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gao_GAO-02-254

gao_GAO-02-254_0

To achieve FFEL program and cost efficiencies, and to improve the availability and delivery of loans, the VFA legislation of 1998 authorized VFAs between Education and the state-designated guaranty agencies. Guaranty agency officials were particularly dissatisfied with Education’s lack of communication about the VFA development process and its inability to meet its own timetable. Changes Offer Potential for Improved Performance All four agreements contain provisions for incentive payments for improved guaranty agency performance, and all four grant waivers to certain statutory and regulatory requirements. The agreements went into effect without Education having developed a clear way to measure changes in guaranty agency performance. It is likely to be difficult to distinguish the results of the VFAs from the effects of other factors, such as the general condition of the economy, but without uniform measures the task becomes even more difficult. The VFA legislation required that Education report on the status of the VFAs, including a description of the standards by which each agency’s performance under the agreement was assessed and the degree to which each agency achieved the performance standards. The report was due no later than September 30, 2001; however, as of this time, no report has been issued. Conclusions The VFA development process did not fully meet the needs of the guaranty agencies or other program participants. We found that Education is not fully prepared to evaluate the success of VFAs in part because it does not have adequate standardized performance measures, such as delinquent loan cure rates. In order to ensure that all VFAs are in compliance with statutory requirements, we recommend that the secretary of Education renegotiate the Texas VFA as soon as practicable to obtain changes necessary to ensure that the VFA does not increase projected federal costs; renegotiate the California VFA as soon as practicable to obtain changes necessary to ensure that the VFA does not increase projected federal costs, with or without changing the trigger default rate; renegotiate the Great Lakes and American Student Assistance VFAs for time periods after fiscal year 2003 to ensure that the VFAs do not increase projected federal program costs; and improve projections of the cost effects of renegotiated VFAs and any future VFA proposals by (1) requiring that each VFA specify an effective time period, (2) conducting a cost analysis covering that period, and (3) conducting analyses to project the cost effects of changes in assumptions regarding guaranty agency performance, such as default rates, in making the cost projections. To determine the extent to which Education’s VFA development process met the needs of guaranty agencies and other program participants, we interviewed Education officials involved in the development of the VFAs, officials at each of the nine guaranty agencies that submitted an application for a VFA, and nine guaranty agencies that did not submit applications. To determine the extent to which the VFAs complied with statutory requirements we reviewed the VFA agreements, provisions of the Higher Education Act (HEA) concerning the Federal Family Education Loan Program (FFELP), and related regulations.

Why GAO Did This Study The relationship between the Department of Education and state-designated guaranty agencies that run the largest federal student loan program is changing in order to achieve program and cost efficiencies and improve delivery of student financial aid. These state or private not-for-profit agencies guarantee payment if students fail to repay loans obtained through the Federal Family Education Loan programs. The 1998 Amendments to the Higher Education Act authorize the Secretary of Education to enter into "voluntary flexible agreements" (VFA) with individual guaranty agencies. These agreements allow a guaranty agency to waive or modify some of the federal requirements that apply to other guaranty agencies. What GAO Found GAO found that the process for developing the agreements did not fully meet the needs of the guaranty agencies and other program participants. The process frustrated guaranty agency officials GAO talked to, especially those who ultimately chose not to apply for a VFA and those who were not granted a VFA. Agency officials said that Education's communication about the VFA development process was poor and that Education was unable to meet its own timetable. The VFAs generally complied with most of the legislative requirements. However, one of the four agreements does not conform to the requirement that projected federal program costs not increase due to the agreements. The key changes implemented under the VFAs include incentive pay structures for guaranty agencies and waivers of certain statutory and regulatory requirements. Each VFA contains provisions for paying the guaranty agency incentive amounts on the basis of specific performance measures, such as default rates. Education is not prepared to assess the effects of VFAs because it lacks a way to adequately measure changes in guaranty agency performance. The lack of uniform measures makes it difficult to distinguish the results of the VFAs from the effects of other factors, such as the general condition of the economy. Although the Department is required to report on the status of the VFA by September 2001, no reports have been issued so far.

gao_GAO-08-1124T

gao_GAO-08-1124T_0

Decisions of the District Court for the Northern Mariana Islands and the District Court of Guam may be appealed to the U.S. Court of Appeals for the Ninth Circuit, and decisions of the District Court of the Virgin Islands may be appealed to the U.S. Court of Appeals for the Third Circuit. Unlike Other Insular Areas, Matters of Federal Law in American Samoa Are Adjudicated in U.S. District Courts in Hawaii or the District of Columbia Unlike other insular areas, such as CNMI, Guam, and USVI, American Samoa does not have a federal court. Reasons offered against changing the current system of adjudicating matters of federal law focus largely on concerns about the impact of an increased federal presence on Samoan culture and traditions, as well as concerns regarding the impartiality of local juries. Reasons Offered for Changing the Current System Focus Principally on the Difficulties of Adjudicating Matters of Federal Law and Greater Access to Justice As was the case in the 1990s, and was repeated in the interviews we conducted and e-mail comments we received, the reasons offered for changing the American Samoa judicial system principally stem from challenges associated with adjudicating matters of federal law arising in American Samoa and the desire to provide American Samoans with greater access to justice. Federal law enforcement officials have identified a number of issues that limit their ability to pursue matters of federal law arising in American Samoa. This issue had also been discussed in the mid-1990s. Each scenario would require a statutory change and present unique operational issues to be addressed. Three Scenarios Present Different Structures and Operational Issues to Be Resolved Based on our review of past legislative proposals, testimonies, and reports, and through discussions with legal experts and American Samoa and federal government officials, we identified three potential scenarios for establishing a federal court in American Samoa or expanding the federal jurisdiction of the High Court of American Samoa: 1. establishing an Article IV district court in American Samoa, 2. establishing a district court in American Samoa that would be a division of the District of Hawaii, or 3. expanding the federal jurisdiction of the High Court of American Samoa. Potential Cost Elements Subject to Considerable Uncertainties The potential cost elements for establishing a federal court in American Samoa include agency rental costs, personnel costs, and operational costs; most of which would be funded by congressional appropriations. U.S. While the cost data are very limited, in the end, the controversy surrounding whether and how to create a venue for adjudicating matters of federal law emanating from American Samoa is not principally focused on costs, but on other factors, such as equity, justice, and cultural preservation. Thus, policy considerations, other than an analysis of cost effectiveness, are more likely to be the basis for deciding whether and how to establish a court with federal jurisdiction in American Samoa.

Why GAO Did This Study American Samoa is the only populated U.S. insular area that does not have a federal court. Congress has granted the local High Court federal jurisdiction for certain federal matters, such as specific areas of maritime law. GAO was asked to conduct a study of American Samoa's system for addressing matters of federal law. This testimony discusses: (1) the current system for adjudicating matters of federal law in American Samoa and how it compares to those in the Commonwealth of the Northern Mariana Islands (CNMI), Guam, and the U.S. Virgin Islands (USVI); (2) the reasons offered for or against changing the current system for adjudicating matters of federal law in American Samoa; (3) potential scenarios and issues associated with establishing a federal court in American Samoa or expanding the federal jurisdiction of the local court; and (4) the potential cost elements and funding sources associated with implementing those different scenarios. This testimony is based on GAO work performed from April 2007 to June 2008. What GAO Found Because American Samoa does not have a federal court like the CNMI, Guam, or USVI, matters of federal law arising in American Samoa have generally been adjudicated in U.S. district courts in Hawaii or the District of Columbia. Reasons offered for changing the existing system focus primarily on the difficulties of adjudicating matters of federal law arising in American Samoa, principally based on American Samoa's remote location, and the desire to provide American Samoans more direct access to justice. Reasons offered against any changes focus primarily on concerns about the effects of an increased federal presence on Samoan culture and traditions and concerns about juries' impartiality given close family ties. During the mid-1990s, several proposals were studied and many of the issues discussed then, such as the protection of local culture, were also raised during the GAO study. Based on previous studies and information gathered for its June 2008 report, GAO identified three potential scenarios, if changes were to be made: (1) establish a federal court in American Samoa under Article IV of the U.S. Constitution, (2) establish a district court in American Samoa as a division of the District of Hawaii, or (3) expand the federal jurisdiction of the High Court of American Samoa. Each scenario would present unique issues to be addressed, such as what jurisdiction to grant the court. The potential cost elements for establishing a federal court in American Samoa include agency rental costs, personnel costs, and operational costs, most of which would be funded by congressional appropriations. Exact details of the costs to be incurred would have to be determined when, and if, any of the scenarios were adopted. The controversy surrounding whether and how to create a venue for adjudicating matters of federal law in American Samoa is not principally focused on an analysis of cost effectiveness, but other policy considerations, such as equity, justice, and cultural preservation.

gao_GAO-01-590

gao_GAO-01-590_0

FHA insures lenders against losses on mortgages for single-family homes. As a result, 71 field offices still have single-family staff. Centers Have Found It Difficult to Use and Supervise Field Office Staff Effectively Because the location of center field office staff was determined more by the location of staff who remained unassigned after the 2020 reorganization than by the centers’ needs, the centers have had difficulty making effective use of staff that remain in field offices. Timing Limits Effective Use of Training Funds The centers have found it difficult to use their training funds effectively because HUD provided them late in the fiscal year and pulled some funds back before they could be used. The Centers Make Extensive Use of Contractors, but Monitoring Has Been a Significant Challenge The centers’ reliance on contractors has grown, but the ability of HUD staff to monitor contractors has not kept pace. Centers Have Expanded Their Use of Contractors Because of increases in the centers’ responsibilities and staff shortages, HUD is using contractors more than it projected in its 2020 plan. Recommendations for Executive Action To address the human capital challenges facing HUD’s homeownership centers, we recommend that the Secretary of Housing and Urban Development direct the Assistant Secretary for Housing-Federal Housing Commissioner to assess the deployment of the centers’ workforce in light of current organizational needs, develop a plan for locating center staff where they are needed, and deploy the staff accordingly; develop a training curriculum for center staff that ensures that available training funds are allocated and used to develop the skills that the staff need to perform their responsibilities; and use tools, such as our human capital self-assessment checklist, to develop a strategic human capital management plan for the homeownership centers that considers all areas of human capital management, including the size of the workforce, workforce deployment, training, and oversight of contractors. We reviewed HUD’s 2020 Management Reform Plan and supporting documents. Key contributors to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our objectives were to examine (1) the deployment of staff at the Department of Housing and Urban Development’s (HUD) homeownership centers, (2) the training provided to center staff, and (3) the centers’ monitoring of their contractors. Homeownership: Results of and Challenges Faced by FHA’s Single-Family Mortgage Insurance Program (GAO/T-RCED-99-133, Mar.

Why GAO Did This Study The Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), insures billions of dollars in home mortgage loans made by private lenders. HUD's 2020 Management Reform Plan, issued in 1997, sought to downsize and reform the agency, including its single-family mortgage insurance program. As part of its 2020 plan, HUD consolidated the single-family program's field activities at four new regional homeownership centers and specified resources for the centers. Although HUD has substantially streamlined FHA's single-family mortgage insurance programs, human capital issues remain a concern. This report reviews HUD's implementation of the homeownership center concept under the 2020 plan, focusing on (1) the deployment of center staff, (2) the training provided to the center staff, and (3) the centers' monitoring of contractors. What GAO Found GAO found that nearly half of the centers' staff remain in 71 field offices across the country, even though HUD envisioned that only a third of the staff would stay in the field offices. The deployment of staff across the centers is not consistent with their workload, and, as a result, the centers are having trouble supervising and making effective use of staff. GAO also found that HUD has not developed a standardized training curriculum for center staff. The centers have had difficulty using their training funds effectively because HUD provided them late in the fiscal year and then pulled back some funds before they could be used. Finally, increased responsibilities and staff shortage have caused the centers to expand their use of contractors. However, the centers' ability to monitor contractors has not kept pace with their growing reliance on them.

gao_GAO-04-433

gao_GAO-04-433_0

In fiscal years 2002 and 2003, these grant programs, administered by DHS, Health and Human Services (HHS), and Justice awarded about $340 million to the District of Columbia, Maryland, Virginia, and state and local emergency management, law enforcement, fire departments, and other emergency response agencies in NCR. This initiative included a total of $60.5 million to NCR, which was one of seven metropolitan areas included in the initial round of funding. Consequently, it is difficult for us or ONCRC to determine what gaps, if any, remain in the emergency response capacities and preparedness within the NCR. The plan for the $60.5 million allocated funds for projects, including planning, training, equipment, and exercises to benefit the region as a whole, as opposed to allocating funds to meet the individual needs of each NCR jurisdiction separately. This adds to the challenge of developing and implementing a coordinated plan for enhancing first responder capacity. Effective regional and local management of the large amounts of available homeland security funding is an important element in improving our national preparedness. Recommendations for Executive Action To help ensure that emergency preparedness grants and associated funds are managed in a way that maximizes their effectiveness, we recommend that the Secretary of the Department of Homeland Security take the following three actions in order to fulfill the department’s statutory responsibilities in the NCR: work with the NCR jurisdictions to develop a coordinated strategic plan to establish goals and priorities for enhancing first responder capacities that can be used to guide the use of federal emergency preparedness funds; monitor the plan’s implementation to ensure that funds are used in a way that promotes effective expenditures that are not unnecessarily duplicative; and identify and address gaps in emergency preparedness and evaluate the effectiveness of expenditures in meeting those needs by adapting standards and preparedness guidelines based on likely scenarios for NCR and conducting assessments based on them. To determine what federal funds have been provided to local jurisdictions for emergency preparedness, for what specific purposes, and from what sources, we met with officials from the DHS’s Office for National Capital Region Coordination (ONCRC), ONCRC’s Senior Policy Group, Federal Emergency Management Agency (FEMA), homeland security advisers for the District of Columbia, Maryland, and Virginia, and first responders from eight jurisdictions within NCR—the District of Columbia; the city of Alexandria; and Arlington, Fairfax, Loudoun, Prince William, Montgomery, and Prince George’s counties. Our review revealed the lack of consistent data reported by the jurisdictions in the region and the lack of a central source for such data.

Why GAO Did This Study Since the tragic events of September 11, 2001, the National Capital Region (NCR), comprising jurisdictions including the District of Columbia and surrounding jurisdictions in Maryland and Virginia, has been recognized as a significant potential target for terrorism. GAO was asked to report on (1) what federal funds have been allocated to NCR jurisdictions for emergency preparedness; (2) what challenges exist within NCR to organizing and implementing efficient and effective regional preparedness programs; (3) what gaps, if any, remain in the emergency preparedness of NCR; and (4) what has been the role of the Department of Homeland Security (DHS) in NCR to date. What GAO Found In fiscal years 2002 and 2003, grant programs administered by the Departments of Homeland Security, Health and Human Services, and Justice awarded about $340 million to eight NCR jurisdictions to enhance emergency preparedness. Of this total, the Office for National Capital Region Coordination (ONCRC) targeted all of the $60.5 million Urban Area Security Initiative funds for projects designed to benefit NCR as a whole. However, there was no coordinated regionwide plan for spending the remaining funds (about $279.5 million). Local jurisdictions determined the spending priorities for these funds and reported using them for emergency communications and personal protective equipment and other purchases. NCR faces several challenges in organizing and implementing efficient and effective regional preparedness programs, including the lack of a coordinated strategic plan for enhancing NCR preparedness, performance standards, and a reliable, central source of data on funds available and the purposes for which they were spent. Without these basic elements, it is difficult to assess first responder capacities, identify first responder funding priorities for NCR, and evaluate the effectiveness of the use of federal funds in enhancing first responder capacities and preparedness in a way that maximizes their effectiveness in improving homeland security.

gao_GAO-07-346

gao_GAO-07-346_0

Depending on the passenger, this document review can occur at three separate time frames during the process of flying internationally, as follows: (1) the State Department reviews the travel documents in advance of travel for passengers who are required to obtain a visa in advance of their travel, (2) air carrier personnel review passengers’ travel documents for authenticity upon check-in for flights, and (3) CBP officers review passenger travel documents either upon the passengers’ arrival in the United States or, in some cases, prior to their departure for the United States. This step is a risk targeting process that occurs for international flights traveling to or from the United States. TSA has named this prospective prescreening program Secure Flight. As we have reported in our prior work on Secure Flight, currently only air carriers—and not the U.S. government—match passenger information against the No Fly and Selectee Lists to prescreen passengers on domestic flights. DHS is Taking Steps to Strengthen the Current International Passenger Prescreening Process CBP has several efforts under way to strengthen certain international passenger prescreening processes. The pilot program has been tested in several foreign airports, and CBP is negotiating with other countries to expand it elsewhere and to make certain IAP sites permanent. According to CBP officials, CLP’s purpose is to enhance border security by providing technical assistance and training to air carrier staff on the identification of improperly documented passengers destined for the United States. DHS Intends to Align International and Domestic Prescreening Programs, but DHS Has Not Yet Made All Key Policy Decisions A second effort that CBP has under way to strengthen the international passenger prescreening process involves the alignment of the U.S. government’s international and domestic aviation prescreening programs, which are being developed separately by CBP and TSA, respectively. In discussions with us, CBP and TSA officials stated that these coordination efforts were continuing, but they did not provide any documentation of how such matters were being resolved or when they planned for the programs to be aligned. CBP Has Not Fully Disclosed its Use of Personal Information during the Prescreening Process One additional issue requires consideration, as well, in the context of DHS’s efforts to strengthen the passenger prescreening process. Because CBP’s development and operation of its international passenger prescreening process has not been accompanied by the publication of Privacy Act notices or E-Government Act privacy impact assessments that fully describe the use of personal data and the steps taken to protect privacy, the public may not be aware of the different ways that their information is being used or protected, as required by law. If these two prescreening efforts are not effectively coordinated with each other, air carriers and other stakeholders could be unnecessarily inconvenienced and experience potentially avoidable costs. Recommendations for Executive Action To strengthen CBP’s international aviation passenger prescreening process, in our November 2006 report we recommended that the Secretary of the Department of Homeland Security take or direct the Commissioner of Customs and Border Protection to take the following three actions: To more fully incorporate risk management principles into the planning, implementation, and evaluation of the IAP pilot, CBP should (1) prepare a strategic plan that identifies the risks, goals, objectives, and performance measures for the IAP pilot, and (2) conduct program evaluations that measure the performance of the pilot IAP sites against predetermined goals and performance measures. It focuses on only certain elements of the current international aviation passenger prescreening process as well as only some of the actions that DHS is taking or has planned to strengthen prescreening procedures. More specifically the report’s content is limited to certain issues related to: the implementation of the Immigration Advisory Program (IAP), a CBP program that assesses risk levels for certain passengers in overseas locations; aligning international and domestic passenger prescreening programs; ensuring that compliance with privacy laws is fully achieved with respect to information collected to conduct international passenger prescreening. Terrorist Watch List Screening: Efforts to Help Reduce Adverse Effects on the Public. Aviation Security: Management Challenges Remain for the Transportation Security Administration’s Secure Flight Program.

Why GAO Did This Study Passenger prescreening--a process that includes matching passengers' identifying information against records extracted from the U.S. government terrorist watch list--is one of several security measures in place to help ensure the safety of commercial flights traveling to or from the United States. DHS has several efforts underway to strengthen international aviation passenger prescreening. This report focuses on certain elements of the passenger prescreening process as well as some of the actions that DHS is taking or has planned to strengthen prescreening procedures. This report is a limited version of the original November 2006 report as various agencies that we reviewed deemed some of the information in the original report to be security sensitive. GAO's work included interviewing officials and assessing relevant documentation from federal agencies, U.S. and foreign air carriers, industry groups, and several foreign countries. What GAO Found Customs and Border Protection (CBP), the Department of Homeland Security (DHS) agency responsible for international passenger prescreening, has planned or is taking several actions designed to strengthen the aviation passenger prescreening process. One such effort involves CBP stationing U.S. personnel overseas to evaluate the authenticity of the travel documents of certain high-risk passengers prior to boarding U.S.-bound flights. Under this pilot program, called the Immigration Advisory Program (IAP), CBP officers personally interview some passengers deemed to be high-risk and evaluate the authenticity and completeness of these passengers' travel documents. IAP officers also provide technical assistance and training to air carrier staff on the identification of improperly documented passengers destined for the United States. The IAP has been tested at several foreign airports and CBP is negotiating with other countries to expand it elsewhere and to make certain IAP sites permanent. Successful implementation of the IAP rests, in part, on CBP clearly defining the goals and objectives of the program through the development of a strategic plan. A second aviation passenger prescreening effort designed to strengthen the passenger prescreening process is intended to align international passenger prescreening with a similar program (currently under development) for prescreening passengers on domestic flights. The Transportation Security Administration (TSA)--a separate agency within DHS--is developing a domestic passenger prescreening program called Secure Flight. If CBP's international prescreening program and TSA's Secure Flight program are not effectively aligned once Secure Flight becomes operational, this could result in separate implementation requirements for air carriers and increased costs for both air carriers and the government. CBP and TSA officials stated that they are taking steps to coordinate their prescreening efforts, but they have not yet made all key policy decisions. In addition to these efforts to strengthen certain international aviation passenger prescreening procedures, one other issue requires consideration in the context of these efforts. This issue involves DHS providing the traveling public with assurances of privacy protection as required by federal privacy law. Federal privacy law requires agencies to inform the public about how the government uses their personal information. Although CBP officials have stated that they have taken and are continuing to take steps to comply with these requirements, the current prescreening process allows passenger information to be used in multiple prescreening procedures and transferred among various CBP prescreening systems in ways that are not fully explained in CBP's privacy disclosures. If CBP does not issue all appropriate disclosures, the traveling public will not be fully aware of how their personal information is being used during the passenger prescreening process.

gao_GAO-11-919T

gao_GAO-11-919T_0

DHS Continues to Implement and Strengthen Its Mission Functions, but Key Operational and Management Challenges Remain Since DHS began operations in March 2003, it has developed and implemented key policies, programs, and activities for implementing its homeland security missions and functions that have created and strengthened a foundation for achieving its potential as it continues to mature. DHS Has Made Progress in Implementing its Mission Functions, but Program Weaknesses and Management Issues Have Hindered Implementation Efforts DHS has made important progress in implementing and strengthening its mission functions over the past 8 years, including implementing key homeland security operations and achieving important goals and milestones in many areas. The department’s accomplishments include developing strategic and operational plans across its range of missions; hiring, deploying and training workforces; establishing new, or expanding existing, offices and programs; and developing and issuing policies, procedures, and regulations to govern its homeland security operations. For example:  DHS issued the QHSR, which provides a strategic framework for homeland security, and the National Response Framework, which outlines guiding principles for disaster response.  DHS successfully hired, trained, and deployed workforces, such as a federal screening workforce which assumed security screening responsibilities at airports nationwide, and the department has about 20,000 agents to patrol U.S. land borders.  DHS created new programs and offices, or expanded existing ones, to implement key homeland security responsibilities, such as establishing the United States Computer Emergency Readiness Team to, among other things, coordinate the nation’s efforts to prepare for, prevent, and respond to cyber threats to systems and communications networks. However, more work remains for DHS to address gaps and weaknesses in its current operational and implementation efforts, and to strengthen the efficiency and effectiveness of those efforts to achieve its full potential. For example, DHS has not yet developed a set of target capabilities for disaster preparedness or established metrics for assessing those capabilities to provide a framework for evaluating preparedness, as required by the Post-Katrina Emergency Management Reform Act. Table 1 provides examples of key progress and work remaining in DHS’s functional mission areas, with an emphasis on work we completed since 2008. Moreover, DHS has not yet established performance measures to assess the effectiveness of its programs for investigating alien smuggling operations and foreign nationals who overstay their authorized periods of admission to the United States, making it difficult for these agencies to determine progress made in these areas and evaluate possible improvements. In addition, DHS took action to develop and deploy new technologies to help meet its homeland security missions. Key Themes Have Impacted DHS’s Progress in Implementing Its Mission Functions Our work at DHS has identified several key themes—leading and coordinating the homeland security enterprise, implementing and integrating management functions for results, and strategically managing risks and assessing homeland security efforts—that have impacted the department’s progress since it began operations. DHS made progress and has had successes in all of these areas, but our work found that these themes have been at the foundation of DHS’s implementation challenges, and need to be addressed from a departmentwide perspective to position DHS for the future and enable it to satisfy the expectations set for it by the Congress, the administration, and the country. While DHS is one of a number of entities with a role in securing the homeland, it has significant leadership and coordination responsibilities for managing efforts across the homeland security enterprise. Eight years later, DHS remains on our high-risk list. Strategically managing risks and assessing homeland security efforts. Key threats, such as attempted attacks against the aviation sector, have impacted and altered DHS’s approaches and investments, such as changes DHS made to its processes and technology investments for screening passengers and baggage at airports. These accomplishments are especially noteworthy given that the department has had to work to transform itself into a fully functioning cabinet department while implementing its missions—a difficult undertaking for any organization and one that can take years to achieve even under less daunting circumstances. This is a work of the U.S. government and is not subject to copyright protection in the United States.

Why GAO Did This Study The terrorist attacks of September 11, 2001, led to profound changes in government agendas, policies and structures to confront homeland security threats facing the nation. Most notably, the Department of Homeland Security (DHS) began operations in 2003 with key missions that included preventing terrorist attacks from occurring in the United States, reducing the country's vulnerability to terrorism, and minimizing the damages from any attacks that may occur. DHS is now the third-largest federal department, with more than 200,000 employees and an annual budget of more than $50 billion. Since 2003, GAO has issued over 1,000 products on DHS's operations in such areas as border and transportation security and emergency management, among others. As requested, this testimony addresses DHS's progress and challenges in implementing its homeland security missions since it began operations, and issues affecting implementation efforts. This testimony is based on a report GAO is issuing today, which assesses DHS's progress in implementing its homeland security functions and work remaining. What GAO Found Since it began operations in 2003, DHS has implemented key homeland security operations and achieved important goals and milestones in many areas to create and strengthen a foundation to reach its potential. As it continues to mature, however, more work remains for DHS to address gaps and weaknesses in its current operational and implementation efforts, and to strengthen the efficiency and effectiveness of those efforts to achieve its full potential. DHS's accomplishments include developing strategic and operational plans; deploying workforces; and establishing new, or expanding existing, offices and programs. For example, DHS (1) issued plans to guide its efforts, such as the Quadrennial Homeland Security Review, which provides a framework for homeland security, and the National Response Framework, which outlines disaster response guiding principles; (2) successfully hired, trained, and deployed workforces, such as a federal screening workforce to assume security screening responsibilities at airports nationwide; and (3) created new programs and offices to implement its homeland security responsibilities, such as establishing the U.S. Computer Emergency Readiness Team to help coordinate efforts to address cybersecurity threats. Such accomplishments are noteworthy given that DHS has had to work to transform itself into a fully functioning department while implementing its missions--a difficult undertaking that can take years to achieve. While DHS has made progress, its transformation remains high risk due to its management challenges. Examples of progress made and work remaining include: Border security. DHS implemented the U.S. Visitor and Immigrant Status Indicator Technology program to verify the identities of foreign visitors entering and exiting the country by processing biometric and biographic information. However, DHS has not yet determined how to implement a biometric exit capability and has taken action to address a small portion of the estimated overstay population in the United States (individuals who legally entered the country but then overstayed their authorized periods of admission). Aviation security. DHS developed and implemented Secure Flight, a program for screening airline passengers against terrorist watchlist records. DHS also developed new programs and technologies to screen passengers, checked baggage, and air cargo. However, DHS does not yet have a plan for deploying checked baggage screening technologies to meet recently enhanced explosive detection requirements, a mechanism to verify the accuracy of data to help ensure that air cargo screening is being conducted at reported levels, or approved technology to screen cargo once it is loaded onto a pallet or container. Emergency preparedness and response. DHS issued the National Preparedness Guidelines that describe a national framework for capabilities-based preparedness, and a Target Capabilities List to provide a national-level generic model of capabilities defining all-hazards preparedness. DHS is also finalizing a National Disaster Recovery Framework. However, DHS needs to strengthen its efforts to assess capabilities for all-hazards preparedness, and develop a long-term recovery structure to better align timing and involvement with state and local governments' capacity. Chemical, biological, radiological and nuclear (CBRN) threats. DHS assessed risks posed by CBRN threats and deployed capabilities to detect CBRN threats. However, DHS should work to improve its coordination of CBRN risk assessments, and identify monitoring mechanisms for determining progress made in implementing the global nuclear detection strategy. GAO's work identified three themes at the foundation of DHS's challenges: Leading and coordinating the homeland security enterprise; Implementing and integrating management functions for results; and Strategically managing risks and assessing homeland security efforts. This testimony contains no new recommendations.

gao_HEHS-99-40

gao_HEHS-99-40_0

The Balanced Budget Act of 1997 authorized $3 billion for welfare-to-work grants to state (the 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands) and local communities to move welfare recipients into jobs—$1.5 billion is available to be awarded by Labor each year in fiscal years 1998 and 1999. Labor also awarded a total of almost $500 million in competitive grants using all of the approximately $368 million in competitive grant funds available for fiscal year 1998 and about a third of the competitive grant funds available for fiscal year 1999. Of the states that applied for formula grant funding, Arizona was the only state that did not pledge sufficient matching funds to receive its maximum federal allocation. These six states chose not to participate for various reasons, including concerns about their ability to provide state matching funds. Of the six states that declined to participate in the welfare-to-work formula program, four states—Idaho, Mississippi, South Dakota, and Wyoming—neither informed Labor they would not be participating in welfare-to-work, nor submitted a welfare-to-work plan to Labor; the remaining states—Ohio and Utah—informed Labor that they would not participate. Most states had at least one local service organization that received competitive grant funds. Three States Set Specific Focus for Formula Grants, While Others Allowed Wider Local Discretion Three of the six states we reviewed—Massachusetts, Michigan, and Wisconsin—specified populations to be served with formula grant funds, such as assistance to unemployed noncustodial parents or TANF recipients who are reaching their time limits on cash assistance. Plans for the other three states—Arizona, California, and New York—stated that the use of welfare-to-work funds would be determined by the local service delivery areas. For example, Michigan’s plan emphasized serving unemployed noncustodial parents who have child support payments in arrears and whose dependents are receiving TANF assistance. In contrast, three states defined their formula grant focus more broadly and did not emphasize a specific service strategy. California’s state plan noted that—given the diversity of the state’s local service delivery areas—no one service strategy could be effectively applied statewide. Stronger Partnerships Are Developing Between the Workforce Development and Human Service Agencies State and local officials in the six states we reviewed noted that a stronger partnership was developing between the workforce development agencies and other human service agencies assisting welfare recipients. They attributed this stronger relationship, at least in part, to their joint involvement in the welfare-to-work planning process. For the welfare-to-work competitive grants we reviewed, competitive grantees also coordinated their plans with state and local officials. We also obtained information about the competitive grants Labor awarded on May 27, 1998, and November 20, 1998, with welfare-to-work funds available for fiscal years 1998 and 1999. New York submitted its welfare-to-work plan on June 29, 1998.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information about: (1) welfare-to-work formula and competitive grants awarded to, or declined by, states for fiscal year (FY) 1998; (2) how selected grantees are planning to use these funds; and (3) how selected grantees plan to meet welfare-to-work requirements to better integrate the states' workforce development services with other human services for welfare recipients. What GAO Found GAO noted that: (1) The Department of Labor (DOL) awarded formula grants to 44 states plus the District of Columbia, Guam, Puerto Rico, and the Virgin Islands with welfare-to-work funding available for FY 1998, and, as of November 20, 1998, it had awarded competitive grants to 126 organizations with combined welfare-to-work funding available for fiscal years 1998 and 1999; (2) six states--Idaho, Mississippi, Ohio, South Dakota, Utah, and Wyoming--did not participate in the welfare-to-work formula grant program; (3) these states, which would have received a total of about $71 million, chose not to participate for various reasons, including concerns about their ability to provide state matching funds; (4) Arizona was the only state that applied for formula grant funds but did not pledge sufficient matching funds to receive its maximum federal allocation; (5) the competitive grant funds Labor awarded represented all welfare-to-work funds available for FY 1998 and about a third of the FY 1999 funds; (6) most states had at least one local service organization that received competitive grant funds; (7) three of the six states GAO reviewed--Massachusetts, Michigan, and Wisconsin--outlined very specific uses for formula funds, while plans for the other three states--Arizona, California, and New York--indicated that the use of these funds would be determined by the local service delivery areas; (8) Michigan's and Wisconsin's plans emphasized assistance to unemployed noncustodial parents--these parents, mostly fathers, often have child support payments in arrears and dependents who are receiving welfare cash assistance; (9) Massachusetts focused on serving Temporary Assistance for Needy Families recipients who are reaching their time limits on cash assistance; (10) in contrast, California's plan did not emphasize a specific welfare-to-work service strategy because state officials believed that no one service strategy could be applied effectively throughout the state; (11) similarly, Arizona and New York allowed local service delivery areas to decide on strategies for using formula grant funds; (12) state and local officials in the six states GAO reviewed noted that a stronger partnership was developing between the workforce development agencies and other human service agencies assisting welfare recipients, in part because of their joint involvement in the welfare-to-work planning process; and (13) the welfare-to-work competitive grantees also coordinated their plans with state and local officials.

gao_GAO-06-737

gao_GAO-06-737_0

The President’s Management Agenda has identified rightsizing as one of the administration’s priorities. In fiscal year 2004, Congress mandated the establishment of the Office of Rightsizing within State. Accurate Data on Personnel Overseas Not Yet Available; U.S. Government Rightsizing Efforts Under Way Almost 5 years into the President’s Management Initiative on rightsizing, the U.S. government does not yet have accurate data on the size and composition of the U.S. overseas presence at embassies and consulates; however, State is working on a unified database which, if periodically updated by posts, should provide an accurate depiction of the overseas presence. In addition, State estimated that there are approximately 78,000 U.S. government positions overseas, as of December 2005. Several agencies reported that they have added staff overseas as a result of new mission requirements, and others reported that they have relocated or reduced their personnel to better meet mission needs and respond to the rightsizing efforts. Since its formation, some of the activities of the office have included coordinating staffing requests of U.S. government agencies, developing guidance for and analyzing post rightsizing reviews, and formulating a rightsizing review plan. Non-State agencies have voiced a number of concerns related to interactions with the Office of Rightsizing, including their desire to be more involved in the rightsizing process. It is unclear how the rightsizing review decisions, such as elimination of duplicative functions, will be implemented at each post, according to officials at post and in State’s regional bureaus. Between late 2004 and summer 2005, about 35 posts participated in the first cycle of reviews, and the office conducted formal analyses of the posts’ reviews in late 2004 and early 2005. The Office of Rightsizing reported over $50 million in costs saved or avoided to the U.S. government based on its analysis of the first cycle of reviews. In addition, we found that the Office of Rightsizing did not have a systematic process to quantify costs saved or avoided as a result of post staffing reductions stemming from reviews in the spring 2005 cycle. Posts Identified Challenges in Conducting Rightsizing Reviews A number of management officers identified various challenges in conducting the reviews at their post, including resistance by non-State agencies at posts to address rightsizing measures. Moreover, after a slow start, State’s Office of Rightsizing is beginning to achieve momentum in coordinating government-wide rightsizing efforts. We recognize that efforts are currently under way to develop accurate data; however because of the importance of having accurate data on overseas staffing and the length of time it has taken to develop this data, management oversight may be needed to ensure completion of this task. Recommendations for Executive Action To ensure that the U.S. government’s overseas presence under chief of mission authority is accurately accounted for and to ensure that the U.S. government’s rightsizing goals are being coordinated and that posts can maximize savings and gain efficiencies through rightsizing, we recommend that the Secretary of State take the following three actions: Provide oversight to ensure the timely development and use of a single database that accurately accounts for U.S. overseas personnel staffing numbers and has accountability measures to encourage posts and agencies to keep the database accurate and up to date; Increase outreach activities with non-State agencies so that all relevant agencies with an overseas presence can discuss and share information on rightsizing initiatives on a regular and continuous basis; and Require that posts develop action plans to transition to and meet the agreed upon outcomes of their rightsizing reviews. We spoke with officials in the Office of Rightsizing about the rightsizing process and reviewed rightsizing guidance and related documentation. GAO Comments 1. We modified our text to show that, although we have not been able to independently assess the Office of Rightsizing’s estimates, it has presented evidence to show that some major cost avoidance and cost savings have occurred. 2. 3.

Why GAO Did This Study In 2001, the administration identified the rightsizing of embassies and consulates as one of the President's management priorities. Rightsizing initiatives include: aligning staff overseas with foreign policy priorities and security and other constraints; demonstrating results by moving administrative functions from posts to regional or central locations; and eliminating duplicative functions at posts. This report (1) discusses the size and recent trends in the U.S. government overseas presence, (2) assesses the congressionally mandated Office of Rightsizing's progress in managing the U.S. government's overseas rightsizing efforts, and (3) assesses the process and outcomes of the legislatively mandated rightsizing reviews of overseas posts. What GAO Found Almost five years into the President's Management Initiative on rightsizing, the U.S. government does not yet have accurate data on the size of the U.S. overseas presence. At various times, we received estimates ranging from 66,000 to 69,000 American and non-American personnel. In addition, State estimated that there are approximately 78,000 U.S. government positions overseas, as of December 2005. State Department (State) officials said that they are working on a unified database which, if periodically updated by posts, will provide an accurate depiction of the overseas presence. State officials indicated that the database will be completed later this year. Because of the importance of having accurate data on overseas staffing and the length of time it has taken to develop this data, management oversight may be needed to ensure completion of this task. Several agencies reported that they have added staff overseas as a result of new mission requirements, and other agencies reported that they have repositioned their personnel to better meet mission needs and in response to rightsizing efforts. State established the congressionally mandated Office of Rightsizing the United States Government Overseas Presence (Office of Rightsizing) in 2004, which, after a slow start, has begun to provide overall direction to the government-wide rightsizing process. Some of the office's activities have included coordinating staffing requests of U.S. government agencies, developing guidance for and analyzing post rightsizing reviews, and formulating a rightsizing review plan. We found that coordination on rightsizing issues between State and other agencies with an overseas presence was initially slow, but has since improved. Nevertheless, non-State agencies have voiced a number of concerns regarding their interaction with the Office of Rightsizing, including their desire to be more included in the rightsizing process. Congress requires Chiefs of Mission to conduct rightsizing reviews at every overseas post at least once every 5 years. Between late 2004 and summer 2005, about 35 posts participated in the first cycle of reviews. However, the Office of Rightsizing provided limited guidance to posts on how the reviews should be conducted and did not have a systematic process for reporting the outcomes of the reviews. In fall 2005, officials in the Office of Rightsizing developed more comprehensive guidance, which posts we interviewed found useful. We found that cost was not considered a key element in the post reviews. Nevertheless, the Office of Rightsizing reported over $150 million in cost savings or avoidance to the U.S. government based on its analysis of these reviews. Although we have not been able to independently assess the Office of Rightsizing's estimates, it has presented evidence to show that some major cost avoidance and cost savings have occurred. Management officers identified various challenges to the review process, such as resistance from non-State agencies and a lack of time to conduct the review. It is unclear how posts will implement the rightsizing review decisions, such as elimination of duplicative functions, according to post officials and officials in State's regional bureaus.

gao_AIMD-97-9

gao_AIMD-97-9_0

DISA’s current efforts focus on acquiring and implementing DISN CONUS services. Defense’s Analysis of DISN Acquisition Alternatives In developing its DISN acquisition approach, Defense considered several acquisition alternatives in April and May 1995 including one—using a single contractor to furnish a comprehensive set of services to the government—that is similar to the integrated approach that AT&T had advocated. Defense also evaluated the costs and benefits of separately acquiring component services with the government integrating those components itself, and other alternative approaches as well. In reviewing Defense’s analyses of alternatives, we found that Defense evaluated the advantages and disadvantages of each acquisition alternative in terms of relative cost and how it (1) met DISN requirements, (2) facilitated technology insertion and enhancement, (3) could be implemented within schedule constraints, and (4) supported Defense’s control of the network. DISA selected an acquisition strategy that divided the acquisition into four components with four separately awarded contracts. Ability of DISN Acquisition Strategy To Yield Best Value Defense believes that it has selected the acquisition strategy that will yield the best value to the government over the course of DISN’s life cycle. Defense Lacks Performance Measures Critical to DISN’s Success By better establishing its operational requirements and life cycle costs for DISN, Defense would lay the groundwork for assessing whether the system is meeting its cost and performance goals. The next step would be to develop effective measures for tracking DISN’s progress against this baseline cost and performance information. At present, Defense is far from meeting any of these requirements. At a minimum, these measures should include the concerns of DISN customers and should correspond to the five factors—requirements, technology enhancement, schedule, management, and cost—that DISA used to select its acquisition strategy. As stated in our report, these actions are critical in order for Defense to have an objective cost and performance baseline for measuring the success of this acquisition.

Why GAO Did This Study Pursuant to congressional request, GAO reviewed the steps taken by the Department of Defense (DOD) in selecting and implementing its acquisition strategy for the Defense Information System Network (DISN) Continental United States (CONUS), focusing on whether: (1) DOD considered alternative approaches, such as use of an integrated bid, in its selection of an acquisition strategy; and (2) the selected acquisition strategy will yield the best value to the government over DISN's life-cycle. What GAO Found GAO found that: (1) DOD considered several options prior to selecting an acquisition strategy for DISN, including an approach that would have involved using a single comprehensive service provider to furnish an integrated set of services to the government and another one that involved separately acquiring component services with the government integrating those components itself; (2) DOD considered the advantages and disadvantages of each option in terms of five factors: requirements; technology enhancement; schedule; management; and cost; (3) after evaluating its options and receiving industry comments on its draft request for proposals, DOD ultimately decided on an approach that calls for the Defense Information Systems Agency (DISA) to separately acquire and integrate component services itself, using contracts awarded on a staggered schedule; (4) DOD believes that this strategy will best meet national security needs at a reasonable cost; (5) in reviewing DOD's DISN efforts in 1995, GAO reported that DOD had yet to define the program's minimal acceptable requirements; (6) GAO also reported that DOD had not yet developed an estimate of what it would cost to acquire, operate, and sustain the DISN infrastructure; (7) without this information, DOD has no objective cost and performance baseline for measuring DISN's success; (8) without this baseline, GAO cannot determine whether the selected acquisition strategy will yield the best value to the government over the course of DISN's life cycle, which is estimated to be over 10 years; (9) once this baseline is developed, DOD must also establish effective measures for tracking DISN's progress; (10) at present, DOD is far from meeting federal requirements for establishing performance measures; and (11) by developing measures that focus on benefits, costs, and risks, DOD management can target problem areas, highlight successes, and ensure DISN meets its cost and performance goals.

gao_GAO-09-451

gao_GAO-09-451_0

DOE Officials Reported Varied Reasons for Work Stoppages at Tank Farms and the Waste Treatment Plant, but Supporting Documentation Is Limited DOE officials reported that from January 2000 through December 2008, work on the Hanford tank farms and the waste treatment plant temporarily stopped at least 31 times to address various safety or construction concerns. Sixteen of the work stoppages reportedly resulted from concerns about safety. Information on Work Stoppages Is Not Consistently Collected DOE does not routinely collect or formally report information about work stoppages, in part because federal regulations governing contracts do not require contractors to track work stoppages and the reasons for them. DOE Generally Pays Costs Associated with Work Stoppages Under the terms of the cost-reimbursement contracts for the tank farms and the waste treatment plant, DOE generally pays the costs for corrective action or construction rework associated with temporary work stoppages and does not require the contractor to separately track these costs. These were all considered allowable costs, and DOE has reimbursed the contractor for them. Even though the contractors are being reimbursed for the costs associated with work stoppages, they can experience financial consequences, either through loss of performance fee or fines and penalties assessed by DOE or its regulators. For example, DOE may withhold payment of a performance award, called a fee, from contractors for failure to meet specified performance objectives or measures or to comply with applicable environmental, safety, and health requirements. Inadequate Oversight Cited as Contributing to Some Work Stoppages For the majority of DOE’s reported work stoppages, no supporting documentation was available to evaluate whether better oversight or regulation could have prevented them. For two incidents for which documentation was available—internal investigations and prior GAO work—a lack of oversight contributed to both. Specifically, the accident investigation report for the tank farm spill found that oversight and design reviews by DOE’s Office of River Protection failed to identify deficiencies in CH2M Hill’s tank pump system, which did not meet nuclear safety technical requirements. GAO in 2006 found that DOE’s failure to effectively implement nuclear safety requirements, including requirements that all waste treatment plant facilities would survive a potential earthquake, contributed substantially to delays and growing costs at the plant. Work was halted at the two facilities for 2 years as a result. With regard to regulations, however, officials we interviewed from DOE, the Defense Nuclear Facilities Safety Board, and the Office of Inspector General said they did not believe that insufficient regulation was a factor in these two events. Appendix I: Scope and Methodology To determine the number of times work was suspended at the Hanford site, we obtained from the Department of Energy’s (DOE) Office of River Protection officials a listing of work stoppages occurring from January 2000 through December 2008 at either the waste treatment plant or the tank farms. We sought to independently verify the 31 work stoppages identified by DOE and to uncover additional information about them, including the nature of the event and the duration and the scope of each, by reviewing the following: DOE’s Occurrence Reporting and Processing System, a database of reportable accidents and other incidents affecting worker, public, and environmental safety; DOE’s database of investigation reports on accidents causing serious injury to workers or serious damage to the facility or the environment; DOE citations issued against contractors for violating nuclear safety Defense Nuclear Facilities Safety Board reports addressing Hanford Site Bechtel National Inc. and CH2M Hill Hanford Group Problem Evaluation Requests, internal reports of incidents or accidents involving safety issues.

Why GAO Did This Study The Department of Energy's (DOE) Hanford Site in Washington State stores 56 million gallons of untreated radioactive and hazardous wastes resulting from decades of nuclear weapons production. DOE is constructing facilities at the site to treat these wastes before permanent disposal. As part of meeting health, safety, and other standards, work at the site has sometimes been suspended to address safety or construction quality issues. This report discusses (1) work stoppages from January 2000 through December 2008 and what is known about them, (2) the types of costs associated with work stoppages and who paid for them, and (3) whether more effective regulation or oversight could have prevented the work stoppages. GAO interviewed knowledgeable DOE and contractor officials about these events. When documentation was available, GAO obtained DOE and contractor accident and safety incident reports, internal DOE and independent external evaluations, and costs. What GAO Found DOE officials reported that from January 2000 through December 2008, activities to manage hazardous wastes stored in underground tanks and to construct a waste treatment facility have been suspended at least 31 times to address safety concerns or construction quality issues. Federal regulations governing contracts do not require contractors to formally report work stoppages and the reasons for them, and DOE does not routinely collect information on them. As a result, supporting documentation on work stoppages was limited. DOE reported that work stoppages varied widely in duration, with some incidents lasting a few hours, and others lasting 2 years or more. Officials reported that about half the work stoppages resulted from concerns about worker or nuclear safety and included proactive safety "pauses," which typically were brief and taken to address an unsafe condition that could potentially harm workers. The remainder of the work stoppages occurred to address concerns about construction quality at the waste treatment plant. Under the terms of the cost-reimbursement contracts for managing the tanks and constructing the waste treatment plant, DOE generally pays all costs associated with temporary work stoppages and does not require the contractor to separately track these costs, although DOE and the contractors do track some costs under certain circumstances. For example, the costs for cleaning up, investigating, and implementing corrective actions were collected for a July 2007 hazardous waste spill at one of the tank farms; these costs totaled over $8 million. The contractors, too, can face financial consequences, such as reduction in earned fee or fines and penalties assessed by DOE or outside regulators. For example, DOE may withhold payment of a performance award, called a fee, from contractors for failure to meet specified performance objectives or to comply with applicable environmental, safety, and health requirements. For the majority of DOE's reported work stoppages, supporting documentation was not available to evaluate whether better oversight or regulation could have prevented them. For 2 of 31 work stoppages where some information was available--specifically, accident investigations or prior GAO work--inadequate oversight contributed to the work stoppages. For example, the accident investigation report for the tank farm spill found that oversight and design reviews by DOE's Office of River Protection failed to identify deficiencies in the tanks' pump system design, which did not meet nuclear technical safety requirements. Similarly, in 2006, GAO found that DOE's failure to effectively implement nuclear safety requirements contributed substantially to schedule delays and cost growth at Hanford's waste treatment plant. With regard to regulations, however, officials from DOE, the Defense Nuclear Facilities Safety Board, and DOE's Office of Inspector General said they did not believe that insufficient regulation was a factor in these events.

gao_GAO-05-185

gao_GAO-05-185_0

To help carry out their responsibilities, the four land management agencies have either strategic plans or other policy or management guidance for addressing invasive species. Agencies responsible for parks, natural resources, and transportation were also involved in invasive species management. Other Types of Entities Play an Important Role in Weed Management A growing number of areas in the country—particularly in the western states—participate in multijurisdictional organizations known as “weed management areas” or “cooperative weed management areas.” These areas—which typically include federal, state, and local agencies; nongovernmental organizations and businesses; and citizens—coordinate and collaborate on weed management issues among neighboring landowners. Funding for Weed Management Comes from a Variety of Sources Efforts to manage invasive weeds rely on a web of federal, state, and local government funding as well as nongovernmental funding sources. Some entities use general operating funds, while others rely on grant programs administered by numerous federal agencies. Federal and Nonfederal Officials Identified Funding, Cooperation, and Public Education as Key to Effective Weed Management The majority of the officials we interviewed cited insufficient funding as the primary barrier to dealing effectively with invasive weeds (39 of 48 and 37 of 41 officials responding to questions about managing weeds on nonfederal land and federal land, respectively). First, federal and nonfederal officials said that project funding needs to be consistent and predictable from year to year, because, to be effective, weed eradication actions need to be done regularly until the weed population is under control—which in some cases may take several years. Clear Consensus Does Not Exist among Weed Management Stakeholders on How Additional Resources for Weed Control Should Be Distributed The officials we interviewed offered wide-ranging views on how the federal government could best provide additional resources to weed management entities. Most officials responding to the issue (33 of 38) stated that the federal government should expand an existing program or programs rather than create a new one to distribute additional weed management funds. The creation of a new program—which the newly passed law requires—will add another set of application procedures to learn and a new set of officials who may or may not be familiar with state and local weed management entities and their respective needs. Officials supportive of this approach said that states best know their weed problems and therefore would make better-informed funding decisions. Recommendation for Executive Action To help ensure that the new program under the Noxious Weed Control and Eradication Act is implemented effectively, we recommend that the Secretary of Agriculture direct the implementing agency to collaborate with other USDA and Interior agencies that have experience managing invasive weeds (1) in developing the mechanisms for allocating funds to weed management entities, and (2) in determining what entities should receive such funding, using the agencies—along with other regional, state, and local experts—as technical advisers, as appropriate. Objectives, Scope, and Methodology The objectives of this report are to determine (1) the federal and nonfederal entities that implement projects to address harmful nonagricultural weeds, (2) the sources of funding that these entities use, (3) the views of federal and nonfederal officials on the barriers that limit the effectiveness of weed control efforts, (4) these officials’ observations on specific aspects of how to implement a new program—or to infuse new resources into an existing program—to support weed management and control, and (5) the legal ramifications, if any, of the use of certain terms— such as invasive, noxious, and nonnative—and their associated definitions on control efforts. While a large number of departments and agencies are in some way responsible for weed management, as agreed with the requester, we limited our focus on the federal entities engaged in weed management to the Department of the Interior and the Department of Agriculture (USDA). Within Interior and USDA, we limited our scope to the four agencies that manage the most public land—Bureau of Land Management (BLM), National Park Service (NPS), Fish and Wildlife Service (FWS), and Forest Service; other agencies administering programs that can provide funding to landowners and other partners (Animal and Plant Health Inspection Service, Natural Resources Conservation Service, and Farm Services Agency); and agencies engaged in research into the use of weed control methods (Agricultural Research Service; Cooperative State Research, Education, and Extension Service; and U.S. Geological Survey). The states we selected were California, Colorado, Idaho, Maryland, and Mississippi. One distinction is whether a species is native or nonnative. Second, some states take control actions against invasive weeds in addition to those identified as noxious weeds in their statutes and regulations. CDFA has established through regulation a noxious weed list that includes over 130 plant species. In the Department of Natural Resources, individual natural resource land units—including forests, wildlife areas, and state parks—conduct weed management as part of general operations. GAO Comments 1.

Why GAO Did This Study Invasive weeds, native or nonnative plant species, cause harm to natural areas such as rangelands or wildlife habitat and economic impacts due to lost productivity of these areas. While the federal investment in combating invasive species is substantial most has been concentrated on agricultural lands, not on natural areas. In this report, GAO describes (1) the entities that address invasive weeds in natural areas and the funding sources they use; (2) federal, state, and local weed management officials' views on the barriers to weed management; and (3) their opinions about how additional resources for weed management could be distributed. GAO limited this study to entities in the Departments of Agriculture and the Interior, and California, Colorado, Idaho, Maryland, and Mississippi, and gathered information through interviews of over 90 weed management officials. What GAO Found All types of landowners--government and private--are involved in the battle against invasive weeds in natural areas and include federal agencies such as the Bureau of Land Management, the Fish and Wildlife Service, the Forest Service, and the National Park Service; state and local agencies such as those responsible for agriculture, natural resources, and transportation; and individuals who manage their lands for a variety of purposes, including production or preservation. In some cases, federal or state laws and regulations require that landowners and managers control specific regulated weeds. In other instances, land managers control weeds--including unregulated ones--to meet their larger responsibilities for natural resource conservation. Weed management entities rely on a wide range of funding sources to carry out their activities. The federal government is the largest source of funding through the general budgets of federal land management agencies and numerous grant programs for natural resource management. State and local agencies and nongovernmental entities often rely on a mix of their own funding, grant resources, and collaboration with other entities or volunteers to implement weed management projects. Not surprisingly, given the magnitude of the invasive weed problem, federal and nonfederal officials we questioned believed that the lack of consistent and adequate funding limits effective management of the problem. Specifically, some officials commented that funding needs to be consistent from year to year to ensure that invasive weeds are eradicated or kept in check, but available resources for weed management often fluctuate. In addition, some officials said that funding is sometimes received late in the year, beyond the point when effective actions can be taken. Other identified barriers to effective weed management included the requirement to comply with National Environmental Policy Act requirements in order to conduct treatments, a lack of cooperation among entities needed to combat invasive weeds, and a general lack of awareness and public education on the issue. Posed with the prospect of a new program or funds for addressing invasive weeds, a majority of the federal and nonfederal officials who responded to our question preferred that existing programs be used to disburse additional funds. Several officials noted that a key factor for such an approach is to capitalize on existing relationships among current programs and weed management entities, rather than creating a new program. A majority of officials also believed that an agency within the Department of Agriculture should implement any new program or funding source, but that states should play a key role in determining how funds should be distributed. Some officials noted, however, that certain agencies have different expertise with regard to weeds and knowledge of local weed management entities. As we completed our review, a new law required the creation of a new program to provide funding by the Department of Agriculture for weed management. The law requires that the department rely on reviews by regional, state, and local experts when making funding decisions.

gao_GAO-15-525

gao_GAO-15-525_0

As discussed previously, lithium is a key component of nuclear weapons and is therefore essential for the refurbishment of the nuclear weapons stockpile. NNSA Has Identified Various Challenges in Its Lithium Production Strategy NNSA has identified various challenges in its lithium production strategy that may impact its ability to meet demand for lithium through and beyond 2025. NNSA has also identified actions that may mitigate these challenges. NNSA Has Identified Challenges in Three Key Areas The challenges pertain to three key areas: (1) insufficient supply of qualified lithium material, (2) catastrophic failure of buildings or equipment, and (3) potential delays in the availability of the proposed new lithium production facility (Lithium Production Capability facility). NNSA’s supply of currently qualified lithium—lithium approved for use in weapon systems in refurbishment—will run out by 2020, according to the lithium production strategy. In April 2015, NNSA officials told us that due to additional recent increases in demand, with no additional action to increase supply, this date has moved to 2018. According to NNSA officials, with no additional action to increase supply, Y-12 may run out of qualified lithium by 2018. In March 2014, for example, a 300-pound slab of concrete fell from the ceiling into an active work area—an area that has since been roped off and is no longer in use (see fig. Procure lithium from outside sources. The mitigating actions identified in the lithium production strategy are in early stages of development, and may bring additional challenges. NNSA’s Mission Need Statement for a Lithium Production Capability Is Not Fully Independent of a Particular Solution NNSA did not develop a mission need statement for lithium production that is fully independent of a particular solution, contrary to the direction of DOE Order 413.3B. In January 2015, NNSA program officials submitted a statement of mission need, or CD-0, for lithium production for approval to the Deputy Administrator for Defense Programs, NNSA. This statement was approved on June 10, 2015. According to the order and related guidance, this approach allows a program office the flexibility to explore a variety of solutions. The Lithium Production Capability mission need statement is a 24-page document that includes, among other things, a description of the capability gap, alternatives for addressing its mission need, and a section for estimated cost and schedule ranges. The mission need statement details this gap in terms of functional and operational gaps, including (1) the continued physical deterioration of the building where lithium operations are being conducted and the resulting shortage of components; (2) the continuous deterioration of mechanical and electrical systems in the existing facility (building 9204-2), with increasing unsustainable energy costs and greenhouse gas emissions, which will affect controlled work environments, ongoing operations, and delivery of mission work; (3) the inability to introduce new technologies into the facility due to its degraded condition; and (4) the facility’s noncompliance with current codes. NNSA’s mission need statement lists seven alternatives for addressing its mission need: do nothing, outsource the lithium processing capability, refurbish/repurpose one or more of the existing Y-12 facilities, lease off-site suitable facilities, secure third-party financing to build one or more new facilities, consider new modular facilities to transfer missions from existing facility or facilities that are beyond repair, and build a complete and functioning facility at Y-12. According to DOE Order 413.3B, the mission need should be independent of a particular solution, and should not be defined by the equipment, facility, technological solution, or physical end-item. NNSA officials noted that they plan to analyze other alternatives for meeting the mission as part of CD-1. Giving preference to a particular solution may exclude serious consideration of other potential viable alternatives. Recommendation for Executive Action To improve NNSA’s ability to choose the best alternative that satisfies the mission need for lithium production, we recommend that the Secretary of Energy request that NNSA’s Deputy Administrator for Defense Programs take steps to ensure that NNSA objectively consider all alternatives, without preference for a particular solution, as it proceeds with the analysis of alternatives process. In its comments, NNSA neither agreed nor disagreed with our recommendation. We did not conclude that NNSA would not conduct an analysis of alternatives, but that its mission need statement for lithium production was not fully independent of a particular solution, and that demonstrating preference for one alternative—a replacement facility for lithium production—may affect the rest of NNSA’s analysis of alternatives process and could potentially undermine NNSA’s ability to choose the best alternative that satisfies the mission need. Such a focus may introduce a bias into the analysis alternatives process. Appendix I: Objectives, Scope, and Methodology To describe the challenges the National Nuclear Security Administration (NNSA) has identified with its lithium production strategy, we reviewed NNSA and Y-12 National Security Complex documents related to lithium production and lithium requirements. To determine the extent to which NNSA developed an independent mission need statement for lithium production independent of a particular solution, in accordance with DOE direction and guidance, we identified the requirements and guidance by reviewing DOE Order 413.3B (“Program and Project Management for the Acquisition of Capital Assets”) and DOE G 413.3-17 (“Mission Need Statement Guide”).

Why GAO Did This Study An isotope of lithium is a key component of nuclear weapons and is essential for their refurbishment. NNSA halted certain aspects of its lithium production operation—conducted at its Y-12 site—in May 2013 due to the condition of the site's 72-year old lithium production facility. Y-12 management concluded that usable lithium could run out without additional actions. In response, NNSA developed a strategy that proposed a new lithium production facility by 2025 and identified “bridging” actions needed to meet demand through 2025. In January 2015, NNSA submitted for approval a mission need statement for lithium production capabilities. Senate Report 113-176 included a provision for GAO to review lithium production at NNSA's Y-12 site. This report (1) describes the challenges NNSA has identified with its lithium production strategy, and (2) determines the extent to which NNSA developed a mission need statement that is independent of a particular solution, as called for in DOE's directive on project management. To do this work, GAO reviewed relevant agency directives, guidance, and other documents and interviewed agency officials. What GAO Found The National Nuclear Security Administration's (NNSA) has identified various challenges in its lithium production strategy that may impact its ability to meet demand for lithium in the future, as well as actions that may mitigate these challenges. These challenges pertain to three key areas. First, NNSA may not have a sufficient supply of lithium material for defense program requirements. NNSA officials told GAO in April 2015 that, due to additional recent increases in demand, its supply of currently qualified lithium—lithium approved for use in weapon systems in refurbishment—will run out by 2018 without additional actions. Second, at NNSA's Y-12 National Security Complex in Oak Ridge, Tennessee, where lithium production operations are conducted, the existing lithium production facility and equipment are at risk of catastrophic failure. In March 2014, for example, a 300-pound slab of concrete fell from the ceiling into an active work area (this area is no longer in use). Third, fiscal constraints could cause delays in the construction of a new lithium production facility. NNSA, in its lithium production strategy, also identifies various actions that it could take to mitigate these challenges—including procuring lithium from outside sources and outsourcing certain aspects of the lithium production process. However, the mitigating actions are in early stages of development, and may bring additional challenges. In developing and implementing its lithium production strategy, NNSA did not develop a mission need statement that is fully independent of a particular solution, contrary to the agency directive on Program and Project Management for the Acquisition of Capital Assets, which governs the design and construction of new facilities (DOE Order 413.3B). According to this directive, the mission need statement should be independent of a particular solution, and it should not be defined by the equipment, facility, technological solution, or physical end-item. This allows the program office responsible for the capital asset project to explore a variety of alternatives. In January 2015, NNSA program officials submitted a mission need statement for lithium production for approval to the Deputy Administrator for Defense Programs, NNSA. It was approved on June 10, 2015. The mission need statement included, among other things, a description of the capability gap, alternatives for addressing its mission need—such as building a new facility, leasing off-site facilities, or outsourcing lithium processing—and estimated cost and schedule ranges. However, the document expresses the capability gap in terms of a particular solution—specifically, a new facility. For example, it includes multiple references to an alternative facility to replace the existing facility, suggesting that NNSA gave preference to building a new facility. In addition, it did not include cost and schedule estimates for six of the seven alternatives presented in the mission need document. The mission need statement includes cost and schedule estimates only for the alternative of building a functioning facility at Y-12. NNSA officials told GAO that they plan to analyze other alternatives for meeting the mission need for lithium production. However, by seemingly giving preference to a particular solution in its mission need document, NNSA is not following DOE's project management order, which may preclude serious consideration of other potential viable alternatives. A mission need statement biased toward a particular solution may introduce bias into the rest of the analysis of alternatives process. What GAO Recommends GAO recommends that NNSA objectively consider all alternatives, without preference for a particular solution, as it proceeds with its analysis of alternatives process. NNSA neither agreed nor disagreed with GAO's recommendation; however, it disagreed with the conclusions. GAO continues to believe its conclusions are fair and well supported.

gao_GAO-13-326

gao_GAO-13-326_0

U.S. law allows the export of certain agricultural goods, medicine, and medical devices to Iran under certain conditions. From 2010 through 2012, the United States Established Additional Financial Sanctions Targeting Iran Recent congressional legislation and a number of executive orders enacted since 2010 have established additional U.S. financial sanctions targeting Iran. According to an Under Secretary of the Treasury, “CISADA set a new precedent” because “… t gave the Secretary of the Treasury the authority for the first time to require U.S. banks to terminate correspondent banking relationships with foreign banks that knowingly engaged in significant transactions with designated Iranian banks.” Among other actions, section 104(c) of CISADA required the Secretary of the Treasury to prescribe regulations to prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution found to have knowingly engaged in certain activities or facilitating a significant transaction by entities such as Iran’s Islamic Revolutionary Guard Corps (IRGC). Agencies Administer and Enforce U.S. Financial Sanctions Targeting Iran U.S. government agencies and regulators administer and enforce U.S. financial sanctions targeting Iran with banks’ assistance. State administers some investment and trade sanctions, principally energy sanctions, targeting Iran. The federal and state banking regulators ensure effective compliance with these sanctions programs by the banks that they regulate. Specifically, since 2005, Treasury and Justice, in coordination with State and federal regulators, have taken actions against banks, assessing large financial settlements for systematic and willful violations of sanctions laws, including violations of Iran financial sanctions regulations. Treasury has primary responsibility for administering the finance-related provisions of recent U.S. sanctions authorities by developing regulations, conducting outreach to domestic and foreign financial regulators and financial institutions, and identifying apparent sanctions violations. Treasury also assesses the effects of financial sanctions on the Iranian economy. Identification of violations. Similarly, in December 2012, both HSBC Holdings, PLC and HSBC Bank USA N.A. U.S. and International Sanctions Have Adversely Affected the Iranian Economy, and Iran Is Attempting to Adapt to Them The combination of the various U.S. and international trade, investment, and financial sanctions has adversely affected the Iranian economy and its future outlook. Our analysis indicates that the Iranian economy has consistently underperformed comparable peer countries across key economic indicators since the enactment of U.S. and international sanctions between 2010 and 2012. Following the enactment of sanctions beginning in 2010, Iran’s oil production, oil export revenue, and gross domestic product (GDP) have declined relative to comparable countries, and inflation has increased. Some experts stated that the deterioration in Iran’s recent economic performance resulted from a combination of sanctions— including U.S. and international sanctions—and economic mismanagement by the government of Iran. Several aspects of the sanctions have reduced Iran’s ability to produce oil. Since 2010, Iranian oil export revenue has declined while peers’ revenue has increased. Three forecasters—IHS Global Insight, IMF, and the Economist Intelligence Unit—have downgraded their forecasts of the Iranian economy to reflect a deterioration in Iran’s expected economic performance after the enactment of recent U.S. and international sanctions. EU and U.S. Exports of Humanitarian Goods to Iran Increased During 2012 Our analysis indicates that EU and U.S. exports of humanitarian goods to Iran increased by about 35 percent in the first 10 months of 2012, from $1.671 billion in the first 10 months of 2011 to $2.258 billion in the first 10 months of 2012 (see table 3). Iran Is Trying to Adapt to Sanctions by Seeking New Payment Mechanisms and Changing Trading Partners Iran Is Reportedly Using Barter Agreements for Some Oil Exports According to open sources, the government of Iran has made efforts to adapt to U.S. and international sanctions in a number of ways, including using alternative payment mechanisms such as barter agreements and changing its trading partners. However, these recent agreements have thus far not fully offset the reduced exports to the EU and others. GAO staff who made key contributions to this report are listed in appendix V. Appendix I: Scope and Methodology To describe recent laws and executive orders that have added to the Department of Treasury’s (Treasury) authority to implement financial sanctions targeting Iran, we reviewed the public laws and executive orders that define these sanctions, as well as the regulations developed to administer them. To review the impact of sanctions targeting Iran on the availability of humanitarian goods to Iran, we reviewed official UN and open source reports about the access of such goods in Iran.

Why GAO Did This Study Since 1987, the United States has implemented a broad range of sanctions targeting Iran to deter it from developing its nuclear program, supporting terrorism, and continuing its human rights abuses. Beginning in 2010, Congress has enacted additional financial sanctions which generally restrict Iranian access to the U.S. financial system. In addition, the United Nations and the European Union have adopted several sanctions to compel Iran to suspend its nuclear program. However, concerns have been raised in Congress and by the United Nations about the impact of these sanctions, including the effect of recent financial sanctions on exports of humanitarian goods to Iran. The export of certain humanitarian goods to Iran is allowed by U.S. law, under certain conditions. In this report, GAO (1) describes recent laws and executive orders that have added to Treasury's authority to implement financial sanctions targeting Iran, (2) describes U.S. efforts to administer and enforce the financial sanctions, and (3) analyzes evidence of the effect that recent U.S. and international sanctions have had on the Iranian economy. GAO reviewed U.S. public laws, executive orders, and agency guidance; met with U.S. agency officials; and analyzed trade and economic data from the International Monetary Fund, European Union, and others, as well as forecasts of Iran's future economic performance. What GAO Found Since 2010, congressional legislation, such as the Comprehensive Iran Accountability, Sanctions, and Divestment Act of 2010 (CISADA), as well as a number of executive orders, have established additional U.S. financial sanctions targeting Iran. For example, CISADA authorized the imposition of sanctions on foreign financial institutions that facilitated certain activities or financial transactions by entities including Iran's Islamic Revolutionary Guard Corps. According to an Under Secretary of the Treasury, CISADA "set a new precedent," because "[i]t gave the Secretary of the Treasury the authority for the first time to require U.S. banks to terminate correspondent banking relationships with foreign banks that knowingly engaged in significant transactions with designated Iranian banks." The Department of the Treasury (Treasury)-along with other U.S government agencies-administers and enforces U.S. financial sanctions targeting Iran. Treasury administers the sanctions by developing regulations, conducting outreach to domestic financial regulators and foreign banks, identifying apparent sanctions violations, and assessing the effects of the sanctions. State administers some investment and trade sanctions, principally energy sanctions, targeting Iran. U.S agencies and federal and state banking regulators have taken a range of actions to ensure compliance with financial sanctions. Specifically, in recent years, Treasury and the Department of Justice (Justice) have taken actions against banks for systematic and willful violations of sanctions laws, including violations of U.S. financial sanctions regulations targeting Iran. For example, in 2012, Justice announced that both HSBC Holdings, PLC and HSBC Bank USA NA had agreed to forfeit $1.256 billion to the United States in connection with violations of sanctions targeting Iran, among other countries. The combination of U.S. and international sanctions has adversely affected the Iranian economy and its future outlook. According to GAO's analysis, the Iranian economy has consistently underperformed the economies of comparable peer countries across a number of key economic indicators since 2010, when recent sanctions were enacted. In contrast to its peers, Iran's oil production, oil export revenues, and economic growth estimates have fallen, and its inflation has increased. For example, Iran's oil export revenues fell by 18 percent from 2010 to 2012, while its peers' oil export revenues increased by 50 percent. In addition, professional and International Monetary Fund forecasts of the Iranian economy were downgraded to reflect deterioration in Iran's expected economic performance after the implementation of recent sanctions. Some experts have stated that Iran's recent economic deterioration has resulted from a combination of sanctions and Iranian economic mismanagement. GAO's analysis of European Union and U.S. exports to Iran of humanitarian goods indicates that exports of these goods, such as agricultural goods and medicines, increased in the first 10 months of 2012 compared with 2011. UN reports have raised concerns about the availability of such goods in Iran. According to open sources, the government of Iran has tried to adapt to the sanctions through various means, including using alternative payment mechanisms such as barter agreements and changing its trading partners. However, these recent agreements have thus far not fully offset the reduced exports of oil to the European Union and others.

gao_GAO-04-36

gao_GAO-04-36_0

While OSC Was Far More Successful in Meeting Time Limits For Processing Prohibited Personnel Practices Cases than Whistleblower Disclosure Cases, Backlogs of Both Types of Cases Persisted OSC met the 240-day case processing statutory limit for about 77 percent of prohibited personnel practices cases from fiscal years 1997 through 2003 and met the 15-day statutory limit for whistleblower disclosure cases about 26 percent of the time. OSC’s average time to process a whistleblower disclosure case was more than six months for each of the seven years we examined. Table 5 shows that over the seven-year period, whistleblower disclosure cases in backlog averaged 96 percent. These data show that the merger of the agency’s investigators and attorneys into three parallel investigative and prosecutive units and the adoption of streamlined investigative procedures increased productivity, while the adoption of a priority system for processing prohibited personnel practices and whistleblower disclosure cases allowed more important cases to be handled more expeditiously. OSC noted several mitigating factors, including staff turnover and the need to train new staff, which limited its ability to process more cases and reduce the backlog of cases. OSC has not detailed in any of its documents created for Congress or the executive branch a comprehensive strategy for processing more cases within statutory time limits and reducing the backlog of cases. Claim that Budget for Staff Has Not Kept Pace with Caseload Does Not Fully Explain OSC’s Case Processing Record OSC officials told us that the primary reason that the agency has not been more successful in meeting the statutory time limit for its cases, particularly those involving whistleblower disclosure, is lack of an adequate number of staff. Meeting 15-day Limit for Whistleblower Disclosure Cases Is Difficult, But OSC Has Not Proposed an Alternative Time Limit According to OSC, in 1978, during congressional consideration of the Civil Service Reform Act of 1978, senators drafting the legislation envisioned that 15 to 20 full-time staff would be needed to process whistleblower disclosure cases within 15 days. Presenting a strategy to Congress that demonstrates how additional staffing, organizational changes, or legislative solutions would help reduce the backlog of prohibited personnel practices and whistleblower disclosure cases would provide Congress with information that it needs for oversight and resource allocation. Our review provided information in the following areas (1) OSC’s caseload by type and number and changes to the caseload between fiscal years 1997 to 2003, (2) the extent to which cases were processed within time frames set by Congress, (3) actions taken by management to address workload issues, and (4) the agency’s perspective on the adequacy of its resources.

Why GAO Did This Study The U.S. Office of Special Counsel has not been consistently processing cases within statutory time limits, creating backlogs. Because the backlogs are of concern to the Congress, this report provides information on how many cases were processed within statutory time limits, the actions taken by OSC to address case processing delays and backlog, and the agency's perspective on the adequacy of its resources and our analysis of this perspective. What GAO Found The U.S. Office of Special Counsel (OSC) met the 240-day statutory time limit for processing prohibited personnel practice cases about 77 percent of the time from fiscal year 1997 through 2003 and met the 15-day limit for processing whistleblower disclosure cases about 26 percent of the time. OSC took an average of more than six months to process a whistleblower disclosure case. Over the seven-year period, 34 percent of the prohibited personnel practices cases were backlogged as were 96 percent of the whistleblower disclosure cases. In an attempt to address workload issues, in 2001 OSC streamlined processes and hired additional staff. OSC data indicate that the merger of the agency's investigators and attorneys into a single unit increased the average number of cases processed per individual from June 2001 to June 2002. A case priority processing system for prohibited personnel practices and whistleblower disclosure cases allowed OSC to process more important cases more expeditiously, according to OSC. OSC officials told us that the primary reason the agency has not been more successful in meeting the statutory time limits for its cases, particularly those involving whistleblower disclosure, is lack of an adequate number of staff. Our analysis of OSC data indicates, however, that even with increased staffing, the agency was not able to process a significantly larger number of cases within the time limits. OSC noted that staff turnover and the need to train new staff lowered its productivity. Officials also noted the difficulty in meeting the 15-day limit for processing whistleblower disclosure cases, but have not proposed an alternative time limit. In external documents to Congress, OSC has discussed its case processing and backlog difficulties, but has not developed a comprehensive strategy for dealing with them. Presenting such a strategy would provide Congress with information that it needs for oversight and resource allocation.

gao_OSI-98-1

gao_OSI-98-1_0

Sato & Associates Contract Based on our investigation, we believe there was insufficient urgency to limit competition and that the sole-source contract to Sato & Associates was not proper. Further, the cost of that review, over $90,700, appears artificially high. When we asked the contracting officer why she did not attempt to identify other individuals or companies that could perform the contract, she stated that Ms. Lau had told her that Mr. Sato “had unique capabilities which would preclude the award of a management studies contract to anyone else.” Contract Award On January 9, 1995, Treasury’s PSD awarded a contract at the request of the Treasury OIG to Sato & Associates to perform a management study of the Treasury OIG. The contract was awarded without full and open competition on the basis of unusual and compelling urgency. The J&A for the Sato contract provided that “he Government would be injured if the Inspector General is unable to quickly assess any needs for management reform and make any required changes that would ensure that she receives the appropriate staff support for the implementation of her policies.” According to the contracting officer, when she questioned Ms. Lau about the justification for the Sato contract and whether an urgent need existed, Ms. Lau stated that she did not want to divulge too much of “the internal goings-on” in the Inspector General’s Office to the contracting officer. In June 1995, Interior awarded a management study contract to Sato & Associates for approximately $62,000 less than the offer in Mr. Sato’s unsolicited proposal. They were to “a. On August 17, 1995, OPM conducted a preliminary briefing with senior OIG staff concerning the nature of the OIG problems. She wanted the contract awarded before the annual OIG managers’ meeting scheduled for September 14, 1995, to prove to her managers that she intended to fix the problems identified in the OPM study. Following receipt of the proposals and oral presentations by the offerors, two OIG officials selected Kathie M. Libby, doing business as KLS, a consultant from OPM’s list, as the successful contractor. Contract Award On September 12, 1995, a time-and-materials contract was awarded to KLS. The agency justified limiting the competition on the basis of unusual and compelling urgency. However, we do not believe Ms. Lau’s ability to convey that message at the management conference and to correct the problems identified in the OPM study would have been seriously impaired had the announcement of the actual consultant been delayed by a few months in order to conduct a full and open competition. The original term of the contract was 1 year. In our view, the largest modification (Modification 4) materially deviated from the original contract’s scope of work and should have been the subject of a separate procurement action. Poor Management Practices In addition to legal improprieties in the manner in which the agency awarded and assigned tasks under the contract, we found a pattern of careless management in the procurement process and in oversight of performance under the contract. In several instances, KLS performed and billed for work that was not included in the contract statement of work. A review of Ms. Lau’s travel vouchers revealed that she had made 22 trips between September 1994 and February 1997 (30 months)—5 to California of which 3 included stops in San Francisco.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the award of a sole-source contract to Sato & Associates for a management study of the Department of the Treasury's Office of Inspector General (OIG) and of a consulting services contract to Kathie M. Libby, doing business as KLS, using other than full and open competition. GAO also reviewed the nature and purpose of trips to California made by Treasury Inspector General (IG) Valerie Lau since her appointment. What GAO Found GAO noted that: (1) shortly after her confirmation as Inspector General, Ms. Lau notified the Treasury Procurement Services Division (PSD) that she wanted Sato to perform a management review; (2) PSD awarded a sole-source management study contract to Sato on the basis of unusual and compelling urgency; (3) although Ms. Lau stated that the need to limit competition was urgent because of the need to make reassignments in the senior executive ranks and to marshal the resources needed to conduct audits, there was insufficient urgency to limit competition; (4) the price of Sato's contract for the Treasury OIG effort appears to be artificially high, in light of the fact that the firm performed a similar review of the Department of the Interior OIG for approximately $62,000 less; (5) in September 1995 PSD awarded a time-and-materials, consulting services contract to Libby to review and analyze an Office of Personnel Management (OPM) report on morale and diversity problems in the OIG office and assist OIG managers and staff concerning goals identified in the OPM study; (6) the contract was awarded on the basis of unusual and compelling urgency following limited competition; (7) the justification for limiting competition was not reasonable, since Ms. Lau could still have conveyed to her managers that the problems identified in the OPM study would be addressed and corrected those problems, had the consultant selection been delayed a few months to obtain full and open competition; (8) the largest modification made to the KLS contract was outside the scope of the contract and should have been obtained through a separate, competitive procurement; (9) GAO identified a pattern of careless management in the procurement process and in oversight of performance under the KLS contract; (10) OIG failed to fully understand and articulate its needs, resulting in a fourfold increase in the contract's total price and a 1-year extension to the period of performance; (11) OIG paid for work that was not authorized, and payments were made without verification that work had been done and without determining that travel and transportation costs documents had been received; and (12) all five of Ms. Lau's trips to California made between September 1994 and February 1997 were scheduled for work-related reasons.

gao_GAO-06-1009T

gao_GAO-06-1009T_0

The Bureau Has Made Significant Progress Preparing for the 2010 Census The Bureau has made significant progress redesigning its approach for conducting the 2010 Census, including early planning, a greater reliance on contractors, and actions related to nonresponse follow-up, a key cost driver. Specifically, the Bureau’s preparations for the 2010 Census appear to be further along than at a similar point during the planning cycle for the 2000 Census. Bureau Will Make Extensive Use of Contractors for 2010 Census For the 2010 Census the Bureau plans to make the most extensive use of contractors in its history, turning to the private sector to supply a number of different mission-critical functions, including nationwide data collection and processing activities, and improvements to the address file and maps. The Bureau estimates that of the $11.3 billion total cost of the census, around $1.9 billion (or 17 percent) will be spent for its seven largest contracts. Closely monitoring these major contracts will be important. The Bureau has agreed to take steps to mitigate some of these challenges, such as enhancing the ability of key contract project offices to better manage contracts through such actions as developing action plans with milestones for key activities and regularly briefing senior managers. Bureau Has Taken Steps to Reduce Nonresponse Follow-up Costs, but Challenges with Technology Remain Since 2000, the Bureau has reengineered the decennial census and has begun to implement new initiatives to reduce the cost of nonresponse follow-up, including a short-form-only census and automation, the key feature of which is the use of hand-held mobile computing devices (MCD). However, the MCDs experienced significant reliability problems during the 2004 and 2006 census tests. However, the new MCD will not be operationally tested until the 2008 Dress Rehearsal, and if problems do emerge, little time will be left to develop, test, and incorporate refinements. If after the 2008 Dress Rehearsal the MCD is found not to be reliable, the Bureau could be faced with a remote but daunting possibility of having to revert to the costly, paper-based census used in 2000. Bureau Does Not Have Sufficient Planning and Cost Documentation for the 2010 Census Despite its emphasis on cost containment, the Bureau does not have a comprehensive, integrated project plan that details milestones and itemized costs for completing key activities for the 2010 Census, and its $11.3 billion life-cycle cost estimate for the 2010 Census lacks timely and complete supporting data. The supporting data of the estimate are not timely because they do not include the most current information from testing and evaluation, and the estimate is not complete because it does not provide sufficient information on how changing assumptions could affect cost. Absent this information, we are unable to determine the affect proposed budget reductions will have in 2007, as well as the impact of those reductions on the overall design and the Bureau’s 2010 life-cycle cost estimate. As previously noted, the Bureau now estimates the 2010 Census will cost over $11.3 billion, making it the most expensive in history, even after adjusting for inflation. For example, one key assumption that has not been updated pertains to the use of a new technology—new hand-held, GPS-enabled MCDs. The Bureau anticipated that the use of MCDs would facilitate reductions in administrative and support costs in the Bureau’s field offices, including a 50 percent reduction in clerical and administrative local census office staff costs and a 50 percent reduction in space at each local census office. Specifically, Bureau evaluations of the 2004 test show that more help desk staff at the local census office were needed to support the use of the MCD, and additional storage space was needed for the devices. In our view, revising cost estimates on the most recent information— including test results that are pertinent to cost assumptions—can assist the Bureau and external decision makers to oversee costs and make necessary resource allocations to help ensure a successful, cost-effective census. We also stated that updates of the life-cycle cost could be timelier—previously the life-cycle cost estimate had been provided at 2- year intervals. Conclusions Questions have been raised about the impact of proposed reductions in the Bureau’s fiscal year 2007 overall budget request.

Why GAO Did This Study The U.S. Census Bureau (Bureau) estimates that the 2010 Census will cost over $11.3 billion, making it the most expensive in our history. The U.S. House of Representatives and Senate appropriation bills propose to reduce the Bureau's fiscal year 2007 budget request, raising questions about the Bureau's design of the 2010 Census and associated costs. Based on issued GAO work, this testimony addresses the extent to which the Bureau has (1) made progress redesigning its approach, including nonresponse follow-up, a key cost driver; and (2) developed a comprehensive project plan for the 2010 Census, as well as timely, detailed cost data for effective oversight and cost control. What GAO Found Since 2000, the Bureau has made significant progress in redesigning the 2010 Census. Preparations for the 2010 Census appear to be further along than at a similar point of the 2000 Census; the Bureau plans to make the most extensive use of contractors in its history to implement such mission-critical tasks as data collection and processing, and updating addresses and maps; and it has developed new initiatives, such as changing to a short-form-only census and automating field operations to reduce nonresponse follow-up costs. Still, the Bureau will have to resolve challenges that could increase the costs of the census. For example, the Bureau will need to effectively monitor contracts, as $1.9 billion of the $11.3 billion life-cycle costs will be spent on seven major contracts. The Bureau has agreed to take steps to mitigate some of these challenges, such as enhancing the ability of key contract project offices to better manage contracts through such actions as developing action plans with milestones for key activities and regularly briefing senior managers. Also, the use of hand-held mobile computing devices (MCD) to help reduce nonresponse follow-up costs by automating operations and managing the agency's payroll is a key component of the redesigned census. However, the MCDs experienced reliability problems during testing. The Bureau maintains that those problems will be fixed by developing a new MCD through a contract awarded in March 2006; however, the new MCD will not be tested until the 2008 Dress Rehearsal, and little time will remain to develop, test, and incorporate refinements if the MCDs do not perform as expected. If after the Dress Rehearsal the MCD is found to be unreliable, the Bureau could be faced with the remote but daunting possibility of having to revert to the costly paper-based census used in 2000. The Bureau has not developed and provided a comprehensive, integrated project plan that details milestones, itemized costs, and measurable goals for completing key activities. Also, the Bureau's $11.3 billion life-cycle cost estimate lacks timely and complete supporting data, because it does not contain the most current information from testing and evaluation nor does it provide sufficient information on how changing assumptions could affect costs. For example, one key assumption that has not been updated pertains to the use of the MCDs. The Bureau anticipates that their use could reduce administrative and support costs in its local census offices, including 50 percent cost reductions for staff and office space. However, the 2004 Census Test showed that more help desk staff and more storage space would be needed to support the devices. The Bureau did not change the life-cycle cost estimate because, in the view of Bureau managers, field tests are for operational purposes, not to inform cost estimates. However, using test results to update cost assumptions could assist the Bureau and external policymakers to oversee costs and make necessary resource allocations. Furthermore, absent a comprehensive plan and updated cost information, the effect of proposed 2007 budget reductions on the overall design and life-cycle costs of the 2010 Census cannot be determined.

gao_RCED-96-83

gao_RCED-96-83_0

At the Port Level, Most Key Stakeholders Have Limited Involvement in VTS 2000 Given that the Coast Guard is not yet at the point of determining what VTS 2000 equipment will be installed at each port, it is perhaps not surprising that many key stakeholders we interviewed said they had little or no involvement in VTS 2000. However, among those who supported VTS 2000, many said their support was conditional. As table 3 showed, views on funding such a system were mixed. In general, because stakeholders we interviewed perceived that other VTS alternatives could be less costly than VTS 2000, they were somewhat more disposed to consider paying for a VTS alternative. These concerns include the private sector’s ability to fund the initial start-up costs of such a system, the private sector’s exposure to liability, and the Coast Guard’s role in planning and overseeing a privately funded system. A report produced by the state of Florida states that “any interim [VTS] system should be established in conjunction with the Coast Guard since a system without Coast Guard support will have no real authority and may not conform with other U.S. Coast Guard systems.” While support for the Coast Guard’s involvement in privately funded systems was widespread, opinions were somewhat divided over what form this involvement should take. Important questions about the VTS program currently remain unanswered, including how many ports need the system, how much it will cost, and whether other cost-effective solutions are available. Given the (1) high development costs for the program (estimated at up to $145 million) and (2) the large number of proposed sites that show relatively low net benefits from acquiring new VTS 2000 systems, determine whether the safety benefits of VTS 2000 can be achieved more inexpensively by installing other VTS systems, perhaps patterned after existing, recently upgraded Coast Guard systems. The scope of its operation depends in part on the river conditions. Ten of the 17 ports under consideration for VTS 2000, however, currently have some form of VTS system or radio-based information system. II provided additional information on the Port Needs Study). Additional copies are $2 each. A recorded menu will provide information on how to obtain these lists.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the Coast Guard's vessel traffic service (VTS) 2000 program, focusing on: (1) the status of the program; (2) the extent to which major stakeholders support the programs; (3) whether major stakeholders who do not support VTS 2000 acquisition and funding are interested in acquiring other VTS systems; and (4) the issues that could affect privately funded VTS systems. What GAO Found GAO found that: (1) VTS 2000 presents large-scale uncertainties as to the demand for the system or how much it will cost because the Coast Guard does not have adequate information on how many ports will operate VTS 2000; (2) VTS 2000 development plans have not reached the stage where specific components have been selected for ports; (3) at many proposed locations, the economic benefits of installing VTS 2000 are unclear; (4) VTS 2000 stakeholders stated that they have had no involvement with the program; (5) support for VTS 2000 is mixed because potential stakeholders believe that it will be too expensive for their ports and users would be unfairly targeted; (6) supporters of other VTS systems believed that alternate systems would be less expensive or existing systems were sufficient; (7) ports without VTS favor adding some form of VTS capability, but are reluctant to fund it; and (8) the privatization of VTS depends on the private sector's ability to fund the system, exposure to liability, and the Coast Guard's ability to oversee the transition.

gao_RCED-96-42

gao_RCED-96-42_0

States’ and EPA’s Permitting Authorities Vary in Whether and How They Control Pollutants in Discharge Permits Our review of the data on municipal permits for five commonly discharged toxic pollutants disclosed that decisions about whether and how to control pollutants differed both from state to state and within states. Because EPA relies on its regional offices to oversee the states’ implementation policies, it does not maintain national information on these policies. Moreover, except for some efforts by its regional offices, EPA has not assessed the impact of the differences among the states. EPA said that its regional offices do review the states’ standards and implementation policies and that they do consider the impact of variations among the states in their reviews. Major contributors to this report are listed in appendix V. EPA’s and the States’ Responsibilities Figure I.1 illustrates the roles and responsibilities of the Environmental Protection Agency (EPA) and the state agencies in developing water quality standards and implementing them in the permits issued to municipal and industrial wastewater treatment facilities under the National Pollutant Discharge Elimination System program (NPDES). Approve states' water quality standards.

Why GAO Did This Study GAO reviewed the Environmental Protection Agency's (EPA) authority to permit municipal wastewater treatment facilities to discharge pollutants into surface waters, focusing on: (1) differences in how EPA and the states control discharges of specific pollutants; and (2) EPA oversight of state water quality standards and policies. What GAO Found GAO found that: (1) controls over the discharge of pollutants in surface waters vary by state; (2) differences in state water pollutant controls are a concern to neighboring states that share water bodies; (3) differences in state controls exist because surface waters differ greatly throughout the country and EPA regulations allow for flexibility in the way states assess and control water pollution; (4) EPA has limited oversight of state water quality standards, since it does not maintain sufficient information on state implementation policies or assess the impact of variations among states and it reviews relatively few permits; and (5) EPA plans to enhance its reviews of state implementation policies and increase its emphasis on controlling pollution within watersheds.

gao_GAO-03-975

gao_GAO-03-975_0

Enterprise was founded in 1982 as a vehicle for helping low-income people revitalize their communities. Originally the act focused on providing funding for capacity building in 23 urban areas. Currently, it provides funding to groups and activities in urban, rural, and tribal areas nationwide. Grantees Use a Variety of Methods to Help Build Capacity LISC and Enterprise are national organizations that use local program offices to provide financial and technical support to CDCs. Generally, Section 4 funds are used to pay for staff salaries, training, technology, and office supplies and equipment and to fund the operating support collaboratives. Figure 4 illustrates the broad impact that Section 4 funding had for this nonprofit organization on other CDCs. All four grantees currently have initiatives that focus on these areas. Grantees Have Raised Significant Amounts of Private Sector Funding and other cash and in-kind contributions. However, we could not demonstrate Other Resources Since the four grantees became eligible for Section 4 funding, they have raised nearly $800 million from the private sector in matching funds and empirically that Section 4 funding influenced the grantees’ fund-raising owing to external factors such as economic trends and private sector interests. However, HUD relies on the grantees to ensure that they and their subrecipients are matching funds correctly. Furthermore, in response to a GAO report recommendation that HUD require program offices to determine the practicability of measuring the impact of technical assistance and establishing objective, quantifiable, and measurable performance goals, HUD is working with a group of national technical assistance providers to develop a framework to assess the effectiveness of its technical assistance programs. HUD is responsible for ensuring that grantees are utilizing Section 4 funds according to federal law and regulations and has several controls in place to ensure that they do. While HUD has overarching responsibility for detecting such internal control failures, the cost-effectiveness of adding additional federal controls at the subrecipient level must be weighed against the size of the program and the amount of federal funding involved. Given the relative size of the Section 4 program and the fact that similar problems should not recur if HUD and the grantees remain vigilant, we do not believe that additional controls are necessary at this time. To determine the importance of Section 4 funding to private sector involvement in community development initiatives, we reviewed public laws, federal regulations, HUD directives, budget documents, and other materials. To determine how HUD and Section 4 grantees controlled the management and measured the impact of Section 4 programs, we reviewed and analyzed HUD and grantee criteria, processes and procedures for monitoring, controlling, and measuring performance and tested grantee monitoring and control procedures at seven subrecipients. We will also send copies to the Secretary of Housing and Urban Development and the Director of the Office of Management and Budget.

Why GAO Did This Study Congress recognized the importance of building the capacity of community development organizations by passing Section 4 of the HUD Demonstration Act of 1993. The act authorized the Department of Housing and Urban Development (HUD) to partner with several national nonprofit organizations that provide funding to these community groups for such things as training, staff salaries, office equipment and supplies, and management information systems. In 2002, HUD provided $31 million for capacitybuilding activities. To help Congress with its oversight of Section 4, we reviewed the evolution and use of Section 4 funding, the importance of Section 4 funding to private sector involvement, and the management controls and measurements that are in place to assess Section 4. What GAO Found We found that Section 4 has evolved from a narrowly targeted initiative that focused on providing funding for capacity building in 23 urban areas to a broader program that funds groups and activities in urban, rural, and tribal areas nationwide. The four organizations (grantees) use Section 4 funding to provide a variety of capacity-building support to their subrecipients. These subrecipients are nonprofit organizations that undertake locally targeted initiatives in areas such as economic development, low-income housing construction, and job training. The Section 4 funds that the grantees receive help leverage private sector funding and in-kind contributions such as land and equipment, pro bono legal services, office space, and voluntary labor. Since the four grantees became eligible for Section 4 funding, they have leveraged nearly $800 million in cash and in-kind contributions from the private sector. HUD is responsible for ensuring that Section 4 funds are used according to federal law and regulations and that grantees are utilizing funds efficiently and effectively. However, HUD relies on grantees to oversee their subrecipients. The grantees had far-reaching organizational structures and processes in place to monitor and control their subrecipients. But we found that one of the seven subrecipients we tested for monitoring and control procedures had reimbursed a subrecipient for an item that was prohibited by the Office of Management and Budget (OMB). While HUD has the overall responsibility to prevent such internal control failures, the cost-effectiveness of adding additional federal controls must be weighed against the amount of the federal dollars involved. We believe that as long as HUD and the grantees remain vigilant, additional controls are not necessary at this time. HUD is taking steps to develop a framework for assessing the effectiveness of its technical assistance programs and will take part in an OMB Program Assessment Rating Tool review.

gao_GGD-95-148

gao_GGD-95-148_0

Objectives, Scope, and Methodology Our objectives were to (1) measure the growth of accounts on the invalid segment of the IMF, (2) assess IRS’ procedures to verify the identities of tax return filers whose returns were posted to the IMF invalid segment, and (3) identify any effects the procedures may have on IRS’ TSM goals and its income-matching program. It does not clearly convey that persons who file with missing or incorrect numbers, including filers who were issued temporary numbers, are required to provide documentation verifying their identities. For example, the current master file structure with its valid and invalid segments allows two or more taxpayers to have accounts under the same SSN, or one taxpayer to have several accounts under different numbers. IRS’ Income-Matching Program Hampered by Posting Returns to the IMF Invalid Segment Each year, IRS matches the income claimed by taxpayers with the income reported by third parties on information returns. IRS took steps in 1995 that, when fully implemented, could help reduce the number of accounts on the IMF invalid segment. For example, IRS is doing more to verify the identities of taxpayers who file returns with missing or incorrect SSNs, and it plans to issue permanent identification numbers to taxpayers that could be used in IRS’ matching program. GAO Comments 1. 2. 3. 4. 5.

Why GAO Did This Study GAO reviewed the Internal Revenue Service's (IRS) procedures for processing and posting tax returns with missing or incorrect social security numbers (SSN), focusing on: (1) the growth in IRS individual master file (IMF) accounts with missing or incorrect SSN; (2) IRS procedures for verifying the identities of tax return filers; and (3) the potential effect of these procedures on IRS plans to modernize the tax system and on the income-matching program. What GAO Found GAO found that: (1) the average annual growth rate for invalid IMF accounts was significant from 1986 through 1994; (2) IRS has revised its procedures to require taxpayers with missing or incorrect SSN or temporary numbers to provide documentation that verifies their identity; (3) these revised procedures could help reduce the number of invalid IMF accounts when fully implemented; (4) the IRS Tax Modernization System is in jeopardy because the master file structure allows two or more taxpayers to have accounts under the same number, or one taxpayer to have several accounts under different numbers; (5) the IRS income-matching program is hampered by posting returns to IMF invalid accounts; and (6) IRS plans to assign permanent taxpayer identification numbers to filers that are ineligible to obtain SSN and encourage the use of these numbers on information returns.

gao_GAO-05-362

gao_GAO-05-362_0

In its fiscal year 2001 report to Congress on federal government information security reform, OMB identified poor security oversight of contractor-provided IT systems and services as a common governmentwide challenge. Specifically, this information security program is to include the following periodic assessments of the risk and magnitude of harm that could result from the unauthorized access, use, disclosure, disruption, modification, or destruction of information or information systems; risk-based policies and procedures that cost-effectively reduce information security risks to an acceptable level and ensure that information security is addressed throughout the life cycle of each information system; subordinate plans for providing adequate information security for networks, facilities, and systems or groups of information systems; security awareness training for agency personnel, including contractors and other users of information systems that support the operations and assets of the agency; periodic testing and evaluation of the effectiveness of information security policies, procedures, and practices, performed with a frequency depending on risk, but no less than annually, and that includes testing of management, operational, and technical controls for every system identified in the agency’s required inventory of major information systems; a process for planning, implementing, evaluating, and documenting remedial action to address any deficiencies in the information security policies, procedures, and practices of the agency; procedures for detecting, reporting, and responding to security plans and procedures to ensure continuity of operations for information systems that support the operations and assets of the agency. In addition, as part of its statutory responsibilities under FISMA, NIST has issued standards and guidance that include consideration of security oversight of contractor-provided IT systems and services and other users with privileged access to federal data and systems. Contractors that provide systems and services or other users with privileged access to federal data and systems can introduce risks to agency information and systems. Strategic. Of the remaining 7 agencies, 5 indicated that other users do not possess or use their data and systems; 1 indicated that it had not assessed risks of other users with privileged access; and the other agency did not respond regarding whether they had assessed risks of other users with privileged access to federal data and systems. Agencies Use Various Methods for Overseeing Contractor Security Federal agencies report using three primary methods for overseeing the information security of contractors using contract language to establish information security requirements having information security policies for contractors and other users with privileged access to federal data; and using NIST self-assessment tools to assess contractor security capabilities and assess the security implemented by other users with privileged access to federal data. However when not properly implemented, each of these methods has limitations. Most Agencies Have Information Security Policies for Contractors, but Few Policies Provide for Oversight Capabilities Although most agencies reported having written policies that addressed information security for contractor-provided IT services and systems and for other users with privileged access to federal data and systems, few established specific policies for overseeing the information security practices of contractors to ensure compliance with contract requirements and agency information security policies. However, without such policies, oversight efforts can be impeded. For example, the information security requirements in FAR are being revised and OMB continues to gather data from the agencies about the number of contractor facilities reviewed by agencies. FISMA requirements apply to all federal contractors and organizations or sources that possess or use federal information or that operate, use, or have access to federal information systems on behalf of an agency. Conclusions Contractors provide valuable services that contribute to the efficient functioning of the government, but a range of risks from contractors and other users with privileged access to federal data and systems must be managed effectively. To address these complex challenges, a variety of administration efforts have been started to further enhance federal agencies’ efforts to improve information security oversight of contractors, but challenges remain. For example, the effort to update FAR guidance has not been completed. OMB General Counsel provided oral comments on the report, which have been incorporated as appropriate. OMB did not disagree with the overall recommendations and recognized the need for further agency action to address contractor security oversight. Objectives, Scope, and Methodology The objectives of our review were to Describe the information security risks associated with the federal government’s reliance on contractors providing information technology systems and services and other users with privileged access to federal data and systems federal information or access federal information systems. Identify methods used by federal agencies to ensure security of information and information systems that are operated, used, or accessed by contractors and other users with privileged access to federal data. Discuss what steps the administration is taking to ensure implementation and oversight of security of information and information systems that are operated, used, or accessed by contractors and other users with privileged access to federal data. To describe the information security risks associated with the federal government’s reliance on contractors and other organizations, we analyzed existing federal regulations, laws, and guidelines such as the Federal Acquisition Regulation (FAR); Federal Information Security Management Act of 2002 (FISMA); and National Institute of Standards and Technology (NIST) guidance. We also reviewed annual chief information officer and inspectors general FISMA reports to assess progress made in meeting FISMA requirements related to contractor security.

Why GAO Did This Study The federal government increasingly relies on information technology (IT) systems to provide essential services affecting the health, economy, and defense of the nation. To assist in providing these important services, the federal government relies extensively on contractors to provide IT services and systems. In addition to contractors that provide systems and services to the federal government, other organizations possess or use federal information or have access to federal information systems. These other organizations with privileged access to federal data and systems can include grantees, state and local governments, and research and educational institutions. The Office of Management and Budget (OMB) cited contractor security as a governmentwide challenge in a 2001 information security report to Congress. Recognizing the need for agencies to have effective information security programs, Congress passed the Federal Information Security Management Act of 2002 (FISMA), which provides the overall framework for ensuring the effectiveness of information security controls that support federal operations and assets. FISMA requirements apply to all federal contractors and organizations or sources that possess or use federal information or that operate, use, or have access to federal information systems on behalf of an agency. Our objectives were to (1) describe the information security risks associated with the federal government's reliance on contractor-provided IT systems and services and other users with privileged access to federal data and systems; (2) identify methods used by federal agencies to ensure security of information and information systems that are operated, used, or accessed by contractors and other users with privileged access to federal data; and (3) discuss steps the administration is taking to ensure implementation and oversight of security of information and information systems that are operated, used, or accessed by contractors and other users with privileged access to federal data and systems. What GAO Found Contractors and users with privileged access to federal data and systems provide valuable services that contribute to the efficient functioning of the government, but a range of risks (including operational, strategic, and legal) must be managed effectively. Most agencies recognize risks to the confidentiality, integrity, and availability of their information and systems associated with the use of contractors and other users with privileged access to federal data and systems. For example, malicious code can be inserted into agency software and systems. In addition, agencies also reported specific risks when contractors develop software or perform work at off-site facilities. Federal agencies reported additional risks to their operations posed by other users with privileged access to federal data and systems, such as lack of controlled network connections, poor access controls, and the introduction of viruses and worms. Agencies use contracts, policies, and self-assessments for ensuring information security oversight of contractors; however, each of these methods has limitations and needs further strengthening. Most agencies reported using contract language to establish information security requirements for contractors. However, agency-provided contract language generally did not address key elements of FISMA, such as annual testing of controls. In addition, the majority of agencies reported having information security policies for contractors and almost two-thirds of the agencies reported having such policies for other users with privileged access to federal data. Yet our analysis of agency-provided policies found that only 5 agencies had established policies that specifically addressed information security oversight of contractor-provided systems. Finally, the majority of agencies reported using the NIST self-assessment tool to assess contractor security capabilities. However, only 10 reported using the tool to assess the security implemented by other users with privileged access to federal data. The administration continues in its efforts to improve information security oversight of contractors, but challenges remain. For example, efforts to update the Federal Acquisition Regulation (FAR) to include the information security requirements of FISMA (which would be reflected in all relevant government contracts) have been under way since 2002, but are not yet complete. OMB continues to gather data about the number of agency systems, including those that are operated by contractors, and how many have been reviewed using a self-assessment tool. However, the data submitted showed that several agencies' chief information officers and inspectors general disagreed on the number of contractor or agency systems by as many as 100 systems or more. In addition, the data collected by OMB does not address other users with privileged access to federal data or the quality of the self assessments. Finally, NIST has developed guidance, parts of which are relevant to contractor security oversight. However, unified governmentwide guidance for overseeing information security of contractors and other users with privileged access to federal data and systems has not been issued.

gao_T-AIMD-96-165

gao_T-AIMD-96-165_0

Nor does it address the risk inherent in shifting hundreds of millions of dollars to additional contractual efforts when the evidence, as demonstrated with IRS’ Cyberfile project, is clear that IRS does not have the disciplined processes in place to manage all of its current contractual efforts effectively. IRS Does Not Yet Have a Comprehensive Strategy to Maximize Electronic Filings IRS has identified increasing electronic filings as critical to achieving its modernization vision. IRS said, for example, that it was developing and implementing a process to select, prioritize, control, and evaluate information technology investments to achieve reengineered program missions. To address IRS’ software development weaknesses and upgrade IRS’ software development capabilities, we recommended that the IRS Commissioner immediately require that all future contractors who develop software for the agency have a software development capability rating of at least CMM Level 2; and before December 31, 1995, define, implement, and enforce a consistent set of requirements management procedures for all TSM projects that goes beyond IRS’ current request for information services process, and for software quality assurance, software configuration management, and project planning and tracking; and define and implement a set of software development metrics to measure software attributes related to business goals. The Department of the Treasury report also noted that a schedule for conducting software capability evaluations was developed. However, this initial set of metrics is incomplete. IRS is using contractors to complete its security and data architectures, but has not committed to a completion date. IRS is still working on plans for its integration testing and control facility.

Why GAO Did This Study GAO discussed the Internal Revenue Service's (IRS) efforts to modernize the tax processing system. What GAO Found GAO noted that: (1) it has recently made numerous recommendations to IRS relating to its Tax Systems Modernization (TSM) effort; (2) IRS is making progress in maximizing electronic tax filing and controlling its systems and software development efforts; (3) IRS action on some GAO recommendations is incomplete; (4) IRS has not defined a process for selecting, controlling, and evaluating its technology investments, completed procedures for requirements management, quality assurance, configuration management, and project planning and tracking, or defined its systems, security, and data architectures; (5) a Department of the Treasury report acknowledged that IRS does not have the capability to develop and integrate TSM, and will obtain additional contractual help to do so; and (6) while additional contracting may help, IRS does not have the capability to successfully manage all of its current contractors.

gao_GAO-16-871T

gao_GAO-16-871T_0

The Total Number of Incidents Involving Incomplete Inactivation of Pathogens Is Unknown The total number of incidents involving incomplete inactivation that occurred from 2003 through 2015 is unknown for three reasons: (1) the inability to easily identify incidents involving incomplete inactivation in incident databases; (2) the absence of reporting requirements for pathogens that are not select agents; and (3) the absence of a clear, consistent definition of inactivation. We identified additional incidents that the Select Agent Program and NIH did not initially identify. Moreover, experts at our meeting noted that this can make it difficult to understand when an incident occurs. We also recommended that they revise reporting forms to help identify when incidents involving incomplete inactivation occur and analyze the information reported to help identify the causes of incomplete inactivation to mitigate the risk of future incidents. Gaps in Science and Limited Guidance Affect the Implementation of Inactivation in High-Containment Laboratories Several challenges affect the implementation of inactivation in high- containment laboratories, including (1) limited scientific information for developing and implementing inactivation protocols, (2) limited federal guidance for developing inactivation protocols, (3) inconsistent implementation of safeguards to help ensure inactivation is properly conducted, and (4) varied documentation requirements for shipping inactivated material. We concluded that without more comprehensive and consistent federal guidance on the development and validation of inactivation protocols, protocols will vary in their scientific soundness and effectiveness, increasing the risk that inactivation may not be achieved. The Select Agent Program Inconsistently Referred Violations and Enforced Regulations Related to Incidents Involving Incomplete Inactivation The two agencies that comprise the Select Agent Program—CDC and APHIS—did not consistently refer incidents involving incomplete inactivation for further investigation and enforcement to the HHS Office of Inspector General or APHIS’s Investigative and Enforcement Services. We found, however, that CDC and APHIS did not use the same set of criteria for referring violations for investigation by the HHS Office of Inspector General or APHIS’s Investigative and Enforcement Services. Select Agent Program officials and an expert from our group noted that the Select Agent Program is independent in its oversight of HHS labs since it organizationally exists in a separate part of the department from the HHS agencies that have high-containment laboratories. GAO Contact and Staff Acknowledgments For further information on this testimony, please contact Timothy M. Persons, Chief Scientist, at (202) 512-6522 or [email protected] or John Neumann, Director, Natural Resources and Environment, at (202) 512-3841 or [email protected].

Why GAO Did This Study This testimony summarizes the information contained in GAO's September 2016 report, entitled ( GAO-16-642 ). or John Neumann at (202) 512-3841 or [email protected] . What GAO Found The total number of incidents involving incomplete inactivation--a process to destroy the hazardous effects of pathogens while retaining characteristics for future use--that occurred from 2003 through 2015 is unknown for several reasons. One key reason is that the Select Agent Program--operated by the Departments of Health and Human Services (HHS) and Agriculture (USDA) to oversee certain dangerous pathogens, known as select agents--does not require laboratories to identify such incidents on reporting forms. According to the program, 10 incidents occurred from 2003 through 2015. However, GAO identified an additional 11 incidents that the program did not initially identify. Because the program cannot easily identify incidents involving incomplete inactivation, it does not know the frequency or reason they occur, making it difficult to develop guidance to help mitigate future incidents. The 21 identified incidents involved a variety of pathogens and laboratories, as shown below. Several challenges affect the implementation of inactivation in high-containment laboratories, including gaps in scientific knowledge and limited guidance. For example, there is limited federal guidance for researchers on the development and validation of inactivation protocols. Validation helps ensure protocols are scientifically sound and produce consistent results. Due to limited guidance, laboratories varied in their interpretation of validated methods of inactivation, resulting in researchers applying differing levels of rigor. Without more comprehensive guidance, as called for by experts, protocols will vary in their scientific soundness, increasing the risk of incomplete inactivation. The Select Agent Program did not consistently refer incidents involving incomplete inactivation for further investigation and enforcement for violations of select agent regulations. For example, the program referred incidents involving incomplete inactivation at various laboratories, but did not refer two incidents in 2014 that occurred at HHS. A memorandum of understanding between HHS and USDA states that the program should handle incidents consistently. GAO found, however, that the program does not have a consistent, written set of criteria for handling incidents. Without such criteria, the program risks inconsistent enforcement of select agent regulations. This further highlights GAO's previous finding that existing federal oversight of high-containment laboratories is fragmented and self-policing.

gao_GAO-10-289

gao_GAO-10-289_0

To fulfill this pledge, the U.S. government created the FATA Development Program, which aims to “support the Government of Pakistan’s development efforts to integrate FATA into the mainstream of Pakistan.” In support of this pledge, State reports that the U.S. government has allocated $728 million in nonmilitary assistance in Pakistan’s western frontier region, including the FATA. U.S. Development Efforts in the FATA Are Generally Aligned with U.S. National Security and Pakistan’s Development Goals, but Joint U.S.- Pakistan Implementation Plans Are Lacking The U.S. development objectives in the FATA are generally in alignment with U.S. national security goals and the government of Pakistan’s development objectives. USAID and the Government of Pakistan Have Not Developed Joint Strategic Implementation Plans for Each FATA Agency As Called for in Their Agreement In September 2007, USAID and the government of Pakistan signed an agreement regarding development activities in the FATA that included a requirement to develop joint strategic implementation plans for each of the seven FATA agencies. The United States Has Two Efforts Under Way to Track the Pledge In accordance with good management practices, the U.S. government has implemented two efforts to track the $750 million pledge. U.S. Efforts to Measure and Report the Performance of Development Programs in the FATA Are Lacking USAID and State collect reports on the performance of their FATA-specific programs, as required by federal regulations and agreements with implementing partners. INL did not collect all of the required documentation of how it tracks project performance. Development programs for which performance could be measured against annual targets generally did not achieve those targets. Additionally, USAID’s performance management plan does not identify possible evaluation efforts and does not include a timeline for duties such as assessing the quality of data obtained and reviewing implementing partners’ reports. State’s INL is using a combination of monitoring procedures, but also is not documenting its use of all of these procedures. USAID has generally documented its use of each of these monitoring procedures for its OTI development activities. As shown in figure 12, INL did not always document its use of its monitoring procedures. Recommendations for Executive Action To help ensure that U.S. development projects associated with the U.S. pledge and future spending plans for Pakistan continue to be aligned with our national security goal of assisting Pakistan in addressing terrorist threats, and have clearly articulated monitoring responsibilities, indicators, and performance tracking, we recommend that USAID work with the government of Pakistan to complete the development of joint strategic implementation plans as originally called for in the agreement between USAID and the government of Pakistan. Appendix I: Objectives, Scope, and Methodology The objectives of this review were to examine (1) the extent to which U.S. development objectives align with U.S. goals and Pakistan’s objectives, (2) U.S. efforts to track the fulfillment of the U.S. pledge, (3) efforts to measure and report the performance of development programs, and (4) efforts to monitor development assistance in the Federally Administered Tribal Areas (FATA). We interviewed U.S. officials in Washington, D.C., and in Islamabad, Pakistan.

Why GAO Did This Study Pakistan's Federally Administered Tribal Areas (FATA) has been a recognized safe haven for al Qaeda leadership and a base for the Taliban to launch cross-border attacks into Afghanistan. The United States, in an effort to assist Pakistan in addressing this threat, pledged $750 million between 2007 and 2011 to support development activities in the FATA region. This report focuses on (1) the extent U.S. development objectives align with U.S. national security goals and Pakistan's objectives, (2) U.S. efforts to track the pledge, (3) U.S. efforts to measure program performance in the FATA, and (4) efforts to monitor assistance in the FATA. GAO reviewed U.S. and Pakistani documents and interviewed U.S. and Pakistani officials in Washington, D.C., and Pakistan. GAO has prepared this report under the Comptroller General's authority to conduct evaluations on his own initiative. What GAO Found U.S. national security goals call for development assistance to aid the Pakistani government in addressing terrorist threats emanating from the FATA. GAO found that U.S. development objectives in the FATA are generally aligned with U.S. national security goals and Pakistan's FATA development plans. In September 2007, USAID and Pakistan signed an agreement regarding development activities in the FATA including the creation of joint strategic implementation plans for the seven FATA geographic areas. We found, however, that the U.S. and Pakistan have not yet completed such plans. The U.S. government has implemented two efforts to track its $750 million pledge in accordance with good management practices. State is tallying allocations of U.S. programs in Pakistan's western frontier region (which includes the FATA), and the USAID controller in Islamabad has undertaken an effort to track most, but not all, U.S. development-related obligations and expenditures in the FATA. As of the end of fiscal year 2009, the U.S. government has reportedly allocated over $728 million toward the pledge. USAID and State collect reports on the performance of their FATA-specific programs. However, key elements, such as identification of evaluation efforts and a timeline for reviewing implementing partner reports required by USAID's regulations are missing in its performance management plan for the FATA. Also, State did not collect all the required project performance documentation. Long-term development programs for which performance could be measured against annual targets generally did not achieve targets. Although hampered by security challenges that prevent direct monitoring called for in its guidance, USAID has taken steps to apply a set of indirect monitoring procedures. This includes collecting information from implementing partners and locally employed staff, and the use of a geographic information system. While USAID officials told GAO they use these methods, GAO found that USAID did not always document the use of these monitoring procedures. GAO also found that State has several monitoring procedures, but had not fully documented their use of these procedures.

gao_GAO-03-10

gao_GAO-03-10_0

Budget Formulation and Planning Efforts Are Centrally Managed, While Budget Execution and Planning Are Linked in Networks Although VHA’s budget formulation and planning processes are both centrally managed, they are not closely linked. The Office of Policy and Planning prepares VHA Network Strategic Planning Guidance, directing networks on how to develop their individual strategic plans. Performance Information Influences Resource Allocation Decisions in a Variety of Ways at These Networks Integrating performance information into resource allocation decisions is apparent at the network level during budget execution. At the two networks we visited, managers told us that they use an internal data system that compares cost and performance data across facilities as a tool to make resource allocation decisions. Network managers also use various communication methods, both within their networks and across other networks, to share information on performance measures and ways to meet those measures. It is also used to analyze resource utilization and the cost of providing health care services. Performance target: 100 percent of diabetic veterans should receive retinal eye exams to decrease the potential incidence of blindness. However, this requires the services of an ophthalmologist who must interpret the exam results. The network did not have resources to maintain an ophthalmologist on staff at each site, so many diabetics were not being tested. A Network 2 manager found that a particular piece of equipment could record test results, then transmit them to an ophthalmologist at another location. Thus, the network invested resources in a number of these machines for Community Based Outpatient Clinics (CBOCs) to use, thereby increasing the network’s capacity for meeting this performance target. Challenges VHA has undergone a cultural shift over the past 7 years that has helped to integrate budget and performance, but managers face continuing challenges to further integration and in defining areas for improvement. The agency’s budgeting and planning processes are not directly linked, so opportunities are missed to fully use planning information in the budget process. VHA officials acknowledged the offices in charge of these processes did not work closely together in the past, but steps are being taken to improve this linkage. Performance Information is Available but Not Included in Resource Allocation Decisions VHA does not include the most complete information available when allocating resources. 1.

Why GAO Did This Study Encouraging a clearer and closer link between budgeting and planning is essential to improving federal management and instilling a greater focus on results. Through work at various levels within the organization, this report on the Veterans Health Administration (VHA)--and its two companion studies on the Administration on Children and Families (GAO-03-09) and the Nuclear Regulatory Commission (GAO-03-258)--documents (1) what managers considered successful efforts at creating linkages between planning and performance information to influence resource choices and (2) the challenges managers face in creating these linkages. What GAO Found VHA's budget formulation and planning processes are centrally managed, but are not closely linked. Resource distribution to VHA's health care networks is mostly formulaic, determined primarily by the distribution of the veterans being served. VHA offices involved in budget formulation and strategic planning provide guidance to health care networks in developing their financial and strategic plans. Integrating performance information into resource allocation decisions is apparent at the health care network level during budget execution. Health care network managers told us that they use an internal data system as a tool to decide how to allocate resources to their facilities and programs. They also use various communication methods to share information on performance measures, and are held responsible for meeting those measures. Network managers provided specific examples where performance information influenced their resource allocation decisions. For example, one performance target specifies that all diabetic veterans are expected to receive retinal eye exams. An ophthalmologist must interpret the results of such an exam; however, most outpatient clinics do not have the resources to maintain an ophthalmologist on staff. One network invested in machines that record test results and transmit them to an ophthalmologist at another location, thereby increasing the network's capacity for meeting this performance target. While budget and performance integration has improved, VHA managers still face additional challenges. VHA's budgeting and planning processes are not directly linked, but VHA officials noted that steps are being taken to better integrate them. Also, VHA does not use the most complete information available when making resource allocation decisions to its health care networks, so the link between resources and results could be improved.

gao_GAO-10-247

gao_GAO-10-247_0

In particular, a maintenance of effort provision requires a state or its agency to maintain certain levels of state spending for a certain program. Efforts to Implement and Evaluate Compliance with Maintenance of Effort and Similar Provisions Are Ongoing and Proving to Be Challenging Requirements for the programs that are subject to Recovery Act provisions designed to guard against the substitution of federal funds for state funds vary by responsible agency. The federal agencies responsible for these programs have issued guidance to recipients on how to implement the maintenance of effort or similar provision requirements. However, some agencies and states face challenges in implementing these provisions. For example, the Department of Commerce’s review of applications to ensure that proposed projects would not be feasible without federal funding has been delayed by scheduling and staffing challenges. In addition, officials from several state departments of transportation told us that while they plan to meet their maintenance of effort requirements, decreasing state revenues and budgets pose a challenge to doing so. According to a DOT official, the department has not made a decision as to whether the Recovery Act requires states to maintain a total level of effort for covered programs or to maintain their level of effort for each covered program. According to FTA officials, FTA has begun this review, but it is not complete. Education plans for determining compliance with maintenance of effort provision: Education has begun to draft a monitoring plan to oversee and enforce state compliance with maintenance of effort requirements under SFSF. Because SFSF is a new program established under the Recovery Act, Education has yet to finalize monitoring plans and processes. HUD officials said they are currently developing a strategy for monitoring the competitive grants that were awarded in September 2009. BTOP involves more applications and far more funds than the agency formerly handled through other programs (see fig. 1). While NTIA originally anticipated that it would begin announcing awards on or about November 7, 2009, the agency now estimates that it will begin in December 2009 and will not finish awarding the first round of grants until February 2010. More than 9 months have elapsed since the passage of the Recovery Act, but federal and state officials have not completed key steps in the implementation of the maintenance of effort or similar provisions, including finalizing state transportation certifications and ensuring transparency of state education support levels, for the covered programs under the Recovery Act with maintenance of effort provisions. The Department of Education has taken important steps to ensure that states are maintaining their maintenance of effort levels. Appendix I: Objectives, Scope, and Methodology To determine the programs in the American Recovery and Reinvestment Act of 2009 (Recovery Act) with maintenance of effort or similar requirements, we searched the Recovery Act for maintenance of effort and similar provisions. These programs received a total of about $106.8 billion in appropriations. To describe the steps that agencies have taken to implement these requirements, we reviewed guidance from the six agencies, including notices published by the Departments of Commerce and Housing and Urban Development (HUD) on funding availability, guidance issued by DOT in February, May, and September 2009 on maintenance of effort requirements to governors and FHWA division offices, and the Department of Education’s guidance to states on the State Fiscal Stabilization Fund program’s maintenance of effort requirements.

Why GAO Did This Study To help prevent the substitution of federal funds for state, local, or private funds, the American Recovery and Reinvestment Act of 2009 (Recovery Act) contains maintenance of effort and similar provisions requiring that recipients maintain certain levels of spending for selected programs. This report provides information on selected programs in the Recovery Act with maintenance of effort or similar provisions, the guidance federal agencies have issued to implement these requirements, and how responsible federal agencies are determining whether recipients meet these requirements. To conduct this work, GAO identified eight programs in the Recovery Act that contain a new maintenance of effort or similar provision; account for at least $4 billion in appropriations by agency; and collectively account for about $100.5 billion of the $106.8 billion in Recovery Act appropriations with these provisions. The eight programs with maintenance of effort or similar provisions span the areas of education, highway, housing, rail, telecommunications, and transit. The specifics of each provision vary by responsible agency, such as whether a state must certify the amount of funding it will maintain, whether waivers are allowed, and the consequences (if any) of not meeting the provisions. The federal agencies responsible for these eight programs have issued guidance to states and other recipients on how to implement the maintenance of effort or similar provision requirements. However, federal and state officials have not completed key steps in implementing these provisions because of administrative and fiscal challenges. What GAO Found (1) The Department of Transportation (DOT) has begun to assess the highway and transit levels that states certified to maintain; however, it has not estimated a date for completing this assessment and has not finalized plans for determining states' compliance with their transit certifications. Furthermore, according to a DOT official, the department has not made a decision as to whether the Recovery Act requires states to maintain a total level of effort for covered programs or to maintain their level of effort for each covered program. Officials from several state departments of transportation told GAO that while they plan to meet their maintenance of effort requirements, decreasing state revenues and budgets pose a challenge to doing so. (2) The Department of Education (Education) has begun to draft a monitoring plan to oversee and enforce state compliance with maintenance of effort requirements under the State Fiscal Stabilization Fund. Because the State Fiscal Stabilization Fund is a new program under the Recovery Act, Education has yet to finalize monitoring plans and processes. In addition, Education has not issued guidance to states on how to document that they met their required maintenance of effort level. (3) Department of Housing and Urban Development (HUD) officials said they are monitoring Capital Fund formula grants through ongoing efforts. Officials further stated that they are still developing a strategy for monitoring Capital Fund competitive grants. (4) The Department of Commerce's (Commerce) review of broadband grant applications for funding has been delayed because of scheduling and staffing challenges. In particular, the broadband grant program involves more applications and far more funds than the agency formerly handled, raising concerns whether the department has sufficient staff resources to implement the program in accordance with Recovery Act priorities. While Commerce originally anticipated that this review would be completed by November 7, 2009, the agency now estimates that it will not complete this review process and award the first round of grants until February 2010.

gao_GAO-07-1235T

gao_GAO-07-1235T_0

DOD Has Established Force Health Protection and Surveillance Policies for Deployed Federal Civilians, but Should Do More to Ensure That Components Comply with Its Requirements We reported in 2006 that DOD had established force health protection and surveillance policies aimed at assessing and reducing or preventing health risks for its deployed federal civilian personnel; however, at the time of our review, the department lacked a quality assurance mechanism to ensure the components’ full implementation of its policies. Our review of deployment records and other documentation at the selected component locations found that these components lacked documentation to show that some federal civilian personnel who deployed to Afghanistan and Iraq had received the required pre-deployment health assessments. Lack of Centralized Deployment Information Hinders the Overall Effectiveness of Force Health Protection and Surveillance for Deployed Federal Civilian Personnel Beyond the aforementioned weaknesses found in the selected components’ implementation of force health protection and surveillance requirements for deploying federal civilians, as a larger issue, we noted in our 2006 report that DOD lacked comprehensive, centralized data that would enable it to readily identify its deployed civilians, track their movements in theater, or monitor their health status, further hindering efforts to assess the overall effectiveness of its force health protection and surveillance capabilities. DOD Has Established and Implemented Medical Treatment Policies Which Provide for the Care of Its Deployed Federal Civilians In our 2006 report, we found that DOD had established medical treatment policies that cover its federal civilians while they are deployed to support contingency operations in Afghanistan and Iraq, and available workers’ compensation claims we reviewed confirmed that those deployed federal civilians received care consistent with the policies. These policies state that DOD federal civilians who require treatment for injuries or diseases sustained during overseas hostilities may be provided care under the DOD military health system. Specifically, in reviewing a sample of seven workers’ compensation claims (out of a universe of 83) filed under the Federal Employees’ Compensation Act by DOD federal civilians who deployed to Iraq, we found that in three cases where care was initiated in theater the affected federal civilians had received treatment in accordance with DOD’s policies. Further, in all seven claims that we reviewed, DOD federal civilians who requested medical care after returning to the United States, had, in accordance with DOD’s policy, received initial medical examinations and/or treatment for their deployment-related injuries or illnesses and diseases through either military or civilian treatment facilities. DOD Provides Special Pays and Benefits to Deployed DOD Federal Civilian and Military Personnel, but the Types and Amounts Differ Our 2006 report found that DOD provides a number of special pays and benefits to its federal civilian personnel who deploy in support of contingency operations, which are generally different in type and in amount from those provided to deployed military personnel. In 2003, we designated federal disability programs as a high-risk area because of continuing challenges with modernizing those programs. Survivors of DOD federal civilian personnel, however, almost always receive lower noncash benefits than military personnel. Other special pays were unique to each group. DOD Federal Civilian and Military Personnel Receive Different Types and Amounts of Disability Benefits, Depending on Specific Program Provisions and Individual Circumstances In the event of sustaining an injury while deployed, DOD federal civilian and military personnel are eligible to receive two broad categories of government-provided disability benefits—disability compensation and disability retirement. Survivors of DOD Federal Civilian and Military Personnel Received Comparable Types of Benefits, but Benefit Amounts Differ Survivors of deceased DOD federal civilian and military personnel generally receive similar types of cash survivor benefits—either as a lump sum, a recurring payment, or both—through comparable sources.

Why GAO Did This Study As the Department of Defense (DOD) has expanded its involvement in overseas military operations, it has grown increasingly reliant on its federal civilian workforce to support contingency operations. GAO was asked to discuss DOD's (1) force health protection and surveillance policies, (2) medical treatment policies that cover federal civilians while they are deployed to support contingency operations in Afghanistan and Iraq, and (3) differences in special pays and benefits provided to DOD's deployed federal civilian and military personnel. For this statement, GAO primarily drew on its September 2006 report that addressed these objectives. For its report, GAO analyzed over 3,400 deployment-related records at eight component locations for deployed federal civilians and policies related to defense health care, reviewed claims filed under the Federal Employees' Compensation Act (FECA); and examined major provisions of special pays and disability and death benefits provided to DOD's deployed federal civilians and military personnel. What GAO Found In 2006, GAO reported that DOD had established force health protection and surveillance policies to assess and reduce or prevent health risks for its deployed federal civilians, but it lacked procedures to ensure implementation. GAO's review of over 3,400 deployment records found that components lacked documentation that some federal civilians who deployed to Afghanistan and Iraq had received, among other things, required pre- and post-deployment health assessments and immunizations. Also, DOD lacked centralized data to readily identify its deployed civilians and their movement in theater, thus hindering its efforts to assess the overall effectiveness of its force health protection and surveillance capabilities. GAO noted that until DOD establishes a mechanism to strengthen its oversight of this area, it would not be effectively positioned to ensure compliance with its policies, or the health care of deployed federal civilians. GAO also reported that DOD had established medical treatment policies for its deployed federal civilians, which provide those who require treatment for injuries or diseases sustained during overseas hostilities with care under the DOD military health system. GAO reviewed a sample of seven workers' compensation claims (out of a universe of 83) filed under FECA by DOD federal civilians who deployed to Iraq. GAO found in three cases where care was initiated in theater that the affected civilians had received treatment in accordance with DOD's policies. In all seven cases, DOD civilians who requested care after returning to the United States had, in accordance with DOD's policies, received medical examinations and/or treatment for their deployment-related injuries or diseases. GAO reported that DOD provides certain special pays and benefits to its deployed federal civilians, which generally differ in type and/or amount from those provided to deployed military personnel. For example, in cases where injuries are sustained while deployed, both DOD federal civilian and military personnel are eligible to receive government-provided disability benefits; however, the type and amount of the benefits vary, and some are unique to each group. Importantly, continuing challenges with modernizing federal disability programs have been the basis for GAO's designation of this as a high-risk area since 2003. In addition, while the survivors of deceased DOD federal civilian and military personnel generally receive similar types of cash survivor benefits for Social Security, burial expenses, and death gratuity, the comparative amounts of these benefits differ. However, survivors of DOD federal civilians almost always receive lower noncash benefits than military personnel. GAO does not take a position on the adequacy or appropriateness of the special pays and benefits provided to DOD federal civilian and military personnel. Any deliberations on this topic should include an examination of how such changes would affect ensuring adequate and appropriate benefits for those who serve their country, as well as the long-term fiscal well-being of the nation.

gao_GAO-09-613T

gao_GAO-09-613T_0

At the request of Enforcement staff, the Commission may issue a formal order of investigation, which allows the division’s staff to compel witnesses by subpoena to testify and produce books, records, and other documents. While overall Enforcement resources and activities have remained relatively level in recent years, the number of non-supervisory investigative attorneys, who have primary responsibility for developing enforcement cases, decreased by 11.5 percent, from a peak of 566 in fiscal year 2004 to 501 in fiscal year 2008. Nevertheless, Enforcement management and investigative attorneys agreed that resource challenges have affected their ability to bring enforcement actions effectively and efficiently. Enforcement management told us that the current level of resources has not prevented the division from continuing to bring cases across a range of violations. More specifically, investigative attorneys cited the low level of administrative, paralegal, and information technology support, unavailability of specialized services and expertise, and a burdensome system for internal case review as causing significant delays in bringing cases, reducing the number of cases that can be brought, and potentially undermining the quality of cases. SEC’s strategic plan calls for targeting resources strategically, examining whether positions are deployed effectively, and exploring how to improve program design and organizational structure. Recently, Enforcement management has begun efforts that seek to streamline the case review process. Various Factors Affect the Amount of Penalties and Disgorgements Ordered, While Overall, Total Amounts Have Declined in Recent Years Enforcement staff consider a number of factors when determining the dollar amounts of penalties and disgorgements, which in total have declined in recent years. To determine a penalty in an individual case, Enforcement staff consider factors such as the nature of the violation, egregiousness of conduct, cooperation by the defendant, remedial actions taken, and ability to pay. The 2007 policy, now discontinued, required Enforcement staff, when contemplating a corporate penalty, to obtain Commission approval of a penalty range before settlement discussions could begin. Setting aside the effect of the implementation of any policy, the total amount of penalties and disgorgement ordered on an annual basis can vary according to the type and magnitude of cases concluded in a given period. In particular, penalties fell 84 percent, from a peak of $1.59 billion in fiscal year 2005 to $256 million in fiscal year 2008. Disgorgements fell 68 percent, from a peak of $2.4 billion in fiscal year 2006 to $774.2 million in fiscal year 2008. Recent Corporate Penalty Policies— Adopted and Implemented with Only Limited Communication— Have Delayed Cases and Discouraged Penalties We found that Enforcement management, investigative attorneys, and others concurred that the 2006 and 2007 penalty policies, as applied, have delayed cases and produced fewer and smaller corporate penalties. That the 2007 policy (Commission pre-approval of a settlement range) could have led to less-informed decisions about corporate penalties. That the policies have reduced incentives for subjects of enforcement actions to cooperate with the agency, because of the perception that SEC has retreated on penalties. That it became more difficult to obtain formal orders of investigation, which allow issuance of subpoenas to compel testimony and produce books. Our review also showed that in adopting and implementing the 2006 and 2007 corporate penalty policies, the Commission did not act in concert with agency strategic goals calling for broad communication with, and involvement of, the staff. In particular, Enforcement, which is responsible for implementing the policies, had only limited input into their development. As a result, Enforcement attorneys say there has been frustration and uncertainty about application of the penalty policies.

Why GAO Did This Study In recent years, questions have been raised about the capacity of the Securities and Exchange Commission's (SEC) Division of Enforcement (Enforcement) to manage its resources and fulfill its law enforcement and investor protection responsibilities. This testimony focuses on (1) the extent to which Enforcement has an appropriate mix of resources; (2) considerations affecting penalty determinations, and recent trends in penalties and disgorgements ordered; and (3) the adoption, implementation, and effects of recent penalty policies. The testimony is based on the GAO report, Securities and Exchange Commission: Greater Attention Needed to Enhance Communication and Utilization of Resources in the Division of Enforcement ( GAO-09-358 , March 31, 2009). For this work, GAO analyzed information on resources, enforcement actions, and penalties; and interviewed current and former SEC officials and staff, and others. What GAO Found Recent overall Enforcement resources and activities have been relatively level, but the number of investigative attorneys decreased 11.5 percent over fiscal years 2004 and 2008. Enforcement management said resource levels have allowed them to continue to bring cases across a range of violations, but both management and staff said resource challenges have delayed cases, reduced the number of cases that can be brought, and potentially undermined the quality of some cases. Specifically, investigative attorneys cited the low level of administrative, paralegal, and information technology support, and unavailability of specialized services and expertise, as challenges to bringing actions. Also, Enforcement staff said a burdensome system for internal case review has slowed cases and created a risk-averse culture. SEC's strategic plan calls for targeting resources strategically, examining whether positions are deployed effectively, and improving program design and organizational structure. Enforcement management has begun examining ways to streamline case review, but the focus is process-oriented and does not give consideration to assessing organizational culture issues. A number of factors can affect the amount of a penalty or disgorgement that Enforcement staff seek in any individual enforcement action, such as nature of the violation, egregiousness of conduct, cooperation by the defendant, remedial actions taken, and ability to pay. In 2006, the Commission adopted a policy that focuses on two factors for determining corporate penalties: the economic benefit derived from wrongdoing and the effect a penalty might have on shareholders. In 2007, the Commission adopted a policy, now discontinued, that required Commission approval of penalty ranges before settlement discussions. Setting aside the effect of any policies, total penalty and disgorgement amounts can vary on an annual basis based on the mix of cases concluded in a particular period. Overall, penalties and disgorgements ordered have declined significantly since the 2005-2006 period. Total annual penalties fell 84 percent, from a peak of $1.59 billion in fiscal year 2005 to $256 million in fiscal year 2008. Disgorgements fell 68 percent, from a peak of $2.4 billion in fiscal year 2006 to $774.2 million in fiscal year 2008. Enforcement management, investigative attorneys, and others agreed that the two recent corporate penalty polices--on factors for imposing penalties, and Commission pre-approval of a settlement range--have delayed cases and produced fewer, smaller penalties. GAO also identified other concerns, including the perception that SEC had "retreated" on penalties, and made it more difficult for investigative staff to obtain "formal orders of investigation," which allow issuance of subpoenas for testimony and records. Our review also showed that in adopting and implementing the penalty policies, the Commission did not act in concert with agency strategic goals calling for broad communication with, and involvement of, the staff. In particular, Enforcement had limited input into the policies the division would be responsible for implementing. As a result, Enforcement attorneys reported frustration and uncertainty in application of the penalty policies.

gao_AIMD-98-18

gao_AIMD-98-18_0

Disclaimer of Opinion on Statement of Financial Position We are unable to give an opinion on the Statement of Financial Position as of September 30, 1996, because IRS could not provide adequate documentation to support the classification of its inventory of unpaid assessments as federal tax receivables and compliance assessments. Qualified Opinion on Statement of Custodial Activity Because IRS could not provide sufficient evidence to support the classification of certain itemized taxes collected and refunded, we could not determine if the classifications of collection and refund amounts by tax type—for example, payroll versus corporate taxes—as reflected on the Statement of Custodial Activity were reliable. IRS management stated that, except for the material weaknesses in internal controls presented in the agency’s fiscal year 1996 FMFIA report on compliance with the internal control and accounting standards, internal controls provide reasonable assurance that the following would be prevented or detected for amounts material in relation to the financial statements: unauthorized acquisition, use, or disposition of assets, that could lead to noncompliance with laws and regulations; and misstatements in amounts reported in the financial statements. Consequently, we believe that the internal controls were not effective in satisfying the objectives discussed above during fiscal year 1996. Based on this, and on our detailed tests of revenue collection and refund transactions, we were able to determine that the total Net Collections of Federal Revenue as reported on the fiscal year 1996 Statement of Custodial Activity was fairly stated in all material respects in relation to the financial statements taken as a whole.

Why GAO Did This Study Pursuant to a legislative requirement, GAO examined the Internal Revenue Service's (IRS) custodial financial statements for fiscal year (FY) 1996. What GAO Found GAO noted that: (1) GAO was unable to give an opinion on the statement of financial position because IRS could not provide adequate documentation to support its balance of federal taxes receivable; (2) the statement of custodial activity was reliable in all material respects, except that sufficient evidence supporting the classification of itemized tax collections and refunds was not available; (3) while GAO found that total collections of federal revenue (net) and total transfers to Treasury, net of refund appropriations, as reported on the statement of custodial activity, are fairly presented in all material respects in relation to the financial statements taken as a whole, the classification of itemized collections and refunds of federal taxes presented on the statement may not be reliable; (4) IRS management asserted that, except for the material weaknesses identified in IRS' FY 1996 Federal Managers' Financial Integrity Act of 1982 report, internal controls were effective in: (a) safeguarding assets; (b) assuring material compliance with laws and regulations; and (c) assuring that there were no material misstatements in amounts reported in the financial statements; (5) consequently, the internal controls were not effective in satisfying the objectives discussed during FY 1996; and (6) material weaknesses in internal control and recordkeeping systems also precluded the tests necessary to provide a basis for any report on compliance with pertinent laws and regulations.

gao_GAO-17-321

gao_GAO-17-321_0

We recommended that GSA, along with OMB and federal agencies, assess, analyze, and identify any limitations in how agencies collect and report FRPP data. Government-wide Data Were Generally Reliable for Reporting on Real Property Disposals in Fiscal Years 2014 and 2015 Our analysis of FRPP found that disposal data were generally reliable for domestic, federally owned buildings (hereafter referred to as “buildings”) for fiscal years 2014 and 2015. Specifically, for fiscal years 2014 and 2015, we found the following pertaining to the completeness, reasonableness, and internal consistency of the data, based on our data reliability guidance: Completeness of the data: All of the buildings reported as disposed of included values for the disposal date, square feet, and annual O&M cost data fields. OMB’s reporting of FRPP data was also generally reliable. Using FRPP data, we were able to replicate OMB’s reported data, despite minor inconsistencies in reporting. We traced the differences in our analysis and the data OMB reported and we identified three minor inconsistencies, all of which led to some over-reporting of building disposals; we discuss this over-reporting in more detail later in this report. Given that these inconsistencies resulted in minor differences in the number of building disposals, we determined that they did not affect the overall reliability of the government-wide disposal data. Federal Agencies Have Taken Steps to Improve Government- wide Real Property Data and Additional Opportunities Exist to Improve Data and Reporting on Disposed Buildings OMB, GSA, and Selected Agencies Have Taken Steps to Improve Reliability of Government- wide Real Property Data That Should Also Help Improve Disposal Data Our work found that the federal government has demonstrated continued commitment to improving the management of federal real property by executing a number of reform efforts, many of which should improve federal real property data, as described below. To improve the reliability of FRPP disposal data, we recommend that the Administrator of GSA implement a data validation procedure to prevent reporting the same building disposal multiple times. Agency Comments We provided a draft of this report to OMB, GSA, and the Departments of Agriculture, Energy, and the Interior for review and comment. Reliability and reporting of government-wide disposal data: To assess the reliability of government-wide data and reporting on domestic, federally owned buildings’ disposal data in fiscal years 2014 and 2015 we (1) examined information sources and methods OMB used to report on the number of buildings disposed of, square feet reduced, and O&M costs avoided for fiscal years 2014 and 2015; (2) analyzed data from GSA’s FRPP; (3) replicated the figures OMB used in its June 2015 and September 2016 testimonies; and (4) reviewed the data underlying OMB’s reported disposals to assess the extent that these data accurately reflected the building disposals that were intended to be reported.

Why GAO Did This Study Disposal of unneeded buildings—for example through demolition, sale, or transfer to other federal agencies—has the potential to save the government millions of dollars. To this end, OMB has developed policies to reduce space in federal buildings and identify buildings for disposal. Recent progress notwithstanding, GAO's body of work on real property has found limitations in the overall reliability of data in GSA's government-wide database. OMB has reported on the status of federal real property disposals for fiscal years 2014 and 2015. GAO was asked to examine the reliability of the data used to report disposals and any efforts to improve the data. This report assesses (1) the reliability and reporting of government-wide disposal data for fiscal years 2014 and 2015, and (2) steps OMB, GSA, and three selected agencies have taken to improve disposal data. GAO analyzed the most recent FRPP data, agency documents, and interviewed OMB, GSA, and agency officials. GAO selected the Departments of Agriculture, Energy, and the Interior based on the highest numbers of disposed buildings. What GAO Found GAO's analysis showed that government-wide data were generally reliable for reporting on real property disposals for fiscal years 2014 and 2015. The General Services Administration's (GSA) Federal Real Property Profile (FRPP) serves as the building inventory database for most of the largest federal agencies. FRPP's data on real property disposals were generally complete, reasonable, and internally consistent, based on GAO's guidance for assessing data reliability. For example, the disposal date, disposal method, and buildings' square footage data generally met these criteria. The Office of Management and Budget's (OMB) reporting of FRPP disposal data for fiscal years 2014 and 2015 was also generally reliable. Based on analysis of FRPP data, GAO was able to replicate OMB's reported numbers on building disposals, despite minor inconsistencies. GAO identified three minor inconsistencies in its analysis and OMB's reporting, all of which led to some over-reporting of building disposals. For example, the data showed 134 buildings as disposed of in multiple years. Given that these inconsistencies resulted in small differences in the number of buildings reported, GAO determined that the inconsistencies did not affect the overall reliability of government-wide reporting of disposal data. What GAO Recommends GAO recommends (1) that GSA implement a data validation procedure to prevent reporting a building as disposed of multiple times and (2) that OMB, in coordination with GSA, establish a procedure to verify that its reports include data as intended. GSA and OMB agreed with GAO's recommendations and identified steps to implement them.

gao_GAO-05-1037T

gao_GAO-05-1037T_0

Work on the Project Is Progressing, but Delays Continue AOC and its contractors have continued to make progress on the project since the Subcommittee’s July 14 hearing. Although AOC has not evaluated the contractor’s August schedule, it does not believe that so much additional time will be needed. Furthermore, as discussed in the next section, AOC maintains that work could be accelerated to meet the September 15, 2006, target date. Project’s Schedule, Including Possible Actions to Accelerate Work, Raises Management Concerns According to our analysis of the CVC project’s schedule, the base project is unlikely to be completed by the September 15, 2006, target date for several reasons. Base Project’s Construction Is Likely to Be Completed Later Than Scheduled for Several Reasons For several reasons, we believe that the base project is more likely to be completed sometime in the spring or summer of 2007 than by September 15, 2006: As we have previously testified, AOC’s sequence 2 contractor, Manhattan Construction Company, has continued to miss its planned dates for completing activities that we and AOC are tracking to assist the Subcommittee in measuring the project’s progress. Conversely, using temporary equipment or adding workers to overcome delays could increase the project’s costs if the government is responsible for the delays. AOC tied the date for opening the CVC facility to the public to September 15, 2006, the date in the sequence 2 contract for completing the base project’s construction. In our view, allowing some time to address unexpected problems is prudent. We have not reassessed this area recently. Actions Are Needed and Being Taken to Move the Project Forward and Address Concerns Since the Subcommittee’s July 14 CVC hearing, we have discussed a number of actions with AOC officials that we believe are necessary to address problems with the project’s schedule and our concerns. Project Costs and Funding Provided as of September 2005 AOC is still updating its estimate of the cost to complete the CVC project, including the base project and the House and Senate expansion spaces. However, our current $525.6 million estimate does not include costs that AOC may incur for delays beyond those delay costs included in our November 2004 estimate. The House and Senate Committees on Appropriations were notified of this situation and AOC’s plan to address it. However, if AOC encounters significant additional costs for delays or other changes, more funding may be needed. Appendix I: Risk Assessment Methodology With the assistance of a contractor, Hulett & Associates, we assessed the risks associated with the Architect of the Capitol’s (AOC) July 2005 schedule for the Capitol Visitor Center (CVC) project and used the results of our assessment to estimate a time frame for completing the base CVC project with and without identified risks and uncertainties. AOC’s construction management and sequence 2 contractors found that key detailed activities associated with the HVAC system had not been included in the schedule and that the durations for a number of activities were not realistic. Taking all of these factors into account, AOC’s contractors revised the project’s schedule in August. AOC believes that the revised schedule, which shows the base project’s completion date slipping by several months, allows too much time for the identified problems. CPP is developing a cost estimate for this option. We are reviewing these issues. of Defense (DOD) Bid prices exceeding estimates, preconstruction costs exceeding budgeted costs, unforeseen field conditions, Other factors (costs associated with delays and design-to-budget overruns) Project budget after increases (as of November 2004) GAO-projected costs to complete after proposed scope changes (as of June 2005, excluding risks and uncertainties) Additional cost-to-complete items (as of August 2005) Design of the Library of Congress tunnel (Funds from Capitol Preservation Fund) GAO-projected costs to complete (as of August 2005, excluding risks and uncertainties) Potential additional costs associated with risks and uncertainties (as of November 2004) Less: Risks and uncertainties GAO believes the project faced in November 2004 [Congressional seals, orientation film, and backpack storage space ($4.2) + US Capitol Police securitymonitoring ($3.0)] (7.2) Less: Additional cost-to-complete items (as of August 2005) (3.1) The five additional scope items are the House connector tunnel, the East Front elevator extension, the Library of Congress tunnel, temporary operations, and enhanced perimeter security.

Why GAO Did This Study This testimony discusses progress on the Capitol Visitor Center (CVC) project. Our remarks will focus on (1) the Architect of the Capitol's (AOC) progress in managing the project's schedule since the Subcommittee on the Legislative Branch, Senate Committee on Appropriations' July 14 hearing on the project; (2) our estimate of a general time frame for completing the base project's construction and the preliminary results of our assessment of the risks associated with AOC's July 2005 schedule for the base project; and (3) the project's costs and funding, including the potential impact of scheduling issues on cost. However, we will not, as originally planned, provide specific estimated completion dates because AOC's contractors revised the schedule in August to reflect recent delays, but AOC has not yet evaluated the revised schedule. AOC believes that the time added to the schedule by its contractors is unreasonable. Until AOC completes its evaluation and we assess it, any estimates of specific completion dates are, in our view, tentative and preliminary. Similarly, we will wait until the schedule is stabilized to update our November 2004 estimate of the cost to complete the project. Currently, AOC and its consultant, McDonough Bolyard Peck (MBP), are still developing their cost-to-complete estimates. What GAO Found In summary, although AOC and its construction contractors have continued to make progress since the Subcommittee's July 14 CVC hearing, several delays have occurred and more are expected. These delays could postpone the base project's completion significantly beyond September 15, 2006, the date targeted in AOC's July 2005 schedule. Although not yet fully reviewed and accepted by AOC, the schedule that AOC's contractors revised in August 2005 shows February 26, 2007, as the base project's completion date. According to our preliminary analysis of the project's July 2005 schedule, the base project is more likely to be completed sometime in the spring or summer of 2007 than by September 15, 2006. Unless the project's scope is changed or extraordinary actions are taken, the base project is likely to be completed later than September 15, 2006, for the reasons cited by the contractors and for other reasons, such as the optimistic durations estimated for a number of activities and the risks and uncertainties facing the project. AOC believes that the contractors added too much time to the schedule in August for activities not included in the schedule and that it can expedite the project by working concurrently rather than sequentially and by taking other actions. Additionally, we are concerned about actions that have been, or could be, proposed to accelerate work to meet the September 15, 2006, target date. The project's schedule also raises a number of management concerns, including the potential for delays caused by not allowing enough time to address potential problems or to complete critical activities. Fiscal year 2006 appropriations have provided sufficient funds to cover AOC's request for CVC construction funding as well as additional funds for some risks and uncertainties that may arise, such as costs associated with additional sequence 2 delays or unexpected conditions. Although sequence 2 delays have been occurring, the extent to which the government is responsible for their related costs is not clear at this time. Additional funding may be necessary if the government is responsible for significant delay-related costs or if significant changes are made to the project's design or scope or to address unexpected conditions. In addition, we and AOC identified some CVC construction activities that received duplicate funding. AOC has discussed this issue with the House and Senate Appropriations Committees.

gao_GGD-97-24

gao_GGD-97-24_0

Our objective was to determine whether there were lessons to be learned from (1) IRS’ initial use of these procedures and their impact on IRS’ operations and (2) the reaction of redeployed employees and their supervisors to redeployment and the redeployment process. The resulting increase in training requirements and decline in productivity could have been minimized had the Redeployment Understanding (1) limited redeployment to those employees whose jobs were being eliminated and (2) allowed IRS to move employees who had the experience and skills needed for the new jobs. A supervisor of a section at that center who had gained redeployed employees said it had been a “costly transition” because “all employees were considered redeployment eligible even if their job had not been abolished.” Redeployment Procedures Limited IRS’ Ability to Direct Experienced Employees to Related Jobs With some exceptions, such as hardships and placement actions resulting from a grievance, the November 1993 Redeployment Understanding generally required that vacancies for bargaining-unit positions that would be needed in the new environment were to be filled as follows: Lateral reassignment (or change to lower grade), based on seniority, of eligible volunteers (1) from within the local commuting area and then, if the number of volunteers was insufficient, (2) from outside the local commuting area. Conclusions Although it seems reasonable to expect some operational inefficiencies as an inherent part of any redeployment process, those inefficiencies were exacerbated at IRS, in our opinion, by redeployment procedures that made employees eligible for redeployment too soon and prevented IRS from redirecting employees to new jobs on the basis of their related work experiences. Consequently, many of the jobs vacated by redeployed employees had to be filled again by newly hired employees. Thus, IRS’ first redeployment experience came too early to be very effective in achieving the goal of redeployment—which is to move employees out of jobs that would not be needed in the new environment and into jobs that would. Those interviews identified some concerns relating to such things as training and the amount of redeployment information provided to employees; but they also indicated that employees were generally satisfied with their new jobs, and supervisors were generally satisfied with their new employees.

Why GAO Did This Study GAO reviewed the Internal Revenue Service's (IRS) initial efforts to redeploy employees under the terms of the Redeployment Understanding, focusing on whether there were lessons to be learned from: (1) IRS' initial use of redeployment procedures and their impact on IRS' operations; and (2) the reaction of redeployed employees and their supervisors to redeployment and the redeployment process. What GAO Found GAO found that: (1) if IRS develops new redeployment procedures, there are several lessons to be learned from its initial redeployment experiences; (2) although redeployment was intended as a way to move employees out of jobs that would no longer be needed in IRS' modernized environment, it was initially used to move thousands of employees whose jobs were not in immediate jeopardy into new or existing positions that were expected to be needed in the new environment; (3) many jobs vacated by redeployed employees had to be filled by new employees, who may subsequently have to redeployed; (4) training requirements increased and productivity and taxpayer services declined as experienced employees were replaced by inexperienced employees; (5) although some operational inefficiencies, such as reduced productivity and increased training, can be expected as an inherent part of any redeployment process, the negotiated Redeployment Understanding exacerbated these inefficiencies because it generally made many IRS employees eligible for redeployment years before their jobs were expected to be eliminated, and did not allow IRS to fill jobs with employees who had related experience before bringing in volunteers from unrelated areas; (6) GAO's interviews of redeployed employees and supervisors pointed to other lessons that might be learned from IRS' initial redeployment efforts; and (7) most employees were generally satisfied with their new jobs, and supervisors were generally satisfied with their new employees, but many employees cited concerns about the information IRS provided to explain the redeployment process, the assistance IRS provided to help employees find jobs, and the training IRS provided.

gao_T-NSIAD-98-117

gao_T-NSIAD-98-117_0

High Rate of Attrition Continues Despite Increases in Recruit Quality By 1986, recruit quality was at historically high levels. Attrition Is Costly On the basis of DOD-provided cost data, we estimated that in fiscal year 1996, DOD and the services spent about $390 million to enlist personnel who never made it to their first duty stations. Currently, available data on attrition does not permit DOD to pinpoint the precise reasons that enlistees are departing before completing their training. Reducing Attrition Will Not Be Simple In the absence of complete data on why first-term attrition is occurring, we examined the various preenlistment screening processes that correspond to the types of separations that were occurring frequently. For example, because a significant number of enlistees were being separated for medical problems and for fraudulent entry, we focused our work on recruiting and medical examining processes that were intended to detect problems before applicants are enlisted. These processes involve many different military personnel. We also believe that the services’ mechanisms for medically screening military applicants could be improved. To improve the selection of recruiters and enhance the retention of recruits, we recommended that the services (1) use experienced field recruiters to personally interview all potential recruiters, use communication skills as a key recruiter selection criterion, and develop or procure personality screening tests that can aid in the selection of recruiters; (2) emphasize the recruiter’s role in reducing attrition by providing opportunities for recruiter trainees to interact with drill instructors and separating recruits; (3) encourage the services to incorporate more structured physical fitness training for recruits into their Delayed Entry Programs; (4) conduct physical fitness tests before recruits report to basic training; (5) link recruiter rewards more closely to recruits’ successful completion of basic training; and (6) encourage the use of quarterly floating recruitment goals as an alternative to the services’ current systems of monthly goals. DOD and Service Actions in Response to Our Recommendations and the Fiscal Year 1998 Defense Authorization Act DOD and the services have taken many actions in response to our recommendations and the requirements in the Fiscal Year 1998 Defense Authorization Act. Specifically, the working group will be tasked with devising a plan to satisfy the legislative requirements for DOD and the services to (1) improve the system of separation codes, (2) develop a reliable database for analyzing reasons for attrition, (3) adopt or strengthen incentives for recruiters to prescreen applicants, (4) assess recruiters’ performance in terms of the percentage of their enlistees who complete initial combat training or basic training, (5) assess trends in the number and use of waivers, and (6) implement policies and procedures to ensure the prompt separation of recruits who are unable to complete basic training. Until DOD has uniform and complete information on why recruits are being separated early, it will have no basis for determining how much it can reduce attrition.

Why GAO Did This Study GAO discussed: (1) the historical problem of attrition of enlisted personnel and its costs; (2) the Department of Defense's (DOD) lack of complete data on why enlistees are being separated early; (3) GAO's recommendations on ways to improve the screening of recruiters and recruits; and (4) DOD's actions thus far to respond to GAO recommendations. What GAO Found GAO noted that: (1) despite increases in the quality of DOD's enlistees, about one-third of all new recruits continue to leave military service before they fulfill their first term of enlistment; (2) this attrition rate is costly in that the services must maintain infrastructures to recruit and train around 200,000 persons per year; (3) in fiscal year 1996, the services' recruiting and training investment in enlistees who separated before they had completed 6 months totalled $390 million; (4) solving the problem of attrition will not be simple in large part because DOD does not have complete data on why enlisted personnel are being separated; (5) GAO has concentrated on what it has found to be major categories of separation, such as medical problems and fraudulent enlistments; (6) because these types of separations involve the services' entire screening processes, GAO has reexamined these processes from the time recruiters are selected, through the time that applicants are prescreened by recruiters, through the medical examinations applicants undergo, and through the physical preparation of recruits for basic training; (7) GAO has recommended ways to improve the: (a) data DOD collects to analyze reasons for attrition; (b) services' criteria for selecting recruiters; (c) incentive systems for recruiters to enlist persons who will complete basic training; and (d) services' mechanisms for identifying medical problems before recruits are enlisted; (8) many of these recommendations have been incorporated into the National Defence Authorization Act for Fiscal Year 1998; (9) DOD and the services have already taken some positive steps in response to GAO's recommendations and the National Defense Authorization Act; and (10) however, GAO believes that DOD needs to take further action to change the criteria by which recruiters are selected, provide recruiters with more opportunities to interact with drill instructors, and revise recruiters' incentive systems to improve their quality of life.

gao_GAO-16-801

gao_GAO-16-801_0

Terminated with a claim. In particular, our 2012 report found overlap in the products offered, borrower income levels, and geographic areas served by the two programs. In keeping with RHS’s income restrictions, RHS’s loans were smaller than FHA’s, and RHS’s no-down-payment requirement resulted in higher LTV ratios for RHS than for FHA. Both RHS and FHA Served Large Numbers of Borrowers in RHS-Eligible Areas In 2010–2014, RHS and FHA both guaranteed large numbers of loans to borrowers in RHS-eligible areas, with FHA serving more borrowers overall and RHS serving a higher number and percentage of borrowers in more rural areas (see fig. Credit score. 6). In RHS-eligible areas in 2010–2014, most of the borrowers served by each agency had annual incomes of less than $60,000, but RHS borrower incomes were generally lower than those of FHA borrowers. The median income of RHS borrowers was about $44,000, compared with about $57,000 for FHA borrowers—a 28 percent difference. 7). These differences are consistent with the RHS program’s statutory income limits (the program is designed to serve low- and moderate-income borrowers). At origination, both RHS- and FHA-guaranteed loans in RHS-eligible areas had high LTV ratios (above 90 percent)—a median ratio of 101 percent for RHS and 96.5 percent for FHA. At Least 36 Percent of RHS Borrowers Potentially Could Have Met FHA’s Down-Payment and Other Key Criteria Based on our analysis of data on RHS-guaranteed loans, we estimated that at least 36 percent of RHS borrowers could have met key criteria to receive FHA-guaranteed loans and also potentially could have made a 3.5 percent down payment (see fig. Additionally, the borrower’s household income would have had to be within RHS limits. As described previously, FHA requires borrowers to make a 3.5 percent down payment, but RHS has no down-payment requirement. Assuming a 3.75 percent interest rate, the monthly mortgage payments (including the annual guarantee fee) during the first year would have been $50 less, or 7 percent lower, with an RHS- guaranteed loan than with an FHA-guaranteed loan. These trade-offs highlight issues for RHS and FHA to consider in evaluating opportunities to consolidate the programs, as we recommended in 2012 and reaffirm in this report. Our statistical model also estimated that RHS loans would be expected to have higher troubled loan rates than FHA loans, due partly to the higher LTV ratios of RHS borrowers. Additionally, RHS’s higher LTV ratios and lower guarantee fees relative to FHA also may increase financial risk to the federal government from higher potential loan defaults and less revenue to cover unanticipated costs of the loan guarantees. For this reason, we maintain that RHS and FHA should implement our 2012 recommendation to report on and evaluate consolidation opportunities. Estimates of RHS and FHA Borrowers Who Could Have Met Key Criteria for the Other Loan Guarantee Program To estimate the number and percentage of RHS and FHA borrowers in RHS-eligible areas who could have met key criteria for the other agency’s guarantee program in 2010–2014, we compared the characteristics of RHS-guaranteed loans to the requirements and benchmarks for FHA’s program and compared the characteristics of FHA-guaranteed loans to the requirements and benchmarks for RHS’s program. To calculate the illustrative monthly, annual, and lifetime costs of RHS- and FHA-guaranteed loans, we calculated: 1. the monthly principal and interest payment based on the final loan amount (including the financed up-front guarantee fee); 2. the amount of the annual guarantee fee by multiplying the annual average outstanding loan balance by the annual guarantee fee percentage (in 2014, the annual guarantee fee was 0.5 percent for RHS loans and 1.2 percent for FHA loans); 3. the monthly cost of the annual guarantee fee by dividing the amount of the annual guarantee fee by 12 (for 12 months); and 4. the total monthly costs by adding the monthly principal and interest payment to the monthly cost of the annual guarantee fee. To obtain the perspective of program participants, we interviewed a nonprobability sample of eight mortgage lenders selected to capture variation in the geographic areas served, volume of guaranteed loans originated, and mix of RHS and FHA business. Appendix V: Performance of Home Purchase Loans RHS and FHA Guaranteed in RHS- Eligible Areas in Fiscal Years 2010–2012 This appendix describes the results of our analysis comparing the performance of single-family home purchase loans guaranteed by the Rural Housing Service (RHS) and the Federal Housing Administration (FHA) in fiscal years 2010–2012 in RHS-eligible areas after 2 and 3 years of performance. Performance of these loans is defined in terms of the share of loans that are troubled. At the same time, there are some differences. 23). 24). This permitted us to analyze loan performance in the more rural portions of the RHS-eligible areas.

Why GAO Did This Study RHS and FHA help borrowers finance homes by guaranteeing single-family mortgage loans made by private lenders, and both operate in rural areas. However, eligibility for RHS guarantees is restricted to RHS-eligible areas and to low- and moderate-income households. A prior GAO report (GAO-12-554) found overlap in the products offered, borrower income levels, and geographic areas served by the two guarantee programs and recommended that RHS and FHA evaluate and report on opportunities for consolidating similar housing programs. GAO was asked to expand on the analysis in its 2012 report. This report compares the characteristics, performance, and borrower costs of RHS- and FHA-guaranteed loans in RHS-eligible areas. GAO analyzed RHS and FHA data for home purchase loans guaranteed in fiscal years 2010–2014 (which allowed for analysis of loan performance over multiple years). GAO also interviewed RHS and FHA officials, eight lenders (selected to capture variation in rural areas served, origination volume, and mix of RHS and FHA business), and industry associations. What GAO Found GAO's comparison of single-family home purchase loans guaranteed by the Rural Housing Service (RHS) and the Federal Housing Administration (FHA) in fiscal years 2010–2014 identified significant overlap and some differences in the borrowers served. Within statutorily defined rural areas (RHS-eligible areas): Both agencies served large numbers of rural borrowers, but FHA served over 35 percent more than RHS, while RHS reached a greater number of borrowers in the more rural parts of RHS-eligible areas. Most of the borrowers served by each agency had annual incomes below $60,000. But consistent with RHS's statutory income limits, the median borrower income for RHS ($44,000) was well below that for FHA ($57,000). RHS and FHA borrowers had similar credit scores (around 685 at the median) and ratios of housing expenses to monthly gross income (23–24 percent at the median). Borrowers in both programs had high loan-to-value (LTV) ratios (loan amount divided by home value). But RHS's no-down-payment requirement and FHA's statutorily required 3.5 percent down payment resulted in higher LTV ratios for RHS than for FHA (medians of 101 and 96.5 percent, respectively). Significant portions of RHS and FHA borrowers could have met the criteria of the other program. For example, at least 36 percent of RHS borrowers could have met FHA's criteria, including the 3.5 percent minimum down payment. In RHS-eligible areas, RHS loans guaranteed in fiscal years 2010–2011 performed worse than corresponding FHA loans after 3 years. Specifically, for borrowers whose incomes fell within RHS limits, RHS's 3-year troubled loan rate (the share of loans 90 or more days late, in foreclosure, or terminated with a claim) was 7 percent, compared with 6 percent for FHA. GAO estimated that RHS's loans would be expected to perform worse than FHA's due partly to RHS borrowers' higher LTV ratios. Borrower costs—at loan closing and paid monthly—were lower for RHS loans than for FHA loans. Due to differences in down-payment requirements, a borrower purchasing a $125,000 home in 2014 would have paid $4,375 more in up-front costs with an FHA loan than with an RHS loan. Also, FHA (which must maintain a capital reserve) charged borrowers a higher annual guarantee fee than RHS, which has no capital requirement. Due largely to the difference in this fee (charged monthly), a borrower's initial monthly payments would have been about 7 percent lower with an RHS loan (assuming a 3.75 percent interest rate). GAO's analysis provides additional evidence of how the programs overlap in terms of income, location, and borrower qualifications. It also highlights issues for RHS and FHA to consider in evaluating opportunities to consolidate these programs, as GAO recommended in 2012. Specifically, differences in the performance and borrower costs of RHS and FHA loans underscore important tradeoffs. Higher LTV ratios and lower guarantee fees help make mortgages more affordable. However, these features also may elevate financial risks to the federal government from increased loan defaults and less revenue to cover unanticipated costs. Agency consideration of these issues would aid congressional decision-making about potential program consolidation. What GAO Recommends GAO makes no new recommendations in this report but maintains that RHS and FHA should evaluate and report on opportunities to consolidate their similar housing programs.

gao_GAO-04-494

gao_GAO-04-494_0

Background One of the key provisions of the President’s Management Agenda, released in 2001, is the expansion of electronic government. SAFECOM falls within the government-to-government portfolio, due to its focus on accelerating the implementation of interoperable public safety communications at all levels of government. Leadership Changes and Shortcomings in Collaboration Have Hampered SAFECOM’s Progress After more than 2 years, Project SAFECOM has made very limited progress in addressing its overall objective of achieving communications interoperability among entities at all levels of government. SAFECOM’s lack of progress has prevented it from achieving the benefits that were expected of it as one of the 25 OMB-sponsored e–government initiatives, including improving government efficiency and realizing budgetary savings. Two factors have contributed significantly to the project’s limited results. In recent months, the current project team has pursued various near-term activities that are intended to lay the groundwork for future interoperability, including establishing a governance structure that emphasizes collaboration with stakeholders and developing grant guidance for use with awards to public safety agencies that encourage planning for interoperability. However, it has not yet reached written agreements with several of its major stakeholders on their roles in the project or established a stable funding mechanism. Until these weaknesses are addressed, SAFECOM’s ability to achieve its ultimate goal of improving interoperable communications will remain in doubt. At that time, the project was assigned to a fourth management team. This guidance has already been incorporated into grants awarded by the Department of Justice’s Office of Community Oriented Policing Services and the Federal Emergency Management Agency. In addition, we will provide copies to the Secretary of Homeland Security and the Director of OMB.

Why GAO Did This Study One of the five priorities in the President's Management Agenda is the expansion of electronic government (e-government)--the use of Internet applications to enhance access to and delivery of government information and services. Project SAFECOM is one of the 25 initiatives sponsored by the Office of Management and Budget (OMB) to implement this agenda. Managed by the Department of Homeland Security, the project's goal is to achieve interoperability among emergencyresponse communications at all levels of government, while at the same time realizing cost savings. GAO assessed the government's progress in implementing Project SAFECOM. What GAO Found While its overall objective of achieving communications interoperability among emergency response entities at all levels of government is a challenging task that will take many years to fully accomplish, Project SAFECOM, in its 2-year history, has made very limited progress in addressing this objective. OMB's e-government objectives of improving operating efficiency and achieving budgetary savings within federal programs have also been largely stymied. Two major factors have contributed to the project's limited progress: (1) lack of consistent executive commitment and support, and (2) an inadequate level of interagency collaboration. In its 2 1/2-year history, Project SAFECOM has had four different management teams in three different agencies. In recent months, the current project team has pursued various near-term activities that are intended to lay the groundwork for future interoperability, including establishing a governance structure that emphasizes collaboration with stakeholders and developing guidance for making grants that can be used to encourage public safety agencies to plan for interoperability. However, it has not yet reached written agreements with several of its major stakeholders on their roles in the project or established a stable funding mechanism. Until these shortcomings are addressed, the ability of Project SAFECOM to deliver on its promise of improved interoperability and better response to emergencies will remain in doubt.

gao_GAO-17-438

gao_GAO-17-438_0

EOIR’s primary mission is to adjudicate immigration cases by fairly, expeditiously, and uniformly interpreting and administering federal immigration laws. There are 13 U.S. Immigration Courts’ Caseload Grew Due to an Increased Case Backlog, Posing Challenges to Stakeholders The Immigration Courts’ Caseload and Case Backlog Grew As Immigration Courts Completed Fewer Cases Our analysis of EOIR’s annual immigration court system caseload—the number of open cases before the court during a single fiscal year— showed that it grew 44 percent from fiscal years 2006 through 2015 due to an increase in the case backlog, while case receipts remained steady and the courts completed fewer cases. Our analysis showed that EOIR’s case backlog more than doubled from fiscal years 2006 through 2015. Additionally, EOIR does not have efficient practices for hiring new immigration judges, which has contributed to immigration judges being staffed below authorized levels. Furthermore, as previously discussed, about 39 percent of its immigration judges are currently eligible for retirement according to EOIR officials. However, our analysis of EOIR hiring data found that from 2011 to August 2016, EOIR took an average of more than 2 years—742 days—to hire new immigration judges. Using this and other information to assess its immigration judge hiring process to identify opportunities for efficiency; using the assessment results to develop a hiring strategy that targets short- and long-term human capital needs; and implementing actions to increase efficiency could better position EOIR to hire new judges more quickly and address immigration judge staffing gaps, which could improve EOIR’s overall operations. Assessing Case Continuance Data Could Help EOIR Ensure Efficient Management Practices EOIR collects information on the extent and reasons why immigration judges issue continuances—temporary adjournments of case proceedings until a different day or time—but does not systematically assess these data to identify and address potential operational challenges affecting the immigration courts or areas where immigration judges could benefit from additional guidance or training. Specifically, our analysis of EOIR’s continuance data found that the use of all types of continuances increased by 23 percent from fiscal year 2006 to fiscal year 2015. Systematically analyzing the use of continuances, particularly operational continuances, could provide EOIR officials with valuable information about potential challenges the immigration courts may be experiencing or areas that may merit additional guidance and training for immigration judges. In its written comments, EOIR stated that it agrees with most of our 11 recommendations and has begun to address them. In addition, EOIR did not specifically state whether or not it agrees with individual recommendations. We agree with EOIR that this contract is a positive step, but we continue to believe that EOIR would further benefit from developing and implementing a strategic workforce plan that addresses, among other areas, key principles of effective strategic workforce planning. Appendix I: Objectives, Scope, and Methodology This report addresses (1) what Department of Justice’s (DOJ) Executive Office for Immigration Review (EOIR) data indicate about its caseload, including the backlog of cases, and potential contributing factors and effects of the backlog according to stakeholders; (2) how EOIR manages and oversees immigration court operations, including workforce planning, hiring, and technology utilization; (3) the extent to which EOIR has assessed immigration court performance, including analyzing relevant information, such as data on case continuances; and (4) scenarios that have been proposed for restructuring EOIR’s immigration court system and the reasons that have been offered for or against these proposals.

Why GAO Did This Study The Department of Justice's EOIR is responsible for conducting immigration court proceedings, appellate reviews, and administrative hearings to fairly, expeditiously, and uniformly administer and interpret U.S. immigration laws. GAO was asked to review EOIR's management of the immigration court system and options for improving EOIR's performance. This report addresses, among other things, (1) what EOIR data indicate about its caseload, including the backlog of cases; (2) how EOIR manages and oversees immigration court operations, including workforce planning and hiring; and (3) the extent to which EOIR has assessed immigration court performance, including case continuance data. GAO analyzed EOIR's case data from fiscal years 2006 through 2015—the most current data available—reviewed EOIR documentation, interviewed agency officials, and conducted visits to six immigration courts selected to include courts with relatively large and small case backlogs, among other things. GAO also interviewed experts and stakeholders selected based upon, among other things, their published work on the immigration court system. What GAO Found GAO's analysis showed that the Executive Office for Immigration Review's (EOIR) case backlog—cases pending from previous years that remain open at the start of a new fiscal year—more than doubled from fiscal years 2006 through 2015 (see figure) primarily due to declining cases completed per year. EOIR has taken some steps to address its workforce needs, such as entering into a contract to determine judicial staff workloads, but does not have a workforce plan that would help EOIR better address staffing needs, such as those resulting from the 39 percent of its immigration judges who are currently eligible for retirement. EOIR also does not have efficient practices for hiring new immigration judges, which has contributed to immigration judges being staffed below authorized levels. GAO found that it took an average of 742 days to hire new judges from 2011 through August 2016. By assessing its hiring process and developing a hiring strategy that targets staffing needs, EOIR would be better positioned to hire judges more quickly and address its staffing gaps. One example of EOIR's efforts to assess court operations is the extent and reasons why judges issue continuances—temporary case adjournments until a different day or time. EOIR collects continuance data, but does not systematically assess them. GAO's analysis of continuance records showed that that the use of continuances increased by 23 percent from fiscal years 2006 through 2015. Systematically analyzing the use of continuances could provide EOIR officials with valuable information about challenges the immigration courts may be experiencing, such as with operational issues like courtroom technology malfunctions, or areas that may merit additional guidance for immigration judges. What GAO Recommends GAO is making 11 recommendations to, among other things, improve EOIR's workforce planning, hiring, and analysis of continuance data. EOIR stated that it agrees with most of the recommendations, but did not specify whether it agrees with individual recommendations. GAO continues to believe that all 11 recommendations remain valid as discussed further in this report.

gao_GAO-03-550

gao_GAO-03-550_0

Disciplined Students Were Primarily Placed in In-School Suspension Rooms and Out-of-School Suspensions at Home Disciplined special education students were primarily placed in one of two short-term disciplinary settings: in-school suspension rooms or out-of school suspension at home, according to survey respondents in three selected states. Because most disciplined special education students were generally removed for short periods of time, these two short-term disciplinary settings were the most frequently used. In addition to the length of the student’s removal, school and district administrators reported considering several other factors when making placement decisions, including the cumulative number of days the student had been removed during the school year, the cost and availability of placement options, and the student’s offense. Schools and School Districts Provided a Range of Services to Disciplined Special Education Students In the 2001-2002 school year, schools and school district officials in the three states that we studied reported providing a range of services to disciplined special education students. However, how schools and school districts provided educational and other services varied significantly. In another district, educational services in disciplinary settings included active instruction, such as tutoring by special education instructional personnel. Education’s Guidance and Oversight of Disciplinary Placements Has Been Limited Education provided guidance and oversight to states and school districts for disciplinary placements of special education students by providing information on federal requirements and reviewing state self-assessments, improvement plans, and data, and conducting on-site data collection visits in selected states. In addition, Education’s oversight system may not detect possible noncompliance. Education’s next generation oversight system, known as the Continuous Improvement and Focused Monitoring System, has been recently approved by the department and will be implemented in calendar year 2003, according to Education officials. However, according to some state and local education officials, this guidance was not specific enough. However, some school and district officials indicated that being provided with examples that illustrate how to determine whether the days of in-school suspension should be counted as days of removal under the 10-day rule would assist them in ensuring that disciplined special education students are not without their IEP services for more than 10 cumulative days in a school year. In addition, Education plans to conduct site visits in selected states to validate data used by the system to make federal oversight decisions. Appendix I: Objectives, Scope, and Methodology The Ranking Minority Member of the Senate Committee on Health, Education, Labor and Pensions asked GAO to determine: (1) where special education students are placed when they are removed from their educational settings for disciplinary purposes; (2) to what extent local school districts in selected states continue educational services for special education students who are placed in disciplinary settings while they are disciplined and what types of services are provided; and (3) how Education provides support and oversight for disciplinary placements used for special education students. To respond to this inquiry, we conducted an in-depth review of the use of disciplinary placements for special education students at middle and high schools in three states—Illinois, Maryland, and North Carolina. These states were selected because they represented different levels of disciplinary activity, such as the number and percent of special education students who were disciplined and the number of disciplined special education students who were removed from their educational settings on either a short-term (10 days or less) or long-term (more than 10 days) basis.

Why GAO Did This Study In the 2000-01 school year, more than 91,000 special education students were removed from their educational settings for disciplinary reasons. Under the Individuals with Disabilities Education Act (IDEA), schools are required to provide educational services to special education students who are removed from their educational settings for more than 10 days in a school year. Congress asked GAO to determine where disciplined special education students are placed, the extent to which local school districts continue educational services for these students, and how the U.S. Department of Education provides support and oversight for special education disciplinary placements. To address these objectives, GAO conducted a study, using surveys and site-visits, of special education disciplinary placements in three states--Illinois, Maryland, and North Carolina. What GAO Found In the districts and schools in the three states GAO studied, disciplined special education students were primarily placed in in-school suspension rooms or out-of-school suspensions at home, according to survey respondents. These short-term settings were used most frequently because most of the special education students in these schools and districts were removed from their regular educational settings for periods of 10 days or less, according to respondents. Special education students who were removed for longer than 10 days were primarily placed in alternative schools or homebound placements. In addition to considering the length of the student's removal when deciding where to place disciplined special education students, school and district officials considered the cost and availability of placement options and the nature of the student's offense and corresponding disciplinary action. Schools and school district officials in the three states reported that they provided a range of services to disciplined special education students. However, how the schools and school districts provided these services varied significantly. For example, some school districts used self-paced instructional packages to provide educational services to disciplined special education students. Other school districts, however, used tutoring by special education instructional personnel to provide educational services for similar students. In addition to educational services, some disciplined special education students had access to other services such as counseling. The Department of Education provided guidance and oversight to states and school districts for special education disciplinary placements by providing information on federal requirements and reviewing state self-assessments, improvement plans, and data and conducting on-site data collection visits in selected states. However, according to some state and local officials, this guidance has not been specific enough. In particular, the regulations do not provide illustrative examples specifying whether the days of in-school suspension should be counted as days of removal under the 10-day rule. In addition, Education's IDEA oversight system may not detect possible noncompliance because it relies on state monitoring efforts, including state self-assessments and discipline data that have been shown to contain some inaccuracies. Education's next generation of its oversight system has recently been approved by the department and will be implemented in calendar year 2003. This new oversight system includes a component to validate data used by the system to make federal oversight decisions.

gao_GAO-16-433

gao_GAO-16-433_0

Some participants have access to products and services through their plan that can help them turn their savings into a retirement income stream. Required Minimum Distributions Under the Internal Revenue Code (IRC), plan sponsors must comply with required minimum distribution (RMD) provisions under which participants age 70 ½ or older in 401(k) plans must receive minimum annual payments from their plan savings based on their account balance and remaining life expectancy. For example: In 2008, EBSA promulgated a “safe harbor” that describes actions plan fiduciaries can take to satisfy their fiduciary responsibilities when selecting an annuity provider. Most Plans in Our Review Did Not Offer Withdrawal Options or Annuities, and Many Did Not Allow Partial Annuitization About Two-Thirds of Plans in Our Review Did Not Offer Withdrawal Options Record keepers reported that most plans covered by the questionnaire did not offer withdrawal options, which unlike annuities, are 401(k) plan account distributions that may be designed, but are not guaranteed, to last for life. We sent a questionnaire to a non-generalizable sample of plan record keepers that represented about a quarter of the 401(k) plan market at the end of 2014. Concerns about Legal Risk may Deter Plan Sponsors from Offering Annuities, and Record Keeper Limitations may Constrain the Options Plans Can Make Available Fear of Legal Liability May Deter Plan Sponsors from Offering Annuities Plan Sponsor Survey Respondent on Legal Risk “There is a not a single bit of upside to me as a plan sponsor in offering an option that participants don’t want, particularly when it is a complex offering with lots of room for 20/20 hindsight by plaintiff’s counsel, and one that tends to be more expensive. Conclude that, at the time of the selection, the annuity provider is financially able to make all future payments under the annuity contract. DOL is responsible for educating and assisting plan sponsors to help ensure the retirement security of workers and their families. DOL has not provided an incentive for plan sponsors to provide participants a mix of lifetime income options and information about them. Plan Sponsors May Cause Participants to Lose Lifetime Income When They Change Record Keepers or Annuity Providers Another deterrent to plan sponsors offering annuities, according to representatives of annuity providers, is the possibility of plan participants having to lose lifetime income guarantees when the plan sponsor changes service providers. For example, plan sponsors who want to offer an annuity option may work with a number of service providers to determine the appropriate annuity options to offer their participants. However, DOL’s guidance does not encourage plan fiduciaries to use a record keeper that supports products from competing providers. Providing clearer criteria for making this determination likely would encourage more sponsors to seek fiduciary relief for offering annuities. Second, DOL offers fiduciary relief when savings are accumulated in an appropriate mix of investments, but it offers no such relief for plans offering a mix of lifetime income options. DOL guidance can encourage plan sponsors to use a record keeper that includes annuities from other providers on its record keeping platform and increase the likelihood the plan sponsor will have access to annuities that the plan sponsor considers to be in the best interest of the plan participants. Unless DOL encourages plan sponsors to consider providing RMD-based default income, many retirees who do not select a lifetime income option may continue to receive a single lump sum payout that may not be used for lifetime income. Finally, with respect to the recommendations to provide guidance to fiduciaries on how the account balances of their participants will translate into financial security in retirement, DOL stated that it will review its publications along the lines of the recommendations to explore ways in which to encourage use of products and arrangements designed to provide participants and beneficiaries a lifetime income stream after retirement, and take steps to better educate participants and plan sponsors about the need to think about retirement savings as lifetime income. Appendix I: Objectives, Scope, and Methodology Our objectives were to examine 1) the adoption of lifetime income options in 401(k) plans; 2) the barriers, if any, that deter plan sponsors from offering lifetime income options; 3) the challenges participants face, if any, in learning to make informed decisions about lifetime income options; and 4) the defaults that exist for participants who do not choose an option. To address these objectives, we reviewed relevant research, responses to the Request for Information (RFI) by the Department of Labor (DOL) and the Department of the Treasury (Treasury) in 2010, federal laws, regulations, and guidance on lifetime income options. We also conducted a non-generalizable online survey of 54 plan sponsors. 401(k) Plan Record Keeper Questionnaire We collected data on plan adoption and participant use of lifetime income options in 401(k) plans from 11 record keepers who together represent about 42 percent of the 401(k) market as measured by assets, 46 percent as measured by participants, and 26 percent as measured by plans. Related GAO Products GAO, 401(k) Plans: Clearer Regulations Could Help Plan Sponsors Choose Investments for Participants, GAO-15-578 (Washington, D.C.: Aug. 25, 2015).

Why GAO Did This Study As 401(k) plan participants reach retirement they face the challenge of making their savings last for an unknown lifespan, and many 401(k) plan sponsors do not offer options to help participants with this complex task. GAO was asked to review any related challenges and potential changes to help plan sponsors and participants. This report examines, among other things, what is known about the adoption of lifetime income options in 401(k) plans, barriers that deter plan sponsors from offering such options, and the defaults that exist for participants who do not choose a lifetime income option. GAO administered a non-generalizable questionnaire to record keepers, conducted a non-generalizable survey of 54 plan sponsors, and interviewed a range of stakeholders. What GAO Found Workers relying in large part on their 401(k) plan in retirement may not always have a feasible way to make their savings last throughout retirement. Responses to GAO’s non-generalizable questionnaire from 11 401(k) plan record keepers—entities that manage participant account data and transactions for plans—showed that most plans covered by the questionnaire had not adopted products and services that could help participants turn their savings into a retirement income stream (referred to as lifetime income options in this report). Responses to the questionnaire represented more than 40 percent of all 401(k) assets and about a quarter of plans at the end of 2014. GAO found that of the plans covered by the questionnaire, about two-thirds did not offer a withdrawal option —payments from accounts, sometimes designed to last a lifetime—and about three-quarters did not offer an annuity—arrangements that can guarantee set payments for life. Concerns about legal risks and record keeper constraints may deter many plan sponsors—typically employers that provide 401(k) plans and establish investment and distribution options—from offering lifetime income options. The Department of Labor (DOL) issues regulations and guidance for plan sponsors and is responsible for educating and assisting them to help ensure the retirement security of workers. For example, DOL has prescribed steps plan sponsors can take to satisfy their fiduciary duties (i.e. act prudently and in the best interest of participants) when selecting an annuity provider for a 401(k) plan. However, according to industry stakeholders GAO interviewed, those steps are not often used because they include assessing “sufficient” information to “appropriately” conclude that the annuity provider will be financially able to pay future claims without definitions for those terms. Without clearer criteria to select an annuity provider, fear of liability may deter plan sponsors from offering annuities. Further, GAO found that a mix of lifetime income options to choose from is not usually available. DOL provides an incentive in the form of limited liability relief to plan sponsors who, among other things, provide participants at least three diversified investment options. However, no such incentive exists for plan sponsors offering a mix of lifetime income options. Without some degree of liability relief, plan sponsors may be reluctant to offer a diverse mix of lifetime income options to their participants. Lastly, stakeholders told GAO that record keepers may make only their own annuities available to the plans they service. DOL provides guidance on selecting service providers, but it does not encourage plan sponsors to seek choices from their service providers, which may prevent plans from having appropriate annuity options available to offer participants. Required minimum distributions (RMD) can offer a default for those who do not choose a lifetime income option by setting a minimum amount of taxable 401(k) income for those age 70 ½ or older, based on life expectancy. Some plan sponsors know how to administer RMDs, and some already choose to provide RMD payments calculated to last a lifetime. However, DOL’s guidance on default lifetime income is focused on a particular annuity type used only by a few plans. By issuing guidance encouraging plans to consider letting RMDs be the default distribution process for retiring participants, DOL may help create lifetime income for participants who do not choose an option. What GAO Recommends GAO makes seven recommendations to DOL, including that it clarify the criteria to be used by plan sponsors to select an annuity provider, consider providing limited liability relief for offering an appropriate mix of lifetime income options, issue guidance to encourage plan sponsors to select a record keeper that offers annuities from other providers, and consider providing RMD-based default lifetime income to retirees. DOL generally agreed, and described actions it would take to address the intent of the recommendations.

gao_GAO-16-202

gao_GAO-16-202_0

For more details of our findings, recommendations, and the status of actions taken by DOD relating to DOD’s management of SRC I ammunition, see appendix IV. Military Services Have Maintained Accountability of SRC I Ammunition at Sampled Locations, but Gaps Exist in Some Service-Level Guidance and Procedures for How SRC I Ammunition Is Accounted for Across Locations The military services have maintained accountability of SRC I ammunition at 11 sampled locations in the continental United States; however, we identified gaps in some service-level guidance and procedures for how SRC I ammunition is accounted for across locations. Further, during our review, we identified instances in which the Navy and Army had taken actions to enhance the accountability of their physical inventories. The department concurred and reissued policy in 2000 to require DOD components to track and conduct physical inventories of SRC I ammunition by serial number. However, if the Air Force does not revise guidance to clarify that accountability for all SRC I ammunition items in the Air Force’s custody—regardless of ownership—should be maintained in the Air Force’s system of record, both the Air Force and the owning service will lack a record of receipt and management of the SRC I ammunition while at the Air Force location; also the owning service will not have full assurance that accountability was maintained. Army Depot and Marine Corps Guidance Do Not Specify a Time Frame for Receipting Shipments of SRC I Ammunition We found that the military services generally recorded shipment and receipt of SRC I ammunition in their accountability systems; however, we found that existing Army depot and Marine Corps guidance do not specify a time frame for receipting shipments of SRC I ammunition. In a non-generalizable sample of 104 shipments that we reviewed, we found the record of shipment in the shipper’s accountability system. As identified in table 3, 12 of 21 shipments to Army depots and 5 of 30 shipments to Marine Corps locations were receipted more than 2 business days after arrival. The Military Services Have Not Consistently Ensured Timely, Complete, and Accurate Information to Maintain Full Visibility of SRC I Ammunition The military services have not consistently ensured timely, complete, and accurate information to maintain full visibility of SRC I ammunition in the continental United States. Data provided by the Military Surface Deployment and Distribution Command showed that information about 93 of 1,008 shipments identified as containing SRC I items between November 1, 2013, and April 30, 2015, were not in DTTS at the time of carrier departure. Conclusions SRC I ammunition is treated as a higher risk than other conventional ammunition and serves as a potential threat if it were obtained and used by unauthorized individuals or groups. Until the Military Surface Deployment and Distribution Command and the military services collaboratively determine the specific information required for the military services to ensure timely data entry into DTTS, and the military services, with the aid of the Military Surface Deployment and Distribution Command, conduct analysis of the completeness and accuracy of data entered into DTTS military services’ shipping offices on SRC I ammunition shipments, the Military Surface Deployment and Distribution Command will continue to lack full visibility of shipments of SRC I ammunition and the military services will not be well positioned to improve their oversight of the timeliness, completeness, and accuracy of data entered in DTTS. To determine the extent to which the military services have maintained accountability of SRC I ammunition in the continental United States, we reviewed DOD policy and military service guidance, including Department of Defense Manual (DODM) 5100.76, Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives (AA&E), (Apr. We also analyzed data and documents obtained from the Air Force, Army, and Marine Corps on 55 SRC I items from 4 shipments of SRC I ammunition in the continental United States that contained ammunition owned by the Army or Marine Corps that was shipped to and held in the physical custody of the Air Force but for which we had found that accountability was not maintained on the Air Force’s system of record. DOD policy requires SRC I ammunition to be treated as a higher risk than other conventional ammunition which requires a higher level of protection and security.

Why GAO Did This Study DOD manages a stockpile of more than 226,000 SRC I missiles and rockets in the continental United States. SRC I conventional ammunition, which refers to nonnuclear, portable missiles and rockets in a ready-to-fire configuration, is managed as a higher risk than other conventional ammunition and serves as a potential threat if it were obtained by unauthorized individuals or groups. Senate Report 113-176 (2014) included a provision for GAO to review aspects of DOD's management of SRC I ammunition. This report addresses the extent to which the military services have maintained (1) accountability and (2) visibility (i.e., access to accurate information) of SRC I ammunition in the continental United States. GAO reviewed DOD and military service policies, regulations, and guidance on physical inventories and shipping of SRC I ammunition; conducted visits at a non-generalizable sample of 11 military service locations selected based on inventory size and number of shipments of SRC I ammunition; interviewed officials; and analyzed data on SRC I on-hand assets as of April 30, 2015, and on non-generalizable samples of SRC I shipments from November 1, 2013, to April 30, 2015. What GAO Found The military services maintained accountability (i.e., accurate records) of Security Risk Category (SRC) I conventional ammunition at 11 sampled locations within the continental United States; however, GAO identified gaps in some service-level guidance and procedures for how SRC I ammunition is accounted for across locations. GAO identified instances in which the Navy and Army had taken actions to enhance the accountability of the physical inventories of SRC I ammunition, such as the Army evaluating its methodology to ensure contractors with SRC I ammunition in their custody submit documentation to verify completion of inventories. However, GAO identified 55 SRC I ammunition items that were in the physical custody of the Air Force—though owned by the Army or Marine Corps—but accountability was not maintained in any service's system of record while at the Air Force location. Department of Defense (DOD) policy requires that the DOD component having physical custody of materiel maintain accountability in its records regardless of the owner, but the Air Force's guidance requires that ammunition owned by other services be tracked only in a “non-accountable” program. If the Air Force does not revise its guidance to require that accountability be maintained regardless of ownership, the Air Force and the owning service will not have complete records of management of the ammunition and the owning service will not have full assurance that accountability was maintained. GAO found that Army and Marine Corps guidance does not specify a time frame for receipting shipments of SRC I ammunition. Records showed that 12 of 21 shipments to Army depots and 5 of 30 shipments to Marine Corps locations were receipted more than 2 business days after truck arrival. Until Army and Marine Corps officials finalize and implement guidance on required time frames for receipting SRC I ammunition, officials cannot reasonably assure accountability for all shipped SRC I ammunition. The military services have not consistently ensured timely, complete, and accurate information to maintain full visibility of SRC I ammunition in the continental United States. For example, 93 of 1,008 shipments GAO examined were not entered in DOD's Defense Transportation Tracking System (DTTS) at the time of departure. Also, 9 of 104 shipments GAO examined in more detail had inaccurate controlled inventory item codes and were not identified in DTTS as SRC I shipments. The Military Surface Deployment and Distribution Command and the military services have not collaboratively determined the specific information required for the military services to ensure timely data entry into DTTS. Further, the military services, with the aid of the Military Surface Deployment and Distribution Command, have not conducted analysis of the completeness and accuracy of data entered into DTTS by shippers on SRC I ammunition shipments. Until these actions are taken, the Military Surface Deployment and Distribution Command will not have full visibility of shipments of SRC I ammunition and the military services will not be well positioned to improve their oversight of the timeliness, completeness, and accuracy of data entered in DTTS. What GAO Recommends GAO recommends that DOD revise and finalize guidance and improve the timeliness, completeness, and accuracy of information to maintain full accountability and visibility of SRC I ammunition. DOD concurred with all six recommendations and identified specific steps it has already taken as well as plans to address them.

gao_GAO-17-54

gao_GAO-17-54_0

These contractors comprise what is referred to as the ship repair industrial base. In 1982, we reported on deficiencies with the Navy’s implementation of this contracting strategy for ship repairs. In addition, we found that public and private shipyards involved in Navy ship maintenance face a number of challenges in completing maintenance on time, including unanticipated work requirements, workforce inexperience, and workload fluctuations. Market Research and Piloting Helped Inform Roll-out of MAC-MO Strategy, Which Offers Potential Benefits Compared to MSMO Our analysis of the key attributes of the MAC-MO contracting strategy versus its MSMO predecessor indicates that the new strategy offers significant potential benefits, key among them being the ability to control contract costs through the use of firm-fixed-price contracts. According to federal standards for internal control, management should design control activities to respond to risks and evaluate if objectives are being met, which involves leadership-level reviews of performance and establishment of performance measures. MAC-MO Strategy Will Increase Competition Opportunities, but It Is Too Soon to Assess Other Effects on the Ship Repair Industrial Base NAVSEA designed the MAC-MO contracting strategy to increase the number of competition opportunities for the maintenance and modernization of surface ships. Noncomplex Availabilities Competed Among Small Businesses The MAC-MO strategy broadens the pool of prime contractors qualified to compete for work in Norfolk, Virginia and San Diego, California by setting aside noncomplex availabilities in those locations for small businesses. However, six of the non-MSMO contract holders we interviewed were small businesses with varying experience working as a prime contractor for the Navy. Particularly in light of the large and complex nature of ship repair stakeholders in the Navy, not ensuring that progress is systematically assessed and that new lessons learned are incorporated in a timely manner could undermine the Navy’s ability to obtain the improved cost, schedule, and quality outcomes it seeks under the new strategy. Recommendation for Executive Action In order to promote effective implementation of the MAC-MO contracting strategy, we recommend that the Secretary of Defense direct the Secretary of the Navy to complete the following action: Assign responsibility to a single entity comprised of representatives from the fleet and shore-based maintenance communities, such as Surface Team 1, to perform systematic assessments of MAC-MO’s implementation that include the following: Review of lessons learned and identification of changes to Navy processes, including staffing, needed to support the MAC-MO strategy, Evaluation of performance against anticipated cost, schedule, and quality objectives, as outlined in the MAC-MO acquisition strategy, and Input and recommendations from all Navy parties that participate in the scheduling, planning, budgeting, oversight, and policy development for the repair, maintenance, and modernization of non- nuclear surface ships. This report assesses (1) the potential benefits of the MAC- MO contracting strategy, (2) process changes the Navy has taken to address any challenges and to capitalize on anticipated benefits, and (3) how the strategy might affect the Navy’s ship repair industrial base. To determine the key differences between the MAC-MO and the Multi-Ship, Multi-Option (MSMO) contracting strategies in contract pricing, planning the work, ordering, and structuring the competition among ship repair contractors, we analyzed NAVSEA’s acquisition planning documentation for the MAC-MO strategy and reviewed contents of selected MSMO contracts the Navy identified as illustrative, most recent, or were still in a period of performance and MAC-MO contract documentation for third- party planning contract awards. Navy Process Changes To assess process changes the Navy has made to address any challenges and to capitalize on anticipated benefits, we analyzed Navy documentation containing assessments of lessons learned from pilot maintenance availabilities used to test key features of the MAC-MO strategy. We also interviewed Navy contracting, maintenance, and program management officials previously mentioned.

Why GAO Did This Study The Navy has over 150 non-nuclear surface ships that it repairs, maintains, and modernizes using privately owned shipyards. The Navy concluded in 2010 that readiness of the surface ship force was below acceptable levels. This, in addition to the concerns of leadership about cost and schedule growth, led to a revised readiness strategy and, in 2015, introduction of a new contracting strategy for ship repair, referred to as MAC-MO. House Report 114-102 accompanying the fiscal year 2016 National Defense Authorization Act included a provision for GAO to review the Navy's implementation of the MAC-MO strategy. This report assesses (1) the potential benefits of the MAC-MO contracting strategy, (2) process changes the Navy has made to address any challenges and to capitalize on anticipated benefits, and (3) how the strategy will potentially affect the Navy's ship repair industrial base. GAO analyzed the Navy's acquisition planning documentation, lessons learned, and contracts. GAO interviewed Navy officials and visited regional maintenance centers in Norfolk, Va.; San Diego, Calif.; and Mayport, Fla. GAO also interviewed previous and prospective Navy ship maintenance contractors. What GAO Found The Navy's Multiple Award Contract, Multi Order (MAC-MO) contracting strategy for ship repair offers a number of potential benefits compared to the former Multi Ship, Multi-Option (MSMO) contracting strategy, including increased competition. A key difference is that the MAC-MO strategy intends to control costs through the use of firm-fixed price contracts and the use of third-party planners, which could be cost-effective if the planner produces clearly defined work specifications for the repair contractor to price and execute. Prior to implementation of the new strategy, the Navy conducted market research and pilot-tested attributes of the strategy with pilot maintenance periods for a number of ships. The Navy recognized several lessons learned from its pilot maintenance periods and has made subsequent process changes to address key lessons and support MAC-MO. These include a longer time frame for the planning process for finalizing work requirements (see figure). According to the Navy, this additional time is needed to promote stable requirements and, therefore, pricing. The Navy is assessing outcomes of individual maintenance periods; however, it lacks a systematic process involving the fleet- and shore-based maintenance communities to assess overall implementation of MAC-MO. This is inconsistent with federal standards for internal control, which state that management should evaluate its response to risks and evaluate progress made toward program objectives. Not ensuring progress is systematically assessed—particularly in light of the many stakeholders involved—could undermine the Navy's ability to obtain the improved outcomes it seeks with the MAC-MO strategy. The MAC-MO strategy will increase competition opportunities and set aside work for small businesses, but it is too soon to determine how these changes will impact the ship repair industrial base. Industry viewpoints GAO collected on MAC-MO varied both by shipyard location and contractor size. However, former MSMO contract holders reported that the uncertainty associated with the need to continually compete for work could result in decisions to reduce their workforce and facilities. Small businesses GAO spoke with have in the past mostly performed work as subcontractors to MSMO contract holders, but many expressed interest in competing as prime contractors under MAC-MO. What GAO Recommends GAO recommends the Navy assign responsibility to a single entity to systematically assess implementation of the MAC-MO strategy. DOD agreed with GAO's recommended action and plans to report biennially on strategy implementation.

gao_T-RCED-98-170

gao_T-RCED-98-170_0

The Small Business Research and Development Enhancement Act of 1992 reauthorized the SBIR program through fiscal year 2000. It Appears That Agencies Are Adhering to Statutory Funding Requirements; However, the Definition of Extramural R&D on Which the Funding Levels Are Based May Not Be Consistently Applied The agencies’ SBIR officials reported that they have adhered to the act’s requirement of not using SBIR funds to pay for the administrative costs of the program, such as salaries and support services used in processing awards. The program officials also believe that they are adhering to the statutory requirement to fund the program at 2.5 percent of agencies’ extramural research budget. Some of the officials expressed concern because they believe that agencies are using different interpretations of the “extramural budget” definition. This may lead to incorrect calculations of their extramural research budgets. Only Two of the Agencies We Reviewed Have Conducted Audits of Their Extramural Budgets Of the five agencies we reviewed, only two have recently audited their extramural R&D budgets. NSF estimated that these unallowable costs totaled over $100 million. Application Review Process and Current Funding Cycles Are Not Adversely Affecting Recipients’ Financial Status or the Commercialization of Projects Most of the SBIR officials we interviewed believed that neither the application review process nor current funding cycles are having an adverse effect on award recipients’ financial status or their ability to commercialize their projects. SBIR officials did say that some recipients had said that any interruption in funding awards, for whatever reason, affects them negatively. As a result, most of the participating SBIR agencies have established special programs and/or processes in an effort to mitigate any adverse effect(s) caused by funding gaps. Overall, 515 responses, or 35 percent, indicated that their projects had resulted in sales of products or processes, while 691, or 47 percent, had received additional developmental funding. Multiple-Award Recipients Commercialize at Rates Similar to Those of Non-Multiple-Award Recipients Using SBA’s data, we identified phase I award recipients who had received 15 or more phase II awards in the preceding 5 years. Solicitations Rarely Result in Single-Proposals When an agency funds research for a given solicitation topic where only one proposal was received, it may appear that there was a lack of competition. All of the Agencies Promote Program Participation by Women-Owned and Socially and Economically Disadvantaged Small Businesses One of the purposes of the 1992 act was to improve the federal government’s dissemination of information concerning the SBIR program, particularly with regard to program participation by women-owned small businesses and by socially and economically disadvantaged small businesses. For example, our 1991 survey found that 4.6 percent of the respondents reported licensing agreements with foreign firms and that 6 percent reported marketing agreements with foreign firms. U.S. General Accounting Office P.O.

Why GAO Did This Study GAO discussed its review of the Small Business Innovation Research (SBIR) program. What GAO Found GAO noted that: (1) it appears that agencies have adhered to the Small Business Research and Development Enhancement Act's funding requirements; (2) agency program officials reported that they are not using SBIR funds to pay for administrative costs of the program such as salaries and support services used to process awards; (3) the program officials also believe that they are adhering to the statutory requirement to fund the program at 2.5 percent of agencies' extramural research budget; (4) however, some officials believe that agencies are using different interpretations of the extramural budget definition, which may lead to incorrect calculations of their extramural research budgets; (5) of the five agencies that GAO reviewed, only two--the National Science Foundation (NSF) and the National Aeronautics and Space Administration--have conducted audits of their extramural budgets; (6) in 1997, the Office of Inspector General at NSF conducted an audit of the agency's extramural budget and found that it contained over $100 million of unallowable costs such as training and overhead; (7) while most of the SBIR officials GAO interviewed said that neither the application review process nor current funding cycles have had an adverse effect on award recipients' financial status or ability to commercialize, some recipients have said that any interruption in funding awards, for whatever reason, affects them negatively; (8) in response to these concerns over the continuity of funding, most of the participating SBIR agencies have established programs to minimize funding gaps; (9) companies responding to GAO's and the Department of Defense's surveys of award recipients reported that approximately 50 percent of their projects had sales of products or services related to the research or received additional developmental funding after receiving SBIR funding; (10) GAO found that the number of companies receiving multiple awards, which GAO defined as those phase I award recipients that also received 15 or more phase II awards in the proceeding 5 years, had grown from 10 companies in 1989 to 17 in 1996; (11) GAO found that agencies rarely fund research for a given solicitation topic where only one proposal was received; (12) of the five agencies that GAO examined, all reported engaging in activities to foster the participation of women-owned or socially and economically disadvantaged small businesses; and (13) GAO found little evidence of foreign firms, or U.S. firms with substantial foreign ownership interests, benefiting from technology or products developed as a direct result of SBIR-funded research.

gao_GAO-01-843

gao_GAO-01-843_0

Conclusion The armed services have had problems for years with their ability to adequately test their electronic combat systems. The success of the new tester in providing improved test capability is a positive development. Because the tester has identified many more faults in the F-15C and F/A-18C electronic combat systems than the current test equipment was identifying, existing readiness, logistics, and maintenance problems with such systems could worsen. However, pilots would at least have greater knowledge about the readiness and reliability of their self-protection systems and their need for support from specialized aircraft designed to suppress enemy air defenses. On balance, we believe it makes sense for the Air Force and Navy to consider using the new test equipment on their nonfighter aircraft.

What GAO Found The armed services have had problems for years with their ability to adequately test their electronic combat systems. The success of the new Joint Service Electronic Combat Systems Tester Program in providing improved test capability is a positive development. Because the tester has identified many more faults in the F-15C and F/A-18C electronic combat systems than has the current test equipment, existing readiness, logistics, and maintenance problems with such systems could worsen. However, pilots would at least have greater knowledge about the readiness and reliability of their self-protection systems and their need for support from specialized aircraft designed to suppress enemy air defenses. GAO believes that it makes sense for the Air Force and Navy to consider using the new test equipment on their non-fighter aircraft.

gao_GAO-11-404

gao_GAO-11-404_0

Table 1 identifies the major policies related to parts quality at DOD and NASA. Parts Quality Problems Are Widespread and in Some Cases Have Had a Significant Effect on Cost, Schedule, and Performance Parts quality problems reported by each program affected all 21 programs we reviewed at DOD and NASA and in some cases contributed to significant cost overruns, schedule delays, and reduced system reliability and availability. In most cases, problems were associated with electronics parts, versus mechanical parts or materials. Moreover, in several cases, parts problems were discovered late in the development cycle and, as such, tended to have more significant cost and schedule consequences. Poor workmanship was one of the causes of problems with electronic parts. Programs also reported quality problems because of the use of undocumented and untested manufacturing processes. Design Flaws Also Resulted in Parts Quality Problems In addition to problems stemming from poor control of manufacturing processes and materials, many problems resulted from poor part design, design complexity, and inattention to manufacturing risks. Supplier Management Contributed to Quality Problems Program officials at each agency also attributed parts quality problems to the prime contractor’s failure to ensure that its subcontractors and suppliers met program requirements. Agency and Industry Efforts to Address Parts Quality Problems Face Significant Challenges DOD and NASA have instituted new policies to prevent and detect parts quality problems, but most of the programs we reviewed were initiated before these policies took effect. In addition, agencies and industry have been collaborating to share information about potential problems, collecting data, and developing guidance and criteria for activities such as testing parts, managing subcontractors, and mitigating specific types of problems. In the face of such challenges, it is likely that ongoing improvements will have limited success without continued assessments to determine what is working well and what more needs to be done. Improvement Efforts Face Potential Barriers to Success There are significant potential barriers to the success of improvement efforts, including broader acquisition management problems, diffuse leadership in the national security space community, workforce gaps, the government’s decreasing influence on the overall electronic parts market, and an increase in counterfeiting of electronic parts. But there is no mechanism in place to periodically assess the condition of parts quality problems in major space and missile defense programs and the impact and effectiveness of corrective measures. We support DOD’s willingness to address all quality issues and to include parts, materials, and processes as an important focus area in an annual report. Key contributors to this report are provided in appendix V. Appendix I: Scope and Methodology Our specific objectives were to assess (1) the extent to which parts quality problems are affecting Department of Defense (DOD) and National Aeronautics and Space Administration (NASA) space and missile defense programs; (2) the causes of these problems; and (3) initiatives to prevent, detect, and mitigate parts quality problems. To examine the extent to which parts quality problems are affecting DOD (the Air Force, the Navy, and the Missile Defense Agency (MDA)) and NASA cost, schedule, and performance of space and missile defense programs, we reviewed all 21 space and missile programs—9 at DOD, including 4 Air Force, 1 Navy, and 4 MDA systems, and 12 at NASA—that were, as of October 2009, in development and projected to be high cost, and had demonstrated through a critical design review (CDR) that the maturity of the design was appropriate to support proceeding with full- scale fabrication, assembly, integration, and test. Related GAO Products Defense Acquisitions: Assessments of Selected Weapon Programs.

Why GAO Did This Study Quality is key to success in U.S. space and missile defense programs, but quality problems exist that have endangered entire missions along with less-visible problems leading to unnecessary repair, scrap, rework, and stoppage; long delays; and millions in cost growth. For space and missile defense acquisitions, GAO was asked to examine quality problems related to parts and manufacturing processes and materials across DOD and NASA. GAO assessed (1) the extent to which parts quality problems affect those agencies' space and missile defense programs; (2) causes of any problems; and (3) initiatives to prevent, detect, and mitigate parts quality problems. To accomplish this, GAO reviewed all 21 systems with mature designs and projected high costs: 5 DOD satellite systems, 4 DOD missile defense systems, and 12 NASA systems. GAO reviewed existing and planned efforts for preventing, detecting, and mitigating parts quality problems. Further, GAO reviewed regulations, directives, instructions, policies, and several studies, and interviewed senior headquarters and contractor officials. What GAO Found Parts quality problems affected all 21 programs GAO reviewed at the Department of Defense (DOD) and National Aeronautics and Space Administration (NASA). In some cases they contributed to significant cost overruns and schedule delays. In most cases, problems were associated with electronic versus mechanical parts or materials. In several cases, parts problems discovered late in the development cycle had more significant cost and schedule consequences. For example, one problem cost a program at least $250 million and about a 2-year launch delay. The causes of parts quality problems GAO identified were poor workmanship, undocumented and untested manufacturing processes, poor control of those processes and materials and failure to prevent contamination, poor part design, design complexity, and an inattention to manufacturing risks. Ineffective supplier management also resulted in concerns about whether subcontractors and contractors met program requirements. Most programs GAO reviewed began before the agencies adopted new policies related to parts quality problems, and newer post-policy programs were not mature enough for parts problems to be apparent. Agencies and industry are now collecting and sharing information about potential problems, and developing guidance and criteria for testing parts, managing subcontractors, and mitigating problems, but it is too early to determine how much such collaborations have reduced parts quality problems since such data have not been historically collected. New efforts are collecting data on anomalies, but no mechanism exists to use those data to assess improvements. Significant barriers hinder efforts to address parts quality problems, such as broader acquisition management problems, workforce gaps, diffuse leadership in the national security space community, the government's decreasing influence on the electronic parts market, and an increase in counterfeiting of electronic parts. Given this, success will likely be limited without continued assessments of what works well and must be done. DOD and NASA should implement a mechanism for periodic assessment of the condition of parts quality problems in major space and missile defense programs with periodic reporting to Congress. DOD partially agreed with the recommendation and NASA agreed. DOD agreed to annually address all quality issues, to include parts quality.

gao_GAO-06-1012T

gao_GAO-06-1012T_0

Early Initiatives to Leverage Buying Power and Small Business Programs Fostered Collaboration Among DHS Organizations In the three years since its creation, DHS realized some successes among its various acquisition organizations in opening communication through its strategic sourcing and small business programs. DHS’ disparate acquisition organizations quickly collaborated on leveraging spending for various goods and services, without losing focus on small businesses. This use of strategic sourcing—formulating purchasing strategies to meet departmentwide requirements for specific commodities, such as office supplies, boats, energy, and weapons—helped DHS leverage its buying power, with savings expected to grow. We also found that the small business program, whose reach is felt across DHS, was off to a good start. Representatives have been designated in each DHS procurement office to help ensure that small businesses have opportunities to compete for DHS’ contract dollars. DHS Faces Key Challenges In Creating An Integrated Acquisition Organization DHS continues to faces challenges in creating a unified, accountable acquisition organization due to policies that create ambiguity as to accountability for acquisition decisions, inadequate staffing to conduct department-wide oversight, and heavy reliance on interagency contracting in the Office of Procurement Operations, which is responsible for a large portion of DHS’ contracting activity. Policy Directive Relies on Dual Accountability and Exempts Coast Guard and Secret Service Achieving a unified and integrated acquisition system is hampered because an October 2004 policy directive relies on a system of dual accountability between the CPO and the heads of the department’s principal organizations. The Coast Guard is one of the largest organizations within DHS, with obligations accounting for about $2.2 billion in fiscal year 2005, nearly 18 percent of the department’s total. We reported in March 2005 that the CPO lacked sufficient staff to ensure compliance with DHS’ acquisition oversight regulations and policies. To a great extent, the various acquisition organizations within the department were still operating in a disparate manner, with oversight of acquisition activities left primarily up to each individual organization. We have ongoing work in this area and will be reporting on the department’s progress in the near future. We found that the Office of Procurement Operations lacked adequate internal controls to provide oversight of its interagency contracting activity. As reported by DHS, the Office of Procurement Operations’ obligations transferred to other agencies had decreased to 72 percent in fiscal year 2005. Review Process for Major Investments, Despite Use of Best Practices, Was Inconsistent and Lacked Some Management Controls To protect its major, complex investments, DHS has put in place a review process that adopts many acquisition best practices—proven methods, processes, techniques, and activities—to help the department reduce risk and increase the chances for successful investment outcomes in terms of cost, schedule, and performance. While DHS’ framework includes key tenets of this approach, in March 2005 we reported that it did not require two critical management reviews. However, DHS policy does not establish cost and schedule estimates for the acquisition based on knowledge from preliminary designs. We have cited the need for increased contractor tracking and oversight for several large DHS programs. While many of DHS’ major investments use commercial, off-the-shelf products that do not require the same level of review as a complex, developmental investment would, DHS is investing in a number of major, complex systems, such as TSA’s Secure Flight program and the Coast Guard’s Deepwater program, that incorporate new technology. Our work on these two systems highlights the need for improved oversight of contractors and greater adherence to a best practices approach to management review. TSA reports it has identified contract management as a key risk factor associated with the development and implementation of Secure Flight. However, the steps taken so far are not enough to ensure that the department is effectively managing the acquisition of the multitude of goods and services it needs to meet its mission. This is a work of the U.S. government and is not subject to copyright protection in the United States.

Why GAO Did This Study The Department of Homeland Security (DHS) has some of the most extensive acquisition needs within the U.S. government. In fiscal year 2005, the department reported that it obligated almost $17.5 billion to acquire a wide range of goods and services. DHS's acquisition portfolio is broad and complex, including procurements for sophisticated screening equipment for air passenger security; technologies to secure the nation's borders; trailers to meet the housing needs of Hurricane Katrina victims; and the upgrading of the Coast Guard's offshore fleet of surface and air assets. This testimony summarizes GAO reports and testimonies, which have reported on various aspects of DHS acquisitions. It addresses (1) areas where DHS has been successful in promoting collaboration among its various organizations, and (2) challenges it still faces in integrating the acquisition function across the department; and (3) DHS' implementation of an effective review process for its major, complex investments. The information in this testimony is based on work that was completed in accordance with generally accepted government auditing standards. What GAO Found Since its establishment in March 2003, DHS has been faced with assembling 23 separate federal agencies and organizations with multiple missions and cultures into one department. This mammoth task involved a variety of transformational efforts, one of which is to design and implement the necessary management structure and processes for the acquisition of goods and services. We reported in March 2005 that DHS had opened communication among its acquisition organizations through its strategic sourcing and small business programs. With strategic sourcing, DHS' organizations quickly collaborated to leverage spending for various goods and services--such as office supplies, boats, energy, and weapons--without losing focus on small businesses, thus leveraging its buying power and increasing savings. Its small business program, whose reach is felt across DHS, is also off to a good start. Representatives have been designated in each DHS procurement office to ensure small businesses can compete effectively for the agency's contract dollars. We also reported that DHS' progress in creating a unified acquisition organization has been hampered by policy decisions that create ambiguity about who is accountable for acquisition decisions. To a great extent, we found that the various acquisition organizations within DHS were still operating in a disparate manner, with oversight of acquisition activities left primarily up to each individual organization. DHS continues to face challenges in integrating its acquisition organization. Specifically, dual accountability for acquisitions exists between the Chief Procurement Officer (CPO) and the heads of each DHS component; a policy decision has exempted the Coast Guard and Secret Service from the unified acquisition organization; the CPO has insufficient capacity for department-wide acquisition oversight; and staffing shortages have led the Office of Procurement Operations, which handles a large percentage of DHS's contracting activity, to rely extensively on outside agencies for contracting support--often for a fee. We found that this office lacked the internal controls to provide oversight of this interagency contracting activity. This last challenge has begun to be addressed with the hiring of additional contracting staff. Some of DHS's organizations have major, complex acquisition programs that are subject to a multi-tiered investment review process intended to help reduce risk and increase chances for successful outcomes in terms of cost, schedule, and performance. While the process includes many best practices, it does not include two critical management reviews, namely a review to help ensure that resources match customer needs and a review to determine whether a program's design performs as expected. Our prior reports on large DHS acquisition programs, such as the Transportation Security Administration's Secure Flight program and the Coast Guard's Deepwater program, highlight the need for improved oversight of contractors and adherence to a rigorous management review process.

gao_GAO-16-394

gao_GAO-16-394_0

As required by law, the RAs are paid on a contingent basis from recovered overpayments. Under the demonstration, instead of being paid a contingency fee based on recovered overpayments, the RAs were paid contingency fees based on claim denial amounts. Few Differences Exist between Prepayment and Postpayment Reviews and Use Varies by Contractor, but Prepayment Reviews Better Protect Medicare Funds Prepayment Reviews Better Protect Medicare Funds, and Stakeholders Report Few Differences between Prepayment and Postpayment Reviews See Improper Payments Information Act of 2002 (IPIA), Pub. Key stakeholders we interviewed identified few significant differences in conducting and responding to prepayment and postpayment reviews. Specifically, CMS, MAC, and RA officials stated that prepayment and postpayment review activities are generally conducted by claim review contractors in similar ways. In not seeking the authority, CMS may be missing an opportunity to reduce the amount of uncollectable overpayments from RA reviews and save administrative resources associated with recovering overpayments. Contractors Focused on Different Types of Claims in 2013 and 2014 RAs Focused on Inpatient Claim Reviews, Though CMS Has Taken Steps to Ensure RAs Review All Claim Types Our analysis of RA claim review data shows that the RAs focused on reviewing inpatient claims in 2013 and 2014, though this focus was not consistent with the degree to which inpatient services constituted improper payments, or with CMS’s expectation that the RAs review all claim types. For RA postpayment reviews specifically, which excludes reviews conducted as part of the RA Prepayment Review Demonstration, 87 percent of RA reviews were for inpatient claims in 2013, and 64 percent were for inpatient claims in 2014. In general, the RAs have discretion to select the claims they review, and their focus on reviewing inpatient claims is consistent with the financial incentives associated with the contingency fees they receive, as inpatient claims generally have higher payment amounts compared to other claim types. To encourage the RAs to review DME claims— which had the highest rates of improper payments in fiscal years 2012 and 2013—CMS officials stated that they increased the contingency fee percentage paid to the RAs for DME claims. The Focus of SMRC Claim Reviews Varied between 2013 and 2014 Based on CMS’s Direction The focus of the SMRC’s claim reviews depended on the studies that CMS directed the contractor to conduct in 2013 and 2014. In 2014, the claim reviews for this study accounted for all of the SMRC’s DME claim reviews and nearly half of all the SMRC claim reviews. Both RAs and the SMRC Generated Savings for CMS, but Unreliable Data Prevent Comparison to MACs CMS Paid the RAs an Average of $158 per Review, and the RAs Averaged $14 in Identified Improper Payments per Dollar Paid by CMS in 2013 and 2014 The RAs were paid an average of $158 per claim review conducted in 2013 and 2014 and identified $14 in improper payments, on average, per dollar paid by CMS in contingency fees (see Table 7). CMS’s Lack of Reliable MAC Cost and Savings Data Precludes Analysis of the Cost per Review and the Amount of Improper Payments Identified per Dollar Paid by CMS We were unable to determine the cost per review and the amount of improper payments identified by the MACs per dollar paid by CMS because the agency does not have reliable data on funding of MAC claim reviews for 2013 and 2014, and the agency collects inconsistent data on the savings from prepayment claim denials. Conclusions CMS contracts with claim review contractors that use varying degrees of prepayment and postpayment reviews to identify improper payments and protect the integrity of the Medicare program. Although CMS considered the Prepayment Review Demonstration a success, and having the RAs conduct prepayment reviews would align with CMS’s strategy to pay claims properly the first time, the agency has not requested legislative authority to allow the RAs to do so. Inconsistent with federal internal control standards, CMS has not provided the MACs with documented guidance or other instructions for how to calculate savings from prepayment reviews. CMS uses claim review contractors that have different roles and take different approaches to preventing improper payments. However, the essential task of reviewing claims is similar across the different contractors and, without better data, CMS is not in a position to evaluate the performance and cost effectiveness of these different approaches. In order to ensure that CMS has the information it needs to evaluate MAC effectiveness in preventing improper payments and to evaluate and compare contractor performance across its Medicare claim review program, CMS should provide the MACs with written guidance on how to accurately calculate and report savings from prepayment claim reviews. In its comments, HHS disagreed with our first recommendation, but it concurred with our second recommendation.

Why GAO Did This Study CMS uses several types of claim review contractors to help reduce improper payments and protect the integrity of the Medicare program. CMS pays its contractors differently—the agency is required by law to pay RAs contingency fees from recovered overpayments, while other contractors are paid based on cost. Questions have been raised about the focus of RA reviews because of the incentives associated with the contingency fees. GAO was asked to examine the review activities of the different Medicare claim review contractors. This report examines (1) differences between prepayment and postpayment reviews and the extent to which contractors use them; (2) the extent to which the claim review contractors focus their reviews on different types of claims; and (3) CMS's cost per review and amount of improper payments identified by the claim review contractors per dollar paid by CMS. GAO reviewed CMS documents; analyzed CMS and contractor claim review and funding data for 2013 and 2014; interviewed CMS officials, claim review contractors, and health care provider organizations; and assessed CMS's oversight against federal internal control standards. What GAO Found The Centers for Medicare & Medicaid Services (CMS) uses different types of contractors to conduct prepayment and postpayment reviews of Medicare fee-for-service claims at high risk for improper payments. Medicare Administrative Contractors (MAC) conduct prepayment and postpayment reviews; Recovery Auditors (RA) generally conduct postpayment reviews; and the Supplemental Medical Review Contractor (SMRC) conducts postpayment reviews as part of studies directed by CMS. CMS, its contractors, and provider organizations identified few significant differences between conducting and responding to prepayment and postpayment reviews. Using prepayment reviews to deny improper claims and prevent overpayments is consistent with CMS's goal to pay claims correctly the first time and can better protect Medicare funds because not all overpayments can be collected. In 2013 and 2014, 98 percent of MAC claim reviews were prepayment, and 85 percent of RA claim reviews and 100 percent of SMRC reviews were postpayment. Because CMS is required by law to pay RAs contingency fees from recovered overpayments, the RAs can only conduct prepayment reviews under a demonstration. From 2012 through 2014, CMS conducted a demonstration in which the RAs conducted prepayment reviews and were paid contingency fees based on claim denial amounts. CMS officials considered the demonstration a success. However, CMS has not requested legislation that would allow for RA prepayment reviews by amending existing payment requirements and thus may be missing an opportunity to better protect Medicare funds. The contractors focused their reviews on different types of claims. In 2013 and 2014, the RAs focused their reviews on inpatient claims, which represented about 30 percent of Medicare improper payments. In 2013 and 2014, inpatient claim reviews accounted for 78 and 47 percent, respectively, of all RA claim reviews. Inpatient claims had high average identified improper payment amounts, reflecting the costs of the services. The RAs' focus on inpatient claims was consistent with the financial incentives from their contingency fees, which are based on the amount of identified overpayments, but the focus was not consistent with CMS's expectations that RAs review all claim types. CMS has since taken steps to limit the RAs' focus on inpatient claims and broaden the types of claims being reviewed. The MACs focused their reviews on physician and durable medical equipment claims, the latter of which had the highest rate of improper payments. The focus of the SMRC's claim reviews varied. In 2013 and 2014, the RAs had an average cost per review to CMS of $158 and identified $14 in improper payments per dollar paid by CMS to the RAs. The SMRC had an average cost per review of $256 and identified $7 in improper payments per dollar paid by CMS. GAO was unable to determine the cost per review and amount of improper payments identified by the MACs per dollar paid by CMS because of unreliable data on costs and claim review savings. Inconsistent with federal internal control standards, CMS has not provided written guidance on how the MACs should calculate savings from prepayment reviews. Without reliable savings data, CMS does not have the information it needs to evaluate the MACs' performance and cost effectiveness in preventing improper payments, and CMS cannot compare performance across contractors. What GAO Recommends GAO recommends that CMS (1) request legislation to allow the RAs to conduct prepayment claim reviews, and (2) provide written guidance on calculating savings from prepayment reviews. The Department of Health and Human Services disagreed with the first recommendation, but concurred with the second. GAO continues to believe the first recommendation is valid as discussed in the report.

gao_GAO-16-488

gao_GAO-16-488_0

Background Patriot is a mobile Army surface-to-air missile system designed to counter tactical ballistic missiles; cruise missiles; and other threats such as airplanes, helicopters, and unmanned aerial vehicles. The Integrated Air and Missile Defense (IAMD) program is currently developing the IAMD Battle Command System (IBCS) that plans to connect Patriot radars and launchers into IBCS’s central network and command and control stations. Multibillion Dollar Upgrade Strategy Awaits Key Testing Results to Determine the Extent to Which Upgrades Address Capability Needs or Require Additional Development To address a diverse set of capability needs to mitigate evolving threats, the Army is planning to field a number of upgrades, as well as a long-term radar solution, projected to cost $2.9 billion through fiscal year 2021 with additional costs needed for its long-term solutions. Specifically, the Army is budgeting for three ongoing upgrades to address obsolescence issues, four near-term hardware upgrades that begin fielding prior to fiscal year 2017, six mid-term upgrades and supporting equipment that will begin fielding between fiscal years 2017 and 2021, and long-term upgrades— including a long-term radar solution, the details for which are still being determined. Also key among these upgrades is a major software upgrade called Post Deployment Build-8 (PDB-8), which, in addition to a second software upgrade called PDB-8.1, is intended to improve communications and system capabilities against threats. Costs for PDB-8 and PDB-8.1 software-related tasks are estimated based on software-related tasks in the budget. In addition, the program did not establish any oversight mechanisms for the upgrades that were similar to those generally required of MDAPs. Upcoming Tests of PDB-8 and PDB-8.1 Provide Opportunity to Increase Oversight of Near and Mid-term Upgrades If Further Development Is Needed While it would not be productive for DOD to go back and track cost or schedule changes from the start of the Patriot upgrade efforts (see appendix III), in the event that upcoming operational tests reveal the need for further development of PDB-8 and PDB-8.1 and other near- and mid- term upgrades tested along with that software, the department will have an opportunity to provide increased oversight of those upgrades. Of the three remaining components, the Army has already defined the missile as a separate major defense acquisition program and currently plans to do the same for the LTAMD sensor solution, which accounts for $364 million of the requested $1.8 billion over the next five years. Continuing to separately manage and track progress for these components should help provide Congress with the oversight and accountability it needs to make important investment decisions. Although the Army estimated in 2013 that costs for Patriot upgrades would meet the threshold to be considered a major defense acquisition program (MDAP), the Army chose to incorporate the Patriot upgrade efforts into the existing Patriot program which made certain oversight mechanisms inapplicable. DOD partially concurred with our recommendations to provide an initial report—similar to a Selected Acquisition Report—and to provide annual updates to Congress in an effort to establish oversight mechanisms commensurate with other major defense acquisition programs for upgrades operationally tested with PDB-8 and PDB-8.1 in the event that operational test results reveal performance shortfalls that require additional development. DOD’s response focuses on tracking and reporting progress on other MDAPs without clarifying how or if it will track progress on current PDB-8 and PDB-8.1 efforts. To assess the extent to which the Patriot system upgrades will address capability needs and describe the cost, schedule, and testing plans associated with those upgrades we did the following: 1. In sum, the Army has spent about $1.1 billion of the $2.9 billion planned between fiscal years 2013 and 2021 to address Patriot capability needs, as seen in figure 9.

Why GAO Did This Study Patriot is a mobile Army surface-to-air missile system deployed worldwide to defend critical assets and forces. To respond to emerging threats and address a diverse set of capability needs, the Army has spent nearly $1.1 billion and requested $1.8 billion over the next 5 years to upgrade Patriot, begin developing a long-term radar solution, and integrate Patriot components into a central network and command and control system—the Integrated Air and Missile Defense. A House report included a provision for GAO to assess, among other things, the status of the Patriot system and the Army's strategy for completing the upgrades. Among other things, this report examines (1) the extent to which the latest upgrades will address Patriot capability needs and (2) the level of oversight and accountability provided for the upgrade efforts. To conduct this review, GAO examined Army and program documents including test plans and schedules. GAO also interviewed Department of Defense (DOD) and other relevant officials. What GAO Found While the currently fielded version of the Army's Patriot surface-to-air missile system is an improvement over prior versions, the Army currently plans to spend about $2.9 billion between fiscal years 2013 and 2021 on an upgrade strategy to address a variety of capability needs. These efforts are intended to improve the system's performance, reliability, and communications as well as address obsolescence and sustainment issues. The figure below shows planned costs for ongoing efforts, near-term upgrades which begin fielding prior to fiscal year 2017, mid-term upgrades which begin fielding between fiscal years 2017 and 2021, and long-term upgrades—including a long-term radar solution. Key among the mid-term efforts are major software upgrades called Post Deployment Build-8 (PDB-8) and PDB-8.1, which are intended to improve communications and system capabilities against threats. The Army plans to begin operational testing for PDB-8 and PDB-8.1 in fiscal years 2016 and 2019, respectively. These testing results will reveal the extent to which the near and mid-term upgrades work as intended. Although the Army estimated in 2013 that costs for Patriot upgrades would meet the threshold to be considered a major defense acquisition program (MDAP), the Army chose to incorporate the Patriot upgrade efforts into the existing Patriot program which made certain oversight mechanisms inapplicable. Further, it decided not to put a mechanism in place to track or report the upgrades' progress against initial cost, schedule, or performance estimates, similar to those generally required of MDAPs, which GAO considers essential for program oversight. Operational testing for PDB-8 and PDB-8.1 provides the Army with an opportunity to increase oversight. If performance shortfalls indicate a need for further development, the Army will have an opportunity to track progress on these upgrades to provide the oversight tools decisionmakers need to make important investment decisions. What GAO Recommends GAO recommends that the Secretary of Defense direct the Army to establish oversight mechanisms, similar to those for major defense acquisition programs, if additional development is required for upgrades operationally tested with PDB-8 and PDB-8.1. DOD partially concurred, focusing its response on plans to track other MDAPs, but did not clarify how or if it would track current PDB-8 and PDB-8.1 progress. GAO maintains DOD should provide oversight for any additional PDB-8 and PDB-8.1 development.

gao_GAO-07-708

gao_GAO-07-708_0

However, in recent years, the subsidy rate has approached zero. Our analysis of HMDA data indicates that the agency could have insured from 9 to 10 percent more loans in 2005 had the higher mortgage limits been in place. The effect of lowering down-payment requirements on demand for FHA-insured loans is also difficult to estimate. Our analysis of how the proposed pricing structure would affect home purchase borrowers similar to those insured by FHA in 2005 found that approximately 43 percent of borrowers would have paid the same or less while 37 percent would have paid more. Absent any program changes, FHA estimates that the Fund would require an appropriation of credit subsidy budget authority of approximately $143 million. If the major legislative proposals were passed, FHA estimates that the Fund would generate $342 million in negative subsidies. As discussed more fully later in this report, FHA has taken some steps to improve its subsidy estimates. FHA Has Enhanced Tools and Resources Important to Implementing Proposals but Does Not Intend to Mitigate Risks by Piloting New Products FHA has enhanced the tools and resources it uses that would be important to implementing the legislative proposals, but has not always used industry practices that could help the agency manage the risks associated with program changes. FHA also has identified changes in information systems needed to implement the legislative proposals and requested additional staff to help promote new FHA products but faces long-term challenges in these areas. However, the legislative proposals would introduce new risks and challenges such as the difficulty of pricing loans with very low or no down payments whose risks may not be well understood. While other mortgage institutions use pilot programs to manage the risks associated with changing or expanding their product lines, FHA has indicated that it does not plan to pilot any no-down- payment product it is authorized to offer. We have previously indicated that, if Congress authorizes FHA to insure new products, it should consider a number of means, including limiting their initial availability, to mitigate the additional risks these loans may pose. Congress and FHA Could Consider Other Administrative and Legislative Changes to Help FHA Adapt to Changes in the Mortgage Market Mortgage industry participants and researchers have suggested additional options that Congress and FHA could consider to help FHA adapt to changes in the mortgage market, but some changes could have budget and oversight implications. Congress also could consider alternative approaches to the provision of federal mortgage insurance such as converting FHA to a government corporation or implementing risk-sharing arrangements with private partners. Also, using the Fund’s current resources would increase the federal budget deficit unless accompanied by corresponding reductions in other government spending or an increase in receipts. However, FHA has not sought this authority. To adapt to market changes, FHA has implemented new administrative procedures and proposed legislation designed to modernize its mortgage insurance processes, introduce product changes, and provide additional risk-management tools. Specifically, we examined (1) the likely program and budgetary impacts of FHA’s modernization efforts, (2) the tools, resources, and risk-management practices important to FHA’s implementation of the legislative proposals, if passed, and (3) other options that FHA and Congress could consider to help FHA adapt to changes in the mortgage market and the pros and cons of these options. In evaluating the likely program impacts of FHA’s proposed legislative changes, we focused on the proposals to raise FHA loan limits, institute risk-based pricing of mortgage insurance premiums, and lower down- payment requirements. Finally, we estimated the percentage of the newly-eligible loans in each CBSA that FHA would have insured using the following range of assumptions: (1) that FHA’s market share would have been approximately the same as it was among all loans in that CBSA under the actual 2005 loans limits, (2) that FHA’s market share would have been approximately the same as its share of loans with loan amounts ranging from 70 to 100 percent of the actual 2005 loan limits in that CBSA, (3) that FHA’s market share would have been approximately the same as its share of loans with loan amounts ranging from 75 to 100 percent of the actual 2005 loan limits in that CBSA, and (4) that FHA’s market share would be approximately the same as its share of loans with loan amounts ranging from 80 to 100 percent of the actual 2005 loan limits in that CBSA. To estimate the effects of risk-based pricing on borrowers’ eligibility for FHA insurance and the premiums they would pay, we reviewed FHA’s risk-based pricing proposal and interviewed FHA officials regarding their plans to implement risk-based pricing, if authorized. We focused on completed and planned enhancements to FHA’s SFDW data, loan performance models, TOTAL mortgage scorecard, information technology, human capital, and risk-management practices.

Why GAO Did This Study In recent years, the Federal Housing Administration (FHA) has experienced a sharp decline in market share. Also, the agency has estimated that, absent program changes, its Mutual Mortgage Insurance Fund (Fund) would require appropriations in 2008. To adapt to market changes, FHA has implemented new procedures and proposed the following major legislative changes: raising FHA's loan limits, allowing risk-based pricing, and lowering down-payment requirements. GAO was asked to report on (1) the likely program and budget impacts of FHA's modernization efforts; (2) the tools, resources, and risk management practices important to FHA's implementation of the legislative proposals, if passed; and (3) other options that FHA and Congress could consider to help FHA adapt to market changes. To address these objectives, GAO analyzed FHA and Home Mortgage Disclosure Act (HMDA) data and interviewed officials from FHA and other mortgage institutions. What GAO Found FHA's recent changes to insurance approval and appraisal requirements have streamlined its insurance process, and FHA's major legislative proposals could affect the demand for FHA's loans, the cost and availability of insurance to borrowers, and the insurance program's budgetary costs. Based on GAO's analysis of HMDA data, the number of FHA-insured loans could have been from 9 to 10 percent greater in 2005 had the higher, proposed mortgage limits been in effect. GAO's analysis of data on 2005 FHA home purchase borrowers shows that 43 percent would have paid the same or less under the risk-based pricing proposal than they actually paid, 37 percent would have paid more, and 20 percent (those with the highest expected claim rates) would not have qualified for FHA insurance. While to be viewed with caution, FHA has made estimates indicating that the loans it expects to insure in 2008 would result in negative subsidies (i.e., net cash inflows) of $342 million if the major legislative changes were enacted, rather than requiring an appropriation of $143 million absent any program changes. FHA has taken or planned steps to enhance tools and resources and adopt risk-management practices important to implementing the legislative proposals, but does not intend to use a common industry practice, piloting, to mitigate the risks of any zero-down-payment product it is authorized to offer. In response to prior GAO recommendations, FHA has taken steps to improve the loan performance and scoring models it would use in risk-based pricing. It also has identified minor changes to its information systems and staff increases needed to implement the proposals but faces long-term challenges in these areas. Additionally, the legislative proposals would introduce new risks. The proposal to lower down-payment requirements is of particular concern given the higher default rates on these loans and the difficulty of setting prices for new products whose risks may not be well known. GAO has previously indicated that Congress may want to consider requiring FHA to limit the initial availability of any new products and also recommended that FHA itself consider piloting. However, FHA has indicated that it does not plan to pilot any no-down-payment product it might offer. Mortgage industry participants and researchers have suggested more options that Congress and FHA could consider to help FHA adapt to changes in the mortgage market, but some changes could have budget impacts and complicate oversight efforts. Some administrative changes--such as implementing a more limited form of risk-based pricing--are within FHA's existing authority. Congress also could grant FHA additional authority that would allow it to invest the Fund's current resources in information technology and human capital, but this would increase the federal government's budget deficit. Finally, Congress could contemplate other approaches to the provision of federal mortgage insurance, such as creating a government corporation. However, any fundamental changes to how the federal government provides mortgage insurance could require new oversight mechanisms and would require careful deliberation.

gao_T-HEHS-98-41

gao_T-HEHS-98-41_0

The combination of these changes has had a dramatic effect on utilization of the home health benefit in the 1990s, both in terms of the number of beneficiaries receiving services and in the extent of these services. (The appendix contains a figure that shows growth in home health expenditures in relation to the legislative and policy changes.) The number of beneficiaries receiving home health care has more than doubled in recent years, from 1.7 million in 1989 to about 3.9 million in 1996. Interim Changes to Cost Reimbursement To gain some measure of control over payments immediately, the BBA made some significant changes to the cost-based reimbursement system used for home health care while HCFA is developing a PPS for the longer term. In addition, the BBA added a limit on the average per-beneficiary payment received during a year. Such a system also gives agencies an incentive to increase their caseloads, perhaps with patients who do not meet Medicare’s requirements for the benefit. Safeguards Against Fraud and Abuse Still Needed A PPS for home health should enable Medicare to give agencies increased incentives to control costs and to slow the growth in program payments. New Anti-Fraud-And-Abuse Provisions and Initiatives The Congress and the administration recently have taken actions to combat fraud and abuse in the provision of and payment for Medicare home health services. Finally, BBA authorizes HCFA to establish normative guidelines for the frequency and duration of home health services and to deny payment in cases exceeding those guidelines. For home health care, the home health agency usually develops the plan of care and is responsible for monitoring the care provided and ensuring that care is necessary and of adequate quality. HHS is expected to implement the program safeguards mandated by the BBA, such as implementing the requirement for home health agencies to post at least a $50,000 surety bond before they are certified and promulgating a rule requiring new agencies to have enough funds on hand to operate for the first 3 to 6 months. Medicare: Home Health Cost Growth and Administration’s Proposal for Prospective Payment (GAO/T-HEHS-97-92, Mar. 4, 1997).

Why GAO Did This Study GAO discussed how the Balanced Budget Act of 1997 (BBA) addressed the issues of rapid cost growth in Medicare's home health benefit, focusing on: (1) the reasons for the rapid growth of Medicare home health care costs in the 1990s; (2) the interim changes in the BBA to Medicare's current payment system; (3) issues related to implementing the BBA's requirement to establish a prospective payment system (PPS) for home health care; and (4) the status of efforts by Congress and the administration to strengthen program safeguards to combat fraud and abuse in home health services. What GAO Found GAO noted that: (1) changes in law and program guidelines have led to rapid growth in the number of beneficiaries using home health care and in the average number of visits per user; (2) in addition, more patients now receive home health services for longer periods of time; (3) these changes have not only resulted in accelerating cost but also marked a shift from an acute-care, short-term benefit toward a more chronic-care, longer-benefit; (4) the recently enacted BBA included a number of provisions designed to slow the growth in home health expenditures; (5) these include tightening payment limits immediately, requiring a PPS beginning in fiscal year 2000, prohibiting certain abusive billing practices, strengthening participation requirements for home health agencies, and authorizing the Secretary of Health and Human Services to develop normative guidelines for the frequency and duration of home health services; (6) all of these provisions should help control Medicare costs; (7) however, the Health Care Financing Administration (HCFA), the agency responsible for administering Medicare, has considerable discretion in implementing the law which, in turn, means the agency has much work to do within a limited time period; and (8) HCFA's actions, both in designing a PPS and in implementing enhanced program controls to assure that unscrupulous providers cannot readily game the system, will determine to large extent how successful the legislation will be in curbing past abusive billing practices and slowing the rapid growth in spending for this benefit.

gao_GAO-04-414T

gao_GAO-04-414T_0

Data reliability issues with respect to DOD and IRS records prevented us from identifying an exact amount of unpaid federal taxes. Unpaid payroll taxes include amounts that a business withholds from an employee’s wages for federal income taxes, Social Security, Medicare, and the related matching contributions of the employer for Social Security and Medicare. DOD and IRS Are Not Collecting Millions in Unpaid Federal Taxes from Contractors Until DOD establishes processes to provide information from all payment systems to TOP, the federal government will continue missing opportunities to collect hundreds of millions of dollars in tax debt owed by DOD contractors. DOD Is Not Fully Assisting in the Collection of Unpaid Taxes Owed by Its Contractors We estimate that DOD, which functions as its own disbursing agent, could have offset payments and collected at least $100 million in unpaid taxes in fiscal year 2002 if it and IRS had worked together to effectively levy contractor payments. However, in the 6 years since the passage of the Taxpayer Relief Act of 1997, DOD has collected only about $687,000. IRS’s continuous levy authority authorizes the agency to collect federal tax debts of businesses and individuals that receive federal payments by levying up to 15 percent of each payment until the debt is paid. In response to our draft report, DOD developed a schedule to provide payment information to TOP for all of its additional payment systems by March 2005. In addition, DFAS did not have an organizational structure in place to implement the TOP payment reporting process. In one case, IRS cited resource and workload management considerations. DOD Contractors Involved in Abusive or Potentially Criminal Activity Related to the Federal Tax System We selected for case study 47 businesses and individuals that had unpaid taxes and were receiving DOD contractor payments in fiscal year 2002. However, rather than fulfill their role as “trustees” of this money and forward it to IRS, these DOD contractors diverted the money for other purposes. Examples of Abusive or Potentially Criminal Activity Related to the Federal Tax System by Businesses Our audit and investigation of the 34 case study business contractors showed substantial abuse or potential criminal activity as all had unpaid payroll taxes and all diverted funds for personal or business use. The business also made a down payment for the owner’s boat and bought several cars and a home outside the country. The business transferred its employees to a relative’s business, which also had unpaid federal taxes, and submitted invoices and received payments from DOD on a previous contract through August 2003. In 1996, the owner bought a home and furnishings worth approximately $1 million and borrowed nearly $1 million from the business. The tax problems of this business date back to the mid-1990s. Case # 9 - This family-owned and operated building contractor provided a variety of products and services to DOD, and DOD provided a substantial portion of the contractor’s revenues. This contractor received over $200,000 from DOD during 2002. See our related report for details on the other 30 DOD contractor case studies. Contractors with Unpaid Taxes Are Not Prohibited by Law from Receiving Contracts from the Federal Government Federal law does not prohibit a contractor with unpaid federal taxes from receiving contracts from the federal government. The Administrator of Federal Procurement Policy provides overall direction for governmentwide procurement policies, regulations, and procedures. In this regard, OMB’s Office of Federal Procurement Policy is in the best position to develop and pursue policy options for prohibiting federal contract awards to businesses and individuals that abuse the tax system.

Why GAO Did This Study GAO addressed issues related to three high-risk areas including the Department of Defense (DOD) and the Internal Revenue Service (IRS) financial management and IRS collection of unpaid taxes. This testimony provides a perspective on (1) the magnitude of unpaid federal taxes owed by DOD contractors, (2) whether indications exist of abuse or criminal activity by DOD contractors related to the federal tax system, (3) whether DOD and IRS have effective processes and controls in place to use the Treasury Offset Program (TOP) in collecting unpaid federal taxes from DOD contractors, and (4) whether DOD contractors with unpaid taxes are prohibited by law from receiving federal contracts. In a companion report issued today. What GAO Found DOD and IRS records showed that over 27,000 contractors owed about $3 billion in unpaid taxes as of September 30, 2002. DOD has not fully implemented provisions of the Debt Collection Improvement Act of 1996 that would assist IRS in levying up to 15 percent of each contract payment to offset a DOD contractor's federal tax debt. We estimate that DOD could have collected at least $100 million in fiscal year 2002 had it and IRS fully utilized the levy process authorized by the Taxpayer Relief Act of 1997. As of September 2003, DOD had collected only about $687,000 in part because DOD provides contractor payment information from only 1 of its 16 payment systems to TOP. In response to our draft report, DOD developed a schedule to provide payment information to TOP for all of its additional payment systems by March 2005. Furthermore, we found abusive or potentially criminal activity related to the federal tax system through our audit and investigation of 47 DOD contractor case studies. The 47 contractors provided a variety of goods and services, including building maintenance, catering, dentistry, funeral services, and parts or support for weapons and other sensitive military programs. The businesses in these case studies owed primarily payroll taxes with some dating back to the early 1990s. These payroll taxes included amounts withheld from employee wages for Social Security, Medicare, and individual income taxes. However, rather than fulfill their role as "trustees" and forward these amounts to IRS, these DOD contractors diverted the money for personal gain or to fund the business. For example, owners of two businesses each borrowed nearly $1 million from their companies and, at about the same time, did not remit millions of dollars in payroll taxes. One owner bought a boat, several cars, and a home outside the United States. The other paid over $1 million for a furnished home. Both contractors received DOD payments during fiscal year 2002, but one went out of business in 2003. The business, however, transferred its employees to a relative's company (also with unpaid taxes) and recently received payments on a previous contract. IRS's continuing challenges in collecting unpaid federal taxes also contributed to the problem. In several case studies, IRS was not pursuing DOD contractors due to resource and workload management constraints. For other cases, control breakdowns resulted in IRS freezing collection activity for reasons that were no longer applicable. Federal law does not prohibit contractors with unpaid federal taxes from receiving federal contracts. OMB is responsible for providing overall direction to governmentwide procurement policies, regulations, and procedures, and is in the best position to develop policy options for prohibiting federal contracts to contractors that abuse the tax system.

gao_GAO-13-296

gao_GAO-13-296_0

DHS Has Made Changes to NCIPP List Criteria, but Has Not Identified the Impact of These Changes or Validated Its Approach DHS has made several changes to its criteria for including assets on the NCIPP list. These changes initially focused on introducing criteria to make the lists entirely consequence based, with subsequent changes intended to introduce specialized criteria for some sectors and assets. DHS’s changes to the NCIPP criteria have changed the composition of the NCIPP list, which has had an impact on users of the list. However, DHS does not have a process to identify the impact of these changes on users nor has it validated its approach for developing the list. In 2009, DHS changed the level 2 criteria to make the NCIPP list entirely consequence based, a change that brought its approach more into line with statutory requirements and, consistent with the NIPP risk management framework, allowed for comparison across sectors. DHS Has Not Identified the Impact of Changes in Criteria on List Users or Validated Its Approach for Developing the List The changes DHS made to the NCIPP criteria in 2009 and 2010 changed the number of assets on and the composition of the NCIPP list. While the change to an entirely consequence-based list created a common approach to identify infrastructure and align the program with the statute and NIPP, recent and planned criteria changes to accommodate certain sectors and assets represent a departure from this common approach, which could hinder DHS’s ability to compare infrastructure across sectors. Furthermore, DHS has not validated its approach to developing the list to ensure that it accurately reflects the nation’s highest-priority critical infrastructure. DHS recognizes that states, in particular, face challenges— such as resource and budgetary constraints—associated with nominating assets to the NCIPP list, and has taken actions to address these challenges and reduce the burden on states. DHS officials told us that they conducted extensive outreach to states and SSAs to encourage participation in the NCIPP working group including extending the submission deadlines multiple times, funding an on-site meeting with the partners, and hosting webinars and conference calls. DHS has taken several steps to minimize the burden on state partners. Pursuant to the 9/11 Commission Act, which amended title II of the Homeland Security Act, DHS is required to report annually to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Homeland Security of the House of Representatives on, among other things, any significant challenges in compiling the database or list and, if appropriate, the extent to which the database or list has been used to allocate federal funds to prevent, reduce, mitigate, or respond to acts of terrorism.Although DHS was able to compile documents on the database and list for fiscal years 2008 through 2011 that generally contain the information on which DHS is to report, officials from DHS and the Office of Infrastructure Protection told us they were uncertain whether the documents were delivered to the requisite congressional committees because they do not have records to indicate that the documents were delivered. An approach to verify the timely delivery of required reports to the requisite committees of Congress, such as documenting or recording the transactions, would better position DHS to ensure that it is in compliance with its statutory reporting requirements, thereby providing the committees information needed to perform oversight. NCIPP program officials told us they would like to have the NCIPP reviewed to validate the criteria used to decide which assets and systems should be placed on the list, but they have not yet submitted a proposal for this review to the Assistant Secretary for Infrastructure Protection. Recommendations for Executive Action To better ensure that DHS’s approach to identify and prioritize critical infrastructure is consistent with the NIPP risk management framework and that DHS is positioned to provide reasonable assurance that protection and resiliency efforts and investments are focused on the nation’s highest-priority critical infrastructure, we recommend that the Assistant Secretary for Infrastructure Protection, Department of Homeland Security, take the following action: commission an independent, external peer review of the program with clear project objectives for completing this effort. Appendix II: Objectives, Scope, and Methodology To address our first objective—determine the extent to which DHS changed its criteria for developing the National Critical Infrastructure Prioritization Program (NCIPP) list, identified the impact, if any, of these changes, and validated its approach—we reviewed the Implementing Recommendations of the 9/11 Commission Act of 2007 (9/11 Commission Act), which, by amending title II of the Homeland Security Act of 2002, required the Secretary of DHS to establish and maintain a national database of systems and assets determined to be vital and the loss, interruption, incapacity, or destruction of which would have a negative or debilitating effect on the economic security, public health, or safety of the United States, any state, or any local government, or as otherwise determined appropriate for inclusion by the Secretary.

Why GAO Did This Study In October 2012, Hurricane Sandy caused widespread damage across multiple states and affected millions of people. Threats to critical infrastructure are not limited to natural disasters, as demonstrated by the terrorist attacks of September 11, 2001. Originally developed by DHS in 2006, and consistent with the Implementing Recommendations of the 9/11 Commission Act of 2007, the NCIPP identifies and prioritizes nationally significant critical infrastructure each year. However, Members of Congress and some state officials have raised questions about changes DHS has made to its approach for creating the list and the impact of these changes. GAO was asked to review DHS management of the program. GAO assessed the extent to which DHS has (1) changed its criteria for developing the list, identified the impact, if any, of these changes, and validated its approach, (2) worked with states and SSAs to develop the list, and (3) reported to Congress on the NCIPP. GAO, among other things, reviewed laws, DHS policies and procedures; analyzed the lists from 2007 through 2012; and interviewed DHS, SSA, and state homeland security officials selected based on their involvement with the program and geographic diversity. The interviews are not generalizable but provide insights. What GAO Found The Department of Homeland Security (DHS) has made several changes to its criteria for including assets on the National Critical Infrastructure Prioritization Program (NCIPP) list of the nation's highest-priority infrastructure, but has not identified the impact of these changes or validated its approach. In 2009, DHS changed the criteria to make the list entirely consequence based--that is, based on the effect of an event on public health and safety, and economic, psychological, and government mission impacts. Subsequent changes introduced specialized criteria for some sectors and assets. For example, infrastructure that has received a specific, credible threat, but otherwise does not meet NCIPP criteria, may be included on the list. DHS's changes to the NCIPP criteria have changed the composition of the NCIPP list, which has had an impact on users of the list, such as the Federal Emergency Management Agency. However, DHS has not reviewed the impact of changes on users nor validated its approach to developing the list. While the change to an entirely consequence-based list created a common approach to identify infrastructure and align the program with applicable laws and the National Infrastructure Protection Plan, recent criteria changes to accommodate certain sectors and assets represent a departure from this common approach, which could hinder DHS's ability to compare infrastructure across sectors. Program officials noted they would like to validate the NCIPP, but they have not yet submitted a proposal to DHS management. An independent peer review--a best practice in risk management--would better position DHS to reasonably assure that the NCIPP list identifies the nation's highest-priority infrastructure. To develop the list, DHS has consulted with both states and sector specific agencies (SSA)--federal agencies responsible for protection and resiliency efforts among individual critical infrastructure sectors, such as energy, transportation, and dams. Since changing the NCIPP criteria in 2009, DHS has taken proactive steps to help states nominate assets to the list. These steps include providing on-site assistance, minimizing changes to the criteria, conducting outreach to encourage participation in an NCIPP working group (which includes SSAs), and providing explanations of why nominated assets do not make the list. DHS recognizes that states, in particular, face challenges--such as resource and budgetary constraints--associated with nominating assets, and has taken actions to address these challenges and reduce the burden on states. GAO could not verify that DHS is meeting statutory requirements to report annually to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Homeland Security of the House of Representatives on the NCIPP list. DHS officials prepared documents that generally contained information consistent with statutory reporting requirements, but they were uncertain whether they had been delivered to the committees because they do not have records to verify they were delivered. An approach to verify the delivery of the required reports, such as documenting or recording the transactions, would better position DHS to ensure that it is in compliance with its statutory reporting requirements and that it provides the committees with the information needed to perform oversight of the program. What GAO Recommends GAO recommends that DHS commission an external peer review and develop an approach to verify that the annual reports are provided to the requisite committees of Congress. DHS concurred with the recommendations.

gao_GAO-10-1011

gao_GAO-10-1011_0

These communities aligned award decisions with local priorities and, in some cases, elected officials and the budget process factored strongly in funding decisions. Use of Local Priorities to Review and Select Projects Officials from a majority of the entitlement communities in our sample noted that they based their funding priorities on various assessments of local needs, and these priorities influenced the selection of CDBG projects. Entitlement Communities Sought Public Input and Communicated about CDBG Funding through Methods such as Public Hearings, Citizen Advisory Committees, and the Internet All of the entitlement communities in our sample reported that they held at least two public hearings annually and some used citizen advisory committees, surveys, and other outreach methods to involve and inform the public about their distribution of CDBG funds. States also Used Different Methods to Distribute Funds to Non-Entitlement Communities and Communicate with Recipients and the Public States used program flexibility to distribute CDBG funds by varying combinations of three methods: competitive, open application, or formula, and are also required to describe methods in annual plans and consult with eligible non-entitlement community recipients in developing methods. States also used the open application distribution method to fund a variety of eligible activities that met certain threshold criteria as long as funds were available. From our review of all 50 states’ methods of distribution described in annual plans, we found that most states used a combination of the competitive and open application distribution methods to distribute funds to non-entitlement communities within defined CDBG-eligible categories, while a few states utilized a formula to distribute some funds. States Used Several Feedback Methods to Communicate Methods of Distribution and Provide Feedback to Non- Entitlement Communities and the Public All five states in our sample noted that they communicated their methods of distribution to non-entitlement communities and the public through their required annual plans. HUD Staff and Monitoring Results Reported Very Few Findings or Concerns Related to Methods of Distribution HUD staff from the 17 field offices that monitor the entitlement communities and states in our sample reported very few findings or concerns related to methods of distribution. Because HUD monitors the program using risk analysis and because of the flexibility granted to entitlement communities and states to distribute funds, issues made about the choice of methods of distribution are not rated high-risk. HUD’s monitoring tends to focus on higher-risk areas such as ensuring funds are spent on eligible activities that meet one of the national objectives. HUD staff also noted a few cases relating to requirements for states to describe their methods of distribution. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) identify and describe examples of the various methods by which entitlement communities use and distribute their CDBG funds to individual projects within their jurisdiction; (2) identify and describe examples of the various methods by which states distribute CDBG funds to non-entitlement communities; and (3) describe and examine HUD’s role in overseeing the methods by which entitlement communities and states distribute their CDBG funds. To identify and describe the methods by which entitlement communities use and distribute their Community Development Block Grant (CDBG) funds to individual projects within their jurisdictions, we conducted a literature review and examined reports on the CDBG program and a report on managing CDBG grantees. We interviewed the CDBG administrators for each state to obtain an understanding of their methods of distribution and the level of transparency in their process and reviewed relevant documentation. In addition, we interviewed HUD staff from the 17 field offices that oversee our sampled entitlement communities and states to gain an understanding of their policies and practices relating to oversight of methods of distribution and to determine how they ensure that states complied with the requirement to publish their distribution methods. We also reviewed these communities’ annual action plans and other relevant documentation.

Why GAO Did This Study The Housing and Community Development Act of 1974 (act) creating the Community Development Block Grant (CDBG) program provides entitlement communities (metropolitan cities and urban counties) and states with significant discretion in how they distribute funds for eligible activities. Because of this discretion, entitlement communities may use a variety of processes to select individual projects and states may also use different methods to distribute funds to non-entitlement communities. GAO was asked to report on (1) the various methods by which entitlement communities use and distribute their CDBG funds to individual projects within their jurisdictions; (2) the various methods by which states distribute CDBG funds to non-entitlement communities; and (3) HUD's role in overseeing these methods. GAO interviewed CDBG administrators for 20 entitlement communities (the 10 largest by funding and 10 randomly selected) and 5 states (reflecting variety of methods used and geography) and reviewed documents related to their CDBG funding decisions, including the annual action plans for all 50 states. GAO also spoke with CDBG stakeholders, reviewed relevant statutes and regulations, interviewed HUD field office staff and reviewed monitoring documentation. What GAO Found Reflecting the program's flexibility, the 20 entitlement communities in GAO's sample distributed CDBG funds by various methods, but most used some level of competition in awarding funds. Distribution priorities and practices were based on various assessments of local needs, and in some communities, the funding decisions were also part of the local budget process. To communicate processes and award decisions to the public, all the communities in GAO's sample held at least two public hearings, more than half formed citizen advisory committees, and a few conducted needs assessment surveys, among other outreach methods. Sampled entitlement communities varied in the level of detailed criteria they used to evaluate applications, but they made the information available to potential applicants through published instructions, workshops, or the Internet. From a review of all 50 states' methods of distribution described in annual actions plans, GAO found that states used a formula, competition, open application, or a combination of methods to distribute funds to non-entitlement communities. Most states used a combination of competitive and open application processes. Whatever their method of distribution, the five states in GAO's sample evaluated applications to some degree against state priorities, which reflected a variety of needs assessments. States using some competitive distribution processes also incorporated their priorities into the scoring of applicants. All five states communicated their methods of distribution to non-entitlement communities and the public through their required annual plans and additional publications, workshops, and intergovernmental organizations. Of the non-entitlement community officials with whom GAO spoke in 10 localities, all agreed that their states clearly communicated their distribution process. HUD staff from 17 field offices (which monitor the entitlement communities and states in GAO's sample) reported very few findings or concerns related to methods of distribution. Staff told GAO that the lack of findings was due partly to program design (entitlement communities and states can choose distribution methods) and partly to HUD's risk-based monitoring. Because of the flexibility granted to entitlement communities and states, issues related to distribution methods are not rated high-risk. HUD has focused on higher-risk areas such as ensuring funds were spent on eligible activities. However, because states distribute funds to other government jurisdictions, they are required to describe their distribution methods in their plans. As part of its monitoring review, HUD staff check to ensure that the methods of distribution that state plans described were the methods used. Though few issues arose from the reviews, in a few cases HUD staff recommended that states enhance these descriptions. HUD staff also monitor grantees to ensure that public hearing and notice requirements have been met. Staff noted that none of the complaints to HUD offices had pertained to methods of distribution.

gao_GAO-07-555

gao_GAO-07-555_0

The new Medicare Part D drug benefit, which became available in January 2006, enables Medicare beneficiaries to select among private drug plans sponsored by private companies. SSA Has Made Progress in Approving Subsidy Applicants, despite Barriers That Hindered Its Outreach Efforts, but Measuring Its Success Is Difficult SSA approved 2.2 million subsidy applicants as of March 2007, despite factors that limited its efforts to identify the eligible population and solicit applications; however, measuring the success of its efforts is difficult because there are no reliable data on the size of the eligible population. SSA officials told us that their outreach goals were to (1) ensure that as many individuals potentially eligible for the subsidy were informed of the benefit, (2) ensure that all potentially eligible Medicare beneficiaries had an opportunity to apply for the benefit, and (3) solicit 5 million subsidy applications over fiscal years 2005 and 2006 (SSA actually received 5.5 million applications during this time period). For example, SSA has conducted various activities to increase subsidy applications from individuals in rural and homeless communities. Barriers That Limited SSA’s Efforts in Identifying the Eligible Population SSA initially targeted 18.6 million individuals who might be eligible for the subsidy, which was an overestimate of the eligible population. SSA took this approach because there were no reliable data on the size of the eligible population. SSA estimates individuals’ assets because IRS income tax return and other tax data do not contain asset information. SSA’s efforts to solicit applications were hindered by various factors, including individuals’ confusion over the difference between the prescription drug program and the subsidy, the reluctance of some individuals to share personal financial information, and eligibility requirements, among other factors. Measuring the Success of SSA’s Outreach Efforts is Difficult because of the Lack of Reliable Data on the Eligible Population Although the low-income subsidy participation rate compares somewhat favorably to those of some low-income programs during similar stages of implementation, the success of SSA’s efforts is uncertain because no reliable data exist on the total number of individuals potentially eligible for the subsidy. SSA’s Processes for Determining Applicants’ Subsidy Eligibility, Resolving Appeals, and Redetermining Eligibility Lack Key Tools for Monitoring Performance SSA has established subsidy application processes for determining applicants’ subsidy eligibility, resolving appeals, and redetermining subsidy eligibility, but has not established some key tools needed to monitor the performance of all of its processes. However, SSA does not currently have a performance goal to assess the timeliness of its appeals decisions, and lacks the capability to report this information. The Impact of the Subsidy Program Has Been Manageable Although the subsidy program affected SSA’s workload and operations, SSA officials said that the additional workload was manageable overall. SSA hired a total of 2,200 field office staff to assist with subsidy applications, as well as an additional 500 headquarters staff to support its MMA activities. For fiscal year 2006, SSA provided us with data showing that staff spent the equivalent of approximately 2,190 work years on low-income subsidy activities, with almost 50 percent of the time used to process subsidy applications. SSA officials attribute the light impact of the subsidy program to various factors, including the automation of the subsidy application process and the $500 million congressional appropriation it received for administrative start-up costs to implement its MMA responsibilities. Recommendations for Executive Action To improve SSA’s outreach efforts and its ability to measure the effectiveness of the Medicare Part D low-income subsidy application processes, we recommend that the Commissioner of Social Security: establish specific performance goals and measures for SSA’s outreach activities to provide the agency with a means to assess their effectiveness in soliciting applications from additional individuals who qualify for the subsidy, but have not yet applied, and direct staff to begin collecting data on the processing time for individual redetermination decisions, and establish performance standards for processing time for the appeals and redetermination decisions. SSA stated that it monitors the time for completing the overall redetermination cycle, which provides adequate management controls for operational data. While SSA stated that it had established a performance standard for assessing the timeliness of appeals, in a follow-up discussion with agency officials after receiving their comments, they told us that the goal did not currently exist, but that the agency is planning to establish a goal of processing 75 percents of appeals in 60 days. Appendix I: Objectives, Scope, and Methodology To assess the Social Security Administration’s (SSA) implementation of the Medicare Part D low-income subsidy, we reviewed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) to understand SSA’s responsibilities under the law.

Why GAO Did This Study Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), which created a Part D outpatient prescription drug benefit that enables Medicare beneficiaries to enroll in competing private drug coverage plans. The benefit also offers a subsidy administered by the Social Security Administration (SSA) to assist certain low-income Medicare beneficiaries with out-of-pocket costs. GAO was asked to review (1) SSA's progress in identifying and soliciting applications from individuals potentially eligible for the subsidy; (2) SSA's processes for making eligibility determinations, resolving appeals, and redetermining beneficiaries' eligibility; and (3) how the subsidy has affected SSA's workload and operations. To conduct this study, GAO reviewed the law, assessed subsidy data, and interviewed SSA and other officials. What GAO Found SSA approved about 2.2 million Medicare beneficiaries for the low-income subsidy as of March 2007, despite barriers it faced in identifying the eligible population and soliciting applications; however, measuring the success of SSA's outreach efforts is difficult because there are no reliable data on the size of the eligible population. In 2005, SSA mailed 18.6 million subsidy applications to Medicare beneficiaries who were potentially eligible for the subsidy. SSA knew that this mailing was an overestimate, but took this approach to ensure that all who were eligible would be contacted. SSA had hoped to more specifically identify the eligible population using IRS tax data, but current law restricts the use of taxpayer data unless an individual has already applied for the subsidy. Further, SSA conducted a campaign of about 76,000 events held nationwide to educate people about the subsidy and how to apply for it. Since the initial campaign ended, however, SSA has not developed specific performance goals and measures to assess the progress of its continuing outreach efforts. SSA's efforts to solicit applications were hindered by beneficiaries' confusion about the difference between the subsidy and the Medicare Part D prescription drug plan, and the reluctance of some individuals to share personal financial information, among other factors. While the early subsidy participation rate compares favorably to those of some other low-income programs, the lack of reliable data on the size of the eligible population means that the extent to which SSA has signed up the eligible population for the benefit is unknown. While SSA has established processes for making subsidy eligibility determinations, resolving appeals, and conducting redeterminations, it has not established some key management tools to monitor the progress of all of its efforts, as specified in GAO's internal control standards. For example, while SSA tracks various results from its appeals process, it does not currently have a performance goal to assess the timeliness of appeals decisions, but agency officials told us that SSA plans to establish a goal of processing 75 percent of appeals in 60 days. Also, while SSA tracks the status of its redetermination decisions, officials do not believe that it is necessary to measure the time for processing individual redetermination decisions because they said that the time to complete the overall redeterminations cycle provides adequate information. SSA's implementation of the low-income subsidy did affect the agency's workload and operations, but according to SSA officials, the additional workloadhas been manageable overall as a result of increased funding that the agency received to carry out MMA activities. SSA hired 2,200 field office staff, and 500 headquarters staff to handle its new subsidy workload, as well as to carry out other activities for the program. In 2006, SSA staff spent the equivalent of 2,190 work years on low-income subsidy implementation activities, with about 50 percent of the time spent on subsidy applications. While there were periods of high subsidy application activity, SSA officials told us that subsidy program activities did not have an adverse impact on other SSA workloads. The officials attributed the minimal impact of Part D to several factors, including the highly automated subsidy application process and the $500 million congressional appropriation that SSA spent on MMA start-up costs. SSA estimates that its costs for low-income subsidy activities are $175 million annually.

gao_GAO-15-499

gao_GAO-15-499_0

Total Budget Estimates for Modernization Increased Compared with 2014 Plans NNSA’s 2015 budget estimates for modernization total $293.4 billion over 25 years, an increase of $17.6 billion (6.4 percent) from the $275.8 billion in estimates provided in 2014. These budget estimates are provided in four program areas: stockpile, infrastructure, ST&E, and other weapons activities. Within these four program areas, we found that some budget estimates for individual programs changed more significantly from 2014 to 2015 than the total budget estimates changed—decreasing by as much as 31 percent and increasing by as much as 71 percent—because of changes in (1) programs’ scope, (2) production schedules, (3) the methodology used to develop certain budget estimates, and (4) budgetary structure. Near-Term Budget Estimates for Two of Three Life Extension Programs Align with NNSA’s 2015 Plans The 5-year budget estimates contained in the 2015 budget materials for two of the three LEPs that NNSA considers major modernization efforts align with NNSA’s 2015 plans for these two programs. We found that, compared with the prior year’s budget materials, which did not include a high-to-low cost range for these LEPs, the 2015 budget materials did include such a range. In each year of the 2015 FYNSP, budget estimates for the cruise missile LEP are below the low point of the program’s internally developed cost range, which is the minimum funding level that would be consistent with the internal cost estimate. Including information in future versions of budget materials that explicitly identify potential risk to the achievement of program objectives and goals—such as increased program cost and schedule delays, which may result from shortfalls in LEP budget requests compared with internal cost estimates— would improve the transparency and quality of information available to congressional decision makers. In addition, our prior work has emphasized the importance of transparency in federal agencies’ budget presentations because such information helps Congress have a clear understanding of how new funding requests relate to funding decisions for existing projects with continuing resource needs. NNSA’s Budget Estimates for Infrastructure Are Not Adequate to Stop the Growth of Its Deferred Maintenance Backlog, and NNSA Is Taking Steps to Improve Information to Better Prioritize Investment NNSA’s infrastructure budget estimates included in its 2015 budget materials are not adequate to address its reported $3.6 billion deferred maintenance backlog, and the deferred maintenance backlog will continue to grow. One reason the backlog will continue to grow is that the amounts in 2015 budget estimates to address the problem fall below DOE infrastructure investment benchmarks for maintenance or recapitalization. NNSA’s Budget Estimates for Maintaining and Recapitalizing Its Aging Nuclear Infrastructure Fall Below DOE’s Planning Benchmarks the National Nuclear Security Administration as a manufacturing facility for nuclear weapons components. NNSA’s 2015 budget materials continue to demonstrate weaknesses, particularly with respect to (1) internal cost estimates for LEPs that are not fully supported by near-term budget estimates, which could affect the programs’ cost and schedule, and (2) near-term budget estimates for maintenance and recapitalization that do not achieve DOE benchmarks for infrastructure investment, which could impair NNSA’s ability to meet its goal of stopping the growth in its reported $3.6 billion deferred maintenance backlog. Providing information in the budget materials on the potential risks to the achievement of program objectives when near-term budget estimates are not aligned with plans would improve the transparency of budget materials and benefit Congress during appropriation deliberations. Recommendations for Executive Action To improve transparency in future NNSA budget materials so that they are more useful for congressional decision makers, we recommend that the Administrator of NNSA take the following three actions: In instances where NNSA’s internal cost estimates for a life extension program suggest that additional funding may be needed beyond what is included in the 5-year budget estimates to align with the program’s plan, identify the amount of the shortfall in its budget materials and, what, if any, effect the shortfall may have on the program’s cost and schedule or the risk of achieving program objectives. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) identify the extent to which the National Nuclear Security Administration’s (NNSA) budget estimates for modernizing the nuclear security enterprise changed between the 2015 budget materials and the prior year’s material, (2) assess the extent to which NNSA’s budget estimates for its current major modernization efforts align with plans, and (3) assess the extent to which NNSA’s 2015 budget estimates for modernizing the nuclear security enterprise address its stated goal of stopping the growth of the deferred maintenance backlog. NNSA’s budget materials are composed of two key policy documents that are issued annually: the agency’s budget justification, which contains estimates for the 5-year Future-Years Nuclear Security Program (FYNSP), and the Stockpile Stewardship and Management Plan (SSMP), which provides budget estimates over the next 25 years. A list of related GAO products is included at the end of this report. President’s policy priorities. Science, Technology, and Engineering Capabilities Nuclear Weapons: National Nuclear Security Administration Needs to Ensure Continued Availability of Tritium for the Weapons Stockpile.

Why GAO Did This Study Nuclear weapons continue to be an essential part of the nation's defense strategy. The end of the cold war resulted in a shift from producing new nuclear weapons to maintaining the stockpile through refurbishment. Also, billions of dollars in scheduled maintenance for nuclear weapons infrastructure has been deferred. The 2010 Nuclear Posture Review identified long-term stockpile modernization goals for NNSA that include (1) sustaining a safe, secure, and effective nuclear arsenal and (2) investing in a modern infrastructure. The National Defense Authorization Act for Fiscal Year 2011 included a provision for GAO to report annually on NNSA's nuclear security budget materials. This report (1) identifies changes in estimates to the 2015 budget materials from the prior year's materials, and (2) assesses the extent to which NNSA's 2015 budget estimates align with plans for major modernization efforts, and (3) addresses the agency's stated goal of stopping the growth of its deferred maintenance backlog. GAO analyzed NNSA's 2014 and 2015 nuclear security budget materials, which describe modernization plans and budget estimates for the next 25 years, and interviewed NNSA officials. What GAO Found The National Nuclear Security Administration's (NNSA) 25-year budget estimates for modernizing the nuclear security enterprise in its fiscal year 2015 budget materials total $293.4 billion, which is an increase of $17.6 billion (6.4 percent) compared with the prior year's materials. NNSA's budget materials are (1) its 2015 congressional budget justification that includes the President's fiscal year budget request and information about 4 additional years of planned budget requests, and (2) its update to its Stockpile Stewardship and Management Plan that includes NNSA's long-range, 25-year plans for sustaining the stockpile and modernizing the nuclear security enterprise. Congress funds NNSA's 2015 budget estimates in four program areas: stockpile; infrastructure; science, technology, and engineering capabilities; and other weapons activities. GAO found that some budget estimates for individual programs within these four areas changed more significantly from 2014 to 2015 than the total budget estimates changed. For example, stockpile budget estimates to refurbish nuclear weapons through life extension programs (LEP) decreased by 31 percent in part due to changes in programs' production schedules. In contrast, infrastructure budget estimates for construction projects increased by 71 percent largely because the estimates were more complete than those GAO evaluated in 2014. For NNSA's major modernization efforts—which include LEPs that are not in full scale production and major construction projects—near-term budget estimates for two of three LEPs align with plans, but estimates for construction projects are too preliminary to assess alignment. NNSA's near-term budget estimates to refurbish its B61 bomb and W88 warhead align with its plans because annual budget estimates reflect internally developed estimated cost ranges for the programs. However, the near-term budget estimates for the cruise missile LEP are not aligned with NNSA's 2015 plans because annual budget estimates are below the low point of the program's internally developed estimated cost range. A 2008 internal review of NNSA's project management stated that failure to request full funding can result in risks to programs' goals such as increased program costs and schedule delays. GAO's prior work has emphasized the importance of transparency in federal agencies' budget presentations because such information helps Congress understand how new funding requests relate to program decisions. Including information in future versions of budget materials on the potential risks to achieving LEPs' goals when funding requests are not aligned with plans would improve the quality of budget materials. NNSA's infrastructure budget estimates are not adequate to address its reported $3.6 billion deferred maintenance backlog, and the backlog will continue to grow. One reason the backlog will continue to grow is that the 2015 budget estimates to address the problem fall below DOE infrastructure investment benchmarks for maintaining and recapitalizing existing facilities, activities that can reduce deferred maintenance. NNSA's goal to stop the growth of the backlog is stated in its budget materials, but these materials do not identify that budget estimates for maintenance and recapitalization fall below DOE's infrastructure investment benchmarks. Including information in future versions of budget materials on the potential risks to the achievement of infrastructure goals if budget estimates fall below internal benchmarks would improve the transparency of budget materials. What GAO Recommends GAO recommends improving the transparency of future budget materials by identifying potential risks to the achievement of program goals if budget estimates are lower than plans suggest are necessary. NNSA agreed with GAO's recommendations and outlined actions to address them.

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Because of Differing EPA and DOD Performance Metrics and DOD’s Failure to Obtain EPA Approvals, Status of DOD Cleanup Is Unclear Because EPA and DOD use different terminology and metrics to report investigative and remedial work at defense installations, determining the status of cleanup at Fort Meade, McGuire AFB, and Tyndall AFB is challenging. EPA’s data suggest that DOD’s progress at these installations was limited primarily to the early study or investigative phase, whereas DOD’s data suggest that some work in the later remedial action or cleanup phase has taken place at these installations. DOD, on the other hand, reports that cleanup is further along at all three of these installations. The fact that DOD measures progress in smaller increments can lead to differing interpretations of cleanup. Status of Cleanup at These Installations Is Unclear Because DOD Did Not Obtain EPA Concurrence with Some Cleanup Actions and May Need to Do Additional Work EPA and DOD also report very different cleanup progress at defense installations because some of DOD’s reported claims of completed cleanup phases were never approved by EPA, and therefore EPA does not recognize them. A Variety of Obstacles Have Delayed Cleanup Progress Several obstacles have delayed cleanup at the three selected DOD installations in our review. Lack of IAGs Has Made Managing Installation Cleanup and Addressing Routine Matters Challenging, thus Delaying EPA-approved Cleanup Progress The lack of IAGs has contributed to delays in cleanup progress at the three installations in our review. However, PBCs can create pressure on contractors to operate within price caps and meet deadlines, which may conflict with regulatory review times and encourage DOD to take shortcuts. Other problems that EPA cited with using PBCs for environmental cleanup work include contractor’s inability to carry out cleanup-related work required by EPA or other stakeholders that was not contained in the original PBC contract, such as installing monitoring wells, without contract amendment; unrealistic time frames for cleanup work that have not been agreed to by EPA or other stakeholders and that create an incentive for rushed work, resulting in possible rework later on; poor quality of documents submitted to EPA, including lack of legal review and routine failure of the installation to perform quality reviews of contractors’ work, which EPA officials said were due to pressure to meet the fixed price aspect of these contracts, and which result in significant redrafting by EPA’s legal staff; and PBC contractors—rather than DOD officials—acting as project managers to the point of decision making, rather than supporting DOD, when critical cleanup decisions require interaction between EPA and DOD officials. The Air Force’s Failure to Sign an IAG and Pattern of Noncompliance with Federal Laws and Regulations Concerning Environmental Cleanup Have Delayed Cleanup Progress at Tyndall After 13 years on the NPL, Tyndall AFB stands out as the only one of the three installations that received EPA administrative cleanup orders for sitewide cleanup and has not signed an IAG even though IAGs are required under CERCLA. Recommendations for Executive Action We are making six recommendations, as follows: To provide greater assurance that cleanup progress is being measured accurately and consistently, and to build off of the existing DOD and EPA working group’s initial efforts, we recommend that the Secretary of Defense and Administrator of EPA develop a plan with schedules and milestones to identify and implement a uniform method for reporting cleanup progress at the installations and allow for transparency to Congress and the public. Specifically, when a federal agency refuses to enter an IAG at an NPL site or to comply with an administrative cleanup order issued pursuant to RCRA’s imminent hazard provision, EPA cannot take steps to enforce the law, such as initiating a court action to assess fines, as it would do in the case of a private party. We therefore believe it is critically important that Congress consider additional EPA enforcement authority to ensure that cleanup is being pursued properly at federal facility NPL sites. Appendix I: Objectives, Scope, and Methodology We were asked to determine (1) the status of Department of Defense (DOD) cleanup of hazardous substances at selected DOD installations subject to administrative orders and (2) obstacles, if any, to progress in cleanup at these selected sites and the causes of such obstacles. To select installations for more detailed study from the 11 installations that were out of compliance with the Comprehensive Environmental Response, Compensation, and Liability Information System (CERCLA) in February 2009 because they did not have interagency agreements (IAG), we reviewed the 4 that were issued additional Environmental Protection Agency (EPA) cleanup orders under the Resource Conservation and Recovery Act (RCRA) or under the Safe Drinking Water Act (SDWA). GAO Comments 1. For more than a decade DOD has failed to enter into IAGs required by CERCLA section 120 to clean up DOD National Priorities List (NPL) sites.

Why GAO Did This Study Before the passage of federal environmental legislation in the 1970s and 1980s, Department of Defense (DOD) activities contaminated millions of acres of soil and water on and near DOD sites. The Environmental Protection Agency (EPA) has certain oversight authorities for cleaning up contaminants on federal property, and has placed 1,620 of the most contaminated sites--including 141 DOD installations--on its National Priorities List (NPL). As of February 2009, after 10 or more years on the NPL, 11 DOD installations had not signed the required interagency agreements (IAG) to guide cleanup with EPA. GAO was asked to examine (1) the status of DOD cleanup of hazardous substances at selected installations that lacked IAGs, and (2) obstacles, if any, to cleanup at these installations. GAO selected and visited three installations, reviewed relevant statutes and agency documents, and interviewed agency officials. What GAO Found EPA and DOD use different terms and metrics to report cleanup progress; therefore, the status of cleanup at Fort Meade Army Base, McGuire Air Force Base (AFB), and Tyndall AFB is unclear. EPA reports that cleanup at all three installations is in the early investigative phases, while DOD's data suggest that cleanup is further along and, in some cases, in mature stages. EPA and DOD have differing interpretations of cleanup progress because they describe and assess cleanup differently. In particular, while both agencies divide installations into smaller cleanup projects, DOD divides them into units generally smaller than EPA's; therefore, DOD measures its progress in smaller increments. Further, because DOD did not obtain EPA's approval for key cleanup decisions, EPA does not recognize them. Unless key cleanup decisions are justified, documented, and available to the public for review and comment, they are not sufficient under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), and once an IAG is in place, some DOD cleanup work may have to be redone. When an agency refuses to enter into an IAG and cleanup progress lags, because of statutory and other limitations, EPA cannot take steps--such as issuing and enforcing orders--to compel CERCLA cleanup as it would for a private party. A variety of obstacles have delayed cleanup progress at these installations. First, DOD's persistent failure to enter IAGs, despite reaching agreement with EPA on the basic terms, has made managing site cleanup and addressing routine matters challenging at these installations. For example, in the absence of IAGs, DOD may fund work at other sites ahead of these NPL sites. Second, DOD failed to disclose some contamination to EPA and the public in a timely fashion, including lead shot on a playground, delaying cleanup and putting human health at risk. Third, the extensive use of performance-based contracts at these installations has created pressure to operate within price caps and fixed deadlines. In some cases, these pressures may have contributed to installations not exploring the full range of cleanup remedies, or relying on nonconstruction remedies, such as allowing contaminated groundwater to attenuate over time rather than being cleaned up. In particular, Tyndall AFB's long-standing lack of full compliance with environmental cleanup requirements, such as notification of hazardous releases and EPA's 2007 administrative order, has been an obstacle to verifiable cleanup of that installation. What GAO Recommends GAO is recommending, among other things, that EPA and DOD identify options that would provide a uniform method for reporting cleanup progress at the installations and allow for transparency to Congress and the public. EPA and DOD agreed with the recommendations directed at them. GAO is also suggesting that Congress may want to consider giving EPA certain tools to enforce CERCLA at federal facilities without IAGs. DOD disagreed with this suggestion. GAO believes EPA needs additional authority to ensure timely and proper cleanup at such sites.

gao_GAO-10-779

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Special access services are used to provide backhaul, the wireline infrastructure that, among other things, connects cell phone towers to switching stations and, ultimately, to other phones. Data show that the biggest changes since 2000 have been consolidation among wireless carriers and increased use of wireless services by consumers. While the industry has consolidated since 2000, consumers have seen some benefits, such as lower prices and better coverage. Increased Use of Wireless Services by Consumers. Network Investments. Wireless Prices have Declined Over the Last Decade and Coverage has Improved Although consolidation has increased the difficulty for small and regional carriers to compete in the wireless industry, a high concentration of firms in an industry does not necessarily mean that the interests of consumers are poorly served. Some Stakeholders Perceive Certain Regulatory Policies and Industry Practices Jeopardizing the Competitiveness of the Wireless Industry While views differed among stakeholders, some carriers and consumer groups perceive certain FCC wireless policies as having prevented the entry and growth of small and regional carriers, though it is difficult to assess some of these claims without better data. In particular, many stakeholders outside of the top national carriers with whom we spoke noted that spectrum and special access policies favor large national carriers, potentially jeopardizing the competitiveness of the wireless industry. Better data on special access rates, in particular, would clarify the extent to which these policies hinder competition. Additional data are also necessary to determine whether consumers are hindered from moving between wireless carriers and services by particular industry practices. Many small carriers and consumer groups with whom we spoke perceive early termination fees and exclusive handset arrangements as creating such anticompetitive switching costs. FCC Employs Various Strategies to Monitor Competition in the Industry, but Its Annual Report Is Missing Some Data on Inputs and Outputs FCC uses three strategies to oversee and monitor competition in the wireless phone industry: its annual wireless competition report to Congress, its review of proposed mergers, and its investigations of competitive complaints. The primary tool that it uses is the annual mobile wireless competition report, which relies on limited data sources and does not assess some industry inputs and outputs. In assessing mergers, FCC balances potential public interest benefits and harms. Generally in response to complaints, FCC has also undertaken a variety of investigations and inquiries related to competitive challenges. In the past, FCC has generally not collected data on many industry investments and metrics because of the complexity and burden associated with gathering this data from wireless carriers. Recognizing these concerns and changes, FCC recently undertook a process that significantly improved its annual mobile wireless competition report. These metrics help measure the competitiveness of small and regional carriers, can shed light on the impact of switching costs for consumers, and are, therefore, relevant to monitoring competition in the industry. Despite challenges and costs in gathering these data, such information could help FCC better fulfill statutory reporting requirements. Recommendation for Executive Action FCC should assess whether expanding its original data collection of wireless industry inputs and outputs—such as prices, special access rates, capital expenditures, and equipment costs—would help it better satisfy its requirement to review competitive market conditions with respect to commercial mobile services. FCC took no position on our recommendation but provided technical changes which were incorporated as appropriate. We also conducted case studies in both an urban and rural cellular market area in four states as well as the District of Columbia (see table 2).

Why GAO Did This Study Americans increasingly rely on wireless phones, with nearly 40 percent of households now using them primarily or solely. Under federal law, the Federal Communications Commission (FCC) is responsible for fostering a competitive wireless marketplace while ensuring that consumers are protected from harmful practices. As requested, this report discusses changes in the wireless industry since 2000, stakeholders' perceptions of regulatory policies and industry practices, and the strategies FCC uses to monitor competition. To conduct this work, GAO collected and analyzed data and documents from a variety of government and private sources; conducted case studies in both rural and urban areas of four states; and interviewed stakeholders representing consumers, local and state agencies and officials, and various segments of the industry. What GAO Found The biggest changes in the wireless industry since 2000 have been consolidation among wireless carriers and increased use of wireless services by consumers. Industry consolidation has made it more difficult for small and regional carriers to be competitive. Difficulties for these carriers include securing subscribers, making network investments, and offering the latest wireless phones necessary to compete in this dynamic industry. Nevertheless, consumers have also seen benefits, such as generally lower prices, which are approximately 50 percent less than 1999 prices, and better coverage. While views differed among stakeholders, some carriers and consumer groups perceive certain FCC wireless policies as having prevented the entry and growth of small and regional carriers, though it is difficult to assess some of these issues without better data. In particular, many stakeholders outside of the top national carriers who we spoke with noted that policies for making spectrum available for commercial use, as well as policies governing some essential elements of wireless networks, favor large national carriers, potentially jeopardizing the competitiveness of the wireless industry. One such essential element is special access to infrastructure that connects cell phone towers to wireline phone networks. Better data on rates governing those elements would clarify the extent to which competition is hindered. Additional data are also necessary to determine whether consumers are hindered from moving between wireless carriers by particular industry practices. Many small carriers and consumer groups perceive early termination fees associated with wireless service contracts and exclusive handset arrangements as creating switching costs that serve as barriers to consumer movement. FCC uses three strategies to oversee and monitor competition in the wireless phone industry: reviews of proposed mergers, investigations of competitive challenges, and its annual wireless competition report to Congress. In assessing mergers, FCC balances potential public interest benefits and harms. FCC has also undertaken a variety of investigations and inquiries related to competitive challenges, generally in response to complaints. The primary tool that FCC uses is the annual wireless competition report. While FCC recently undertook steps that significantly improved this report, it still does not fully assess some key industry inputs and outputs. FCC generally has not collected data on many industry investments or consumer switching costs because of the complexity and burden associated with gathering these data. However, FCC has recently undertaken ad hoc inquiries to collect such data and, despite challenges and costs, this information could help FCC better fulfill its statutory reporting requirement. In particular, additional data could help assess the competitiveness of small and regional carriers, as well as shed light on the impact of switching costs for consumers. FCC should assess whether expanding original data collection of wireless industry inputs and outputs--such as prices, special access rates, capital expenditures, and equipment costs--would help the Commission better satisfy its requirement to review competitive market conditions with respect to commercial mobile services. FCC took no position on GAO's recommendation, but provided technical changes to this report that were incorporated as appropriate.

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Background GPRAMA requires agencies to publicly report on how they are ensuring the accuracy and reliability of the performance information they use to measure progress towards APGs and performance goals. Priority Goals and Performance Measures: GPRAMA requires agencies to identify their highest priority performance goals as APGs and have ambitious targets for these APGs that can be achieved within 2 years. the level of accuracy required for the intended use of the data; any limitations to the data at the required level of accuracy; and how the agency will compensate for such limitations (if needed) to reach the required level of accuracy. Agencies also must address all five requirements for performance goals in their performance plans and reports. GPRAMA’s Requirements for Agencies’ Annual Performance Plans and Reports Performance plans should identify the planned level of performance for the current fiscal year and the next fiscal year, explain how the agency will ensure the accuracy and reliability of its performance information, identify the agency’s priority goals (APGs), and be published every February, concurrent with the President’s Budget. In response, OMB updated its A-11 guidance in June 2015 to direct agencies to either provide information for publication on Performance.gov of how they are ensuring the quality of performance information for their APGs, or provide a hyperlink from Performance.gov to an appendix in their performance report that discusses the quality of their performance information. Selected Agencies’ Annual Performance Plans and Reports Provided Incomplete Information on the Quality of Performance Information Used to Measure Progress on Priority Goals Five of the six agencies’ performance plans and reports we reviewed did not describe how they ensured the quality of performance information for their individual APGs. On the other hand, all six agencies did describe how they ensured the quality of their performance information overall. related to the GPRAMA requirements, such as on their verification and validation processes. Cross-Agency Working Group Could Help Agencies and OMB Improve Public Reporting on the Quality of Performance Information Used to Measure Progress on Priority Goals In 2015, OMB and the Performance Improvement Council (PIC) established the Data Quality Cross-Agency Working Group. While OMB for several years has directed agencies to discuss the quality of APG performance information in their annual performance plans and reports, the selected agencies’ plans and reports often did not. The same is true for all six agencies on Performance.gov. Recommendations for Executive Action To improve the public reporting about how agencies are ensuring the quality of performance information used to measure progress towards their priority goals, we recommend the following actions: The Secretaries of Agriculture, Defense, Homeland Security, Interior, and Labor, and the Administrator of NASA should more fully address GPRAMA requirements and OMB guidance by working with OMB to describe on Performance.gov how they are ensuring the quality of performance information used to measure progress towards their APGs. The Department of Homeland Security (DHS) also concurred with the recommendation directed to it.

Why GAO Did This Study Federal agencies have not always clearly and transparently explained to Congress and the public how they ensure the quality of their performance information. GPRAMA requires agencies to publicly explain how they ensure the accuracy and reliability of their performance information used to assess progress for their APGs. This is one of a series of GAO reports examining the implementation of GPRAMA, as required by the act. This report assesses how well selected agencies publicly reported on the quality of performance information used to measure progress on APGs. GAO selected six agencies–the Departments of Agriculture, Defense, Interior, and Labor, and NASA and DHS– based on GAO's 2013 federal managers survey on their agency's use of performance information. GAO reviewed information concerning these agencies' APGs published on Performance.gov and in their annual performance plans and reports. What GAO Found The six agencies GAO reviewed generally did not publicly report on how they ensured the accuracy and reliability of performance information used to measure progress on their highest priority performance goals, referred to as agency priority goals (APGs). The GPRA Modernization Act of 2010 (GPRAMA) requires agencies to identify the following when publicly reporting on their APGs: 1) how performance information was verified and validated; 2) data sources; 3) level of accuracy required for intended use; 4) any limitations at the required level of accuracy; and 5) how the agency will compensate for such limitations (if needed) to reach the required level of accuracy. GPRAMA requires agencies to provide this information to the Office of Management and Budget (OMB) for publication on Performance.gov. GPRAMA also directs agencies to provide this information for performance goals, which include APGs, in their annual performance plans and reports. While all six agencies described how they ensured the quality of their performance information overall, GAO found discussions about performance information quality addressing all five GPRAMA requirements in only the Department of Homeland Security's (DHS) performance plans and reports. Source: GAO analysis of selected agencies' performance plans and reports. | GAO-15-788 OMB and the Performance Improvement Council (PIC)–a cross-agency council of agency performance improvement officers–established the Data Quality Cross-Agency Working Group in February 2015. The group has identified several goals, such as improving the reliability and quality of performance information, and could serve as a vehicle for disseminating good practices in public reporting on data quality. What GAO Recommends GAO recommends that all six of the agencies work with OMB to describe on Performance.gov how they are ensuring the quality of their APGs's performance information, and that all agencies, except for DHS, also describe this information in their annual performance plans and reports. GAO also recommends that OMB, working with the PIC, focus on ways the PIC's data quality working group can improve public reporting for APGs. OMB did not comment on the recommendations, but the six agencies generally concurred or identified actions they planned to take to implement them.

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As the largest financial contributor to the United Nations, the United States has a strong interest in the completion of these reforms and has played a significant role in promoting financial, administrative, and programmatic changes. The call for reforms has also grown as a result of problems identified in the United Nations’ management of the Oil for Food program. Sustained Oversight Is Needed for Lasting Results Sustained oversight at all levels of the organization is needed for the United Nations to advance its reform agenda and achieve lasting results. The United Nations had completed 51 percent of its 1997 and 2002 reform initiatives. In addition, many reform efforts comprise only the first step in achieving longer-term goals. More than one-quarter of the Secretary General’s completed reforms in both the 1997 and 2002 agendas consisted of developing a written plan or establishing a new office. Without such assessments, the Secretariat was not able to determine what progress had been made and where further improvements were needed. In February 2005, we contacted the Office of the Deputy Secretary General to determine recent actions it has taken to report on the status and impact of the Secretary General’s reform initiatives. Performance-Based Budgeting Had Begun but Lacked Monitoring and Evaluation At the program level, management reviews that compare actual performance to expected outcomes are critical elements of effective oversight and accountability. The United Nations has completed the initial phase of implementing reforms in a key area—performance-based budgeting. Program reviews that compare actual performance to expected outcomes are important to account for resources and achieve effective results. In December 2000, the Secretariat implemented the first key element of a performance-based budgeting framework by adopting a budget that reflects a results-based budgeting format, including specific program costs, objectives, expected results, and performance indicators to measure the results. Specifically, we recommended that the United States work with other member states to encourage the Secretary General to (1) report regularly on the status and impact of the 1997 and 2002 reforms and other reform that may follow, (2) differentiate between short- and long-term goals and establish time frames for completion, and (3) conduct assessments of the financial and personnel implications needed to implement the reforms. U.N. Oil for Food Program In addition to a systematic monitoring and evaluation system, a strong internal audit and evaluation function can provide the independent assessments needed to help ensure oversight and accountability. OIOS provides this service through audits, evaluations, inspections, and investigations of U.N. funds and programs. In addition, constraints on the internal auditors’ scope and authority prevented the auditors from examining and reporting more widely on some critical areas of the Oil for Food program. U.N. oversight bodies did not obtain timely reporting on serious management problems and were unable to take corrective actions when needed. These constraints limited the internal audit unit’s effectiveness as an oversight tool. In 2002, the U.N. A systematic review of the status of the 154 reforms begun in 1997 and 2002 and information from the Oil for Food program would allow the Secretary General to develop a comprehensive, prioritized agenda for continued U.N. reform.

Why GAO Did This Study The U.N. regular budget for the 2004-2005 biennium exceeded $3 billion for the first time. In light of the organization's increasing demands, the U.N. Secretary General and member states have called on the Secretariat to better define priorities and eliminate outdated activities. In response, the Secretary General launched major reform initiatives in 1997 and 2002, and we reported on the status of these efforts in February 2004. Audits and investigations of the U.N. Oil for Food program have also brought attention to recurring management weaknesses. As the largest financial contributor to the United Nations, the United States has a strong interest in the completion of the Secretary General's reforms. GAO provides observations on areas for U.N. reform based on our 2004 report and our continuing review of the Oil for Food program, including our analysis of internal audit reports and other documents. What GAO Found The United Nations needs sustained oversight at all levels of the organization to achieve lasting results on its reform agenda. We reported in 2004 that the Secretariat had made progress in implementing 51 percent of the Secretary General's 1997 and 2002 management reform initiatives. However, we found that more than one-quarter of the completed reforms only consisted of developing plans or establishing new offices--the first steps in achieving longer term reform goals. In addition, the Secretariat had not periodically conducted comprehensive assessments of the status and impact of its reforms. Accordingly, the Secretariat had not been able to determine what progress had been made or where future improvements were needed. A t the program level, management reviews that compare actual performance to expected results are critical elements of effective oversight and accountability. The United Nations has completed the initial phase of implementing reforms in a key area--performance-based budgeting. It adopted a budget that reflects a result-based budgeting format, including specific program costs, objectives, expected results, and performance indicators to measure results. However, the United Nations has yet to implement the next critical step in performance-based budgeting--a system to monitor and evaluate program impact or results. Program reviews that compare actual performance to expected outcomes are important for accounting for resources and achieving effective results. A strong internal audit function provides additional oversight and accountability through independent assessments of U.N. activities, as demonstrated by audits of the U.N Oil for Food program. U.N. internal auditors found recurring management weaknesses in 58 audits it conducted over 5 years. However, constraints on their scope and authority prevented the auditors from examining and reporting widely on problems in the Oil for Food program. U.N. oversight bodies did not obtain timely reporting on serious management problems and were unable to take corrective actions when needed. These constraints limited the internal audit unit's effectiveness as an oversight tool. GAO plans to conduct more detailed work on the role of the internal auditors in upcoming engagements.

gao_GAO-14-94

gao_GAO-14-94_0

Statutory Requirements for Funds Control As noted above, one of the objectives of internal control generally, and funds control in particular, is to ensure compliance with applicable law. These weaknesses place DOD at risk of making program and operational decisions based on unreliable data and impair DOD’s ability to improve its financial management operations and achieve the department’s audit readiness goals. Auditors have reported on DOD’s inability to provide effective funds control and report reliable financial information, including budgetary information for many years. DOD’s challenges in properly recording and adequately supporting its obligations and disbursements have impaired its ability to track and control the use of public funds. As discussed later in this report, DOD has corrective actions under way to address its transaction control weaknesses, particularly in regard to its audit readiness efforts. Effect of Funds Control Weaknesses on DOD Financial Management Operations Fundamental weaknesses in DOD funds control, including related business systems weaknesses, significantly impair DOD’s ability to ensure the (1) proper use of resources, (2) reliability of reports on the results of operations, and (3) success of its financial audit readiness efforts. DOD Has Actions Under Way to Address Many DOD- Wide Funds Control Weaknesses, but Effective Implementation Will Be Critical DOD is addressing corrective actions on funds control weaknesses through audit readiness efforts under the FIAR Plan and related FIAR Guidance, through other efforts mainly related to improving training and business system controls, and through efforts to address findings in auditor and ADA reports. The Certification Program is to be mandatory for DOD’s approximately 54,000 civilian and military financial management personnel. However, in its summary of management and performance challenges included in DOD’s fiscal year 2012 Agency Financial Report, the DOD IG stated that because of schedule delays ranging up to 13 years, DOD will continue using outdated legacy systems and poorly developed and implemented ERP systems, increasing the risks that (1) the SBR will not be audit ready by September 30, 2014, and (2) DOD may not be able to produce reliable financial data and auditable financial statements without resorting to “heroic efforts, such as data calls and manual workarounds.” In DOD’s fiscal year 2013 Agency Financial Report, the DOD IG reiterated this concern and noted that the department has not reengineered its business processes to the extent necessary, stating that instead it has often customized commercial ERPs to accommodate existing processes. DOD leadership remains committed to achieving financial accountability and reliable information for day-to-day management decision making as well as financial audit readiness. However, corrective actions are not expected to be completed for several years on long-standing funds control weaknesses related to (1) training, supervision, and management oversight; (2) proper authorization, recording, documenting, and reporting of budgetary transactions; and (3) business systems controls. As a result, these weaknesses will continue to adversely affect DOD’s ability to achieve its goals for effective funds controls, including reductions in ADA violations, financial accountability, and reliable financial reporting. Appendix I: Scope and Methodology To determine the extent of long-standing funds control weaknesses, we analyzed 333 audit and financial reports on the Department of Defense’s (DOD) financial management operations issued over the last 7 years– including 190 DOD audit reports, 30 GAO reports, 36 DOD financial reports, and 77 DOD reports of Antideficiency Act (ADA) violations provided to GAO and identified over 1,000 funds control weaknesses. To determine the status of DOD’s corrective actions to address identified funds control weaknesses, we reviewed corrective action statuses in response to mandates in National Defense Authorization Acts related to financial management competencies, skill gaps, and training; corrective actions on transaction-level accounting and financial reporting under DOD’s FIAR Plan; the status of actions to address business system weaknesses; and actions to address DOD ADA violations and DOD IG and military department audit recommendations.

Why GAO Did This Study GAO, the DOD Inspector General (IG), and others have reported on DOD's inability to provide effective control over the use of public funds (i.e., funds control). Funds control requires obligations and expenditures to comply with applicable law. Funds control weaknesses have prevented DOD from reporting reliable financial information, including information on the use of public funds, results of operations, and financial statements, and put DOD at risk of overobligating and overexpending its appropriations in violation of the Antideficiency Act (ADA). GAO was asked to review the status of DOD's efforts to address its funds control weaknesses. GAO's objectives were to determine the (1) extent of reported weaknesses in DOD's funds control and their effect and (2) status of DOD's corrective actions to address known weaknesses. GAO analyzed 333 GAO, DOD IG, and military department audit reports; DOD reports of ADA violations; and selected DOD financial reports. GAO also examined DOD actions to address audit findings and ADA violations, including actions under DOD's FIAR Plan, and discussed corrective actions on funds control weaknesses with DOD and military department auditors and financial managers. What GAO Found GAO's analysis of 333 reports related to Department of Defense (DOD) funds control, issued in fiscal years 2007 through 2013, identified over 1,000 funds control weaknesses related to (1) training, supervision, and management oversight; (2) proper authorization, recording, documentation, and reporting of transactions; and (3) business system compliance with federal laws and accounting standards. Many of the reports GAO reviewed included multiple findings. GAO found that these weaknesses led DOD to make program and operational decisions based on unreliable data and impaired DOD's ability to improve its financial management. Fundamental weaknesses in funds control significantly impaired DOD's ability to (1) properly use resources, (2) produce reliable financial reports on the results of operations, and (3) meet its audit readiness goals. DOD has actions under way to address its department-wide funds control weaknesses. These actions, several of which are targeted for completion in 2017, include a DOD Financial Manager Certification Program intended to establish a framework to guide training and development of DOD's 54,000 financial management personnel at the staff, supervisory, and leadership levels; transaction control testing and corrective action plans under its Financial Improvement and Audit Readiness (FIAR) Plan for reporting on the use of budgetary resources with regard to categories of transactions, such as fund balances, outlays, military and civilian payroll, and contract pay; and testing under the FIAR Plan of material DOD component business system controls and service-provider systems and processes as well as military department actions to address enterprise resource planning system design and implementation issues. DOD leadership says it is committed to achieving effective fund controls to support financial accountability and reliable information for day-to-day management decision making and auditable financial statements. However, because some of the corrective actions on long-standing funds control weaknesses are not expected to be completed until 2017, these weaknesses, until fully resolved, will continue to adversely affect DOD's ability to achieve its goals for financial accountability, including the ability to produce consistent, reliable, and sustainable financial information for day-to-day decision making. Sustained leadership commitment will be critical to achieving success. What GAO Recommends GAO is not making recommendations in this report because DOD already has numerous actions under way to address funds control weaknesses. DOD stated that it appreciates GAO's review and that past deficiencies have informed actions it has under way to address its funds control weaknesses.

gao_GAO-02-538T

gao_GAO-02-538T_0

As an organization that is also part of the armed services, the Coast Guard has both military and civilian positions. (Dollars in Millions) Events of September 11th Substantially Affected Some Coast Guard Missions For the Coast Guard, the events of September 11th produced a dramatic shift in resources used for certain missions. The Coast Guard relocated vessels, aircraft, and personnel from traditional missions—especially law enforcement—to enhance security activities. Fiscal Year 2003 Budget Request Reflects Changing Mission Priorities The fiscal year 2003 budget request of $7.3 billion would increase the Coast Guard’s budget by about $1.9 billion, or 36 percent, over the fiscal year 2002 budget. Funding for operating expenses for all of the Coast Guard’s mission areas would increase from fiscal year 2002 levels. Coast Guard Faces Difficult Budget and Management Challenges While the fiscal year 2003 budget request provides funding increases for every mission area, these increases alone may not return all of its missions to levels that existed prior to September 11th. The Coast Guard does not yet know the level of resources required for its “new normalcy”—the level of security required in the long term to protect the nation’s major ports and its role in overseeing these levels. As a result of its new emphasis on homeland security, the Coast Guard plans to hire over 2,200 new full-time positions to its workforce and increase its pool of reservists by 1,000 if its funding request is approved—putting added strain on its recruiting and retention efforts.

What GAO Found Like many federal agencies, the Coast Guard's priorities were dramatically altered by the events of September 11. The Coast Guard has requested $7.3 billion for fiscal year 2003--a 36 percent increase from the previous year. The events of September 11 caused a substantial shift of effort toward homeland security and away from other missions. As resources were shifted to meet these needs, the law enforcement mission area, which consists mainly of drug and migrant interdiction and fisheries enforcement, saw a dramatic drop in mission capability. The Coast Guard's fiscal year 2003 budget request reflects an attempt to maintain and enhance heightened levels of funding for homeland security while also increasing funding for all other Coast Guard missions beyond fiscal year 2002 levels. The Coast Guard faces substantial management challenges in translating its requested funding increases into increased service levels in its key mission areas. For example, workforce issues present a daunting challenge. If the budget request for fiscal year 2003 is approved, the Coast Guard will add 2,200 full-time positions, retain and build on the expertise and skills of its current workforce, and deal with already high attrition rates and looming civilian retirements. The Coast Guard has yet to determine the long-term level of security needed to protect the nation's major ports. These challenges mean that, in the short term, additional funding may not increase the Coast Guard's ability to carry out its missions.

gao_GAO-12-838

gao_GAO-12-838_0

Most Declarations for Severe Storms, Highest in Southeast and Central Midwest The President received requests from governors during fiscal years 2004 through 2011 for 629 disaster declarations and approved 539 of them, or 86 percent, as shown in table 1. Through January 31, 2012, FEMA obligated $80.3 billion, or an average of about $10 billion a year, from the DRF for 539 disasters declared during fiscal years 2004 through 2011; and FEMA anticipates that when all 539 declarations are closed, obligations will be about $91.5 billion. Almost half of the $80.3 billion in obligations was for Hurricane Katrina. Excluding obligations of $39.7 billion for Hurricane Katrina, FEMA obligated $40.6 billion for the other disaster declarations during fiscal years 2004 through 2011, or an average of about $5 billion a year. In fiscal year 2012, the per capita indicator is $1.35. FEMA’s Per Capita Indicator Used to Assess Eligibility Is Artificially Low Because FEMA’s current per capita indicator does not reflect the rise in (1) per capita personal income since it was created in 1986 or (2) inflation from 1986 to 1999, the indicator is artificially low. Had the indicator been adjusted for inflation beginning when FEMA started using it in 1986, the indicator would have risen more than 100 percent, from $1.00 to $2.07 in 2012. FEMA’s Eligibility Process Does Not Comprehensively Assess a Jurisdiction’s Capability to Respond and Recover Reliance on the PA per capita indicator to determine a jurisdiction’s eligibility for federal assistance—whether the indicator is artificially low or adjusted for increases in personal income or inflation—does not provide an accurate measure of a jurisdiction’s capability to respond to or recover from a disaster without federal assistance. FEMA could also use other measures of fiscal capacity, such as state personal income or gross state product, to more accurately determine a jurisdiction’s ability to pay for damages to public structures without federal assistance. FEMA Does Not Have Specific Criteria to Evaluate Some Cost Share Adjustment Requests and Does Not Track Additional Costs for All Adjustments According to the Stafford Act, the usual cost share arrangement for disaster declarations calls for the federal government to pay not less than 75 percent of the eligible PA costs of a disaster and nonfederal entities (that is, state and local governments) to pay the remaining 25 percent; at a governor’s request, the President can adjust this cost share. FEMA has specific criteria to evaluate a request to adjust the federal share from 75 percent to 90 percent, but does not have specific criteria to evaluate a request to adjust the federal share to 100 percent. As shown in table 6, 109 of the 150 requests, or 73 percent, were approved during this period. Specifically, FEMA may recommend to the President that the federal cost share be increased up to 90 percent when a disaster is so extraordinary that actual federal obligations, excluding FEMA administrative costs, meet or exceed a qualifying threshold. Further, relying on professional judgment only, FEMA is at risk of making inconsistent, and potentially inequitable, recommendations to the President about whether to grant 100 percent cost share adjustments. Because FEMA does not track the costs associated with cost share adjustments, FEMA does not know the financial impact of its recommendations to the President on whether to increase the federal cost share for PA. Understanding the financial impact of FEMA’s recommendations to the President for cost share adjustments would enable FEMA to make more informed recommendations and estimate the impact of the adjustments on available DRF balances. The agency is working on three short- and long-term initiatives to deliver disaster assistance in a more efficient manner. Administrative Cost Percentages Often Exceeded FEMA’s Targets and Have Doubled since Fiscal Year 1989 Our analysis of the 539 disaster declarations during fiscal years 2004 through 2011 shows that 37 percent of the declarations exceeded administrative cost percentage targets established in guidance prepared by FEMA in 2010. Since fiscal year 1989, the average administrative cost percentage for the 1,221 disaster declarations doubled from 9 percent in the 1989-to-1995 period to 18 percent in the 2004-to-2011 period as shown in table 7. Because FEMA’s current approach of comparing the amount of disaster damage with the PA per capita indicator does not accurately reflect whether a jurisdiction has the capabilities to respond to and recover from a disaster without federal assistance, developing a methodology that provides a more comprehensive assessment of jurisdictions’ response and recovery capabilities, including a jurisdiction’s fiscal capacity, could provide FEMA with data that are more specific to the jurisdiction requesting assistance. 2. 3. 4. DHS partially concurred with the fourth recommendation, to implement goals for administrative cost percentages and monitor performance to achieve these goals. However, DHS stated that it plans to conduct a review to better understand and describe its current measures. The number of major disaster declarations and total obligations varied among FEMA regions during fiscal years 2004 through 2011. FEMA obligates funds from the Disaster Relief Fund (DRF) to help jurisdictions respond to and recover from declared disasters. To determine the criteria that FEMA used to recommend to the President that a disaster declaration was warranted for PA, and to what extent FEMA assessed whether an effective response to a disaster was beyond the capabilities of jurisdictions, such as state and local governments, we examined FEMA policies, regulations, and other documents related to the disaster declarations process.

Why GAO Did This Study The growing number of disaster declarations--a record 98 in fiscal year 2011 compared with 65 in 2004--has contributed to increased federal disaster costs. FEMA leads federal efforts to respond to and recover from disasters and makes recommendations to the President, who decides whether to declare a disaster and increase the usual federal cost share of 75 percent. This report addresses (1) the number of declarations requested and approved from fiscal years 2004-2011 and associated DRF obligations; (2) the criteria FEMA used to recommend a declaration for PA, and the extent that FEMA assessed whether an effective response to a disaster was beyond the capabilities of state and local governments; (3) how FEMA determined whether to recommend cost share adjustments, and their costs; and (4) FEMA's administrative cost percentages for declarations. GAO reviewed declaration data for fiscal years 2004-2011 and conducted site visits in 2011 to the two FEMA regions with the highest DRF obligations. The results are not generalizable, but provide insights. What GAO Found During fiscal years 2004-2011, the President received governors' requests for 629 disaster declarations and approved 539, or 86 percent, of which the Federal Emergency Management Agency (FEMA) reported 71 percent were for severe storms. For these 539 declarations, FEMA obligated $80.3 billion, or an average of about $10 billion a year, from the Disaster Relief Fund (DRF), as of January 31, 2012. Almost half of the obligations were for Hurricane Katrina; excluding obligations for Hurricane Katrina, FEMA obligated $40.6 billion, or an average of about $5 billion a year. As of January 31, 2012, FEMA anticipated that when all 539 declarations are closed, total DRF obligations will be about $91.5 billion. GAO's analysis shows that FEMA primarily relied on a single criterion, the per capita damage indicator, to determine whether to recommend to the President that a jurisdiction receive public assistance (PA) funding. However, because FEMA's current per capita indicator, set at $1 in 1986, does not reflect the rise in (1) per capita personal income since it was created in 1986 or (2) inflation from 1986 to 1999, the indicator is artificially low. The indicator would be $3.57 in 2011 had it been adjusted for increases in per capita income and $2.07 in 2012 had it been adjusted for inflation from 1986 to 1999, rather than its current $1.35. GAO's analysis of FEMA's anticipated obligations for 508 declarations with PA during fiscal years 2004-2011 shows that 44 percent and 25 percent would not have met the indicator if it had been adjusted for increases in personal income and inflation, respectively, since 1986. Further, the per capita indicator does not accurately reflect a jurisdiction's capability to respond to or recover from a disaster without federal assistance. GAO identified other measures of fiscal capacity, such as total taxable resources, that could be more useful in determining a jurisdiction's ability to pay for damages to public structures. Developing a methodology to more comprehensively assess state capabilities and reexamining the basis for the indicator could help FEMA more accurately determine a jurisdiction's capacity to respond without federal assistance. FEMA recommends raising the usual 75 percent federal share for PA to 90 percent when federal obligations, excluding FEMA administrative costs, meet a qualifying threshold. However, FEMA has no specific criteria for assessing requests to raise the federal share for emergency work to 100 percent, but relies on its professional judgment. For the 539 disaster declarations during fiscal years 2004-2011, governors made 150 requests to adjust the federal cost share to 90 or 100 percent; 109, or 73 percent, were approved or statutorily mandated, mostly for hurricanes. Without specific criteria for 100 percent cost share, FEMA risks making inconsistent or inequitable recommendations to the President. GAO's analysis of administrative costs for 539 disaster declarations during fiscal years 2004-2011 shows that administrative cost percentages frequently exceeded FEMA's targets, although FEMA does not require that they be met. GAO's analysis of 1,221 disaster declarations shows that average administrative costs doubled from 9 to 18 percent during fiscal years 1989-2011, the time period for which FEMA has data available. FEMA is working on short- and long-term actions to improve efficiencies in delivering disaster assistance, but the agency does not plan to set goals or track performance for administrative costs. Until this happens, it will be difficult for FEMA to ensure assistance is being delivered in an efficient manner. What GAO Recommends GAO recommends, among other things, that FEMA develop a methodology to more accurately assess a jurisdiction's capability to respond to and recover from a disaster without federal assistance, develop criteria for 100 percent cost adjustments, and implement goals for and track administrative costs. FEMA concurred with the first two, but partially concurred with the third, saying it would conduct a review before taking additional action.

gao_GAO-06-132

gao_GAO-06-132_0

Scientists working at the facility are responsible for protecting U.S. livestock against foreign animal diseases that could be accidentally or deliberately introduced into the United States. The North American Foot-and-Mouth Disease Vaccine Bank is also located on Plum Island. DHS and USDA Have Successfully Coordinated Research and Diagnostic Programs at Plum Island DHS’s and USDA’s efforts to coordinate research and diagnostic programs at Plum Island have been largely successful because of the agencies’ early efforts to work together to bring structure to their interaction at the island. Budget Changes at Time of the Transfer in Part Modified Overall Priorities and the Scope of Work at Plum Island Program budget changes that occurred soon after the transfer—resulting in part from implementation of the Homeland Security Act of 2002—modified overall priorities and the scope of USDA’s work at Plum Island. They also noted that some of the aspects of the research being conducted at the island could be performed elsewhere. ARS Is Focusing Its Research on FMD, While Other Programs Were Terminated or Slowed Down Because of Budget Reductions After the transfer, ARS designated FMD—traditionally one of the high- priority diseases at Plum Island—as its top research priority because it poses the greatest threat to the agriculture economy. For example, research on classical swine fever, which included development of a marker vaccine, is proceeding at a slower pace than it did before the budget reductions. An expert we consulted said that doing this work at Plum Island decreases the island’s already limited resources available to study foreign animal diseases. However, APHIS officials told us that as a result of the transfer, the $2.3 million increase that APHIS officials were expecting to receive was not fully realized. DHS Continues to Address Infrastructure Needs and Develop Programs Addressing Its Bioterrorism Priorities at Plum Island As discussed elsewhere in this report, DHS has assumed responsibility for operations and maintenance at Plum Island and has developed its own applied research program. Agency officials did not consider it prudent to speculate on long-term objectives of joint work, in part, because DHS plans to replace the existing Plum Island facility, and aspects of the new facility have not yet been determined. Furthermore, officials told us it is premature to firmly commit to long-term objectives of joint work at Plum Island, in part, because DHS has plans to replace the existing facility with a new, modernized facility. DHS estimates that, pending congressional approval, it will become fully operational by 2012. As DHS evaluates the size and capabilities of the new foreign animal disease facility that the agency estimates will be completed by 2012, it will be important to explore the cost-effectiveness of shifting some current work, such as research that does not involve the use of live agents, to other laboratories and reserve the limited laboratory space at Plum Island for work that can only be performed in that facility. Scope and Methodology To determine how the Department of Homeland Security (DHS) and the U.S. Department of Agriculture (USDA) coordinate research and diagnostic activities at Plum Island, we analyzed DHS and USDA joint strategy documents, including an interagency agreement between DHS and USDA for Plum Island, the Joint DHS and USDA Strategy for Foreign Animal Disease Research and Diagnostic Programs, and the Plum Island Animal Disease Center Charter. To determine what changes, if any, have taken place regarding research and diagnostic priorities at Plum Island since the facility was transferred to DHS, and the reasons for and implications of such changes, we interviewed the current and two former Plum Island directors, spoke with current and former Plum Island scientists, and discussed research and diagnostic priorities with senior officials in the DHS Science and Technology Directorate and USDA’s Agricultural Research Service (ARS) and Animal and Plant Health and Inspection Service (APHIS). This work is important in order to remain prepared to respond to outbreaks of various foreign animal diseases.

Why GAO Did This Study The livestock industry, which contributes over $100 billion annually to the national economy, is vulnerable to foreign animal diseases that, if introduced in the United States, could cause severe economic losses. To protect against such losses, critical research and diagnostic activities are conducted at the Plum Island Animal Disease Center in New York. The Department of Agriculture (USDA) was responsible for Plum Island until June 2003, when provisions of the Homeland Security Act of 2002 transferred the facility to the Department of Homeland Security (DHS). Under an interagency agreement, USDA continues to work on foreign animal diseases at the island. GAO examined (1) DHS and USDA coordination of research and diagnostic activities, (2) changes in research and diagnostic priorities since the transfer, and (3) long-term objectives of joint activities at Plum Island. What GAO Found DHS and USDA's coordination at Plum Island Animal Disease Center has been largely successful because of the agencies' early efforts to work together to bring structure to their interactions at the island. For example, prior to the transfer, officials from DHS and USDA worked in concert to develop a written interagency agreement--effective when the island was transferred to DHS--that coordinated management activities. Subsequently, DHS and USDA created a detailed strategy to guide their joint work on foreign animal disease research and diagnostics. According to this joint strategy, DHS's role is to augment the research and diagnostic work that USDA's Agricultural Research Service (ARS) and the Animal and Plant Health Inspection Service (APHIS) conduct at the island. Since the transfer, budget changes, in part, have modified overall priorities and the scope of work at the island. First, ARS narrowed its research priorities to focus its work primarily on a single foreign animal disease, foot-and-mouth disease (FMD). Traditionally one of the high-priority diseases studied at Plum Island, FMD has emerged as its top research priority because, according to officials, it poses the greatest threat of introduction because of its virulence, infectivity, and availability. Other research programs have been terminated or are proceeding at a slower pace. National experts we consulted confirmed the importance of studying FMD, but stated that it is also important to study a variety of other diseases to remain prepared. They suggested that, to free up limited space at the facility, some of the work that does not require the unique features of Plum Island could be performed elsewhere: for example, work that does not involve the use of a live virus, such as certain aspects of vaccine development. Second, while APHIS's overall priorities have not changed, diagnostic work has been curtailed. Officials said that, after the transfer, because the agency did not receive an expected budget increase, their plans to expand development of diagnostic tools for high-priority diseases were curtailed. This work is vital to rapidly identifying diseases when outbreaks occur. APHIS officials told us that the funds to support work on diagnostic tools remain insufficient. Finally, DHS has assumed responsibility for operations and maintenance at Plum Island and has established an applied research science and agricultural forensics team. While DHS and USDA plan to continue to work together on FMD, agency officials told us that it is not prudent to speculate on long-term objectives at Plum Island, in part, because DHS has plans to replace the Plum Island Animal Disease Center with a new, modernized facility that could be located at Plum Island or elsewhere. Pending congressional approval, DHS estimates that the new facility will be fully operational by 2012.

gao_T-HEHS-98-40

gao_T-HEHS-98-40_0

Parental Substance Abuse Often Brings Children to the Attention of the Child Welfare System Children come to the attention of the child welfare system in two ways—either shortly after birth because they were exposed to drugs or alcohol in-utero or sometime later because they have been abused or neglected. In some states, prenatal substance exposure itself constitutes neglect and is grounds for removing children from the custody of their parents. Older children of substance abusing parents also may enter foster care because they have been abused or neglected as a result of their parents’ diminished ability to properly care for them. Neglect is most frequently cited as the primary reason children are removed from the custody of their parents and placed in foster care. In addition to the large number of foster care cases involving parental substance abuse, the complexities of these family situations place greater demands on the child welfare system. Although the mother was ultimately reunified with her youngest child, it took a considerable amount of time and an array of social services to resolve this case. However, even for those who are able to recover from drug and alcohol addictions, it can be a difficult process that generally involves periods of relapse as a result of the chronic nature of addiction. Some drug treatment administrators and child welfare officials in these same locations believe that shorter time frames might help motivate a parent who abuses drugs to recover. However, expedited time framesmay require that permanency decisions be made before it is known whether the parent is likely to succeed in drug treatment. Most of these initiatives and changes to permanency laws are very new, so there is little experience to draw upon to determine whether they will help achieve timely exits from foster care for cases involving parental substance abuse. For example, California and Illinois have enacted statutory changes that specifically address permanency for foster care cases involving parental substance abuse. States and localities are undertaking programmatic initiatives that may also help to reconcile the goals of family reunification and timely exits from foster care, which may conflict, particularly when parental substance abuse is involved. Many are dually diagnosed with drug or alcohol addictions and mental illnesses, some are involved in criminal activities, some are homeless, and most have additional children in foster care. Reconciling these goals for children whose parents have a substance abuse problem presents a tremendous challenge to the entire child welfare system in determining how to balance the rights of parents with what is truly in the best interest of children. Through our ongoing work, we are continuing to explore the impact of parental substance abuse on foster care, by, for example, examining parents’ substance abuse histories and their drug treatment experiences, as well as exploring initiatives that might help achieve timely foster care exits for cases involving parental substance abuse.

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the implications of parental substance abuse for children and the child welfare system, and permanency planning for foster care cases involving parental substance abuse, focusing on reviews of the substance abuse histories and drug treatment experiences of parents, as well as initiatives that might help achieve timely exits from foster care for cases involving parental substance abuse. What GAO Found GAO noted that: (1) for many children, it is parental substance abuse that brings them to the attention of the child welfare system; (2) when a newborn has been found to have been prenatally exposed to drugs or alcohol, this often triggers an investigation of suspected child abuse and neglect; (3) in some states, prenatal substance exposure itself constitutes neglect and is grounds for removing a child from its parents; (4) substance abuse can damage a parent's ability to care for older children as well, and can lead to child abuse or neglect; (5) as a result, some of these children are removed from the custody of their parents and placed in foster care; (6) once a child is in the system, parental substance abuse is a significant hurdle in their path out of the system--a hurdle that requires drug or alcohol treatment for the parent in addition to other services for the family; (7) the nature of drug and alcohol addiction means a parent's recovery can take a considerable amount of time; (8) other problems these parents face, such as mental illness and homelessness, further complicate these cases; (9) foster care cases that involve parental substance abuse, therefore, place an additional strain on a child welfare system already overburdened by the sheer number of foster care cases; (10) child welfare agencies are charged with ensuring that foster care cases are resolved in a timely manner and with making reasonable efforts to reunite children with their parents; (11) ideally, both of these goals are to be achieved; (12) however, even for parents who are able to recover from drug or alcohol abuse problems, recovery can be a long process; (13) child welfare officials may have difficulties making permanency decisions within shorter time frames before they know whether the parent is likely to succeed in drug treatment; (14) so, when parental substance abuse is an issue in a foster care case, it may be difficult to reconcile these two goals; and (15) the foster care initiatives and laws that some states and localities are instituting may help reconcile the goals of family reunification and timely exits from foster care for the cases involving parental substance abuse.

gao_GAO-02-958

gao_GAO-02-958_0

FDA’s Drug and Biologic Review Process In addition to ensuring that new drugs and biologics are safe and effective and that applications for their approval are reviewed timely, FDA is also responsible for monitoring drugs and biologics for continued safety after they are in use. Once the center has accepted the application, it designates the product as either “priority,” for products that would provide significant therapeutic gains compared to any existing products on the market, or “standard,” for products that would provide no significant therapeutic advantage over other drugs already on the market. In fiscal year 2002, FDA expects to obligate about $170 million in user fees, or 51 percent of the $332 million that FDA expects to spend on its drug and biologic review processes. 5). PDUFA Has Contributed to Increased Workload and Attrition and Decreased Training for FDA Reviewers FDA officials told us that the performance goals added by PDUFA II, combined with PDUFA II’s shortened review timelines, have contributed to a heavy workload for FDA’s reviewers, which has resulted in high turnover and reviewers forgoing training and professional development activities. PDUFA II Resulted in Increased Reviewer Workload PDUFA II affected reviewer workload by shortening review times and adding new performance goals to reduce overall drug development time— the time needed to take a drug from clinical testing to submission of a new drug or biologic application. The availability of new, safer treatments also led to some withdrawals. Size of the Increase in Drug Withdrawal Rates Differs Depending on the Period Examined Our analysis of FDA data found that a higher percentage of drugs has been withdrawn from the market for safety-related reasons since PDUFA’s enactment than prior to the law’s enactment. Fewer resources for non-PDUFA programs may affect FDA’s ability to ensure that the other products the agency regulates, such as food and medical devices, comply with FDA safety standards. Rapid FDA approval of new drugs means that the United States has become the first nation to approve many new medicines. The recent increase in the rate of drug withdrawals also suggests the need for FDA to strengthen its postmarket surveillance activities.

Why GAO Did This Study Ten years ago, Congress passed the Prescription Drug User Fee Act to speed up the review process used to ensure that new drugs and biological products are safe and effective. What GAO Found GAO found that the act has provided the Food and Drug Administration (FDA) with the funding needed to hire more drug reviewers, which has led to faster availability of new drugs to the United States. Approval times have shortened both for priority drugs--those that FDA expects to offer significant therapeutic benefits beyond drugs already on the market--and standard drugs, which are not thought to have significant therapeutic benefits beyond available drugs. Although the act has increased the funds available for FDA's drug and biological reviews, funds for other activities, such as the regulation of foods and medical devices, have shrunk as a share of FDA's overall budget. The 1997 amendments to the act, which shortened review schedules and set new performance goals to reduce overall drug development time, have increased reviewer workload at FDA. GAO found that some drug reviewers may have forgone training and professional development opportunities to ensure that the new goals were met. FDA officials said that the agency continues to experience high turnover rates among these employees. GAO found that a higher percentage of drugs has been withdrawn from the market for safety reasons since the act was enacted but the that the size of the increase in withdrawal rates differs depending on the period examined. The higher rate of drug withdrawals suggests that FDA needs to strengthen its postmarket surveillance efforts. FDA plans to spend $71 million in user fees during the next 5 years to improve the monitoring of new drugs on the market and to track any harmful effects of these products.

gao_GGD-96-70

gao_GGD-96-70_0

However, we found no IRS organization with primary responsibility for monitoring issuers’ compliance and assessing the penalty, and no evidence that IRS had ever assessed the penalty. IRS had no record of Forms 8281 being filed for the 37 bonds we found missing from Publication 1212. IRS Did Not Use Other Means to Obtain Compliance IRS receives other information that it could use to help ensure that OID issuers file Forms 8281. Middlemen’s Reliance on Publication 1212 May Result in OID Underreporting Because Publication 1212 is incomplete, middlemen relying on its information to meet their OID information reporting requirements may not be reporting on all OID bonds they hold for their customers. Bond holders, consequently, may not report such income on their tax returns. Although IRS has continued to issue the publication, it has done little to ensure that the publication contained information on all the appropriate OID bonds. Recommendations to the Commissioner of Internal Revenue To help IRS better meet its responsibility to provide middlemen with complete and reliable information that can be used for OID information reporting, and to help better ensure that the billions of dollars of OID income are properly reported for tax purposes, we recommend that you assign organizational responsibility for monitoring and enforcing the OID bond issuance reporting requirement to specific organizational units and establish formal linkages between the units so that each can effectively carry out its responsibilities; develop procedures, such as periodically matching the list of OID bonds in Publication 1212 with those contained in databases outside of IRS, to improve and help ensure the completeness and reliability of Publication 1212 as an authoritative source of OID information for middlemen; and work with representatives of the securities industry to develop a means to inform and remind OID bond issuers of their responsibility to file Forms 8281. Tax Policy and Administration: IRS’ Efforts to Ensure Corporate Tax Compliance (GAO/T-GGD-91-21, Apr.

Why GAO Did This Study GAO provided information on the Internal Revenue Service's (IRS) efforts to ensure that taxpayers report investment income earned from bonds sold at original issue discount (OID), focusing on the completeness and use of IRS Publication 1212. What GAO Found GAO found that: (1) IRS asserts that OID bond issuers can rely on Publication 1212 to identify all publicly offered OID bonds and compute OID income, but Publication 1212 did not list at least 37 bonds worth billions of dollars; (2) although IRS primarily relies on its sizable penalty to ensure that OID bond issuers file IRS Form 8281 to report OID bond issues, no IRS organization has primary responsibility for monitoring such compliance and there is no evidence that IRS has ever assessed the penalty; (3) IRS has not assessed penalties for late filings of Forms 8281; (4) IRS does not use other information it receives, such as corporate tax returns, to help ensure compliance with Form 8281 reporting requirements; (5) because Publication 1212 is not complete, those relying on the publication to determine their information reporting requirements may not be reporting on all OID bonds; and (6) although some banks and middlemen consider Publication 1212 to be incomplete, they indicated that the publication does serve as a starting point, authority, and reference source.

gao_GAO-05-175

gao_GAO-05-175_0

Background Congressional Authorization and Funding of the Media Campaign The Drug-Free Media Campaign Act of 1998, 21 U.S.C. 1801 et seq., required the Office of National Drug Control Policy to conduct a national media campaign to reduce and prevent drug abuse among America’s youth. Congress has appropriated over $1 billion for ONDCP’s media campaign since it was initiated in 1998. This phase also involves measuring the effectiveness of specific advertisements over time within target audiences. The media campaign also used a contractor to provide assistance with public communications and outreach for the campaign, for example, encouraging the entertainment industry to portray the negative consequences of drug use in movies and television. These contractors used funds from their contracts to secure additional specialized expertise from subcontractors. Prime Contractors and Their Subcontractors Provided Three Broad Categories of Services, but Most of the Estimated Award Dollars Were Committed to Purchasing Media Time and Space During fiscal years 2002 through 2004, the four major prime contractors were responsible for a variety of services that generally fall into three broad categories—advertising, public communications and outreach, and evaluation. According to our analysis, an estimated $520 million was awarded to the prime contractors, of which an estimated $373 million—72 percent—was committed to purchasing media time and space for advertisements. The remaining $147 million—28 percent—was for the services provided by the prime contractors. Although the senate committee report that mandated our review did not define the term “consultants,” through our consultations and its previous hearings, the committee expressed concerns about the use of contractors and their subcontractors for the media campaign. Appendix I: Scope and Methodology Our review of contractor services and contract award amounts associated with the Office of National Drug Control Policy’s (ONDCP) National Youth Anti-Drug Media Campaign covered fiscal years 2002 through 2004. To describe the services provided by contractors and their subcontractors in support of the media campaign, we analyzed the contracts of the four prime contractors and the subcontracts of the 102 subcontractors. The second phase involves ad creation and qualitative and quantitative research.

Why GAO Did This Study The Office of National Drug Control Policy (ONDCP) was required by the Drug Free Media Campaign Act of 1998 (21 U.S.C. 1801 et seq.) to conduct a national media campaign to reduce and prevent drug use among America's youth. Since 1998, Congress has appropriated over $1 billion for the media campaign. However, a 2003 report by the Senate Committee on Appropriations expressed some concerns about the media campaign, including concern that a large portion of the campaign's budget had been used for consulting services rather than the direct purchase of media time and space. The report, therefore, directed GAO to review the use of consultants to support the media campaign. This report describes the services provided by consultants (defined by GAO as the prime contractors and their subcontractors) in support of the media campaign, along with the estimated award amounts for these services. What GAO Found Our analysis of contracts covering ONDCP's National Youth Anti-Drug Media Campaign from fiscal years 2002 through 2004 revealed that four contractors provided many of the services required to execute the campaign. These four prime contractors provided an array of services that fell within three broad categories: (1) advertising, (2) public communications and outreach, and (3) evaluation services to gauge the campaign's effectiveness. The prime contractors also acquired additional specialized expertise from 102 subcontractors. Some of the specific tasks performed by the contractors and their subcontractors included conducting qualitative and quantitative research for advertising creation, working with the entertainment industry to portray the negative consequences of drug use in television and movies, and conducting an evaluation intended to measure the effectiveness of the media campaign. Based on our analysis of contracts covering fiscal years 2002 through 2004, we estimated that $520 million was awarded to the four prime contractors, of which an estimated $373 million--72 percent--was committed to purchasing media time and space for campaign advertisements. The remaining $147 million--28 percent--was for the services provided by the prime contractors. Contractors, in turn, awarded $14 million of that amount to their subcontractors.

gao_GAO-11-466T

gao_GAO-11-466T_0

Adopting a More Coordinated and Crosscutting Approach to Achieving Meaningful Results The federal government faces a series of challenges that in many instances are not possible for any single agency to address alone. Effective GPRAMA implementation could help inform reexamination or restructuring efforts related to these and other areas by identifying the various agencies and federal activities—including spending programs, regulations, and tax expenditures—that contribute to each crosscutting goal. Teacher quality programs: In fiscal year 2009, the federal government spent over $4 billion specifically to improve the quality of our nation’s 3 million teachers through numerous programs across the government. Addressing Weaknesses in Major Management Functions Although agencies have made progress improving their operations in recent years, they need more effective management capabilities to better implement new programs and policies. The act specifies that these goals should include five areas: financial management, human capital management, information technology management, procurement and acquisition management, and real property management. Ensuring Performance Information Is Both Useful and Used in Decision Making Agencies need to consider the differing information needs of various users—such as agency top leadership and line managers, OMB, and Congress—to ensure that performance information will be both useful and used in decision making. By also requiring information to be posted on a governmentwide Web site, the act will make performance information more accessible and easy to use by stakeholders and the public, thus fostering transparency and civic engagement. In addition, to help ensure that performance information is used—not simply collected and reported as a compliance exercise—GPRAMA requires top leadership and program officials to be involved in quarterly reviews of priority goals. Instilling Sustained Leadership Commitment and Accountability for Achieving Results Perhaps the single most important element of successful management improvement initiatives is the demonstrated commitment of top leaders. The act designates the deputy head of each agency as Chief Operating Officer (COO), with overall responsibilities for improving the management and performance of the agency. Engaging Congress in Identifying Management and Performance Issues to Address In order for performance improvement initiatives to be useful to Congress for its decision making, garnering congressional buy-in on what to measure and how to present this information is critical. In past reviews, we have noted the importance of considering Congress a partner in shaping agency goals at the outset. GPRAMA significantly enhances requirements for agencies to consult with Congress when establishing or adjusting governmentwide and agency goals. GAO’s Role in Evaluating GPRAMA, High Risks, and Other Major Government Challenges Realizing the promise of GPRAMA for improving government performance and accountability and reducing waste will require sustained oversight of implementation. Finally, GAO reports to each new Congress on government operations that it identifies as high risk due to their greater vulnerabilities to fraud, waste, abuse, and mismanagement, or the need for broad-based transformation to address economy, efficiency, or effectiveness challenges. While the long-term outlook is driven on the spending side of the budget by rising health care costs and demographics, other areas of the budget should not be exempt from scrutiny. Programs and management functions at significant risk of waste, fraud, and abuse must be corrected.

Why GAO Did This Study The federal government is the world's largest and most complex entity, with about $3.5 trillion in outlays in fiscal year 2010 that fund a broad array of programs and operations. GAO's long-term simulations of the federal budget show--absent policy change--growing deficits accumulating to an unsustainable increase in debt. While the spending side is driven by rising health care costs and demographics, other areas should also be scrutinized. In addition, there are significant performance and management challenges that the federal government needs to confront. GAO was asked to testify on how the provisions of the Government Performance and Results Act (GPRA) Modernization Act of 2010 (GPRAMA) could, if effectively implemented, help address these challenges. Our statement is based on our past and ongoing work on GPRA implementation, as well as our recently issued reports (1) identifying opportunities to reduce potential duplication in government programs, save tax dollars, and enhance revenue; and (2) updating our list of government operations at high risk due to their greater vulnerabilities to fraud, waste, abuse, and mismanagement, or the need for broad-based transformation. As required by GPRAMA, GAO will periodically evaluate implementation of the act and report to Congress on its findings and recommendations. What GAO Found GAO's past and ongoing work illustrates how GPRAMA could help address government challenges in five areas: 1) Adopting a more coordinated and crosscutting approach to achieving meaningful results. GPRAMA could help inform reexamination or restructuring efforts and lead to more efficient and economical service delivery in overlapping program areas by identifying the various agencies and federal activities--including spending programs, regulations, and tax expenditures--that contribute to crosscutting outcomes. These program areas could include multiple employment and training programs or numerous teacher quality initiatives, among others. 2) Addressing weaknesses in major management functions. Agencies need more effective management capabilities to better implement their programs and policies. GPRAMA requires long-term goals to improve management functions in five key areas: financial, human capital, information technology, procurement and acquisition, and real property. GAO's work has highlighted opportunities for improvements in each of these areas and aspects of several of them are on the GAO high-risk list. 3) Ensuring performance information is both useful and used in decision making. Agencies need to consider the differing needs of various stakeholders, including Congress, to ensure that performance information will be both useful and used. For performance information to be useful, it must be complete, accurate, valid, timely, and easy to use. Yet decision makers often do not have the quality performance information they need to improve results. To help address this need, GPRAMA requires (1) disclosure of information about accuracy and validity, (2) data on crosscutting areas, and (3) quarterly reporting on priority goals on a publicly available Web site. 4) Instilling sustained leadership commitment and accountability for achieving results. Perhaps the single most important element of successful management improvement initiatives is the demonstrated commitment of top leaders, as shown by their personal involvement in reform efforts. GPRAMA assigns responsibilities to a Chief Operating Officer and Performance Improvement Officer in each agency to improve agency management and performance. 5) Engaging Congress in identifying management and performance issues to address. In order for performance improvement initiatives to be useful to Congress for its decision making, garnering congressional buy-in on what to measure and how to present this information is critical. GAO has previously noted the importance of considering Congress a partner in shaping agency goals at the outset. GPRAMA significantly enhances requirements for agencies to consult with Congress.

gao_GGD-95-68

gao_GGD-95-68_0

For this review, we assessed the impact of title I assistance on (1) broad-based, sustainable development in recipient countries and (2) long-term market development for U.S. agricultural goods in those countries. Food security was defined in the 1990 act as “access by all people at all times to sufficient food and nutrition for a healthy and productive life.” While the 1990 act emphasized food security—an economic development and food assistance issue—it also assigned title I program management responsibilities to USDA, whose international responsibilities are foreign market development for U.S. agricultural goods, rather than to the Agency for International Development (AID), which is an international economic development agency. Although U.S. agricultural products have been exported under the title I program for 40 years, none of the many studies we reviewed has established a link between food aid and long-term commercial market share for U.S. agricultural products. However, the link between title I, economic development, and subsequent market development is tenuous. 3.2). The act clarified program management responsibility by assigning title I to USDA and titles II and III to AID. 480 funds between the title I and title III programs. Competing Objectives Hinder Development of an Effective Program Strategy The objectives of the P.L. We found that the primary way in which title I can contribute to sustainable economic development in recipient countries is by helping the country save foreign exchange to invest in projects that promote long-term economic development.

Why GAO Did This Study Pursuant to a legislative requirement, GAO reviewed the impact of Title I assistance on: (1) sustainable economic development in recipient countries; and (2) long-term market development for U.S. agricultural goods in those countries. What GAO Found GAO found that: (1) U.S. agricultural exports and world food aid have decreased because there are other donor countries and new programs such as the Department of Agriculture's (USDA) market development program; (2) title I has had minimal effect on sustainable economic development in recipient countries; (3) the primary way in which title I food aid can contribute to broad-based sustainable development in the recipient country is to give the country the foreign exchange savings it needs to invest in long-term economic development projects; (4) the link between title I and market development is uncertain, since USDA and other agency studies have not shown a link between title I assistance and the establishment of a long-term commercial market share for U.S. agricultural products; (5) price-sensitive exports restrict title I market development opportunities; (6) Title I program management has been streamlined by assigning title I programs to USDA and titles II and III to the Agency for International Development (AID); and (7) while the objectives of P.L. 480 legislation can support U.S. foreign policy and trade interests, they can also impede the development of an effective program strategy.

gao_HEHS-98-132

gao_HEHS-98-132_0

Most States Provide Optional Federal Benefits to Pre-Reform and New Immigrants States have the option of continuing TANF and Medicaid benefits to pre-reform immigrants and providing these benefits to new immigrants after 5 years of U.S. residency. Limited Number of States Provide Benefits to New Immigrants During 5-Year Bar About a third of the states provide state-funded temporary assistance to needy families, medical assistance, or both to new immigrants during their 5-year bar from federal programs. California, Maryland, Massachusetts, and Washington provide both state-funded cash and medical assistance, while New Jersey and Virginia provide medical assistance. States’ Approaches to Providing Food Assistance to Immigrants With the continuation of TANF, Medicaid, and SSI benefits to pre-reform immigrants, the largest federal benefit loss for most immigrants is the termination of food stamps. At the time of our review, some states had created state-funded programs that were replacing benefits for about one-quarter of those estimated to no longer be eligible for federal food stamps nationwide. This group of immigrants consists mostly of children, the disabled, and the elderly— those groups who were most often targeted in the state-funded programs. Almost one-fifth of those no longer eligible were immigrant children. The most recent legislation (P.L. 105-185) restores federal food stamp eligibility, effective November 1, 1998, to 250,000—mostly children, the disabled, and the elderly—of the estimated 820,000 immigrants no longer eligible for food stamps in fiscal year 1999, according to USDA. Some States Replace Lost Food Stamp Benefits for Immigrants At the time of our review, 14 states representing almost 90 percent of immigrants nationwide receiving food stamps in 1996 were replacing food stamp benefits with state-funded benefits to a portion of immigrants no longer eligible. The state-funded food stamp programs generally target the same groups whose eligibility for federal food stamp benefits has been restored. States’ responses to the restoring of these benefits, such as changing eligibility for state-funded programs, are unknown at this time. States Continue to Face Challenges Implementing New Restrictions for Immigrants The eligibility changes under welfare reform for immigrants expanded states’ administrative responsibilities and added financial responsibilities for those states choosing to provide replacement benefits. In addition to the challenges all states face, those providing state-funded programs face challenges obtaining future funding and managing the different eligibility rules and funding streams of both federal and state programs. States Face Administrative Challenges Following Restrictions Implementing the new restrictions required the states and localities to educate welfare workers and immigrant recipients about the eligibility changes and to recertify the eligibility of immigrant recipients. States’ more recent and future challenges include implementing the new alien status verification requirements—verifying the citizenship or immigration status of applicants for all federal public benefits, implementing the new sponsor deeming requirements, and enforcing affidavits of support for immigrants sponsored by family members. The states are focusing their welfare assistance efforts on immigrants living in the United States before welfare reform and have not yet focused much attention on the possible needs of new immigrants. Along with choosing to continue TANF and Medicaid benefits for pre-reform immigrants and to provide these benefits to new immigrants after the federal 5-year bar, New Jersey devised a new state-funded food stamp program to replace lost federal benefits and a statewide naturalization assistance program. Additional copies are $2 each.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and the impact its restrictions would have on immigrant children and their families, focusing on: (1) the options states chose regarding Temporary Assistance for Needy Families (TANF) and Medicaid benefits for immigrants and state-funded assistance available to new immigrants during the 5-year bar; (2) for restricted federal programs, Supplemental Security Income (SSI), and food stamps, the number of immigrants, including children, whose federal benefits have been terminated, and the state-funded assistance available to them; and (3) the major implementation issues and challenges state agencies face in administering the provisions changing welfare assistance to immigrants. What GAO Found GAO noted that: (1) although the states could have dropped immigrants from their welfare rolls, most states have chosen to provide some welfare benefit to part of this population; (2) nearly all states have chosen to continue providing federal TANF and Medicaid benefits to pre-reform immigrants and to provide these benefits to new immigrants after 5 years of U.S. residency; (3) about a third of the states use state funds to provide similar benefits to some new immigrants during the 5-year bar; (4) among these states are 6 of the 10 where most immigrants live--2 states provide state-funded medical assistance and 4 states provide both state-funded cash and medical assistance; (5) with the states' continuation of TANF and Medicaid benefits to pre-reform immigrants and the retention of these immigrants' SSI benefits, the greatest economic impact of welfare reform for most of these immigrants is the loss of federally funded food stamp benefits; (6) after the implementation of the food stamp restrictions, an estimated 940,000 immigrants receiving food stamps in 1997 lost eligibility for receiving them; (7) almost one-fifth of this group consisted of immigrant children; (8) at the time of GAO's review, 14 states had created state-funded food stamp programs serving about a quarter of this immigrant group nationwide--primarily children, the disabled, and the elderly; (9) fewer states, however, offer state-funded food stamps to new immigrants; (10) the most recent legislation will restore food stamp eligibility to an estimated 250,000 immigrants, mostly children, the disabled, and the elderly, the same groups targeted by state-funded food stamp programs; (11) states' responses to the restoring of these benefits, such as changing eligibility for state-funded programs, are unknown at this time; (12) with the implementation of the welfare reform restrictions for immigrants, states and local governments face added responsibilities; (13) states' future challenges include verifying the citizenship or immigration status of applicants for all federal public benefits and enforcing affidavits of support for new immigrants sponsored by relatives; (14) the states GAO visited anticipated major systems changes and other additional work to implement the new verification procedures; (15) furthermore, states choosing to provide assistance to immigrants no longer eligible for federal benefits are uncertain about future funding for these programs; and (16) these states also face additional challenges managing funding streams and determining eligibility for federal and state programs.

gao_GAO-05-530T

gao_GAO-05-530T_0

These grants are a means of achieving an important goal—enhancing the ability of first responders to prevent, prepare for, respond to, and recover from terrorist incidents with well-planned and well-coordinated efforts that involve police, fire, emergency medical, public health, and other personnel from multiple jurisdictions. During fiscal years 2002 through 2005, the State Homeland Security Grant Program and Urban Areas Security Initiative program accounted for about 69 percent of total ODP grant funds. GAO supports a risk-based approach to homeland security. ODP Grant Award Procedures Over time, ODP has modified its grant application processes and procedures for awarding grants to states, governing how states distribute funds to local jurisdictions, and facilitating reimbursements for states and localities. For the statewide grant programs, ODP has allowed the states flexibility in deciding how the grant programs are structured and implemented in their states. For the first round of the urban area grants in fiscal year 2003, the grants were made directly to the seven urban areas identified as recipients. Some state and local officials’ ability to spend grant funds was complicated by the need to meet various state and local legal and procurement requirements and approval processes, which could add months to the process of purchasing equipment after grant funds had been awarded. Some states, in conjunction with DHS, have modified their procurement practices to expedite the procurement of equipment and services. ODP has responded by establishing a new Homeland Security Preparedness Technical Assistance Program service to enhance the grant management capabilities of state administrative agencies and by surveying states to identify their technical needs and best practices they have developed related to managing and accounting for ODP grants, including the procurement of equipment and services at the state and local levels. Accountability for Effective Use of Grant Funds In distributing federal funds to states to assist first responders in preventing, preparing for, and responding to terrorist threats, the federal government has required states to develop strategies to address their homeland security needs as a condition for receiving funding. ODP found, however, that, while the worksheets reflected the number and cost of specific items that states and localities planned to purchase, neither states nor ODP had a reporting mechanism to specifically assess how well these purchases would, in the aggregate, meet preparedness planning needs or priorities, or the goals and objectives contained in state or urban area homeland security strategies. In addition to the ISIPs, ODP now requires the states to submit biannual strategy implementation reports showing how the actual expenditure of grant funds at both the state and local levels was linked by projects to the goals and objectives in the state and urban area strategy. On March 31, 2005, DHS issued a document entitled “Interim National Preparedness Goal” that reflects the department’s progress in developing readiness targets, priorities, standards for preparedness assessments and strategies, and a system for assessing the nation’s overall level of preparedness. DHS’s task of defining a national preparedness goal and translating that definition into capabilities that are meaningful and readily transferable to the wide variety of local jurisdictions around the nation is still not complete.

Why GAO Did This Study In fiscal years 2002 through 2005, the Office for Domestic Preparedness (ODP) within the Department of Homeland Security managed first responder grants totaling approximately $10.5 billion. The bulk of this funding has been for statewide grants through the State Homeland Security Grant Program and urban area grants through the Urban Areas Security Initiative. This testimony provides information on the history and evolution of these two grant programs, particularly with respect to ODP grant award procedures; timelines for awarding and transferring grant funds; and accountability for effective use of grant funds. What GAO Found Federal first responder grants are a means of achieving an important goal--enhancing the ability of first responders to prevent, prepare for, respond to, and recover from terrorist and other incidents with well-planned, well-coordinated efforts that involve a variety of first responders from multiple jurisdictions. ODP has led federal efforts to develop these capabilities in part through its management of federal first responder grants. ODP has modified grant award procedures for states and localities. ODP developed procedures and guidelines for awarding the State Homeland Security Grant Program and the Urban Areas Security Initiative grants to states, and for determining how states and localities could expend funds and seek reimbursement for first responder equipment or services they purchased. As part of this process, ODP gave states some flexibility by allowing them to determine how grant funds were to be managed and distributed within their states and whether purchases would be made locally or at the state level. Congress, ODP, states, and localities have acted to expedite grant awards by setting time limits for the grant application, award, and distribution processes and by instituting other procedures. Nevertheless, the ability of states and localities to spend grant funds expeditiously was complicated by the need to fulfill state and local legal and procurement requirements, which in some cases added months to the purchasing process. Some states have modified their procurement practices, and ODP is identifying best practices to aid in the effort, but challenges remain. ODP has taken steps to improve accountability in the state preparedness planning process, in part by requiring states to update homeland security strategies. In tandem with this effort, ODP revised its grant-reporting method, moving away from requiring states, localities, and urban areas to submit itemized lists of first responder equipment they plan to purchase towards a more results-based approach, whereby grant managers at all levels must demonstrate how grant expenditures are linked to larger projects that support goals in state homeland security strategies. As part of a broader effort to meet mandates contained in Homeland Security Presidential Directive 8, addressing national preparedness goals for all hazards, ODP has taken steps to ensure more assessments of first responder needs are conducted on a national basis. Finally, ODP recently issued interim national preparedness goals that reflect the department's progress in developing readiness targets, priorities, standards for preparedness assessments and strategies, and a system for assessing the nation's overall level of preparedness. However, DHS's task of finalizing these goals and translating them into capabilities that are meaningful and readily transferable to the wide variety of local jurisdictions around the nation is still not complete.

gao_RCED-95-72

gao_RCED-95-72_0

Lack of Uniform Instructions Led to Different Rent-Restriction Requirements HUD’s instructions for disposing of multifamily properties did not provide HUD field offices or purchasers of HUD properties with clear directions for implementing the rent-restriction alterative. Moreover, several officials believed that the procedure for filling vacancies is beneficial because it can place more of the cost of providing affordable housing on property owners since it essentially requires the owners to accept low-income households on a first-come, first-served basis even if they would not pay the full rental cost. The officials told us that they had not required field offices to monitor purchasers’ compliance with rent-restriction agreements because they considered this to be a low priority, given the relatively small number of properties that had been sold with rent restrictions. Although rent-restriction agreements are likely to continue as an important aspect of HUD’s multifamily property disposition activities, future use of the current rent-restriction alternative is likely to decrease. Occupants can be required to pay a percentage of the median income in the local area, instead of a percentage of their household income. HUD has acknowledged that it did not provide field offices and property owners adequate instructions when the rent-restriction approach was implemented. HUD also said that it would issue revised monitoring procedures to its field offices by May 1, 1995. Through its comments, HUD implemented the recommendations that we proposed by establishing a firm schedule for (1) clarifying procedures that owners must follow in managing rent-restricted units, (2) clarifying procedures field offices are to use in monitoring owners’ compliance, and (3) establishing similar procedures for new rent-restriction options that the agency will use to carry out requirements of the Multifamily Housing Property Disposition Reform Act of 1994. A recorded menu will provide information on how to obtain these lists.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the Department of Housing and Urban Development's (HUD) procedures for implementing a rent-restriction alternative for the disposition of multifamily properties, focusing on: (1) HUD instructions to its field offices and property purchasers on implementing the alternative; (2) HUD instructions to field offices on monitoring purchasers' compliance with rent-restriction agreements; and (3) the expected future use of the rent-restriction alternative. What GAO Found GAO found that: (1) HUD has not provided adequate instructions on how the rent-restriction alternative should be implemented; (2) HUD has inconsistently enforced its policy of filling vacant units on a first-come, first-served basis, which ensures that new property owners accept low-income households regardless of how much rental income the owners receive; (3) HUD did not require its field offices to monitor property owners' compliance with rent-restriction agreements until July 1994, since it placed a low priority on establishing monitoring requirements because few properties were sold with rent restrictions; (4) HUD plans to issue instructions clarifying program requirements by May 1, 1995; (5) changes authorized by new property disposition legislation are likely to diminish HUD use of the current rent-restriction alternative; and (6) many occupants of rent-restricted units may be required to pay rents computed as a percentage of the area median income rather than as 30 percent of their own adjusted household income.

gao_GAO-09-227

gao_GAO-09-227_0

Under the BSA regulatory scheme, FinCEN is responsible for the overall administration and enforcement of BSA and may take enforcement actions, but federal and state regulators and SROs conduct day-to-day compliance and enforcement activities. FinCEN has retained enforcement authority and may impose civil penalties for violations. Further, across financial industries, agencies have not established a formal mechanism through which they could discuss compliance processes and trends without industry present. Unlike SEC, CFTC had not provided the examination modules to FinCEN for its review because the agencies did not have an information- sharing MOU in place until January 2009. IRS Has Improved Its BSA Compliance Efforts; However, It Does Not Fully Coordinate Examination Schedules with States Since our 2006 report, IRS has made improvements in its BSA/AML compliance program by revising guidance, identifying additional NBFIs, and coordinating with FinCEN and the states; however, IRS and state agencies have missed opportunities to better leverage examination resources by not coordinating their examination schedules. Therefore, some financial institutions have multiple regulators from various institutions. Regulators with Enforcement Authority Took BSA-Related Enforcement Actions, and Federal Banking Regulators Reported Improved Coordination of Enforcement Actions The BSA/AML examinations that federal banking regulators, SEC, CFTC, and their SROs conducted resulted in the citation of violations and the taking of informal (in the case of the federal banking regulators) and formal enforcement actions. FinCEN also has been discussing how to improve analytical support with the regulators. However, some state, securities, and futures regulators have limited electronic access to BSA data, which impedes their risk scoping for examinations and ability to independently verify audit information. While FinCEN and IRS recently have been meetin more frequently to discuss IRS referrals, no formal agreed-upon proces exists to address IRS referral issues and provide more timely feedback to IRS-examined institutions on their AML efforts. FinCEN and CFTC signed a data- access MOU concurrently with their information-sharing MOU in January 2009. FinCEN officials said they finalized a regulatory data-access template in July 2008 and have begun providing additional state regulators with direct electronic access, and anticipate providing expanded access to the federal financial regulators. Recommendations for Executive Action To reduce the potential for duplicative efforts and better leverage limited examination resources, we recommend that the Commissioner of IRS work with state agencies to develop a process by which to coordinate MSB examination schedules between IRS and state agencies that conduct BSA examinations of MSBs. Appendix I: Objectives, Scope and Methodology Our objectives were to (1) describe how Bank Secrecy Act (BSA) compliance and enforcement efforts are distributed among federal and state regulators, self-regulatory organizations (SRO), and the Financial Crimes Enforcement Network (FinCEN); (2) describe how federal agencies other than FinCEN are implementing their BSA activities and evaluate their coordination efforts; and (3) evaluate how FinCEN is executing its BSA responsibilities and coordinating BSA efforts among the various agencies. In addition, to better understand how BSA/AML authorities were delegated and interrelate with other financial regulatory authorities, we interviewed officials from the federal agencies included in the BSA/AML compliance and enforcement regulatory framework—FinCEN; the federal banking regulators: the Board of Governors of the Federal Reserve System (Federal Reserve), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Office of Thrift Supervision (OTS), and National Credit Union Administration (NCUA); Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and the SROs they regulate; Internal Revenue Service (IRS); and Department of Justice (Justice).

Why GAO Did This Study The legislative framework for combating money laundering began with the Bank Secrecy Act (BSA) in 1970 and most recently expanded in 2001with the USA PATRIOT Act. The Financial Crimes Enforcement Network (FinCEN) administers BSA and relies on multiple federal and state agencies to ensure financial institution compliance. GAO was asked to (1) describe how BSA compliance and enforcement responsibilities are distributed, (2) describe how agencies other than FinCEN are implementing those responsibilities and evaluate their coordination efforts, and (3) evaluate how FinCEN is implementing its BSA responsibilities. Among other things, GAO reviewed legislation, past GAO and Treasury reports, and agreements and guidance from all relevant agencies; and interviewed agency, association, and financial institution officials. What GAO Found FinCEN is responsible for the administration of the BSA regulatory structure, and has delegated examination responsibility to the federal banking regulators (Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Office of Thrift Supervision, and National Credit Union Administration), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Internal Revenue Service (IRS). The federal banking regulators, SEC, CFTC, securities and futures self-regulatory organizations (SRO), and state agencies also have their own separate authorities to examine for compliance among institutions they supervise and take enforcement actions for noncompliance. FinCEN has retained enforcement authority for BSA and may take enforcement actions independently or concurrently with the regulators. While federal agencies have enhanced their BSA compliance programs, opportunities exist to improve interagency and state examination coordination. The federal banking regulators issued an interagency examination manual; SEC, CFTC, and their respective SROs developed BSA examination modules; and FinCEN and IRS, which examines nonbank financial institutions (NBFI), issued an examination manual for money services businesses (MSB). However, IRS has not fully coordinated MSB examination schedules with the states that also examine MSBs, potentially missing opportunities to reduce duplication and leverage resources. The federal financial regulators traditionally have different compliance approaches for their industries. With respect to BSA, multiple regulators are examining for compliance with the same legislation across industries and, for some larger holding companies, within the same institution. However, they do not have a mechanism through which all regulators discuss (without industry present) how to promote greater consistency, reduce unnecessary regulatory burden, and identify concerns across industries. Federal banking regulators reported improved transparency and coordination of enforcement actions. While FinCEN has increased regulatory resources, provided examination support, and made advances in outreach, it could improve its informationsharing efforts. FinCEN improved its system for tracking referrals but lack of a process for communication between IRS and FinCEN for IRS referrals, coupled with IRS's limited enforcement authority, may delay timely feedback to IRS-examined institutions. FinCEN completed more information-sharing memorandums of understanding (MOU) with federal and state agencies, but did not sign its MOU with CFTC until January 2009, which limited their information-sharing efforts. Some state regulators and securities and futures regulators continue to have no electronic access to BSA data. Lack of direct access to BSA data impedes their ability to identify potential risk areas on which to focus their examinations and effectively leverage resources. FinCEN officials said they finalized a data-access template in July 2008, and had begun providing more electronic access.

gao_GAO-15-632T

gao_GAO-15-632T_0

Background The SSI program was established in 1972 under Title XVI of the Social Security Act and provides payments to low-income aged, blind, and disabled persons—both adults and children—who meet the financial eligibility requirements. During fiscal year 2014, SSA estimated that it made $5.1 billion in improper payments in the program. SSA Faces Program Integrity Challenges in Preventing, Detecting, and Recovering Overpayments SSA Could Prevent Billions of Dollars in Overpayments by Conducting More Disability Reviews and Could Ensure Review Consistency by Improving Guidance Because CDRs are a key mechanism for ensuring continued medical eligibility, when SSA does not conduct them as scheduled, program integrity is affected and the potential for overpayments increases as some recipients may receive benefits for which they are no longer eligible. SSA reported in January 2014 that it is behind schedule in assessing the continued medical eligibility of its disability program recipients and has accumulated a backlog of 1.3 million CDRs. In our June 2012 report, we recommended that SSA eliminate the existing CDR backlog of cases for children with impairments who are likely to improve and, on an ongoing basis, conduct CDRs at least every 3 years for these children. If this recommendation were implemented, SSA could potentially save $3.1 billion over 5 years by preventing overpayments to children with mental impairments, according to our analysis of fiscal year 2011 data. Moving forward, one of the goals in SSA’s Fiscal Year 2014- 2018 Strategic Plan is to strengthen the integrity of the agency’s programs. SSA recently reported that in each year since 2012, it has increased the number of reviews conducted for SSI children, completing nearly 90,000 reviews in fiscal year 2014, in contrast to the 25,000 reviews it completed in fiscal year 2011, the year prior to GAO’s audit. In prior work, our analysis of SSA data showed that 1.4 percent of all people who left the agency’s disability programs between fiscal years 1999 and 2005 did so because SSA found that they had improved medically; however, recipients more commonly left for other reasons, including conversion to Social Security retirement benefits or death. In December 2012, we reported that SSA lacks comprehensive, timely information on SSI recipients’ financial institution accounts and wages. SSA has developed tools in recent years to obtain more comprehensive and timely financial information for SSI recipients, but these tools have limitations: The Access to Financial Institutions initiative, which SSA implemented in all states in June 2011, involves electronic searches of about 96 percent of the financial institutions where SSI recipients have a direct deposit account. SSA recently reported that it is continuing to gain experience using these tools and is studying the effects of recent expansions to the Access to Financial Institutions initiative. In May 2015, the SSA Office of the Inspector General (OIG) noted that despite SSA’s implementation of the Access to Financial Institutions initiative, the dollar amount of overpayments associated with financial account information has increased over the last few fiscal years. The OIG recommended that SSA continue (1) monitoring Access to Financial Institutions to ensure a positive return on investment and (2) researching other initiatives that will help to reduce improper payments in the SSI program. SSA Faces Several Management Challenges in Administering SSI SSA Is Taking Some Steps to Address Ongoing Workload and Service Delivery Challenges SSA faces management challenges that may constrain its ability to ensure program integrity. During this same time, workloads and service delivery demands are expected to increase. Federal internal controls guidance states that management should consider how best to retain valuable employees, plan for their eventual succession, and ensure continuity of needed skills and abilities. Thus, we recommended that SSA update its succession plan to mitigate the potential loss of institutional knowledge and expertise and help ensure leadership continuity. In response to our recommendation, SSA published a human capital operating plan, detailing specific workforce management and succession planning steps SSA will take across the organization. Federal internal controls guidance states that federal agencies should comprehensively identify risks, analyze and decide how to manage these risks, and establish mechanisms to deal with continual changes in governmental, economic, industry, regulatory, and operating conditions. We recommended that SSA develop a long-term strategy for service delivery. In response to these recommendations, SSA appointed a chief strategic officer responsible for coordinating agency-wide planning efforts. SSA has also recently taken a key step toward developing a long-range strategic plan to address wide-ranging management challenges. SSI Program Complexity Is a Long-Standing Challenge As stated in Vision 2025, SSA plans to realize its service delivery vision in part by simplifying and streamlining its policies and procedures, and in 2013, SSA formed an SSI Simplification Workgroup that is tasked with identifying promising proposals that could simplify the SSI program and reduce improper payments. Program complexity has been a long- standing challenge for SSI that contributes to administrative expenses and the potential for overpayments.

Why GAO Did This Study The SSI program, administered by SSA, provides cash assistance to eligible aged, blind, and disabled individuals with limited financial means. In fiscal year 2014, the program paid nearly $56 billion in federally funded benefits to about 8.2 million individuals. The program has grown substantially in recent years, and is expected to grow more in the near future. SSA has a stewardship responsibility to guard against improper payments and to address program integrity issues that if left unchecked could increase the potential for waste, fraud, and abuse. SSA estimated that it made $5.1 billion in improper payments in fiscal year 2014. In addition, SSA's management concerns are wide ranging and include ensuring its workforce is able to meet service delivery needs. In this statement, GAO describes SSA's challenges with 1) ensuring SSI program integrity and 2) managing the program. This testimony is primarily based on GAO products issued from 2002 to 2015, which used multiple methodologies, including analyses of SSI administrative data from fiscal years 2000 to 2011; reviews of relevant federal laws, regulations, and guidance; and interviews of SSA officials. In May 2015, GAO obtained current data on improper payments and updates from SSA reports and guidance on actions taken to address GAO's past recommendations. What GAO Found The Social Security Administration (SSA) faces challenges with ensuring the integrity of the Supplemental Security Income (SSI) program's processes for preventing, detecting, and recovering overpayments. For example, SSA is required in certain circumstances to periodically review SSI recipients' medical and financial eligibility, yet the lack of timely reviews and difficulty getting complete financial information hinder SSA's ability to prevent and detect overpayments to recipients. SSA estimated that $4.2 billion of the payments it administered to SSI recipients in fiscal year 2013 were overpayments. In June 2012, GAO found that SSA had accumulated a substantial backlog of recipients' medical eligibility reviews, including for over 23,000 children with mental impairments who were deemed likely to medically improve when initially determined eligible for benefits. GAO recommended that SSA eliminate its backlog for these children and conduct timely reviews going forward, estimating based on fiscal year 2011 data that these actions could save more than $3.1 billion over 5 years by preventing related overpayments. SSA recently reported that it has increased the number of medical eligibility reviews conducted for SSI children in each year since 2012, completing nearly 90,000 reviews in fiscal year 2014—in contrast to the 25,000 reviews completed in fiscal year 2011—and plans to continue these efforts. In December 2012, GAO also reported that a lack of comprehensive, timely information on SSI recipients' financial accounts and wages led to overpayments. GAO noted that SSA had recently developed electronic tools to address these issues, and SSA reported that the agency is gaining experience using them. However, despite these efforts, in May 2015, the SSA Office of the Inspector General found that overpayments associated with financial account information have increased in recent years and recommended SSA continue researching initiatives that will help to reduce improper payments in the SSI program. SSA agreed to this recommendation. SSA faces several management challenges in administering SSI related to workload, service delivery, and program complexity. In 2013, GAO reported that as a result of an ongoing retirement wave, SSA faced a loss of institutional knowledge and expertise, which may result in increased review backlogs and improper payments. GAO recommended that SSA update its succession plan, in line with federal internal controls guidance that states that management should plan for succession and ensure continuity of needed skills and abilities. In response, SSA published a human capital document detailing its succession plans. Federal internal controls guidance also states that agencies should comprehensively identify and manage risks, and GAO also recommended SSA develop a long-term service delivery plan to determine, among other things, how SSA will address both program integrity and other workloads. In response, SSA published an April 2015 description of its vision for future service delivery and indicated it plans to develop a strategy for achieving this vision moving forward. SSA also noted the importance of simplifying its policies and procedures to meet its service delivery goals and SSA has plans to do so. Program complexity is a long-standing challenge that contributes to administrative expenses and potential overpayments. GAO is beginning work for this subcommittee related to how benefit amounts are calculated for multiple SSI recipient households, an area that SSA has considered for program simplification. What GAO Recommends GAO has previously made recommendations to help SSA strengthen its program oversight and address management challenges. In response, the agency has taken some steps and plans to do more.

gao_HEHS-96-64

gao_HEHS-96-64_0

During grantee budget years 1992, 1993, and 1994—a period of intense growth—about two-thirds of the 1,197 grantees had unspent balances at the end of each budget year. Larger Proportion of Carryover Funds Added to Grantee Awards in Grantee Budget Year 1994 Unspent balances occur when a grantee’s total award differs from the amount the grantee spent during its budget year. In grantee budget year 1994, we found that about three-fourths of carryover funding was added to awards as TOA, and the remainder was offset as NOA. For example, for both grantee budget years 1993 and 1994, we found that about 90 percent of carryover funds added to grantee awards was 1 year old, and the remainder was from 2 to 3 years old; and from about 70 to 90 percent of carryover funds offsetting grantee awards was from 1 to 2 years old, and the remainder was 3 or more years old. On the basis of our review of Head Start grantee files, the intended use of a large proportion of Head Start carryover funds from grantee budget years 1993 and 1994 combined was to be used for expanding program enrollments and renovating or buying facilities. On the basis of Head Start files, we determined in most cases that these unspent balances resulted from (1) small differences between grantees’ budget estimates and actual expenditures; (2) grantee problems renovating or constructing facilities, which delayed planned expenditures; and (3) the receipt of supplemental funding by grantees late in their budget year, which made it difficult for grantees to spend their funds before year’s end. Of the 12 Head Start regions, 2 are operated from the Department of Health and Human Services headquarters in Washington, D.C.—1 for Native Americans and the other for migrant workers.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the: (1) amount of Head Start funding unspent by program grantees at the end of budget years 1992 to 1994 and the reasons for these unspent funds; (2) proportion of carryover funds that were added to grantee awards and that are 1 or more budget years old; and (3) grantees' intended use of carryover funds. What GAO Found GAO found that: (1) about two-thirds of the grantees reviewed had unspent balances of $69,000 to $177,000 during budget years 1992 through 1994; (2) most of the unspent balances resulted from small differences between grantees' budget estimates and actual expenditures, problems related to building Head Start centers, and grantees' inability to spend their awards because of the Department of Health and Human Services (HHS) disbursement problems; (3) one-half of all the carryover funds in budget year 1993 and about three-fourths of the carryover funds in budget year 1994 were added to grantee awards in subsequent budget years; (4) about one-half and one-fourth of carryover funds in grantee budget years 1993 and 1994 offset grantee awards; (5) Head Start offset 70 to 90 percent of its grantee awards with carryover funds within 2 budget years of an unspent balance; and (6) carryover funds added to grantee awards were used to expand Head Start enrollments, build new facilities, purchase capital equipment and train staff.

gao_GAO-01-288

gao_GAO-01-288_0

We found three factors that comprise this ability. First, developers employed systems engineering to identify gaps between resources and customer wants before committing to a new product development. Second, customers and product developers were flexible before launch. Leeway existed to reduce expectations, defer them to future programs, or to invest more resources up front to eliminate gaps between resources and expectations. Third, the roles and responsibilities of the customer and the product developer were balanced, with the product developer given the responsibility to determine or significantly influence product requirements. In cases where these factors were not present at program launch, product development began with imbalanced product requirements. The result was an imbalance between product requirements and resources, which also resulted in cost and schedule increases. By this time, key features of the Crusader were defined. The best practices for balancing needs and resources before committing to a new product or weapon system development are to (1) conduct systems engineering to illuminate what has to be done to match the wants with the resources; (2) establish fixed cycle times for an initial product within an overall evolutionary approach to foster flexibility needed to make key trade-offs; and (3) maintain parity between requirement setters and product developers when translating customer needs into product requirements.

What GAO Found This report examines how best practices offer improvements to the way the Department of Defense defines and matches weapon system requirements to available resources such as cost, schedule, and mature technologies. GAO identified three factors that were key to matching needs and resources before product development began. First, developers employed the technique of systems engineering to identify gaps between resources and customer needs before committing to a new product development. Second, customers and developers were flexible. Leeway existed to reduce or defer customer needs to future programs or for the developer to make an investment to increase knowledge about a technology or design feature before beginning product development. Third, the roles and responsibilities of the customer and the product developer were matched, with the product developer being able to determine or significantly influence product requirements. In cases where these factors were not present at program launch, product development began without a match between requirements and resources. Invariably, this imbalance favored meeting customer needs by adding resources, which resulted in increased costs and later deliveries.

gao_GAO-02-449

gao_GAO-02-449_0

One Standard Form Used in the Recertification Process Is of Questionable Value to IRS; Another Is Potentially Confusing to Taxpayers Although IRS has revised some of the correspondence it sends taxpayers as part of the recertification process, two standard forms that are an integral part of the process can lead to unnecessary taxpayer burden because they (1) are of questionable value to the recertification process and/or (2) provide the taxpayer with inadequate or confusing information. IRS Asks for Information That Can Be Difficult for Taxpayers to Obtain or Is Inconsistent with What Examiners Accept Providing documentation to show that a child lived with the taxpayer has consistently been identified as the toughest EIC eligibility requirement to substantiate. Conclusions Administering the EIC is not an easy task for IRS. IRS has to balance its efforts to help ensure that all qualified persons claim the credit with its efforts to protect the integrity of the tax system by guarding against fraud and other forms of noncompliance associated with the EIC. IRS’s outreach and correspondence to taxpayers and its training of examiners have improved since then.

What GAO Found The earned income credit (EIC) is a refundable tax credit available to low-income, working taxpayers. Administering the EIC is not an easy task for the Internal Revenue Service (IRS). IRS has to balance its efforts to help ensure that all qualified persons claim the credit with its efforts to protect the integrity of the tax system and guard against fraud and other forms of noncompliance associated with EIC. Although IRS made some changes to its correspondence, improved its examiner training, and expanded taxpayer outreach, certain aspects of the recertification process continue to cause problems for taxpayers. Since the inception of the EIC Recertification Program in 1998, IRS has taken steps to improve some of the letters and forms it uses to correspond with taxpayers about the program. However, two standard forms that IRS uses in corresponding with taxpayers as part of the recertification process can lead to unnecessary taxpayer burden. IRS asks taxpayers to submit certain information as part of the process that can be difficult for some EIC claimants to obtain or is inconsistent with what many examiners consider acceptable.

gao_GAO-08-678

gao_GAO-08-678_0

Programs That Provide Housing Supports Other programs provide housing supports. This estimate is likely to be low because it is based on a survey that did not include individuals who were homeless, institutionalized, or incarcerated—populations that likely suffer high rates of mental illness. Our analysis also found that about 186,000 young adults received disability benefits from SSA in 2006 because their mental illness was so severe that they were found to be unable to engage in substantial gainful activity. At Least 2.4 Million Young Adults Had a Serious Mental Illness in 2006, and Many Suffered from Multiple Disorders and Did Not Graduate from High School According to our analysis of the NCS-R, an estimated 2.4 million young adults aged 18 through 26 had a serious mental illness in 2006— approximately 6.5 percent of the estimated 37 million young adults living in U.S. households. 1.) We also found that nearly all young adults with serious mental illness were diagnosed with more than one mental disorder. Young Adults with Serious Mental Illness Face Challenges Accessing Appropriate Support According to researchers, public officials, and advocates, young adults with serious mental illness can have difficulty finding services tailored to their needs, qualifying for adult programs, and navigating multiple programs and delivery systems. Selected States Provide Multidimensional Services to Young Adults with Serious Mental Illness Using Various Strategies Recognizing the challenges faced by young adults with serious mental illness, the four states we visited—Connecticut, Maryland, Massachusetts, and Mississippi—have designed programs with multidimensional services to help them transition into adulthood. They include broadening eligibility criteria for mental health services, employing some of the evidence-based practices promoted by SAMHSA, coordinating efforts across multiple state agencies, leveraging federal and state funding sources, and involving consumers and family members in developing policies and aligning services. They also try to integrate the services so that young adults do not have to navigate multiple discrete programs. Federal Agencies Have Supported Demonstrations, Provided Technical Assistance and Research, and Formed Interagency Working Groups The needs of young adults with serious mental illness have also received some attention from the federal government, which has, to some extent, supported state efforts to serve them through demonstrations, technical assistance, and research. This number is likely to include young adults who may not have been included in the NCS-R, such as those living in an institution and many with schizophrenia or psychosis. More specifically, to provide information on the number and demographic characteristics of young adults with serious mental illness, which we defined as individuals aged 18 through 26, we analyzed data from the federally funded National Comorbidity Survey-Replication, 2001-2003 (NCS-R), of the 2006 Current Population Survey, Annual Social and Economic Supplement (CPS), and two sources of data on individuals receiving disability benefits from the Social Security Administration (SSA): the 2006 Ticket Research File (TRF) and the National Beneficiary Survey, 2004 (NBS). To identify these states, we reviewed published research and interviewed federal and state officials, mental health researchers, and advocacy groups to learn of states that were viewed as offering progressive statewide or state-organized programs that focus specifically on young adults with serious mental illness. Appendix II: Federal Programs Identified by Bazelon as Helping Young Adults with a Serious Mental Illness (SMI) Appendix II: Federal Programs Identified by Bazelon as Helping Young Adults with a Serious Mental Illness (SMI) Engaging Persons with Disabilities in National and Community Services Grants Drug-Free Communities Support Program Grants Juvenile Justice and Delinquency Prevention State Formula Grant Title V Community Prevention Grants Program National Guard Youth ChalleNGe Program Elementary and Secondary School Counseling Program Federal Direct Student Loan and Family Education Loan Programs Grants for the Integration of Schools and Mental Health Systems Federal Supplemental Educational Opportunity Grants Safe and Drug Free Schools Vocational and Adult Education State Basic Grants Vocational Rehabilitation: Supported Employment State Grants Vocational Rehabilitation, Title I Formula Grants Community Mental Health Services Block Grant Comprehensive Community Mental Health Services for Children and Their Families Educational and Training Vouchers Program for Youths Aging out of Foster Care Health Care for the Homeless Healthy and Ready to Work Initiative John H. Chafee Foster Care Independence Program Maternal & Child Health Block Grant Medicaid Partnerships for Youth in Transition Projects for Assistance in Transition from Homelessness - PATH Runaway and Homeless Youth Act Programs State Adolescent Substance Abuse Treatment Coordination Substance Abuse Prevention and Treatment Block Grant Temporary Assistance for Needy Families Title IV-B and Promoting Safe and Stable Families Title IV-E – Payments for Children in Foster Care Youth Transition Into the Workplace Grant Safe Schools and Healthy Students Initiative Section 8 Housing Choice Vouchers Workforce Investment Act Youth Formula Grants Ticket-To-Work and Work Incentives Improvement Special Supplemental Nutrition for Women, Infants and Children (WIC) Appendix III: Evidence-Based Practices Promoted by SAMHSA Helps people stay out of the hospital and develop skills for living in the community, through treatment customized to individual needs delivered by a team of practitioners, available 24 hours a day. This program assists young adults in developing healthy relationships that can motivate them to change their behavior. The Transition to Adulthood among Adolescents Who Have Serious Emotional Disturbance. Kessler, R., and others. 2 (1995): 90-112.

Why GAO Did This Study The transition to adulthood can be difficult for young adults who suffer from a serious mental illness, such as schizophrenia or bipolar disorder. When these individuals are unsuccessful, the result can be economic hardship, social isolation, and in some cases suicide, all of which can pose substantial costs to society. Due to concerns about young adults with serious mental illness transitioning into adulthood, GAO was asked to provide information on (1) the number of these young adults and their demographic characteristics, (2) the challenges they face, (3) how selected states assist them, and (4) how the federal government supports states in serving these young adults and coordinates programs that can assist them. To do this work, GAO analyzed data based on national surveys, including the National Comorbidity Survey Replication (NCS-R), and administrative data from the Social Security Administration (SSA). GAO also reviewed published research; interviewed federal, state, and local officials, as well as mental health providers, experts, and advocacy groups; and conducted site visits in Connecticut, Maryland, Massachusetts, and Mississippi --four states that focus on this population. GAO did not make any recommendations. HHS made comments intended to clarify the report and we made changes as appropriate. What GAO Found GAO estimates that at least 2.4 million young adults aged 18 through 26--or 6.5 percent of the non-institutionalized young adults in that age range-- had a serious mental illness in 2006, and they had lower levels of education on average than other young adults. The actual number is likely to be higher than 2.4 million because homeless, institutionalized, and incarcerated persons were not included in this estimate--groups with potentially high rates of mental illness. Among those with serious mental illness, nearly 90 percent had more than one mental disorder, and they had significantly lower rates of high school graduation and postsecondary education. GAO also found that about 186,000 young adults received SSA disability benefits in 2006 because of a mental illness that prevented them from engaging in substantial, gainful activity. Young adults with serious mental illness can have difficulty finding services that aid in the transition to adulthood, according to researchers, public officials, and mental health advocates. Because available mental health, employment, and housing services are not always suited for young adults with mental illness, these individuals may not opt to receive these services. They also can find it difficult to qualify for adult programs that provide or pay for mental health services, disrupting the continuity of their treatment. Finally, navigating multiple discrete programs that address varied needs can be particularly challenging for them and their families. The four states GAO visited help young adults with serious mental illness transition into adulthood by offering programs that provide multidimensional services intended to be age and developmentally appropriate. These programs integrate mental health treatment with employment and other supports. To deliver these services, states use various strategies. They coordinate across multiple state agencies, leverage federal and state funding sources, and involve young adults and their families in developing policies and aligning supports. The needs of young adults with serious mental illness have also received attention from the federal government, and agencies have been providing some support to states through demonstrations, technical assistance, and research. Federal agencies have also established bodies to coordinate programs to serve those with mental health needs, youth with disabilities, and youth in transition, which may help improve service delivery for young adults with serious mental illness, as well.

gao_GAO-05-31

gao_GAO-05-31_0

FSA Has Made Progress Addressing Key Issues, but Has Not Completely Fulfilled Its Planning and Reporting Responsibilities FSA has made progress in addressing key issues in the areas of financial management and internal control, systems integration, program integrity, and determining the cost of administering its programs, but FSA has not completely fulfilled its responsibility with respect to developing performance plans and reports. FSA has completed several critical systems integration tasks but is not yet operating in a fully integrated environment. Financial Management and Internal Control For several years, independent auditors reported serious financial management problems at FSA, but in fiscal years 2002 and 2003, the agency received an unqualified—or “clean”—opinion on its financial statements. In addition, although the auditors identified two reportable conditions, they did not identify any material internal control weaknesses in FSA’s fiscal year 2003 audit. Cost of Administering FSA’s Programs As part of its effort to demonstrate that it has reduced the cost of administering its programs—one of the purposes established in the HEA— FSA is implementing an activity-based cost (ABC) model. However, FSA’s proposed ABC model was not fully operational as of July 2004. Once FSA’s cost model is fully tested and operational, FSA should be able to identify the full cost to administer its financial aid programs and reliably determine the changes in such costs over time. Although FSA had not previously prepared a performance plan, it had strategic objectives and annual goals, and its 2003 performance report clearly discusses FSA’s achievement of its annual goals. FSA Has Developed a Human Capital Strategy and Taken Steps to Increase the Accountability of Officials, but Both Efforts Have Weaknesses FSA has laid the foundation for a comprehensive human capital strategy and has taken steps to further its efforts to address the accountability of senior officials, but some of the human capital strategy’s components and the accountability system have weaknesses. For example, the plan outlines challenges the agency will likely face in coming years and discusses recognized weaknesses and challenges, such as the need to develop the skills of staff and maintain the focus of the agency’s leadership on human capital issues. However, we found weaknesses in some of the strategy’s components. FSA Has Taken Steps to Increase the Accountability of Officials, but Its Criteria for Awarding Bonuses Are Not Clear FSA has taken steps to increase the accountability of its senior officials— one of its purposes as a PBO. The new agreements do not include such information. FSA has also made progress in addressing its human capital management challenges, but weaknesses remain. We recommend that the Secretary of Education direct FSA’s Chief Operating Officer to issue clear guidance and detailed directions for teams to follow when performing comprehensive compliance reviews; develop 5-year performance plans with action steps that are linked to FSA’s strategic objectives and with specific performance measures or targets for its objectives; and include measures or trend data in FSA’s performance reports that clearly demonstrate whether the agency has made progress toward achieving its strategic objectives; revise the succession plan to include approaches that focus on the current and future capacity and needs as well as provide developmental projects or training for staff to prepare them to fulfill new duties; enhance systematic evaluation activities for its human capital initiatives such as the learning coupon; and establish and communicate clear criteria for awarding bonuses to senior staff. FSA also said that it has revised its succession plan. However, we were not provided a copy of this plan. In addition, FSA stated that it has made significant progress in the area of systems integration. Specifically, we analyzed the Higher Education Act (HEA) to understand the Title IV programs and to understand the purposes and requirements established for the Office of Federal Student Aid (FSA) when the Congress designated the agency as a performance- based organization (PBO).

Why GAO Did This Study In 2003, the Department of Education's Office of Federal Student Aid (FSA) managed about $60 billion in new financial aid. In 1998, the Congress designated FSA as a performance-based organization. In so doing, it specified purposes for the agency, such as to reduce program costs and increase accountability of its officials, and provided flexibilities such as allowing FSA to pay bonuses. Also FSA is required to annually prepare a performance plan and report and have performance agreements for its senior officials. Past reviews revealed serious problems and concerns about FSA's management. In January 2003, GAO reported that FSA had made progress but had not sufficiently addressed some key management issues. Also, GAO noted that FSA, like other agencies needed to address human capital issues. GAO assessed FSA's progress in (1) addressing key management issues and meeting requirements for planning and reporting, and (2) developing a human capital strategy and increasing the accountability of its officials. What GAO Found FSA has made progress addressing its key management issues; however, its plans and reports do not contain all the required information needed by the Congress and the public to assess FSA's progress in achieving its goals and purposes. FSA's significant improvements in its financial management and internal control are reflected in its receiving an unqualified or "clean" opinion on its financial statements for fiscal years 2002 and 2003. In addition, FSA's fiscal year 2003 financial audit did not identify any material internal control weaknesses. FSA has also made progress in other areas, but to a lesser extent. FSA completed several critical systems integration tasks, but full systems integration is several years away. In addition, FSA has addressed many program integrity issues--factors that could affect the vulnerability of student aid programs to fraud, waste, and abuse--but has not developed guidance to ensure that its comprehensive compliance reviews are being performed as expected. Furthermore, FSA has developed a cost model that has the potential to identify the full cost of its activities and changes in costs over time, but as of July 2004, the model was not fully operational. As a result, FSA has not been able to demonstrate that it has reduced the cost of administering its programs. Also, FSA issued a 5-year performance plan and annual performance reports, but neither included specific measures needed to determine whether FSA has made progress toward meeting its longer-term strategic objectives. FSA has developed a comprehensive human capital strategy and has taken steps to increase the accountability of most of its officials, but some of the human capital strategy's components and the accountability system have weaknesses. FSA's human capital plan describes the agency's human capital strategy and the strategy's components. For example, FSA has a draft succession plan to prepare for the retirement of key staff. However, this plan has weaknesses. The draft succession plan shows that the agency will redistribute the duties of most retiring staff but does not discuss how the agency will develop the skills of remaining staff to take over new responsibilities. To increase the accountability of its officials, FSA changed from a pass-fail to multilevel performance appraisal systems for its senior officials and included job-specific goals in their performance agreements based on their areas of responsibility. FSA also changed the way it awards performance bonuses, but the criteria were not clear.

gao_GAO-11-472

gao_GAO-11-472_0

Scope and Methodology To determine the extent to which the federal government’s response to the helium-3 shortage was affected by DOE’s management of helium-3, we reviewed the DOE Isotope Program’s strategic planning documents, helium-3 sales data, and information on NNSA’s inventory of helium-3. Also, we used the federal standards for internal control to assess DOE’s management of helium-3. To describe the steps that the federal government is taking, if any, to increase the helium-3 supply and develop alternatives to helium-3, we reviewed feasibility studies that presented options for alternative sources and recycling unused equipment and interviewed representatives from Ontario Power Generation, a Canadian power company. In radiation detection equipment, helium-3 is used to detect neutrons that are emitted by nuclear material. Like the United States, Russia extracts helium-3 from its tritium stockpile. Federal Response to the Helium-3 Shortage Was Delayed by Weaknesses in DOE’s Management of Helium-3 The federal government’s awareness of and response to the helium-3 shortage was delayed because no DOE entity had stewardship responsibility for the overall management of helium-3. Without stewardship responsibility, key risks to managing helium-3, such as the lack of understanding of the helium-3 inventory and the demand for helium-3, were not identified or mitigated by either entity. Officials from DOE’s Isotope Program and NNSA Did Not Communicate about the Helium-3 Inventory or Its Extraction Rate While the Isotope Program’s mission includes selling isotopes and providing related isotope services, senior program officials said that they interpret this mission to exclude helium-3 and other isotopes that the program sells but whose supply it does not control. Helium-3 inventory and production information was not shared between officials at the Isotope Program and NNSA because, according to NNSA officials, this information was generally treated as classified by NNSA out of concern that the inventory and annual extraction rate could be used to calculate the size of the U.S. tritium stockpile, which is classified. One of the standards for internal control in the federal government—information and communications—states that information should be recorded and communicated to management and others within an entity in a form and within a time frame that enables them to carry out their responsibilities. Isotope Program and NNSA officials told us that this lack of communication contributed to the government’s delayed response to the helium-3 shortage. In doing so, the policy committee established the following three priorities for allocating the limited supply of helium-3: Priority 1: Applications for which there are no alternatives to helium-3, which includes, for example, research that requires ultra-low temperatures that can be achieved only with helium-3. Priority 2: Programs for detecting nuclear material at foreign ports and borders, which includes, for example, NNSA’s Second Line of Defense program that deploys radiation detection portal monitors at key overseas ports and border crossings. Priority 3: Programs for which substantial costs have already been incurred, such as DOE’s Spallation Neutron Source research facility that conducts physics research. Key Federal Agencies Are Collaborating to Increase the Helium-3 Supply and Develop Alternatives DOE and NNSA are taking actions to increase the supply of helium-3 by, among other things, pursuing other sources and recycling helium-3 from retired equipment. Specifically, NNSA officials said that NNSA is in discussions with Ontario Power Generation (OPG) to determine the feasibility of obtaining helium-3 from OPG’s stores of tritium. OPG has accumulated this tritium as a by-product of producing electricity using heavy-water nuclear reactors. In addition to increasing the supply of helium-3, federal agencies and private companies are researching alternatives to helium-3 for several applications in order to decrease demand. Conclusions Facing a critical shortage of helium-3 since 2008, DOE and other federal agencies are collaborating to bring supply and demand into balance, while supporting essential applications for which there are no alternatives. Once the stewardship for these isotopes has been assigned, we further recommend that the Secretary of Energy direct the head of the responsible office(s) to take the following three actions: develop and implement a communication process that provides complete information to the assigned entity on the production and inventory of isotopes that are produced outside the Isotope Program; develop strategic plans that, among other things, systematically assess and document risks to managing the isotopes and supporting activities, such as not having control over the supply of these isotopes, and implement actions needed to mitigate them; and develop and implement a method for forecasting the demand of isotopes that is more accurate than the one that is currently used.

Why GAO Did This Study Helium-3 gas is a key component of equipment used at ports and border crossings to detect radiation and prevent the smuggling of nuclear material into the United States, among other uses. The National Nuclear Security Administration (NNSA), a separate agency within the Department of Energy (DOE), extracts helium-3 and controls the inventory. Since 2003, NNSA has made helium-3 available for sale to DOE's Isotope Development and Production for Research and Applications Program (Isotope Program). After September 11, 2001, demand increased for radiation detection equipment, and in 2008, the federal government learned that it faced a severe domestic shortage of the gas. GAO was asked to review DOE's management of helium-3 to (1) determine the extent to which the federal government's response to the helium-3 shortage was affected by DOE's management of helium-3; (2) determine the federal government's priorities for allocating the limited supply of helium-3; and (3) describe the steps that the federal government is taking to increase the helium-3 supply and develop alternatives to helium-3. GAO reviewed DOE and NNSA documents and interviewed cognizant agency officials. What GAO Found The federal government's awareness of and response to the helium-3 shortage was delayed because no DOE entity had stewardship responsibility for the overall management of helium-3--a by-product of the radioactive decay of tritium, a key component of the U.S. nuclear weapons program. Although the Isotope Program's mission includes selling isotopes and providing related isotope services, senior program officials said that they interpret this mission to exclude helium-3 and 16 other isotopes that the program sells but whose supply it does not control. As a result of this weakness in DOE's management of helium-3, officials at the Isotope Program and NNSA did not communicate about the helium-3 inventory or its extraction rate. According to NNSA and Isotope Program officials, they communicated with each other about how much helium-3 to sell each year and at what price but not about the size of the helium-3 inventory or extraction rate because NNSA generally treated this information as classified, due to concerns that the helium-3 inventory could be used to calculate the size of the U.S. tritium stockpile. NNSA and Isotope Program officials told GAO that this lack of communication contributed to the federal government's delayed response to the helium-3 shortage. The standards for internal control in the federal government state that information should be communicated to management and others within a time frame that enables them to carry out their responsibilities. Further, without stewardship by a DOE entity, key risks to managing helium-3, such as the lack of complete information on the production and inventory of helium-3, were not identified or mitigated. The federal standards for internal control state that management should assess the risks faced from external and internal sources and decide what actions to take to mitigate them. Facing this critical shortage of helium-3, DOE and other federal agencies are collaborating to bring supply and demand into balance. Specifically, in July 2009, an interagency policy committee was formed, which halted allocations of helium-3 for domestic radiation detection equipment and established three priorities for allocating helium-3: (1) applications for which there are no alternatives to helium-3 have first priority (e.g., research that can be achieved only with helium-3); (2) programs for detecting nuclear material at foreign ports and borders have second priority; and (3) programs for which substantial costs have already been incurred have third priority (e.g., a DOE research facility that conducts physics research). To increase the supply of helium-3, the federal government is, among other things, pursuing other sources and developing alternatives. Specifically, NNSA is in discussions with Ontario Power Generation (OPG), a power company in Ontario, Canada, to obtain helium-3 from its stores of tritium. OPG has accumulated tritium as a by-product of producing electricity using a type of nuclear reactor not found in the United States. Also, federal agencies and private companies are researching alternative technologies to replace helium-3 in several applications to decrease demand. What GAO Recommends GAO recommends, among other things, that DOE clarify whether the stewardship for those isotopes produced outside the Isotope Program, such as helium-3, rests with the program or another DOE entity. DOE stated that it understands and can implement these recommendations.

gao_GAO-08-1052T

gao_GAO-08-1052T_0

There are also potential costs and trade-offs. Highway public-private partnerships can also potentially provide mobility and other benefits to the public sector, through the use of tolling. Though concession agreements can limit the extent to which a concessionaire can raise tolls, it is likely that tolls will increase on a privately operated highway to a greater extent than they would on a publicly run toll road. Unlike public toll authorities, private-sector firms pay federal income tax. According to financial and legal experts, including those who were involved in the lease of the Chicago Skyway in Chicago, Illinois, and the Indiana Toll Road, the useful economic life of those facilities was lengthy. The requirement to demonstrate effective asset ownership thus required lengthy partnership concession periods and contributed to the 99-year and 75-year concession terms for the Chicago Skyway and Indiana Toll Road, respectively. Determining the extent of depreciation deductions associated with highway public-private partnerships, and the extent of foregone revenue to the federal government, if any, from these deductions is difficult to determine because they depend on such factors as taxable income, total deductions, and marginal tax rates of private-sector entities involved with highway public-private partnerships. Financial experts told us that in the absence of the depreciation benefit, the concession payments to Chicago and Indiana would likely have been less than the $1.8 billion and $3.8 billion paid, respectively. State and local officials in the U.S. projects we reviewed heavily relied on concession terms. While these protections are important, governments in other countries, including Australia and the United Kingdom, have developed systematic approaches to identifying and evaluating public interest before agreements are entered into, including the use of public interest criteria, as well as assessment tools, and require their use when considering private investments in public infrastructure. While similar tools have been used to some extent in the United States, their use has been more limited. Using up-front public interest analysis tools can assist public agencies in determining the expected benefits and costs of a project and an appropriate means to undertake the project. Not using such tools may lead to certain aspects of protecting public interest being overlooked. Direct Federal Involvement with Highway Public- Private Partnerships Has Generally Been Limited, but Identification of National Interests in Highway Public- Private Partnerships Has Been Lacking Direct federal involvement in highway public-private partnerships has generally been limited to projects in which federal requirements must be followed because federal funds have or will be used. Recent highway public-private partnerships have involved sizable investments of funds and significant facilities and could pose national public interest implications such as interstate commerce that may transcend whether there is direct federal investment in a project. Given the minimal federal funding in highway public-private partnerships to date, few mechanisms exist to consider potential national public interests in them. We have called for a fundamental reexamination of the nations surface transportation policies, including creating well-defined goals based on identified areas of national interest, incorporating performance and accountability into funding decisions, and more clearly defining the role of the federal government as well as the roles of state and local governments, regional entities, and the private sector. Such a reexamination provides an opportunity to identify emerging national public interests (including tax considerations), the role of the highway public-private partnerships in supporting and furthering those national interests, and how best to identify and protect national public interests in future public-private partnerships. This is no easy task, however.

Why GAO Did This Study The private sector is increasingly involved in financing and operating highway facilities under long-term concession agreements. In some cases, this involves new facilities; in other cases, firms operate and maintain an existing facility for a period of time in exchange for an up-front payment to the public sector and the right to collect tolls over the term of the agreement. In February 2008 GAO reported on (1) the benefits, costs, and trade-offs of highway public-private partnerships; (2) how public officials have identified and acted to protect the public interest in these arrangements; and (3) the federal role in highway public-private partnerships and potential changes in this role. The Senate Finance Committee asked GAO to testify on this report and to highlight its discussion of tax issues. GAO reviewed the experience of projects in the U.S. (including the Chicago Skyway and Indiana Toll Road agreements), Australia, Canada, and Spain. What GAO Found Highway public-private partnerships provide potential benefits, such as sharing risks with the private sector, more efficient operations and management of facilities and, through the use of tolling, increased mobility and more cost-effective investment decisions. There are also potential costs and trade-offs--there is no "free" money in public-private partnerships and it is likely that tolls on a privately operated highway will increase to a greater extent than they would on a publicly operated toll road. There are also financial trade-offs. Unlike public toll authorities, the private sector pays federal income taxes and can deduct depreciation on assets for which they have effective ownership. The extent of these deductions and the amount of foregone revenue, if any, to the federal government is difficult to determine. Demonstrating effective ownership may require lengthy concession periods and, according to experts involved in the lease of the Chicago Skyway and Indiana Toll Road, contributed to the 99-year and 75-year concession terms on these two facilities, respectively. Experts also told us that in the absence of the depreciation benefit, the concession payments to Chicago and Indiana would likely have been less than $1.8 billion and $3.8 billion, respectively. Highway public-private partnerships in the U.S. that GAO reviewed sought to protect the public interest largely through concession agreement terms prescribing performance and other standards. While these protections are important, governments in other countries, such as Australia, have developed systematic approaches to identifying and evaluating public interest and require their use when considering private investments in public infrastructure. Similar tools have been used to some extent in the United States, but their use has been more limited. Using up-front tools can also assist public agencies in determining the expected benefits and costs of a project and an appropriate means to deliver the project. Not using such tools may lead to certain aspects of protecting the public interest being overlooked. While direct federal involvement has been limited to where federal investment exists and while the DOT has actively promoted them, highway public-private partnerships may pose national public interest implications such as interstate commerce that transcend whether there is direct federal investment in a project. However, given the minimal federal funding in highway public-private partnerships to date, little consideration has been given to potential national public interests in them. GAO has called for a fundamental reexamination of our surface transportation policies, including creating well-defined goals based on identified areas of national interest. This reexamination provides an opportunity to identify emerging national public interests (including tax considerations), the role of the highway public-private partnerships in supporting and furthering those national interests, and how best to identify and protect national public interests in future highway public-private partnerships.

gao_GAO-12-308

gao_GAO-12-308_0

Since its creation, the ITS Joint Program Office has overseen allocation and expenditure of more than $3 billion for deploying ITS applications and researching new technologies. State and Local Governments Use ITS in Various Ways to Manage Congestion, and Some New Uses of ITS Are Promising State and local governments currently use ITS technologies in a variety of ways to monitor traffic conditions, control traffic flow, and inform travelers. We identified several emerging uses of ITS that have significant potential to reduce traffic congestion. Transportation agencies can use ITS technologies to control arterial traffic through traffic signals. Dynamic message signs are popular for communicating traffic information to travelers. Further Use of Leading Practices Could Enhance DOT’s Promotion of ITS and Better Address Challenges DOT activities sponsored and funded by RITA and FHWA promote and support the use of ITS and address the challenges that state and local governments face in deploying and effectively using ITS technologies. According to FHWA officials, an internal analysis found that a similar percentage of funds, or between about $800 million and $1.3 billion, of FHWA’s American Recovery and Reinvestment Act funds were used for ITS deployments, with the majority of the total American Recovery and Reinvestment Act funds being obligated between early 2009 and March 2011. According to the experts we interviewed, RITA’s and FHWA’s publications and guidance related to ITS, as well as the ITS databases, were not considered as useful as other activities.agencies noted that FHWA’s website is helpful, four experts and one While several transportation state and local official said that RITA’s and FHWA’s websites have too much information and are not well organized. Transportation agencies may not be aware of all of the ITS-related activities and information offered by RITA and FHWA. However, RITA has not yet determined to what extent its strategy will address these issues. Several options have been proposed for improving communication about ITS resources and facilitating learning exchanges. It will be important for DOT to work with its external partners and determine its role in these efforts to ensure it is fully leveraging its resources in promoting the use of ITS and maximizing its reach. Recommendations for Executive Action To effectively target efforts, leverage resources, better promote and support the use of ITS technologies by state and local governments, and improve access to and awareness of ITS resources, we recommend that the Secretary of Transportation take the following three actions: clearly define and document the respective roles and responsibilities of RITA and FHWA in promoting and supporting the use of ITS, revise ITS information on RITA and FHWA websites to improve its usefulness for state and local audiences based on their needs, and include in RITA’s strategy for promoting the adoption of ITS technologies plans for collaborating with external partners to (1) further enhance communication about the availability of ITS resources and (2) facilitate learning exchanges. DOT said it would consider our recommendations, and provided technical clarifications that we incorporated into the report as appropriate. Appendix I: Objectives, Scope, and Methodology This report addresses (1) how state and local governments currently use Intelligent Transportation Systems (ITS) technologies to manage traffic and emerging uses of these technologies that have the greatest potential to reduce congestion, (2) what types of challenges state and local governments face in using ITS technologies to manage traffic congestion, and (3) the extent to which the Department of Transportation’s (DOT) promotion and support of state and local governments’ use of ITS technologies have met leading practices and responded to challenges they face. We synthesized information from interviews with officials from DOT, including the Research and Innovative Technology Administration (RITA) and Federal Highway Administration (FHWA). FHWA provides federal aid highway funds to states, some of which can be applied to ITS projects.

Why GAO Did This Study Traffic congestion burdens the nation’s quality of life and will likely grow substantially if current trends continue. Intelligent Transportation Systems (ITS) are a range of technologies that can reduce congestion at less cost than some other approaches. The U.S. Department of Transportation’s (DOT) Research and Innovative Technology Administration (RITA) is responsible for promoting and supporting the use of ITS in coordination with other modal administrations, including the Federal Highway Administration (FHWA). Since 1994, DOT has overseen the allocation and expenditure of more than $3 billion for deploying and researching ITS. GAO was asked to address (1) the current and emerging uses of ITS technologies by state and local governments, (2) the challenges these governments face in using ITS, and (3) the extent to which DOT’s efforts to promote and support ITS address these challenges and follow leading practices. To conduct this work GAO visited four sites, and interviewed and analyzed documents and data from DOT and state and local transportation officials, ITS experts, and other stakeholders. What GAO Found State and local governments currently use ITS technologies in various ways to monitor and control traffic and inform travelers. For example, transportation agencies use cameras to monitor traffic conditions, signal technologies to control traffic flow, and dynamic message signs to inform travelers about travel conditions. By interviewing experts, GAO identified several emerging uses of ITS that have significant potential to reduce traffic congestion. For example, integrating traffic and emergency services data can allow for enhanced detection of and response to roadway incidents. However, some cities use ITS and the emerging uses to a much greater extent than others. State and local governments face multiple challenges in using ITS technologies to manage traffic congestion. For example, some agencies do not fully integrate ITS into their planning processes. Funding the deployment and maintenance of ITS technologies is also an issue, because of funding constraints and competition with other needed infrastructure projects. Further, agencies struggle to attract and retain staff with the skills necessary to manage and maintain ITS systems and may not have leaders who support ITS. Finally, coordination among agencies can enhance the effectiveness of ITS through such activities as synchronized traffic signals along a corridor, but such coordination can be difficult given agencies’ differing perspectives and priorities. RITA’s and FHWA’s activities to promote and support the use of ITS technologies help address these challenges. Both offer ITS-related training and technical assistance and provide guidance and information on their websites. FHWA estimates that states used about $800 million to $1.3 billion of their eligible 2010 federal aid highway funds and $798 million to $1.3 billion of American Recovery and Reinvestment Act funds on ITS. Further adoption of leading practices could improve these efforts. RITA’s and FHWA’s respective roles in these efforts are not clearly defined, potentially inhibiting their ability to effectively leverage resources. Some experts and transportation agencies noted that ITS-related information on RITA’s and FHWA’s websites is not always presented in a way that is useful and some agencies lack awareness of some ITS activities sponsored by DOT. Several options have been proposed to improve communication about ITS-related activities and facilitate the sharing of ITS information among state and local officials. While RITA intends to develop a new strategy in 2012 for promoting the use of ITS, it has not yet determined whether it will incorporate any of these proposals. What GAO Recommends GAO recommends that the Secretary of Transportation clearly define the roles of RITA and FHWA in promoting the use of ITS, improve the usefulness of ITS information on the agencies’ websites, and include in its strategy plans to further enhance communication on ITS activities. DOT reviewed a draft of this report, said it would consider our recommendations, and provided technical comments.

gao_GAO-04-808

gao_GAO-04-808_0

Some stakeholders who use companies’ filings, such as investors and researchers, believe that the existing environmental disclosure requirements allow too much flexibility and are too narrow in scope to capture important environmental information. Other stakeholders, primarily those who prepare or file reports with SEC, hold the opposite view, and said that the scope of the current requirements and guidance is adequate and that companies need flexibility to accommodate their individual circumstances. Little Is Known about the Extent to Which Companies Are Disclosing Environmental Information in SEC Filings Determining what companies should be disclosing in SEC filings is extremely challenging without having access to company records and considering the flexibility in the disclosure requirements. Some of the studies provide tentative insights about the amount of environmental information companies are disclosing but not the adequacy. One of the consequences of disclosure requirements that are subject to interpretation—and of not having direct access to company records—is the difficulty of determining with any certainty whether a low level of disclosure indicates that the company does not have existing or potential environmental liabilities, has determined that such liabilities are not material, or is not adequately complying with disclosure requirements. Eleven of the studies found variations in the amount of information specific companies were disclosing in their filings with SEC. Adequacy of SEC’s Efforts to Monitor and Enforce Compliance with Environmental Disclosure Requirements Cannot Be Determined Without better information on the extent of environmental disclosure and results of SEC’s reviews of companies’ filings, the adequacy of SEC’s efforts to monitor and enforce compliance with environmental disclosure requirements cannot be determined. Over the years, SEC and EPA have made sporadic efforts to coordinate on improving environmental disclosure. Currently, EPA periodically shares limited information on specific, environment-related legal proceedings, such as those involving monetary sanctions. SEC Does Not Systematically Track or Analyze the Results of Its Oversight Efforts SEC’s primary means to monitor and enforce requirements for the disclosure of material information—including environmental matters—are the review of companies’ filings and the issuance of comment letters to obtain additional information, as appropriate. If a reviewer questions the accuracy or completeness of the filing and believes that further disclosures may be warranted, SEC issues a comment letter requesting additional information. Experts Suggest Changes to Requirements and Guidance, Increased Oversight, and Nonregulatory Actions to Increase and Improve Environmental Disclosure The experts that we surveyed generally concur with the concerns identified by stakeholders and offered a variety of suggestions for improving disclosure or, in some instances, comments about why particular proposals are unnecessary or unworkable. The suggestions we obtained fell into three broad categories: modifying disclosure requirements and guidance, increasing oversight and enforcement, and adopting nonregulatory approaches to improving disclosure. Among other things, SEC should consider organizing the information so that agency officials can systematically determine the most frequently identified problem areas, analyze trends over time or within particular industries, and assess the need for additional guidance in certain areas. Scope and Methodology To determine key stakeholders’ views on how well SEC has defined the requirements for environmental disclosure, we first identified what environmental information companies are required to disclose. To obtain suggestions on actions for increasing and improving environmental disclosure, we conducted a Web-based survey of 30 experts on environmental disclosure issues. Securities and Exchange Commission, Staff Accounting Bulletin No. Objective: To examine the extent to which companies disclosed environmental information in their annual reports to shareholders.

Why GAO Did This Study To help investors make informed decisions, the Securities and Exchange Commission (SEC) enforces federal securities laws requiring companies to disclose all information that would be considered important or "material" to a reasonable investor, including information on environmental risks and liabilities, in reports filed with SEC. To monitor companies' disclosures, SEC reviews their filings and issues comment letters requesting revisions or additional information, if needed. This report addresses (1) key stakeholders' views on how well SEC has defined the requirements for environmental disclosure, (2) the extent to which companies are disclosing such information in their SEC filings, (3) the adequacy of SEC's efforts to monitor and enforce compliance with disclosure requirements, and (4) experts' suggestions for increasing and improving environmental disclosure. What GAO Found Key stakeholders disagree about how well SEC has defined the disclosure requirements for environmental information. Some stakeholders who use companies' filings, such as investor organizations and researchers, maintained that the requirements allow too much flexibility and are too narrow in scope to capture important environmental information. Other stakeholders, primarily those who prepare or file reports with SEC, said that the scope of the current requirements and guidance is adequate and that companies need flexibility to accommodate their individual circumstances. Little is known about the extent to which companies are disclosing environmental information in their filings with SEC. Determining what companies should be disclosing is extremely challenging without access to company records, considering the flexibility in the disclosure requirements. Despite strong methodological limitations, some studies provide tentative insights about the amount of environmental information companies are disclosing and the variation in disclosure among companies. However, the problem in evaluating the adequacy of disclosure is that one cannot determine whether a low level of disclosure means that a company does not have existing or potential environmental liabilities, has determined that such liabilities are not material, or is not adequately complying with disclosure requirements. The adequacy of SEC's efforts to monitor and enforce compliance with environmental disclosure requirements cannot be determined without better information on the extent of environmental disclosure. In addition, SEC does not systematically track the issues raised in its reviews of companies' filings and thus, does not have the information it needs to analyze the frequency of problems involving environmental disclosure, compared with other types of disclosure problems; identify trends over time or within particular industries; or identify areas in which additional guidance may be warranted. Over the years, SEC and EPA have made sporadic efforts to coordinate on improving environmental disclosure; currently, EPA periodically shares limited information on specific, environment-related legal proceedings, such as those involving monetary sanctions. Using a Web-based survey of 30 experts that use disclosure information, including investor organizations and financial analysts among others, GAO obtained suggestions for increasing and improving environmental disclosure in three broad categories: modifying disclosure requirements and guidance, increasing oversight and enforcement, and adopting nonregulatory approaches to improving disclosure. Some of the experts offered comments about why particular proposals are unnecessary or unworkable. GAO also sought the views of representatives of companies that file reports with SEC, who questioned the value and feasibility of some suggestions.

gao_HEHS-98-21

gao_HEHS-98-21_0

In fiscal year 1996, FDA reviewed the results of 287 inspections of foreign pharmaceutical manufacturers conducted by its investigators in 35 countries (see figure 1). Timeliness of Inspection Reports Has Improved, but Delays in Taking Prompt Enforcement Actions Continue FDA’s 1988 internal evaluation found that delays in the submission of final inspection reports by investigators made it difficult for FDA to take prompt enforcement action against foreign manufacturers that did not comply with federal regulations that ensure the safety, purity, and quality of pharmaceutical products. For domestic manufacturers with a history of serious GMP manufacturing problems, FDA typically conducts a reinspection to verify that promised corrective actions have been implemented. As a result of downgrading, FDA conducted far fewer reinspections of foreign manufacturers than was recommended by its investigators. However, CDER officials downgraded the inspection classifications and recommendations for enforcement action in 41 of these inspections, based on foreign manufacturers’ promises to implement corrective actions. The OAI classification is the most serious and requires FDA to reinspect the manufacturer to verify that it has improved its production processes to comply with GMPs. FDA Conducts Infrequent Routine Inspections of Foreign Pharmaceutical Manufacturers FDA’s 1988 and 1993 internal evaluations found that while FDA routinely conducted surveillance inspections of domestic pharmaceutical manufacturers, foreign manufacturers were typically inspected only when they were listed in new drug applications. Enforcing GMP compliance through routine surveillance inspections is FDA’s most comprehensive program for monitoring the quality of marketed pharmaceutical products. FDA Plans to Conduct More Routine Inspections of Foreign Pharmaceutical Manufacturers In June 1997, FDA’s foreign inspection working group proposed a strategy for scheduling more routine surveillance inspections of accepted foreign pharmaceutical manufacturers. Serious Problems Persist in Managing Foreign Inspection Data Although both FDA’s 1988 and 1993 internal evaluations identified serious problems in its foreign inspection data systems, the agency still lacks a comprehensive, automated system for managing its foreign inspection program. As a result, essential foreign inspection information is not readily accessible to the different FDA units that are responsible for planning, conducting, and reviewing inspections and taking enforcement actions against foreign manufacturers. As a result, foreign inspection data are not readily accessible to the different FDA units responsible for conducting foreign inspections and reviewing inspection results. FDA has taken some action to address these problems. Recommendations to the Commissioner of the Food and Drug Administration To improve the effectiveness of FDA’s foreign inspection program to ensure that only safe, pure, and high quality drugs are imported into the United States, we recommend that the Commissioner of FDA ensure that serious manufacturing deficiencies are promptly identified and enforcement actions are initiated by requiring investigators to prepare inspection reports and CDER to issue warning letters within established time periods and reexamine and revise FDA’s foreign inspection strategy to provide adequate assurance that all foreign manufacturers exporting approved pharmaceutical products to the United States comply with U.S. standards.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Food and Drug Administration's (FDA) efforts to correct problems identified in earlier evaluations of its foreign drug inspection program, focusing on FDA's efforts to: (1) prepare inspection reports and take enforcement actions against foreign pharmaceutical manufacturers in a timely manner; (2) improve the consistency with which FDA evaluates the results of foreign inspections and conducts reinspections to verify that foreign pharmaceutical manufacturers have corrected serious deficiencies; (3) conduct routine inspections of foreign pharmaceutical manufacturers to monitor their compliance with U.S. quality standards; and (4) improve the management of data needed for planning inspections, monitoring inspection results, and taking enforcement actions. What GAO Found GAO noted that: (1) FDA has taken several actions to address problems with its foreign inspection program that were identified in two previous internal evaluations; (2) although FDA has improved the timeliness with which investigators submit inspection reports, in fiscal year (FY) 1996, almost 60 percent were still submitted later than called for by agency standards, including half the reports that identified the most serious deficiencies in manufacturing quality; (3) during FY 1996 and FY 1997, headquarters review personnel continued to downgrade the classifications of inspections recommended by its field investigators who conducted the inspections; (4) most of the decisions to downgrade the classifications were based on foreign manufacturers' promises to implement corrective actions; (5) as a result, FDA conducted fewer reinspections of these facilities to verify that foreign manufacturers had corrected serious manufacturing deficiencies; (6) FDA conducts infrequent routine inspections of foreign manufacturers to ensure that they continue to comply with U.S. quality standards, although routine surveillance inspections constitute FDA's most comprehensive program for monitoring the quality of marketed pharmaceutical products; (7) most inspections of foreign pharmaceutical manufacturers are performed to approve the marketing of new products; (8) routine surveillance inspections of manufacturers producing approved pharmaceutical products already marketed in the United States accounted for only 20 percent of FDA's foreign inspections during FY 1995; (9) as a result, routine inspections of foreign pharmaceutical manufacturers occur with far less frequency than the 2-year interval required for domestic manufacturers; (10) FDA has been striving to improve its management of data needed for planning inspections, monitoring inspection results, and taking enforcement actions; (11) at present, FDA relies on 15 separate systems to identify foreign pharmaceutical manufacturers, plan foreign inspection travel, track inspection results, and monitor enforcement actions; (12) as a result, essential foreign inspection data are not readily accessible to the different FDA units that are responsible for planning, conducting, and reviewing inspections and taking enforcement actions against foreign manufacturers; and (13) FDA is developing a comprehensive, agencywide automated system to provide better data for managing its foreign inspection program.

gao_GAO-06-1070

gao_GAO-06-1070_0

Determining Top Secret Clearances for Industry Personnel Averaged More than One Year and Government Statistics Did Not Portray All Delays Industry personnel contracted to work for the federal government waited more than one year on average to receive top secret security clearances, and government statistics did not portray the full length of time it takes many applicants to obtain a clearance. Delays in the clearance process may cost money and pose threats to national security. Delays in the Application- Submission and Investigation Phases Are Caused by Many Factors Industry personnel granted eligibility for top secret clearances from DISCO in January and February 2006 waited an average of 446 days for their initial clearance or 545 days for their clearance update. Investigative Phase Took Longer Than the Goal Specified Investigations for the initial top secret clearances of industry personnel took an average of 286 days for DISCO cases adjudicated in January and February 2006 (see table 2). The shorter period of 171 days is less than the 180 days provided as a goal in the governmentwide plan. In December 2006, IRTPA will require that at least 80 percent of the adjudications be completed within 30 days. We have noted in the past that focusing on completing initial clearance investigations could negatively affect the completion of clearance-update investigations and thereby increase the risk of unauthorized disclosure of classified information. In addition, use of incomplete investigative reports and not fully documenting adjudicative considerations may undermine the government’s efforts to increase the acceptance of security clearances granted by other federal agencies. Almost All of the Sampled Investigative Reports Were Incomplete In our review of 50 initial investigations randomly sampled from the population used in our timeliness analyses, we found that almost all (47 of 50) of the investigative reports were missing documentation required by the federal investigative standards. At least half of the 50 reports that we examined did not contain the required documentation in three investigative areas: residence, employment, and education (see fig. Although federal standards indicate that investigations may be expanded as necessary to resolve issues, according to OPM, (1) issue resolution is a standard part of all initial investigations and periodic reinvestigations for top secret clearances and (2) all issues developed during the course of an investigation should be fully resolved in the final investigative report provided to DOD. We found a total of 36 unresolved issues in 27 of the investigative reports. Foreign influence issues were unresolved. DISCO Adjudicators Granted Top Secret Clearance Eligibility for Cases with Missing Information DISCO adjudicators granted top secret clearance eligibility for the 27 industry personnel whose investigative reports contained unresolved issues without requesting additional information or documenting in the adjudicative report that the information was missing. In November 2005, we were optimistic that the government plan for improving the clearance process prepared under the direction of OMB’s Deputy Director for Management would be a living document that would provide the strategic vision for correcting long- standing problems in the personnel security clearance process. Recommendations for Executive Action To improve the timeliness of the processes used to determine whether or not industry personnel are eligible for a top secret clearance, we are making the following recommendations to the Director of the Office of Management and Budget to direct the Deputy Director for Management, in his oversight role of the governmentwide clearance process, to take the following actions: Direct OPM and DOD to fully measure and report all of the time that transpires between when the application is initially received by the federal government to when the clearance-eligibility determination has been provided to the customer. To improve the completeness of the documentation for the processes used to determine whether or not industry personnel are eligible for a top secret clearance and to decrease future concerns about the reciprocal acceptance of clearances issued by other agencies, we are recommending that the Director of the Office of Management and Budget direct the Deputy Director for Management, in his oversight role of the governmentwide clearance process, to take the following actions: Require OPM and DOD to (1) submit to the Deputy Director their procedures for eliminating the deficiencies that we identified in their investigative and adjudicative documentation and (2) develop and report metrics on completeness and other measures of quality that will address the effectiveness of the new procedures. GAO’s High-Risk Program. DOD Personnel Clearances: Government Plan Addresses Some Long- standing Problems with DOD’s Program, But Concerns Remain. GAO’s 2005 High-Risk Update.

Why GAO Did This Study The damage that unauthorized disclosure of classified information can cause to national security necessitates the prompt and careful consideration of who is granted a security clearance. However, long-standing delays and other problems with DOD's clearance program led GAO to designate it a high-risk area in January 2005. DOD transferred its investigations functions to the Office of Personnel Management (OPM) in February 2005. The Office of Management and Budget's (OMB) Deputy Director for Management is coordinating governmentwide efforts to improve the clearance process. Congress asked GAO to examine the clearance process for industry personnel. This report addresses the timeliness of the process and completeness of documentation used to determine the eligibility of industry personnel for top secret clearances. To assess timeliness, GAO examined 2,259 cases of personnel granted top secret eligibility in January and February 2006. For the completeness review, GAO compared documentation in 50 randomly sampled initial clearances against federal standards. What GAO Found GAO's analysis of timeliness data showed that industry personnel contracted to work for the federal government waited more than one year on average to receive top secret clearances, longer than OPM-produced statistics would suggest. GAO's analysis of 2,259 cases in its population showed the process took an average of 446 days for initial clearances and 545 days for clearance updates. While OMB has a goal for the application-submission phase of the process to take 14 days or less, it took an average of 111 days. In addition, GAO's analyses showed that OPM used an average of 286 days to complete initial investigations for top secret clearances, well in excess of the 180-day goal specified in the plan that OMB and others developed for improving the clearance process. Finally, the average time for adjudication (determination of clearance eligibility) was 39 days, compared to the 30-day requirement that starts in December 2006. An inexperienced investigative workforce, not fully using technology, and other causes underlie these delays. Delays may increase costs for contracts and risks to national security. In addition, statistics from OPM, the agency with day-to-day responsibility for tracking investigations and adjudications, underrepresent the time used in the process. For example, the measurement of time does not start immediately upon the applicant's submission of a request for clearance. Not fully accounting for all the time used in the process hinders congressional oversight of the efforts to address the delays. OPM provided incomplete investigative reports to DOD, and DOD personnel who review the reports to determine a person's eligibility to hold a clearance (adjudicators) granted eligibility for industry personnel whose investigative reports contained unresolved issues, such as unexplained affluence and potential foreign influence. In its review of 50 investigative reports for initial clearances, GAO found that that almost all (47 of 50) cases were missing documentation required by federal investigative standards. At least half of the reports did not contain the required documentation in three investigative areas: residence, employment, or education. Moreover, federal standards indicate expansion of investigations may be necessary to resolve issues, but GAO found at least one unresolved issue in 27 of the reports. We also found that the DOD adjudicators granted top secret clearance eligibility for all 27 industry personnel whose investigative reports contained unresolved issues without requesting additional information or documenting that the information was missing in the adjudicative report. In its November 2005 assessment of the government plan for improving the clearance process, GAO raised concerns about the limited attention devoted to assessing quality in the clearance process, but the plan has not been revised to address the shortcomings GAO identified. The use of incomplete investigations and adjudications in granting top secret clearance eligibility increases the risk of unauthorized disclosure of classified information. Also, it could negatively affect efforts to promote reciprocity (an agency's acceptance of a clearance issued by another agency) being developed by an interagency working group headed by OMB's Deputy Director.

gao_AIMD-99-215

gao_AIMD-99-215_0

To assess the degree to which an agency’s plan provides a clear picture of intended performance across the agency, we examined whether it includes (1) sets of performance goals and measures that address program results; (2) baseline and trend data for past performance; (3) performance goals or strategies to resolve mission-critical management problems; and (4) identification of crosscutting programs (i.e., those programs that contribute to the same or similar results), complementary performance goals and common or complementary performance measures to show how differing program strategies are mutually reinforcing, and planned coordination strategies. Agencies’ Plans Lack Consistent Attention to Mission-Critical Management Challenges and Program Risks The fiscal year 2000 annual performance plans show inconsistent attention to the need to resolve the mission-critical management challenges and program risks that continue to undermine the federal government’s economy, efficiency, and effectiveness. However, similar to the situation with the 1999 plans, few agencies have attempted the more challenging task of establishing complementary performance goals, mutually reinforcing strategies, and common performance measures, as appropriate. The effective and efficient coordination of crosscutting programs is important because our work has suggested that mission fragmentation and program overlap are widespread. Our work has found that uncoordinated federal efforts confuse and frustrate program recipients, waste scarce resources, and undermine the overall effectiveness of the federal effort. Figure 5 shows the results of our assessment of the 24 agencies. However, individual agencies show progress in making useful linkages between their budget requests and performance goals, as we will detail in a companion letter to this report. Performance Plans Provide Limited Confidence That Performance Data Will Be Credible The majority of the fiscal year 2000 performance plans we reviewed provide only limited confidence that performance information will be credible, and agencies need to make substantial progress in this area. Congressional and executive branch decisionmakers must have assurance that the program and financial data being used will be sufficiently timely, complete, accurate, useful, and consistent if these data are to inform decisionmaking. Conclusions Agencies can continue to build on the progress that has been made over the last year in improving the performance plans by focusing their efforts on five key areas that offer the greatest opportunities for continuing improvements. The fiscal year 2000 plans provide a general picture of agencies’ intended performance. Coordinating crosscutting programs. Also not yet widespread are discussions of how crosscutting program efforts are being coordinated. Crosscutting programs, by definition, involve more than one agency, and coordination therefore requires the ability to look across agencies and ensure that the appropriate coordination is taking place. Clearly showing how strategies will be used to achieve results. From that work, we derived practices to identify each plan’s strengths and weaknesses and determined the extent to which the plan includes three key elements of informative performance plans: (1) clear picture of intended performance, (2) specific discussion of strategies and resources, and (3) confidence that performance information will be credible. 6. 7. 8. 10.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the fiscal year (FY) 2000 performance plans of the 24 agencies covered by the Chief Financial Officers Act, focusing on the: (1) extent to which the agencies' plans include the three key elements of informative performance plans: (a) clear pictures of intended performance; (b) specific discussions of strategies and resources; and (c) confidence that performance information will be credible; and (2) degree of improvement the FY 2000 performance plans represent over the FY 1999 plans. What GAO Found GAO noted that: (1) on the whole, agencies' FY 2000 performance plans show moderate improvements over the FY 1999 plans and contain better information and perspective; (2) however, key weaknesses remain, and important opportunities exist to improve future plans; (3) the plans provide general pictures of intended performance across the agencies suggesting that important opportunities for continued improvements still remain to be addressed; (4) while all the plans include baseline and trend data for at least some of their goals and measures, inconsistent attention is given to resolving mission-critical management challenges and program risks; (5) these management challenges and program risks continue to seriously undermine the federal government's performance and to leave it vulnerable to billions of dollars in waste, fraud, abuse, and mismanagement; (6) agencies could also provide clearer pictures of intended performance by providing greater attention to crosscutting program issues; (7) coordinating crosscutting programs is important because mission fragmentation and program overlap are widespread across the federal government; (8) most agencies' plans show some improvement in their recognition of crosscutting program efforts; (9) however, few plans attempt the more challenging tasks of discussing planned strategies for coordination and establishing complementary performance goals and common or complementary performance measures; (10) continued progress on this issue is important because GAO has found that unfocused and uncoordinated crosscutting programs waste scarce funds, confuse and frustrate program customers, and limit overall program effectiveness; (11) crosscutting programs involve more than one agency, and coordination therefore requires the ability to look across agencies and ensure that the appropriate coordination is taking place; (12) agencies' discussions of how resources and strategies will be used to achieve results show mixed progress; (13) some agencies show progress in making useful linkages between their budget requests and performance goals, while other agencies are not showing the necessary progress; (14) the continuing lack of confidence that performance information will be credible is also a source of major concern; (15) many agencies offer only limited indications that performance data will be credible; and (16) the inattention to ensuring that performance data will be sufficiently timely, complete, accurate, useful, and consistent is an important weakness in the performance plans.

gao_GAO-07-1121T

gao_GAO-07-1121T_0

Background NASA plans to finish assembling the ISS in fiscal year 2010 and operate the station until 2016. The station is scheduled to support 6-person crew capability as early as 2009. The shuttle was to be the primary means for ISS re-supply and crew rotation. NASA’s international partners were planning to augment the shuttle’s capabilities with their cargo and crew spacecraft. Following the Columbia disaster in 2003, the President set a new “vision” for NASA that called for the shuttle’s retirement in 2010 upon completing ISS assembly. As part of the Vision, NASA is developing new crew and cargo vehicles, with the crew vehicle currently scheduled to be available in the 2015 timeframe. One of the vehicles—the Crew Exploration Vehicle—will carry and support only crews traveling to low earth orbit and beyond and will also be capable of ferrying astronauts to and from the ISS. However, since these systems are not scheduled to become operational until 2015, NASA plans to rely on international partners and commercial providers to make up the 5-year gap in ISS logistics and crew rotation resulting from the shuttle retirement. Large ORUs that originally were to be launched and returned on the shuttle would have to be pre-positioned on the ISS before the shuttle retires. At the time we performed our work several factors hampered the ability of the Space Shuttle Program to develop a detailed long-term strategy for sustaining the critically skilled workforce necessary to support safe space shuttle operations through retirement. According to agency officials, currently NASA is mapping the available skills of the Space Shuttle workforce with the skills it will need for future work so that it can better plan and implement workforce reassignments. Filling the Gap between the Shuttle and New NASA- Developed Vehicles to Service the International Space Station NASA has several options for filling the gap between the shuttle, which will retire in 2010 and new NASA-developed vehicles that are not expected to come on-line until 2015. As you know, GAO has identified contract management as a high risk area for NASA. The agency’s preference is to use commercially developed vehicles, rather than rely on the vehicles developed by the international partners to cover the capability gap after retirement of the shuttle fleet. This was highlighted by the International Space Station Independent Safety Task Force, and NASA has been working to address the concerns laid out in that study. This is a work of the U.S. government and is not subject to copyright protection in the United States.

Why GAO Did This Study This testimony discusses the challenges faced by the National Aeronautics and Space Administration (NASA) on the International Space Station (ISS) and the Space Shuttle. NASA is in the midst of one of the most challenging periods in its history. As part of its Vision for Space Exploration, NASA is simultaneously developing a range of new technologies and highly complex systems to support future exploration efforts, completing assembly of the space station, and retiring the space shuttle. This is NASA's biggest transition effort since landing humans on the moon more than 3 decades ago and then initiating the Space Shuttle Program a few years later. Taken together, these efforts create significant challenges in terms of managing investments, launch and other facilities, workforce, international partners, and suppliers. Clearly, any delays or problems in completing and sustaining the space station itself, may well have reverberating effects on NASA's ability to ramp up efforts to develop technologies needed for future exploration or to support other important missions. GAO has undertaken a body of work related to NASA's transition efforts that include NASA's industrial supplier base, its workforce challenges, development of new crew and cargo spacecraft, and NASA's assembly and sustainment activities related to the ISS. This statement focuses on the preliminary results of on-going efforts, as well as other GAO work completed to date. Specifically, it will address the following challenges: (1) executing plans to use the shuttle to complete the ISS; (2) maintenance of the shuttle workforce through retirement of the shuttle; and (3) filling the gap between the shuttle and new NASA-developed vehicles to service the ISS. NASA's ability to overcome these challenges will be critical to ensuring the availability of the International Space Station as a viable research entity into the future. While these results and findings are preliminary, many have been echoed in other studies and identified by NASA itself. Our work is being conducted in accordance with generally accepted government auditing standards. What GAO Found NASA plans to finish assembling the ISS in 2010 and operate the station until 2016. The station is scheduled to support 6-person crew capability as early as 2009. The shuttle was to be the primary means for ISS re-supply and crew rotation. NASA's international partners were planning to augment the shuttle's capabilities with their cargo and crew spacecraft. Following the Columbia disaster in 2003, the President set a new "vision" for NASA that called for the shuttle's retirement in 2010 upon completing ISS assembly. As part of the Vision, NASA is developing new crew and cargo vehicles, currently scheduled to be available in the 2015 timeframe. One of the vehicles--the Crew Exploration Vehicle--will carry and support only crews traveling to low earth orbit and beyond and will also be capable of ferrying astronauts to and from the ISS. However, since these systems are not scheduled to become operational until 2015, NASA plans to rely on international partners and commercial providers to make up the 5-year gap in ISS logistics and crew rotation resulting from the shuttle retirement.

gao_GAO-08-191T

gao_GAO-08-191T_0

The act directs FCC to require full-power television stations to cease analog broadcasting on February 17, 2009. Options available to these households include (1) purchasing a digital television set that includes a tuner capable of receiving, processing, and displaying a digital signal; (2) purchasing a digital-to-analog converter box, which converts the digital broadcast signals to analog so they can be viewed on an existing analog set; or (3) subscribing to a cable, satellite, or other service to eliminate the need to acquire a digital-to-analog converter box. Federal Entities and Other Stakeholders are Facilitating the Transition, but Comprehensive Planning and Risk Management is Limited FCC and NTIA, in conjunction with other stakeholders, have taken steps to facilitate the DTV transition. In addition, FCC has conducted periodic reviews to report on transition progress and held a workshop for interested parties to discuss transition challenges and issues. NTIA has statutory responsibility for the converter box subsidy program, and it has issued a contract in preparation for that program’s development. Private sector industries, including broadcasters, manufacturers, and retailers have also begun preparing for the transition. Despite public-private sector interaction designed to help facilitate the transition, we found that no comprehensive plan exists for the DTV transition. Progress in Consumer Education on the DTV Transition Has Been Made, But Widespread Implementation Is Not Yet Underway FCC and NTIA, along with industry and other private stakeholders, have made progress in educating consumers about the DTV transition. For example, FCC and NTIA have developed informational materials on the transition and begun outreaching directly to consumer and stakeholder groups. To identify the difficulties and challenges to consumer education and outreach, we convened an expert panel to discuss consumer education issues applicable to the DTV transition, including potential challenges that may obstruct efforts and the key planning components of a consumer education campaign that will help to overcome some of those challenges. NTIA Has Taken Steps to Implement a Subsidy Program for Converter Boxes, but Challenges Remain NTIA has made progress in implementing the converter box subsidy program, including soliciting stakeholder comments, meeting with industry participants, and selecting IBM in August 2007 to administer the program. The subsidy program’s outcomes depend on the coordination and participation of NTIA, IBM, converter box manufacturers, retailers, and consumers. At the time of our review, several retailers we contacted expressed concerns about the possibility of a redemption system that would affect their point-of-sale systems, noting that modifying these systems can be time-consuming, resource-intensive, and expensive, and can affect their other financial systems. Retailer representatives told us they will need more information about the contractor’s technical solution before they could assess the impact on their systems and whether it would affect their participation. With limited or delayed retailer participation, consumers might face difficulties in redeeming their coupons for eligible converter boxes during the designated time period. However, a number of technical and coordination issues remain, such as antenna replacement and tower construction. In addition, cable and satellite television providers must coordinate with broadcasters to ensure that they can continue to receive and transmit the digital broadcast signals after the transition. While not required to cease analog broadcasting, some translator stations may choose to retransmit a digital signal but others will convert the digital signal to analog and continue to broadcast in analog after February 2009. Cable and Satellite Television Providers Must Coordinate with Broadcasters to Ensure They Continue to Receive Broadcast Signals Cable and satellite television providers face fewer challenges than broadcasters with the DTV transition, however, there are technical issues that need to be resolved to ensure they can provide digital broadcast signals to their subscribers. Our Future Work Will Focus on the Progress of the DTV Transition We have work planned to assess the progress of the DTV transition. We plan to report on changes in consumer awareness over time by conducting surveys throughout the transition process. Furthermore, we will continue to monitor government and industry consumer education efforts and will analyze the efforts compared with key practices for consumer outreach. In addition, we plan to survey broadcasters to obtain their perspectives on the technical issues that must be addressed prior to the DTV transition date.

Why GAO Did This Study On February 17, 2009, federal law requires all full-power television stations in the United States to cease analog broadcasting, enabling the government to reclaim valuable spectrum that the broadcasters currently use for analog broadcasts. This change, often referred to as the digital television (DTV) transition, requires action by broadcasters and consumers to ensure broadcast television signals are still available and viewable. The National Telecommunications and Information Administration (NTIA) created a program to subsidize consumers' purchases of digital-to-analog converter boxes. This testimony provides preliminary information on (1) the progress made by federal entities, and others, to facilitate the transition, (2) the progress in the education of consumers about the transition, (3) the progress made in implementing the converter box subsidy program, (4) technical issues of the transition, and (5) future GAO work on the progress of the DTV transition. GAO interviewed officials with the Federal Communications Commission (FCC) and NTIA. Further, GAO interviewed a wide variety of industry and other stakeholders involved with the transition, including members of the DTV Transition Coalition--a group of public and private stakeholders, and experts on strategic communications. GAO discussed this testimony with FCC and NTIA officials and incorporated their comments. What GAO Found FCC and NTIA, in conjunction with other stakeholders, have taken steps to facilitate the DTV transition. For example, FCC has conducted periodic reviews to report on transition progress, and NTIA has issued a contract for administering the converter box subsidy program. In addition, private sector industries have also begun preparing for the transition. Despite public-private sector interaction designed to help facilitate the transition, we found that no comprehensive plan exists for the DTV transition. Without such a plan, meaningful guidance for coordinating responsibilities and measuring progress might not be available to the private or public sector. Several federal and private stakeholders have begun consumer education campaigns. FCC and NTIA have developed informational materials and begun direct outreach to consumer groups. In addition, private industry stakeholders created the DTV Transition Coalition and are voluntarily conducting outreach efforts. However, these efforts are in the planning stages and challenges remain. An expert panel that GAO convened identified potential challenges and key practices for a consumer education campaign. NTIA has made progress in implementing the converter box subsidy program, but the program's outcome depends on the voluntary participation of retailers and manufacturers. Retailers we contacted expressed concerns about the possibility of a redemption system that would affect their point-of-sale systems and stated they would need more information on IBM's technical solution before they could assess the impact on their systems and whether it would affect their participation. With limited or delayed retailer participation, consumers might face difficulties in redeeming their coupons for eligible converter boxes. Most television stations already transmit a digital signal, but technical and coordination issues, such as antenna replacement and tower construction, may present challenges for broadcasters. In addition, cable and satellite television providers must coordinate with broadcasters to ensure that they can continue to receive and transmit the digital broadcast signals. Further, certain stations that retransmit the television signals, known as translator stations, are not required to cease analog broadcasting. These stations may choose to retransmit a digital signal, or they may convert the digital signal to analog and continue to broadcast in analog after February 2009. We plan on reporting on the progress of the DTV transition, including the status of consumer education and awareness about the DTV transition, IBM and NTIA's administration of the converter box subsidy program, and industry technical preparations throughout the upcoming transition period. We will continue to monitor government and industry consumer education efforts and plan to analyze the efforts compared with key practices for consumer outreach. In addition, we plan to survey broadcasters on the technical issues that must be addressed prior to the DTV transition date.

gao_GAO-03-614

gao_GAO-03-614_0

IRS plans to conduct detailed, line-by-line audits on 1,683 of the approximately 47,000 returns in the NRP sample in order to assess the accuracy of NRP classification and, if necessary, to adjust NRP results—a process called calibration. Scope and Methodology To describe IRS’s implementation of NRP, we have conducted frequent meetings with officials in IRS’s NRP Office and other IRS officials as they have implemented the program. We considered whether NRP is being implemented in accordance with its design. For this review, we also considered whether IRS was maintaining a focus on meeting NRP’s objectives of obtaining quality research results while, at the same time, minimizing taxpayer burden. Our evaluation focuses only on IRS’s efforts to obtain voluntary reporting compliance information. Staff members were trained before they began to carry out NRP tasks. As of the end of March 2003, IRS completed NRP casebuilding for about 94 percent of the approximately 47,000 returns in the NRP sample and about 73 percent of NRP returns have been classified. Also, for 3,651 NRP cases, IRS completed all necessary audit work. IRS made substantial progress in casebuilding and classification starting in 2002, and the number of cases assigned to NRP auditors has been increasing quickly since January 2003. The NRP audit process also includes quality assurance measures that include both in- process and completed case reviews, with all NRP audits reviewed before they are formally closed with the taxpayer. IRS Is Taking Steps to Minimize and Assess Taxpayer Burden As IRS planned, NRP casebuilding and classification processes are helping minimize the burden on taxpayers with returns in the NRP sample. NRP Processes Are Helping to Reduce Taxpayer Burden IRS is following its plans to reduce burden on taxpayers selected as part of the NRP sample by (1) compiling NRP casebuilding materials that allow IRS to verify certain items on tax returns without requesting the information from the taxpayer, (2) classifying returns according to items that need to be verified through an audit, and (3) limiting most NRP audits to items that cannot be verified without an audit. IRS now estimates that more face-to-face audits will take place than initially projected because (1) as the NRP plan recognized, IRS’s initial estimates were uncertain and based on aging data and (2) the final form of NRP classification guidelines meant more face-to- face and fewer correspondence audits. Conclusions IRS continues to be on track for meeting its NRP goal of obtaining meaningful compliance data while minimizing the burden on taxpayers with returns in the NRP sample. Appendix I: Comments from the Internal Revenue Service

Why GAO Did This Study The Internal Revenue Service (IRS) needs up-to-date information on voluntary compliance in order to assess and improve its programs. IRS's last detailed study of voluntary compliance was done in the late 1980s, so the compliance information IRS is using today is not current. IRS is now carrying out the National Research Program (NRP), through which IRS auditors are reviewing about 47,000 randomly selected tax year 2001 individual tax returns. In June 2002, GAO reported that NRP was necessary, that its design was sound, and that it appeared to meet IRS's goals of acquiring useful compliance data while minimizing burden on taxpayers with returns in the sample. GAO was asked to review IRS's implementation of NRP. GAO reviewed IRS's method of gathering internal and third-party data (casebuilding) and IRS's process of reviewing casebuilding materials to determine if audits are necessary (classification) and assessed IRS's plans to ensure consistent data collection while minimizing burden on taxpayers. What GAO Found IRS's NRP is being implemented as planned and consequently is on track to meet the agency's objectives of obtaining quality research results while minimizing the burden on the approximately 47,000 taxpayers with returns in the NRP sample. IRS officials have completed the development and testing of NRP processes and have selected and trained staff members to carry out the program. Additionally, as the graphic illustrates, IRS is currently nearing the completion of casebuilding and has made progress in classifying NRP returns. Audits, when required, began in November 2002. As of the end of March 2003, IRS had closed 3,651 NRP cases. In accordance with IRS's plans to minimize burden on taxpayers with returns in the NRP sample, some cases have been closed without any taxpayer contact or with only limited audits. The NRP plan recognized that the initial estimates for the overall NRP sample size and the number of returns to be audited were uncertain because they were based on aging data. The overall NRP sample size will be smaller and IRS officials expect to conduct more face-to face audits than initially estimated. As IRS completes NRP casebuilding, classification, and audits, it is implementing quality assurance steps, including efforts to ensure that key audit steps are completed on all NRP audits before they are formally closed with taxpayers. This is important since the data collected from each NRP audit represent information from thousands of similar taxpayers.

gao_GAO-11-633T

gao_GAO-11-633T_0

In contrast to DOD’s disability evaluation system, which evaluates only medical conditions affecting servicemembers’ fitness for duty, VA evaluates all medical conditions claimed by the veteran, whether or not they were previously evaluated in DOD’s disability evaluation process. In that report, the agencies concluded that, as of February 2010, servicemembers who went through the IDES pilot were more satisfied than those who went through the legacy system, and that the IDES process met the agencies’ goals of delivering VA benefits to active duty servicemembers within 295 days and to reserve component servicemembers within 305 days. While our review of DOD and VA’s data and reports generally confirmed DOD and VA’s findings as of early 2010, we found that not all of the service branches were achieving the same results, case processing times increased between February and August 2010, and other agency goals are not being met. For example, active component cases completed in March 2011 took an average of 394 days—99 days over the 295-day target. Pilot Sites Experienced Several Challenges Based on our prior work, we found that--as DOD and VA tested the IDES at different facilities and added cases to the pilot--they encountered several challenges that led to delays in certain phases of the process. These staffing shortages contributed to delays in the IDES process. These two sites were unable to quickly increase staffing levels, particularly of examiners. Logistical challenges integrating VA staff at military treatment facilities: DOD and VA officials at some pilot sites we visited said that they experienced logistical challenges integrating VA staff at the military facilities. Housing and other challenges posed by extended time in the military disability evaluation process: Although many DOD and VA officials we interviewed at central offices and pilot sites felt that the IDES process expedited the delivery of VA benefits to servicemembers, several also indicated that it may increase the amount of time servicemembers are in the military’s disability evaluation process. As of March 2011, the IDES was operating at 73 sites, covering about 66 percent of all military disability evaluation cases. This differs from the pilot phase where, according to DOD and VA officials, some sites implemented the IDES without having been fully prepared. For these areas, we recommended additional action that the agencies could take, with which the agencies generally concurred. We recommended that, prior to implementing IDES at MTFs, DOD direct military services to conduct thorough assessments of the adequacy of military physician staffing for completing MEB determinations and develop contingency plans to address potential shortfalls, e.g. due to staff turnover or caseload surges. To identify challenges as they arise in all DOD and VA facilities and offices involved in the IDES and thereby enable early remedial action, we recommended that DOD and VA develop a systemwide monitoring mechanism. This system could include continuous collection and analysis of data on DOD and VA staffing levels, sufficiency of exam summaries, and diagnostic disagreements; monitoring of available data on caseloads and case processing time by individual VA rating office and PEB; and a formal mechanism for agency officials at local DOD and VA facilities to communicate challenges and best practices to DOD and VA headquarters. However, we identified significant challenges at pilot sites that require careful management attention and oversight. We noted a number of steps that DOD and VA were undertaking or planned to undertake that may mitigate these challenges. Related GAO Products Military and Veterans Disability System: Pilot Has Achieved Some Goals, but Further Planning and Monitoring Needed.

Why GAO Did This Study This testimony discusses the efforts by the Departments of Defense (DOD) and Veterans Affairs (VA) to integrate their disability evaluation systems. Wounded warriors unable to continue their military service must navigate DOD's and VA's disability evaluation systems to be assessed for eligibility for disability compensation from the two agencies. GAO and others have found problems with these systems, including long delays, duplication in DOD and VA processes, confusion among servicemembers, and distrust of systems regarded as adversarial by servicemembers and veterans. To address these problems, DOD and VA have designed an integrated disability evaluation system (IDES), with the goal of expediting the delivery of VA benefits to servicemembers. After pilot testing the IDES at an increasing number of military treatment facilities (MTF)--from 3 to 27 sites--DOD and VA are in the process of deploying it worldwide. As of March 2011, the IDES has been deployed at 73 MTFs--representing about 66 percent of all military disability evaluation cases--and worldwide deployment is scheduled for completion in September 2011. This testimony summarizes and updates our December 2010 report on the IDES and addresses the following points: (1) the results of DOD and VA's evaluation of their pilot of the IDES, including updated data as of March 2011 from IDES monthly reports, where possible; (2) challenges in implementing the piloted system to date; and (3) DOD and VA's plans to expand the piloted system and whether those plans adequately address potential challenges. What GAO Found In summary, DOD and VA concluded that, based on their evaluation of the pilot as of February 2010, the pilot had (1) improved servicemember satisfaction relative to the existing "legacy" system and (2) met their established goal of delivering VA benefits to active duty and reserve component servicemembers within 295 and 305 days, respectively, on average. However, 1 year after this evaluation, average case processing times have increased significantly, such that active component servicemembers' cases completed in March 2011 took an average of 394 days to complete--99 days more than the 295-day goal. In our prior work, we identified several implementation challenges that had already contributed to delays in the process. The most significant challenge was insufficient staffing by DOD and VA. Staffing shortages and process delays were particularly severe at two pilot sites we visited where the agencies did not anticipate caseload surges. The single exam posed other challenges that contributed to delays, such as disagreements between DOD and VA medical staff about diagnoses for servicemembers' medical conditions that often required further attention, adding time to the process. Pilot sites also experienced logistical challenges, such as incorporating VA staff at military facilities and housing and managing personnel going through the process. DOD and VA were taking or planning to take steps to address a number of these challenges. For example, to address staffing shortages, VA is developing a contract for additional medical examiners, and DOD and VA are requiring local staff to develop written contingency plans for handling caseload surges. Given increased processing times, the efficacy of these efforts at this time is unclear. We recommended additional steps the agencies could take to address known challenges--such as establishing a comprehensive monitoring plan for identifying problems as they occur in order to take remedial actions as early as possible--with which DOD and VA generally concurred.

gao_NSIAD-98-114

gao_NSIAD-98-114_0

Formal campaigns were initiated against dracunculiasis and leprosy in 1991, and against polio and lymphatic filariasis in 1988 and 1997, respectively. In April 1997, WHO provided the House International Relations Committee with estimated costs and target dates for eradicating or eliminating the seven diseases. Our review focuses on the estimates that WHO provided to us as of December 1997. WHO officials estimated that about $7.5 billion would be needed to eradicate or eliminate the seven targeted diseases. We used this information to assess whether the data underlying WHO’s estimates were sound. Soundness of Estimates Varies by Disease WHO officials and other experts identified the following as the key factors to consider in estimating direct costs for eradicating or eliminating diseases: (1) the funds needed to purchase the required intervention products, such as vaccines, drugs, insecticides, or water filters; (2) the prevalence and incidence of the disease and the population targeted for intervention; (3) the administrative costs for delivering products to the target population (for example, transportation, setting up local infrastructure, administering vaccines or treatment, spraying, and technical assistance); (4) the costs for surveillance activities, such as diagnosing the disease, testing blood or other specimens at laboratories, and monitoring and reporting disease incidence; and (5) for eradication, the costs of certifying that each country is free of the disease. Potential Cost Savings for Polio and Measles Polio The overall savings to the United States as a result of polio eradication are estimated to be at least $304 million a year, including about $230 million in public and private expenditures for controlling polio within U.S. borders and about $74 million for the global eradication effort. Experts Suggest Other Diseases as Possible Candidates for Eradication International public health experts at CDC and Johns Hopkins University and a 1993 report by the International Task Force for Disease Eradication (ITFDE) revealed a number of diseases that pose threats to the United States and that are technically possible to eradicate. Diseases commonly mentioned include rubella, mumps, hepatitis B, and Hib. They noted that other diseases could be considered as eradication candidates after success with the currently targeted diseases is achieved. Other infectious diseases pose a growing threat to the United States but do not have characteristics that make them amenable to eradication. Smallpox Eradication Showed That Success Was Possible According to the literature and experts with whom we met, the primary lesson learned from the smallpox initiative was that disease eradication can be technically feasible. For the United States, cumulative savings from smallpox eradication are estimated at $17 billion. For the other diseases, complete data are unavailable so the estimates are more speculative. The United States is spending a significant amount to combat these diseases domestically and overseas, most of which could be saved if eradication and elimination efforts are successful. The treatment programs are largely community based. Objectives, Scope, and Methodology Our objectives were to examine (1) the soundness of WHO’s cost and time frame estimates for eradicating or eliminating seven infectious diseases, (2) U.S. spending related to these diseases in fiscal year 1997 and any potential U.S. savings as a result of eradication or elimination, (3) other diseases that may pose a risk to Americans and that could be candidates for eradication, and (4) historical information on U.S. costs and savings from smallpox eradication and whether experts view smallpox eradication as a model for other diseases.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the World Health Organization's (WHO) efforts to eradicate seven infectious diseases--dracun culiasis, polio, leprosy, measles, onchocerciasis, Chagas' disease, and lymphatic filariasis--worldwide, focusing on: (1) the cost and timeframe estimates developed by WHO for eradicating or eliminating these diseases; (2) U.S. spending related to the seven diseases in fiscal year 1997 and any potential cost savings to the United States as a result of eradication or elimination; (3) other diseases that international health experts believe pose a risk to Americans and could be candidates for eradication; and (4) historical information on U.S. costs and savings from smallpox eradication and whether experts view smallpox eradication as a model for other diseases. What GAO Found GAO noted that: (1) the soundness of WHO's cost and timeframe estimates for eradicating or eliminating the seven diseases varied for each disease; (2) cost and timeframe estimates for dracunculiasis, polio, and leprosy were the most sound because campaigns against them have been under way for several years and are largely based on firm data about target populations and intervention costs from ongoing initiatives; (3) for the other diseases, WHO's estimates are more speculative because data underlying the cost and timeframe estimates are incomplete or unavailable; (4) WHO officials acknowledge that the costs and timeframes provided to the House Committee on International Relations are not exact and that they must continually be refined as new information becomes available; (5) the United States spent about $391 million in 1997 on programs to combat these diseases; (6) potential savings to the United States if eradication or elimination of these diseases were achieved could be substantial; (7) most of the savings would result from eliminating the need to vaccinate U.S. children against polio and measles; (8) the experts GAO interviewed and its review of the literature identified several other diseases that pose health threats to the United States and that meet the scientific criteria for eradication used by health experts; (9) four diseases were frequently mentioned: rubella, mumps, hepatitis B, and Hemophilus influenzae type B; (10) WHO officials stated that while it is technically possible to eradicate these diseases with existing vaccines, it is unlikely that other diseases will be considered for eradication before achieving success with currently targeted diseases; (11) using Centers for Disease Control and Prevention data, GAO estimated that the United States has saved almost $17 billion to date from the eradication of smallpox in 1977; (12) the savings are due to the cessation of vaccinations and related expenditures such as surveillance, treatment, and loss of productivity; (13) experts agree that several lessons can be learned from the smallpox effort, but the primary lesson is that a disease can actually be eradicated; and (14) however, they also suggested that smallpox has limitations as a model for other diseases because it had characteristics that were uniquely amenable to eradication.

gao_GAO-01-987

gao_GAO-01-987_0

TEA-21 requires that FTA evaluate projects against “project justification” and “local financial commitment” criteria contained in the act. Although these evaluation requirements existed prior to the enactment of the act, TEA-21 requires FTA to (1) develop a rating for each criterion as well as an overall rating of “highly recommended,” “recommended,” or “not recommended” and use these evaluations and ratings in approving projects’ advancement to the preliminary engineering and final design phases and approving grant agreements; and (2) issue regulations on the evaluation and rating process. FTA’s Evaluation and Rating Process for New Starts Proposals Finalized In April 1999 and 2000, we reported that FTA had made substantial progress in developing and implementing an evaluation process that included the individual criterion ratings and overall project ratings required by TEA-21. FTA Proposes Seven New Projects for New Starts Funding FTA’s New Starts report and budget proposal for fiscal year 2002 requests that $1.14 billion be made available for the construction of new transit systems and expansions of existing systems through the New Starts program. As described earlier, for fiscal year 2002 FTA evaluated 40 projects and prepared ratings for 26 of them. These three projects were not rated this year. Limited New Starts Funding Available for Future Transit Projects According to FTA, it will have limited authority to make funding commitments to New Starts projects throughout the remainder of the TEA-21 authorization period—the end of fiscal year 2003—if it makes funding commitments to seven projects as proposed in fiscal year 2002. FTA estimates these projects would require about $80 billion in local, state, and federal funds to complete. Because of this impending “budget crunch,” it is important that FTA adopt the recommendation we made last year that it further prioritize among the projects it rates as “highly recommended” or “recommended” for funding purposes.

Why GAO Did This Study The Federal Transit Administration's (FTA) New Starts program has provided state and local agencies with more than $6 billion in the last eight years to help design and construct transit projects. Although the funding for this program is higher than it has ever been, the demand for these resources is also extremely high. FTA was directed to prioritize projects for funding by evaluating, rating, and recommending potential projects on the basis of specific financial and project justification criteria. This report discusses (1) the refinements made to FTA's evaluation and rating process since last year, (2) how New Starts projects were selected for FTA's New Starts report and budget request for fiscal year 2002, and (3) FTA's remaining New Starts commitment authority. What GAO Found GAO found that FTA made several refinements to its rating process. For instance, potential grantees were more strictly assessed on their ability to build and operate proposed projects than in the past. FTA also made several technical changes and established new performance measures to evaluate the program. New Starts projects were selected by evaluating 40 new projects for 2002 and developing ratings for 26 of them. FTA then determined whether the projects rated "highly recommended" or "recommended" met its readiness criteria. Of these projects, FTA recommended four of them for funding commitments. FTA also recommended three additional projects--one that was exempt from the rating process and two that were rated last year. FTA reports that it will have limited authority to make funding commitments to new projects in fiscal year 2003 if it enters into the seven New Starts grant agreements in 2002 as proposed.

gao_GAO-07-163

gao_GAO-07-163_0

The plans are to identify how the countries will use compact funds to promote broad compact development goals such as economic advancement and budgetary self-reliance. The FSM, the RMI, and the United States are required to provide the necessary staff support to their representatives on the committee to enable the parties “to monitor closely the use of assistance under the Compacts.” FSM and RMI Grant Management The FSM and the RMI are responsible for grant management, including managing and monitoring the day-to-day operations and financial administration of each sector. OIA’s Honolulu field office has four professional staff— specialists in health, education, infrastructure, and financial management—who perform various activities, such as analyzing FSM and RMI budgets and required reports; reviewing expenditures and performance with FSM and RMI government officials and conducting site visits; providing briefings and advice to OIA, HHS, and State officials regarding progress and problems; providing support for JEMCO and JEMFAC meetings; monitoring the countries’ compliance with grant terms and withholding funds from the countries for noncompliance with requirements such as those expressed in the fiscal procedures agreements or in grant conditions (such remedies did not exist in the previous compact). Figure 3 shows the FSM sector grant allocations for 2004 through 2006. Infrastructure. Education. Land use issues. A lack of technical capacity also challenges the countries’ ability to collect performance data and measure progress. Health sector. Second, both countries’ reports contained incomplete activity-level information. FSM and RMI Lack Capacity to Collect, Assemble, and Analyze Data to Assess Progress The FSM’s ability to measure progress is limited by its lack of capacity to collect, assemble, and analyze performance data. In addition, the countries’ single audit reports for 2004 and 2005, particularly the FSM’s reports, indicated weaknesses in the countries’ financial statements and compliance with the requirements of major federal programs, calling into question their accountability for the use of compact funds. However, the FSM’s timeliness in submitting its single audit reports improved from 2004 to 2005, and the RMI submitted its single audit reports for these 2 years on time. V shows the total number of material weaknesses and reportable conditions findings for the RMI for 2001 through 2005 single audit reports.) However, OIA took corrective actions in several instances. Suspended grant funding. Withheld grant funding. The need to respond to various challenges facing the FSM reduced OIA’s administrative oversight of assistance provided under the compact. Staffing challenges. In 2004 through 2006, compact grants were, for the most part, allocated among the countries’ six sectors as required, with emphasis on health, education, and infrastructure, and the countries have made progress in implementing the grants in most sectors. To improve FSM grant administration, planning, and measurement of progress toward compact goals, and to ensure oversight, monitoring, and accountability for FSM compact expenditures, we recommend that the Secretary of the Interior direct the Deputy Assistant Secretary for Insular Affairs, as Chairman of JEMCO, to coordinate with other U.S. agencies on the committee in working with the FSM national government to take the following actions: establish plans for sector spending and investment by the FSM national and state governments to minimize any adverse consequence of reduced funding resulting from the annual decrement or partial inflation adjustment; evaluate the impact of the current FSM distribution between states and sectors on the ability of the nation to meet national goals or deliver services; fully develop the mechanism for measuring sector grant performance and collect complete baseline data to track progress toward development goals; and ensure that the quarterly performance reports contain reliable and verified program and financial information for use as a monitoring tool by both the FSM and the U.S. governments. Objectives, Scope, and Methodology This report examines, for 2004 through 2006, (1) the Federated States of Micronesia’s (FSM) and the Republic of the Marshall Islands’ (RMI) use of compact funds; (2) FSM and RMI efforts to assess progress toward their stated development and sector goals; (3) FSM and RMI monitoring of sector grants and accountability for the use of compact funds; and (4) the Department of the Interior’s (Interior) administrative oversight of the compacts. To report on the FSM’s and the RMI’s use of amended compact funds, we reviewed the U.S., FSM, and RMI annual compact reports for 2004 and 2005; FSM and RMI strategic planning documents and budgets; briefing documents prepared by Interior’s Office of Insular Affairs (OIA) in preparation for the annual bilateral meetings with the two countries; and FSM and RMI single audits for 2001 through 2005. Compact of Free Association: An Assessment of Amended Compacts and Related Agreements.

Why GAO Did This Study In 2003, the United States signed Compacts of Free Association with the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI), amending a 1986 compact with the countries. The amended compacts provide the countries with a combined total of $3.6 billion from 2004 to 2023, with the annual grants declining gradually. The assistance, targeting six sectors, is aimed at assisting the countries' efforts to promote economic advancement and budgetary self-reliance. The Department of the Interior (Interior) administers and oversees the assistance. Complying with a legislative requirement, GAO examined, for fiscal years 2004 through 2006, (1) the FSM's and the RMI's use of compact funds, (2) their efforts to assess progress toward development goals, (3) their monitoring of sector grants and accountability for compact funds, and (4) Interior's administrative oversight of the assistance. GAO visited the FSM and the RMI; reviewed reports; and interviewed officials from the FSM, RMI, and U.S. governments. What GAO Found For 2004 through 2006, compact assistance to the FSM and the RMI was allocated largely to the education, infrastructure, and health sectors, but various factors limited the countries' use of compact funds. Deterrents to the FSM's use of infrastructure funds included constraints on land use and disagreement on project implementation processes. Land use issues also hindered the RMI's use of infrastructure funds. In addition, the FSM's distribution of the grants among its four states resulted in significant differences in per-student education and per-capita health funding. Neither country has planned for long-term sustainability of the grant programs, taking into account the annual decreases in grant funding. To assess progress toward development goals, the FSM and the RMI established goals and objectives for each sector and are collecting performance data for education and health. However, a lack of complete and reliable baseline data prevents the countries from gauging progress in these sectors. Also, both countries' required quarterly performance reports contained incomplete and unreliable information, limiting the reports' utility for tracking progress. The countries' ability to measure progress is further challenged by a lack of technical capacity to collect, assemble, and analyze baseline and performance data. Although the FSM and the RMI are required to monitor day-to-day sector grant operations, their ability to meet this requirement for 2004 through 2006 was limited. According to officials in the respective governments, the responsible offices have insufficient staff, budgets, and time to monitor grant operations. In addition, both countries' single audit reports for 2004 and 2005 indicated weaknesses in their ability to account for the use of compact funds. For instance, the FSM's audit report for 2005 contained 57 findings of material weaknesses and reportable conditions in the national and state governments' financial statements for sector grants, and the RMI's report contained 2 such findings. Furthermore, both countries' single audit reports indicated noncompliance with requirements of major federal programs. For example, the FSM's audit report for 2005 contained 45 findings of noncompliance, while the RMI's audit report contained 11 findings. Interior's Office of Insular Affairs (OIA) has conducted administrative oversight of the sector grants by monitoring the countries' sector grant performance and spending, assessing their compliance with sector grant conditions, and monitoring the audit process. In response to shortcomings that it identified, OIA took several actions, such as withholding or suspending grant funding and ensuring the provision of technical assistance. However, OIA's oversight has been limited by the need to deal with challenges facing the FSM, such as its difficulty in preparing budgets, as well as by its own staffing challenges.

gao_GAO-13-9

gao_GAO-13-9_0

CBP Uses ATS and Other Tools to Target Maritime Cargo Shipments for National Security Purposes ATS is the primary system that CBP targeters use to review maritime cargo shipments for national security purposes, and targeters we spoke with were generally satisfied with how ATS and its weight set of national security rules have assisted in their targeting efforts. The risk score, however, is not the sole factor that determines whether a targeter reviews the data for a shipment or whether the shipment is selected for a security examination. In particular, targeters at each of the six ATUs we visited explained that they use the ATS risk score as a starting point for the targeting process, but that their decisions are ultimately based on additional research. On the basis of the ATS risk score and the research conducted, targeters make a qualitative assessment of the risk and determine whether to hold a shipment for examination. Targeters at ATUs are required to review data in ATS for all medium-risk and high-risk shipments that arrive at their respective ports. Targeters’ reviews: ATS also indicates whether the shipment data have been reviewed by a targeter at the targeter’s own location or at another CBP targeting location, such as a Container Security Initiative port or NTC-C. CBP targeters also use tools outside of ATS to conduct research. A targeter could also determine that an examination is not necessary for a medium-risk shipment—for example, the weight set may assign a medium-risk score to a shipment based on the data available, but the targeter could determine through research that the score is based on a clerical error in the data provided. CBP’s Efforts to Assess the Weight Set Have Been Limited CBP Developed Performance Measures to Assess the Weight Set but Is Continuing to Update the Methodology We have previously reported that ensuring controls to assess ATS’s effectiveness in identifying high-risk shipments was important for providing CBP with the best information to inform its targeting efforts. Currently, CBP assesses the performance of the weight set using the following performance measures: True positive rate (TPR) which reflects the percentage of maritime shipments that ATS assessed as high risk within the population of shipments in which CBP identified a threat during an examination. False positive rate (FPR) which reflects the percentage of maritime shipments that ATS assessed as high risk within the population of shipments in which CBP did not identify a threat during an examination. The TPR enables CBP to determine the accuracy of the weight set in identifying high-risk shipments. CBP Does Not Have Reasonable Assurance That the Updated Weight Set Is More Effective than Alternative Versions or the Version It Replaced Prior to implementing the current version of the weight set in early 2011, CBP did not conduct an assessment to determine whether the updated version of the weight set would be more effective than the previous version of the weight set or other alternatives that were considered during the update process. Assessing the potential effectiveness of alternative versions of the weight set prior to selecting one for implementation would provide CBP with more information to make an informed decision. CBP Has Not Regularly Assessed the Weight Set against Performance Targets to Determine when Updates Are Needed Since implementing the current version of the weight set in early 2011, CBP has not regularly assessed the weight set against established performance targets to monitor its performance and obtain information to determine when updates to the weight set are necessary. Nevertheless, given the importance of the weight set to CBP’s process for targeting cargo containers, regular performance assessments of the weight set that include evaluating results against established performance targets could help CBP determine when updates are needed in a timelier manner and help it better prioritize the resources it needs to complete the updates.Furthermore, CBP officials stated that they intend to continue adjusting the methodology for calculating the performance measures to mitigate data limitations and more accurately reflect the performance of the weight set. Such steps could help CBP determine when changes may be needed and ensure that its targeters have the best information available regarding the risk of maritime cargo container shipments arriving in the United States. Recommendations for Executive Action To enhance its targeting of maritime cargo containers and better position CBP to provide reasonable assurance of the effectiveness of ATS, we recommend that the Commissioner of CBP take the following two actions: ensure that future updates to the weight set are based on results of assessments that demonstrate that the chosen version of the weight set is more effective than other alternatives, including the existing version, and establish targets for CBP’s performance measures and use those measures to assess the effectiveness of the weight set on a regular basis to better determine when updates to the weight set are needed. DHS concurred with the two recommendations. Appendix I: Federal Strategy for Ensuring the Security of Maritime Cargo Container Shipments This appendix describes the core programs related to U.S. Customs and Border Protection’s (CBP) strategy for ensuring the security of maritime cargo container shipments. In this report, the DHS OIG stated that CBP could improve its process for changing or deleting targeting rules by, among other things, documenting (1) rule change decisions and (2) the testing and evaluation of rule changes.

Why GAO Did This Study The U.S. economy is dependent on the expeditious flow of millions of tons of cargo each day. Cargo containers are an important instrument of global trade but also can present security concerns. CBP is responsible for administering container security programs, and its strategy for securing maritime cargo containers includes analyzing information to identify shipments that may contain terrorist weapons or other contraband. Because CBP has insufficient resources to examine every container, targeters use ATS to target which container shipments should be examined. GAO was asked to assess CBP's targeting efforts. This report addresses (1) how ATS supports CBP's targeting of maritime cargo container shipments for national security purposes and (2) the extent to which CBP assesses the effectiveness of ATS's national security targeting rules. GAO analyzed fiscal year 2011 CBP data on shipments and containers arriving at U.S. ports and containers scanned at these ports. GAO also visited six CBP units selected on the basis of the percentage of maritime shipments that were scored as high risk or medium risk for national security purposes at these locations in fiscal year 2011, among other factors. GAO also analyzed documents, such as CBP's ATS performance measures. What GAO Found U.S. Customs and Border Protection (CBP), within the Department of Homeland Security (DHS), employs a risk-based approach that uses the Automated Targeting System (ATS) and other tools to identify (target) maritime cargo shipments for further examination. ATS is a web-based enforcement and decision support system that includes a set of rules to assess the risk level for each arriving cargo shipment. This set of rules is referred to as the maritime national security weight set (weight set) because each rule in the set has a specific weighted value assigned to it. CBP classifies the risk scores from the weight set as low, medium, or high risk. CBP policy states that a shipment's risk score is to determine, in part, actions taken by CBP officers (targeters) at the ports. Specifically, targeters are generally required to review shipment data for all medium-risk and high-risk shipments and hold high-risk shipments for examination. The risk score, however, is not the sole factor that determines whether a targeter reviews the data for a shipment or whether CBP examines a shipment. In particular, targeters at each of the six ports GAO visited explained that they use the ATS risk score as a starting point for the targeting process but that their decisions regarding which shipments to examine are ultimately based on additional research. Targeters at the six ports GAO visited said they also use tools outside of ATS, such as web searches, to research shipments. CBP efforts to assess the weight set's effectiveness in identifying the risk of shipments have been limited. CBP has performance measures--represented by the percentage of shipments targeted as high risk that contain a threat and the percentage of shipments targeted as high risk that do not contain a threat--that enable CBP to determine the accuracy of the weight set, given a particular workload or examination rate. However, CBP did not assess the weight set to verify its effectiveness when implementing an updated version in early 2011. Prior to implementing the updated version of the weight set, CBP assessed the potential impact of the update on CBP's workload but did not conduct an assessment to determine whether the updated version of the weight set would be more effective in identifying high-risk shipments than the previous version or other alternatives. Assessing the potential effectiveness of alternative versions of the weight set prior to selecting one for implementation could help CBP make more informed decisions about future updates. Doing so could also provide CBP reasonable assurance that the version it selects is the most effective of the alternatives and is more effective than the previous version it replaces. Furthermore, since implementing the updated version of the weight set in early 2011, CBP has not regularly assessed the weight set to monitor its performance and to help determine when changes are needed. For example, CBP conducted the first assessment of the current version of the weight set, using the performance measures, in the summer of 2012--18 months after the weight set's implementation in early 2011. Regular assessments of the weight set's effectiveness could help CBP determine when updates are needed in a timelier manner and ensure that targeters have the best information available to make targeting decisions. Moreover, CBP has not established targets for the performance measures so that it is not clear whether a particular change in the weight set's performance is significant enough to suggest that changes are needed to improve the effectiveness of the weight set. What GAO Recommends GAO recommends that CBP (1) ensure that future updates to the weight set are based on assessments of its performance and (2) establish targets for performance measures and use those measures to regularly assess effectiveness of the weight set. DHS concurred with these recommendations.

gao_GAO-17-384

gao_GAO-17-384_0

More specifically, VHA provides health care services, including primary care and specialized care, and it performs research and development to improve veterans’ needs. This program office is responsible for providing organizational guidance on a broad range of pharmacy activities to the 260 pharmacies located in VA’s medical centers and outpatient clinics. Key IT Management Processes Are Partially Consistent with Leading Practices VA has established IT management processes that are partially consistent with leading practices. The HISP identifies strategic goals and objectives related to health IT within VHA. VHA’s IT Investment Management Process Is Consistent with Leading Practices, but a Department-level Board Has Been Inactive and Clear Investment Selection Criteria Have Not Been Defined According to leading practices for IT investment management, establishing and following a systematic and organized approach to investment management helps lay the foundation for successful, predictable, and repeatable investment decisions. One of these boards—the Portfolio Investment Management Board—has been identified by its charter as the department-level IT investment review board to be responsible for integrating IT investment decisions with VA’s mission, strategic plan, budget, and enterprise architecture. This framework defines a total of 262 core business functions as part of the VHA business architecture. VHA’s Core Business Functions Are Not Fully Supported by Current IT Systems VA’s IT systems are generally aligned to VHA core business functions, but the administration has unaddressed needs that indicate current IT systems do not fully support the functions. However, our review of new service requests, which are requests in the NSR database for identified IT needs submitted by VHA programs and business owners, determined that VHA’s core business functions are not fully supported by systems. In this regard, as of October 2016, VHA had 2,772 requests for IT needs documented in the NSR database since 1998. Of these, approximately 817 were open requests—IT needs identified throughout VHA that had not been met. Further, 316, or about 39 percent, of these open needs are long-standing—they have been open for more than 5 years. The fact that business functions are not fully supported is further illustrated when reviewing needs associated with three program areas— pharmacy benefits management, scheduling, and community care— which all have open requests that represent long-standing, unmet IT needs. Veterans Access to Care (scheduling and consults). However, VA’s partial implementation of effective IT strategic planning, investment management, and enterprise architecture has put the department at risk of being unable to fully support VHA with the information systems it needs to perform its mission of providing high- quality health care to veterans. Recommendations for Executive Action To assist VA in improving key IT management processes to ensure that investments support the delivery of health care services, we recommend that the Secretary of Veterans Affairs direct the Under Secretary for Health and the Chief Information Officer to take the following four actions: Identify performance metrics and associated targets for the goals and objectives in the department’s IT strategic plans, including the Information Resources Management strategic plan and the Health Information Strategic Plan, as they relate to the delivery of health IT and the VHA mission. In addition, the department stated that it plans to include the outstanding needs of these key program areas in its VHA IT Requirements Governance Process during fiscal year 2018 to ensure the needs are addressed in this multi-year planning review. Appendix I: Objectives, Scope, and Methodology The objectives of this study were to determine the extent to which the Department of Veterans Affairs’ (VA) (1) information technology (IT) management processes are consistent with leading practices and (2) current IT systems support the Veterans Health Administration’s (VHA) core business functions. We compared our analysis to critical processes related to investment selection described in GAO’s framework.

Why GAO Did This Study VHA, an administration within VA, provides a broad range of primary care, specialized care, and related medical and social support services to veterans. In doing so, VHA operates one of the nation's largest health care systems through 168 VA medical centers and more than 1,000 outpatient facilities. The administration managed total budget resources reported at nearly $91 billion in fiscal year 2016. Based on interest in VHA's ability to oversee its health care system and provide timely care, GAO reviewed IT management at VHA. Specifically, GAO determined the extent to which VA's (1) IT management processes are consistent with leading practices and (2) current IT systems support VHA's core business functions. To do so, GAO analyzed documentation and interviewed officials about VA's approach to IT management processes related to strategic planning, investment management, and enterprise architecture, and compared VA's processes to leading practices. In addition, GAO reviewed data related to VA's IT systems and VHA's IT business needs. GAO further reviewed IT needs from three key VHA program areas. What GAO Found The Department of Veterans Affairs (VA) has established information technology (IT) management processes that are partially consistent with leading practices. VA has issued strategic plans that identify goals and objectives related to health IT; established investment review boards at the department-level and within the Veterans Health Administration (VHA) that are responsible for selecting IT investments aligned to VHA priorities; and documented VHA's core business functions within an enterprise architecture. However, the IT strategic plans do not include performance measures and targets for their defined objectives, VA's department-level IT investment board has been inactive and its investment selection guidance lacks criteria, and the department has not fully identified metrics aligned to core business functions to inform investment decisions. Until VA can improve these processes, it risks having IT systems that may not fully support VHA's mission. IT systems at VA are generally aligned to core business functions defined by VHA; however, among new service requests, which identify unmet needs of business owners, 817 out of a total of 2,772 IT needs identified for VHA since 1998 had not been met as of October 2016. About 39 percent of these open requests had been open for more than 5 years. GAO's review of the business needs identified in three key program areas—Pharmacy Benefits Management, Veterans Access to Care, and Community Care—showed a number of long-standing needs. According to VA officials, their need to balance the resources for IT needs across the department is a reason that business needs have remained unresolved. Until VA prioritizes resources to address these needs, VHA's programs may not be well supported by IT systems capable of delivering health care services consistent with its objectives. What GAO Recommends GAO is recommending that VA address the deficiencies identified with IT strategic planning, investment management, and enterprise architecture; and ensure that the three programs' IT needs are addressed. VA agreed with GAO's recommendations and described actions planned to address them by the end of fiscal year 2018.

gao_GAO-13-859T

gao_GAO-13-859T_0

States’ Use of IT to Administer UI Programs State agencies rely extensively on IT systems to carry out their UI program functions. These include systems for administering benefits and for collecting and administering the taxes used to fund the programs. The systems are costly and difficult to support. Most states’ systems cannot efficiently handle current workload demands, including experiencing difficulties implementing new federal or state laws due to constraints imposed by the systems. Labor’s Role in Facilitating IT Modernization In addition to providing general oversight of the UI program, the Department of Labor plays a role in facilitating the modernization of states’ UI IT systems. States Face Challenges in Modernizing Their Tax and Benefit Systems Our September 2012 report noted that selected states had made varying progress in modernizing the IT systems supporting their UI programs. Specifically, we found that each of the three states that were part of a multistate consortium were in the initial phases of planning that included defining business needs and requirements; two individual states were in the development phase—that is, building the system based on requirements; two were in a “mixed” phase where part of the system was in development and part was in the operations and maintenance phase; and two were completed and in operations and maintenance. These efforts had, among other things, enhanced states’ UI technology to support web-based services with more modern databases and replaced outdated programming languages. In particular, individual states encountered the following challenges, among others: All nine states cited limited funding and/or the increasing cost of UI systems as a major challenge. For example, they said that the economic downturn had resulted in smaller state budgets, which limited state funds for IT modernization. States also identified challenges in operating and maintaining a system developed by vendors because state employees may have lacked the needed expertise to maintain the new system once the vendor staff leave. Six of the nine states noted that continuing to operate their legacy systems while simultaneously implementing new UI systems required them to balance scarce staff resources between the two major efforts. In addition to the challenges facing individual states, we found that states participating in multistate consortiumschallenges: encountered a separate set of Representatives from all three consortiums indicated that differences among states in procurement, communication, and implementation of best practices; the involvement of each state’s IT office; and the extent to which the state’s IT is centralized could impact the effort to design and develop a common system. States within a consortium often had different views on the best approach to developing and modernizing systems. States had concerns about liabilities in providing services to another state. All three consortium representatives we spoke to noted that obtaining an independent and qualified leader for a multistate modernization effort was challenging. Both individual states and consortium officials had developed methods to mitigate specific challenges and identified lessons learned. Accordingly, we recommended that Labor (1) perform a comprehensive analysis of lessons learned and (2) distribute the analysis to each state through an information-sharing platform or repository, such as a website. Labor generally agreed with the first recommendation; it did not agree or disagree with the second recommendation but said it was committed to sharing lessons learned. These controls included the following: establishing aspects of a project management office for centralized and coordinated management of projects under its domain; incorporating industry-standard project management processes, tools, and techniques into their modernization UI efforts; adopting independent verification and validation to verify the quality of the modernization projects; and employing IT investment management standards, such as those called for in our IT investment management framework. If effectively implemented, these controls could help successfully guide the states’ UI modernization efforts. In summary, while states have taken steps to modernize the systems supporting their UI programs, they face a number of challenges in updating their aging legacy systems and moving program operations to a modern web-based IT environment. States have begun to address some of these challenges, and the nine states in our review had established some IT management controls, which are essential to successful modernization efforts.

Why GAO Did This Study The joint federal-state unemployment insurance program is the Department of Labor's largest income maintenance program, and its benefits provide a critical source of income for millions of unemployed Americans. The program is overseen by Labor and administered by the states. To administer their UI programs, states rely heavily on IT systems--both to collect and process revenue from taxes and to determine eligibility and administer benefits. However, many of these systems are aging and were developed using outdated computer programming languages, making them costly and difficult to support and incapable of efficiently handling increasing workloads. Given the importance of IT to state agencies' ability to process and administer benefits, GAO was asked to provide testimony summarizing aspects of its September 2012 report on UI modernization, including key challenges states have encountered in modernizing their tax and benefit systems. To develop this statement, GAO relied on its previously published work. What GAO Found As GAO reported in September 2012, nine selected states had made varying degrees of progress in modernizing the information technology (IT) systems supporting their unemployment insurance (UI) programs. Specifically, the states' modernization efforts were at various stages--three were in early phases of defining business needs and requirements, two were in the process of building systems based on identified requirements, two were in a "mixed" phase of having a system that was partly operational and partly in development, and two had systems that were completely operational. The enhancements provided by these systems included supporting web-based technologies with more modern databases and replacing outdated programming languages, among others. Nevertheless, while taking steps to modernize their systems, the selected states reported encountering a number of challenges, including the following: Limited funding and the increasing cost of UI systems . The recent economic downturn resulted in smaller state budgets, limiting what could be spent on UI system modernization. In addition, competing demands and fluctuating budgets made planning for system development, which can take several years, more difficult. A lack of sufficient expertise among staff . Selected states reported that they had insufficient staff with expertise in UI program rules and requirements, the ability to maintain IT systems developed by vendors, and knowledge of current programming languages needed to maintain modernized systems. A need to continue to operate legacy systems while simultaneously implementing new systems . This required states to balance scarce resources between these two efforts. In addition, a separate set of challenges arose for states participating in multistate consortiums, which were established to pool resources for developing joint systems that could be used by all member states: Differences in state laws and business processes impacted the effort to design and develop a common system. States within a consortium differed on the best approach for developing and modernizing systems and found it difficult to reach consensus. Decision making by consortium leadership raised concerns about liability for outcomes that could negatively affect member states. Consortiums found it difficult to obtain a qualified leader for a multistate effort who was unbiased and independent. Both consortium and individual state officials had taken steps intended to mitigate challenges. GAO also noted that a comprehensive assessment of lessons learned could further assist states' efforts. In addition, the states in GAO's review had established certain IT management controls that can help successfully guide modernization efforts. These controls include establishing a project management office, using industry-standard project management guidance, and employing IT investment management standards, among others. What GAO Recommends In its prior report on states' UI system modernization efforts, GAO recommended that the Department of Labor conduct an assessment of lessons learned and distribute the analysis to states through an information-sharing platform such as a website. Labor agreed with the first recommendation; it neither agreed nor disagreed with the second recommendation, but stated that it was committed to sharing lessons learned.

gao_NSIAD-96-107

gao_NSIAD-96-107_0

However, Navy officials have raised concerns about the viability of placing the engine on the DDG-51. The Center for Naval Analyses cost-benefit analysis of the ICR engine concluded that the engine should not be used on the DDG-51 due to the high cost to fit the engines on ships that were not designed for them and the small number of destroyers (14 at that time) remaining to be built. This latter problem was due, in part, to continuing contractor quality control problems. In March 1996, an ICR program official told us that the impact of the initial recuperator failure on the ICR program has been catastrophic and that the Navy has yet to recover from it. According to Navy officials and documents, the need to have a propulsion system available for ships in development, especially the new multinational frigate, drove an aggressive recuperator recovery plan to redesign recuperators without the benefit of results from tests of individual cores and the environmental test data from a special test unit. The Philadelphia facility cost $5.4 million to construct. Because of funding reductions and other problems, the Navy is considering eliminating this testing. Navy Undecided If It Will Test the Engine at Sea The Navy has not decided if it will test the ICR at sea because of the high cost involved. If it is determined that the program should continue, the Secretary of Defense should direct the Secretary of the Navy to not use the engine in the DDG-51 destroyer; determine total program costs for developing and acquiring the engine relative to the Navy’s requirements for future surface combatant ships, including costs for U.S. test facilities and/or pilot ship engine testing; prepare a facility use plan for the U.S. test site; and prepare a test plan and schedule for the engine that provide sufficient assurance that it can transition from development to production and be realistically available for use in any U.S. ship. Specifically, with the January 1995 failure of the engine’s recuperator, the program has experienced serious design, manufacturing, and quality assurance problems. A recorded menu will provide information on how to obtain these lists.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the Navy's intercooled recuperated (ICR) engine program, focusing on the: (1) Navy's need for the engine; (2) cost, schedule, and performance of the program; and (3) impact of the Navy's test and development strategies. What GAO Found GAO found that: (1) some Navy officials are questioning the economic viability of the ICR engine program and have raised concerns over placing ICR engines on naval destroyers, since most destroyers are equipped with reliable propulsion systems; (2) engine development costs pose a significant economic investment; (3) some officials believe the engine should not be used on naval destroyers given the small number of new U.S. destroyers involved, adequacy of current destroyer engines, high cost of incorporating the engine, uncertainty of future integration plans, and current state of ICR development; (4) the Navy has not recovered from initial recuperator failure that resulted from design, manufacturing, and quality assurance problems; (5) a contractor is instituting a recovery plan to redesign future recuperators, but the plan is not allowing sufficient time to evaluate test data prior to ordering production ICR engines; (6) the Navy has interrupted work on redesigning future recuperators because of funding reductions, contractor quality control problems, manufacturing problems, and delivery delays; and (7) the Navy needs to decide how and when it will use the Philadelphia ICR test facility and if it will test the ICR engine at sea.

gao_GAO-02-715T

gao_GAO-02-715T_0

Through such improvements, IRS expected to better enable taxpayers to comply with the tax laws. Compliance and Collection Declines The first area of risk involves the declines in compliance and collection programs. As part of our ongoing work for the House Ways and Means Subcommittee on Oversight, we identified large and pervasive declines across the compliance and collection programs, except for returns processing, between fiscal years 1996 and 2001. For example, individual and corporate audit productivity as measured by cases closed per unit of staff time declined 31 and 47 percent, respectively, while field and telephone collection productivity declined over 20 percent. A significant decline in voluntary compliance would undermine IRS’s modernization effort. Performance Management Risks As noted, IRS has made progress in revamping its performance management system. In addition to having comparable measures to gauge performance, IRS needs to do more and better evaluations of its business practices so that it can determine the factors that affect program performance and identify ways to more effectively use resources and improve service. IRS’s current method of producing financial statements is not a workable long-term solution to meeting its financial reporting responsibilities for two basic reasons. Appendix: Overview of Trends in Tax Administration Overall, since the mid-1990s IRS has seen increased workload, decreased staffing, and significant changes in the allocation of resources between taxpayer assistance programs and its compliance and collection programs.

What GAO Found In light of the fourth anniversary of the Internal Revenue Service (IRS) Restructuring and Reform Act of 1998, which established Congress' expectation that IRS modernize to better meet taxpayer needs, GAO gave an overview of IRS's current performance and resources and then assessed the progress that IRS has made modernizing and the risks to continued progress. Overall, IRS has seen increased workload, decreased staffing, and significant changes in the allocation of resources between taxpayer assistance programs and its compliance and collection programs. Between 1995 and 2001, IRS's workload, measured by returns filed, increased by 10 percent while aggregate staffing declined by 14 percent. Over the same time, there was a significant internal reallocation of resources with a disproportionate decline in compliance and collection program staffing to accommodate more emphasis on taxpayer service, such as telephone assistance, and to information systems operation and investment. Electronic filing of returns increased but not enough to reduce paper returns sufficiently to free significant processing resources for use elsewhere. The reallocation of resources shows signs of beginning to produce more accurate service for taxpayers, but the compliance and collection programs have seen large and pervasive declines in performance indicators such as audit rates, collection cases closed, enforcement actions such as liens and levies, and raw productivity.

gao_GAO-16-265

gao_GAO-16-265_0

Federal Data Services Hub The data hub is a CMS system that acts as a single portal for exchanging information between the federally facilitated marketplace and CMS’s external partners, including other federal agencies, state-based marketplaces, other state agencies, other CMS systems, and issuers of qualified health plans. As a result, CMS does not consider the data hub to be a repository of personally identifiable information. In September 2014, we reported that while CMS had taken steps to protect the security and privacy of data processed and maintained by the complex set of systems and interconnections that support Healthcare.gov, weaknesses remained in both the processes used for managing information security and privacy as well as the technical implementation of IT security controls. In addition, CMS did not have an effective process for resolving inconsistencies for individual applicants for the federal Health Insurance Marketplace. None of the incidents described in the data included any evidence that an attacker had compromised sensitive data, including PII, from Healthcare.gov. While CMS has taken steps to secure the data hub, we identified weaknesses in the technical controls protecting the data flowing through the system. For example: CMS did not appropriately restrict the use of administrative privileges for data hub systems. In addition to the above weaknesses, we identified other security weaknesses in controls related to boundary protection, identification and authentication, authorization, encryption, audit and monitoring, and software updates that limit the effectiveness of the security controls on the data hub and unnecessarily place sensitive information at risk of unauthorized disclosure, modification, or exfiltration. CMS Has Not Fully Implemented Security and Privacy Oversight of State-Based Marketplaces, Three of Which Had Significant Weaknesses CMS has taken various actions to oversee the security and privacy controls implemented at the state-based marketplaces, including assigning roles and responsibilities for oversight entities, conducting regular meetings with state officials to discuss pending issues, and establishing a new reporting tool to monitor marketplace performance. While CMS has developed policies for overseeing security and privacy controls at the state-based marketplaces, it has not defined specific oversight procedures, the timing for when each activity should occur, or what follow-up corrective actions should be performed if deficiencies are identified. The three states generally agreed with the potential mitigation activities and have plans to address them. Recommendations for Executive Action To improve the oversight of privacy and security controls over the state- based marketplaces, we recommend that the Secretary of Health and Human Services direct the Administrator of the Centers for Medicare & Medicaid Services to take the following three actions: define procedures for overseeing state-based marketplaces, to include day-to-day activities of the relevant offices and staff; develop and document procedures for reviewing the SMART tool, including specific follow-up timelines and identifying corrective actions to be performed if deficiencies are identified; and require continuous monitoring of the privacy and security controls over state-based marketplaces and the environments in which those systems operate to more quickly identify and remediate vulnerabilities. In a separate report with limited distribution, we are also making 27 recommendations to resolve technical information security weaknesses within the data hub related to boundary protection, identification and authentication, authorization, encryption, audit and monitoring, and software updates. HHS concurred with all of GAO’s recommendations. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) describe the extent to which security and privacy incidents were reported for Healthcare.gov or key supporting systems; (2) assess the effectiveness of the controls implemented by the Centers for Medicare & Medicaid Services (CMS) to protect the Federal Data Services Hub (data hub) and the information it transmits; (3) assess the effectiveness of CMS’s oversight of key program elements and controls implemented by state-based marketplaces and the effectiveness of those elements at selected state-based marketplaces to protect the information they contain. To address our first objective, we reviewed and analyzed data on information security and privacy incidents reported by CMS that occurred between October 6, 2013, and March 8, 2015, affecting Healthcare.gov and its supporting systems. Lastly, we interviewed knowledgeable officials and reviewed CMS policies and procedures for incident handling.

Why GAO Did This Study The Patient Protection and Affordable Care Act required the establishment of health insurance marketplaces in each state to allow consumers to compare, select, and purchase health insurance plans. States establishing their own marketplaces are responsible for securing the supporting information systems to protect sensitive personal information they contain. CMS is responsible for overseeing states' efforts, as well as securing federal systems to which marketplaces connect, including its data hub. GAO was asked to review security issues related to the data hub, and CMS oversight of state-based marketplaces. Its objectives were to (1) describe security and privacy incidents reported for Healthcare.gov and related systems, (2) assess the effectiveness of security controls for the data hub, and (3) assess CMS oversight of state-based marketplaces and the security of selected state-based marketplaces. GAO reviewed incident data, analyzed networks and controls, reviewed policies and procedures, and interviewed CMS and marketplace officials. This is a public version of a limited official use only report that GAO issued in March 2016. Sensitive information on technical issues has been omitted from this version. What GAO Found The Centers for Medicare & Medicaid Services (CMS) reported 316 security-related incidents, between October 2013 and March 2015, affecting Healthcare.gov—the web portal for the federal health insurance marketplace—and its supporting systems. According to GAO's review of CMS records for this period, the majority of these incidents involved such things as electronic probing of CMS systems by potential attackers, which did not lead to compromise of any systems, or the physical or electronic mailing of sensitive information to an incorrect recipient. None of the incidents included evidence that an outside attacker had successfully compromised sensitive data, such as personally identifiable information. Consistent with federal guidance, CMS has taken steps to protect the security and privacy of data processed and maintained by the systems and connections supporting Healthcare.gov, including the Federal Data Services Hub (data hub). The data hub is a portal for exchanging information between the federal marketplace and CMS's external partners. To protect these systems, CMS assigned responsibilities to appropriate officials and documented information security policies and procedures. However, GAO identified weaknesses in technical controls protecting the data flowing through the data hub. These included insufficiently restricted administrator privileges for data hub systems, inconsistent application of security patches, and insecure configuration of an administrative network. GAO also identified additional weaknesses in technical controls that could place sensitive information at risk of unauthorized disclosure, modification, or loss. In a separate report, with limited distribution, GAO recommended 27 actions to mitigate the identified weaknesses. In addition, while CMS has taken steps to oversee the security and privacy of data processed and maintained by state-based marketplaces, improvements are needed. For example, CMS assigned roles and responsibilities to various oversight entities, met regularly with state officials, and developed a reporting tool to monitor performance. However, it has not defined specific oversight procedures, such as the timing for when each activity should occur, or what follow-up corrective actions should be performed if deficiencies are identified. Further, CMS does not require sufficiently frequent monitoring of the effectiveness of security controls for state-based marketplaces, only requiring testing once every 3 years. GAO identified significant weaknesses in the controls at three selected state-based marketplaces. These included insufficient encryption and inadequately configured firewalls, among others. In September 2015, GAO reported these results to the three states, which generally agreed and have plans in place to address the weaknesses. Without well-defined oversight procedures and more frequent monitoring of security controls, CMS has less assurance that state-based marketplaces are adequately protected against risks to the sensitive data they collect, process, and maintain. What GAO Recommends GAO is recommending that CMS define procedures for overseeing the security of state-based marketplaces and require continuous monitoring of state marketplace security controls. HHS concurred with GAO's recommendations.

gao_GAO-10-728

gao_GAO-10-728_0

Stakeholders Addressed Issues in Three Key Areas That Would Need To Be Considered in Designing an NIB Stakeholders who responded to our questionnaire addressed a variety of issues in three key areas that would need to be considered in designing an NIB: mission and administrative structure, financing authorities, and project eligibility and prioritization. While a Majority of Stakeholders Supported the Creation of an NIB, Their Views Varied on Its Mission and Administrative Structure About three-quarters of stakeholders (20 of 27) responding to our questionnaire supported the creation of an NIB. In addition, there was no consensus among stakeholders on whether an NIB should be administered as a new responsibility for an existing federal agency, structured as a government corporation, or structured as a GSE. We have previously reported that an entity’s administrative structure affects the extent to which it is under federal control, how its activities are reflected in the federal budget, and the risk exposure of U.S. taxpayers. A Majority of Stakeholders Agreed on an NIB’s Financing Authorities, Including How an NIB Should Be Funded and How It Should Finance Projects Most stakeholders (20 of 22) agreed that the federal government should provide all or some of the initial capital for an NIB, though 4 stakeholders suggested that federal capitalization be augmented by private funds. Most stakeholders (21 of 23) agreed that an NIB should be authorized to generate its own funds for operating expenses and lending, with a majority of stakeholders (15) supporting an NIB authorized to use multiple mechanisms to generate funds. Stakeholders offered a variety of reasons for supporting financial mechanisms. Stakeholders’ Views Varied on What Projects Should Be Eligible for Financing, but a Majority of Stakeholders Agreed on How Projects Should Be Prioritized Stakeholders had a variety of views on the types of projects that should be eligible for financing from an NIB. Stakeholders also agreed that an NIB should prioritize projects that address the greatest infrastructure need and that generate the greatest public health and environmental benefits. Two examples illustrate these differences: Santa Paula, California, entered into a DBFO in 2008. Cost and Operational Efficiencies Another advantage cited by company and municipal officials and publications we identified is that privately financed PPPs may bring cost and operational efficiencies to wastewater collection and treatment. Several municipal officials told us companies can take advantage of economies of scale in a privately financed PPP by, for example, buying key supplies, such as chemicals, in bulk. Reported Challenges to Considering and Developing Privately Financed Wastewater PPPs Municipal and company officials also identified a number of potential challenges to considering and developing privately financed wastewater PPPs. Municipal and company officials told us that private financing typically costs more than tax-exempt municipal bonds. The NRC study also reported that, for municipalities, private financing is roughly 20 to 40 percent more expensive than public financing. We sent the questionnaire to 23 national organizations with expertise in the wastewater industry in one of the following areas: financing and operating wastewater projects, constructing and maintaining wastewater infrastructure, local and state wastewater infrastructure needs, and environmental protection. To determine the extent to which wastewater public-private partnerships (PPPs) have been privately financed, we conducted a literature search of online databases to identify academic and news articles discussing privately financed wastewater PPPs initiated since 1992, when President Bush signed an Executive Order encouraging such partnerships. To determine the potential advantages and challenges of privately financed wastewater PPPs, we conducted interviews with officials from six of the seven municipalities we identified that entered into a privately financed wastewater PPP since 1992; officials from Cranston, Rhode Island, declined to speak with us. In addition, we conducted case studies in four of the states in which privately financed wastewater PPPs have occurred: Alaska, California, New Jersey, and Ohio. After reviewing various publications, we included the 10 publications that: (1) focused on the wastewater industry in the United States; (2) discussed the advantages and challenges of wastewater PPPs; and (3) specifically addressed the use of private financing in the context of a PPP. 1. 2. 3. What relationship, if any, should an NIB have with the existing state- level Clean Water State Revolving Fund programs? Should an NIB exclusively finance large infrastructure projects? National Research Council.

Why GAO Did This Study Communities will need hundreds of billions of dollars in coming years to construct and upgrade wastewater infrastructure. Policymakers have proposed a variety of approaches to finance this infrastructure, including the creation of a national infrastructure bank (NIB) and the increased use of privately financed public-private partnerships (PPP). In this context, GAO was asked to identify (1) stakeholder views on issues to be considered in the design of an NIB and (2) the extent to which private financing has been used in wastewater PPPs and its reported advantages and challenges. In conducting this work, GAO developed a questionnaire based on existing NIB proposals and administered it to 37 stakeholders with expertise in wastewater utilities, infrastructure needs, and financing; GAO received 29 responses from stakeholders with a variety of perspectives about an NIB. To determine the extent to which wastewater PPPs have been privately financed and their advantages and disadvantages, GAO identified and interviewed municipalities involved in privately financed PPPs and wastewater services companies, conducted case studies in states with privately financed PPPs, and conducted a literature review. GAO is not making any recommendations. While this report discusses a number of funding approaches, GAO is not endorsing any option and does not have a position on whether an NIB should be established. What GAO Found Stakeholders who responded to GAO's questionnaire discussed issues in the following three key areas that should be considered in designing an NIB: 1) Mission and administrative structure. While a majority of stakeholders supported the creation of an NIB, their views varied on its mission and administrative structure. One-third supported an NIB to fund only water and wastewater infrastructure, while two-thirds responded that it should also fund transportation and energy projects. There was no consensus among stakeholders on whether an NIB should be administered by an existing federal agency, structured as a government corporation, or structured as a government-sponsored enterprise. GAO has previously reported that an entity's administrative structure affects the extent to which it is under federal control, how its activities are reflected in the federal budget, and the risk exposure of U.S. taxpayers. 2) Financing authorities. A majority of stakeholders agreed on an NIB's financing authorities. Specifically, a majority said the federal government should provide the initial capital; an NIB should be authorized to use a variety of options to generate funds for operating expenses and lending; and an NIB should offer a variety of mechanisms for financing projects, such as providing direct loans, loan guarantees, and funding for the Environmental Protection Agency's existing wastewater funding program--the Clean Water State Revolving Fund. 3) Project eligibility and prioritization. Stakeholders' views varied on which types of projects should be eligible for NIB financing, such as whether it should exclusively finance large projects. In addition, a majority agreed an NIB should prioritize projects that address the greatest infrastructure need and generate the greatest environmental and public health benefits. GAO identified seven municipalities that have entered into privately financed PPPs--contractual agreements in which the private partner invests funds in the wastewater infrastructure--since 1992: Arvin, California; Cranston, Rhode Island; Fairbanks, Alaska; Franklin, Ohio; North Brunswick, New Jersey; Santa Paula, California; and Woonsocket, Rhode Island. Municipal and wastewater company officials GAO interviewed identified the following examples of advantages of privately financed PPPs: 1) Provide access to financing for municipalities that have difficulty using traditional financing sources, such as municipal bond markets. 2) May make operations more efficient, for example, by taking advantage of economies of scale by buying key supplies, like chemicals, in bulk. 3) May bring new infrastructure online faster than traditional public procurement because companies have more flexibility. These officials identified challenges of privately financed PPPs, including: 1) Local opposition may arise out of concerns about higher wastewater rates and the potential loss of municipal wastewater jobs. 2) Private financing is generally more costly than tax-exempt municipal bonds because of higher interest rates; a 2002 National Research Council study reported that private financing is 20 to 40 percent more expensive. 3) Contracts can be costly and difficult to develop because they are complex, and municipalities and companies are unfamiliar with this type of PPP.

gao_GAO-05-526

gao_GAO-05-526_0

Background The Homeland Security Act of 2002 established USCIS within DHS. As to the performance measures and their related standards or goals, three of USCIS’s performance measures are call quality monitoring, accuracy of information provided, and accuracy of capturing information. Accuracy of information provided. The contract stated that the contractor would be eligible to earn financial incentive awards if the average monthly performance met or exceeded the standards on a quarterly basis at each call center, and allowed USCIS to make deductions from payments to the contractor if the average monthly performance fell below the standards. USCIS Evaluated Contractor’s Performance but Suspended Use of Financial Incentives for More Than 2 Years Due to Performance Measurement Dispute USCIS did not reach agreement with the contractor on how to apply the performance measurement requirements described in the PRS before awarding the performance-based service contract. USCIS suspended all financial incentives, positive or negative, while the parties negotiated this issue over a period of about 16 months without reaching agreement. After negotiations were abandoned, USCIS determined that, for the fourth quarter of 2004, the contractor had failed to meet four of seven performance measures and merited a payment deduction. In a separate matter, USCIS failed to ensure that all contractual, regulatory, and GAO standards pertaining to the documentation of the contractor’s performance were fulfilled. By letter dated November 29, 2004, the contractor stated that, under the terms of the contract, USCIS could not unilaterally determine the performance measurement requirements because all aspects of the requirements were negotiable, including the performance standards. USCIS Plans to Solicit New Tier 1 Call Center Contracts with Changes to Improve Performance Although the disagreement between the two parties had not been resolved, USCIS exercised its option to extend the current call center contract for another year through May 31, 2006, to allow time to solicit and award new call center contracts. With respect to any performance deficiencies, the government’s records should include, among other things, the number and type of defects observed and any actions to correct deficiencies. USCIS Has Used Results of Monitoring Efforts to Identify Opportunities to Improve Customer Service and Call Flow at All Call Centers USCIS used contractor performance data, including the results of surveys, call monitoring, and the mystery shopper program, to identify opportunities to improve customer service, including improving call- response times, help CSRs and IIOs better respond to customer inquiries, and manage the flow of calls into call centers. It is too early to assess the impact of these initiatives. Citizenship and Immigration Services (USCIS) established to monitor and evaluate the performance of contractor-operated call centers, we interviewed USCIS headquarters officials in Washington, D.C.; Tier 1 contractor officials in Arlington, Virginia, and at a contractor-operated call center; and an official representing an independent consulting firm under contract to USCIS and located in Fairfax, Virginia. 3. 4.

Why GAO Did This Study The U.S. Citizenship and Immigration Services (USCIS) bureau within the Department of Homeland Security (DHS) provides toll-free telephone assistance through call centers to immigrants, their attorneys, and others seeking information about U.S. immigration services and benefits. As the volume of calls increased--from about 13 million calls in fiscal year 2002 to about 21 million calls in fiscal year 2004--questions were raised about USCIS's ability to ensure the reliability and accuracy of the information provided at call centers run by an independent contractor. This report analyzes: (1) the performance measures established by USCIS to monitor and evaluate the performance of contractor-operated call centers; (2) how performance measures were used to evaluate the contractor's performance; and (3) any actions USCIS has taken, or plans to take, to strengthen call center operations. What GAO Found USCIS developed seven performance measures intended to assess the performance and overall quality of responses provided by customer service representatives at contractor-operated call centers. These measures include how quickly calls were answered and the accuracy of information provided. The contract between USCIS and its contractor stipulated that the contractor could earn financial incentive awards if the average monthly performance met or exceeded the standards on a quarterly basis at each of four call centers. Conversely, financial deductions could be made if the standards were not met. USCIS did not finalize the terms regarding how the contractor's actual performance would be calculated, or scored, before awarding the contract. This limited USCIS's ability to exercise performance incentives (positive or negative) because the parties could not reach agreement on performance terms. USCIS suspended the use of financial incentives while the parties negotiated the issue. Agreement was not reached after 16 months, however, USCIS determined that the contractor had failed to meet standards for 4 of the 7 performance measures in the fourth quarter of 2004 and took action to reduce its payments for services. The contractor objected, citing the lack of agreement on the performance measurements and the impact of workload increases, but USCIS disagreed and stated it would reduce payment. In a separate but related matter, USCIS failed to meet contractual, regulatory, and GAO standards pertaining to how the contractor's performance would be documented--especially with respect to any deficiencies. Finally, USCIS exercised its option to extend the call center contract through May 2006, to allow time to solicit and award new call center contracts. USCIS said it intends to finalize performance measurement terms in the new contracts. USCIS used contractor performance data it collected over the course of the contract to identify opportunities to improve customer service and call flow, among other things. Several initiatives were launched as a result.

gao_GAO-12-674T

gao_GAO-12-674T_0

Background The federal government and the states share responsibilities for financing and administering Medicaid. CMS is responsible for overseeing state Medicaid programs. CMS’s Oversight of Managed Care Rate Setting Was Inconsistent and Did Not Ensure the Quality of the Data Used to Set Rates We found that CMS had not ensured that all states were complying with the actuarial soundness requirements and did not have sufficient efforts in place to ensure that states were using reliable data to set managed care rates. Specifically, in August 2010, we reported that there were significant gaps in CMS’s oversight of 2 of the 26 states included in our review. Second, at the time of our work, CMS had not completed a full review of a second state’s rate setting since the actuarial soundness requirements became effective in August 2002, and therefore may have provided federal funds for managed care rates that were not in compliance with all of the requirements. Variation in practices across CMS regional offices contributed to these gaps and other inconsistencies in the agency’s oversight of states’ rate setting. We also reported in 2010 that CMS’s efforts to ensure the quality of the data used to set rates were generally limited to requiring assurances from states and health plans—efforts that did not provide the agency with enough information to ensure the quality of the data used. With limited information on data quality, CMS cannot ensure that states’ managed care rates are appropriate, which places billions of federal and state dollars at risk for misspending. CMS Oversight of Medicaid Supplemental Payments Needs Improvement In our prior work, we have reported on varied financing arrangements involving supplemental payments that shifted costs from the states to the federal government. Our work found that while a variety of federal legislative and CMS actions have helped curb inappropriate financing arrangements, gaps in oversight remain. and accountability requirements in place for DSH payments. However, these requirements are not in place for non-DSH supplemental payments, which may be increasing. By 2010, this amount had grown to $14 billion, with a federal share of $9.6 billion. However, according to CMS officials, states’ reporting of non-DSH supplemental payments was likely incomplete. For example, there are now improved transparency As a result of our prior work, we have made numerous recommendations aimed at improving federal oversight of supplemental payments. Additionally, given continued concerns associated with Medicaid supplemental payments, we have work under way related to states’ reporting and CMS’s oversight of DSH and non-DSH supplemental payments. CMS’s Expanded Role in Ensuring Medicaid Program Integrity Presents Challenges to and Opportunities for Assisting States In December 2011, we testified that the key challenge CMS faced in implementing the statutorily established federal Medicaid Integrity Program was ensuring effective coordination to avoid duplicating state program integrity efforts, particularly in the area of auditing provider claims. After examining CMS’s program expenditures, we found that overpayments identified by its audit contractors since fiscal year 2009 were not commensurate with its contractors’ costs. In addition, CMS reported in 2011 that it was redesigning the National Provider Audit Program to achieve better results. Data limitations—in particular, the use of summary data that states submit to CMS on a quarterly basis—may have hampered the contractors’ ability to identify improper claims beyond what states already identified. CMS’s other core oversight activities—triennial comprehensive state program integrity reviews and annual assessments—are broad in scope and were conceived to provide a basis for the development of appropriate technical assistance. However, we found that much of the information collected from the annual assessments duplicated information collected during triennial reviews. Finally, we found that the Medicaid Integrity Institute appears to promote effective state coordination and collaboration. High-Risk Series: An Update.

Why GAO Did This Study Medicaid, a joint federal-state health care program, financed care for about 67 million people at a cost of $401 billion in fiscal year 2010. At the federal level, CMS, an agency within the Department of Health and Human Services, is responsible for overseeing the design and operations of states’ Medicaid programs, while the states administer their respective programs’ day-to-day operations. The shared financing arrangement between the federal government and the states presents challenges for program oversight and Medicaid has been on GAO’s list of high-risk programs since 2003, in part, because of concerns about the fiscal management of the program. Our prior work has shown that CMS continues to face challenges overseeing the Medicaid program. What GAO Found Oversight of managed care rate-setting has been inconsistent. In August 2010, GAO reported that the Centers for Medicare & Medicaid Services (CMS) had not ensured that all states were complying with the managed care actuarial soundness requirements that rates be developed in accordance with actuarial principles, appropriate for the population and services, and certified by actuaries. For example, GAO found significant gaps in CMS’s oversight of 2 of the 26 states reviewed—CMS had not reviewed one state’s rates in multiple years and had not completed a full review of another state’s rates since the actuarial soundness requirements became effective. Variation in practices across CMS regional offices contributed to these gaps and other inconsistencies in the agency’s oversight of states’ rate setting. GAO’s previous work also found that CMS’s efforts to ensure the quality of the data used to set rates were generally limited to requiring assurances from states and health plans—efforts that did not provide the agency with enough information to ensure the quality of the data used. With limited information on data quality, CMS cannot ensure that states’ managed care rates are appropriate, which places billions of federal and state dollars at risk for misspending. GAO made recommendations to improve CMS’s oversight. Oversight of supplemental payments needs improvement. GAO has reported on varied financing arrangements involving supplemental payments—disproportionate share hospital (DSH) payments states are required to make to certain hospitals, and other non-DSH supplemental payments—that increase federal funding without a commensurate increase in state funding. GAO’s work has found that while a variety of federal legislative and CMS actions have helped curb inappropriate financing arrangements, gaps in oversight remain. For example, while there are federal requirements designed to improve transparency and accountability for state DSH payments, similar requirements are not in place for non-DSH supplemental payments, which may be increasing. From 2006 to 2010, state-reported non-DSH supplemental payments increased from $6.3 billion to $14 billion; however, according to CMS officials, reporting was likely incomplete. GAO made numerous recommendations aimed at improving oversight of supplemental payments. Challenges exist related to CMS’s role ensuring program integrity. In December 2011, GAO testified that the key challenge CMS faced in implementing the statutorily established federal Medicaid Integrity Program was ensuring effective coordination to avoid duplicating state program integrity efforts, particularly in the area of auditing provider claims. GAO found that overpayments identified by its audit contractors since fiscal year 2009 were not commensurate with its contractors’ costs, and CMS reported in 2011 that it was redesigning its audit program to achieve better results. Data limitations may have hampered the contractors’ ability to identify improper claims beyond what states had already identified. With regard to CMS’s other core oversight activities—annual assessments and triennial comprehensive state program integrity reviews—GAO found that much of the information collected from the annual assessments duplicated information collected during triennial reviews. Finally, CMS’s Medicaid Integrity Institute, a national training program, appears to promote effective state coordination and collaboration.