Selected Charities Changed Their Vehicle Donation Business Operations in Order to Adapt to the New Environment In order to offset decreased revenue from the vehicle donation programs, some charities have changed their vehicle donation business operations. Examples of changes include using minimum bids, selling vehicles online, and selling vehicles directly to the public. Selected Charities Reported Mixed Experiences with Administering the Changes in Vehicle Donation Rules All of the charities said that administrative burdens have increased; however, some charity officials noted that they were able to accommodate the increase. Appendix III: Objectives, Scope, and Methodology Our objective was to determine how charities have been affected by the 2005 changes to the amounts donors can claim on their tax returns for donated vehicles. The information provided by charity officials is anecdotal and cannot be generalized to other charities that operate vehicle donation programs. Donors are asking more questions since the change in the rules than they did before. Total charity revenues increased because of changes in other fund-raising activities.

Why GAO Did This Study In 2003, GAO found that many taxpayers' estimates of the value of their vehicles, claimed as tax deductions, were in excess of the charities' subsequent sales of the vehicles. Subsequently, effective January 1, 2005, the rules related to the amount taxpayers can claim as a deduction on their tax returns for vehicles donated to charities changed. Under the new rules, in many cases the amount taxpayers are allowed to claim as a deduction is less than they could have claimed before the changes. Some charities that used vehicle donations as a revenue source said that the changes could lead to fewer donated vehicles and reduced revenues. GAO was asked to determine how charities have been affected by the 2005 changes. GAO discussed the rule changes with Internal Revenue Service (IRS) officials and the impact of the changes with representatives of several charities. GAO judgmentally selected 10 charities from among the 65 contacted in the course of the 2003 GAO study. The experiences of these charities cannot be generalized to all charities because the selected charities were not drawn from a statistical sample of all charities with vehicle donation programs. What GAO Found The selected charities GAO contacted reported mixed experiences after the rules for claiming a tax deduction for donating a vehicle were changed. Prior to the law change, taxpayers could claim estimated fair market value for any donated vehicle. However, beginning January 1, 2005, taxpayers are generally limited to deducting only the sales price of the vehicle when a donated vehicle is sold by the charity. The 10 charities GAO contacted reported varied experiences in the number of, quality of, and revenue from donated vehicles; some changes in their business operations; and mixed experiences with administering the changes in the rules. Of these 10 charities, when comparing 2003 to 2006, 6 reported decreases in the number of vehicles donated and some of these decreases were substantial. Also, 3 charities reported an increase, and 1 did not provide data. Three reported an increase in quality, 3 a decrease, and 4 no change. Six reported a decrease in vehicle donation revenue from 2003 to 2006, 3 an increase, and 1 did not provide data. GAO did not find a consistent pattern when comparing the number of donated vehicles with the revenue from the vehicle donation program or a charity's overall revenue. In response to the rule changes, some charities changed their fund-raising activities and some decreased services, such as reducing the hours for providing services. Examples of business operations changes include using minimum bids at auctions, selling vehicles online, and selling vehicles directly to the public instead of through wholesalers. Finally, all 10 reported increased administrative burden due to increased reporting requirements, but they were able to accommodate the increase in paperwork.

gao_GAO-15-60

gao_GAO-15-60_0

The GOES-R series is the next generation of satellites that NOAA is planning. The GOES-R program has completed important steps in developing its first satellite. For example, the program has defect management procedures in place as part of its overall testing program. However, the issue affected more than documentation. Unless the program can find a way to unite these disparate approaches to provide consistency in the methods by which defects are identified, prioritized, captured, and tracked, it will be more difficult for management to analyze and understand trends in opening and closing high-priority defects or to make decisions on how to best resolve the defects. Facing a Gap in Backup Satellite Coverage, the GOES-R Program Has Improved Contingency Plans Though Shortfalls Remain GOES satellite data are considered a mission-essential function because of their criticality to weather observations and forecasts. Without a full complement of operational GOES satellites, the nation’s ability to maintain the continuity of data required for effective weather forecasting could be compromised. However, it continues to face challenges in maintaining its schedule and controlling its costs. The program continues to experience delays in remaining major milestones, which could result in further delays to the launch date. While NOAA and its contractors have implemented a defect management process which is successful in many areas, there are shortfalls in how the program defines defects, monitors trends, and reports on defects and defect metrics. Until the program addresses these shortfalls and reduces the number of open defects, it may not have a complete picture of remaining issues and faces an increased risk of further delays to the GOES-R launch date. NOAA could experience a gap in satellite data coverage if GOES-R is delayed further and one of the two remaining operational satellites experiences a problem. Specifically, we recommend that the Secretary of Commerce direct the NOAA Administrator to: investigate and address inconsistencies totaling hundreds of thousands of dollars in monthly earned value data reporting for the GLM and ABI instruments; address shortfalls in defect management identified in this report, including the lack of clear guidance on defect definitions, what defect metrics should be collected and reported, and how to establish a defect’s priority or severity; and reduce the number of unresolved defects on the GOES ground system and spacecraft. In addition, because NOAA has not fully implemented our prior recommendation to improve its satellite gap mitigation plan, we recommend that the Secretary of Commerce direct the NOAA Administrator to: add information to the GOES satellite contingency plan on steps planned or underway to mitigate potential launch delays, the potential impact of failure scenarios in the plan, and the minimum performance levels expected under such scenarios. NOAA concurred with all four of our recommendations and identified steps that it plans to take to implement them. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) assess progress on the GOES-R program with respect to planned schedule, cost, and functionality; (2) assess efforts to identify and address issues discovered during integration and testing; and (3) evaluate the likelihood of a gap in satellite coverage and analyze the adequacy of contingency actions in place to prevent or mitigate such a gap. As allowed by NOAA’s guidance, contractors on the spacecraft track defects differently than the ground system contractors do.

Why GAO Did This Study NOAA, with the aid of the National Aeronautics and Space Administration (NASA), is procuring the next generation of geostationary weather satellites. The GOES-R series is to replace the current series of satellites, which will likely begin to reach the end of their useful lives in 2015. This new series is considered critical to the United States' ability to maintain the continuity of satellite data required for weather forecasting through 2036. GAO was asked to evaluate GOES-R. GAO's objectives were to (1) assess progress on program schedule, cost, and functionality; (2) assess efforts to identify and address issues discovered during integration and testing; and (3) evaluate the likelihood of a gap in satellite coverage and actions to prevent or mitigate such a gap. To do so, GAO analyzed program and contractor data, earned value data information, and defect reports, compared both defect management policies and contingency plans to best practices by leading organizations, and interviewed officials at NOAA and NASA. What GAO Found The National Oceanic and Atmospheric Administration (NOAA)'s Geostationary Operational Environmental Satellite-R (GOES-R) program has made major progress in developing its first satellite, including completing testing of satellite instruments. However, the program continues to face challenges in the areas of schedule, cost, and functionality. Specifically, the program has continued to experience delays in major milestones and cost overruns on key components. Also, in order to meet the planned launch date, the program has deferred some planned functionality until after launch, and program officials acknowledge that they may defer more. NOAA and its contractors have implemented a defect management process as part of their overall testing approach that allows them to identify, assess, track, resolve, and report on defects. However, shortfalls remain in how defects are analyzed and reported. For example, contractors manage, track, and report defects differently due to a lack of guidance from NOAA. Without consistency among contractors, it is difficult for management to effectively prioritize and oversee defect handling. In addition, more than 800 defects in key program components remained unresolved. Until the program makes progress in addressing these defects, it may not have a complete picture of remaining issues and faces an increased risk of further delays to the GOES-R launch date. As the GOES-R program approaches its expected launch date of March 2016, it faces a potential gap of more than a year during which an on-orbit backup satellite would not be available. This means that if an operational satellite experiences a problem, there could be a gap in GOES coverage. NOAA has improved its plan to mitigate gaps in satellite coverage. However, the revised plan does not include steps for mitigating a delayed launch, or details on potential impacts and minimum performance levels should a gap occur. Until these shortfalls are addressed, NOAA management cannot fully assess all gap mitigation strategies, which in turn could hinder the ability of meteorologists to observe and report on severe weather conditions. What GAO Recommends GAO is recommending that NOAA address shortfalls in its defect management approach, reduce the number of open high-priority defects, and add information to its satellite contingency plan. NOAA concurred with GAO's recommendations and identified steps it plans to take to implement them.