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gao_GAO-01-67

gao_GAO-01-67_0

Panel speakers then discussed how data sharing has benefited their programs, how technology offers new data- sharing possibilities, the privacy and security concerns that arise in a data- sharing environment, and how data sharing can be advanced among benefit and loan programs governmentwide. Finally, many states have begun to participate in multistate matches, known as Public Assistance Report Information System (PARIS) matches, to identify welfare recipients who receive simultaneous benefits in more than one state. Three of the data-sharing applications discussed involve computer applications that make direct communication among computer systems possible. If agencies shared their data in this manner, individuals applying for or receiving benefits from multiple agencies could provide much of the information that these agencies needed only one time, to one agency. Although symposium speakers and audience participants who discussed privacy issues agreed that it is important to protect this right, they disagreed about the extent to which data sharing threatens it. One idea proposed by Mr. Stack and others would be to allow agencies to use some of the program dollars saved through data-sharing efforts to expand such efforts and to pursue cases in which data exchanges have indicated possible overpayments.

What GAO Found Data sharing among federal agencies that run federal benefit and loan programs is important for determining the eligibility of applicants and beneficiaries. A GAO symposium on data sharing highlighted various issues facing federal agencies in their efforts to prevent abuse of federal programs. Symposium speakers focused on the number of program dollars saved by interagency data exchanges. Agencies using computer matching have detected undisclosed income and welfare recipients who receive benefits from more than one state. Improved technologies offer agencies the opportunity to expand their data sharing efforts. Such technologies include computer systems that can communicate directly with other systems and computer networks that can obtain information directly from financial institutions. Symposium speakers agreed that applicants' privacy should be protected when personal information is shared among agencies, but they disagreed about the extent to which data sharing threatens it. Privacy laws and security-related technology provide individuals with some protection against the possible misuse of personal information, but symposium participants differed on whether these protections are adequate.

gao_GAO-07-825

gao_GAO-07-825_0

In 1976, the Congress passed TSCA to provide EPA with the authority to obtain information on chemicals and regulate those substances that pose an unreasonable risk to human health or the environment. Under REACH, authority exists to establish restrictions for any chemical that poses unacceptable risks and to require authorization for the use of chemicals identified as being of very high concern. REACH Requires Chemical Companies to Develop More Information than TSCA on the Effects of Chemicals on Human Health and the Environment TSCA does not require companies to develop information for either new or existing chemicals, whereas REACH generally requires companies to submit and, in some circumstances, requires companies to develop such information for both kinds of chemicals. For existing chemicals, companies do not have to develop such information unless EPA requires them to do so. TSCA Does Not Require Chemical Companies to Develop Hazard Information for Existing Chemicals, and EPA Uses Regulatory and Voluntary Programs to Gather Such Information for Certain Chemicals While TSCA does not require chemical companies to develop information on the harmful effects of existing chemicals on human health or the environment, TSCA provides that EPA, by issuing a test rule, can require such information on a case-by-case basis. In addition, this program may not provide enough information for EPA to use in making risk-assessment decisions. TSCA Generally Requires EPA to Demonstrate That Chemicals Will Cause Unreasonable Risk While REACH Requires Chemical Companies to Ensure No Adverse Chemical Effects Both TSCA and REACH provide regulators with authorities to control chemical risks by restricting the production or use of both new and existing chemicals. EPA Has Had Difficulty Proving That Chemicals Pose Unreasonable Risks and Has Regulated Few Existing Chemicals under Section 6 of TSCA Even when EPA has toxicity and exposure information on existing chemicals, the agency has had difficulty demonstrating that chemicals present or will present an unreasonable risk and that they should have limits placed on their production or use. Further, the regulation must apply the least burdensome requirement that will adequately protect against such risk. EPA has these 90 days to review the chemical information in the premanufacture notice and identify the chemical’s potential risks. In addition to such authorization procedures, REACH provides procedures for placing restrictions on chemicals that pose an unacceptable risk to health or the environment. Accordingly, REACH places greater limitations on the kinds of information that companies may claim as confidential or sensitive. EPA’s Ability to Share Data Collected under TSCA Is Limited TSCA has provisions to protect information claimed by chemical companies as confidential or sensitive business information, such as information on chemical production volumes and trade secret formulas. Concluding Observations Substantial differences exist between TSCA and REACH in their approaches to obtaining the information needed to identify chemical risks; controlling the manufacture, distribution, and use of chemicals; and providing the public with information on harmful chemicals. Toxic Substances Control Act and the EU’s Registration, Evaluation and Authorization of Chemicals New chemicals are those not on the TSCA inventory. EPA can issue a proposed order or seek a court injunction to prohibit or limit the manufacture, processing, distribution in commerce, use, or disposal of a chemical if EPA determines that there is insufficient information available to permit a reasoned evaluation of the health and environmental effects of a chemical and that (1) in the absence of such information, the chemical may present an unreasonable risk of injury to health or the environment or (2) it is or will be produced in substantial quantities and (a) it either enters or may reasonably be anticipated to enter the environment in substantial quantities or (b) there is or may be significant or substantial human exposure to the substance. To ensure that EPA can implement its initiatives without having to face legal challenges and delays, the Congress may wish to consider revising TSCA to provide explicit authority for EPA to enter into enforceable consent agreements under which chemical companies are required to conduct testing, clarify that health and safety data cannot be claimed as confidential require substantiation of confidentiality claims at the time that the claims are submitted to EPA, limit the length of time for which information may be claimed as confidential without reaffirming the need for confidentiality, establish penalties for the false filing of confidentiality claims, and authorize states and foreign governments to have access to confidential business information when they can demonstrate to EPA that they have a legitimate need for the information and can adequately protect it against unauthorized disclosure.

Why GAO Did This Study Chemicals play an important role in everyday life. However, some chemicals are highly toxic and need to be regulated. In 1976, the Congress passed the Toxic Substances Control Act (TSCA) to authorize the Environmental Protection Agency (EPA) to control chemicals that pose an unreasonable risk to human health or the environment, but some have questioned whether TSCA provides EPA with enough tools to protect against chemical risks. Like the United States, the European Union (EU) has laws governing the production and use of chemicals. The EU has recently revised its chemical control policy through legislation known as Registration, Evaluation and Authorization of Chemicals (REACH) in order to better identify and mitigate risks from chemicals. GAO was asked to review the approaches used under TSCA and REACH for (1) requiring chemical companies to develop information on chemicals' effects, (2) controlling risks from chemicals, and (3) making information on chemicals available to the public. To review these issues, GAO analyzed applicable U.S. and EU laws and regulations and interviewed U.S. and EU officials, industry representatives, and environmental advocacy organizations. GAO is making no recommendations. What GAO Found REACH requires companies to develop information on chemicals' effects on human health and the environment, while TSCA does not require companies to develop such information absent EPA rule-making requiring them to do so. While TSCA does not require companies to develop information on chemicals before they enter commerce (new chemicals), companies are required to provide EPA any information that may already exist on a chemical's impact on human health or the environment. Companies do not have to develop information on the health or environmental impacts of chemicals already in commerce (existing chemicals) unless EPA formally promulgates a rule requiring them to do so. Partly because of the resources and difficulties the agency faces in order to require testing to develop information on existing chemicals, EPA has moved toward using voluntary programs as an alternative means of gathering information from chemical companies in order to assess and control the chemicals under TSCA. While these programs are noteworthy, data collection has been slow in some cases, and it is unclear if the programs will provide EPA enough information to identify and control chemical risks. TSCA places the burden of proof on EPA to demonstrate that a chemical poses a risk to human health or the environment before EPA can regulate its production or use, while REACH generally places a burden on chemical companies to ensure that chemicals do not pose such risks or that measures are identified for handling chemicals safely. In addition, TSCA provides EPA with differing authorities for controlling risks, depending on whether the risks are posed by new or existing chemicals. For new chemicals, EPA can restrict a chemical's production or use if the agency determines that insufficient information exists to permit a reasoned evaluation of the health and environmental effects of the chemical and that, in the absence of such information, the chemical may present an unreasonable risk. For existing chemicals, EPA may regulate a chemical for which it finds a reasonable basis exists to conclude that it presents or will present an unreasonable risk. Further, TSCA requires EPA to choose the regulatory action that is least burdensome in mitigating the unreasonable risk. However, EPA has found it difficult to promulgate rules under this standard. Under REACH, chemical companies must obtain authorization to use chemicals that are listed as chemicals of very high concern. Generally, to obtain such authorization, chemical companies need to demonstrate that they can adequately control risks posed by the chemical or otherwise ensure that the chemical is used safely. TSCA and REACH both have provisions to protect information claimed by chemical companies as confidential or sensitive business information but REACH requires greater public disclosure of certain information, such as basic chemical properties, including melting and boiling points. In addition, REACH places greater restrictions on the kinds of information chemical companies may claim as confidential.

gao_GAO-06-12

gao_GAO-06-12_0

In fiscal year 2005, about $1.79 billion, or 70 percent, of CMS’s nearly $2.55 billion total appropriations for IT went to support Medicaid state investments. The remaining approximately $0.76 billion, or 30 percent, was used for CMS’s internal investments. This process is carried out by CMS’s Center for Medicaid and State Operations and 10 regional offices. While these efforts do not fully address any of the weaknesses we identify in this report, they enhance the agency’s ability to perform key activities. Although the process for approving states’ funding requests for MMIS activities is characterized by (1) standard procedures performed consistently across the regional offices, (2) guidance that staff can rely on in carrying out their duties, and (3) requirements for reporting information to the central office, the process for monitoring MMIS activities is not. Until CMS defines standard procedures for monitoring MMIS activities, guidance for staff to rely on, and reporting requirements, CMS’s central office may not be able to easily determine whether state MMISs are facilitating the delivery of Medicaid benefits in the most effective and beneficial manner. Specifically, the agency has established about half of the practices for building the investment foundation, but few practices to manage its investments as a portfolio. Critical to CMS’s success in going forward will be the development of an implementation plan that (1) is based on an assessment of strengths and weaknesses; (2) specifies measurable goals, objectives, and milestones; (3) specifies needed resources; (4) assigns clear responsibility and accountability for accomplishing tasks; and (5) is approved by senior-level management. Although the agency has initiated improvement efforts, it has not developed a comprehensive plan to guide these and other efforts needed to improve its investment management process. Without such a plan and procedures for implementing it, CMS will be challenged in sustaining the commitment it needs to fully establish its investment management process. On the basis of this, we state that CMS does not have the full suite of capabilities to manage its internal investments because it has only established a little over half of the foundational practices and 2 of 27 portfolio-level key practices, and we reiterate the need to fully establish both sets of practices to increase assurance that executives are selecting and managing the mix of investments that best meets the agency’s needs and priorities. Objectives, Scope, and Methodology The objectives of our review were to (1) evaluate Centers for Medicare & Medicaid Services (CMS) capabilities for managing its internal information technology (IT) investments, (2) determine any plans the agency might have for improving these capabilities, and (3) examine CMS’s process for approving and monitoring the state Medicaid management systems it funds.

Why GAO Did This Study To carry out its mission of ensuring health care security for beneficiaries, the Centers for Medicare & Medicaid Services (CMS) relies heavily on information technology (IT) systems. In fiscal year 2005, CMS's total IT appropriations was about $2.55 billion, of which about $760 million, or 30 percent, was to support internal investments, and $1.79 billion was to fund the Medicaid Management Information Systems (MMIS) that states use to support their Medicaid programs. (GAO is using the term "internal" to refer to all of CMS' IT investments excluding state MMISs.) In light of the size and significance of these investments, GAO's objectives were to (1) evaluate CMS's capabilities for managing its internal investments, (2) determine any plans the agency might have for improving these capabilities, and (3) examine CMS's process for approving and monitoring state MMISs. What GAO Found Judged against GAO's framework for IT investment management, which measures the maturity of an organization's investment management process, CMS's capabilities for effectively managing its internal investments are limited. Specifically, the agency has established a little over half of the foundational practices it needs to manage individual investments and has executed 2 of the 27 key practices needed to manage investments as a portfolio. Until CMS fully establishes foundational and portfolio-level practices, executives will lack the assurance that they are managing the agency's collection of investments in a manner that minimizes risks and maximizes returns. CMS has initiated steps to improve its investment management process; however, these steps do not fully address the weaknesses GAO identifies in this report, nor are they coordinated with other needed improvement efforts into a plan that (1) is based on an assessment of strengths and weaknesses; (2) specifies measurable goals, objectives, and milestones; (3) specifies needed resources; (4) assigns clear responsibility and accountability for accomplishing tasks; and (5) is approved by senior-level management. Without such a plan and procedures for implementing it, CMS will be challenged in sustaining the commitment it needs to fully establish its investment management process. The process for approving requests for federal funding of MMIS activities (including development, operations, and maintenance activities) is characterized by standard procedures, guidance, and reported information to CMS's Center for Medicaid and State Operations. In contrast, the process for monitoring MMIS activities lacks standard procedures, guidance, and reporting requirements. Without these elements for monitoring MMIS activities, CMS may not be able to easily determine whether the state MMISs in which CMS invests close to $1.7 billion annually are facilitating the delivery of Medicaid benefits in the most effective and beneficial manner.

gao_GAO-04-827T

gao_GAO-04-827T_0

Congress established Farmer Mac with a mission to create a secondary market—a financial market for buying and selling loans, individually or by securitizing them—in agricultural real estate and rural housing loans, and improve the availability of agricultural mortgage credit. Of that total, nearly $3.1 billion was in off-balance sheet standby and similar agreements. In other words, at a time when either the agricultural sector is severely depressed or interest rates are falling, Farmer Mac could be required to purchase large amounts of impaired or defaulted loans under the agreements, thus subjecting Farmer Mac to increased funding liquidity risks and the potential for reduced earnings. Disagreements about the Extent of Coverage of Treasury’s Line of Credit Could Generate Uncertainty Now I want to focus on an issue involving Farmer Mac’s $1.5 billion line of credit with Treasury that could impact the corporation’s long-term financial condition. In a comment letter dated June 13, 1997, and submitted to FCA in connection with a proposed regulation on conservatorship and receivership for Farmer Mac (1997 Treasury letter), Treasury stated “…we have ‘serious questions’ as to whether the Treasury would be obligated to make advances to Farmer Mac to allow it to perform on its guarantee with respect to securities held in its own portfolio—-that is, where the Farmer Mac guarantee essentially runs to Farmer Mac itself.” The 1997 Treasury letter indicated that if the purchase of obligations extended to guaranteed securities held by Farmer Mac this would belie the fact that the securities are not backed by the full faith and credit of the United States, since a loan to Farmer Mac to fulfill the guarantee would benefit holders of Farmer Mac’s general debt obligations. Mission-related Activities Have Increased, but the Impact of Activities on Agricultural Real Estate Market Is Unclear Before I go into whether Farmer Mac’s activities have had an impact on the agricultural real estate loan market, I want to point out that the enabling legislation contains only broad statements of the corporation’s mission and purpose. Our attempt to determine the extent to which Farmer Mac had met its public policy mission led us to conclude that although Farmer Mac has increased its mission-related activities since our previous review, the public benefits derived from these activities are not clear. Farmer Mac stated that this strategy would lower funding costs and increase profitability but as a result, the depth and liquidity of the secondary market for AMBS is unknown. While standby agreements provide greater lending capacity for those institutions, they also lower the amount of capital lending institutions are required to hold against their loans. However, Farmer Mac’s business activities are concentrated among a small number of business partners and its portfolio is concentrated largely in the western United States. Farmer Mac’s Board of Directors May Not Reflect All Shareholder Interests, Be Fully Independent, or Use Clear and Transparent Processes Before discussing governance issues at Farmer Mac, I want to describe how Farmer Mac’s board of directors is structured in federal law. Under this structure, Farmer Mac resembles a cooperative. For this reason, the board may face difficulties representing the interests of all shareholders. FCA Has Taken Steps to Enhance Oversight of Farmer Mac, but Faces Challenges That Could Limit the Effectiveness of Its Oversight During our 2003 review, we noted that FCA had begun strengthening its oversight of Farmer Mac by doing a more comprehensive safety and soundness examination and undertaking initiatives to expand its regulatory framework. However, we found that FCA continued to face significant challenges in sustaining and improving its oversight and more remained to be done to improve its off-site monitoring, assessment of risk-based capital, and mission oversight. We also identified a number of issues related to the data used in and structure of FCA’s risk-based capital model, but the overall impact these issues have on the estimate of risk-based capital for Farmer Mac’s credit risk is uncertain. We recommended in our report that Farmer Mac strengthen its risk management and corporate governance practices and reevaluate its strategies to carry out its mission.

Why GAO Did This Study This testimony is based on GAO's October 2003 report, Farmer Mac: Some Progress Made, but Greater Attention to Risk Management, Mission, and Corporate Governance Is Needed (GAO-04-116). GAO's testimony presents a brief overview of Farmer Mac and discusses issues raised in its 2003 report, including Farmer Mac's risk management practices and line of credit with Treasury, mission related activities, board structure, and oversight, which is provided by the Farm Credit Administration (FCA). What GAO Found Farmer Mac, a government-sponsored enterprise (GSE), was established to provide a secondary market for agricultural real estate and rural housing loans and to increase agricultural mortgage credit. In 2003, GAO reported that several aspects of Farmer Mac's financial risk management practices had not kept pace with its increasing risk profile. First, Farmer Mac had $3.1 billion in off-balance-sheet commitments and other agreements that could obligate it to buy the underlying loans or cover related losses under certain conditions. Farmer Mac and the Farm Credit System institutions that participate in the agreements are required to hold far less capital than is otherwise required. Because Farmer Mac's loan activities are concentrated in a small number of financial institutions and in the West, the risk is not reduced while less capital is required to be held. Under stressful agricultural economic conditions, Farmer Mac could be required to purchase large amounts of impaired or defaulted loans if large amounts of the commitments were exercised. Second, the coverage of Farmer Mac's $1.5 billion line of credit with the U.S. Treasury was controversial, as the entities disagreed on whether the securities it has issued and kept in its portfolio would be eligible. Third, GAO reported that while Farmer Mac had increased its mission-related activities since its 1999 report, their impact on the agricultural real estate market was unclear. The effects were difficult to measure partly because Farmer Mac's statute lacks specific mission goals. For this and other reasons, GAO concluded that the public benefits derived from Farmer Mac's activities are not clear. Finally, for profitability reasons, Farmer Mac had a strategy of holding securities it issued in its portfolio instead of selling them to investors in the capital markets. As a result, the depth and liquidity of the market for Farmer Mac's securities is unknown. Farmer Mac's board structure, set in federal law, may make it difficult to ensure that the board fully represents the interests of all shareholders and meets independence and other requirements. The board structure contains elements of both a cooperative and an investor-owned publicly traded company. For example, two-thirds of the board members do business with Farmer Mac and hold the only voting stock, while the common stock holders have no vote. GAO also identified challenges FCA faced in its oversight of Farmer Mac, including a lack of specific criteria for measuring how well it was achieving its mission. Although FCA had taken steps to improve its safety and soundness oversight, more needs to be done to improve its offsite monitoring and assessment of risk-based capital. Farmer Mac and FCA have efforts underway to address many of GAO's recommendations and it was too early to assess them.

gao_GAO-12-515T

gao_GAO-12-515T_0

Senior ISCD Leaders Developed the ISCD Memorandum to Highlight Various Challenges Hindering CFATS Implementation ISCD’s Memorandum Based Largely on Observations of Senior ISCD Managers Our review of the ISCD memorandum and discussions with ISCD officials showed that the memorandum was developed during the latter part of 2011 and was developed primarily based on discussions with ISCD staff and the observations of the ISCD Director in consultation with the Deputy Director. She confirmed that the memo was intended to begin a dialog about the program and challenges it faced. ISCD Director Was Concerned That Challenges Place the CFATS Program at Risk The ISCD memorandum discussed numerous challenges that, according to the Director, pose a risk to the program. A second group focused on mission issues, including what the author found to be the slow pace of the site security plan approval process, the lack of an established inspection process, and the ISCD’s inability to perform compliance inspections 5 1/2 years after enactment of the CFATS statute, and the lack of an established records management system to document key decisions. Additional details on the human capital, mission, and administrative issues identified in the ISCD memorandum are considered “for official use only.” ISCD Has Begun to Take Various Actions Intended to Address Challenges Identified ISCD’s Action Plan Includes Time Frames for Completing Action Items and Appears to Be a Catalyst for Addressing Some Legacy Issues ISCD is using an action plan to track its progress addressing the challenges identified in the memorandum, and, according to senior division officials, the plan may be helping them address some legacy issues that staff were attempting to deal with before the memorandum was developed. The remaining 60 percent (56 of 94) were in progress. Another completed human capital action item— categorized by ISCD as a cultural issue—called for ISCD management to hold a series of meetings with employees to involve them in addressing program challenges, clarify program priorities related to its mission, and implement changes in ISCD culture. For the remaining 56 items that were in progress, 40 involved human capital management and administrative issues. The development of a new security plan review process may be critical to the effective implementation of the CFATS program. Action Plan Performance Measures Could Help Gauge Progress ISCD, through its action plan, appears to be heading in the right direction toward addressing the challenges identified, but it is too early to tell if the action plan is having the desired effect because (1) the division has only recently completed some action items and continues to work on completing more than half of the others, some of which entail long-term changes, and (2) ISCD has not developed an approach for measuring the results of its efforts. ISCD Officials Stated That Almost Half of the Action Items Require Collaboration with or Action by NPPD or IP According to ISCD officials, almost half of the action items included in the June 2012 action plan either require ISCD to collaborate with NPPD and IP or require NPPD and IP to take action to address the challenges identified in the ISCD memorandum. By developing performance measures, where practical, ISCD, IP, and NPPD would be better equipped to identify any gaps between actual and planned or expected results and take corrective action, where necessary, consistent with Standards for Internal Control in the Federal Government. Recommendation for Executive Action To better ensure that DHS can better understand the effect of its actions as it moves forward with its efforts to address the challenges facing ISCD as it implements the CFATS program, we recommend that the Secretary of Homeland Security direct the Under Secretary for NPPD, the Assistant Secretary for IP, and the Director of ISCD, in conjunction with the development of ISCD’s strategic plan, to look for opportunities, where practical, to measure results of their efforts to implement particular action items, and where performance measures can be developed, periodically monitor these measures and indicators to identify where corrective actions, if any, are needed. This will include ISCD efforts to determine chemical facility risk; manage the process used to assess vulnerabilities, review security plans, and perform inspections; and work with owners and operators of high-risk chemical facilities. Appendix I: Objectives, Scope and Methodology This statement discusses how the internal Infrastructure Security Compliance Division’s (ISCD) memorandum (the ISCD memorandum) was developed and what challenges were identified, what actions are being taken to address the challenges identified, and the extent to which ISCD’s planned actions and proposed solutions require collaboration with National Protection and Programs Directorate (NPPD) or the Office of Infrastructure Protection (IP). Appendix II: ISCD Organizational Structure within NPPD and IP as of June 2012 This appendix provides the organizational structure used to manage the Chemical Facility Anti-Terrorism Standards program within the Infrastructure Security Compliance Division. GAO-11-537R. The Department of Homeland Security’s (DHS) Critical Infrastructure Protection Cost-Benefit Report.

Why GAO Did This Study The events of September 11, 2001, triggered a national re-examination of the security of facilities that use or store hazardous chemicals in quantities that, in the event of a terrorist attack, could put large numbers of Americans at risk of serious injury or death. As required by statute, DHS issued regulations that establish standards for the security of high-risk chemical facilities. DHS established the CFATS program to assess the risk posed by these facilities and inspect them to ensure compliance with DHS standards. ISCD, a component of IP, manages the program. A November 2011 internal ISCD memorandum, prepared by ISCD senior managers, has raised concerns about the management of the program. This testimony focuses on (1) how the memorandum was developed and any challenges identified, (2) what actions are being taken in response to any challenges identified, and (3) the extent to which ISCD’s proposed solutions require collaboration with NPPD or IP. GAO’s comments are based on recently completed work analyzing the memorandum and related actions. GAO reviewed laws, regulations, DHS’s internal memorandum and action plans, and related documents, and interviewed DHS officials. What GAO Found The November 2011 memorandum that discussed the management of the Chemical Facility Anti-Terrorism Standards (CFATS) program was prepared based primarily on the observations of the Director of the Department of Homeland Security’s (DHS) Infrastructure Compliance Security Division (ISCD), a component of the Office of Infrastructure Protection (IP) within the National Protection and Programs Directorate (NPPD). The memorandum was intended to highlight various challenges that have hindered ISCD efforts to implement the CFATS program. According to the Director, the challenges facing ISCD included not having a fully developed direction and plan for implementing the program, hiring staff without establishing need, and inconsistent ISCD leadership—factors that the Director believed place the CFATS program at risk. These challenges centered on human capital issues, including problems hiring, training, and managing ISCD staff; mission issues, including overcoming problems reviewing facility plans to mitigate security vulnerabilities and performing compliance inspections; and administrative issues, including concerns about NPPD and IP not supporting ISCD’s management and administrative functions. ISCD has begun to take various actions intended to address the human capital management, mission, and administrative issues identified in the ISCD memorandum and has developed a 94-item action plan to track its progress. According to ISCD managers, the plan appears to be a catalyst for addressing some of the long-standing issues the memorandum identified. As of June 2012, ISCD reported that 40 percent (38 of 94) of the items in the plan had been completed. These include (1) requiring ISCD managers to meet with staff to involve them in addressing challenges, clarifying priorities, and changing ISCD’s culture and (2) developing a proposal to establish a quality control function over compliance activities. The remaining 60 percent (56 of 94) that were in progress include those requiring longer-term efforts--—i.e., streamlining the process for reviewing facility security plans and developing facility inspection processes; those requiring completion of other items in the plan; or those awaiting action by others, such as approvals by ISCD leadership. ISCD appears to be heading in the right direction, but it is too early to tell if individual items are having their desired effect because ISCD is in the early stages of implementing corrective actions and has not established performance measures to assess results. Moving forward, exploring opportunities to develop measures, where practical, to determine where actual performance deviates from expected results, consistent with internal control standards could help ISCD better identify any gaps between actual and expected results so that it can take further action, where needed. For example, as ISCD develops a new security plan review process, it could look for ways to measure the extent to which the time to do these reviews has been reduced as compared with the time needed under the current review process. According to ISCD officials, almost half of the action items included in the June 2012 action plan require ISCD collaboration with or action by NPPD and IP. The ISCD memorandum stated that IP and NPPD did not provide the support needed to manage the CFATS program when the program was first under development. ISCD, IP, and NPPD officials confirmed that IP and NPPD are providing needed support and stated that the action plan prompted them to work together to address the various human capital and administrative issues identified. What GAO Recommends GAO recommends that DHS look for opportunities, where practical, to measure its performance implementing actions items. DHS concurred with the recommendation.

gao_GAO-08-54

gao_GAO-08-54_0

CMS Paid Most of the $1 Billion of MMA Funds to Contractors Congress appropriated to CMS $1 billion to fund start-up administrative costs to implement MMA provisions. According to CMS financial data, CMS obligated $974.6 million and, from January 2004 through December 2006, expended over $908 million, of which about $735 million or 81 percent was paid to contractors and vendors for a variety of services. Payments were also made for services provided by other federal and state agencies, for CMS employee-related expenses, and for purchase card transactions. Because the help line’s call volume significantly increased with the anticipation of the new prescription drug benefit, CMS used MMA funds to expand help line operations and fund a portion of help line costs. Payments using purchase cards: CMS paid $2.0 million using purchase cards to acquire office supplies, outreach materials, and information technology equipment. According to information provided by OAGM management, as of September 30, 2007, CMS’s contract closeout backlog was approximately 1,300 contracts with a total contract value of approximately $3 billion. CMS Made Nearly $90 Million of Questionable Payments to Contractors Because of the risks in CMS’s contracting practices and pervasive internal control deficiencies, CMS was highly vulnerable to waste and improper payments. Table 3 summarizes the questionable payments we identified. Further, provisional indirect cost rates have not been established. Therefore, we could not verify the amounts billed. Conclusions CMS management has not allocated sufficient resources, both staff and funding, to keep pace with recent increases in contract awards and adequately perform contract and contractor oversight. This poor operating environment created vulnerabilities in the contracting process. In response to our recommendations to improve controls over its contracting process and related payments, CMS stated in its comments that it has taken or will take the following actions: continue to evaluate and update its policies and procedures to make review its policies and criteria for the use of cost reimbursement contracts and the need for approved accounting systems, review and update policies and procedures as appropriate and provide training regarding subcontracting, develop appropriate procedures to support HHS in its cognizant federal update its invoice review and payment policies and procedures as develop comprehensive training on the invoice review and approval require the use of a governmentwide system to track the training taken by personnel assigned to contract oversight, continue to reduce its backlog of contracts awaiting closeout, and obtain contract audits related to our identified questionable payments and seek reimbursement for any costs found to be unallowable. In some cases, due to the facts and circumstances involved, we were unable to determine whether or to what extent the costs were allowable, reasonable, and allocable. Appendix II: Scope and Methodology To determine how the Centers for Medicaid and Medicare Services (CMS) used the $1 billion Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) appropriation, we obtained obligation and disbursement transactions from CMS’s financial systems from the period January 2004 through December 2006 that CMS charged against the MMA appropriation. Because Medicare contracts were not subject to FAR, we did not include this contract in our internal control review. To determine whether payments to contractors were properly supported as a valid use of government funds, we started with the same 67 contracts we had nonstatistically selected. We questioned payments for costs that were potentially improper by assessing whether the costs did not comply with the terms of the contract or applicable regulation (FAR, the Health and Human Services Acquisition Regulation, and Federal Travel Regulation) or that were unsubstantiated because the contractor did not provide adequate support for us to determine whether the costs were allowable.

Why GAO Did This Study The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) established a voluntary outpatient prescription drug benefit, which is administered by the Centers for Medicare and Medicaid Services (CMS). CMS relies extensively on contractors to help it carry out its basic mission. Congress appropriated to CMS $1 billion for start-up administrative costs to implement provisions of MMA. Because CMS had discretion on how to use the appropriation, Congress asked GAO to determine (1) how CMS used the $1 billion MMA appropriation, (2) whether CMS's contracting practices and related internal controls were adequate to avoid waste and to prevent or detect improper payments, and (3) whether payments to contractors were properly supported as a valid use of government funds. To address objectives two and three above, our review extended beyond contract amounts paid with MMA funds. What GAO Found CMS expended over 90 percent of the MMA appropriation by the end of December 2006. The majority, about $735 million, was paid to contractors and vendors for a variety of services. For example, because the volume of calls to the 1-800-MEDICARE help line significantly increased with the new outpatient prescription drug benefit, two contractors were paid about $234 million to support the help line. CMS also made payments to other federal agencies for services such as printing and mailing; to state agencies to fund educating the public; for CMS employee payroll and travel costs; and for purchase card transactions to acquire office supplies, equipment, and outreach materials. CMS management has not allocated sufficient resources, both staff and funding, to keep pace with recent increases in contract awards and adequately perform contract and contractor oversight. This operating environment created vulnerabilities in the contracting process. Specifically, CMS did not adequately fulfill critical contractor oversight, such as working with contractors to establish indirect cost rates. Further, certain contracting practices, such as the frequent use of cost reimbursement contracts, increased risks to CMS. After contract award, pervasive internal control deficiencies increased the risk of improper payments. Because CMS did not have clear invoice review guidance, invoice review procedures were often flawed or did not take place. CMS also had not taken steps to ensure contracts were closed within required deadlines and had a backlog of approximately 1,300 contracts as of September 30, 2007. GAO identified numerous questionable payments totaling nearly $90 million. These payments were for costs not compliant with contract terms, which could be potentially improper; costs for which we could not obtain adequate support to determine whether the costs were allowable; and potential waste caused by risks in CMS's contracting practices. Importantly, in some cases, because we were not able to determine whether or to what extent the costs were allowable, some of the questioned amounts may relate to allowable costs that are not recoverable. The table below summarizes the questionable payments GAO identified.

gao_GAO-04-554

gao_GAO-04-554_0

The program is currently in year 3 of an estimated 11-year development phase. Buy American Act and Specialty Metals Requirements Apply but Will Have Little Effect on JSF Subcontracting Decisions The Buy American Act and Preference for Domestic Specialty Metals clause implementing Berry Amendment provisions apply to the government’s purchase of manufactured end products for the JSF program. Currently, only one JSF prime contractor—Pratt & Whitney— will deliver manufactured end products to the government in this phase of the program. Although the Buy American Act will apply to manufactured end products delivered to DOD during the JSF program, its restrictions will have little impact on the selection of suppliers because of DOD’s use of the law’s public interest exception. This exception allows the head of an agency to determine that applying the domestic preference restrictions would be inconsistent with the public interest. DOD has determined that countries that sign reciprocal procurement agreements with the department to promote defense cooperation and open up defense markets qualify for this exception. The Preference for Domestic Specialty Metals clause applies to articles delivered by Lockheed Martin, Pratt & Whitney, and General Electric under JSF contracts. This restriction must also be included in any subcontract awarded for the program. Similar to the Buy American Act, the Specialty Metals clause contains a provision related to “qualifying country” suppliers. 1.) The gathering of these data, which most of the contractors have made available to the JSF Program Office and DCMA, has increased the breadth of knowledge available to DOD and the program office on the JSF supplier base. JSF Program Office Maintains Subcontract Information on Specific Areas of Interest While the JSF Program Office maintains more information on subcontractors than required by acquisition regulations, this information does not provide the program with a complete picture of the supplier base. The JSF Program Office collects and maintains data on subcontract awards for specific areas of interest—international suppliers and U.S. small businesses. Finally, the JSF Program Office maintains limited information on the companies responsible for supplying critical technologies. The JSF Program Office’s information on the suppliers of key or critical technologies is based on lists that the prime contractors compile as part of the program protection strategy. The lists do not provide visibility into the lower-tier subcontracts that have been issued for developing or supplying these technologies. Conclusions The JSF program has the potential to significantly impact the U.S. defense industrial base. Therefore, contracts awarded now will likely affect the future shape of the defense industrial base. Agency Comments and Our Evaluation We provided DOD a draft of this report for review. DOD provided only technical comments, which we incorporated as appropriate.

Why GAO Did This Study As the Department of Defense's (DOD) most expensive aircraft program, and its largest international program, the Joint Strike Fighter (JSF) has the potential to significantly affect the worldwide defense industrial base. As currently planned, it will cost an estimated $245 billion for DOD to develop and procure about 2,400 JSF aircraft and related support equipment by 2027. In addition, the program expects international sales of 2,000 to 3,500 aircraft. If the JSF comes to dominate the market for tactical aircraft as DOD expects, companies that are not part of the program could see their tactical aircraft business decline. Although full rate production of the JSF is not projected to start until 2013, contracts awarded at this point in the program will provide the basis for future awards. GAO was asked to determine the limits on and extent of foreign involvement in the JSF supplier base. To do this, GAO (1) determined how the Buy American Act and the Preference for Domestic Specialty Metals clause apply to the JSF development phase and the extent of foreign subcontracting on the program and (2) identified the data available to the JSF Program Office to manage its supplier base, including information on suppliers of critical technologies. DOD provided technical comments on a draft of this report, which GAO incorporated as appropriate. What GAO Found The Buy American Act and Preference for Domestic Specialty Metals clause implementing Berry Amendment provisions apply to the government's purchase of manufactured end products for the JSF program. Currently, only one of the three JSF prime contractors is under contract to deliver manufactured end products to the government in this phase of the program. The Buy American Act will apply to manufactured end products delivered to DOD during subsequent phases, but it will have little impact on the selection of suppliers because of DOD's use of the law's public interest exception. DOD, using this exception, has determined that it would be inconsistent with the public interest to apply domestic preference restrictions to countries that have signed reciprocal procurement agreements with the department. All of the JSF partners have signed such agreements. DOD must also apply the Preference for Domestic Specialty Metals clause to articles delivered under JSF contracts. All three prime contractors have indicated that they will meet these Specialty Metals requirements. While the JSF Program Office maintains more information on subcontractors than required by acquisition regulations, this information does not provide the program with a complete picture of the supplier base. The program office collects data on subcontract awards for international suppliers and U.S. small businesses. In addition, it maintains lists of the companies responsible for developing key or critical technologies. However, the lists do not provide visibility into the lower-tier subcontracts that have been issued for developing or supplying these technologies.

gao_GAO-07-67

gao_GAO-07-67_0

CMS Allocated DRA Funds to Three Funding Categories As of September 30, 2006, CMS had allocated approximately $1.9 billion of the total $2 billion in DRA funds to states that were directly affected by Hurricane Katrina or that hosted evacuees in the aftermath of the storm. CMS chose not to allocate any DRA funding to Category IV, for restoring access to health care in impacted communities. CMS allocated the majority of DRA funding (78.3 percent of the $1.9 billion allocated) to Category III, the nonfederal share of expenditures for existing Medicaid and SCHIP beneficiaries, which, by law, was limited to the three directly affected states (Alabama, Louisiana, and Mississippi). 2.) CMS first allocated $1.5 billion to 32 states on March 29, 2006. After the DRA was enacted in February 2006, CMS requested states’ estimated fiscal year 2006 expenditures for three of the four DRA funding categories: Category I—the nonfederal share of expenditures for time-limited Medicaid services; Category II—expenditures for time-limited uncompensated care services; and Category III—for directly affected states, the nonfederal share of expenditures for existing Medicaid and SCHIP beneficiaries. After this reconciliation is completed, CMS will determine how to allocate the remaining $136 million of available DRA funds and any unexpended funds of the approximately $1.9 billion previously allocated to states. States Have Submitted Claims for About Half of Total DRA Allocations As of October 2, 2006, states had submitted to CMS claims for services— including associated administrative costs—totaling about $1 billion (or 54 percent) of the $1.9 billion in DRA funds allocated to them. Each of the 4 selected states we reviewed—Alabama, Louisiana, Mississippi, and Texas—had submitted claims by this time. In addition, claims from the three directly affected states for existing Medicaid and SCHIP beneficiaries accounted for about 85 percent of all DRA claims filed. Therefore, these initial results are likely to change as states continue to file claims for services. Louisiana and Texas Raised Concerns Regarding Future Funding Needs Two of our four selected states raised concerns about their ability to meet the future health care needs of those affected by the hurricane once DRA funds have been expended: Louisiana, which is eligible for DRA funding for Category III services that may be provided beyond June 30, 2006; and Texas, which is not eligible for such ongoing assistance. Alabama and Mississippi officials did not anticipate the need for additional funding beyond what was already allocated by CMS. Louisiana’s funding concerns were associated with managing its program across state borders as evacuees who left the state continue to remain eligible for Louisiana Medicaid. Agency and State Comments and Our Evaluation We provided copies of a draft of this report to CMS and the four states we reviewed: Alabama, Louisiana, Mississippi, and Texas. Alabama provided technical comments, while Mississippi did not comment on the draft report. Comments from Louisiana and Texas centered on each state’s efforts to assist those affected by the hurricane and the ongoing challenges that exist as a result of Hurricane Katrina. GAO staff who made major contributions to this report are listed in appendix V. Appendix I: Deficit Reduction Act of 2005 Allocations to 32 States Under the authority of the Deficit Reduction Act of 2005, the Centers for Medicare & Medicaid Services (CMS) allocated funding totaling approximately $1.9 billion to 32 states, as of September 30, 2006.

Why GAO Did This Study In February 2006, the Deficit Reduction Act of 2005 (DRA) appropriated $2 billion for certain health care costs related to Hurricane Katrina through Medicaid and the State Children's Health Insurance Program (SCHIP). The Centers for Medicare & Medicaid Services (CMS) was charged with allocating the $2 billion in funding to states directly affected by the hurricane or that hosted evacuees. GAO performed this work under the Comptroller General's statutory authority to conduct evaluations on his own initiative. In this report, GAO examined: (1) how CMS allocated the DRA funds to states, (2) the extent to which states have used DRA funds, and (3) whether selected states--Alabama, Louisiana, Mississippi, and Texas--anticipate the need for additional funds after DRA funds are expended. To conduct this review, GAO reviewed CMS's allocations of DRA funds to all eligible states, focusing in particular on the four selected states that had the highest initial allocation (released by CMS on March 29, 2006). GAO obtained data from Medicaid offices in the four selected states regarding their experiences enrolling individuals, providing services, and submitting claims; collected state Medicaid enrollment data; and analyzed DRA expenditure data that states submitted to CMS. What GAO Found As of September 30, 2006, CMS allocated $1.9 billion of the $2 billion in DRA funding to states. CMS allocated funds to: Category I--the nonfederal share of expenditures for time-limited Medicaid and SCHIP services for eligible individuals affected by the hurricane (32 states); Category II--expenditures for time-limited uncompensated care services for individuals without a method of payment or insurance (8 of the 32 states); and Category III--the nonfederal share of expenditures for existing Medicaid and SCHIP beneficiaries (Alabama, Louisiana, and Mississippi). CMS did not allocate funds to Category IV--for restoration of access to health care. After CMS reconciles states' expenditures with allocations, it will determine how to allocate the unallocated $136 million and unexpended funds from the $1.9 billion allocated to states. Of the $1.9 billion in allocated DRA funds, almost two-thirds of the 32 states that received these funds submitted claims totaling about $1 billion as of October 2, 2006. Claims from Alabama, Louisiana, and Mississippi for Category III accounted for about 85 percent of all claims filed. These initial results are likely to change as states continue to file claims for services. Of the four selected states, Louisiana and Texas raised concerns about their ability to meet future health care needs once the DRA funds are expended. Louisiana's concerns involved managing its Medicaid program across state borders as those who left the state remain eligible for the program. Texas was significantly affected by the number of evacuees seeking services, thus raising concerns among state officials about the state's future funding needs. CMS, Alabama, Louisiana, and Texas commented on a draft of this report. CMS suggested the report clarify the DRA funding categories, reallocation process, and communication strategy with states, especially Louisiana. Louisiana and Texas commented on their ongoing challenges, and Alabama provided technical comments. The report was revised as appropriate.

gao_GAO-08-975T

gao_GAO-08-975T_0

Background The purpose of the HUBZone program, which was established by the HUBZone Act of 1997, is to stimulate economic development, through increased employment and capital investment, by providing federal contracting preferences to small businesses in economically distressed communities or HUBZone areas. Qualified nonmetropolitan counties. SBA Relies on Federal Law to Identify HUBZone Areas but Its Map Is Inaccurate Our June 2008 report found that a series of statutory changes have resulted in an increase in the number and types of HUBZone areas. These changes could diffuse (or limit) the economic benefits of the program. 1). To identify and map HUBZone areas, SBA relies on a mapping contractor and data from other executive agencies (see fig. Essentially, the map is SBA’s primary interface with small businesses to determine if they are located in a HUBZone and can apply for HUBZone certification. SBA Has Limited Controls to Ensure That Only Eligible Firms Participate in the HUBZone Program Our June 2008 report also found that the policies and procedures upon which SBA relies to certify and monitor firms provide limited assurance that only eligible firms participate in the HUBZone program. While internal control standards for federal agencies state that agencies should document and verify information that they collect on their programs, SBA obtains supporting documentation from firms in limited instances. In addition, SBA does not follow its own policy of recertifying all firms every 3 years, and has not met its informal goal of 60 days for removing firms deemed ineligible from its list of certified firms. However, SBA has failed to recertify 4,655 of the 11,370 firms (more than 40 percent) that have been in the program for more than 3 years. As a result of the backlog, the periods during which some firms go unmonitored and reviewed for eligibility are longer than SBA policy allows, increasing the risk that ineligible firms may be participating in the program. SBA Lacks a Formal Policy on Timeframes for Decertifying Firms, Which Provides Ineligible Firms with an Opportunity to Obtain Contracts While SBA policies for the HUBZone program include procedures for certifications, recertifications, and program examinations, they do not specify a timeframe for processing decertifications—the determinations subsequent to recertification reviews or examinations that firms are no longer eligible to participate in the HUBZone program. SBA Has Not Implemented Plans to Assess the Effectiveness of the HUBZone Program and Most Agencies Have Not Met Contracting Goals Our June 2008 report also found that SBA has taken limited steps to assess the effectiveness of the HUBZone program. Moreover, federal agencies did not meet the government-wide contracting goal for the HUBZone program in fiscal years 2003 through 2006 (the most recent years for which goaling data are available). According to the Government Performance and Results Act of 1993, federal agencies are required to identify results-oriented goals and measure performance toward the achievement of their goals. According to SBA’s fiscal year 2007 Annual Performance Report, the three performance measures for the HUBZone program were: (1) the number of small businesses assisted (which SBA defines as the number of applications approved and the number of recertifications processed), (2) the annual value of federal contracts awarded to HUBZone firms, and (3) the number of program examinations completed. However, SBA officials indicated that the agency has not devoted resources to implement either of these strategies for assessing the results of the program. Yet by not evaluating the HUBZone program’s benefits, SBA lacks key information that could help it better manage the program and inform the Congress of its results. Most Federal Agencies Did Not Meet Their Contracting Goals for the HUBZone Program Although contracting dollars awarded to HUBZone firms have increased since fiscal year 2003—when the statutory goal of awarding 3 percent of federally funded contract dollars to HUBZone firms went into effect— federal agencies collectively still have not met that goal.

Why GAO Did This Study The Small Business Administration's (SBA) Historically Underutilized Business Zone (HUBZone) program provides federal contracting assistance to small firms located in economically distressed areas, with the intent of stimulating economic development. Questions have been raised about whether the program is targeting the locations and businesses that Congress intended to assist. This testimony focuses on (1) the criteria and process that SBA uses to identify and map HUBZone areas; (2) the mechanisms SBA uses to ensure that only eligible small businesses participate in the program; and (3) the actions SBA has taken to assess the results of the program and the extent to which federal agencies have met HUBZone contracting goals. To address these objectives, GAO analyzed statutory provisions as well as SBA, Census, and contracting data and interviewed SBA and other federal and local officials. What GAO Found SBA relies on federal law to identify qualified HUBZone areas, and recent statutory changes have resulted in an increase in the number and types of HUBZone areas--changes that could diffuse the economic benefits of the program. Further, the map that SBA uses to help firms interested in participating in the program to determine if they are located in a HUBZone area is inaccurate. Specifically, the map incorrectly includes 50 metropolitan counties and excludes 27 nonmetropolitan counties. As a result, ineligible small businesses participated in the program, and eligible businesses have not been able to participate. The mechanisms that SBA uses to certify and monitor firms provide limited assurance that only eligible firms participate in the program. Although internal control standards state that agencies should verify information they collect, SBA verifies the information reported by firms on their application or during recertification--its process for monitoring firms--in limited instances and does not follow its own policy of recertifying all firms every 3 years. GAO found that more than 4,600 firms that had been in the program for at least 3 years went unmonitored. Further, SBA lacks a formal policy on how quickly it needs to make a final determination on decertifying firms that may no longer be eligible for the program. Of the more than 3,600 firms proposed for decertification in fiscal years 2006 and 2007, more than 1,400 were not processed within 60 days--SBA's unwritten target. As a result of these weaknesses, there is an increased risk that ineligible firms have participated in the program and had opportunities to receive federal contracts. SBA has taken limited steps to assess the effectiveness of the HUBZone program, and from 2003 to 2006 federal agencies did not meet the government-wide contracting goal for the HUBZone program. Federal agencies are required to identify results-oriented goals and measure performance toward the achievement of their goals. SBA tracks the number of firms certified or recertified, the annual value of contracts awarded to HUBZone firms, and the number of program examinations completed annually, but has not devoted resources to completing an evaluation of the program. Consequently, SBA lacks key information that could help it better manage and assess the results of the program. Finally, most federal agencies did not meet their HUBZone contracting goals during fiscal year 2006, the most recent year for which we had data. While the percentage of prime contracting dollars awarded to HUBZone firms increased in each fiscal year from 2003 to 2006, the 2006 awards fell short of the government-wide 3 percent goal by about one-third.

gao_NSIAD-98-228

gao_NSIAD-98-228_0

OSD Policy and DOD Doctrine on Low-Level Chemical Warfare Agent Exposures OSD has not issued a policy, nor has DOD developed doctrine, to address exposures of U.S. troops to low levels of chemical warfare agents on the battlefield. No OSD Policy or DOD Doctrine on Low-Level Exposures OSD has not issued a policy on the force protection regarding low-level chemical weapon agent exposures, and DOD has not developed doctrine that addresses low-level exposures to chemical warfare agents, either in isolation or combination with other contaminants that would likely be found on the battlefield. Lack of Consensus on the Effects of Low-Level Exposures In addition to a lack of consensus on the definition or meaning of low-level exposures, there is a lack of consensus within DOD and the research community on the extent and significance of low-level exposure effects. Research on Performance and Health Effects of Low-Level Exposures Research on animals and humans conducted by DOD and others has identified some adverse psychological, physiological, behavioral, and performance effects of low-level exposure to some chemical warfare agents. Researchers we interviewed did agree that the work that has been done to date is lacking in several aspects, including (1) the effects of exposure to low levels of chemical warfare agents in combination with other agents or contaminants likely found on future battlefields; (2) extrapolation of animal models to humans; (3) the breadth of agents tested, types of exposure routes, and length of exposure; and (4) the military or operational implications of identified or projected low-level exposure effects. However, DOD has developed proposals to fund two low-level research efforts, which are under consideration for implementation. Recent Low-Level Research Funding Three low-level research efforts—totaling about $10 million—were included in DOD’s fiscal year 1997 and 1998 chemical and biological defense RDT&E programs. These research efforts represented about 1.5 percent of the approximately $646 million in combined obligational authority authorized for chemical and biological defense RDT&E for these 2 fiscal years. DOD officials told us that these projects were not part of a structured program to determine the performance and health effects of low-level exposures. Moreover, DOD has no chemical defense research plan to evaluate the potential performance effects of low-level exposures or the implications they may have for force protection. The strategy should address, at a minimum, the desirability of an OSD policy on the protection of troops from low-level chemical warfare agent exposures; the appropriateness of addressing low-level chemical warfare agent exposures in doctrine; the need for enhanced low-level chemical warfare agent detection, identification, and protection capabilities; the research needed to fully understand the risks posed by exposures to low levels of chemical warfare agents, in isolation and in combination with other contaminants that would be likely found on the battlefield; and the respective risks, costs, and benefits of addressing low-level chemical warfare agent exposures within DOD’s chemical and biological defense program. We monitored ongoing DOD-funded Gulf War illnesses research that addresses potential long-term health effects from low-dose or chronic chemical exposures.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) approach for addressing U.S. troop exposures to low levels of chemical warfare agents during the Gulf War, focusing on: (1) the extent to which the DOD doctrine addresses exposures to low levels of chemical warfare agents; (2) the extent to which research addresses the performance and health effects of exposures to low levels of chemical warfare agents, either in isolation or combination with other agents and contaminants that would be likely found on the battlefield; and (3) the portion of resources in DOD's chemical and biological defense research, development, test, and evaluation (RDT&E) program explicitly directed at low-level chemical warfare agent exposures. What GAO Found GAO noted that: (1) DOD does not have an integrated strategy to address low-level exposures to chemical warfare agents; (2) it has not stated a policy or developed a doctrine on the protection of troops from low-level chemical exposures on the battlefield; (3) past research indicates that low-level exposures to some chemical warfare agents may result in adverse short-term performance and long-term health effects; (4) DOD has no chemical defense research program to determine the effects of low-level exposures; (5) less than 2 percent of the RDT&E funds in DOD's chemical and biological defense program have been allocated to low-level issues in the last 2 fiscal years; (6) DOD's nuclear, biological, and chemical (NBC) doctrine is focused on mission accomplishment by maximizing the effectiveness of troops in a lethal NBC environment; (7) it does not address protection of the force from low-level chemical warfare agent exposures on the battlefield; (8) according to officials, DOD does not have a doctrine that addresses low-level exposures because there is no: (a) validated low-level threat; (b) consensus on the definition or meaning of low-level exposures; or (c) consensus on the effects of low-level exposures; (9) past research by DOD and others indicates that single and repeated low-level exposures to some chemical warfare agents can result in adverse psychological, physiological, behavioral, and performance effects that may have military implications; (10) the research, however, does not fully address the effects of low-level exposures to a wide variety of agents, either in isolation or combination with other agents and battlefield contaminants; chronic effects; reliability and validity of animal-human extrapolation models; the operational implications of the measured adverse impacts; and delayed performance and health effects; (11) during the last 2 fiscal years, DOD has allocated nearly $10 million, or approximately 1.5 percent of its chemical and biological defense RDT&E budget of $646 million, to fund research and development projects on low-level chemical warfare agent exposure issues; (12) however, these projects were not part of a structured DOD research program focused on low-level effects; and (13) DOD does not have a chemical and biological defense research program designed to evaluate the potential effects of low-level chemical warfare agent exposures, but funding is under consideration for two multiyear research programs addressing low-level effects.

gao_GAO-12-1026T

gao_GAO-12-1026T_0

Planning for the Use of Operational Contract Support Future overseas contingencies are inherently uncertain, but effective planning—at both the strategic and operational levels—can help DOD reduce the risks posed by those uncertainties. DOD has recognized the need to improve its planning for operational contract support. In addition to the Secretary’s January 2011 memorandum, DOD has communicated and emphasized the importance of operational contract support at the strategic level through the issuance of new policy and guidance and ongoing efforts. This board is drafting an Operational Contract Support Action Plan to outline steps the department plans to take to close identified gaps in operational contract support capabilities. Nevertheless, we found that DOD still risked not fully understanding the extent to which it would be relying on contractors to support combat operations and being unprepared to provide the necessary management and oversight of deployed contractor personnel. One way to help address this risk is to ensure military commanders and senior leaders are cognizant of the roles contractors have in supporting DOD’s efforts, as well as the role that DOD military personnel have in managing and overseeing contractors. However, we have previously reported that commanders and senior leaders are not required to take these courses before assuming their contract management roles and responsibilities. These individuals—whether acquisition professionals or non-acquisition personnel, including military commanders—play critical roles in defining requirements, managing and overseeing contracts and contractors, and helping to ensure that the warfighter receives the goods and services needed in a timely manner while serving to mitigate the risks of fraud, waste, and abuse. Our work, as well as the work of others in the accountability community, has identified numerous instances in Iraq, Afghanistan, and elsewhere where these individuals were in short supply, were not properly trained, or were not fully aware of their responsibilities. DOD leadership has recognized the need to rebuild, train, and support a highly qualified and knowledgeable acquisition workforce as a strategic priority. DOD continues to face challenges in strategic workforce planning for its acquisition workforce. However, earlier this year, we reported that DOD has experienced challenges ensuring that (1) it has a sufficient number of CORs and (2) the CORs have the subject-matter expertise and training needed to perform their contract management and oversight duties, in particular for construction projects. DOD has taken some actions to enhance training programs to prepare CORs to manage and oversee contracts in contingency operations. Improving DOD’s Ability to Account for Contracts and Contractors DOD’s ability to effectively leverage operational contract support in contingency environments not only depends on having effective plans in place and having a skilled acquisition and oversight workforce, but also on having appropriate tools to account for contracts and contractor personnel. These tools can provide information that DOD can use to help mitigate risks associated with relying on contractors in contingency environments, including tracking which contracts DOD has awarded, where contractor personnel are located, and whether potential vendors or contractor personnel may pose a risk to U.S. interests. DOD has made efforts to develop tools to improve its ability to account for contracts and contractors, but it is not certain that these efforts will result in long-term solutions that will be available at the start of future contingencies. For example, in 2008, DOD designated the Synchronized Predeployment and Operational Tracker (SPOT) as its system for tracking specific information on certain contracts and associated personnel in Iraq and Afghanistan. While recent efforts have been made to improve SPOT’s tracking of contractor personnel, in reports issued annually since 2008, including in a report we plan to issue today, we have consistently found that DOD has lacked reliable data and systems to report on its contracts and contractor personnel in Iraq and Afghanistan. Without attention to improving the tools needed to effectively account for contracts and contractor personnel, DOD may continue to face similar challenges in future contingencies. Concluding Observations For the past 10 years, DOD has focused its attention on contingency operations in Iraq and Afghanistan. As DOD’s current efforts in Afghanistan draw closer to a conclusion and DOD turns its attention to other challenges, DOD needs to guard against allowing the lessons from Iraq and Afghanistan to be forgotten. Operational Contract Support: Management and Oversight Improvements Needed in Afghanistan. Acquisition Workforce: DOD’s Efforts to Rebuild Capacity Have Shown Some Progress. Warfighter Support: Cultural Change Needed to Improve How DOD Plans for and Manages Operational Contract Support. Warfighter Support: Continued Actions Needed by DOD to Improve and Institutionalize Contractor Support in Contingency Operations.

Why GAO Did This Study DOD has relied heavily on contractors to support its operations in Iraq and Afghanistan and is likely to continue to depend on contractors in future operations. For over 15 years, GAO has made recommendations intended to improve DOD's ability to manage and oversee operational contract support in deployed locations, which DOD has taken some actions to address. GAO has called for a cultural change within DOD to emphasize the importance of institutionalizing operational contract support across the department. As DOD's current efforts in Afghanistan draw closer to a conclusion and DOD turns its attention to other challenges, the department needs to guard against allowing the lessons from Iraq and Afghanistan to be forgotten. This testimony addresses three areas where sustained leadership is needed if DOD is to effectively prepare for the next contingency. These areas pertain to (1) planning for the use of operational contract support, (2) ensuring that DOD possesses the workforce needed to effectively manage and oversee contracts and contractors, and (3) improving DOD's ability to account for contracts and contractors. This statement is drawn from GAO's broad body of work on DOD's efforts to plan for operational contract support and manage and account for contractors in Iraq and Afghanistan--including work reflected in GAO's February 2011 high-risk update, GAO's related testimonies, and GAO's recent reports on operational contract support and other contracting issues. What GAO Found Future overseas contingencies are inherently uncertain, but effective planning for operational contract support can help reduce the risks posed by those uncertainties. The Department of Defense (DOD) has made an effort to emphasize the importance of operational contract support at the strategic level through new policy and guidance and ongoing efforts. For example, in January 2011, the Secretary of Defense issued a memorandum outlining actions and indicating a need to influence a cultural shift in how the department manages contracted support in a contingency environment. DOD has also recognized the need to translate strategic requirements into plans at the operational level, but GAO's past work has shown that DOD's progress in anticipating contractor support in sufficient detail in operation plans has been slow. As a result, DOD has risked not fully understanding the extent to which it will be relying on contractors to support combat operations and being unprepared to provide the necessary management and oversight of deployed contractor personnel. One way to help address this risk is to ensure military commanders and senior leaders are cognizant of the roles contractors have in supporting DOD's efforts and the role that military personnel have in managing and overseeing contractors. While DOD has taken steps to develop additional training, we have reported that commanders and senior leaders are not required to take these courses before assuming their contract management roles and responsibilities. In contingencies, DOD relies on a wide range of individuals to play critical roles in defining requirements, overseeing contractors, and helping to ensure that the warfighter receives the goods and services needed in a timely manner. GAO and others have identified numerous instances in Iraq and Afghanistan where these individuals were in short supply, were not properly trained, or were not fully aware of their responsibilities. DOD leadership has recognized the need to rebuild, train, and support a highly qualified and knowledgeable acquisition workforce. While DOD has made some progress in growing the workforce, it continues to face challenges in its strategic planning efforts. Further, in March 2012, GAO reported that although DOD had taken steps to enhance training for oversight personnel, the department continued to experience challenges ensuring that it had a sufficient number of oversight personnel with the subject-matter expertise and training needed to perform their contract management and oversight duties in Afghanistan. DOD's ability to effectively leverage operational contract support in contingency environments also depends on having appropriate tools to account for contracts and contractor personnel. These tools can provide information that DOD can use to help mitigate risks, including tracking which contracts DOD has awarded, where contractor personnel are located, and whether potential vendors or contractor personnel may pose a potential risk to U.S. interests. DOD has made efforts to develop such tools, but it is not certain that these efforts will result in long-term solutions. For example, while DOD has designated a system for tracking specific information on certain contracts and associated personnel in Iraq and Afghanistan, the department lacks reliable data sources to report on its contracts and contractor personnel. Without attention to improving the tools needed to effectively account for contracts and contractor personnel, DOD may continue to face challenges in future contingencies.

gao_GAO-06-207T

gao_GAO-06-207T_0

Background VA pays basic compensation benefits to veterans incurring disabilities from injuries or diseases that were incurred or aggravated while on active military duty. VA’s Individual Unemployability Benefits Disability compensation can be increased if VA determines that the veteran is unemployable (not able to engage in substantially gainful employment) because of the service-connected disability. Staff at VA’s regional offices make virtually all eligibility decisions for disability compensation benefits, including IU benefits. In contrast, we found that a growing number of U.S. private insurance companies had modernized their programs to enable people with disabilities to return to work. Private Insurers Incorporate Return- to-Work Considerations from the Beginning of the Assessment Process The three private insurers we studied incorporate return-to-work considerations early in the assessment process to assist claimants in their recovery and in returning to work as soon as possible. Private Insurers Provide Incentives for Claimants and Employers to Encourage and Facilitate Return to Work To facilitate return to work, the private insurers we studied employment incentives both for claimants to participate in vocational activities and receive appropriate medical treatment, and for employers to accommodate claimants. In addition, they provide financial incentives to employers to encourage them to provide work opportunities for claimants. Private Insurers Strive to Use Appropriate Staff to Achieve Accurate Disability Decisions and Successful Return-to- Work Outcomes The private disability insurers we studied have developed techniques for using the right staff to assess eligibility for benefits and return those who can to work. Officials of the three private insurers told us that they have access to individuals with a range of skills and expertise, including medical experts and vocational rehabilitation experts. The private insurers we examined told us that they strive to apply the appropriate type and intensity of staff resources to cost-effectively return to work claimants with work capacity. Preliminary findings from our ongoing work indicate that VA still does not have procedures in place to fully assess veterans’ work potential. In addition, the IU decision-making process lacks sufficient incentives to encourage return to work. In considering whether to grant IU benefits, VA does not have procedures to include vocational specialists from its VR&E services to help evaluate a veteran’s work potential. By not using these specialists, VA also misses an opportunity to have the specialist develop a return-to-work plan, in collaboration with the veteran, and identify and provide needed accommodations or services for those who can work. Instead, VA's IU assessment is focused on the veterans’ inabilities and providing cash benefits to those labeled as “unemployable,” rather than providing opportunities to help them return to work. Concluding Observations Return-to-work practices used in the U.S. private sector reflect the understanding that people with disabilities can and do return to work. Moreover, incorporating return-to-work practices could help VA modernize its disability program to enable veterans to realize their full productive potential without jeopardizing the availability of benefits for people who cannot work. 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 Veterans Affairs (VA) provides disability compensation to veterans disabled by injuries or diseases that were incurred or aggravated while on active military duty. Under Individual Unemployability (IU) benefit regulations, a veteran can receive increased compensation at the total disability compensation rate if VA determines that the veteran is unemployable because of service-connected disabilities. GAO has reported that numerous technological and medical advances, combined with changes in society and the nature of work, have increased the potential for people with disabilities to work. Yet VA has seen substantial growth of IU benefit awards to veterans over the last five years. In 2001 GAO reported that a growing number of private insurance companies in the United States have focused their programs on developing and implementing strategies to enable people with disabilities to return to work. Our testimony will describe how U.S. private insurers facilitate return to work in three key areas: (1) the eligibility assessment process, (2) work incentives, and (3) staffing practices. It will also compare these practices with those of VA's IU eligibility assessment process. What GAO Found The disability programs of the three private insurers we reported on in 2001 included three common return-to-work practices in their disability assessment process. Incorporate return-to-work considerations from the beginning of the assessment process: Private insurers integrated return-to-work considerations early and throughout the eligibility assessment process. Their assessment process both evaluated a person's potential to work and assisted those with work potential to return to the labor force. Provide incentives for claimants and employers to encourage and facilitate return to work: These incentives included requirements for obtaining appropriate medical treatment and participating in a return-to-work program, if such a program would benefit the individual. In addition, they provided financial incentives to employers to encourage them to provide work opportunities for claimants. Strive to use appropriate staff to achieve accurate disability decisions and successful return-to-work outcomes: Private insurers have access to staff with a wide range of expertise not only in making eligibility decisions, but also in providing return-to-work assistance. The three private disability insurers told us that they selected the appropriate type and intensity of staff resources to assess and return individuals with work capacity to employment cost-effectively. In comparison, VA's Individual Unemployability decision-making practices lag behind those used in the private sector. As we have reported in the past, a key weakness in VA's decision-making process is that the agency has not routinely included a vocational specialist in the evaluation to fully evaluate the applicant's ability to work. Preliminary findings from our ongoing work indicate that VA still does not have procedures in place to fully assess veterans' work potential. In addition, the IU decision-making process lacks sufficient incentives to encourage return to work. In considering whether to grant IU benefits, VA does not have procedures to include vocational specialists from its Vocational Rehabilitation and Education (VR&E) services to help evaluate a veteran's work potential. By not using these specialists, VA also misses an opportunity to have the specialist develop a return-to-work plan, in collaboration with the veteran, and identify and provide needed accommodations or services for those who can work. Instead, VA's IU assessment is focused on the veterans' inabilities and providing cash benefits to those labeled as "unemployable," rather than providing opportunities to help them return to work. Incorporating return-to-work practices could help VA modernize its disability program to enable veterans to realize their full productive potential without jeopardizing the availability of benefits for people who cannot work.

gao_GAO-08-312T

gao_GAO-08-312T_0

Without this ability, it is difficult for states to determine if a facility’s discharge is exceeding GLI water quality criteria and if a discharge limits are required. As we reported in 2005, developing the analytical methods needed to measure pollutants at the GLI water quality criteria level is a significant challenge to fully achieving GLI goals. Although methods have been developed for the nine BCCs for which GLI water quality criteria have been established, EPA has only approved the methods to measure mercury and lindane below GLI’s stringent criteria levels. Analytical methods for the other BCCs either have not received EPA approval or cannot be used to reliably measure to GLI criteria levels. Once EPA approves an analytical method, Great Lakes states are able to issue point source permits that require facilities to use that method unless the EPA region has approved an alternative procedure. According to EPA officials, specific time frames for developing and approving methods that measure to GLI criteria have not yet been established. Table 1 shows the status of the methods for the nine BCCs. The Great Lakes states’ experience with mercury illustrates the impact of sufficiently sensitive measurement methods on identifying pollutant discharges from point sources. Since this method was approved, the number of permits with discharge limits for mercury rose from 185 in May 2005 to 292 in November 2007. Moreover, EPA and state officials are expecting this trend to continue. Permit Flexibilities Allowing Discharges in Excess of GLI Water Quality Standards Delay Achievement of GLI Goals Permit flexibilities often allow facilities’ discharges to exceed GLI water quality criteria. Allows dischargers to exceed the GLI discharge limit for a particular pollutant specified in their permit. According to EPA and state officials, in many cases, facilities cannot meet GLI water quality criteria for a number of reasons, such as technology limitations, and the flexibilities are intended to give the facility time to make progress toward meeting the GLI criteria. With the exception of compliance schedules, the GLI allows for the repeated use of these permit flexibilities. As a result, EPA and state officials could not tell us when the GLI criteria will be met. EPA Has Taken Some Actions to Ensure Consistent Implementation of the GLI as Recommended in Our 2005 Report In our 2005 report, we described several factors that were undermining EPA’s ability to ensure progress toward achieving consistent implementation of GLI water quality standards. To help ensure full and consistent implementation of the GLI and to improve measures for monitoring progress toward achieving GLI’s goals, we made a number of recommendations to the EPA Administrator. In 2005, we reported that EPA’s efforts to assess progress in implementing the GLI and its impact on reducing point source discharges have been hampered by lack of information on these discharges. EPA has begun to review the efforts and progress made by one category of facilities— municipal wastewater treatment facilities—to reduce their mercury discharges into the basin. However, additional efforts will be needed to ensure consistency at other types of facilities, such as industrial sites, across the Great Lakes states. As methods are developed to determine whether facilities’ discharges for other BCCs meet GLI criteria and EPA approves them, and as more permits include discharge limits, more information will be available on pollutant discharges in the basin. 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 Millions of people in the United States and Canada depend on the Great Lakes for drinking water, recreation, and economic livelihood. During the 1970s, it became apparent that pollutants discharged into the Great Lakes Basin from point sources, such as industrial and municipal facilities, or from nonpoint sources, such as air emissions from power plants, were harming the Great Lakes. Some of these pollutants, known as bioaccumulative chemicals of concern (BCC), pose risks to fish and other species as well as to the humans and wildlife that consume them. In 1995, the Environmental Protection Agency (EPA) issued the Great Lakes Initiative (GLI). The GLI established water quality criteria to be used by states to establish pollutant discharge limits for some BCCs and other pollutants that are discharged by point sources. The GLI also allows states to include flexible permit implementation procedures (flexibilities) that allow facilities' discharges to exceed GLI criteria. This testimony is based on GAO's July 2005 report, Great Lakes Initiative: EPA Needs to Better Ensure the Complete and Consistent Implementation of Water Quality Standards (GAO-05-829) and updated information from EPA and the Great Lakes states. This statement addresses (1) the status of EPA's efforts to develop and approve methods to measure pollutants at the GLI water quality criteria levels, (2) the use of permit flexibilities, and (3) EPA's actions to implement GAO's 2005 recommendations. What GAO Found As GAO reported in 2005, developing the sensitive analytical methods needed to measure pollutants at the GLI water quality criteria level is a significant challenge to achieving GLI's goals. Of the nine BCCs for which criteria have been established, only two--mercury and lindane--have EPA-approved methods that will measure below those criteria levels. Measurement methods for the other BCCs are either not yet approved or cannot reliably measure to GLI criteria. Without such measurement, it is difficult for states to determine whether a facility is exceeding the criteria and if discharge limits are required in the facility's permit. As methods become available, states are able to include enforceable discharge limits in facilities' permits. For example, since EPA approved a more sensitive method for mercury in 1999, the number of permits with mercury limits has increased from 185 in May 2005 to 292 in November 2007. EPA and state officials expect this trend to continue. Similar increases may occur as more sensitive analytical methods are developed and approved for other BCCs. Flexibilities included in permits allow facilities' discharges to exceed GLI water quality criteria. For example, one type of flexibility--variances--will allow facilities to exceed the GLI criteria for a pollutant specified in their permits. Moreover, the GLI allows the repeated use of some of these permit flexibilities, and does not set a time frame for facilities to meet the GLI water quality criteria. As a result, EPA and state officials do not know when the GLI criteria will be met. In the 2005 report, GAO made a number of recommendations to EPA to help ensure full and consistent implementation of the GLI and to improve measures for monitoring progress toward achieving GLI's goals. EPA has taken some actions to implement the recommendations. For example, EPA has begun to review the efforts and progress made by one category of facilities--municipal wastewater treatment plants--to reduce their mercury discharges into the basin. However, until EPA gathers more information on the implementation of GLI and the impact it has had on reducing pollutant discharges from point sources, as we recommended, it will not be able to fully assess progress toward GLI goals.

gao_GAO-05-65

gao_GAO-05-65_0

The care provided to veterans at a VA nursing home could include a range of services, including short-term postacute care needed to recover from a condition such as a stroke to longer-term care required by veterans who cannot be cared for at home because of severe, chronic physical or mental limitations. Overall, VA spent approximately $2.3 billion to provide or pay for nursing home care in VA nursing homes, community nursing homes, and state veterans’ nursing homes in fiscal year 2003. 1.) 2.) State Veterans’ Nursing Homes Provided Half of VA’s Overall Nursing Home Workload, but Networks’ Use of Nursing Home Care Setting Varied State veterans’ nursing homes accounted for half of VA’s overall nursing home workload—measured by average daily census—in fiscal year 2003, even though they accounted for only 15 percent of expenditures. In large part this is because VA pays a per-diem rate for care in state veterans’ nursing homes that, on average, accounts for about one-third of the cost to provide veterans nursing home care in this setting. 3.) About One-Third of VA Nursing Home Care Is Long Stay, but VA Lacks Comparable Information for Other Nursing Home Settings About one-third of the care VA provided in VA nursing homes was long stay in fiscal year 2003. The remainder, or two-thirds of VA nursing home care, was short-stay care (less than 90 days) in this setting. About One-Fourth of Veterans Who Received Care in VA Nursing Homes Are Required to Be Served by the Millennium Act or VA Policy, but VA Lacks Comparable Information for Other Settings In fiscal year 2003, about 26 percent of veterans who received care in VA nursing homes are required to be served by the Millennium Act or VA’s policy on nursing home eligibility. 7.) VA lacks comparable information for community nursing homes or state veterans’ nursing homes on the percentage of veterans that are required to be served based on the Millennium Act or VA’s policy on nursing home eligibility even though these settings combined accounted for 63 percent of VA’s overall nursing home workload. However, VA does not have data on length of stay and the eligibility status of veterans receiving care in these settings as it has for VA nursing homes. Another contact and key contributors are listed in appendix V. Appendix I: Objectives, Scope, and Methodology We reviewed the Department of Veterans Affairs’ (VA) nursing home program for fiscal year 2003 for VA nursing homes, community nursing homes, and state veterans’ nursing homes to determine (1) VA spending to provide or pay for nursing home care, (2) VA workload provided or paid for, (3) the percentage of nursing home care that is long and short stay, and (4) the percentage of veterans receiving care that are required to be served by the Millennium Act or VA policy.

Why GAO Did This Study The Department of Veterans Affairs (VA) operates a $2.3 billion nursing home program that provides or pays for veterans' care in three settings: VA nursing homes, community nursing homes, and state veterans' nursing homes. The Veterans Millennium Health Care and Benefits Act (Millennium Act) of 1999 and VA policy require that VA provide nursing home care to veterans with a certain eligibility. Congress has expressed a need for additional data to conduct oversight of VA's nursing home program. Specifically, for all VA nursing home settings in fiscal year 2003, GAO was asked to report on (1) VA spending to provide or pay for nursing home care, (2) VA workload provided or paid for, (3) the percentage of nursing home care that is long and short stay, and (4) the percentage of veterans receiving care required by the Millennium Act or VA policy. What GAO Found In fiscal year 2003, VA spent 73 percent of its nursing home resources on VA nursing homes--almost $1.7 billion of about $2.3 billion--and the remaining 27 percent on community and state veterans' nursing homes. Half of VA's average daily nursing home workload of 33,214 in fiscal year 2003 was for state veterans' nursing homes, even though this setting accounted for 15 percent of VA's overall nursing home expenditures. In large part, this is because VA pays about one-third of the cost of care in state veterans' nursing homes. Community nursing homes and VA nursing homes accounted for 13 and 37 percent of the workload, respectively. About one-third of nursing home care in VA nursing homes in fiscal year 2003 was long-stay care (90 days or more). Long-stay services include those needed by veterans who cannot be cared for at home because of severe, chronic physical or mental impairments such as the inability to independently eat or the need for supervision because of dementia. The other two-thirds was short-stay care (less than 90 days), which includes services such as postacute care needed for recuperation from a stroke. VA lacks similar data for community and state veterans' nursing homes. About one-fourth of veterans who received care in VA nursing homes in fiscal year 2003 were served because the Millennium Act or VA policy requires that VA provide or pay for nursing home care of veterans with a certain eligibility. All other veterans received care at VA's discretion. VA lacks data on comparable eligibility status for community and state veterans' nursing homes even though these settings combined accounted for 63 percent of VA's overall workload. Gaps in data on length of stay and eligibility in these two settings impede program oversight.

gao_GAO-05-462

gao_GAO-05-462_0

Background Perchlorate is a primary ingredient in solid rocket propellant and has been used for decades by DOD, NASA, and the defense industry in the manufacturing, testing, and firing of rockets and missiles. The revised draft risk assessment included a proposed reference dose equivalent to a concentration of 1 part per billion in drinking water, if it is assumed all exposure comes only from drinking water. The new reference dose is equivalent to 24.5 parts per billion in drinking water, assuming that an adult weighing 70 kilograms (or 154 pounds) consumes 2 liters of drinking water per day, and that all perchlorate ingested comes from drinking water. Perchlorate Has Been Found at Almost 400 Sites across the United States Various federal and state agencies have reported finding perchlorate at almost 400 sites in 35 states, the District of Columbia, and 2 commonwealths of the United States in drinking water, surface water, groundwater, and soil. The concentration levels reported ranged from 4 parts per billion to more than 3.7 million parts per billion in groundwater at 1 site, yet roughly two-thirds of sites had concentration levels at or below 18 parts per billion, the upper limit of EPA’s provisional cleanup guidance for perchlorate. Federal and state agencies are not required to routinely report perchlorate findings to EPA, and EPA does not currently have a formal process to centrally track or monitor perchlorate detections or the status of a cleanup. As a result, a greater number of sites may exist in the United States than is presented in this report. Most of the sites and the highest levels of perchlorate were found in a small number of states. However, the majority of the 395 sites had lower levels of perchlorate. EPA and State Environmental Agencies Use Federal and State Environmental Laws and Regulations to Respond to Perchlorate Although there is no federal standard for perchlorate in drinking water or a federal cleanup standard, EPA and state environmental agencies authorized by EPA have investigated suspected sites; collected samples and analyzed for perchlorate; and, when perchlorate is found, cleaned up or limited perchlorate releases under broad authorities found in various federal environmental laws and regulations. Further, both EPA and authorized states have required responsible parties to sample and clean up perchlorate under other state laws. Parties Responsible for Perchlorate Findings Generally Have Complied with Regulations Requiring Sampling and Cleanup According to EPA and state officials, private industry and public water suppliers have generally complied with regulations requiring sampling, such as those under (1) the RCRA and NPDES permit programs, where responsible parties have been required to sample and report hazardous releases to state environmental agencies, or (2) the Safe Drinking Water Act’s Unregulated Contaminant Monitoring Regulation, which required sampling for unregulated contaminants, such as perchlorate, between 2001 and 2003. According to EPA and state officials, DOD has been reluctant to (1) sample on or near active installations because there is no specific federal regulatory standard for perchlorate or (2) sample where DOD determined the criteria to sample were not met as outlined in its policy. Of these, 26 studies found that perchlorate had an adverse effect. The NAS report considered many of the same health risk studies that we reviewed and concluded that an exposure level higher than initially recommended by EPA may not adversely affect a healthy adult, but recommended more study of the effects of perchlorate on pregnant women and children. The National Academy of Sciences Reported That Evidence Was Insufficient to Show Perchlorate Causes Adverse Effects In January 2005, NAS issued its report on EPA’s draft health assessment and the potential health effects of perchlorate. NAS concluded that an exposure level higher than initially recommended by EPA may not adversely affect a healthy adult. Objectives, Scope, and Methodology We identified (1) the estimated extent of perchlorate nationwide; (2) what actions the federal government, state governments, and responsible parties have taken to clean up or eliminate the source of perchlorate found; and (3) what studies of the potential health risks from perchlorate have been conducted and, where presented, the author’s conclusions or findings on the health effects of perchlorate. Effects not studied. A federal district court in California ruled, in part, that perchlorate is a hazardous waste under RCRA because it is ignitable, under certain conditions.

Why GAO Did This Study Perchlorate, a primary ingredient in propellant, has been used for decades in the manufacture and firing of rockets and missiles. Other uses include fireworks, flares, and explosives. Perchlorate has been found in drinking water, groundwater, surface water, and soil in the United States. The National Academy of Sciences (NAS) reviewed studies of perchlorate's health effects and reported in January 2005 that certain levels of exposure may not adversely affect healthy adults but recommended more studies be conducted on the effects of perchlorate exposure in children and pregnant women. GAO determined (1) the estimated extent of perchlorate in the United States, (2) what actions have been taken to address perchlorate, and (3) what studies of perchlorate's health risks have reported. What GAO Found Perchlorate contamination has been found in water and soil at almost 400 sites in the United States where concentration levels ranged from a minimum reporting level of 4 parts per billion to millions of parts per billion. More than one-half of all sites were in California and Texas, and sites in Arkansas, California, Texas, Nevada, and Utah had some of the highest concentration levels. Yet, most sites had lower levels of contamination; roughly two-thirds of sites had concentration levels at or below the Environmental Protection Agency's (EPA) provisional cleanup standard of 18 parts per billion. Federal and state agencies are not required to routinely report perchlorate findings to EPA, and EPA does not centrally track or monitor perchlorate detections or the status of cleanup. As a result, a greater number of contaminated sites than we reported may already exist. Although there is no specific federal requirement to clean up perchlorate, EPA and state agencies have used broad authorities under various environmental laws and regulations, as well as state laws and action levels, to sample and clean up and/or require the sampling and cleanup of perchlorate by responsible parties. Further, under certain federal and state environmental laws, private industry may be required to sample for contaminants, such as perchlorate. According to EPA and state officials, private industry and public water suppliers have generally complied with regulations requiring sampling and agency requests to sample. The Department of Defense (DOD) has sampled and cleaned up perchlorate in some locations when required by laws and regulations, but the department has been reluctant to sample on or near active installations under other circumstances. Except where there is a specific legal requirement, DOD's perchlorate sampling policy requires the services to sample only under certain conditions. Cleanup is planned or under way at 51 of the almost 400 perchlorate-contaminated sites identified to date. Since 1998, EPA and DOD have sponsored a number of perchlorate health risk studies using varying study methodologies. We reviewed 90 of these studies that generally examined whether and how perchlorate affected the thyroid. About one-quarter concluded that perchlorate had an adverse effect. In January 2005, NAS reported on the potential health effects of perchlorate and concluded that a total exposure level from all sources, higher than that initially recommended by EPA (a dose equivalent to 1 part per billion in drinking water, assuming that all exposure came from drinking water) may not adversely affect a healthy adult. On the basis of NAS' report, EPA revised its reference dose to a level that is equivalent to 24.5 parts per billion in drinking water (if it is assumed that all exposure comes only from drinking water). The reference dose is not a drinking water standard; it is a scientific estimate of the total daily exposure level from all sources that is not expected to cause adverse effects in humans, including the most sensitive populations.

gao_T-RCED-97-76

gao_T-RCED-97-76_0

Information on the Condition of Many Park Resources Is Insufficient While acknowledging the importance of obtaining information on the condition of park resources, the Park Service has made only limited progress in developing it. Park managers told us that—except for certain endangered species, such as sea turtles—they had inadequate knowledge about whether the condition of wildlife was improving, declining, or staying the same. Yet preventing or mitigating these threats and their impact is at the core of the agency’s mission to preserve and protect the parks’ resources. Enhancing Knowledge About Resources Will Involve Difficult Choices The information that I have presented to you today is not new to the National Park Service. Park Service managers have long acknowledged that to improve management of the National Park System, more sound scientific information on the condition of resources and threats to those resources is needed. The Park Service has taken steps to correct the situation. When asked why more progress is not being made, Park Service officials generally told us that funds are limited and competing needs must be addressed. Making more substantial progress in improving the scientific knowledge base about resources in the park system will cost money. Dealing with these challenges calls for the Park Service, the administration, and the Congress to make difficult choices involving how national parks are funded and managed. Regardless of which, if any, of these choices is made, without an improvement in the Park Service’s ability to collect the scientific data needed to properly inventory park resources and monitor their condition over time, the agency cannot adequately perform its mission of preserving and protecting the resources entrusted to it.

Why GAO Did This Study GAO discussed its views on the National Park Service's (NPS) knowledge of the condition of the resources that the agency is entrusted to protect within the National Park System. What GAO Found GAO noted that: (1) GAO's work has shown that although NPS acknowledges, and its policies emphasize, the importance of managing parks on the basis of sound scientific information about resources, today such information is seriously deficient; (2) frequently, baseline information about natural and cultural resources is incomplete or nonexistent, making it difficult for park managers to have a clear knowledge about what condition the resources are in and whether the condition of those resources is deteriorating, improving, or staying the same; (3) at the same time, many of these park resources face significant threats, ranging from air pollution, to vandalism, to the development of nearby land; (4) however, even when these threats are known, NPS has limited scientific knowledge about the severity of them and their impact on affected resources; (5) these concerns are not new to NPS, and in fact, the agency has taken steps to improve the situation; (6) however, because of limited funds and other competing needs that must be completed, NPS has made relatively limited progress to correct this deficiency of information; (7) there is no doubt that it will cost money to make more substantial progress in improving the scientific knowledge base about park resources; (8) dealing with this challenge will require NPS, the administration, and the Congress to make difficult choices involving how parks are funded and managed; and (9) however, without such an improvement, NPS will be hindered in its ability to make good management decisions aimed at preserving and protecting the resources entrusted to it.

gao_GAO-08-561

gao_GAO-08-561_0

VBA Has a Uniform Training Curriculum for New Claims Processors and an Annual Training Requirement for All Claims Processors, but Staff Are Not Held Accountable for Meeting This Requirement VBA has established a standardized curriculum for training new VSRs and RVSRs on how to process claims, and it has an 80-hour annual training requirement for both new and experienced staff; however, it does not hold individual staff accountable for meeting this requirement. To ensure that staff meet this requirement, each regional office must develop an annual training plan, which can contain a mix of training topics identified by VBA central office and by the regional office. According to VBA officials, however, the agency is in the process of implementing an automated system that should allow it to track the training each staff member completes. VBA Is Taking Steps to Strategically Plan Its Training for Staff, but Does Not Adequately Evaluate Training and May Be Falling Short in Design and Implementation VBA is taking steps to strategically plan its training for VSRs and RVSRs including the establishment of a training board to assess VBA’s training needs. A number of new staff raised issues with how consistently their training curriculum was implemented. However, some staff reported that VBA’s implementation of their centralized training was not always consistent. Experienced staff had mixed views on training provided by the regional office. Performance Management System for Claims Processors Generally Conforms to Accepted Practices, but May Not Clearly Differentiate between Performance Levels Performance Management System for Claims Processors Is Generally Consistent with Accepted Practices The elements used to evaluate individual VSRs’ and RVSRs’ performance appear to be generally aligned with VBA’s organizational performance measures, something prior GAO work has identified as a well-recognized practice for effective performance management systems (see app. Although neither VBA nor VA central office officials have examined the distribution of VSRs and RVSRs across the five overall performance ratings, VA indicated it is considering changes to the system designed to allow for greater differentiation in performance ratings. Recommendations for Executive Action The Secretary of Veterans Affairs should direct VBA to: Collect and review feedback from staff on the training conducted at the if the 80-hour annual training requirement is appropriate for all VSRs and RVSRs; the extent to which regional offices provide training that is relevant to VSRs’ and RVSRs’ work, given varying levels of staff experience; and whether regional offices find the TPSS a useful learning tool and, if not, what adjustments are needed to make it more useful; and Use information from its new learning management system to hold individual VSRs and RVSRs accountable for completing whatever annual training requirement it determines is appropriate. Key contributors are listed in appendix V. Appendix I: Objectives, Scope, and Methodology We were asked to determine: (1) What training is provided to new and experienced claims processors and how uniform is this training? (2) To what extent has the Veterans Benefits Administration (VBA) developed a strategic approach to planning training for claims processors and how well is their training designed, implemented, and evaluated? And (3) To what extent is the performance management system for claims processors consistent with generally accepted performance management practices in the public sector? We judgmentally selected these offices to achieve some diversity in geographic location, number of staff, and claims processing accuracy rates, and what we report about these sites may not necessarily be representative of any other regional offices or all regional offices (see fig.

Why GAO Did This Study Faced with an increase in disability claims, the Veterans Benefits Administration (VBA) is hiring a large number of new claims processing staff. We were asked to determine: (1) What training is provided to new and experienced claims processors and how uniform is this training? (2) To what extent has VBA planned this training strategically, and how well is the training designed, implemented, and evaluated? and (3) To what extent is the performance management system for claims processors consistent with generally accepted practices? To answer the questions, GAO reviewed documents including VBA policies and training curricula; interviewed VBA central office officials; visited 4 of VBA's 57 regional offices, which were selected to achieve diversity in geographic location, number of staff, and officewide accuracy in claims processing; and compared VBA's training and performance management to generally accepted practices identified by GAO. What GAO Found VBA has a standardized training curriculum for new staff and a training requirement for all staff, but does not hold staff accountable for meeting this requirement. The curriculum for new staff includes what is referred to as centralized training and training at their home offices. All claims processors must complete 80 hours of training annually, which may cover a mix of topics identified centrally and by regional offices. Individual staff members face no consequences for failing to meet the training requirement, however, and VBA has not tracked training completion by individuals. It is implementing a new system that should provide this capacity. Although VBA has taken steps to plan its training strategically, the agency does not adequately evaluate training and may be falling short in training design and implementation. VBA has a training board that assesses its overall training needs. However, the agency does not consistently collect feedback on regional office training, and both new and experienced staff GAO interviewed raised issues with their training. Some new staff raised concerns about the consistency of training provided by different instructors and about the usefulness of an on-line learning tool. Some experienced staff believe that 80 hours of training annually is not necessary, some training was not relevant for them, and workload pressures impede training. The performance management system for claims processors generally conforms to GAO-identified key practices, but the formula for assigning overall ratings may prevent managers from fully acknowledging and rewarding staff for higher levels of performance. The system aligns individual and organizational performance measures and requires that staff be given feedback throughout the year. However, VBA officials raised concerns about the formula used to assign overall ratings. Almost all staff in the offices GAO visited were placed in only two of five overall rating categories, although managers said greater differentiation would more accurately reflect actual performance differences. The Department of Veterans Affairs (VA) has not examined the ratings distribution, but acknowledges a potential issue with its formula and is considering changes.

gao_GAO-14-269T

gao_GAO-14-269T_0

All commercial airports are eligible to apply to the SPP. In December 2012, we reported that TSA had developed some resources to assist SPP applicants, but it had not provided guidance on its application and approval process to assist airports. Further, we found that airport operators who completed the applications generally stated that they faced difficulties in doing so and that additional guidance would have been helpful. Thus, we recommended that TSA develop guidance that clearly (1) states the criteria and process that TSA is using to assess whether participation in the SPP would compromise security or detrimentally affect the cost- efficiency or the effectiveness of the screening of passengers or property at the airport, (2) states how TSA will obtain and analyze cost information regarding screening cost-efficiency and effectiveness and the implications of not responding to the related application questions, and (3) provides specific examples of additional information airports should consider providing to TSA to help assess an airport’s suitability for the SPP. TSA concurred with our recommendation and has taken actions to address it. Specifically, TSA updated its SPP website in December 2012 by providing (1) general guidance to assist airports with completing the SPP application and (2) a description of the criteria and process the agency will use to assess airports’ applications to participate in the SPP. We believe that these actions address the intent of our recommendation and should help improve transparency of the SPP application process as well as help airport officials determine whether their airports are good candidates for the SPP. Performance between SPP and Non-SPP Airports Varied; TSA Recently Developed a Mechanism to Monitor Private versus Federal Screener Performance Performance Varied between SPP and Non- SPP Airports for Some Measures, but Differences Cannot Be Entirely Attributed to the Use of Private or Federal Screeners In our December 2012 report, we analyzed screener performance data for four measures and found that there were differences in performance between SPP and non-SPP airports, and those differences could not be exclusively attributed to the use of either federal or private screeners. TSA Has Developed a Mechanism to Monitor Private Screener Performance Separately from the Performance of Federal Screeners Since our December 2012 report, TSA has developed a mechanism to regularly monitor private versus federal screener performance, as we recommended. We also reported in December 2012 that TSA had conducted or commissioned prior reports comparing the cost and performance of SPP and non-SPP airports. However, TSA officials stated at the time that they did not plan to conduct similar analyses in the future, and instead, they were using across-the-board mechanisms of both private and federal screeners, such as the Scorecard, to assess screener performance across all commercial airports. However, as we reported in December 2012, the Scorecard and PMR did not provide a complete picture of screener performance at SPP airports because, while both mechanisms provided a snapshot of private screener performance at each SPP airport, this information was not summarized for the SPP as a whole or across years, which made it difficult to identify changes in performance. We concluded that monitoring private screener performance in comparison with federal screener performance was consistent with the statutory requirement that TSA enter into a contract with a private screening company only if the Administrator determines and certifies to Congress that the level of screening services and protection provided at an airport under a contract will be equal to or greater than the level that would be provided at the airport by federal government personnel. TSA concurred with our recommendation, and has taken actions to address it. Specifically, in January 2013, TSA issued its first SPP Annual Report. Further, in September 2013, the TSA Assistant Administrator for Security Operations signed an operations directive that provides internal guidance for preparing the SPP Annual Report, including the requirement that the SPP PMO must annually verify that the level of screening services and protection provided at SPP airports is equal to or greater than the level that would be provided by federal screeners. Further, these actions could also assist TSA in identifying performance changes that could lead to improvements in the program and inform decision making regarding potential expansion of the SPP.

Why GAO Did This Study TSA maintains a federal workforce to screen passengers and baggage at the majority of the nation's commercial airports, but it also oversees a workforce of private screeners at airports who participate in the SPP. The SPP allows commercial airports to apply to have screening performed by private screeners, who are to provide a level of screening services and protection that equals or exceeds that of federal screeners. In recent years, TSA's SPP has evolved to incorporate changes in policy and federal law, prompting enhanced interest in measuring screener performance. This testimony addresses the extent to which TSA (1) has provided guidance to airport operators for the SPP application process and (2) assesses and monitors the performance of private and federal screeners. This statement is based on a report GAO issued in December 2012 and selected updates conducted in January 2014. To conduct the selected updates, GAO reviewed documentation, such as the SPP Annual Report issued in January 2013, and interviewed agency officials on the status of implementing GAO's recommendations. What GAO Found Since GAO reported on this issue in December 2012, the Transportation Security Administration (TSA) has developed application guidance for airport operators applying to the Screening Partnership Program (SPP). In December 2012, GAO reported that TSA had not provided guidance to airport operators on its application and approval process, which had been revised to reflect requirements in the Federal Aviation Administration Modernization and Reform Act of 2012. Further, airport operators GAO interviewed at the time generally stated that they faced difficulties completing the revised application, such as how to obtain cost information. Therefore, GAO recommended that TSA develop application guidance, and TSA concurred. To address GAO's recommendation, TSA updated its SPP website in December 2012 by providing general application guidance and a description of the criteria and process the agency uses to assess airports' SPP applications. The guidance provides examples of information that airports could consider providing to TSA to help assess their suitability for the program and also outlines how the agency will analyze cost information. The new guidance addresses the intent of GAO's recommendation and should help improve transparency of the SPP application process as well as help airport operators determine whether their airports are good candidates for the SPP. TSA has also developed a mechanism to regularly monitor private versus federal screener performance. In December 2012, GAO found differences in performance between SPP and non-SPP airports based on its analysis of screener performance data. However, while TSA had conducted or commissioned prior reports comparing the performance of SPP and non-SPP airports, TSA officials stated at the time that they did not plan to conduct similar analyses in the future, and instead stated that they were using across-the-board mechanisms to assess screener performance across all commercial airports. In December 2012, GAO found that these across-the-board mechanisms did not summarize information for the SPP as a whole or across years, which made it difficult to identify changes in private screener performance. GAO concluded that monitoring private screener performance in comparison with federal screener performance was consistent with the statutory provision authorizing TSA to enter into contracts with private screening companies and recommended that TSA develop a mechanism to regularly monitor private versus federal screener performance. TSA concurred with the recommendation. To address GAO's recommendation, in January 2013, TSA issued its first SPP Annual Report, which provides an analysis of private versus federal screener performance. Further, in September 2013, a TSA Assistant Administrator signed an operations directive that provides internal guidance for preparing the SPP Annual Report, including the requirement that the report annually verify that the level of screening services and protection provided at SPP airports is equal to or greater than the level that would be provided by federal screeners. These actions address the intent of GAO's recommendation and could assist TSA in identifying performance changes that could lead to improvements in the program. What GAO Recommends GAO is making no new recommendations in this statement.

gao_GAO-07-945

gao_GAO-07-945_0

Further, CMS is not likely to complete these other financial reviews until almost 3 years after the bid submission date for each contract year, in part because it must first reconcile payment data that prescription drug plans are not required to submit to CMS until 6 months after the contract year is over. For the audits of the contract year 2006 bids, CMS officials explained that they did not intend for the audits of contract year 2006 bid submissions to meet the one-third audit requirement and that they plan to conduct other reviews of the financial records of organizations to meet the requirement for contract year 2006. However, in late May 2007, CMS informed us that its legal counsel had determined that the agency does not have the legal authority to recover funds from MA organizations based on the findings from the ACR audits. On the basis of our assessment of the statutes, CMS had the authority to pursue financial recoveries, but its rights under the contracts for 2001–2005 are limited because its implementing regulations did not require that each contract include provisions to inform organizations about the audits and about the steps that CMS would take to address identified deficiencies, including pursuit of financial recoveries. The ACR Audit Process Did Not Consistently Quantify Impacts on Beneficiaries CMS contracted with audit firms at a cost of $15.2 million to audit ACRs for contract years 2001-2005, but did not ensure that the audit process consistently provided information to assess the potential impact on beneficiaries. In our October 2001 report, we reported that for contract year 2001, CMS had planned to require auditors, where applicable, to do so. CMS officials told us that they plan to close out the audits without pursuing financial recoveries. OACT officials responsible for the bid audit process explained that they will use the audit results to help organizations improve their methods in preparing bids in subsequent years, but their audit follow-up process does not involve taking action to recover funds from organizations based on audit results because they maintain that CMS does not have the legal authority to do so. However, according to our assessment of the statute, CMS has the authority to include terms in its contracts with MA organizations and prescription drug plan sponsors that would allow it to pursue financial recoveries based on the bid audit results. CMS has authority to sanction organizations but did not identify any findings from the contract year 2006 bid audits where a sanction would be warranted. The current bid audits provide CMS with information in a timely manner to address identified deficiencies. Appendix I: Scope and Methodology To determine whether the Centers for Medicare & Medicaid Services (CMS) met the requirement for auditing Adjusted Community Rates (ACRs) for one-third of the Medicare Advantage (MA) organizations for contract years 2001 through 2005 and one-third of the bid submissions for contract year 2006, we first requested the criteria and analysis from CMS to show how it met the requirement.

Why GAO Did This Study In fiscal year 2006, the Centers for Medicare & Medicaid Services (CMS) spent over $51 billion on the Medicare Advantage program, which serves as an alternative to the traditional fee-for-service program. Under the Medicare Advantage program, companies wishing to participate must annually submit bids (effective with contract year 2006) that identify the health services the company will provide to Medicare members and the estimated cost and revenue requirements for providing those services. For 2001 through 2005, the submissions were called Adjusted Community Rate (ACR) Proposals. The Balanced Budget Act (BBA) of 1997 requires CMS to annually audit the financial records supporting the submissions of at least one-third of participating organizations. BBA also requires that GAO monitor the audits. In this report, GAO examined (1) whether CMS met the one-third requirement for 2001 through 2006, (2) what information the ACR audits provided and how CMS used it, and (3) what information the bid audits provided and how CMS used it. What GAO Found CMS did not document its process to determine whether it met the requirement for auditing ACRs for one-third of the participating Medicare Advantage organizations for contract years 2001-2005. CMS is planning to conduct other financial reviews of organizations to meet the audit requirement for contract year 2006, but by the end of our fieldwork in June 2007, CMS had not finalized its plans. Further, CMS does not plan to complete the financial reviews until almost 3 years after the bid submission date each contract year. This will affect its ability to address deficiencies in a timely manner. CMS did not consistently ensure that the audit process for contract years 2001-2005 provided information to assess the impact on beneficiaries. After contract year 2003 audits were completed, CMS took steps to determine such impact and identified about $34 million from those audits that beneficiaries could have received in additional benefits. However, in late May 2007, CMS officials told us they were planning to close out the audits without pursuing financial recoveries because the agency does not have the legal authority to do so. According to our assessment of the statutes, CMS had the authority to pursue financial recoveries, but its rights under contracts for 2001-2005 are limited because its implementing regulations did not require that each contract include provisions to inform organizations about the audits and about the steps that CMS would take to address identified deficiencies, including pursuit of financial recoveries. CMS audited contract year 2006 bids for 80 organizations, and 18 had a material finding that affected amounts in approved bids. CMS officials said that they will use the audit results to help improve bids in subsequent years but took limited action to follow-up on contract year 2006 findings. CMS will not pursue financial recoveries based on audit results because it maintains that it does not have the legal authority to do so. However, according to our assessment of the statutes, CMS has the authority to include terms in bid contracts that would allow it to pursue financial recoveries. CMS also has the authority to sanction organizations but has not identified instances where sanctions are warranted. We also noted that CMS did not document steps taken to mitigate conflicts of interest for the firms performing audits.

gao_T-AIMD-98-63

gao_T-AIMD-98-63_0

Integral to executing each of FAA’s programs are extensive information processing and communications technologies. Further, its strategic plan—defining program management responsibilities and providing an approach to addressing the millennium challenge—has yet to be made final. Little Time Remains for Critical Renovation, Validation, and Implementation Activities, Placing January 1, 2000, Readiness at Risk One result of delayed awareness and assessment activities is that the time remaining for renovation, validation, and implementation can become dangerously compressed. Renovation, validation, and implementation activities are the three critical final phases in correcting Year 2000 vulnerabilities. However, because of the agency’s delays in completing its awareness and assessment activities, time is running out for FAA to renovate all of its systems, validate these conversions or replacements, and implement its converted or replaced alternatives. Should the pace at which FAA addresses its Year 2000 issues not quicken, and critical FAA systems not be Year 2000 compliant and therefore not be ready for reliable operation on January 1 of that year, the agency’s capability in several essential areas—including the monitoring and controlling of air traffic—could be severely compromised. This could result in the temporary grounding of flights until safe aircraft control can be assured. Our report being released today makes a number of specific recommendations to increase the likelihood that FAA systems will be Year 2000 compliant on January 1 of that year. At a minimum, this would include issuing a final FAA Year 2000 plan providing the Year 2000 program manager with the authority to enforce Year 2000 policies and outlining FAA’s strategy for addressing the date change; assessing how its major business lines and the aviation industry would be affected if the Year 2000 problem were not corrected in time and using these results to help rank the agency’s Year 2000 activities; completing inventories of all information systems and their components, completing assessments of all inventoried systems to determine criticality and whether the system will be converted, replaced, or retired; determining priorities for system conversion and replacement based on establishing plans for addressing identified date dependencies; developing plans for validating and testing all converted or replaced crafting realistic contingency plans for all business lines to ensure the continuity of critical operations; and developing a reliable cost estimate based on a comprehensive inventory and completed assessments of the various systems’ criticality, and how their needs for modification will be addressed.

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the Federal Aviation Administration's (FAA) efforts to address the year 2000 problem, focusing on: (1) FAA's reliance on information processing; (2) where the agency stands today; (3) what remains at risk; and (4) what GAO recommends must be done to increase the likelihood that FAA systems will be year 2000 compliant by January 1 of that year. What GAO Found GAO noted that: (1) many of FAA's systems could fail to perform as needed when using dates after 1999, unless proper date-related calculations can be assured; (2) the implications of FAA's not meeting this immovable deadline are enormous and could effect hundreds of thousands of people through customer inconvenience, increased airline costs, grounded or delayed flights, or degraded levels of safety; (3) FAA's progress in making its systems ready for the year 2000 has been too slow; (4) at its current pace, it will not make it in time; (5) the agency has been severely behind schedule in completing basic awareness activities, including establishing a program manager with responsibility or its year 2000 program and issuing a final, overall year 2000 strategy; (6) further, FAA does not know the extent of its year 2000 problem because it has not completed key assessment activities; (7) specifically, it has yet to analyze the impact of its systems' not being year 2000 compliant, inventory and assess all of its systems for date dependencies, make final its plans for addressing any identified date dependencies, or develop plans for continued operations in case systems are not corrected in time; (8) until these activities are completed, FAA cannot know the extent to which it can trust its systems to operate safely using dates beyond 1999; (9) delays in completing awareness and assessment activities also leave FAA little time for critical renovation, validation, and implementation activities--the final three phases in an effective year 2000 program; and (10) with under 2 years left, FAA is quickly running out of time, making contingency planning even more critical.

gao_GAO-12-66

gao_GAO-12-66_0

USCIS Did Not Always Follow Acquisition Policy Contributing to Program Delays, Cost Increases, and Unreliable Schedules USCIS has not consistently followed the acquisition management approach that DHS outlined in its management directives in developing and managing the Transformation Program. However, USCIS did not complete several acquisition planning documents required by DHS policy prior to moving forward with an acquisition approach and selecting a solutions architect to develop USCIS ELIS’s capabilities. USCIS Awarded a Contract to Develop Program Capabilities without Fully Understanding Requirements and Resources Needed USCIS awarded a solutions architect contract to begin capability development activities prior to having a full understanding of requirements and resources needed to execute the program. DHS’s acquisition policy requires that programs conduct planning efforts to establish a program’s operational requirements, to develop a program baseline against which to measure progress, and a plan that outlines the program’s acquisition strategy. We have previously reported that firm requirements must be established and sufficient resources must be allocated at the beginning of an acquisition program, or the program’s execution will be subpar. However, USCIS did not develop the first version of the ORD until October 2009, almost a year after the award of the solutions architect contract. Moreover, cost information in the acquisition plan is not traceable to other documents, such as a validated life-cycle cost estimate or an acquisition program baseline, as required by DHS guidance. However, the estimated cost through fiscal year 2011 is about $703 million, about $292 million more than estimated in May 2008. Subsequently, in April 2011, the program completed development of operational requirements and the acquisition program baseline. Improved Acquisition Planning Could Help USCIS Avoid Further Delays and Potential Cost Overruns for the Transformation Program USCIS Does Not Have Reasonable Assurance That Future Milestones Are Achievable USCIS is continuing to manage the Transformation Program without specific acquisition management controls such as reliable schedules and as a result it will be difficult for USCIS to provide reasonable assurance that it can meet its future milestones. USCIS has established schedules for the first release of the Transformation Program, but our analysis shows that these schedules are not reliable as they do not meet best practices for schedule estimating. For example, the schedules did not identify all activities to be performed by the government and solutions architect. Collectively, and moving forward, not meeting the nine key practices increases the risk of schedule slippages and related cost overruns and makes meaningful measurement and oversight of program status and progress, as well as accountability for results, difficult to achieve. Among other things, best practices and related federal guidance call for a program schedule to be programwide in scope, meaning that it should include the integrated breakdown of the work to be performed by both the government and its contractors over the expected life of the program. As outlined by DHS acquisition management guidance, a life-cycle cost estimate is a required and critical element in the acquisition process. USCIS has developed and updated the life-cycle cost estimate for the Transformation Program, but USCIS’s individual schedules for the Transformation Program do not meet best practices for schedule estimating, thus raising questions about the credibility of the program’s life-cycle cost estimates. Best practices that we have previously identified for cost estimation state that because some program costs such as labor, supervision, rented equipment, and facilities cost more if the program takes longer, a reliable schedule can contribute to an understanding of the cost impact if the program does not finish on time. In commenting on this report, DHS, including USCIS, concurred with the recommendations. DHS's letter outlined the actions that USCIS is taking action or has taken to address each recommendation. Department of Homeland Security: Billions Invested in Major Programs Lack Appropriate Oversight.

Why GAO Did This Study Each year, the Department of Homeland Security's (DHS) U.S. Citizenship and Immigration Services (USCIS) processes millions of applications for immigration benefits using a paper-based process. In 2005, USCIS embarked on a major, multiyear program to transform its process to a system that is to incorporate electronic application filing, adjudication, and case management. In 2007, GAO reported that USCIS was in the early stages of the Transformation Program and that USCIS's plans partially or fully met key practices. In 2008, USCIS contracted with a solutions architect to help develop the new system. As requested, GAO evaluated the extent to which USCIS has followed DHS acquisition policy in developing and managing the Transformation Program. GAO reviewed DHS acquisition management policies and guidance; analyzed transformation program planning and implementation documents such as operational requirements; compared schedule and cost information with GAO best practice guidance; and interviewed USCIS officials.. What GAO Found USCIS has not consistently followed the acquisition management approach that DHS outlined in its management directives in developing and managing the Transformation Program. USCIS awarded a solutions architect contract in November 2008, in effect selecting an acquisition approach before completing documents required by DHS management directives. Specifically, DHS's acquisition policy requires that prior to selecting an acquisition approach, programs establish operational requirements, develop a program baseline against which to measure progress, and complete a plan that outlines the program's acquisition strategy. However, USCIS did not complete an Operational Requirements Document until October 2009, which was to inform the Acquisition Program Baseline and the Acquisition Plan. Consequently, USCIS awarded a solutions architect contract to begin capability development activities prior to having a full understanding of the program's operational requirements and the resources needed to execute the program. GAO has previously reported that firm requirements must be established and sufficient resources must be allocated at the beginning of an acquisition program, or the program's execution will be subpar. The lack of defined requirements, acquisition strategy, and associated cost parameters contributed to program deployment delays of over 2 years. In addition, through fiscal year 2011, USCIS estimates it will have spent about $703 million, about $292 million more than the original program baseline estimate. USCIS expects to begin deployment of the first release of the Transformation Program in December 2011. However, USCIS is continuing to manage the program without specific acquisition management controls, such as reliable schedules, which detail work to be performed by both the government and its contractor over the expected life of the program. As a result, USCIS does not have reasonable assurance that it can meet its future milestones. USCIS has established schedules for the first release of the Transformation Program, but GAO's analysis shows that these schedules are not reliable as they do not meet best practices for schedule estimating. For example, program schedules did not identify all activities to be performed by the government and solutions architect. Moreover, as outlined by DHS acquisition management guidance, a life-cycle cost estimate is a required and critical element in the acquisition process. USCIS has developed and updated the $1.7 billion life-cycle cost estimate for the Transformation Program, but USCIS's individual schedules for the Transformation Program did not meet best practices for schedule estimating, raising questions about the credibility of the program's life-cycle cost estimates. Because some program costs such as labor, supervision, and facilities cost more if the program takes longer, reliable schedules can contribute to an understanding of the cost impact if the program does not finish on time. Collectively, and moving forward, not meeting best practices increases the risk of schedule slippages and related cost overruns, making meaningful measurement and oversight of program status and progress, and accountability for results, difficult to achieve. What GAO Recommends GAO recommends that USCIS ensure its program schedules and life-cycle cost estimates are developed in accordance with best practices guidance. DHS concurred with GAO's recommendations and outlined the actions that USCIS is taking or has taken to address each recommendation.

gao_GAO-02-674

gao_GAO-02-674_0

Through such improvements, IRS expected to better enable taxpayers to comply with the tax laws. In two of the six compliance programs, the amount of unpaid taxes identified increased. For the deferred cases, penalties and interest continue to accumulate, making future payment of those assessments increasingly demanding. Noncompliance Was Less Likely to Be Detected and Pursued The data presented earlier on the changes in IRS’s compliance and collection programs showed that the likelihood that taxpayer noncompliance would be detected and pursued by IRS declined between fiscal years 1996 and 2001. Some Increased Time in Initiating Collection Although IRS intended that by deferring collection action on some tax debts it would be able to initiate collection action for some higher-priority cases sooner, our random samples showed that the median length of time that taxpayers had owed back taxes at the time they were assigned to collection increased between 1996 and 2001. IRS’s New Strategic Assessments Address Tax Noncompliance but Could Provide More Quantitative Information The strategic assessments prepared by the wage and investment and small business operating divisions identified the risk of declining compliance as a major issue for IRS. Because of a lack of information, the operating divisions’ strategic assessments could not quantify the impact that their changes may have on taxpayer compliance. Appendix I: Objectives, Scope, and Methodology As requested, the objectives of GAO’s review were to describe the changes since 1996 in IRS’s compliance and collection programs, including the extent of collection deferrals, and the factors contributing to the program changes; determine how the program changes have affected taxpayers, including their compliance with tax laws, the buildup of penalties and interest, and the length of time before collection actions are initiated; and determine how IRS addressed the program changes, including their effect on taxpayers, in its strategic assessments.

What GAO Found For several years, Congress and others have been concerned about declines in the Internal Revenue Service's (IRS) compliance and collection programs. Taxpayers' willingness to voluntarily comply with the tax laws depends in part on their confidence that their friends, neighbors, and business competitors are paying their share of taxes. GAO found large and pervasive declines in five of the six compliance programs and in both collection programs between fiscal years 1996 and 2001. Factors contributing to the declines in the program and in collection coverage include declines in IRS staffing, increased workloads, and increased procedural controls mandated by Congress to better safeguard taxpayer interests. The declines in IRS's compliance and collection programs had several impacts. The likelihood that taxpayer noncompliance would be detected and pursued by IRS declined and the length of time that taxpayers owed back taxes at the time that they were assigned to collection increased between 1996 and 2001. The amount of penalties and interest continued to accumulate on deferred collection cases, making future payment increasingly demanding if subsequently pursued by IRS. Strategic assessments, which were prepared to provide a basis for decisions on significant program changes in IRS dealings with individual and small business taxpayers, identified the risk of declining compliance as a major trend, issue, or problem for IRS. The assessments could not quantify the impact that the initiatives may have on taxpayer compliance because IRS has yet to implement a system to measure taxpayer compliance.

gao_GAO-07-401

gao_GAO-07-401_0

For example, property-casualty insurers’ losses and loss adjustment expenses accounted for approximately 73 percent of written premiums in 2005. Title Insurance Market Is Highly Concentrated at the Insurer Level, but Otherwise Differs across States Title insurance markets can be described by various characteristics, such as the following: While high market concentration exists among national title insurers, they market insurance through large numbers of independent and affiliated agents, with the mix varying across states. The use of ABAs—in which a real estate professional, such as a real estate agent, owned a share of a title agency—varied. These practices varied within as well as across states. Multiple Factors Raise Questions about the Extent of Competition and the Reasonableness of Prices in the Title Insurance Industry Among the factors raising questions about the existence of price competition and the resulting prices paid by consumers within the title insurance industry are the following: consumers find it difficult to shop for title insurance, therefore, they put little pressure on insurers and agents to compete based on price; title agents do not market to consumers, who pay for title insurance, but to those in the position to refer consumers to particular title agents, thus creating potential conflicts of interest; a number of recent investigations by HUD and state regulatory officials have identified instances of alleged illegal activities within the title industry that appear to reduce price competition and could indicate excessive prices; as property values or loan amounts increase, prices paid for title insurance by consumers appear to increase faster than insurers’ and agents’ costs; and in states where agents’ search and examination services are not included in the premium paid by consumers, it is not clear that additional amounts paid to title agents are fully supported by underlying costs. Third, title insurance is a smaller but required part of a larger transaction that consumers are generally unwilling to disrupt or delay. Rather, title agents market to and compete for referrals from real estate and mortgage professionals. This puts consumers in a potentially vulnerable situation where, to a great extent, they have little or no influence over the price of title insurance but, at the same time, they have little choice but to purchase that insurance. Furthermore, federal and state regulators have identified a number of recent allegedly illegal activities related to the marketing and sale of title insurance, which suggests that some in the title insurance industry are taking advantage of consumers’ vulnerability. HUD and several state regulators have already begun to take steps in this area, but these efforts often face challenges, such as HUD’s limited enforcement authority, statutory limitations of RESPA, potentially confusing regulations, and a lack of coordination among multiple regulators. Ultimately, because of the involvement of both federal and state regulators, including multiple regulators at the state-level, effective regulatory improvements will be a challenge and will require a coordinated effort among all involved. Key contributors to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology We previously provided a report and testimony identifying characteristics of current title insurance markets that merited additional study, including the extent to which title insurance premium rates reflect underlying costs and the extent of state oversight of title agents and other real estate professionals. This report focuses on issues related to (1) the characteristics of title insurance markets across states, (2) the factors that raise questions about prices and competition in the industry, and (3) the current regulatory environment and planned regulatory changes. The existence of ongoing or past Department of Housing and Urban Development (HUD) investigations in the state. To assess the current state and federal regulatory environment, we reviewed laws and regulations, and interviewed key regulators. Understanding these costs would require state insurance regulators to gather and analyze financial data on title agents.

Why GAO Did This Study In a previous report and testimony, GAO identified issues related to title insurance markets, including questions about the extent to which premium rates reflect underlying costs, oversight of title agent practices, and the implications of recent state and federal investigations. This report addresses those issues by examining (1) the characteristics of title insurance markets across states, (2) factors influencing competition and prices within those markets, and (3) the current regulatory environment and planned regulatory changes. To conduct this review, GAO analyzed available industry data and studies, and interviewed industry and regulatory officials in a sample of six states selected on the basis of differences in size, industry practices, regulatory environments, and number of investigations. What GAO Found The U.S. title insurance market is highly concentrated at the insurer level, but market characteristics varied across states. In 2005, for example, five insurers accounted for 92 percent of the national market, with most states dominated by two or three large insurers. Variations across states included the way title agents conducted their searches as well as the number of affiliated business arrangements (ABA) in which real estate agents, brokers, and others have a stake in a title agency. Finally, premiums varied across states due to cost and market variations that can also make understanding and overseeing title insurance markets a challenge on the national level. Certain factors raise questions about the extent of competition and the reasonableness of prices that consumers pay for title insurance. Consumers find it difficult to comparison shop for title insurance because it is an unfamiliar and small part of a larger transaction that most consumers do not want to disrupt or delay for comparatively small potential savings. In addition, because consumers generally do not pick their title agent or insurer, title agents do not market to them but to the real estate and mortgage professionals who generally make the decision. This can create conflicts of interest if those making the referrals have a financial interest in the agent. These and other factors put consumers in a potentially vulnerable situation where, to a great extent, they have little or no influence over the price of title insurance but have little choice but to purchase it. Furthermore, recent investigations by the Department of Housing and Urban Development (HUD) and state insurance regulators have identified instances of alleged illegal activities within the title industry that appeared to take advantage of consumers' vulnerability by compensating realtors, builders, and others for consumer referrals. Combined, these factors raise questions about whether consumers are overpaying for title insurance. Given consumers' weak position in the title insurance market, regulatory efforts to ensure reasonable prices and deter illegal marketing activities are critical. However, state regulators have not collected the type of data, primarily on title agents' costs and operations, needed to analyze premium prices and underlying costs. In addition, the efforts of HUD and state insurance regulators to identify inappropriate marketing and sales activities under the Real Estate Settlement Procedures Act (RESPA), have faced obstacles, including constrained resources, HUD's lack of statutory civil money penalty authority, some state regulators' minimal oversight of title agents, and the increasing number of complicated ABAs. Finally, given the variety of professionals involved in a real estate transaction, a lack of coordination among different regulators within states, and between HUD and the states, could potentially hinder enforcement efforts against compensation for consumer referrals. Because of the involvement of both federal and state regulators, including multiple regulators at the state level, effective regulatory improvements will be a challenge and will require a coordinated effort among all involved.

gao_GAO-05-892T

gao_GAO-05-892T_0

The Victoria 19 case has been cited by ICE as representing a new model for fighting alien smuggling—a model that ICE (1) subsequently used to launch a multi-agency task force (Operation ICE Storm) in the Phoenix (Arizona) metropolitan area and (2) reportedly was using to develop ICE’s national “Antismuggling/Human-Trafficking Strategy.” ICE’s Strategy for Combating Alien Smuggling Not Yet Issued Although its development was announced as early as June 2003, a national strategy for combating alien smuggling had not been finalized and implemented by ICE as of July 5, 2005. ICE officials indicated that the draft strategy was being adjusted to broadly cover all aspects of smuggling—encompassing aliens, as well as drugs and other illegal contraband—and to focus initially on the Southwest border, between the United States and Mexico—the most active area in terms of smuggling activity and open investigations. Also, ICE and CBP— two DHS components with complementary antismuggling missions— signed a memorandum of understanding in November 2004 to address their respective roles and responsibilities, including provisions to ensure proper and timely sharing of information and intelligence. CBP has primary responsibility for interdictions between ports of entry while ICE has primary responsibility for investigations, including those resulting from alien smuggling interdictions referred by CBP. Currently, however, there is no mechanism in place for tracking the number and the results of referrals or leads made by CBP to ICE for investigation, including even whether ICE declined to act on the referrals. For instance, if a tracking mechanism were in place, CBP could continue pursuing certain leads if ICE—for lack of available resources or other reasons—does not take action on the referrals. Under this statute, which is codified at 8 U.S.C. § 1324, about 2,400 criminal defendants were convicted in federal district courts in fiscal year 2004. As mentioned previously, alien smuggling globally generates billions of dollars in illicit revenues annually, according to some estimates. ICE officials noted, however, that none of ICE’s reported seizures from alien-smuggling cases in fiscal year 2004 ($7.3 million) and the first 6 months of fiscal year 2005 ($7.8 million) were made abroad. However, our May 2005 report noted that Justice does not have a legislative proposal on this subject pending before Congress because the department’s legislative policy resources have been focused on other priorities. Conclusions Creation of DHS in March 2003 has provided new opportunities to more effectively combat alien smuggling, particularly in reference to using financial investigative techniques to target and seize the monetary assets of smuggling organizations. Also evolving is the working relationship of ICE and CBP, two DHS components that have the primary responsibility for investigating and interdicting alien smugglers. Having clearly defined roles and responsibilities for these components is important, given their complementary antismuggling missions. According to Justice and ICE, the absence of civil forfeiture authority for real property used to facilitate the smuggling of aliens is inappropriate because law enforcement is unable in many cases to seize stash houses where smugglers hide aliens while awaiting payment and travel arrangements to final destinations throughout the nation. Specifically, we recommended that the Secretary of Homeland Security establish a cost-effective mechanism for tracking the number and results of referrals by CBP to ICE, and the Attorney General, in collaboration with the Secretary of Homeland Security, consider developing and submitting to Congress a legislative proposal, with appropriate justification, for amending the civil forfeiture authority for real property used to facilitate the smuggling of aliens.

Why GAO Did This Study Globally, alien smuggling generates billions of dollars in illicit revenues annually and poses a threat to the nation's security. Creation of the Department of Homeland Security (DHS) in March 2003 has provided an opportunity to use financial investigative techniques to combat alien smugglers by targeting and seizing their monetary assets. For instance, the composition of DHS's largest investigative component--U.S. Immigration and Customs Enforcement (ICE)--includes the legacy Customs Service, which has extensive experience with money laundering and other financial crimes. Another DHS component, U.S. Customs and Border Protection (CBP) has primary responsibility for interdictions between ports of entry. In summer 2003, ICE announced that it was developing a national strategy for combating alien smuggling. This testimony is based on GAO's May 2005 report on the implementation status of the strategy and investigative results in terms of convictions and seized assets. What GAO Found As of July 5, 2005, ICE had not finalized its strategy for combating alien smuggling. ICE was adjusting the draft strategy to focus on the southwest border and encompass all aspects of smuggling, aliens as well as drugs and other contraband. In adjusting the strategy, ICE officials stressed the importance of incorporating lessons learned from ongoing follow-the-money approaches such as Operation ICE Storm, a multi-agency task force launched in October 2003 to crack down on migrant smuggling and related violence in Arizona. Also, the strategy's effectiveness depends partly on having clearly defined roles and responsibilities for ICE and CBP, two DHS components that have complementary antismuggling missions. CBP is primarily responsible for interdictions between ports of entry and ICE for investigations that extend to the U.S. interior. In this regard, ICE and CBP signed a memorandum of understanding in November 2004 to address their respective roles and responsibilities, including provisions for sharing information and intelligence. Currently, however, there is no mechanism in place for tracking the number and the results of referrals made by CBP to ICE for investigation. CBP and ICE officials acknowledged that establishing a tracking mechanism could have benefits for both DHS components. Such a mechanism would help ICE ensure that appropriate action is taken on the referrals. Also, CBP could continue to pursue certain leads if ICE--for lack of available resources or other reasons--cannot take action on the referrals. In fiscal year 2004, about 2,400 criminal defendants were convicted in federal district courts under the primary alien-smuggling statute, and ICE reported seizures totaling $7.3 million from its alien-smuggling investigations. For the first 6 months of fiscal year 2005, ICE reported $7.8 million in seizures from alien-smuggling investigations. A concern raised by ICE and the Department of Justice is the lack of adequate statutory civil forfeiture authority for seizing real property, such as "stash" houses where smugglers hide aliens while awaiting payment and travel arrangements to final destinations throughout the nation. However, Justice does not have a legislative proposal on this subject pending before Congress because the department's legislative policy resources have been focused on other priorities.

gao_GAO-17-176

gao_GAO-17-176_0

In 2004, Congress provided Treasury with a permanent, indefinite appropriation to reimburse financial agents, and Treasury uses that appropriation to pay financial agents supporting Fiscal Service’s revenue collections, payments, and other programs. Although the National Bank Act and other statutes authorize Treasury to use financial agents, they do not require Treasury to report to Congress on its use of such agents. Treasury’s Use of Financial Agents Has Evolved in Response to Changes in Technology and New Laws, but Treasury Does Not Disclose in a Central Location How It Uses or How Much It Pays Each Agent Since the 1980s and continuing today, Treasury has been using financial agents to modernize its systems and keep pace with technological changes in providing financial services to the public. Although Treasury discloses in its annual budget the total amount paid to financial agents, it has not publicly disclosed in a central location information about Fiscal Service’s individual financial agents, including their compensation and services provided. Treasury’s Traditional Use of Financial Agents Has Evolved to Promote Electronic Collections and Payments While Treasury historically has used financial agents to physically hold and disburse public money, its use of financial agents began to evolve in the mid-1980s as it sought to reduce the number of paper-based collection and payment transactions by moving them to electronic systems in response to technological advancements, new laws, and other factors. Increased Transactions and Services Provided Have Partly Driven Growth in Financial Agent Compensation since Fiscal Year 2004 Since Treasury received the permanent, indefinite appropriation to reimburse financial agents, the total amount (outlays) that Treasury has paid Fiscal Service’s financial agents has increased steadily from approximately $378 million in fiscal year 2005 to approximately $636 million in fiscal year 2015 (see fig. For example, the Card Acquiring Service, the largest revenue collections program in terms of cost, uses a financial agent to process debit and credit card payment transactions at federal agencies. According to the Office of Management and Budget’s directive on open government, transparency promotes accountability by providing the public with information about government activities. While Fiscal Service did not fully document compliance with its process, including controls, for financial agents designated between 2010 and 2015, it adopted new procedures in November 2015 to provide greater assurance that its documentation will be complete. The FASP process and related controls help provide reasonable assurance that the selection and designation process is effective and efficient, documents important information, and complies with applicable laws and regulations. The 2015 FASP guidance directs the program office responsible for designating the financial agent to provide Fiscal Service’s Bank Policy and Oversight (BPO) Division with an electronic copy of its administrative record. None contained all of the documents listed in the 2010 FASP guidance, but three contained the majority. For example, the record for myRA, a new retirement savings program using a financial agent to provide custodial services, contained 6 of 11 key documents—missing, for example, certain planning and approval documents. As a result, the documents comprising the administrative records varied in the extent to which they complied with Fiscal Service’s internal controls set forth in the 2010 FASP guidance. Fiscal Service agreed with the recommendation and noted that it was revising its FASP guidance and expected to complete the revisions by year-end 2015. Unlike the 2010 guidance, the 2015 guidance instructs not only Fiscal Service’s program offices to provide BPO with an electronic copy of their administrative records at the end of a FASP, but it also instructs BPO to use a checklist to ensure that the necessary documents have been created and electronically delivered to BPO. As noted, the 2015 FASP guidance was not in effect for the administrative records that we reviewed. In addition, Treasury provided technical comments on the draft report, which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology Our objectives were to examine (1) how the Department of the Treasury’s (Treasury) use and compensation of financial agents has changed as it has modernized its payment and collection systems and (2) the Bureau of the Fiscal Service’s (Fiscal Service) process and related internal controls for selecting and designating financial institutions as financial agents. To examine how Treasury’s use and compensation of financial agents has changed as it has modernized its payment and collection systems, we reviewed federal statutes, regulations, and directives that have guided Treasury’s use of financial agents; Treasury’s annual budget documents; documentation on current and former Treasury programs using financial agents, including compensation data and descriptions of services provided by financial agents; financial agency agreements and amendments to those agreements; audit or similar reports issued by GAO, Treasury’s Office of the Inspector General, or others; and congressional testimony from a Treasury official. To examine Fiscal Service’s process and related internal controls for selecting and designating financial institutions as financial agents, we reviewed federal statutes and regulations authorizing or governing Treasury’s use of financial agents; Fiscal Service’s policies and procedures and related documentation for selecting and designating financial agents, including financial agency agreements, financial agent solicitations, and selection decision memoranda; and audit or similar reports issued by GAO, Treasury’s Office of the Inspector General, or others. Under the 2010 FASP guidance, Fiscal Service’s program offices were required to maintain an administrative record comprised of documents generated during a FASP that describes and supports the decision-making process.

Why GAO Did This Study Under the National Bank Act and other statutes, Treasury is authorized to designate certain financial institutions as depositaries of public money and financial agents of the federal government. Treasury uses financial agency agreements to designate financial agents. In 2004, Congress provided Treasury with a permanent, indefinite appropriation to reimburse financial agents for their services, which replaced its use of non-appropriated funds. GAO was asked to review Treasury's use of financial agents. This report examines (1) how Treasury's use and compensation of financial agents has changed as it has modernized its payment and collection systems and (2) Fiscal Service's process and related internal controls for selecting and designating financial agents. GAO examined documents on Treasury's programs using financial agents; budget and other data on financial agent compensation; and laws and regulations governing the use of financial agents. GAO also reviewed Fiscal Service's FASP guidance and internal records supporting its selection and designation of five financial agents between 2010 and 2015. GAO interviewed Fiscal Service officials about its FASP and its use of financial agents. What GAO Found The Department of the Treasury's (Treasury) use of financial agents has evolved as it has moved from paper to electronic transactions in response to changes in technology and new laws. Treasury has a long history of using financial agents to support its core functions of disbursing payments and collecting revenue. Since the 1980s, Treasury has used agents to move from paper to electronic transactions as it has modernized its systems. For example, Treasury began using financial agents to collect tax revenue electronically in response to a 1984 law and to make payments electronically in response to a 1996 law. Such changes have continued since Congress enacted a permanent, indefinite appropriation in 2004 for Treasury to reimburse financial agents, after which Treasury began including in its annual budget the total amount paid to financial agents. Compensation to financial agents has grown from $378 million in fiscal year 2005 to $636 million in fiscal year 2015, partly due to increases in the number of debit and credit card payments made to federal agencies that are processed by financial agents. While Treasury discloses in its annual budget the total amount paid to financial agents, it has not fully disclosed in a central location information about individual agents, including their compensation and services provided. Treasury officials said they are not required and have not determined a need to publicly disclose compensation under each financial agency agreement. According to an Office of Management and Budget directive on open government, transparency promotes accountability by providing the public with information about government activities. Greater disclosure and transparency could enhance the accountability of Treasury's use of financial agents by informing the public and Congress about how much and for what purposes it is spending federal funds to obtain services from financial agents. The Bureau of the Fiscal Service (Fiscal Service)—the largest user of financial agents within Treasury—developed its financial agent selection process (FASP) guidance to document the steps and internal controls that its program offices generally are expected to follow in selecting and designating financial agents. The guidance provides assurances that a FASP is effective and efficient, documents key information, and complies with applicable laws and regulations. The guidance directs program offices to maintain an administrative record of key documents generated during a FASP. GAO selected five financial agents designated between 2010 and 2015 to review their administrative records but could review only four because the record for one was not created. None contained all the documents listed in the guidance, but three contained the majority. For example, the record for my RA®, a new retirement savings program using a financial agent to provide custodial services, contained 6 of 11 key documents—missing, for example, certain planning and approval documents. As a result, the records varied in the extent to which they complied with Fiscal Service's guidance, including controls. In November 2015, Fiscal Service revised its guidance to require not only program offices to deliver an electronic copy of their administrative records to the Bank Policy and Oversight (BPO) Division but also BPO to use a checklist to ensure that the records are complete. The 2015 guidance was not in effect for the records GAO reviewed. However, BPO's implementation of the new procedure should provide assurances that future designations are in compliance with the FASP guidance, including controls. What GAO Recommends GAO recommends that Treasury publicly disclose in a central location information about its financial agents, including their compensation and services provided. Treasury agreed with GAO's recommendation and provided technical comments, which were incorporated as appropriate.

gao_GAO-04-901

gao_GAO-04-901_0

As a result of these problems, as well as the tremendous cost, complexity, and mission criticality of the modernization program, we designated the program as a high-risk information technology initiative in 1995, and it has remained on our high-risk list since that time. Prior Report Noted Weaknesses in FAA’s Software Acquisition Capabilities In March 1997, we reported that FAA’s processes for acquiring software, the most costly and complex component of its ATC systems, were ad hoc, sometimes chaotic, and not repeatable across projects. The Capability Maturity Model Integration Provides a Means of Assessing an Organization’s Ability to Manage Software and System Acquisition and Development An essential aspect of FAA’s ATC modernization program is the quality of the software and systems involved, which is heavily influenced by the quality and maturity of the processes used to acquire, develop, manage, and maintain them. Our objectives were (1) to evaluate FAA’s capabilities for developing and acquiring software and systems on its ATC modernization program and (2) to assess the actions FAA has under way to improve these capabilities. To assess the actions FAA has under way to improve its system and software acquisition and development processes, we evaluated process improvement strategies and plans. FAA Is Performing Most Project Planning Practices, but It Is Not Yet Fully Managing the Process The purpose of project planning is to establish and maintain plans that define the project activities. However, these process improvement activities are not required throughout the air traffic organizations, and the recurring weaknesses we identified in our project- specific evaluations are due in part to the choices these projects were given in deciding whether to and how to adopt process improvement initiatives. As a result, FAA is not consistent in its adoption and management of process improvement efforts, so that individual projects’ costs, schedules, and performance remain at risk. Without agencywide adoption of process improvement initiatives, the agency cannot increase the maturity of its organizational capabilities. Acting on our prior recommendations, in 1999, FAA established a centralized process improvement office that reports directly to the Chief Information Officer. Because of this voluntary approach, to date less than half of the projects listed in FAA’s system architecture have sought appraisals in at least one process area. As a result, the Air Traffic Organization does not currently have a policy that requires organizations and project teams to implement process improvement initiatives such as the iCMM. Unless the Chief Operating Officer demonstrates a strong commitment to process improvement and establishes a consistent, institutionalized approach to implementing, enforcing, and evaluating this process improvement, FAA risks taking a major step backwards in its capabilities for acquiring ATC systems and software. That is, FAA may not be able to ensure that critical projects will continue to make progress in improving systems acquisition and development capabilities, and the agency is not likely to proceed to the more advanced capability levels which focus on organizationwide management of processes. Should this occur, FAA will continue to be vulnerable to project management problems including cost overruns, schedule delays, and performance shortfalls. Conclusions and Recommendations Conclusions The Federal Aviation Administration (FAA) has made considerable progress in implementing processes for managing software acquisitions. However, recurring weaknesses in the areas of verification, quality assurance, and measurement and analysis prevented the projects from achieving a basic level of performance in these areas and from effectively managing these and other process areas.

Why GAO Did This Study Since 1981, the Federal Aviation Administration (FAA) has been working to modernize its aging air traffic control (ATC) system. Individual projects have suffered cost increases, schedule delays, and performance shortfalls of large proportions, leading GAO to designate the program a high-risk information technology initiative in 1995. Because the program remains a high risk initiative, GAO was requested to assess FAA's progress in several information technology management areas. This report, one in a series responding to that request, has two objectives: (1) to evaluate FAA's capabilities for developing and acquiring software and systems on its ATC modernization program and (2) to assess the actions FAA has under way to improve these capabilities. What GAO Found FAA has made progress in improving its capabilities for acquiring software-intensive systems, but some areas still need improvement. GAO had previously reported in 1997 that FAA's processes for acquiring software were ad hoc and sometimes chaotic. Focusing on four mission critical air traffic projects, GAO's current review assessed system and software management practices in numerous key areas such as project planning, risk management, and requirements development. GAO found that these projects were generally performing most of the desired practices: of the 900 individual practices evaluated, 83 percent were largely or fully implemented. The projects were generally strong in several areas such as project planning, requirements management, and identifying technical solutions. However, there were recurring weaknesses in the areas of measurement and analysis, quality assurance, and verification. These weaknesses hinder FAA from consistently and effectively managing its mission critical systems and increase the risk of cost overruns, schedule delays, and performance shortfalls. To improve its software and system management capabilities, FAA has undertaken a rigorous process improvement initiative. In response to earlier GAO recommendations, in 1999, FAA established a centralized process improvement office, which has worked to help FAA organizations and projects to improve processes through the use of a standard model, the integrated Capability Maturity Model. This model, which is a broad model that integrates multiple maturity models, is used to assess the maturity of FAA's software and systems capabilities. The projects that have adopted the model have demonstrated growth in the maturity of their processes, and more and more projects have adopted the model. However, the agency does not require the use of this process improvement method. To date, less than half of FAA's major ATC projects have used this method, and the recurring weaknesses we identified in our project-specific evaluations are due in part to the choices these projects were given in deciding whether to and how to adopt this process improvement initiative. Further, as a result of reorganizing its ATC organizations to a performance-based organization, FAA is reconsidering prior policies, and it is not yet clear that process improvement will continue to be a priority. Without a strong senior-level commitment to process improvement and a consistent, institutionalized approach to implementing and evaluating it, FAA cannot ensure that key projects will continue to improve systems acquisition and development capabilities. As a result, FAA will continue to risk the project management problems--including cost overruns, schedule delays, and performance shortfalls--that have plagued past acquisitions.

gao_GAO-05-335

gao_GAO-05-335_0

The act sunsets in November 2007. Hundreds of federal grant programs implement various domestic policies and have administrative requirements that may be duplicative, burdensome, or conflicting—which can impede the effectiveness of grants programs. Some Progress Made in Streamlining Grant Administration across Agencies, but More Progress Is Needed To implement P.L. 106-107’s requirement to improve the effectiveness and performance of federal grants, a common plan was developed and most, but not all, grant-making agencies have submitted reports annually on their progress toward this plan as required by the law. The work groups have identified several changes that should be made, but many of these are still in the developmental or approval stages. Some specific objectives included (1) streamlining, simplifying, and improving announcements of funding opportunities and related business processes, application requirements and procedures, and award documents; (2) streamlining and simplifying standard and unique report forms, allowing for electronic submission of reports, achieving greater uniformity in federal business processes for reporting, and improving reporting by recipients; (3) simplifying and standardizing, to the extent appropriate, general administrative requirements and agency treatment of them in the terms and conditions of award; and (4) fully developing and implementing a portal for identifying and applying for grants, and ensuring that any revised electronic data standards are interoperable and present a common face to grant-making agencies, applicants, and recipients. 106-107 and the common plan emphasized, coordination among the agencies and with grantees in the planning and implementation of grant- streamlining initiatives can increase the likelihood that the standard processes and policies developed will meet the diverse needs of all the stakeholder groups. However, the P.L. The lack of clear goals and timelines for the cross-agency work groups to complete tasks and for agencies to implement systems undoubtedly has contributed to the lack of progress in implementing these proposals. 106-107 have a mixed record of coordinating with grantees. Grants.gov publicizes its plans and meeting minutes on its Web site and solicits ongoing grantee input through its Web site, regular satisfaction surveys, and outreach meetings with grantees. Unlike Grants.gov, the work groups have neither made information about their work public nor solicited ongoing grantee input, and approaches outlined in the common plan, such as establishing an ombudsman position, have not been implemented. Without ongoing grantee input, the reforms are less likely to meet the needs of the grantees and achieve the purposes of the act. 106-107 requirements, such as the development of common electronic systems to manage and report on the use of funding from similar federal grant programs administered by different agencies, move forward. Detailed Information on Grants.gov As cross-agency teams identified the need for streamlining, agency representatives and the Office of Management and Budget (OMB) recognized that potential grantees needed a simpler and more consistent way to identify and apply for federal grant opportunities.

Why GAO Did This Study The federal government distributed about $400 billion in federal grants in fiscal year 2003 through about 1,000 different federal grant programs administered by several federal agencies with different administrative requirements. Congress, concerned that some of these requirements may be duplicative, burdensome, or conflicting--and could impede cost-effective delivery of services--passed the Federal Financial Assistance Management Improvement Act of 1999, commonly called P.L. 106-107, and mandated that GAO assess the act's effectiveness. This report addresses (1) progress made to streamline and develop common processes for grantees and (2) the coordination among the Office of Management and Budget (OMB), the agencies, and potential grant recipients. What GAO Found More than 5 years after passage of P.L. 106-107, grant agencies have made progress in some areas of grant administration, but in other areas, particularly the development of common reporting systems, progress is just beginning. Grant-making agencies together developed a common plan for streamlining processes. Several cross-agency teams identified changes that should be made, and these plans are in various stages of completion. For example, a Web-based system, Grants.gov, is now available to help potential grantees identify grant opportunities and apply for them electronically. Common forms are being developed to eliminate duplication and unnecessary differences among agencies. However, efforts toward common electronic systems for reporting financial and performance information have not been developed, although the law requiring them sunsets in 2007. Further, individual agencies have not all reported on their progress annually, as required. The individual agencies and the cross-agency work groups have a mixed record of coordinating with grantees. For example, the cross-agency work groups solicited public input to their early plan. Grants.gov publicizes its plans and solicits ongoing grantee input through its Web site and user surveys. However, the work groups generally have not made information about their work public nor solicited ongoing grantee input. Without such input, reforms are less likely to meet the needs of grantees. In general, the oversight of streamlining initiatives has shifted, potentially contributing to the lack of progress on all aspects of grant management.

gao_GAO-02-377T

gao_GAO-02-377T_0

In addition to VA’s better known missions—to provide health care and benefits to veterans and medical research and education— VA has a fourth mission: to provide medical backup to DOD in times of war and civilian health care backup in the event of disasters producing mass casualties. Medical Recordkeeping and Surveillance During the Gulf War Was Lacking Investigations into the unexplained illnesses of service members and veterans who had been deployed to the Gulf uncovered the need for DOD to implement an effective medical surveillance system to obtain comprehensive medical data on deployed service members, including Reservists and National Guardsmen. The council concluded that the Gulf War exposed many deficiencies in the ability to collect, maintain, and transfer accurate data describing the movement of troops, potential exposures to health risks, and medical incidents in theater. Medical Surveillance Under Operation Joint Endeavor Improved but Was Not Comprehensive In response to these reports, DOD strengthened its medical surveillance system under Operation Joint Endeavor when service members were deployed to Bosnia-Herzegovina, Croatia, and Hungary. We have also reported that some of DOD’s programs designed to improve medical surveillance have not been fully implemented. Specifically, these officials informed us that DOD is developing a more accurate roster of deployed service members and enhancing its information technology capabilities.

What GAO Found GAO, the Institute of Medicine, and others have cited weaknesses in the Defense Department's (DOD) medical surveillance during the Gulf War and Operation Joint Endeavor. DOD was unable to collect, maintain, and transfer accurate data on the movement of troops, potential exposures to health risks, and medical incidents during deployment in the Gulf war. DOD improved its medical surveillance system under Operation Joint Endeavor, providing useful information to military commanders and medical personnel. However, GAO found several problems with this system. For example, incomplete or inaccurate information related to service members' health and deployment status. DOD's has not established a single, comprehensive electronic system to document, archive, and access medical surveillance data. DOD has begun several initiatives to improve the reliability of deployment information and to enhance its information technology capabilities, but some initiatives are several years away from full implementation. Nonetheless, these efforts reflect a commitment by DOD to establish a comprehensive medical surveillance system. The ability of the Department of Veterans Affairs to fulfill its role in serving veterans and providing backup to DOD in times of war will be enhanced as DOD increases its medical surveillance capability.

gao_GAO-13-746

gao_GAO-13-746_0

For example, the report includes information on the amount of money returned to the Medicare Trust Funds as a result of HCFAC activities. HCFAC Appropriations HHS and DOJ receive funding from several appropriations to conduct their HCFAC program activities. Figure 1 describes HCFAC appropriations to HHS, HHS-OIG, and DOJ. About 78 percent of obligated funds were from mandatory HCFAC appropriations, 11 percent of obligated funds were from discretionary HCFAC appropriations, and 12 percent of obligated funds were from other appropriations.the obligations for HCFAC activities were for personnel costs; some agencies reported obligating funds for services under contract and supplies. Additionally, HHS-OIG and DOJ obligated over 8 percent of their HCFAC funds to support Strike Force teams located in 9 cities nationwide. Additionally, HHS-OIG employed auditors and evaluators to study issues related to the Medicare and Medicaid programs, including issues related to fraud in these programs, as well as a variety of other issues. Agencies Use Several Indicators to Assess HCFAC Activities, and Some Key Outputs Changed Over Time HHS, HHS-OIG, and DOJ use several indicators to assess HCFAC activities as well as to inform decision-makers about how to allocate resources. Additionally, many of the indicators that HHS, HHS-OIG, and DOJ use reflect the collective work of multiple agencies since they work many health care fraud cases jointly. Outputs from some of these key indicators have changed in recent fiscal years. For example, the return-on-investment has increased from $4.90 returned for every $1.00 invested for fiscal years 2006-2008 to $7.90 returned for every $1.00 invested for fiscal years 2010-2012. For example, the USAOs use indicators related to criminal prosecutions, including the number of defendants charged and the number of convictions. For example, the report includes information on the results of HCFAC activities, such as the dollar amount recovered as a result of fraud cases, which HHS-OIG and DOJ officials say reflects the investigative work done by HHS-OIG and FBI, as well as the work of DOJ’s components in prosecuting the cases. Several Factors Contribute to Lack of Information about the Effectiveness of HCFAC Activities The indicators used by agencies to track the outputs of HCFAC activities provide information on the accomplishments of HCFAC activities, not on the effectiveness of the activities in reducing health care fraud and abuse. However, difficulty in establishing a causal link between HCFAC activities and output indicators, difficulty in determining the deterrent effect HCFAC activities may have on potential health care fraud and abuse, limited research on the effectiveness of health care fraud interventions, and the lack of a health care fraud baseline hinder a broader understanding of the effectiveness of the HCFAC program in reducing health care fraud and abuse. Indicators Agencies Use to Assess HCFAC Activities Provide Information on Accomplishments, but Not Effectiveness The indicators that HHS, HHS-OIG, and DOJ use to track HCFAC activities offer insights on the accomplishments and outputs of HCFAC activities, but they do not measure the effectiveness of the HCFAC program in reducing health care fraud and abuse. It is difficult to establish if the HCFAC program has a direct relationship to changes in the amount of health care fraud and abuse. CMS reports that after completion of the pilot, it will determine whether the measurement approach should be expanded to other areas of health care. HHS and DOJ use a number of indicators to assess the activities they conduct to reduce health care fraud and abuse. Additionally, even with a baseline estimate of the total amount of probable fraud, there will likely be continuing challenges in understanding the effectiveness of the HCFAC program, such as isolating the program’s ability to reduce or prevent fraud and abuse. Results from these studies could provide HHS and DOJ with additional information regarding which activities are the most effective in reducing health care fraud and abuse, and could potentially inform agency decisions about how best to allocate limited resources. Agency Comments GAO provided a draft of the report to HHS and DOJ. HHS also provided examples of CMS’s efforts to reduce fraud, waste, and abuse in Medicare. The examples provided were not included in our review because they were not included in the funding used to calculate the return-on-investment for the HCFAC program. In addition, HHS and DOJ provided technical comments, which we have incorporated as appropriate. Discretionary HCFAC appropriations refer to budgetary resources provided in annual appropriation acts, other than those that fund mandatory programs. United States Attorneys’ Offices (USAOs) Number of Federal health care fraud related convictions Number of new civil health care fraud investigations opened Number of civil health care fraud investigations pending Number of investigations completed per Department of Justice attorney working on financial fraud and health care fraud cases (Target: 11.92 investigations per attorney) DOJ Component Indicators used by agencies to assess activities (Associated target, if applicable) Percentage of criminal cases favorably resolved for litigating divisions (Target: 90 percent of criminal cases favorably resolved; 80 percent of civil cases favorably resolved) Percent of white collar crimes cases concerning mortgage fraud, health care fraud, and official corruption favorably resolved (Target: 90 percent of white collar cases favorably resolved) 92.2 percent of white collar crime cases favorably resolved in fiscal year 2010 indicates that measure is included in Fiscal Year 2012 annual HCFAC report indicates that measure is in DOJ’s Performance and Accountability report ¡ indicates that the measure is in DOJ’s Performance Plan for Fiscal Year 2012 ⁄ indicates that the measure is in FBI’s Financial Crimes Report to the Public for Fiscal Years 2010 – 2011.

Why GAO Did This Study GAO has designated Medicare and Medicaid as high-risk programs partly because their size, scope, and complexity make them vulnerable to fraud. Congress established the HCFAC program and provided funding to HHS and DOJ to help reduce fraud and abuse in Medicare and Medicaid. GAO was asked to examine how HHS and DOJ are using funds to achieve the goals of the HCFAC program, and to examine performance assessments and other metrics that HHS and DOJ use to determine the program's effectiveness. This report (1) describes how HHS and DOJ obligated funds for the HCFAC program, (2) examines how HHS and DOJ assess HCFAC activities and whether key program outputs have changed over time, and (3) examines what is known about the effectiveness of the HCFAC program in reducing health care fraud and abuse. To describe how HHS and DOJ obligated funds, GAO obtained financial information from HHS and DOJ for fiscal year 2012. To examine how HHS and DOJ assess HCFAC activities and whether key outputs have changed over time, GAO reviewed agency reports and documents, and interviewed agency officials. To examine what is known about the effectiveness of the HCFAC program, GAO conducted a literature review and interviewed experts. In comments on a draft of this report, HHS noted examples of CMS's efforts to reduce health care fraud, though these examples were not included in the HCFAC return-on-investment calculation. Additionally, HHS and DOJ provided technical comments, which GAO incorporated as appropriate. What GAO Found In fiscal year 2012, the Department of Health and Human Services (HHS), HHS Office of Inspector General (HHS-OIG), and the Department of Justice (DOJ) obligated approximately $583.6 million to fund Health Care Fraud and Abuse Control (HCFAC) program activities. About 78 percent of obligated funds were from mandatory HCFAC appropriations (budgetary resources provided in laws other than appropriation acts), 11 percent of obligated funds were from discretionary HCFAC appropriations (budgetary resources provided in appropriation acts), and 12 percent were obligated funds from other appropriations that HHS, HHS-OIG, and DOJ used to support HCFAC activities. HCFAC funds were obligated to support a variety of activities, including interagency Medicare Fraud Strike Force Teams--which provide additional investigative and prosecutorial resources in geographic areas with high rates of health care fraud--located in 9 cities nationwide. HHS, HHS-OIG, and DOJ use several indicators to assess HCFAC activities, as well as to inform decision-makers about how to allocate resources and prioritize those activities. For example, in addition to other indicators, the United States Attorneys' Offices use indicators related to criminal prosecutions, including the number of defendants charged and the number of convictions. Additionally, many of the indicators that HHS, HHS-OIG, and DOJ use--such as the dollar amount recovered as a result of fraud cases--reflect the collective work of multiple agencies since these agencies work many health care fraud cases jointly. Outputs from some key indicators have changed in recent years. For example, according to the fiscal year 2012 HCFAC report, the return-on-investment--the amount of money returned to the government as a result of HCFAC activities compared with the funding appropriated to conduct those activities--has increased from $4.90 returned for every $1.00 invested for fiscal years 2006-2008 to $7.90 returned for every $1.00 invested for fiscal years 2010-2012. Several factors contribute to a lack of information about the effectiveness of HCFAC activities in reducing health care fraud and abuse. The indicators agencies use to track HCFAC activities provide information on the outputs or accomplishments of HCFAC activities, not on the effectiveness of the activities in actually reducing fraud and abuse. For several reasons, assessing the impact of the program is challenging. For example, it is difficult to isolate the effect that HCFAC activities, as opposed to other efforts such as changes to the Medicare provider enrollment process, may have in reducing health care fraud and abuse. It is also difficult to estimate a health care fraud baseline--a measure of the extent of fraud--that is needed to be able to track whether the amount of fraud has changed over time as a result of HCFAC or other efforts. HHS has a project under way to establish a baseline of probable fraud in home health care, and will determine whether this approach to estimating a baseline of fraud should be expanded to other areas of health care. Results from this project and other studies could provide HHS and DOJ with additional information regarding which activities are the most effective in reducing health care fraud and abuse, and could potentially inform agency decisions about how best to allocate limited resources.

gao_RCED-95-207

gao_RCED-95-207_0

DOE said that it wanted to increase its oversight of contractors and involve federal employees more in contract management. Both field and headquarters offices competed for the 1,200 positions, but DOE used a different process to allocate the new positions to the offices. Collectively, the offices requested 1,575 new FTEs and proposed a total of $1.235 billion in savings. These savings do not include the FTEs’ salary and benefit costs, about $70,000 per employee—$84 million annually if all 1,200 new employees are hired. In its review of the field offices’ revised bids, the evaluation team concluded that the justifications were not adequate for almost $900 million—87 percent—of the $1.035 billion in savings targeted for the 2 years. DOE Is Developing a Reporting System to Track Cost Savings and Productivity Improvements DOE is assured of lower costs because the agency is incurring major reductions in its cleanup budget—about $913 million in fiscal years 1995 and 1996. By the fourth quarter of fiscal year 1995, procedures to collect, report, and validate the productivity improvements and resulting dollar savings related to the new staff are expected to be in place. Our review focused on the following three major questions: What process did DOE use to justify the new hires? Did DOE’s justifications support the claimed cost savings and productivity improvements? How is DOE assuring itself that the established cost savings and productivity improvements will be achieved?

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) process for hiring new employees and improving the productivity of environmental cleanup, focusing on: (1) the process DOE used to justify the new hires; (2) whether DOE justifications support the claimed cost savings and productivity improvements; and (3) how the cost savings and productivity improvements will be achieved. What GAO Found GAO found that: (1) DOE used a competitive bidding process to justify the allocation of 1,200 new positions in its field and headquarters offices; (2) the offices requested 1,575 new staff and estimated that the new staff could save over $1.2 billion dollars in fiscal years (FY) 1995 and 1996, resulting from increased federal oversight of contractors and greater federal involvement in contract management; (3) DOE lowered the 2-year savings estimate to about $890 million, not including the $84 million annually in compensation for the 1,200 new staff; (4) DOE did not adequately justify about $900 million in savings from productivity improvements; (5) although DOE is unsure of the justifications, it is reducing its Environmental Management Office's budget by about $300 million in FY 1995, before seeing if productivity improvements occur; and (6) DOE is developing procedures to measure productivity improvements and resulting cost savings the new staff are expected to achieve.

gao_GAO-10-570

gao_GAO-10-570_0

VA Reported Spending about $4.4 Billion in Fiscal Year 2009 for Mental Health Services in VA Settings Primarily Used for Providing Mental Health Services In its fiscal year 2011 congressional budget justification, VA reported spending about $4.4 billion in fiscal year 2009 for mental health services provided in VA settings primarily used for mental health services. 1.) 2.) However, VA did not report this spending as mental health spending in its fiscal year 2011 congressional budget justification or in any other publicly available report. Although VA determines how much it spends for some of its mental health services, it did not report fiscal year 2009 spending for these mental health services as mental health spending in its fiscal year 2011 congressional budget justification or in any other publicly available report. According to VA officials, VA does not have complete spending information for inpatient hospital mental health services provided by mental health providers in VA settings not primarily used to provide mental health services. Additionally, VA does not have spending information for counseling services to address mental health issues provided by Vet Centers. VA Provided Mental Health Services to More Than 1 Million Unique Patients in Fiscal Year 2009, but VA Did Not Report Workload for All of Its Mental Health Services In fiscal year 2009, VA provided mental health services to about 1.22 million unique patients in VA settings primarily used for providing mental health services. The number of unique patients is not available until after VA’s budget justification is published. In addition, VA did not report workload for the mental health services that it provided in other settings—community settings for which VA paid non- VA providers to provide mental health services and VA settings not primarily used for providing mental health services, such as nursing homes, in which VA mental health providers provided services. VA also did not report workload for counseling services to address mental health issues provided by Vet Centers. Specifically, VA did not report the number of encounters for outpatient services or the average daily census for each of its inpatient hospital, residential, and domiciliary services. Additionally, VA did not report the spending and workload for mental health services provided in other settings that are key to VA’s efforts to meet the mental health needs of veterans: VA settings not primarily used for providing mental health services and community settings where VA pays non-VA providers to provide mental health services. VA’s reporting of mental health spending and workload does not give Congress a complete overview of VA’s mental health services and limits information available for congressional oversight. Recommendations for Executive Action To enhance information available for congressional oversight and use by stakeholders on VA’s spending and workload for mental health services, we recommend that the Secretary of Veterans Affairs take the following four actions: include workload information, including number of encounters and average daily census, by type of service, for mental health services provided in VA settings primarily used for providing mental health services with its presentation of mental health spending in its annual congressional budget justification; include spending and workload information, including number of encounters and average daily census, for mental health services that VA pays non-VA providers to deliver in community settings in its annual congressional budget justification, or in a separate, annual, publicly available report soon after the information becomes available; include spending and workload information, including number of encounters and average daily census, for mental health services provided in VA settings not primarily used for providing mental health services in its annual congressional budget justification, or in a separate, annual, publicly available report soon after the information becomes available; and include workload information, including number of visits, for counseling services to address mental health issues provided by Vet Centers in its annual congressional budget justification, or in a separate, annual, publicly available report soon after the information becomes available. Appendix I: Scope and Methodology To examine the Department of Veterans Affairs’ (VA) spending and workload for mental health services, we examined, for fiscal year 2009, (1) VA’s spending for mental health services and (2) VA’s workload for mental health services.

Why GAO Did This Study The Department of Veterans Affairs (VA) provides, or pays for, a range of mental health services for veterans. To effectively manage resources and ensure access to eligible veterans, VA needs complete spending and workload information for mental health services. This information is also important for congressional oversight GAO was asked to examine VA's mental health spending and workload. In this report, GAO examined for fiscal year 2009 (1) VA's spending for mental health services and (2) VA's workload for mental health services. GAO examined VA's reporting of mental health spending and workload data for fiscal year 2009 in its fiscal year 2011 congressional budget justification and whether VA reported these data in any other publicly available report. GAO analyzed additional mental health spending and workload data and interviewed VA officials. What GAO Found VA reported in its fiscal year 2011 congressional budget justification spending about $4.4 billion on mental health services in fiscal year 2009 in VA settings primarily used for providing mental health services. However, VA had additional spending in fiscal year 2009 for mental health services that VA did not report as mental health spending in its budget justification or in any other publicly available report. Specifically, VA did not report as mental health spending the amounts it spent for those mental health services that it (1) paid non-VA providers to provide in community settings and (2) provided in VA settings not primarily used for providing mental health services, such as nursing homes. VA also did not report as mental health spending the amount it spent for counseling services to address mental health issues provided by VA Vet Centers. Although VA did not report this spending information, VA does determine its spending for mental health services provided by non-VA providers and for outpatient mental health services provided in VA settings not primarily used for providing mental health services. According to VA officials, VA spent an additional $269 million for these services in fiscal year 2009. VA does not have complete spending information for inpatient hospital mental health services provided by mental health providers in VA settings not primarily used to provide mental health services nor does it have spending information for counseling services to address mental health issues provided by Vet Centers. In fiscal year 2009, VA provided mental health services to about 1.22 million unique patients in VA settings primarily used for providing mental health services. However, VA did not report this information in its fiscal year 2011 congressional budget justification or in any other publicly available report. VA officials said that the number of unique patients is not available until after VA's budget justification is published. Additionally, VA did not report other workload information that it has on (1) the number of encounters for outpatient services and the average daily census for each of its inpatient hospital, residential, and domiciliary services provided in VA settings primarily used for providing mental health services and (2) the workload for mental health services provided in other settings--community settings for which VA paid non-VA providers to provide mental health services and VA settings not primarily used for providing mental health services. VA also did not report the workload for counseling services to address mental health issues provided by Vet Centers, but VA is able to estimate its workload for these services. VA's reporting of mental health spending and workload does not give Congress a complete overview of VA's mental health services and limits information available for congressional oversight of VA's mental health services. Reporting additional mental health spending and workload information could enhance information available for congressional oversight.

gao_GAO-17-732

gao_GAO-17-732_0

BJS also produces annual estimates of federal, state, and local governments’ criminal justice costs. Such costs include the value of damaged property, medical care to treat injuries, and costs to install alarm systems to avoid crime. Other costs occur as a response to crime, such as the cost of judicial proceedings or the costs to incarcerate offenders. It has been the basis for better understanding criminal victimization in the United States. Researchers Use Differing Approaches and Face Numerous Challenges, Leading to Disagreement on Cost Estimates Based on a survey of experts associated with the cost of crime and a review of literature in the field, we found that there is no commonly used approach for estimating the costs of crime. We identified four primary methods to estimate costs. In addition, some experts told us that current methodologies are inadequate to fully estimate costs. As a result of these challenges, research has produced widely varying estimates on the costs of crime. Measuring crime’s economic effect on markets. Using jury awards to estimate victimization costs. Calculating categories of costs separately to develop a total cost. For example, one expert stated that many studies that use surveys to estimate the public’s willingness to pay to reduce crime develop their estimates on the basis of the public’s perception of crime and not the actual magnitude of crime. Experts Identified Approaches that Could Improve the Understanding of the Cost of Crime and Its Use in Policy Discussions Experts we surveyed for this report provided five broad topic areas that may help improve the understanding of the cost of crime. Further, experts noted that researchers could refine their estimates by combining different methodological approaches. Cost of punishment and incarceration. Cost of potential bias in the administration of justice. Appendix II: Bibliography of Research on the Cost of Crime We reviewed and analyzed 27 research studies on estimating the cost of crime in the United States, published from 1996 to April 2017. (2) What actions have experts considered in order to improve the understanding and use of cost of crime research? Scope of Crimes and Costs For purposes of this report, we focused on crimes committed in the United States. To identify various categories of crime, we relied on information from Department of Justice’s (DOJ) Office of Justice Programs (OJP), the Federal Bureau of Investigation (FBI), and a study released by the National Academies of Sciences, Engineering, and Medicine (National Academies), which FBI and OJP commissioned in 2013. These fields include economics, criminology, demography, sociology, public health, and computer science; Knowledge on specific or technical aspects of estimating various costs of crime, such as statistics on the prevalence of crime, methods used to estimate the cost of crime, and experience or knowledge of the full range of crimes and challenges estimating costs for these crimes; and For participants with criminology expertise, experience with different aspects of assessing various costs of crime, such as the effects of crime on offenders, victims, and communities, corporate and white- collar crime, recidivism, substance abuse, mental illness, juvenile delinquency, policing, and mass incarceration. The structured questionnaire included questions about existing research studies, methods used to estimate the cost of crime and the advantages and challenges of each method, challenges creating estimates for certain costs and certain crimes, challenges identifying the magnitude of crime, how cost of crime estimates can be used in criminal justice policy decisions, and what can be done to improve cost of crime estimates.

Why GAO Did This Study Crime and society's response to it pose significant costs to the United States. The Department of Justice's Bureau of Justice Statistics reported that federal, state, and local governments collectively spent over $280 billion in fiscal year 2012 (adjusted to 2016 dollars) on criminal justice programs such as police protection, the court system, and incarceration. There are also many other financial and nonfinancial effects of crime that researchers consider when estimating the total costs of crime in the United States. These can include tangible costs such as replacing damaged property or medical care to treat victims' injuries, and intangible costs such as changes in people's behavior to avoid crime, among many other costs. Researchers have estimated varying annual costs of crime, including totals of $690 billion, $1.57 trillion, and $3.41 trillion, adjusted to 2016 dollars. GAO was asked to examine issues related to estimating the costs of crime committed in the United States. This report examines: 1) how experts estimate the cost of crime in the United States, and the challenges they face, and 2) the actions experts have considered in order to improve the understanding and use of cost of crime research. To answer these questions, GAO worked with the National Academies of Sciences, Engineering, and Medicine to identify and survey experts in fields associated with estimating the cost of crime, including criminology, economics, public health, public policy, and statistics, among others. GAO also reviewed 27 studies that estimated the cost of crime in the United States, published from 1996 to 2017. What GAO Found Based on a survey of experts associated with studying the costs of crime and a literature review, GAO found that there is no commonly used approach for estimating the costs of crime, and experts face multiple challenges when making estimates. GAO identified four primary methods to estimate costs, each with limitations: 1) measuring effects on markets, 2) using jury awards, 3) surveying the public for its willingness to pay to reduce crime, and 4) calculating individual categories of cost to develop a total cost. Experts stated that current methodologies are inadequate to fully estimate costs and that they face numerous challenges in developing estimates, such as the value of intangible costs of crime. As a result, research has produced widely varying and inconsistent estimates on the costs of crime. Experts provided five broad areas they believe warrant further study to improve understanding of the costs of crime: 1) costs of crimes not reported to law enforcement agencies, 2) costs of punishment and incarceration, 3) costs of recidivism, 4) costs of potential bias in the administration of justice, and 5) uncertainty of cost estimates. Further, experts noted that researchers could refine estimates by combining different methodological approaches. They urged researchers to consider cost of crime estimates under different policy scenarios, such as in setting sentencing guidelines, to help better inform policy decisions.

gao_T-RCED-98-131

gao_T-RCED-98-131_0

In announcing their proposed alliance, American Airlines and British Airways emphasized that they are at a competitive disadvantage with these alliances because the airlines in those alliances can, among other things, better coordinate service and jointly set fares. In addition, they also likely result in higher airfares. European Reviews Considering a Range of Competitive Issues; U.S. The European regulatory agencies have nearly completed their reviews, and the formal U.S. review has yet to get under way. European Commission’s Review Forthcoming In July 1996, because of concerns about the anticompetitive effects of the alliances, the European Commission’s Directorate General for Competition initiated a review of the proposed AA/BA alliance and three other ongoing alliances: United/Lufthansa/SAS; Delta/Swissair/Sabena/Austrian Airlines; and Northwest/KLM. United Kingdom Awaiting European Commission’s Draft Remedies The U.K. Department of Trade and Industry is conducting its own review of the proposed AA/BA alliance. U.S. As with the other international code-sharing alliances that the United States has approved, DOT officials explained that they will not approve AA’s and BA’s proposed code-sharing alliance with antitrust immunity unless the United States has reached an open skies agreement with the United Kingdom. For the month of March 1998, an analysis of Official Airline Guide data indicates that AA and BA account for nearly 58 percent of the seats available on scheduled passenger flights between the United States and London. Moreover, as of March 1998, the two airlines account for 37 of the 55 total daily roundtrips (67 percent) between the United States and Heathrow offered by scheduled U.S. and British airlines. Our review of current competitive conditions in the New York-Heathrow (Kennedy and Newark) market indicates that substantial new entry would need to occur to provide competition because of the (1) size of the market, (2) large share of that market currently held by AA and BA, (3) frequency of service in that market—15 flights a day—provided by the two airlines (compared with 3 daily flights by United and 3 daily flights by Virgin Atlantic), and (4) substantial portion of the market accounted for by time-sensitive business travelers. This time, some were not as clear on the number of slots they would need to be competitive. If the proposed alliance is approved and the regulatory agencies decide how many slots and gates should be made available, it is uncertain how long it would take the British Airports Authority, which owns and operates seven U.K. airports, including London’s Heathrow and Gatwick airports, to actually make them available to new airlines. DOT will have to address this issue because it will be critical for new carriers to obtain access to commercially viable slots, as well as needed gates and facilities, at the same time as the proposed alliance begins joint operations. Airline Sales and Marketing Practices May Further Enhance Market Dominance Over Smaller, Nonaligned, and New Entrant Carriers According to airline officials, aviation experts, and consumer groups we interviewed, restrictions on access to slots and gates at Heathrow Airport are the most significant barriers to competition in U.S.-U.K. markets, but sales and marketing practices—which include frequent flier programs, travel agent commission overrides, multiple listings on computer reservation systems, and corporate incentive programs—may also reduce competition. However, measuring the impact of these practices on fares is difficult, and limiting them would involve a trade-off between their anticompetitive effect and the consumer benefits that some of them bring. If an airline is already dominant in a given airport, these programs will serve to reinforce this dominance. Frequent flier programs encourage travelers to chose one airline over another on the basis of factors other than price. 14, 1996). 6, 1995).

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the United States' aviation relations with the United Kingdom, focusing on the: (1) status of the various reviews of the proposed American Airlines/British Airways (AA/BA) alliance being undertaken by the European regulatory agencies and the Departments of Transportation and Justice; (2) competitive impact of the proposed alliance; and (3) extent to which sales and marketing practices of American Airlines and British Airways should be considered in reviewing the alliance. What GAO Found GAO noted that: (1) European regulatory agencies have nearly completed their reviews of the proposed AA/BA alliance; (2) they are considering a range of issues that would have to be addressed as a condition of approving the alliance, including the number of slots and gates that other airlines would need at London's Heathrow Airport to compete, as well as American Airlines' and British Airways' marketing practices; (3) the United Kingdom, which is also reviewing the proposed alliance, is waiting for the European Commission to announce its draft remedies; (4) in contrast, the Department of Transportation (DOT) has not yet begun its formal review of the proposed alliance because neither airline has filed all the documentation requested; (5) DOT has reiterated that it will not approve the alliance until the United States successfully negotiates an open skies agreement with the United Kingdom; (6) the proposed AA/BA alliance raises significant competition issues; (7) currently, the two airlines account for nearly 58 percent of the available seats on scheduled U.S. and British airlines between the U.S. and London; (8) in addition, they provide over 70 percent--and in some cases all-of the available seats on scheduled U.S. and British airlines between Heathrow Airport and several key U.S. airports, including Chicago, Boston, and Miami; (9) as a result of this level of market concentration, DOT's approval of the alliance would further reduce competition unless, as a condition of approval, other U.S. airlines were able to obtain adequate access to Heathrow; (10) although slots, gates, and facilities are most important, most experts and some airline officials with whom GAO spoke also recognize that American Airlines' and British Airways' sales and marketing practices may make competitive entry more difficult for other airlines; (11) practices such as frequent flier programs and travel agent commission overrides encourage travelers to choose one airline over another on the basis of factors other than obtaining the best fare; (12) such practices may be most important if an airline is already dominant in a given market or markets; (13) ultimately, this may lead to higher fares than would exist in the absence of these marketing practices; (14) even so, the experts agreed that measuring the effect of these practices is nearly impossible; and (15) mitigating their effect without banning them is difficult, and banning them involves a trade-off between their anticompetitive effect and the consumer benefits that some of them bring.

gao_GAO-14-44

gao_GAO-14-44_0

OMB and Agencies Have a Variety of Responsibilities under the Computer Matching Act OMB is responsible for developing guidelines and providing continuing assistance to agencies on the implementation of the Computer Matching Act, while agencies have a variety of implementation responsibilities. Agency responsibilities can be grouped into three major areas: (1) developing computer matching agreements containing specific elements for each proposed matching program and notifying Congress, OMB, and the public of computer matching activities; (2) conducting cost-benefit analyses for proposed computer matching programs; and (3) establishing DIBs to oversee computer matching programs, including reviewing and approving computer matching agreements. OMB has periodically published guidance for implementing the act, including documents issued in 1989, 1991, 2000, and 2013. If a proposed match is covered by the Computer Matching Act, a CMA must be developed and approved by all participating agencies.Among other things, the act requires that CMAs include the purpose and legal authority for conducting the program; the justification for the program and the anticipated results, including a specific estimate of any savings; a description of the records that will be matched, including each data element that will be used, the approximate number of records that will be matched, and the projected starting and completion dates of the matching program; procedures for providing individual notice at the time of application, and notice periodically thereafter as directed by the DIB (subject to OMB guidance), to applicants or recipients of federal benefits; procedures for verifying information produced in the matching program as required to ensure that no benefits action is taken before the information acquired through computer matching is verified and potentially affected individuals are notified and have an opportunity to contest findings; procedures for the retention and timely destruction of identifiable records created by a recipient agency or nonfederal agency in the matching program; procedures for ensuring the administrative, technical, and physical security of the records matched and the results of the matching programs; and information on assessments that have been made on the accuracy of the records that will be used in the program. OMB recommended, but did not require, that the Privacy Act officer serve as the board secretary. However, implementation among these seven agencies was inconsistent in several ways: Agencies differed in their understanding of what circumstances and types of data-sharing the act applied to, such as whether CMAs were required for “front-end” data queries. While these agencies generally developed cost-benefit analyses for their computer matching agreements, they did not consistently address key costs and benefits needed to assess the value of their computer matching programs. Further, OMB has provided little assistance to agencies in implementing the act, which may contribute to inconsistent implementation. Labor’s DIB did not submit biennial reports in 2008 or 2012. However, agency officials stated that they have not received consistent assistance from OMB. Several Factors May Discourage Implementation of CMAs at Selected Agencies Agency officials at six of the seven agencies we reviewed told us that the act’s rigorous requirements and the CMA review processes within and among agencies were lengthy and resource-intensive and that statutory time frames for conducting matching activities were too short, discouraging implementation of CMAs. Similarly, OIG officials at four agencies stated that, given the short duration of CMAs, the typical length of the CMA approval process discouraged them from computer matching, as did the requirement that their proposed agreements be approved by agency DIBs. We recommend that the Secretary of Health and Human Services develop and implement policies and procedures for cost-benefit analyses related to computer matching agreements to include key elements such as personnel and computer costs, as well as avoidance of future improper payments and recovery of improper payments and debts; ensure the DIB reviews cost-benefit analyses to make certain cost savings information for the computer matching program is included before approving CMAs; and ensure the DIB performs annual reviews and submits annual reports on agency computer matching activities, as required by the act. The OMB staff did not state whether the agency agreed or disagreed with our recommendations. SSA stated that it is currently working on an initiative to improve its cost- benefit analysis process and will ensure that all CMAs comply with the act’s requirements and OMB’s guidance. Appendix I: Objectives, Scope, and Methodology The objectives of our review were to (1) determine agencies’ responsibilities under the Computer Matching Act, (2) determine how selected agencies are implementing that act with regard to federal benefits programs, and (3) describe the views of officials at selected agencies on the process of developing and implementing computer matching agreements (CMA). We focused on federal agencies with the highest expenditures in benefits and assistance programs, specifically the Departments of Agriculture (USDA), Education (ED), Health and Human Services (HHS), Homeland Security (DHS), and Veterans Affairs (VA), and the Social Security Administration (SSA). We also reviewed guidance developed by the Office of Management and Budget (OMB) on computer matching.

Why GAO Did This Study Computerized matching of data from two or more information systems is one method of data analysis that can assist in detecting and preventing fraud, waste, and abuse in government programs, and it is commonly used to help identify improper payments in federal benefit programs and activities. However, computer matching may also pose privacy risks to individuals. To ensure that federal agency computer matching programs protect individuals' privacy rights, from 1988 through 1990 Congress enacted amendments to the Privacy Act of 1974 (collectively referred to in this report as the Computer Matching Act). GAO was asked to review issues relating to computer matching. This report examines (1) agencies' responsibilities under the Computer Matching Act, (2) how selected agencies are implementing the act with regard to federal benefits programs, and (3) the views of officials at selected agencies on the process of developing and implementing computer matching agreements. GAO reviewed the act's provisions and OMB guidance. It also interviewed officials and examined documents at seven agencies with high expenditures in benefits and assistance programs. What GAO Found The Office of Management and Budget (OMB) is responsible for developing guidelines and providing assistance to agencies on implementing the Computer Matching Act, while agencies have a variety of implementation responsibilities. Agency responsibilities include (1) developing computer matching agreements (CMA) containing specific elements for each proposed matching program and notifying Congress, OMB, and the public of such activities; (2) conducting cost-benefit analyses for proposed matching programs; and (3) establishing data integrity boards to oversee matching programs. The seven agencies GAO reviewed (the Departments of Agriculture, Education, Health and Human Services, Homeland Security, Labor, Veterans Affairs, and the Social Security Administration) have taken a number of steps to implement the act's requirements. They have all established processes for creating CMAs, and the agreements generally included the elements required by the act. However, implementation among these agencies was inconsistent in several ways. First, the selected agencies differed in their understanding of whether CMAs were required for data queries. OMB's guidance is not clear on whether such queries are covered by the act. Second, while the selected agencies generally developed cost-benefit analyses for their CMAs, they did not consistently address key elements needed to assess the value of computer matching programs. OMB stated in 1989 that it would issue specific guidance for cost-benefit analyses of computer matching programs, but it has not done so. Finally, agency data integrity boards have not consistently reported to OMB on agencies' computer matching activities as required by the act. OMB guidance requires biennial reporting, which varies from the act's requirement for annual reports. The lack of clear guidance from OMB has contributed to the inconsistent implementation of the act at the agencies GAO reviewed. Several agency and office of inspector general officials stated that the act's rigorous requirements and short time frames discouraged them from pursuing CMAs. Officials at six agencies stated that CMA review processes were lengthy and resource-intensive and that statutory durations for conducting matching activities were too short. Similarly, officials from offices of the inspector general at four agencies stated that the length of the approval process and the requirement that proposed agreements be approved by data integrity boards discouraged them from computer matching. What GAO Recommends GAO is recommending that OMB revise its guidance and that selected agencies develop and implement policies and procedures for cost-benefit analyses and ensure annual reviews and reporting. In their comments, agencies concurred with GAO's recommendations, with the exception of Education. OMB did not state whether the agency agreed or disagreed. GAO continues to believe that the recommendations are valid, as discussed in the report.

gao_GAO-12-760T

gao_GAO-12-760T_0

Factors to Consider When Evaluating Expiring Tax Provisions Factors commonly used to evaluate tax policy in general can be applied to decisions of whether and how to extend expiring tax provisions, including tax expenditure provisions. The factors, listed in table 1 and discussed below, may also be relevant to evaluating other policy tools, such as spending programs or regulations. Tax expenditures may, in effect, be viewed as spending programs channeled through the tax system. Revenues foregone through tax expenditures either reduce funding available for other federal activities or require higher tax rates to raise a given amount of revenue. Like decisions about spending, deciding whether to extend an expiring tax expenditure involves considering whether the benefit of the intended outcome is worth the effect on other programs or tax rates. Simplicity, transparency, and administrability. Relationship to Other Policy Tools. Tax expenditures are one policy tool out of several—including spending, grants, loans and loan guarantees, and regulations—that policymakers can use to achieve public goals. How a tax expenditure is designed can affect its revenue effects and how it relates to the criteria for a good tax system. can help in evaluating tax If not well designed or effectively implemented, tax expenditures can contribute to mission fragmentation and program overlap, thus creating the potential for duplication with other policy tools. Measurement Challenges. Unavailable or insufficient data can hinder policymakers’ ability to consider how the factors described above relate to particular tax expenditures. A key challenge is that data necessary to assess how and by whom a tax expenditure is used generally are not collected on tax returns unless IRS needs the information to ensure tax compliance or is legislatively mandated to collect or report the information. We and the Office of Management and Budget (OMB) have noted that the desired outcomes of a tax expenditure or other policy tool are often the combination of effects of the program and external factors. Illustrating These Factors Using Examples from GAO’s Past Work Our prior reports on tax expenditures illustrate how these factors can be used to help evaluate whether and how to extend expiring tax provisions. Our past work related to domestic ethanol production highlights the importance of considering how tax expenditures relate to other policy tools. Congress allowed the credit to expire at the end of 2011. Our past work on higher-education tax expenditures illustrates how tax expenditures that are not transparent (i.e., cannot be easily understood by taxpayers) can result in taxpayers making decisions that do not maximize their tax benefits. In 2005, we reported that little is known about the effectiveness of education-related federal grants, loans, and tax expenditures in promoting student outcomes including college attendance, students’ choice among colleges, and the likelihood that students will continue their education. We also found that research gaps may be due, in part, to data and methodological challenges—such as difficulty isolating the behavioral effects of the tax expenditure under study from other changes—that have proven difficult to overcome. We found that the research tax credit, as currently designed, distributes incentives unevenly across taxpayers and provides many recipients with windfall benefits, earned for research that they would have done anyway. Our work on the nonbusiness energy property credit highlights the importance of considering revenue foregone and the criteria for good tax policy when determining whether and how to extend specific tax provisions. JCT estimates the budgetary effect of the President’s proposal extending and modifying this provision through December 31, 2013, would be about $2.4 billion in fiscal years 2012-2022.

Why GAO Did This Study GAO was asked to discuss the extension of tax provisions, sometimes called tax extenders, that either expired in 2011 or are scheduled to expire at the end of 2012. For a prior hearing of this subcommittee, the Joint Committee on Taxation (JCT) prepared a document detailing 64 expiring tax provisions. Most of these provisions are tax expenditures—reductions in a federal taxpayer’s tax liability that result from special credits, deductions, exemptions and exclusions from taxation, deferral of tax liability, and preferential tax rates. Tax expenditures are often aimed at policy goals similar to those of spending programs, such as encouraging economic development in disadvantaged areas and stimulating research and development. Because revenue is foregone, these provisions may, in effect, be viewed as spending programs channeled through the tax system. For those provisions the President proposed extending through 2013, JCT estimated the budgetary effect would be at least $40 billion in foregone revenue over its 10-year budget window. This testimony outlines factors useful for considering trade-offs when deciding whether and how to extend provisions and illustrates their application to some of the expiring provisions. GAO’s testimony is based on previous work on tax reform and tax expenditures. What GAO Found Factors commonly used to evaluate tax policy, as well as other policy tools such as spending programs or regulations, can be applied to decisions about whether and how to extend expiring tax expenditures, as discussed below. Revenue Effects . Revenues foregone through tax expenditures either reduce resources available to fund other federal activities or require higher tax rates to raise a given amount of revenue. Like decisions about spending, deciding whether to extend an expiring tax expenditure involves considering whether the benefit of the intended outcome is worth the effect on other programs or tax rates. The nation’s long-term fiscal challenge makes it all the more important to ensure tax expenditures are efficient and relevant. Criteria for Good Tax Policy . Three long-standing criteria typically used to evaluate tax policy—equity; economic efficiency; and a combination of simplicity, transparency, and administrability—can be applied to the expiring tax expenditures. Because the criteria may sometimes conflict with one another, there are usually trade-offs to consider when evaluating particular tax expenditures. Relationship to Other Policy Tools . Tax expenditures represent just one policy tool of several—including spending, grants, loans, and regulations—that policymakers can use to achieve policy goals. If not well designed, tax expenditures can create the potential for duplication with other policy tools. Measurement Challenges . Unavailable or insufficient data can hinder policymakers’ ability to consider how the factors described above relate to particular tax expenditures. A key challenge is that data necessary to assess how a tax expenditure is used and by whom generally are not collected on tax returns unless the Internal Revenue Service needs the information to ensure tax compliance or is legislatively mandated to collect or report the information. GAO’s prior reports on tax expenditures illustrate how these factors can be used to evaluate whether and how to extend expiring tax provisions. For example, GAO found that the research tax credit, as currently designed, provides many recipients with windfall benefits earned for spending they would have done anyway. A report on domestic ethanol production—in which GAO suggested modifying or phasing out a tax credit that was duplicative of the renewable-fuel standard—highlights the importance of considering how tax expenditures relate to other policy tools. GAO’s work on higher-education tax expenditures illustrates how tax expenditures that are not transparent (i.e., cannot be easily understood by taxpayers) can result in taxpayers making decisions that do not maximize their tax benefits. This work also concluded that little is known about the effectiveness of education-related federal grants, loans, and tax expenditures in promoting certain student outcomes, such as college attendance. Research gaps may be due, in part, to data and methodological challenges—such as difficulty isolating the behavioral effects of the tax expenditure under study from other changes—that have proven difficult to overcome. What GAO Recommends GAO has made many recommendations in its previous reports on tax expenditures that reflect the factors described in this testimony. Some have been acted on, while others have not.

gao_GAO-06-300

gao_GAO-06-300_0

CMS Programs to Monitor the Payment Accuracy of Medicare FFS Claims The objective of the CERT Program and the HPMP is to measure the degree to which CMS, through its contractors, is accurately paying claims. 1.) 2.) Determinations of error were made by QIO physician reviewers. Estimation of the National Medicare FFS Error Rate CMS estimated the national Medicare FFS error rate by combining the three contractor-type error rates (carrier, DMERC, and FI) from the CERT Program and the one contractor-type error rate (QIO) from the HPMP. 3.) CMS Methodology Adequate for Estimating the Error Rates in the CERT Program The methodology used by CMS in the CERT Program to estimate error rates by contractor type (carrier, DMERC, and FI) in fiscal year 2004 was adequate. The CERT Program also had adequate processes in place to collect medical records and to accurately identify and categorize payment errors. The statistical methods that CMS used to estimate the contractor-type error rates were valid. CMS Methodology Adequate for Estimating the Error Rate in the HPMP We found that the methodology used by CMS was adequate to produce a reliable estimate of the fiscal year 2004 Medicare error rate for the one contractor type (QIO) in the HPMP. We found also that the methodology was adequate because the HPMP contractors responsible for collecting the medical records for the sampled claims, as well as for identifying and determining errors, had appropriate controls in place to ensure that established procedures were followed. Sampling Methods The sample size that CMS used for the HPMP, about 40,000 claims, was sufficiently large to produce a reliable estimate of the fiscal year 2004 error rate for the QIO contractor type. Based on our review, we found that the HPMP sample was representative of the population from which it was drawn in terms of average dollar amount per claim. CMS Methodology Adequate for Estimating the National Error Rate CMS appropriately combined the error rates under the CERT Program and the HPMP to estimate the fiscal year 2004 national Medicare error rate. CMS estimated the national Medicare error rate by averaging the error rates of the four contractor types (carrier, DMERC, FI, and QIO), weighted by each contractor type’s share of total Medicare FFS payments. HHS also noted that CMS is continually committed to refining the processes to estimate, as well as lower, the level of improper payments in the Medicare FFS program. These changes primarily affected HHS’s processes for calculating an annual error rate estimate for the Medicare FFS program. To conduct our analysis of CMS’s sampling methods, we reviewed work performed by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) contractor that assessed these methods and CMS documentation for the fiscal year 2004 Medicare error rate. To conduct our analysis of CMS’s statistical methods, we reviewed the OIG contractor’s computer programming code, which replicated CMS’s estimation of the error rates for carriers, durable medical equipment regional carriers (DMERC), and fiscal intermediaries (FI), as calculated by the CERT Program subcontractor responsible for statistical analysis of the error rates for fiscal year 2004. Appendix II: Fiscal Year 2004 Error Rate Information by Contractor Type—Carriers, DMERCs, FIs, and QIOs Appendix II: Fiscal Year 2004 Error Rate Information by Contractor Type—Carriers, DMERCs, FIs, and QIOs year 2004(in dollars) CMS estimated paid claims error rate (percentage) CMS estimated standard error(percentage) precision(percentage) 13.5 year 2004(in dollars) CMS estimated paid claims error rate (percentage) CMS estimated standard error(percentage) precision(percentage) 4.5 year 2004(in dollars) CMS estimated paid claims error rate (percentage) CMS estimated standard error(percentage) precision(percentage) 23.8 year 2004(in dollars) CMS estimated paid claims error rate (percentage) CMS estimated standard error(percentage) precision(percentage) Carriers are health insurers and pay claims submitted by physicians, diagnostic laboratories and facilities, and ambulance service providers. DMERCs are health insurers and pay claims submitted by durable medical equipment suppliers. FIs are almost exclusively health insurers and pay claims submitted by home health agencies, non- prospective payment system (PPS) hospitals, hospital outpatient departments, skilled nursing facilities, and hospices.

Why GAO Did This Study The Centers for Medicare & Medicaid Services (CMS) estimated that the Medicare program paid approximately $20 billion (net) in error for fee-for-service (FFS) claims in fiscal year 2004. CMS established two programs--the Comprehensive Error Rate Testing (CERT) Program and the Hospital Payment Monitoring Program (HPMP)--to measure the accuracy of claims paid. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directed GAO to study the adequacy of the methodology that CMS used to estimate the Medicare FFS claims paid in error. GAO reviewed the extent to which CMS's methodology for estimating the fiscal year 2004 error rates was adequate by contractor type for (1) the CERT Program, (2) the HPMP, and (3) the combined national error rate (including both the CERT Program and the HPMP). GAO reviewed relevant CMS documents and reports related to the CERT Program and the HPMP. In addition, GAO reviewed work performed by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) and its contractor that evaluated CMS's fiscal year 2004 statistical methods and other aspects of the error rate estimation process. GAO also conducted interviews with officials from CMS, HHS's OIG, and their contractors. What GAO Found The methodology used by CMS for the CERT Program was adequate to estimate the fiscal year 2004 error rates by contractor type--carrier, durable medical equipment regional carrier (DMERC), and fiscal intermediary (FI). Carriers pay claims submitted by physicians, diagnostic laboratories and facilities, and ambulance service providers. DMERCs pay claims submitted by durable medical equipment suppliers. FIs pay claims submitted by hospitals, home health agencies, hospital outpatient departments, skilled nursing facilities, and hospices. The methodology was adequate because CMS used a large sample--about 120,000 claims--and an appropriate sample selection strategy. For these fiscal year 2004 error rate estimates, CMS made improvements in the collection of medical records that supported the sampled claims. These medical records were appropriately reviewed to determine whether there were errors in payment. CMS used valid statistical methods to estimate the fiscal year 2004 error rates for the carrier, DMERC, and FI contractor types. The methodology used by CMS for the HPMP was adequate to estimate the fiscal year 2004 error rate by quality improvement organizations (QIO), which are responsible for ascertaining the accuracy of coding and payment of Medicare FFS paid claims for acute care inpatient hospital stays. CMS's sampling methods were adequate because the agency used a large sample, approximately 40,000 claims, that was representative of the population from which it was drawn in terms of average dollar amount per claim. Also, the HPMP had adequate processes in place to ensure appropriate determinations of error. CMS used valid statistical methods to estimate the fiscal year 2004 error rate for the QIO contractor type. The fiscal year 2004 contractor-type error rate estimates for the CERT Program and the HPMP were appropriately combined to determine the national Medicare error rate through the use of a valid statistical method. CMS estimated the national Medicare error rate by averaging the carrier, DMERC, and FI contractor-type error rates in the CERT Program and the QIO contractor-type error rate in the HPMP, weighted by each contractor type's share of total Medicare FFS payments. In written comments, HHS noted that GAO found CMS's methodology adequate for estimating the fiscal year 2004 national Medicare FFS error rate. HHS also noted that CMS is continually committed to refining the processes to estimate, as well as lower, the level of improper payments in the Medicare FFS program.

gao_GAO-05-77

gao_GAO-05-77_0

This report should provide information on the results of its progress in meeting annual goals. The Commission Has Not Fully Complied with Key GPRA Requirements The Commission has not updated or revised its strategic plan since 1997, as required under GPRA, and its most recent annual performance plan and report contain weaknesses that limit the Commission’s ability to effectively manage its operations and communicate its performance. Without revisiting its strategic goals, the Commission does not have a firm basis on which to develop its annual goals. However, the Commission’s fiscal year 2005 plan does not discuss the strategies or resources needed to achieve its goals. GPRA requires agencies to submit information on how they plan to verify and validate the performance measures used to assess the accomplishment of their annual goals. The Commission’s Annual Performance Report for Fiscal Year 2003 Does Not Fulfill Several GPRA Requirements and Overall Does Not Communicate the Commission’s Performance Although the Commission’s most recent annual performance report, for fiscal year 2003, describes the agency’s achievements as well as reasons for not meeting certain goals, the report does not include several elements required under GPRA and provides little evidence and context for evaluating the agency’s performance. The report provides no account of the Commission’s performance for many of the annual goals set forth in its fiscal year 2003 performance plan. While the report explains why some goals were not met, it does not provide plans, schedules, or recommendations for addressing these unmet goals. OMB and OPM Have Provided Oversight, and the Commission Has Made Limited Changes in Response to OPM’s Recommendations In recent years, OMB and OPM have provided budgetary and human capital management oversight for the Commission. OMB’s oversight of the Commission focuses primarily on the budgetary process. In providing oversight of its human capital management, OPM conducted reviews and made recommendations to the Commission in the 1990s to improve the Commission’s human capital management and overall management. In 1996 and 1999, OPM conducted two reviews of the Commission’s human capital management systems and made recommendations in each report for improvements. As of August 2004, we found that the Commission had not implemented five of six broader, systemic recommendations made by OPM. The Commission took some actions in response to the recommendations in our 1994 and 1997 reports. In addition, the Commission has not implemented three of the four recommendations in our October 2003 report. Recommendations for Executive Action To strengthen the Commission’s management practices, we recommend that the Commission update its 5-year strategic plan according to GPRA’s required schedule and include all elements required under GPRA and OMB guidance; ensure that future annual performance plans include all elements required under GPRA and OMB guidance, reflect funding levels requested in the President’s Budget, and are revised if necessary to reflect actual appropriations; ensure that annual performance reports include all elements required implement all of the recommendations in OPM’s and GAO’s previous reports; include the status of the Commission’s efforts to implement OPM’s and GAO’s recommendations in its GPRA plans and reports; and seek the services of an existing Inspector General from another agency to help keep the Commission and the Congress informed of problems and deficiencies and to conduct and supervise necessary audits and investigations. At that time, we will send copies of this report to the U.S. Commission on Civil Rights and other interested parties. 1. 3.

Why GAO Did This Study The Chairmen of the Senate and House Committees on the Judiciary asked GAO to determine (1) the extent of the U.S. Commission on Civil Rights' compliance with the requirements of the Government Performance and Results Act (GPRA) of 1993, (2) what federal oversight is provided to the Commission, and (3) the status of the implementation of recommendations from GAO's past reviews of the Commission. What GAO Found The U.S. Commission on Civil Rights--an independent federal agency that monitors and reports on the status of civil rights in the United States--has not fully complied with the requirements of GPRA. Under this act, agencies are required to submit strategic plans and annual performance plans that detail their long-term and annual goals as well as information on how they plan to meet these goals. GPRA also requires agencies to submit annual performance reports that provide information on their progress in meeting the goals. However, the Commission has not updated or revised its strategic plan since 1997. Without revisiting its strategic goals, the Commission lacks a firm basis on which to develop its annual goals and evaluate its performance. In addition, its most recent annual performance plan and annual performance report contain weaknesses that limit the agency's ability to effectively manage its operations and communicate its performance. For example, the performance plan does not discuss the Commission's strategies or resources for achieving its goals, does not provide budgetary information for its programs, and does not provide performance indicators for some annual goals. Similarly, the performance report does not account for the Commission's performance for many of the annual goals set forth in its performance plan and does not provide plans, schedules, or recommendations for addressing each of the Commission's unmet goals. The Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) have provided oversight for the Commission's budgetary and human capital operations in recent years. OMB's oversight has focused on the Commission's budget requests and GPRA plans and reports. OPM conducted two reviews of the Commission's human capital management systems in the 1990s and made recommendations for improvement, including improvements to its grievance and performance appraisal systems. Although the Commission has implemented some of OPM's earlier recommendations, it has not implemented five of six broader, systemic recommendations made in 1999 for improvement to its human capital management systems. Unlike many other executive agencies, the Commission does not have an Inspector General to provide oversight of its operations beyond OMB and OPM. GAO has conducted several reviews of the Commission's management operations in recent years. The Commission took some actions in response to the recommendations in GAO's 1994 and 1997 reports. However, the Commission has not implemented three of the four recommendations in GAO's October 2003 report for improving the agency's management and procurement practices.

gao_GAO-14-266

gao_GAO-14-266_0

Section 346 of the National Defense Authorization Act for Fiscal Year 2002 encouraged the sharing of data between AWPS and LMP (which had been in development since 1999) and identified several requirements related to AWPS. Among other things, the law required: the Army to continue to use AWPS as a standard Army-wide manpower system under the supervision and management of the Secretary of the Army; the Secretary of the Army to submit annual progress reports to Congress on the implementation of the AWPS master plan until the Secretary certifies to Congress that AWPS is fully implemented; and GAO to submit evaluations of each of the Army’s annual reports not later than 60 days after the Army has issued them to Congress. The Army Has Not Followed Certain Statutory and Regulatory Requirements for Implementing AWPS The Army Has Not Submitted Annual Progress Reports to Congress on AWPS Implementation The Army has not submitted the required annual progress reports to Congress on the implementation of the AWPS master plan since 2002. The Army has not been submitting annual reports because, according to Army officials, it does not plan to submit progress reports until the revised master plan is completed. According to Army regulation, USAMAA is responsible for reviewing and validating manpower requirements models. USAMAA officials told us they contacted AMC in late 2011 or early 2012 regarding submitting AWPS for validation. At the time, AMC was not prepared to move forward with validation. However, officials from the AWPS program management office told us that in April 2012 they asked for assistance from USAMAA regarding submitting AWPS for validation, but that additional assistance had not yet been provided. Because USAMAA officials involved in these earlier contacts subsequently left USAMAA, we were unable to corroborate that USAMAA did not respond to AWPS program management officials’ requests for assistance. As of September 2013, the draft of the updated AWPS master plan states that the Army plans to submit AWPS to USAMAA for validation in the next 1 to 4 years, and AMC officials also acknowledged the need to have AWPS validated by USAMAA. Through USAMAA validation of AWPS, the Army would have greater assurance that reports of these types, linking workload demand to workforce requirements, are accurate. The Army Has Begun to Assess Unnecessary Overlap between AWPS and LMP, but Progress Has Been Limited The Army has begun to assess whether unnecessary overlap exists between AWPS and LMP and has begun its assessment by initiating data-collection and analysis efforts. However, its overall progress— including the development of a business case analysis—has been limited, due primarily to the absence of senior-level leadership involvement and attention and the lack of a fully developed and documented approach for conducting the assessment, including an established milestone for completing it. GAO has found that overlap among government programs or activities can lead to unnecessary duplication and can result in unnecessary costs and less-efficient and less-effective services. The team has received a demonstration on the current functionality provided by AWPS and LMP and has distributed surveys to Army personnel with AWPS accounts to collect information on how they use the system. The survey also asked whether they used another tool—such as LMP—to provide similar functionality. Based on our review of the consolidated responses to the project team’s survey and our previous work, there is potential for some unnecessary overlap between AWPS and LMP, but further analysis is necessary. Best practices have shown that sustained leadership attention and involvement can help organizations make lasting changes and achieve positive results. Standards for Internal Control call for proper documentation of evaluation processes. The absence of senior-level AMC leadership involvement and attention, as well as the lack of a fully developed and documented approach that includes an established milestone for completion, increases the risk that the Army will not make sustained progress in its efforts to identify and eliminate unnecessary overlap between AWPS and LMP. To provide greater assurance of the accuracy of manpower requirements reports produced by AWPS for use at Army industrial sites, we recommend that the Secretary of the Army direct AMC—with assistance as needed from USAMAA—to submit AWPS to USAMAA for review and validation as a manpower requirements determination tool, in accordance with Army regulations. To complete the Army’s assessment of unnecessary overlap between AWPS and LMP and to ensure that a sound business decision is made on how to most cost-effectively provide AWPS functionality, we recommend that the Secretary of the Army direct the Commanding General, AMC, to take the following two actions: Identify a specific senior-level AMC manager or committee to provide increased leadership involvement and attention of the project team’s efforts, to include ensuring that a strong and stable team exists for managing change. Establish a fully developed and documented approach for the team’s assessment, including a milestone for completing it. Agency Comments We requested comments from the Army, but none were provided.

Why GAO Did This Study AWPS is an information system that produces management reports intended to link the Army's industrial workload demands to workforce requirements. The Army has spent over $90 million on the system through fiscal year 2013 and plans to spend approximately $35.6 million over the next 5 years. AWPS relies on data from LMP, which was implemented after AWPS, and prior GAO reports have noted the potential overlap between AWPS and LMP. Pub. L. No. 111-139 mandates that GAO identify federal programs, agencies, offices, and initiatives that have duplicative goals or activities. This review evaluates the extent to which the Army has (1) followed certain applicable statutory and regulatory requirements for implementing AWPS and (2) assessed whether there is unnecessary overlap between AWPS and LMP. GAO reviewed laws, regulations, and prior GAO reports; analyzed Army documents related to its assessment of unnecessary overlap between AWPS and LMP; and interviewed Army officials. What GAO Found The Army has not followed certain applicable statutory and regulatory requirements for implementing the Army Workload and Performance System (AWPS). The National Defense Authorization Act for Fiscal Year 2002 requires the Secretary of the Army to submit annual progress reports to Congress on the implementation of the AWPS master plan until the Secretary certifies to Congress that AWPS is fully implemented. Although the Secretary has not yet made this certification, the Army has not been submitting progress reports. According to Army officials, the Army does not plan to submit progress reports until a revised master plan for AWPS is completed. However, for many years the Army has been unable to complete an update to the master plan due to a lack of oversight. Additionally, the Army has not validated AWPS as a manpower requirements determination tool. Army regulation states that the U.S. Army Manpower and Analysis Agency (USAMAA) is responsible for reviewing and validating manpower requirements models like AWPS and that major commands—such as the Army Materiel Command (AMC)—are responsible for submitting their models to USAMAA for validation. AMC directs the activities of Army industrial sites and is the primary user of AWPS. USAMAA and AMC officials have discussed the need for AWPS to be validated, but AWPS has not yet been submitted to USAMAA for validation. USAMAA officials initially contacted AMC regarding submitting AWPS for validation; however, at the time, AMC was not prepared to proceed. Later, when ready to seek validation, AWPS officials told GAO they asked for assistance from USAMAA, but additional assistance had not yet been provided. Because USAMAA officials involved in these earlier contacts subsequently left USAMAA, GAO was unable to corroborate that USAMAA did not respond to AWPS officials' request for assistance. Through USAMAA validation, the Army would have greater assurance that AWPS workforce management reports are accurate. The Army has begun to assess whether unnecessary overlap exists between AWPS and the Logistics Modernization Program (LMP), but its overall progress has been limited. At the direction of AMC leadership, a project team was established and has begun to assess the extent to which AWPS's software functionality can be replaced with existing or future LMP functionality. The team has distributed surveys to AWPS users to collect information on how they use AWPS, and whether they use other tools—such as LMP—to provide similar functionality. Initial responses to this survey indicate the potential for some overlap between AWPS and LMP. Identifying unnecessary overlap among government programs or activities is important because overlap can lead to unnecessary duplication and can result in unnecessary costs and less-efficient and less-effective services. However, the overall progress of the team's assessment has been limited, due primarily to the absence of senior-level leadership attention and involvement and to the lack of a fully developed and documented approach for the assessment. Best practices have shown that sustained leadership attention and involvement can help organizations achieve positive results, and internal control standards call for proper documentation of evaluation processes. The absence of these elements increases the risk that the Army will not make progress in identifying and eliminating unnecessary overlap between AWPS and LMP. What GAO Recommends GAO is making four recommendations to the Army to (1) strengthen oversight for completing the update to the AWPS master plan, (2) direct that AWPS be submitted to USAMAA for validation, (3) identify a specific senior-level AMC manager or committee to provide oversight of the project team's efforts, and (4) establish a fully developed and documented approach for the team's assessment that includes a milestone for completing this effort. GAO requested comments from the Army, but none were provided.

gao_GAO-15-677

gao_GAO-15-677_0

Background Medicaid finances the delivery of health care services for a diverse low- income and medically needy population. Medicaid Eligibility, Enrollment, Services, and Expenditures Historically, Medicaid eligibility has been limited to certain categories of low-income individuals—such as children, parents, pregnant women, persons with disabilities, and individuals age 65 and older. Key Issues Facing the Medicaid Program Maintaining and Improving Access to Quality Care Medicaid enrollees report access to medical care that is generally comparable to that of privately insured individuals. We continue to believe that our recommendation is valid. However, a lack of reliable CMS data about program payments and state financing of the non-federal share of Medicaid hinders oversight, and our work has pointed to the need for better data, as well as improved policy and oversight, to ensure that funds are being used appropriately and efficiently. In addition, gaps in HHS’s criteria, process, and policy for approving states’ demonstration spending raise questions about billions of dollars in federal spending. Improving HHS’s review and approval process for demonstration spending may prevent unnecessary federal spending. Medicaid improper payments are a significant cost to Medicaid—totaling an estimated $17.5 billion in fiscal year 2014, according to HHS. Due to our concerns about Medicaid’s improper payment rate and the sufficiency of federal and state oversight, we added Medicaid to our list of high-risk programs in 2003.appropriate use of funds by (1) identifying and preventing improper payments in both fee-for-service and managed care, (2) setting appropriate payment rates for managed care organizations, and (3) ensuring only eligible individuals and providers participate in Medicaid. CMS concurred with these recommendations. Improving the responsiveness of federal assistance to states during economic downturns would facilitate state budget planning, provide states with greater fiscal stability, and better align federal assistance with the magnitude of the economic downturn’s effects on individual states. Targeted assistance based on state needs. Based on our work, we noted that Congress could consider enacting an FMAP formula that is targeted for variable state Medicaid needs and provides automatic, timely, and temporary increased FMAP assistance in response to national economic downturns. More Equitable Funding Formula Would Better Reflect States’ Varying Ability to Fund Medicaid In prior work spanning more than three decades, we have emphasized that in federal-state programs such as Medicaid, funds should be allocated to states in a manner that is equitable from the perspective of both enrollees and taxpayers. Medicaid’s Ongoing Transformation Highlights the Importance of Federal Oversight We have reported over the years on challenges facing the Medicaid program and concerns about the adequacy of federal oversight. The effects of changes brought on by PPACA, as well as the aging of the U.S. population, will continue to emerge in the coming years and are likely to exacerbate the challenges that already exist in federal oversight and management of the Medicaid program.delivery and payment approaches, as well as new technologies, will continue to pose challenges to federal oversight and management. Recent state efforts to explore new health care models have implications for federal oversight of enrollees’ care and program costs. Attention to Medicaid’s transformation and the key issues facing the program will be important to ensuring that Medicaid is both effective for the enrollees who rely on it and accountable to the taxpayers. GAO has multiple ongoing studies in these areas and will continue to monitor the Medicaid program for the Congress. Agency Comments We provided a draft of this report to HHS for review. HHS provided technical comments, which we incorporated as appropriate. The following table lists selected Medicaid-related recommendations GAO has made to the Department of Health and Human Services that are classified as open because the agency has either not taken or has not completed steps to implement the recommendation. The recommendations are listed by key issue and report. Washington, D.C.: January 30, 2015. Program Integrity: Further Action Needed to Address Vulnerabilities in Medicaid and Medicare Programs. Other GAO Products Medicaid: Overview of Key Issues Facing the Program.

Why GAO Did This Study The Medicaid program marks its 50th anniversary on July 30, 2015. The joint federal-state program has grown to be one of the largest sources of health care coverage and financing for a diverse low-income and medically needy population. Medicaid is undergoing transformative changes, in part due to PPACA, which expanded the program by allowing states to opt to cover low-income adults in addition to individuals in historic categories, such as children, pregnant women, older adults, and individuals with disabilities. GAO has a large body of work on challenges facing Medicaid and gaps in federal oversight. This report describes (1) key issues that face the Medicaid program based on this work, and (2) program and other changes with implications for federal oversight. GAO reviewed its reports on Medicaid issued from January 2005 through July 2015; reviewed documentation from the Centers for Medicare & Medicaid Services (CMS), the HHS agency that oversees Medicaid; and interviewed CMS officials. What GAO Found GAO identified four key issues facing the Medicaid program, based on prior work. Access to care : Medicaid enrollees report access to care that is generally comparable to that of privately insured individuals and better than that of uninsured individuals, but may have greater health care needs and greater difficulty accessing specialty and dental care. Transparency and oversight : The lack of complete and reliable data on states' spending—including provider payments and state financing of the non-federal share of Medicaid—hinders federal oversight, and GAO has recommended steps to improve the data on and scrutiny of states' spending. Also, improvements in the Department of Health and Human Services' (HHS) criteria, policy, and process for approving states' spending on demonstrations—state projects that may test new ways to deliver or pay for care—are needed to potentially prevent billions of dollars in unnecessary federal spending, as GAO previously recommended. Program integrity : The program's size and diversity make it vulnerable to improper payments. Improper payments, such as payments for non-covered services, totaled an estimated $17.5 billion in fiscal year 2014, according to HHS. An effective federal-state partnership is key to ensuring the most appropriate use of funds by, among other things, (1) setting appropriate payment rates for managed care organizations, and (2) ensuring only eligible individuals and providers participate in Medicaid. Federal financing approach : Automatic federal assistance during economic downturns and more equitable federal allocations of Medicaid funds to states (by better accounting for states' ability to fund Medicaid) could better align federal funding with states' needs, offering states greater fiscal stability. GAO has suggested that Congress could consider enacting a funding formula that provides automatic, timely, and temporary increased assistance in response to national economic downturns. Medicaid's ongoing transformation—due to the Patient Protection and Affordable Care Act (PPACA), the aging of the U.S. population, and other changes to state programs—highlights the importance of federal oversight, given the implications for enrollees and program costs. Attention to Medicaid's transformation and the key issues facing the program will be important to ensuring that Medicaid is both effective for the enrollees who rely on it and accountable to the taxpayers. GAO has multiple ongoing studies in these areas and will continue to monitor the Medicaid program for the Congress. What GAO Recommends GAO has made over 80 recommendations regarding Medicaid, some of which HHS has implemented. GAO has highlighted 24 key recommendations that have not been implemented. HHS agreed with and is acting on some and did not agree with others. GAO continues to believe that all of its recommendations have merit and should be implemented. HHS provided technical comments on a draft of this report, which GAO incorporated as appropriate.

gao_GAO-10-307T

gao_GAO-10-307T_0

Miscellaneous Obligations Used Extensively for Mission-Related Activities in Fiscal Year 2007 In fiscal year 2007, VHA used miscellaneous obligations to record over $6.9 billion against its appropriations for the procurement of mission-related goods and services at 129 VHA stations throughout the country. As shown in figure 1, $3.8 billion of this total (55.1 percent) was for fee-based medical and dental services for veterans, and another $1.4 billion (20.4 percent) was for drugs, medicines, and hospital supplies. The remainder covered, among other things, state homes for the care of disabled veterans, transportation of veterans to and from medical centers for treatment, and logistical support and facility maintenance for VHA medical centers nationwide. VHA officials said they used miscellaneous obligations to administratively reserve estimated funds required to facilitate the payments for goods and services for which specific quantities and time frames were uncertain. Deficiencies in Design of Controls over Miscellaneous Obligations Increase the Risk of Fraud, Waste, and Abuse In September 2008, we reported that VA policies and procedures were not designed to provide adequate controls over the use of miscellaneous obligations. The use of miscellaneous obligations carries inherent risk due to a lack of a negotiated contract. VHA did not have effective basic internal controls nor mitigating controls with respect to oversight by contracting officials, segregation of duties, and supporting documentation for recording the obligation of funds. The systems used did not have a mechanism for contracting officials to electronically document their review of miscellaneous obligations, and no manual documentation procedures had been developed. Without proper segregation of duties, risk of errors, improper transactions, and fraud increases. Our case studies showed inadequate segregation of key duties in 30 of the 42 obligations we reviewed. In these instances, controls were not designed to prevent one official from performing two or more of the following key functions: requesting the miscellaneous obligation, approving the miscellaneous obligation, recording the obligation of funds, or certifying delivery of goods and services and approving payment. Without procedures calling for more definitive descriptions of the purpose, we could not confirm that these miscellaneous obligations were for bona fide needs or that the invoices reflected a legitimate use of federal funds. These recommendations focused on the need to better ensure adequate oversight of miscellaneous obligations by contracting officials; segregation of duties from initiation through receipt of the resulting goods and services; maintaining supporting documentation for miscellaneous obligations; and establishing an oversight mechanism to ensure control policies and procedures are fully and effectively implemented. Specifically, in January 2009, VA issued volume II, chapter 6 of VA Financial Policies and Procedures— Miscellaneous Obligations which outlines detailed policies and procedures aimed at addressing the deficiencies we identified in our September 2008 report. We have not yet fully evaluated the extent to which VA’s new policies and procedures are in place and operating as intended. However, full and effective implementation of this new guidance will be critical to reducing the government’s risks associated with VA’s use of miscellaneous obligations.

Why GAO Did This Study In September 2008, GAO reported internal control weaknesses over the Veterans Health Administration's (VHA) use of miscellaneous obligations to record estimates of obligations to be incurred at a future date. GAO was asked to testify on its previously reported findings that focused on (1) how VHA used miscellaneous obligations, and (2) the extent to which the Department of Veterans Affairs' (VA) related policies and procedures were adequately designed. GAO also obtained an update on the status of VA's activities to improve controls over its use of miscellaneous obligations. GAO's testimony is primarily a summary of its prior report (GAO-08-976), and also includes follow-up work to obtain information on the status of VA's efforts to implement our prior recommendations. What GAO Found In September 2008, GAO reported that VHA recorded over $6.9 billion of miscellaneous obligations for the procurement of mission-related goods and services in fiscal year 2007. VHA officials stated that miscellaneous obligations were used to facilitate payment for goods and services when the quantities and delivery dates are not known. According to VHA data, almost $3.8 billion (55.1 percent) of VHA's miscellaneous obligations was for fee-based medical services for veterans and another $1.4 billion (20.4 percent) was for drugs and medicines. The remainder funded, among other things, state homes for the care of disabled veterans, transportation of veterans to and from medical centers for treatment, and logistical support and facility maintenance for VHA medical centers nationwide. In 2008, GAO found that VA policies and procedures were not designed to provide adequate controls over the authorization and use of miscellaneous obligations with respect to oversight by contracting officials, segregation of duties, and supporting documentation for the obligation of funds. Collectively, these control design flaws increased the risk of fraud, waste, and abuse. These control design flaws were confirmed in GAO's case studies at VHA medical centers in Pittsburgh, Pennsylvania; Cheyenne, Wyoming; and Kansas City, Missouri. For example, in all of the 42 obligations reviewed, GAO found no documented approval by contracting officials. The systems used did not have a mechanism for contracting officials to electronically document their review of miscellaneous obligations and no manual documentation procedures had been developed. Furthermore, in 30 of the 42 obligations reviewed, one official performed two or more of the following functions: requesting, creating, approving or obligating funds for the miscellaneous obligation, or certifying delivery of goods and services and approving payment. Without proper segregation of duties, risk of errors, improper transactions, and fraud increases. Lastly, GAO found a lack of adequate supporting documentation at the three medical centers we visited. In 8 of 42 instances, GAO could not determine the nature, timing, or the extent of the goods or services being procured from the description in the purpose field. As a result, GAO could not confirm that these miscellaneous obligations were for bona fide needs or that the invoices reflected a legitimate use of federal funds. In January 2009, VA issued volume II, chapter 6 of VA Financial Policies and Procedures--Miscellaneous Obligations which outlines detailed policies and procedures aimed at addressing the deficiencies GAO identified in the September 2008 report. Full and effective implementation of this new guidance will be critical to reducing the government's risks associated with VA's use of miscellaneous obligations. GAO has not yet evaluated the extent to which these new policies have been fully and effectively implemented.

gao_GAO-15-407

gao_GAO-15-407_0

Background The Middle Class Tax Relief and Job Creation Act of 2012 (2012 act) established numerous responsibilities for FirstNet, most of which relate directly to developing the nationwide public-safety broadband network (hereafter, public safety network). In establishing this network, FirstNet must issue open, transparent, and competitive Requests for Proposals (RFP) to private sector entities for the purpose of building, operating, and maintaining the public safety network; develop RFPs that include appropriate timetables for construction, and network coverage areas and service levels, among other things; enter into agreements to use, to the maximum extent economically desirable, existing commercial, federal, state, local, and tribal infrastructure; promote competition in the public-safety equipment marketplace by requiring that equipment for the public safety network be built to open, non-proprietary standards; promote integration of the public safety network with public-safety address special considerations for areas with unique homeland or require deployment phases that include substantial rural coverage milestones; and develop the technical and operational requirements for the public safety network, as well as the practices and procedures for managing and operating it. The 2012 act requires FirstNet to be self-funding beyond this initial $7 billion. Efforts to establish local and regional public-safety networks are also ongoing, and predate the 2012 act. Even with the establishment of the public safety network, first responders will continue to rely on their current LMR systems for mission-critical voice communications. FirstNet Is Making Progress Meeting Responsibilities but Lacks Certain Elements of Effective Internal Controls FirstNet Is Making Progress Carrying Out Statutory Responsibilities FirstNet has made progress carrying out its statutory responsibilities in three areas—(1) establishing its organizational structure, (2) planning the public safety network, and (3) consulting with stakeholders—but could face challenges in each of these areas. FirstNet has set objectives and taken some steps to assess risks. However, FirstNet has not yet fully assessed risks it may face in accomplishing its objectives. Given this, complete risk assessments could help FirstNet appropriately design its full internal control system and achieve its objectives while maximizing use of its available resources. However, FirstNet has not yet finished establishing its control environment. Specifically, although FirstNet officials told us that they intend to develop a code/standards of conduct policy, which is an important form of ethical and behavioral guidance for personnel, they have not yet developed this item as of February 2015. FirstNet Faces Difficult Decisions in Determining How to Pay for a Nationwide Public-Safety Network Estimated to Cost Billions Cost of a Public Safety Network Estimated to be at least $12 Billion over First 10 Years Various entities have estimated the cost to construct and operate a nationwide network for public safety from a low of $12 billion to a high of between $34 and $47 billion, over the first 10 years. Various Factors Will Influence Cost of FirstNet’s Public Safety Network Cost estimates notwithstanding, various factors will influence the cost of constructing and operating FirstNet’s public safety network, including (1) the business model used, especially the extent of commercial partnerships; (2) use of existing infrastructure; (3) efforts to ensure network reliability; and (4) network coverage. FirstNet Faces Difficult Decisions about User Fees and Commercial Partnerships in Determining How to Become Self-Funding Although FirstNet has various revenue options it is authorized to use to become self-funding, it is unclear how FirstNet will use those authorities. However, FirstNet faces difficult decisions determining how to best utilize these revenue sources. Coverage: Widespread network coverage can attract more users, and thus user fee revenue, but is expensive to construct and maintain. FirstNet Has Processes in Place to Identify Early Builder Project Lessons but Has Not Developed a Written Evaluation Plan While FirstNet has taken steps to collect and evaluate lessons learned from the early builder projects, it could do more to ensure that the lessons are properly evaluated. We have previously found that a well-developed evaluation plan for projects like the early builder projects can help ensure that agencies obtain the information necessary to make effective program and policy decisions. Given that the early builder projects are doing, in part, on a regional and local level what FirstNet must eventually do on a national level, a complete evaluation plan that includes a detailed data-analysis plan could play a key role in FirstNet’s strategic planning and program management, providing feedback on both program design and execution. Recommendations for Executive Action To improve the accountability and transparency of FirstNet’s operations, and ensure that FirstNet is gaining as much knowledge from the early builder projects as possible, we recommend that FirstNet take the following two actions: strengthen FirstNet’s internal control system by fully assessing risks, developing standards of conduct, and evaluating performance against these standards, and develop an evaluation plan that includes a detailed data-analysis plan for the early builder projects’ performance and results, including how the observations and lessons learned reported to FirstNet and identified by consultants will be evaluated. FirstNet also stated that it plans to establish supplemental standards of conduct, which will operate in conjunction with applicable regulations and existing FirstNet and Department of Commerce policies. Specifically, we reviewed (1) the extent to which FirstNet is carrying out its responsibilities and establishing internal controls for developing the public safety network, (2) how much the public safety network is estimated to cost to construct and operate and how FirstNet plans to become a self-funding entity, and (3) what lessons can be learned from local and regional public-safety network projects.

Why GAO Did This Study For communications during emergencies, public safety officials rely on thousands of separate systems, which often lack interoperability, or the ability to communicate across agencies and jurisdictions. The 2012 act created FirstNet within the Department of Commerce to establish, for public safety use, a nationwide, interoperable, wireless broadband network, which will initially support data transmissions. The 2012 act established numerous responsibilities for FirstNet, provided $7 billion for network construction, and required FirstNet to be self-funding beyond this initial allocation. As part of the effort, FirstNet is working with five “early builder projects” that are building local and regional public-safety broadband networks. GAO was asked to examine FirstNet's progress in establishing the network. GAO assessed (1) FirstNet's progress carrying out its responsibilities and establishing internal controls, (2) how much the network is estimated to cost and how FirstNet plans to become self-funding, and (3) what lessons can be learned from the early builder projects. GAO reviewed FirstNet documentation and public-safety network cost estimates, surveyed all state-designated FirstNet contacts, and interviewed FirstNet officials and public safety stakeholders selected for their telecommunications and public safety experience. What GAO Found The First Responder Network Authority (FirstNet) has made progress carrying out its responsibilities established in the Middle Class Tax Relief and Job Creation Act of 2012 (the 2012 act) but lacks certain elements of effective internal controls. FirstNet is charged with the complex and challenging task of establishing a new, nationwide, wireless broadband network for public safety entities, in consultation with federal, state, local, and tribal stakeholders. The network will initially support interoperable data communications, and later integrate mission-critical voice capabilities as public safety standards for voice communications are developed. FirstNet has made progress establishing an organizational structure, planning for the network, and consulting with stakeholders. FirstNet has also begun establishing policies and practices consistent with federal internal control standards. Officials told GAO that they plan to continue to do so. However, FirstNet has not fully assessed its risks or established standards of conduct—which is an important form of ethical guidance for its personnel . Given that FirstNet faces numerous risks to achieve its complex objectives, fully assessing risks could help FirstNet achieve its objectives and maximize use of its resources. Developing standards of conduct could also help FirstNet address any performance issues in a timely manner. A nationwide public-safety broadband network has been estimated by various entities to cost billions of dollars, and FirstNet faces difficult decisions determining how to fund the network's construction and ongoing operations. These estimates indicate the cost to construct and operate such a network could be from $12 to $47 billion over the first 10 years. The actual cost of FirstNet's network will be influenced by FirstNet's (1) business model, especially the extent of commercial partnerships; (2) use of existing infrastructure; (3) efforts to ensure network reliability; and (4) network coverage. For example, the cost of the network may be higher if FirstNet does not utilize partnerships and some existing infrastructure. To become self-funding, FirstNet is authorized to generate revenue through user fees and commercial partnerships. However, FirstNet faces difficult decisions in determining how to best utilize these revenue sources. For instance, widespread network coverage can attract more users and revenue, but is expensive to construct and maintain, especially in rural areas. FirstNet has taken steps to collect and evaluate information and lessons from the five “early builder projects” that are developing local and regional public-safety networks, but could do more to ensure that the lessons are properly evaluated. For example, FirstNet has asked the projects to report on the experiences of their networks' users and has assigned contractors to collect and log lessons. However, FirstNet does not have a plan that clearly articulates how it will evaluate those experiences and lessons. Although FirstNet told GAO that it remains in close contact with early builder projects, GAO has previously found that a well-developed evaluation plan for projects like these can help ensure that agencies obtain the information necessary to make effective program and policy decisions. Given that the early builder projects are doing on a local and regional level what FirstNet must eventually do nationally, an evaluation plan can play a key role in FirstNet's strategic planning and program management, providing feedback on both program design and execution and ensuring FirstNet has not missed opportunities to incorporate lessons the projects have identified. What GAO Recommends FirstNet should complete its risk assessment, develop standards of conduct, and develop an evaluation plan for early builder projects. FirstNet concurred with the recommendations.

gao_GAO-07-1241T

gao_GAO-07-1241T_0

State and Local Fusion Centers Vary in Their Stages of Development and Characteristics Since September 2001, almost all states and several local governments have established or are in the process of establishing fusion centers. Law enforcement entities, such as state police or state bureaus of investigation, are the lead or managing agencies in the majority of the operational centers we contacted. However, the centers varied in their staff sizes and partnerships with other agencies. At least 34 of the 43 operational fusion centers we contacted reported that they had federal personnel assigned to their centers. Products disseminated and services provided also vary. Federal Agencies’ Efforts to Support Fusion Centers Help to Address Some Reported Challenges DHS and DOJ, recognizing the importance of fusion centers in information sharing, have undertaken efforts that begin to address challenges fusion center officials identified in establishing and operating their centers, such as accessing information, obtaining security clearances, obtaining and retaining personnel, obtaining funding, and finding sufficient guidance and training. Fusion center officials cited challenges accessing and managing multiple information systems. Both DHS and FBI have provided security clearances for state and local personnel in order to access classified information and have set goals to reduce the length of time it takes to obtain a security clearance. However, obtaining and using security clearances represented a challenge for 44 of the 58 fusion centers we contacted. Officials in 43 of the 58 fusion centers we contacted reported facing challenges related to obtaining personnel, and officials in 54 fusion centers reported challenges with obtaining and maintaining funding when establishing and operating their centers, challenges that some of these officials also said affected their centers’ sustainability. To support fusion centers, DHS and FBI have assigned personnel to centers. They said that these issues created confusion for their centers over the steps needed to secure federal funds, made it difficult to plan for the future, and created concerns about the fusion centers’ abilities to sustain their capabilities for the long term. DHS has made several changes to help address these challenges by taking steps to ease the grant process and by adjusting some of the restrictions on the timing and use of grant funds. The federal government, through the ISE, has stated that it expects to rely on a nationwide network of fusion centers as the cornerstone of information sharing with state and local governments, but ISE plans or guidance to date do not articulate the long-term role the federal government expects to play in sustaining these centers, especially in relation to the role of their state or local jurisdictions. It is critical for center management to know whether to expect continued federal resources, such as grant funds, facility support, personnel, and information systems over the long term. DHS, DOJ, and the PM-ISE have taken some steps to develop guidance and provide technical assistance to fusion centers to help address their challenges in the areas of guidance and training. Furthermore, officials at 31 of the fusion centers we contacted said they had challenges training their personnel, and officials at 11 centers we contacted, most of whom were operational centers that had been in existence for more than 2 years, expressed a need for the federal government to establish standards for training fusion center analysts. DHS and DOJ have initiated a technical assistance service program for fusion centers and, along with the PM-ISE, sponsored regional and national conferences and are developing a baseline capabilities document to provide more specific guidelines for fusion centers. However, as of September 2007 the baseline capabilities document is in draft. However, it is also important for fusion center management to understand the federal government’s role with respect to these centers since this affects state and local governments’ support to centers.

Why GAO Did This Study In general, a fusion center is a collaborative effort to detect, prevent, investigate, and respond to criminal and terrorist activity. Recognizing that fusion centers are a mechanism for information sharing, the federal government--including the Program Manager for the Information Sharing Environment (PM-ISE), who has primary responsibility for governmentwide information sharing, the Department of Homeland Security (DHS), and the Department of Justice (DOJ)--is taking steps to partner with fusion centers. This testimony is based on GAO's draft report on state and local fusion centers. It addresses (1) the status and characteristics of the centers and (2) to what extent federal efforts help alleviate challenges fusion centers identified. In conducting this work GAO reviewed center-related documents and conducted interviews with officials from DHS, DOJ, and the PM-ISE, and semistructured interviews with 58 state and local fusion centers. What GAO Found Most states and many local governments have established fusion centers to address gaps in information sharing. Fusion centers across the country vary in their stages of development--from operational to early in the planning stages. Officials in 43 of the centers GAO contacted described their centers as operational, and 34 of these centers had opened since January 2004. Law enforcement entities, such as state police or state bureaus of investigation, are the lead or managing agencies in the majority of the operational centers GAO contacted. However, the centers varied in their staff sizes and partnerships with other agencies. At least 34 of the 43 operational fusion centers we contacted reported that they had federal personnel assigned to their centers. Products disseminated and services provided vary. DHS and DOJ have several efforts under way that begin to address some of the challenges fusion center officials identified. DHS and DOJ have provided many fusion centers access to their information systems, but fusion center officials cited challenges accessing and managing multiple information systems. Both DHS and the Federal Bureau of Investigation (FBI) have provided security clearances for state and local personnel and set timeliness goals. However, officials cited challenges obtaining and using security clearances. Officials in 43 of the 58 fusion centers contacted reported facing challenges related to obtaining personnel, and officials in 54 fusion centers reported challenges with funding, some of which affected these centers' sustainability. They said that these issues made it difficult to plan for the future, and created concerns about the fusion centers' ability to sustain their capability for the long term. To support fusion centers, both DHS and FBI have assigned personnel to the centers. To help address funding issues, DHS has made several changes to address restrictions on the use of federal grant funds. These individual agency efforts help address some of the challenges with personnel and funding. However, the federal government has not clearly articulated the long-term role it expects to play in sustaining fusion centers. It is critical for center management to know whether to expect continued federal resources, such as personnel and grant funding, since the federal government, through an information sharing environment, expects to rely on a nationwide network of centers to facilitate information sharing with state and local governments. Finally, DHS, DOJ, and the PM-ISE have taken steps to develop guidance and provide technical assistance to fusion centers, for instance by issuing guidelines for establishing and operating centers. However, officials at 31 of the 58 centers said they had challenges training their personnel, and officials at 11 centers expressed a need for the federal government to establish standards for fusion center analyst training to help ensure that analysts have similar skills. DHS and DOJ have initiated a technical assistance program for fusion centers. They have also developed a set of baseline capabilities, but the document is in draft as of September.

gao_GAO-03-519T

gao_GAO-03-519T_0

While it will take some time for us to fully answer this question, we view the new strategies, and the framework they provide, as a positive step. The new strategies show cohesion in that they are organized in a hierarchy, share common themes, and cross-reference each other. In addition, the collective strategies are more comprehensive than the single strategy they generally replace because they include more detailed functions and more players. Similarly, among the strategies more relevant to combating terrorism overseassuch as the National Security Strategy of the United States of America, the National Strategy for Combating Terrorism, the National Strategy to Combat Weapons of Mass Destruction, and the National Military Strategy of the United States of Americaall contain either goals or objectives relating to strengthening international relationships; strengthening intelligence gathering and analysis capabilities; and improving capabilities to deter, prevent, and respond to weapons of mass destruction. There are some areas where linkages could be improved. In addition, our more recent work on homeland security stressed the need for partnerships with state and local governments and the private sector. Consistent with GAO’s earlier findings and recommendations, some of the new strategies include not just the federal government, but also these other players as well as the international community. Potential Challenges in Implementing the Strategies The strategies by themselves, no matter how cohesive and comprehensive, will not ensure a strategy-driven, integrated, and effective set of programs to combat terrorism. Given that these strategies are relatively new, GAO has not yet evaluated their implementation, either individually or collectively. For example, we have designated the implementation and transformation of the Department of Homeland Security as a high-risk federal activity. The Congress also will play a key role in implementing these strategies. New Strategies Reflect Long-Standing Programs Regarding the question of whether these strategies are driving programs, it is important to note that these new strategies reflect a host of pre-existing programs. Some of the related policies and programs have been in place for several years. It is important, for example, that federal agencies have clearly defined roles and responsibilities. A key component in integrating federal agencies is interagency coordination. While the strategies generally do not address such coordination mechanisms, we identified them for both homeland security and combating terrorism overseas. The challenge of integration goes beyond the federal level to include state and local governments, the private sector, and the international community. For example, the National Strategy for Homeland Security and the National Strategy for the Physical Protection of Critical Infrastructures and Key Assets provide extended discussions of the importance of partnerships among various federal agencies, state and local governments, the private sector, and to a lesser degree, the international community. One key to assessing overall performance that we have previously called for in strategies is that they define an end-state—what a strategy is trying to achieve. Finally, some end-states are more strategic in nature, the prime example belonging to the National Security Strategy of the United States of America, which seeks to create a “balance of power that favors human freedom: conditions in which all nations and all societies can choose for themselves the rewards and challenges of political and economic liberty.” Although some strategies identify an end-state, most strategies lack detailed performance goals and measures to monitor and evaluate the success of combating terrorism programs. This approach would provide a clearer statement on what the nation hopes to achieve through its programs to combat terrorism. The general lack of specific performance goals and measures in the strategies makes it more important that individual federal agencies have explicit performance goals and related measures. Beyond federal agencies, national goals and measures of success may warrant a dialogue about performance goals and measures for nonfederal partners—state and local governments, the private sector, and the international community. GAO will continue to assist this subcommittee, and the Congress as a whole, in helping the federal government develop and implement programs to protect the United States from terrorism both at home and abroad.

Why GAO Did This Study In GAO's past work, we have stressed the importance of a national strategy to combat terrorism. We stated that such a national strategy should provide a clear statement about what the nation hopes to achieve. A national strategy should not only define the roles of federal agencies, but also those of state and local governments, the private sector, and the international community. A national strategy also should establish goals, objectives, priorities, outcomes, milestones, and performance measures. In essence, a national strategy should incorporate the principles of the Government Performance and Results Act of 1993, which requires federal agencies to set strategic goals, measure performance, and report on the degree to which goals are met. What GAO Found We view the new strategies as a positive step forward. While it will take some time for us to fully evaluate whether they form a cohesive and comprehensive framework, there are some positive indications. The new strategies show cohesion in that they are organized in a hierarchy, share common themes, and cross-reference each other. For example, they provide high-level goals and objectives on the issues of national security in general, and how combating terrorism fits into that larger picture, how to provide for homeland security, and how to combat terrorism overseas. In addition, they provide more detailed goals and objectives for specific functions or areas that include military operations, weapons of mass destruction, money laundering, cyber security, and the protection of physical infrastructures. In addition, the collective strategies are more comprehensive than the single strategy they generally replace because, consistent with our earlier recommendations, they include not just the federal government, but also state and local governments, the private sector, and the international community. There will be many challenges to implementing these strategies in a manner that is strategy-driven, integrated, and effective. Given the recency of these strategies, it is premature to evaluate their collective implementation. Regarding the question of whether these strategies are driving programs, it is important to note that these strategies reflect a host of pre-existing programs: some of the programs to implement the new strategies have been in place for several years. Nonetheless, the strategies address the implementation of some programs more vigorously than before. Regarding the integration of programs, it is important that federal agencies have clear roles and responsibilities to combat terrorism. Given the number of agencies, it is also important that there be mechanisms to coordinate across agencies. We have identified federal agency roles and responsibilities and coordination mechanisms for both homeland security and combating terrorism overseas and will continue to evaluate their effectiveness. For example, we recently have designated the implementation and transformation of the Department of Homeland Security as a high-risk federal activity. Moreover, implementation must extend beyond the federal level to integrate these efforts with state and local governments, the private sector, and the international community. Regarding the effectiveness of these strategies, performance measures will be important to monitor the successes of programs. One key to assessing overall performance that we previously have identified is that strategies should define an end-state of what the strategies are trying to achieve. Some strategies meet this test, but they generally do not include detailed performance measures. This raises the importance of individual federal agencies having performance measures and reporting their progress. Beyond federal agencies, national measures of success may require a dialogue on appropriate performance measures for state and local governments, the private sector, and the international community. Congress also has an important role in authorizing, funding, and overseeing the implementation of these strategies to protect the American people from terrorism both at home and abroad.

gao_GAO-05-415

gao_GAO-05-415_0

SEC’s Revised Mutual Fund Examination Program Offers Potential Benefits but also Poses Significant Oversight Challenges Since the detection of the mutual fund trading abuses in the summer of 2003, SEC has made significant changes to its traditional examination approach, which generally focused on conducting routine examinations of all funds on an established schedule. SEC Has Revised Its Traditional Mutual Fund Examination Approach in the Wake of the Mutual Fund Trading Abuses Historically, routine examinations of mutual fund complexes—groups or families of funds sharing the same adviser or underwriter—have served as the cornerstone of SEC’s mutual fund oversight, accounting for 85 percent of the total fund examinations done from 1998 through 2003. In particular, SEC staff said that routine examinations were not the best tool for broadly identifying emerging compliance problems, since funds were selected for examination based largely on the passage of time, not based on their particular risk characteristics. The key initiatives that SEC is taking to strengthen its mutual fund oversight program are largely intended to focus the agency’s resources on the largest and highest risk funds and activities. The rule is expected to increase SEC’s examination workload, but because of data limitations the precise extent will not be known until hedge fund advisers actually register. SEC Efforts to Ensure Quality Do Not Include Review of Work Papers of Completed Mutual Fund Examinations SEC uses several methods to ensure the quality of its examinations but does not review completed examinations and work papers as done by other regulators to determine whether the examinations were conducted according to procedures or done consistently across field offices. To help ensure that these policies and procedures are followed, SEC relies on experienced supervisors in its field offices to oversee all stages of routine examinations. SEC’s Oversight Examinations of Broker-Dealers Provide Limited Information on the Adequacy of SRO Oversight To assess SRO oversight of broker-dealers, including their mutual fund sales practices, SEC conducts examinations of broker-dealers shortly after they have been examined by SROs. However, these SEC broker-dealer examinations, which involve a significant commitment of agency examination resources, provide limited information on the adequacy of SRO oversight and impose duplicative regulatory costs on the securities industry. For mutual fund examinations, SEC does not require staff to document their examination plans to facilitate supervisory review. For broker-dealer examinations, SEC has not developed an automated system to track the full scope of work completed during examinations and therefore lacks useful information about SRO oversight. Third, to strengthen SEC’s approach to mutual fund examinations, we recommend that SEC establish a policy or procedure for supervisory review of work papers prepared during routine examinations and for documenting such reviews; establish a policy or procedure for preparing a written plan for each routine examination, documenting at a minimum the preliminary objectives and scope of the examination; and consider reviewing on a sample basis completed routine examinations and work papers to assess the quality and consistency of work within and across the field offices conducting examinations. Similarly, SEC’s inability to conduct examinations of all mutual funds within a reasonable period will limit its capacity to accurately distinguish relatively higher risk funds from lower risk funds and effectively target its limited examination resources on those funds posing the highest risks. Scope and Methodology To identify and assess the changes SEC has made to or is planning for its mutual fund examination program, we reviewed SEC testimony, speeches, reports, and other documents related to the agency’s mutual fund examination program. Securities and Exchange Commission’s (SEC) Broker-Dealer Examination Guidance and Training You asked us to provide information about aspects of SEC’s oversight of the broker-dealer industry, including (1) how SEC, NASD, and the New York Stock Exchange (NYSE) share information, including written examination guidance, related to their review of mutual fund sales practices and other examination priorities; (2) how SEC distributes and stores examination guidance for use by its broker-dealer examiners; and (3) what training SEC has provided to its broker-dealer examiners on mutual funds and other topics, and how it tracks and assesses such training. Through its oversight role, SEC reviews aspects of the self-regulatory organization (SRO) examination modules, including the mutual fund sales practice module.

Why GAO Did This Study As the frontline regulator of mutual funds, the Securities and Exchange Commission (SEC) plays a key role in protecting the nearly half of all U.S. households owning mutual funds, valued around $8 trillion in 2005. Mutual fund abuses raised questions about the integrity of the industry and quality of oversight provided by SEC and self-regulatory organizations (SRO) that regulate broker-dealers selling funds. This report assesses (1) changes SEC has made to, or is planning for, its mutual fund exam program; (2) key aspects of SEC's quality control framework for routine fund exams; and (3) the adequacy of SEC's oversight of NASD and the New York Stock Exchange in protecting shareholders from mutual fund sales abuses. What GAO Found SEC is initiating several changes intended to strengthen its mutual fund exam program but faces challenges overseeing the fund industry. In the wake of the fund abuses, SEC has revised its past approach of primarily conducting routine exams of all funds on a regular schedule. It concluded these exams were not the best tool for identifying emerging problems, since funds were not selected for examination based on risk. To quickly identify problems, SEC is shifting resources away from routine exams to targeted exams that focus on specific risks. It will conduct routine exams on a regular schedule but only of funds deemed high risk. SEC also is forming teams to monitor some of the largest groups of advisers and funds. Although SEC is seeking to focus its resources on higher risk funds and activities, the resource tradeoffs it made in revising its oversight approach raise significant challenges. The tradeoffs may limit SEC's capacity not only to examine funds considered lower risk within a 10-year period but also to accurately identify which funds pose higher risk and effectively target them for routine examination. Potentially taxing its resources further, SEC recently adopted a rule to require advisers to hedge funds (investment vehicles generally not widely available to the public) to register with it. This rule is expected to increase SEC's exam workload, but the precise extent is not yet known. SEC has integrated some quality controls into its routine exams, but certain aspects of its framework could be improved. It relies on experienced staff to oversee all exam stages but does not expressly require supervisors to review work papers or document their review. GAO found deficiencies in key SEC exam work papers, raising questions about the quality of supervisory review. SEC also does not require examiners to prepare written exam plans, though they use considerable judgment in customizing each exam. Written plans could serve as a guide for conducting exams and reviewing whether exams were completed as planned. As done by other regulators, SEC also could review a sample of work papers to test compliance with its standards. A primary tool that SEC uses to assess the adequacy of SRO oversight of broker-dealers offering mutual funds provides limited information for achieving its objective and imposes duplicative costs on firms. To assess SRO oversight, SEC reviews SRO exam programs and conducts oversight exams of broker-dealers, including their mutual fund sales practices. SEC's oversight exams take place 6 to 12 months after SROs conduct their exams and serve to assess the quality of SRO exams. However, GAO reported in 1991 that SEC's oversight exams provided limited information in helping SROs to improve their exam quality, because SEC and the SROs used different exam guidelines and their exams often covered different periods. GAO found that these problems remain, raising questions about the considerable resources SEC devotes to oversight exams. GAO also found that SEC has not developed an automated system to track the full scope of work done during its oversight exams. Thus, SEC cannot readily determine the extent to which these exams assess mutual fund sales practices.

gao_GAO-15-699T

gao_GAO-15-699T_0

BLM Has Different Policies for Bonding Wind and Solar Projects, but a Proposed Rule Would Establish Consistent Requirements As detailed in our report, in 2008, BLM issued a wind energy development policy that includes provisions for bonding wind energy projects on federal land. BLM Has About $100 Million in Bonds for Wind and Solar Projects, but the Systems for Tracking These Bonds Are Not Reliable We found that BLM has about $100 million in bonds—primarily in the form of letters of credit and surety bonds—to cover reclamation costs associated with 12 solar rights-of-way and 108 wind rights-of-way on federal land in nine western states, according to our analysis of BLM data. BLM tracks bonds through LR2000 and the Bond and Surety System, but we found that neither system was reliable for this purpose. We found instances where a bond’s status or amount had not been updated in one or both systems. Because information in these two data systems was missing, inaccurate, or out of date, BLM has limited assurance that either system is reliable for tracking wind and solar bonds to ensure that bonding policies are being followed and that all projects have the required bonds. BLM has taken some limited steps to improve its bonding data. BLM Has Limited Assurance That Bonds for Wind and Solar Rights-of-Way Will Cover Reclamation Costs BLM has limited assurance that bonds for wind and solar rights-of-way will cover reclamation costs. BLM also inconsistently adheres to its policies for the periodic review of the amounts of wind and solar bonds to verify their adequacy. We found that 14 out of 45 wind and solar development rights-of-way were underbonded by as much as $15 million in total—approximately $5.5 million for wind rights-of-way and as much as $9 million for solar rights-of- way—according to our review of BLM project files and data.we identified 10 wind rights-of-way where the bond amount was lower than the $10,000-per-turbine minimum established in BLM’s 2008 wind policy. Unclear documentation of bond decisions. Specifically, for 21 of the 33 wind rights-of-way we reviewed, there was little or no documentation to support the bond amount. Specifically, for 1 right-of-way, the holder did not develop a reclamation cost estimate, as directed by BLM’s 2010 solar policy. BLM also does not adequately ensure that wind and solar bond instruments are properly secured, handled, and stored. However, the National Renewable Energy Inconsistent adherence to periodic review policies. Of the 45 wind and solar rights-of-way we reviewed, 23 had bonds that were at least 4 months overdue for an adequacy review. BLM does not have detailed policies to ensure that all bonds are properly maintained and secured and bond decisions accurately documented in project files. As a result, BLM may not have accurate and complete information with which to track wind and solar bonds, and BLM has limited assurance that the bonds in place will be adequate to cover reclamation costs if the right-of-way holder does not meet its obligations. As a result of these findings and to help ensure that bonds are adequate to cover reclamation costs for wind and solar projects on federal land, we made five recommendations to the Secretary of the Interior in our June 2015 report. Specifically, we recommended that the Secretary direct the Director of the Bureau of Land Management to develop detailed policies for processing wind and solar bonds to ensure bonds are properly secured, handled, and stored; develop policies that detail how information related to bonding decisions should be documented in project files; develop a policy that all data for wind and solar energy projects be entered in LR2000 and the Bond and Surety System within 10 business days; establish data standards for the Bond and Surety System; and develop an LR2000 action code to automatically notify BLM staff that a right-of-way is due for a bond adequacy review. In its comments on a draft report, the agency concurred with each of these recommendations.

Why GAO Did This Study Renewable energy projects can affect thousands of acres of federal land and involve significant infrastructure. BLM directs renewable energy developers to obtain bonds to cover the costs of returning the land to its pre-developed condition when the project terminates, a process called reclamation. Reclamation can cost millions and take years to complete. This testimony addresses (1) BLM’s policies for the bonding of wind and solar projects on federal land; (2) the amount and types of bonds held by BLM for the reclamation of these projects, and how BLM tracks the bonds; and (3) the extent to which BLM ensures that bonds for wind and solar rights-of-way are adequate to cover reclamation costs. It is based on a June 2014 report, for which GAO conducted a file review of all 45 wind and solar development project rights-of-way with a bond as of April 15, 2014; analyzed data from BLM data systems; reviewed relevant federal laws, regulations, and BLM policies and procedures; and interviewed agency officials. What GAO Found The Department of the Interior’s Bureau of Land Management (BLM) has different policies for the bonding of wind and solar projects on federal land. For example, BLM’s 2008 wind policy established minimum bond amounts, but BLM’s 2010 solar policy set no minimum. However, the agency has issued a proposed rule that would establish consistent requirements for the bonding of the two types of projects in several areas, including minimum bond amounts. BLM has about $100 million in bonds for the reclamation of wind and solar projects on federal land. These bonds are primarily letters of credit and surety bonds. BLM has two data systems for tracking bonds, but GAO found that neither system is reliable for this purpose. Specifically, GAO found instances in both systems where information was missing or inaccurate, or had not been updated. Further, the agency does not have a timeliness standard for wind and solar data entry, contrary to having such a standard for its mining program. Without accurate or complete information, BLM has limited assurance that its data systems are reliable for tracking wind and solar bonds to ensure that bonding policies are being followed and that projects have the required bonds. BLM has limited assurance that bonds for wind and solar rights-of-way will cover reclamation costs, leaving the federal government potentially at financial risk if developers do not complete reclamation. GAO found about one-third of the wind and solar rights-of-way were underbonded by as much as $15 million in total. Also, BLM did not clearly document how it made its bond decisions, contrary to government standards that call for documentation of significant events. Specifically, GAO found that for about two-thirds of the wind rights-of-way, there was little or no documentation to support the bond amount. In addition, BLM does not adequately ensure that wind and solar bond instruments are properly secured, handled, and stored and does not have policies related to this. In one BLM field office, a staff member told GAO that someone mistakenly shredded several bonds. BLM also does not consistently adhere to its policies calling for periodic review of wind and solar bond amounts to verify their adequacy. GAO found about half of the bonds were at least 4 months overdue for review. BLM officials acknowledged that automatic notifications could be established in their data system as to when reviews are due. Without policies to document decisions and properly secure bonds, and steps to ensure bond adequacy reviews, BLM has limited assurance that bonds in place will be adequate to cover reclamation. What GAO Recommends In its June 2014 report, GAO recommended, among other things, that BLM develop policies on documenting bonding decisions, the proper handling and storage of bonds, and timely data entry. GAO also recommends that BLM take steps to ensure projects are periodically reviewed to ensure bond adequacy. Interior generally concurred with GAO’s recommendations.

gao_GAO-01-191

gao_GAO-01-191_0

These requirements include steps for improving protective services; services to children and families; and the placement, supervision, and review of children in foster care (app. However, these changes have generally fallen short of expected results. High turnover adversely affects CFSA’s capacity to effectively manage the provision of services to children and families. Critical initiatives include collaborative operations among the agencies that provide child welfare and other support services, as well as case-specific initiatives aimed at bringing together children, family members, social workers, attorneys, and others to help address the needs of children and their families.Some participants in the District’s child welfare system have recently taken initial steps to improve operations. For example, District agencies have initiated recent efforts to integrate child welfare services with other family services. The Structural Issues Are Important in Transferring CFSA Back to the District Long-standing challenges such as a lack of effective working relationships in the child welfare system impede the District’s ability to fully apply best practices to protect children. As it prepares for the transfer of CFSA to local governance, the District faces many organizational and operational challenges. Prepared with input from key participants in the District’s child welfare system and presented to the subcommittee by the Mayor in October 2000, this plan addresses the roles of OCC, MPD, the D.C. Superior Court, and others in the District’s child welfare system.In October 2000, the U.S. District Court issued a consent order terminating the receivership upon the satisfaction of several major conditions, such as the enactment of legislation ending bifurcated investigations of child abuse and neglect allegations, the appointment of a child welfare agency administrator by the District’s mayor, and the development of licensing standards for foster homes and group homes. An assessment of staff training needs.

Why GAO Did This Study Many children have languished in the care of the District of Columbia's child welfare system for extended periods of time. Years of indifference, managerial shortcomings, and long-standing organizational divisiveness have undermined the system's ability to safeguard these children. As a result of these prolonged deficiencies, the U.S. District Court for the District of Columbia issued a remedial order in 1991 to improve the performance of the child welfare agency. GAO assessed the agency's progress in complying with the court's requirements, specifically examining how financial and operational changes made by the Children and Family Services Agency (CFSA) have affected the protection of children and the provision of services to children and families, the extent to which critical elements of an effective child welfare system have been applied in the District, and issues that need to be addressed in planning for the transfer of CFSA back to local governance. What GAO Found GAO found that the financial and operational changes have not significantly improved the protection of children or the delivery of other child welfare services. Although the District has started to integrate child welfare services with other support services, it still lacks a fully developed collaborative structure to help foster more efficient day-to-day operations and improve program accountability. Furthermore, multiple issues must be resolved before CFSA can be transferred back to local governance.

gao_GAO-01-795

gao_GAO-01-795_0

Conclusions Original plans for identifying spectrum to support third generation mobile wireless systems by July 30, 2001, and to auction licenses by September 30, 2002, were premature. We agree with FCC and the Department of Commerce that delaying the identification of spectrum and the auction of licenses for third generation wireless systems could serve the public interest. Adequate information is not currently available to fully identify and address the uncertainties and risks of reallocation. Thus, DOD and the federal government could make decisions affecting national security without knowing the full extent of risks they face or the steps available to reduce those risks. Extending the current schedule for identification and auction of licenses for this portion of the spectrum would allow DOD to complete technical and operational assessments and to consider future spectrum requirements of DOD systems. In addition, a delay would allow the federal government and DOD to further consider the adequacy of existing national spectrum strategies affecting international agreements and DOD overseas military operations, to modify these strategies as necessary, and to incorporate these strategies into a DOD long-range spectrum plan.

What GAO Found Current plans for identifying spectrum to support third generation mobile wireless systems by July 30, 2001, and to auction licenses by September 30, 2002, are premature. GAO agrees with the Federal Communications Commission (FCC) and the Department of Commerce that delaying the identification of spectrum and the auction of licenses for third generation wireless systems could serve the public interest. Adequate information is not currently available to fully identify and address the uncertainties and risks of reallocation. The Department of Defense (DOD) and the federal government could make decisions affecting national security without knowing the full extent of risks they face or steps available to reduce those risks. Extending the current schedule for the identification and auction of licenses for this portion of the spectrum would allow DOD to complete technical and operational assessments and to consider the nation's future spectrum requirements. In addition, a delay would allow time to further consider the adequacy of existing national spectrum strategies affecting international agreements and for DOD overseas military operations to modify these strategies as necessary and to incorporate them into the nation's long-range spectrum plan.

gao_HEHS-98-60

gao_HEHS-98-60_0

MAFs primarily served patients with urgent but uncomplicated conditions and stabilized patients with more complicated needs before transferring them to full-service hospitals. Moreover, Medicare’s costs for inpatient care at MAFs were lower than if the care had been furnished in rural hospitals. RPCHs Treat Patients With Less Complex Illnesses or Stabilize Them for Transfer As envisioned when the program was authorized, most RPCH inpatients have less complex illnesses that do not require intensive or high-technology care. In addition, RPCHs often serve as the source of primary care for residents in their areas. The average stay for the 1,708 inpatients treated by RPCHs between September 1993 and May 1996 was 2.85 days. As we found when we reviewed services provided by MAFs in Montana, the three medical conditions most commonly treated by the RPCHs were pneumonia (247 cases), heart failure and shock (141 cases), and inflammation of the digestive canal (99 cases). The 13 RPCHs treated more than 6,700 different Medicare beneficiaries during their latest available cost-reporting period and submitted more than 28,000 outpatient claims for services for these patients (see table 2). Although RPCH costs are slightly higher (8.8 percent) than PPS payments to rural hospitals, RPCH costs would have been lower if claims included in our review had complied with the 72-hour maximum length-of-stay requirement in effect when these admissions occurred. Payments for those days totaled an estimated $295,000. Medicare RPCH payments for the 163 beneficiaries who were initially treated at an RPCH and transferred to a full-service PPS hospital totaled about $322,000 (see app. Medicare payments to RPCHs for inpatient stays were, however, somewhat higher than payments would have been to rural PPS hospitals to treat the same patients. A primary reason for this was that about 21 percent of the inpatient cases had lengths of stay that exceeded the 72-hour maximum in effect at the time, and 8 percent would have exceeded the 96-hour limit for CAHs. HCFA also has not established a way of checking compliance with the requirement that a physician certify that patients admitted to RPCHs, now CAHs, are expected to be discharged within the maximum allowed length-of-stay limit. Objectives, Scope, and Methodology Our objectives were to develop information on the cases treated and inpatient and outpatient services performed at RPCHs, the relative cost of providing inpatient health care services to Medicare beneficiaries at RPCHs and acute-care hospitals, and compliance with the physician certification and 72-hour inpatient stay requirement. We then compared those costs with the amount Medicare would have paid an acute-care hospital under PPS for the same DRG at hospitals in the rural areas of the applicable states and the urban hospitals nearest to the RPCHs. From the outpatient claims, we extracted data on the types of services provided to Medicare beneficiaries. For each patient transferred, we compared the RPCH cost to what a rural PPS hospital would have been paid if it had transferred the patient. We did not verify RPCHs’ compliance with the requirement that physicians certify that a Medicare patient can reasonably be expected to be discharged within 72 hours (changed by BBA to 96 hours) because this certification is entered on patient records maintained by RPCHs and it was not practical for us to review these records.

Why GAO Did This Study Pursuant to a legislative requirement, GAO reviewed the Rural Primary Care Hospital (RPCH) Program, focusing on: (1) assessing compliance with the requirements that RPCHs have an average length of stay of 72 hours or less and that physicians certify that inpatients are expected to be discharged within 72 hours; (2) assessing whether these two requirements affected the type of patients treated by RPCHs; and (3) comparing Medicare's cost for inpatient services in RPCHs to what those costs would likely have been in hospitals paid under the prospective payment system. GAO also looked at how the experience under the RPCH program could be used in implementing the expanded Critical Access Hospital (CAH) Program. What GAO Found GAO noted that: (1) RPCHs provide additional and, likely, much more proximate access to health care for Medicare beneficiaries residing in the rural areas where the facilities operate; (2) these facilities treat, on an inpatient basis, beneficiaries with less complex illnesses and furnish important stabilization and transfer services for those with more complex conditions; (3) moreover, RPCHs serve as the source of outpatient care ranging from primary to emergency care; (4) the 13 RPCHs for which complete data were available had 1,708 Medicare inpatient cases since they were certified to participate in the program; (5) the RPCHs provided the full inpatient stay for 1,545 beneficiaries who had less complex needs and stabilized and transferred an additional 163 beneficiaries to full-service hospitals; (6) the RPCHs treated primarily patients (65 percent of the total) who had respiratory ailments such as pneumonia, circulating system problems such as congestive heart failure, and digestive system illnesses such as inflammation of the digestive canal; (7) in addition, during the most recent cost-reporting period, these RPCHs provided more than 28,000 outpatient visits for more than 6,700 beneficiaries; (8) these outpatient visits ranged from those for primary care to emergency treatment for injuries; (9) Medicare payments for the 1,545 cases from September 1993 to May 1996 treated solely by an RPCH were slightly more than if these cases had been treated at full-service rural hospitals and somewhat less than if they had been treated at urban hospitals; (10) a primary reason why RPCH costs were higher than those for rural hospitals was that about 21 percent of the stays exceeded the 72-hour stay limitation in effect at the time; (11) without the extra inpatient days these cases involved, RPCH costs would likely have been lower than those for rural full-service hospitals; (12) the Health Care Financing Administration (HCFA) had not established a way to enforce the 72-hour maximum length-of-stay requirement for RPCHs, and it is important that the agency do so for the replacement CAH program's 96 hour maximum; (13) as is to be expected with limited-service hospitals, RPCHs in the four states GAO studied transferred a higher portion of patients to other hospitals than did full-service rural hospitals; and (14) total Medicare payments for the 163 transfer cases were about $148,000 higher than if a full service rural hospital had transferred the patients to another acute care hospital because of differences in the way payments are determined in the two situations.

gao_GAO-08-282

gao_GAO-08-282_0

Specifically, the Immigration and Nationality Act grants the Secretary of Homeland Security discretionary authority to parole an alien into the United States temporarily on a case-by-case basis for urgent humanitarian reasons, such as to obtain medical treatment not available in his or her home country, visit a dying relative, or reunify young children with relatives. Once the purpose of the parole is fulfilled, the alien is to leave the United States. About Three-Fourths of Humanitarian Parole Applications Were Denied with Few Differences in Denial Rates by Demographic Characteristic and Some Differences in Adjudicator Recommendations The 8,748 humanitarian parole applications that HAB adjudicated from October 1, 2001, through June 30, 2007, displayed various characteristics, and grant and denial rates did not differ for most of them, although there were some differences in adjudicator recommendations. Specifically, 54 percent were female; 46 percent, male. Forty-five percent of the applicants came from 11 countries, with Mexico having the greatest number of applicants. Sixty-four percent of the requests for humanitarian parole were for two reasons—family reunification (49 percent) and medical emergency (15 percent). We estimate that 57 percent of the denials specified as a reason that the applicant had not first exhausted all other avenues of immigration, such as applying for a visa, and that in 13 percent of the denials, applicants had committed an infraction of immigration law or other crime—both of which are generally disqualifying factors, absent what the USCIS Web site on humanitarian parole describes as “a very compelling emergency.” We found few differences in the granting or denial rates with regard to the demographic characteristic of gender and, with two exceptions, with regard to country of residence. The needed medical treatment was available outside the United States. The latter factor—the adjudicator involved—must be considered in the context of the adjudication process, which requires that each application be reviewed by two different adjudicators and that if the first two adjudicators disagree in their recommendation, a third adjudicator then reviews the application and makes a recommendation. According to HAB officials, variations were expected in the grant/denial recommendation rates among adjudicators, since the facts and circumstances of each application varied and adjudicators do not all review the same applications. HAB officials told us that they have followed a practice of applying this policy to those who are under age 18, since 18 is the age of majority in many countries. Each adjudication outcome requires at least two adjudicators’ recommendations and sometimes a “tie breaker” recommendation by a third adjudicator before a final decision is made by the HAB Branch Chief or a designee. HAB Generally Had Effective Internal Controls, but Those Related to Staffing, Training, and Communication with Stakeholders Could Be Strengthened HAB has designed internal controls to help ensure that requests for humanitarian parole are decided in a fair, equitable, and objective manner, and our review of case files and the PCTS database found that these controls have been generally effective, that is, functioning as intended. First, following HAB’s transfer from ICE to USCIS, HAB may no longer have a sufficient number of permanent staff to ensure continued compliance with its policies and procedures. These areas relate to the number of HAB staff needed to ensure it continues to follow its policies and procedures, a training program for new staff not familiar with humanitarian parole and/or staff who may be detailed to the HAB to help process applications, and whether USCIS’s Web site—the primary means of communicating program criteria to potential applicants—has sufficient information about the circumstances under which a person may apply for humanitarian parole. Recommendations for Executive Action To help ensure that HAB is able to process applications for humanitarian parole consistent with its own policies and procedures and to help ensure applicants understand the humanitarian parole rules and processes, we recommend that the Secretary of DHS direct the Director of USCIS to take the following three actions coordinate with the HAB Branch Chief to determine the number of staff HAB needs to process humanitarian parole applications in accordance with its policies and procedures and assign them to HAB; develop a formal training program curriculum on adjudication of humanitarian parole cases for new and detailed staff; and revise USCIS’s Web site instructions for humanitarian parole to help ensure that applicants understand the need to first exhaust all other immigration avenues and the criteria HAB uses to adjudicate humanitarian parole applications. Citizenship and Immigration Service’s (USCIS) Humanitarian Assistance Branch’s (HAB) policies and procedures for adjudicating applications for humanitarian parole. Data Analysis We performed comprehensive analyses on PCTS data covering the period from October 1, 2001 through June 30, 2007.

Why GAO Did This Study The Immigration and Nationality Act requires that most visitors and immigrants to the United States obtain a visa. Aliens unable to obtain a visa, and with a compelling humanitarian need, may apply to the Department of Homeland Security (DHS) to be granted humanitarian parole. This permits an alien to enter the United States on a temporary basis. Parole responsibility rests with DHS's Humanitarian Assistance Branch (HAB), which was transferred to the U.S. Citizenship and Immigration Services (USCIS) in August 2007. In response to congressional requesters, GAO examined (1) the characteristics of those who applied for humanitarian parole since October 1, 2001, and (2) internal controls HAB designed to adjudicate applications along with the extent to which HAB adhered to them. To conduct this work, GAO analyzed HAB documents and data, such as its protocols and database of all parole applications since October 1, 2001; interviewed HAB officials about adjudication processes; and interviewed attorneys who had helped individuals file for parole. What GAO Found The 8,748 humanitarian parole applications that HAB adjudicated from October 1, 2001, through June 30, 2007, displayed various characteristics--54 percent of the applicants were female and 46 percent, male; 45 percent of the applicants came from 11 countries, with the largest number from Mexico. Sixty-four percent of the requests for humanitarian parole were for family reunification or medical emergency. Persons under age 18 had a 35 percent grant rate--higher than the rate for applicants over 18 and consistent with the stated purposes of humanitarian parole. Seventy-six percent of applications were denied; 24 percent were granted. Among multiple reasons cited for denial by adjudicators in a projectible sample of cases we analyzed, an estimated 57 percent of applicants had not exhausted other avenues of immigration available to them before applying for humanitarian parole, as generally is required. Data analysis revealed few differences in parole denial rates with regard to gender or, with two exceptions, country of residence. While denial recommendation rates for individual adjudicators varied, HAB officials stated that this is expected because the facts and circumstances of cases vary and adjudicators have different backgrounds and experiences that might affect their reviews of an application. HAB has designed internal controls to help ensure that requests for humanitarian parole are decided in accordance with applicable guidelines; these controls have been functioning as intended. Specifically, HAB has, among other controls, clear and detailed written policies and procedures, including a requirement that every application be reviewed by two adjudicators and that if they disagree, a third is to make a "tie-breaking" recommendation. A final decision is then made by the HAB Branch Chief or a designee, but if the Branch Chief decides to override the adjudicators' recommendations, the case is first discussed with higher-level officials. A computerized data system also records key information in every case. While HAB's controls are generally effective, three areas can be strengthened. First, following a transfer of HAB to USCIS, HAB may no longer have a sufficient number of permanent staff to ensure it continues to follow policies and procedures, since two adjudicators are insufficient to provide independent reviews of requests for reconsideration--HAB guidance recommends that such requests be reviewed by two additional adjudicators not previously involved. Second, HAB does not have a formal training program for new staff who may be detailed to help process applications. Such training is essential to ensure that criteria for granting and denying parole are applied consistently and fairly by the adjudicators. Third, USCIS's Web site has limited information about the circumstances under which a person may apply for humanitarian parole. More information and clearer instructions could reduce the number of applications from those who had not taken the steps generally required before applying for humanitarian parole, such as exhausting other available avenues for entry into the United States.

gao_GAO-11-563

gao_GAO-11-563_0

No Impacts on Off-site Environmental Resources from Leaks at the Three Plants to Date Have Been Discernible, but Future On-site Impacts Are Less Certain, and Some Risks May Not Be Fully Understood, according to Experts in Our Environmental Impacts Discussion Group Based on the information that is available on the case studies considered by the experts, the experts in our environmental impacts discussion group concluded that the leaks have had no discernible impact on off-site environmental resources. Consequently, some of the experts noted that when a licensee decommissions a plant with this level of groundwater contamination, the licensee may have to conduct costly remediation to be able to meet NRC regulations for unrestricted release of the site, or the site could have deed restrictions placed on its future use. Finally, experts identified the need for licensees’ monitoring data and assessments of impacts to be more transparent and to be independently reviewed to provide greater public confidence in them. NRC Requires Licensees to Inspect the Function of Their Safety-Related Underground Piping Systems, Monitor the Plant Environs for Radiation, and Report Releases in a Timely Manner NRC inspection requirements related to underground piping systems at all 104 U.S. nuclear power plants focus on ensuring the functionality of safety-related piping systems, monitoring the plant environs for radiation, and reporting planned and unplanned releases. Even though NRC has not generally required licensees to have on-site groundwater monitoring wells, most plants have installed some on- site wells that could help detect and monitor leaks. The Nuclear Power Industry, Licensees, and NRC Have Taken a Variety of Actions in Response to Underground Piping Leaks In response to underground piping leaks at nuclear power plants, the nuclear power industry adopted two voluntary initiatives largely intended, according to the Nuclear Energy Institute (NEI), to enhance public confidence in the operation and maintenance of their plants. This second initiative—called the Buried Piping Integrity Initiative—was designed to provide reasonable assurance of structural and leaktight integrity of all buried pipes. Licensees’ actions in response to identified leaks at their power plants have varied, ranging from simply repairing the leak source and documenting the extent of the leak for future cleanup, to performing extensive mitigation. Moreover, some of the stakeholders we interviewed noted that some of the inspection techniques used in the oil and gas industry to provide additional information about the structural integrity of underground pipes could be used in the nuclear power industry. Some Stakeholders Said That NRC Should Require More Timely Leak Information from Licensees and Should Make It More Accessible to the Public According to some stakeholders, NRC should require licensees to report information about the level and extent of groundwater contamination from a leak and the licensee’s assessment of a leak’s impact in a more timely manner. For example, some of these stakeholders said that NRC could improve the accessibility of information on its Web site. NRC’s groundwater monitoring requirements are intended to identify when the public could be or has been exposed through drinking water to radiation doses above certain limits rather than to promptly detect underground piping system leaks. NRC also agreed with each of the report recommendations and asserted that they have established activities to address the recommendations. In responding to our recommendation to periodically evaluate the extent to which the industry voluntary Groundwater Protection Initiative will result in prompt detection of leaks and, based on these evaluations, determine whether the agency should expand its groundwater monitoring requirements, NRC stated that “the public can be assured that the NRC will continue to review the status of industry implementation of the initiative and consider regulatory changes as appropriate.” Specifically, NRC said that it reviews reported groundwater monitoring results and changes to licensees’ programs for identifying and controlling spills and leaks. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) determine experts’ opinions on the impacts, if any, that underground piping system leaks have had on public health and the environment; (2) assess Nuclear Regulatory Commission (NRC) requirements of licensees for inspecting underground piping systems and monitoring and reporting on leaks from these systems; (3) identify actions the nuclear power industry, licensees, and NRC have taken in response to underground piping system leaks; and (4) identify, according to key stakeholders, what additional NRC requirements, if any, could help prevent, detect, and disclose leaks from underground piping systems. Appendix II: Case Studies for Experts’ Consideration We worked with the National Academy of Sciences to convene groups of experts to discuss the impacts that underground piping system leaks have had on public health and the environment.

Why GAO Did This Study All U.S. nuclear power plant sites have had some groundwater contamination from radioactive leaks, and some of these leaks came from underground piping systems. The Nuclear Regulatory Commission (NRC) regulates nuclear power plants to protect public health and the environment from radiation hazards. GAO was asked to (1) determine experts' opinions on the impacts, if any, of underground piping system leaks on public health and the environment; (2) assess NRC requirements of licensees for inspecting these systems and monitoring and reporting on leaks; (3) identify actions the nuclear power industry, licensees, and NRC have taken in response to leaks; and (4) identify additional NRC requirements, if any, that key stakeholders think could help prevent, detect, and disclose leaks. GAO convened expert discussion groups through the National Academy of Sciences and asked experts to review three case studies, analyzed documents, visited seven plant sites and two NRC regional offices, and interviewed stakeholders. What GAO Found While experts in our public health discussion group generally agreed that radioactive leaks at the three nuclear power plants in our case studies of actual events had no discernible impact on the public's health, these experts noted that additional information could enhance the identification of the leaks and the characterization of their impacts. The experts in our environmental impact discussion group concluded that environmental resources beyond the plant site have not been impacted discernibly, but that on-site contamination could affect plant decommissioning; for example, the licensee may have to conduct costly remediation to meet NRC regulations for unrestricted release of the site. Experts also identified the need for licensees to transparently report monitoring data and for licensees' groundwater monitoring programs to be independently reviewed. NRC inspection requirements focus on ensuring the functionality of underground piping systems that are essential for both the safe operation and the shutdown of plants rather than providing information about the condition of the underground piping systems. In addition, NRC's groundwater monitoring requirements generally focus on monitoring off-site locations, where a member of the public could be exposed to radiation, but not on onsite groundwater monitoring, which can improve the likelihood that leaks will be detected before they migrate off-site. In response to leaks, the nuclear power industry has implemented two voluntary initiatives to increase public confidence in plant safety. The first initiative was intended to improve on-site groundwater monitoring to promptly detect leaks. The second was intended to provide reasonable assurance of underground piping systems' structural and leaktight integrity. Licensees' responses to detected leaks have varied, ranging from repairing the leak source and documenting the leak's extent, to performing extensive mitigation. In addition, NRC has assessed its regulatory framework for, and oversight of, inspection of underground piping systems and groundwater monitoring. Based on the low risk posed by spills to date, NRC determined that no further regulations are needed at this time but has committed to such actions as gathering information on underground piping leak trends and reviewing codes and standards for underground piping. Key stakeholders identified additional NRC requirements that they thought could help prevent, detect, and disclose leaks. Some saw a need for NRC to require licensees to inspect the structural integrity of underground piping using techniques used in the oil and gas industry, while noting the challenges to applying such techniques at nuclear power plants. Industry is undertaking research to overcome these challenges. Stakeholders also noted that NRC should enhance its on-site groundwater monitoring requirements to promptly detect leaks and minimize their impacts. Finally, stakeholders said that NRC should require licensees to provide leak information in a more timely fashion and should make that information more accessible to the public. What GAO Recommends GAO recommends that NRC periodically assess the effectiveness of the groundwater initiative and determine whether structural integrity tests should be included in licensee inspection requirements, when they become feasible, based on industry research. NRC stated it agrees with the report and recommendations and asserted that NRC has taken relevant actions.

gao_GAO-08-712

gao_GAO-08-712_0

Long-Term Care Insurance LTCI helps pay for the costs associated with long-term care services. Long-Term Care Insurance Regulation Oversight of the LTCI industry is largely the responsibility of states. States Have Made Efforts to Improve Oversight of Rate Setting, Though Some Consumers Remain More Likely to Experience Rate Increases Than Others In recent years, many states have made efforts to improve oversight of rate setting, though some consumers remain more likely to experience rate increases than others. While regulators in most of the 10 states we reviewed told us that they expect these more comprehensive standards will be successful, they noted that more time is needed to know how well the standards will work. Regulators from the states in our review also use other standards or practices to oversee rate setting, several of which are intended to keep premium rates more stable. Specifically, consumers may face more risk of a rate increase depending on when they purchased their policy, from which company their policy was purchased, and which state is reviewing a proposed rate increase on their policy. Many States Adopted More Comprehensive Rate Setting Standards since 2000, but It Is Too Soon to Determine the Effectiveness of the Standards Since 2000, NAIC estimates that more than half of states nationwide have adopted new rate setting standards for LTCI. States that adopted new standards generally moved from the use of a single standard designed to ensure that premiums were not set too high to the use of more comprehensive standards designed to enhance rate stability and provide other protections for consumers. Although a growing number of consumers will be protected by the more comprehensive standards going forward, as of 2006 many consumers had policies that were not protected by these standards. Some Consumers May Remain More Likely to Experience Rate Increases Than Others Although some states are working to improve oversight of rate setting and to help ensure LTCI rate stability by adopting the more comprehensive standards and through other efforts, there are other reasons why some consumers may remain more likely to experience rate increases than others. 1.) States in Our Review Oversee Claims Settlement Practices Using Consumer Complaints and Examinations, and Several States Are Considering Additional Protections States in our review oversee claims settlement practices by monitoring consumer complaints and conducting market conduct examinations in an effort to ensure that companies are complying with claims settlement standards. Claims settlement standards in these states largely focus on timeliness, but there is notable variation in which standards states adopted and how states define timeliness. For example, regulators from 4 states told us that their state is considering an independent review process for consumer appeals of claims denials. States’ Claims Settlement Standards Largely Focus on Ensuring Timely Practices, Though States Differ in Specific Standards Adopted and in Definitions of Timeliness The 10 states in our review have standards established by law and regulations for governing claims settlement practices. Specifically, the standards are designed to ensure the timely investigation and payment of claims and prompt communication with consumers about claims. State regulators frequently resolve individual complaints by assisting consumers in obtaining payment. Regulators from four states also told us that they regularly review complaint data to identify trends in company practices over time or across companies, including practices that may violate claims settlement standards. Such an addition may be useful, as regulators from three states told us that they lack the authority to resolve complaints involving a question of fact, for example, when the consumer and company disagree on a factual matter regarding a consumer’s eligibility for benefits. Agency Comments and Our Evaluation We received comments on a draft of this report from NAIC. However, NAIC officials also reported that states were concerned that the report seemed to critique certain aspects of state regulation without a balanced discussion and seemed to be making an argument for certain reforms. Our draft reported differences in states’ oversight of rate setting and claims settlement practices without making any conclusions or recommendations. In addition, we selected states that were both congruent and not congruent with the National Association of Insurance Commissioners (NAIC) LTCI model act and regulation to reflect the variation in state oversight of the product.

Why GAO Did This Study As the baby boom generation ages, the demand for long-term care services, which include nursing home care, is likely to grow and could strain state and federal resources. The increased use of long-term care insurance (LTCI) may be a way of reducing the share of long-term care paid by state and federal governments. Oversight of LTCI is primarily the responsibility of states, but over the past 12 years, there have been federal efforts to increase the use of LTCI while also ensuring that consumers purchasing LTCI are adequately protected. Despite this oversight, concerns have been raised about both premium increases and denials of claims that may leave consumers without LTCI coverage when they begin needing care. GAO was asked to review the consumer protection standards governing LTCI policies and how those standards are being enforced. Specifically, GAO examined oversight of the LTCI industry's (1) rate setting practices and (2) claims settlement practices. GAO reviewed information from the National Association of Insurance Commissioners (NAIC) on all states' rate setting standards. GAO also completed 10 state case studies on oversight of rate setting and claims settlement practices, which included structured reviews of state laws and regulations, interviews with state regulators, and reviews of state complaint information. GAO also reviewed national data on rate increases implemented by companies What GAO Found Many states have made efforts to improve oversight of rate setting, though some consumers remain more likely to experience rate increases than others. NAIC estimates that since 2000 more than half of states nationwide have adopted new rate setting standards. States that adopted new standards generally moved from a single standard that was intended to prevent premium rates from being set too high to more comprehensive standards designed to enhance rate stability and provide other protections for consumers. Although a growing number of consumers will be protected by the more comprehensive standards going forward, as of 2006 many consumers had policies not protected by these standards. Regulators in most of the 10 states GAO reviewed said that they expect these more comprehensive standards will be effective, but also recognized that more time is needed to know how well the standards will work in stabilizing premium rates. State regulators in GAO's review also use other standards or practices to oversee rate setting, several of which are intended to help keep premium rates more stable. Despite state oversight efforts, some consumers remain more likely to experience rate increases than others. Specifically, consumers may face more risk of a rate increase depending on when they purchased their policy or which state is reviewing a proposed rate increase on their policy. The 10 states in GAO's review oversee claims settlement practices by monitoring consumer complaints and completing examinations in an effort to ensure that companies are complying with claims settlement standards. Claims settlement standards in these states largely focus on timely investigation and payment of claims and prompt communication with consumers, but the standards adopted and how states define timeliness vary notably across the states. Regulators told GAO that they use consumer complaints to identify trends in companies' claims settlement practices, including whether they comply with state standards, and to assist consumers in obtaining payment for claims. In addition to monitoring complaints, these regulators also said that they use examinations of company practices to identify any violations in standards that may require further action. Finally, state regulators in 6 of the 10 states in GAO's review are considering additional protections related to claims settlement. For example, regulators from 4 states said that their states were considering an independent review process for consumers appealing claims denials. Such an addition may be useful, as some regulators said that they lack authority to resolve complaints where, for example, the company and consumer disagree on a factual matter regarding a consumer's eligibility for benefits. In commenting on a draft of this report, NAIC compiled comments from its member states who said that the report was accurate but seemed to critique certain aspects of state regulation, including differences among states, and make an argument for certain reforms. The draft reported differences in states' oversight without making any conclusions or recommendations.

gao_GAO-11-502

gao_GAO-11-502_0

JROC Did Not Always Consider Trade-offs or Influence Trade-off Decisions The JROC considered trade-offs made by the military services before validating requirements for four of the seven proposed programs it reviewed in fiscal year 2010, and provided input to the military services on the cost, schedule, and performance objectives for two of the seven programs. As a result, a program can spend significant time in technology development before the JROC gets to formally weigh in on these trade-offs through the JCIDS process. JCIDS Reviews Are Not Aligned with the Most Significant Trade-off Decisions The JROC does not formally review the trade-off decisions made as a result of an AOA until a proposed program’s CDD enters the JCIDS process. According to DOD officials, the most significant trade-offs are made by the military services between ICD and CDD reviews during the AOA, which is intended to compare the operational effectiveness, cost, and risks of a number of alternative potential solutions. A significant amount of time and resources can be expended before the JROC gets to weigh in on these trade-offs during CDD reviews. We found the estimates presented to the JROC were often unreliable when assessed against best practices criteria. In most cases, the military services had not effectively conducted uncertainty and sensitivity analyses, which establish confidence levels for resource estimates, based on the knowledge available, and examine the effects of changing assumptions and ground rules. The lack of this information affects the JROC’s efforts to ensure that programs are fully funded and its ability to consider the resource implications of cost, schedule, and performance trade-offs. JROC Received Resource Estimates That Did Not Meet Best Practices The JROC first receives resource estimates for proposed programs when it reviews CDDs, and when we reviewed the CDD resource estimates presented to the JROC in fiscal year 2010, we found that they were generally unreliable when assessed against our best practices criteria. JROC Did Not Consistently Prioritize Requirements and Capability Gaps The JROC does not currently prioritize requirements, consider redundancies across proposed programs, or prioritize and analyze capability gaps in a consistent manner. As a result, the Joint Staff is missing an opportunity to improve military service and departmentwide portfolio management efforts. According to Army, Air Force, and Navy officials, having a better understanding of warfighter priorities from the JROC would be useful to inform both portfolio management efforts and service budgets. A DOD review team examining the JCIDS process is considering changes that would address the prioritization of requirements. Recommendations for Executive Action To enhance the JROC’s role in DOD-wide efforts to deliver better value to the taxpayer and warfighter, we recommend that the Vice Chairman of the Joint Chiefs of Staff, as chairman of the JROC, take the following five actions: Establish a mechanism to review the final AOA report prior to Milestone A to ensure that trade-offs have been considered and to provide military advice on these trade-offs and the proposed materiel solution to the Milestone Decision Authority. Appendix I: Scope and Methodology To conduct our work, we reviewed relevant sections of Title 10 of the U.S. Code, the Weapon Systems Acquisition Reform Act of 2009 (WSARA), and the National Defense Authorization Act for Fiscal Year 2008 to establish the role of the Joint Requirements Oversight Council (JROC) in considering trade-offs among cost, schedule, and performance objectives; reviewing the estimated level of resources needed to fulfill these requirements; and prioritizing requirements. We then focused our analysis on the unclassified requirement documents reviewed by the JROC and JCB in fiscal year 2010 which identified capability gaps or defined performance requirements for new major defense acquisition programs: 13 ICDs and 7 CDDs.

Why GAO Did This Study The Weapon Systems Acquisition Reform Act of 2009 (WSARA) directed the Joint Requirements Oversight Council (JROC) to ensure trade-offs among cost, schedule, and performance objectives are considered as part of its requirements review process. WSARA also directed GAO to assess the implementation of these requirements. This report addresses (1) the extent to which the JROC has considered trade-offs within programs, (2) the quality of resource estimates presented to the JROC, and (3) the extent to which the JROC is prioritizing requirements and capability gaps. To do so, GAO analyzed requirement documents reviewed by the JROC in fiscal year 2010, which identified capability gaps or performance requirements for new major defense acquisition programs. GAO also assessed resource estimates presented to the JROC against best practices criteria in the GAO Cost Estimating and Assessment Guide. What GAO Found The JROC considered trade-offs made by the military services before validating requirements for four of the seven proposed programs it reviewed in fiscal year 2010. According to DOD officials, the most significant trade-offs are made by the military services during the analysis of alternatives (AOA), which occurs between the JROC's review of an Initial Capabilities Document (ICD) and its review of a Capability Development Document (CDD). The AOA is intended to compare the operational effectiveness, cost, and risks of a number of alternative potential solutions. The JROC does not formally review the trade-off decisions made as a result of an AOA until it reviews a proposed program's CDD. As a result, the JROC does not have an opportunity to provide military advice on trade-offs and the proposed solution before it is selected, and a significant amount of time and resources can be expended in technology development before the JROC gets to formally weigh in. The military services did not consistently provide high-quality resource estimates to the JROC for proposed programs in fiscal year 2010. GAO found the estimates presented to the JROC were often unreliable when assessed against best practices criteria. In most cases, the military services had not effectively conducted uncertainty and sensitivity analyses or examined the effects of changing assumptions and ground rules, all of which could further the JROC's efforts to ensure that programs are fully funded and provide a sound basis for making cost, schedule, and performance trade-offs. The JROC does not currently prioritize requirements, consider redundancies across proposed programs, or prioritize and analyze capability gaps in a consistent manner. As a result, the Joint Staff is missing an opportunity to improve the management of DOD's joint portfolio of weapon programs. According to Army, Air Force, and Navy officials, having a better understanding of warfighter priorities from the JROC would be useful to inform both portfolio management efforts and service budgets. A DOD review team examining the JROC's requirements review process is considering changes that would address the prioritization of requirements on a departmentwide basis. What GAO Recommends GAO recommends that the JROC establish a mechanism to review AOA results earlier in the acquisition process, require higher quality resource estimates from requirements sponsors, prioritize requirements across proposed programs, and address potential redundancies during requirements reviews. The Joint Staff partially concurred with GAO's recommendations and generally agreed with their intent, but differed with GAO on how to implement them.

gao_T-AIMD-99-102

gao_T-AIMD-99-102_0

Therefore, in the mid-1980s, it began planning to acquire an automated land and mineral case processing system. According to BLM, it obligated about $411 million on the ALMRS/Modernization project between fiscal years 1983 and 1998, of which more than $67 million was spent to develop ALMRS IOC software. BLM has been slow to implement some of our recommendations and has not yet fully implemented others. Designing and developing the project without a system architecture and concept of operations unnecessarily increased the risk that the ALMRS/Modernization would not meet the business and information needs of the bureau. Where BLM Should Go From Here At this point, BLM has made an enormous investment in software that does not meet its business needs. In addition, to reduce the risk that future information technology efforts will result in a similar outcome, BLM should assess its investment management practices and its systems acquisition capabilities. Analysis of ALMRS IOC Software Is Needed We believe that since BLM has invested over $67 million to develop the ALMRS IOC software, the bureau should thoroughly analyze the software to determine whether it can be modified to meet users’ needs and at what cost. However, the officials recognize that this was not the same as the more comprehensive assessment suggested by SEI.

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the Bureau of Land Management's (BLM) Automated Land and Mineral Record System project, also known as the ALMRS/Modernization, focusing on: (1) the history of the project; (2) the results of GAO's reviews, including the key reasons for problems; and (3) where GAO believes BLM should go from here. What GAO Found GAO noted that: (1) BLM spent over 15 years and estimates that it invested about $411 million planning and developing the ALMRS/Modernization, only to have the major software component--known as the ALMRS Initial Operating Capacity (IOC)--fail; (2) as a result of that failure, the bureau decided not to deploy ALMRS IOC at this time; (3) GAO has previously reported on the significant problems and risks that BLM has encountered; (4) GAO has made many recommendations to reduce those risks; however, BLM has been slow to implement some recommendations and has not yet fully implemented others; (5) BLM now needs to determine whether it can salvage any of the more than $67-million reported investment in ALMRS IOC software, by analyzing the software to determine if it can be cost-beneficially modified to meet BLM's needs; and (6) in addition, to reduce the risk that future efforts will result in similar failures, BLM should assess its information technology investment practices and systems acquisition capabilities.

gao_GAO-04-444

gao_GAO-04-444_0

From fiscal year 1997 to fiscal year 2002, the number of patients medical centers in the network treated increased by 27 percent. Medical Centers in Network 9 (Nashville) Received About $1 Billion in Fiscal Year 2002 from the Network and Other Sources The six medical centers in Network 9 (Nashville) received about $1 billion in fiscal year 2002 from three sources: the network, VA headquarters, and resources from collections. The network allocated the largest share of this total—83 percent or about $825 million of the total resources received by the six medical centers. Finally, the six medical centers also collected about 7 percent of the total resources medical centers received or $73 million in resources from collections of third-party insurance payments, veteran copayments, and reimbursements primarily for services provided to non- VA healthcare providers. From fiscal year 1997 through fiscal year 2003, Network 9 (Nashville) allocated more than 80 percent of medical center resources each year. A large portion of the resources allocated on the basis of fixed-capitation amounts for patient workload and case mix came from the network and a smaller portion came from VA headquarters. The other resources that medical centers received in fiscal year 2002 were based on a variety of other factors such as network managers’ determination of the financial needs of medical centers during the course of the year. These resources came from the network, VA headquarters, and collections. Since VA changed its resource allocation system in fiscal year 1997, medical centers in Network 9 (Nashville) received about three-quarters of their resources based on fixed-capitation amounts and about one-quarter based on other factors each year from fiscal years 1997 through 2003. Medical Centers Received About One-Quarter of Their Resources Based on a Variety of Other Factors Medical centers in Network 9 (Nashville) received about 23 percent of their total resources, or $232 million, in fiscal year 2002 based on a variety of factors other than fixed-capitation amounts for patient workload and case mix. Another contact and key contributors are listed in appendix V. Appendix I: Objectives, Scope, and Methodology We reviewed Network 9 (Nashville) allocations to its medical centers for fiscal year 2002 to determine: (1) the amount of resources medical centers in the network received and the source of those resources, (2) the basis on which medical centers in the network received these resources, and (3) the extent to which network office expenditures were greater than in fiscal year 1997 and the primary reasons accounting for any increase. We estimated the portion of these direct VA allocations to medical centers in the network that was based on fixed-capitation amounts for patient workload and case mix by assuming that during this period the portion was the same as in fiscal year 2002, when such resources amounted to 20 percent of VA headquarters’ direct allocations to the network. VA Health Care: Changes Needed to Improve Resource Allocation to Health Care Networks.

Why GAO Did This Study Since fiscal year 1997, the Department of Veterans Affairs (VA) has relied primarily on its 21 health care networks to allocate resources to its medical centers. VA headquarters also directly allocates some resources to the medical centers. In addition, medical centers collect resources from third-party insurance payments and other sources. VA provides general guidance to\ networks for resource allocation to medical centers, but permits variation in networks' allocation methodologies. Representatives from veterans groups and others have expressed concerns regarding resource allocations to medical centers in Network 9 (Nashville) known as the Mid South Healthcare Network. GAO was asked to report for fiscal year 2002 (1) the amount of resources medical centers in the network received and the source of those resources and (2) the basis on which medical centers in the network received these resources. GAO was also asked to supplement findings for fiscal year 2002 with information for fiscal years 1997 through 2003. What GAO Found The six medical centers in Network 9 (Nashville), known as the Mid South Healthcare Network, received a total of about $1 billion in resources in fiscal year 2002. The network allocated 83 percent of the total, or $825 million, to its medical centers. The medical centers received smaller amounts from VA headquarters (9 percent of the total or about $93 million) and resources from collections (7 percent of the total or about $73 million). As in fiscal year 2002, the network allocated more than 80 percent of medical center resources each year from fiscal years 1997 through fiscal year 2003. Medical centers in Network 9 (Nashville) received about 77 percent of their resources, or $760 million, in fiscal year 2002 based on fixed-per-patient amounts, referred to as fixed-capitation amounts, for patient workload and case mix. Patient workload is the number of patients treated, and case mix is a classification of patients into categories based on health care needs and related costs. The largest portion of these resources allocated on this basis came from the network while a smaller portion came from VA headquarters. Medical centers in the network received about 23 percent of their total resources, or $232 million, in fiscal year 2002 based on a variety of other factors such as network managers' determination of the financial needs of medical centers during the course of the year. These resources came from the network, VA headquarters, and collections. Since VA changed its resource allocation system in fiscal year 1997, the medical centers in the network received about the same portions of their resources based on fixed capitation amounts and on a variety of other factors each year from fiscal years 1997 through 2003. VA agreed with GAO's findings.

gao_GAO-12-52

gao_GAO-12-52_0

In April 2011, revised coding guidelines for Alzheimer’s disease dementia were issued, which raised new concerns for CMS that diagnosing Alzheimer’s disease dementia may be more discretionary. Effect of Revised Community Model on Payment Accuracy Varied for High-Risk Groups Studied In our comparison of the current and revised community models, the revised community model slightly reduced the accuracy of MA payment adjustments for beneficiaries with multiple chronic conditions—one of three high-risk groups in our study. Specifically, the revised community model reduced the accuracy for beneficiaries with at least two chronic conditions by $164, which was about 1 percent of average actual expenditures. While the revised community model reduced the accuracy of MA payment adjustments for beneficiaries with multiple chronic conditions as a whole, this model improved the accuracy for the 4 percent of community FFS beneficiaries with six or more chronic conditions by $727 or 2 percent of average actual expenditures. 1.) Within the low-income group, estimates from the revised and current community models were similar for beneficiaries who received the Part D LIS but were not dually eligible for Medicare and Medicaid, with the revised community model slightly reducing accuracy by $28, or less than 0.5 percent of average actual expenditures. C-SNP New Enrollee Model Substantially Improved Accuracy of MA Payment Adjustments, but Considerable Inaccuracy Remains for Certain Groups Compared with the general new enrollee model, the C-SNP new enrollee model substantially improved the accuracy of estimated health care expenditures, and therefore of MA payment adjustments, for C-SNP- eligible new enrollees but still underestimated expenditures for certain Specifically, the C-SNP new enrollee groups by considerable amounts.model underestimated expenditures for C-SNP-eligible new enrollees by $1,461, while the general new enrollee model underestimated expenditures for this group by $3,914—an improvement in accuracy of $2,453, or about 25 percent of average actual expenditures. The amount by which accuracy improved was similar across 14 severe or disabling chronic conditions: $2,402 to $2,723 (a range which represented 7 to 24 percent of average actual expenditures). This result reflects the design of the C-SNP new enrollee model, which increases the expenditure estimates from the general new enrollee model by an amount that does not depend on beneficiaries’ medical conditions. Despite the improved accuracy both on average and for each of the 14 conditions, the C-SNP new enrollee model still underestimated expenditures for beneficiaries who had certain conditions, such as end-stage liver disease or stroke, by more than $15,000. On the other hand, the C-SNP new enrollee model improved the accuracy of estimated health care expenditures of C-SNP eligible new enrollees with 4 or more severe or disabling conditions by $2,521, or about 8 percent of actual average expenditures. However, the C-SNP new enrollee model still underestimated expenditures for this group by over $20,000. Concluding Observations Accurately adjusting payments to MA plans is important to help ensure that these plans have the same financial incentive to enroll and care for beneficiaries regardless of their health status or the resources they are expected to consume. Whether CMS decides to implement the revised community model that includes HCCs for dementia will depend on CMS’s assessment of the advantage of more accurate payment adjustment for beneficiaries with dementia compared with the disadvantage of a potential increase in the discretionary coding of dementia. However, the model still considerably underestimated expenditures for new enrollees diagnosed with four or more severe or disabling conditions, which could place plans that disproportionately enroll these beneficiaries at a relative financial disadvantage. In its comments, CMS suggested that the report include an assessment of the overall accuracy of the current risk adjustment model. While we agree that an overall assessment of the model’s accuracy would be useful, such an analysis was not within the scope of our work and would have required additional data. Appendix I: Additional Potential Changes to the Medicare Advantage Risk-Adjustment Models The Centers for Medicare & Medicaid Services (CMS) has been conducting ongoing research on the Medicare Advantage (MA) risk- adjustment models to improve the models’ accuracy in estimating expenditures for beneficiary groups. Comparing the Accuracy of General and C-SNP New Enrollee Models To compare the accuracy with which the general and C-SNP new enrollee models adjust payments for C-SNP-eligible new enrollees, we measured the accuracy of the general and C-SNP new enrollee models using the same method we used for comparing the accuracy of the current and revised community models.

Why GAO Did This Study The Centers for Medicare & Medicaid Services (CMS) pays plans in Medicare Advantage (MA)--the private plan alternative to Medicare fee-for-service (FFS)--an amount per beneficiary that is adjusted to reflect beneficiary health status. This adjustment, called risk adjustment, helps ensure that health plans have the same financial incentive to enroll and care for beneficiaries regardless of their health status. In 2010, CMS announced plans to revise the major medical conditions included in its principal risk-adjustment model--the community model--and add a model for new enrollees in chronic condition special needs plans (C-SNP), which target beneficiaries with certain severe or disabling chronic conditions. CMS began using the C-SNP new enrollee model in 2011, in place of the general new enrollee model, to adjust MA payments for new Medicare beneficiaries who enroll in a C-SNP. GAO was asked to examine the accuracy of these models for high-risk beneficiaries. Using data for a nationally representative sample of 2007 FFS beneficiaries, GAO computed the amount that expenditure estimates were above or below actual expenditures for 2007, the most recent data available at the time. GAO compared the accuracy of the current and revised community models for three high-risk groups: beneficiaries with multiple chronic conditions, with low income, and with dementia. GAO compared the accuracy of the general and C-SNP new enrollee models for new enrollees eligible to enroll in a C-SNP. What GAO Found The effect of CMS's revised community model on payment accuracy varied for the high-risk groups studied. Specifically, compared with the current community model, the revised community model slightly reduced the accuracy of MA payment adjustments for beneficiaries with multiple chronic conditions by $164, or about 1 percent of average actual expenditures. For beneficiaries with low income, the accuracy of the revised and the current community models was similar: estimates differed by $5, or less than 0.1 percent of average actual expenditures. For beneficiaries with dementia, the revised community model substantially improved the accuracy of MA payment adjustments by $2,674, or about 16 percent of average actual expenditures. Compared with the general new enrollee model, the C-SNP new enrollee model substantially improved the accuracy of MA payment adjustments for new enrollees with C-SNP conditions, but considerable inaccuracy in the model's estimates remains for certain groups. The amount by which accuracy improved was similar across 14 severe or disabling chronic conditions: about $2,500. This reflects the design of the C-SNP new enrollee model, which increases expenditure estimates from the general new enrollee model by an amount that does not depend on beneficiaries' medical conditions. However, the C-SNP new enrollee model still underestimated expenditures for C-SNP-eligible new enrollees, on average, by about $1,500 and by more than $15,000 for beneficiaries who had certain conditions, such as end-stage liver disease or stroke. The C-SNP new enrollee model's results varied depending on the number of severe or disabling conditions the beneficiary had. Specifically, the model reduced the accuracy of estimated expenditures for new enrollees with only 1 severe or disabling condition by about 62 percent of average actual expenditures but improved the accuracy for those with 4 or more conditions by about 8 percent. However, the C-SNP new enrollee model still underestimated expenditures for beneficiaries with 4 or more conditions by over $20,000. Accurate risk adjustment is particularly important for certain high-risk beneficiary groups that are more challenging and costly to treat and may benefit particularly from the coordination of care MA plans can provide. The decision to implement the revised community model that adjusts for dementia will depend on CMS's assessment of the advantages of more accurate payment adjustment for beneficiaries with dementia compared with the potential increase in the discretionary coding of dementia because of revised coding guidelines for Alzheimer's disease dementia published in April 2011. Additionally, while the introduction of the C-SNP new enrollee model improved the accuracy of payment adjustments for eligible new enrollees, on average, the model still considerably underestimated expenditures for certain groups, which could place plans that disproportionately enroll beneficiaries in these groups at a relative financial disadvantage. In its comments on a draft of this report, CMS suggested that GAO assess the overall accuracy of the current risk adjustment model. GAO did not assess overall model accuracy because such an analysis was not within the scope of GAO's work and would have required additional data.

gao_GGD-98-62

gao_GGD-98-62_0

An aspect of this review was to identify aliens who may not have revealed their arrests or convictions. After reviewing criminal histories provided by the FBI, INS identified 17,257 applicants who were naturalized between August 31, 1995, and September 30, 1996, with criminal history records of arrests for felonies or other potentially disqualifying crimes. Accordingly, INS reviewed 16,858 criminal histories and corresponding case files in an attempt to judge if these aliens should have been naturalized. As shown in table 1, in its review of these 16,858 case files, INS designated each case as either “proper,” “requires further action,” or “presumptively ineligible.” According to INS officials, a case was designated as proper if the data in the case file supported the initial decision to naturalize the individual. The EOIR reviewers and the INS review adjudicators had the same decisions in 439 of the 557 cases (or 79 percent). The results for the 118 cases in which INS and EOIR reached different decisions were as follows: in 6 cases, INS judged that the aliens were presumptively ineligible, while EOIR judged that in 1 of these cases the initial adjudication decision was proper and in the other 5 cases further action was required by INS field units; in 40 cases, INS judged that further action was required by its field units, while EOIR judged that in 36 of these cases the initial adjudication decisions were proper and in the other 4 cases the aliens were presumptively ineligible; and in 72 cases, INS judged that the initial adjudication decisions were proper, while EOIR judged that in 68 of these cases further action was required by INS field units and in the other 4 cases the aliens were presumptively ineligible. Although in these examples more of the INS judgments were in agreement with the initial adjudication, we could not conclude that a statistically significant difference existed between the INS and EOIR decisions. As previously discussed, INS is reviewing the 6,323 cases—that is, the 5,954 cases that INS judged as requiring further action and the 369 cases that INS judged the aliens to be presumptively ineligible—for potential revocation. Conclusions INS reviewed the case files of 16,858 aliens with criminal history records who had been naturalized between August 31, 1995, and September 30, 1996. To provide quality assurance that INS’ decisions during the review were unbiased, EOIR reviewed a statistically valid sample of 557 alien case files from the universe of 16,858 aliens. After we discussed the 72 cases with an INS attorney involved with reviewing the cases for potential revocation, he said that these cases are being reviewed with the other 6,323 cases. The overall approach KPMG employed to monitor INS’ judgments followed accepted social science standards. The standards KPMG used included (1) establishing procedures to ensure the appropriate collection and review of FBI criminal history records and the review of related alien case files, (2) promoting consistency in the judgments of INS adjudicators by providing training and using a standardized worksheet, and (3) identifying recurring adjudicator errors so that corrective action could be taken. In addition, KPMG’s report disclosed limitations in the study procedures followed and discussed conditions that may have affected the accuracy and completeness of INS’ review.

Why GAO Did This Study Pursuant to a congressional request, GAO reported on the Immigration and Naturalization Service's (INS) review of its case files of aliens who were naturalized between August 31, 1995 and September 30, 1996, and who the Federal Bureau of Investigation (FBI) had identified as having criminal history records, focusing on the: (1) results of the INS and Executive Office for Immigration Review's (EOIR) case reviews; and (2) approach used by KPMG Peat Marwick LLP to monitor INS' efforts to identify improperly naturalized aliens. What GAO Found GAO noted that: (1) after receiving criminal history records from the FBI, INS reviewed to case files of 16,858 aliens with records that included a felony arrest or conviction of a serious crime who were naturalized between August 31, 1995, and September 30, 1996; (2) INS reviewed these criminal history records and its case files in an attempt to judge if these aliens should have been naturalized; (3) in its review of these 16,858 case files, INS designated each case as either proper, requires further action, or presumptively ineligible; (4) INS designated 10,535 cases as proper, 5,954 cases as requires further action, and 369 cases as presumptively ineligible; (5) to provide quality assurance that INS' decisions during the review were unbiased, EOIR reviewed a statistically valid sample of 557 alien cases from the universe of 16,858 aliens; (6) EOIR and INS reached the same decisions in 439 (or 79 percent) of the 557 cases; (7) although there was a 21-percent disagreement rate between the INS and EOIR reviewers, GAO could not conclude that a statistically significant difference existed between the INS and EOIR decisions; (8) INS is reviewing for potential revocation the 6,323 cases that its adjudicators judged as requiring further action or presumptively ineligible; (9) although INS initially did not plan to review the 72 cases that EOIR's review indicated may also have involved improper naturalization decisions, an attorney involved in reviewing the 6,323 cases said that these 72 cases are being reviewed with the other cases; (10) in carrying out its monitoring responsibilities, KPMG used accepted social science standards; (11) the KPMG report: (a) established procedures to ensure the appropriate collection and review of FBI criminal history records and the review of related alien case files; (b) promoted consistency in the judgments of INS adjudicators by providing training and having the adjudicators use a standardized worksheet, and (c) identified recurring adjudicator errors so that corrective action could be taken; and (12) KPMG's report also: (a) disclosed limitations in the study procedures followed; and (b) discussed conditions that may have affected the accuracy and completeness of INS' review.

gao_GAO-15-222

gao_GAO-15-222_0

Federal and State Actions to Address Municipal Fiscal Crises Congress has provided assistance to municipalities in fiscal crisis by using a variety of approaches on a case-by-case basis. Edward Byrne Memorial Justice Assistance Grant Program (JAG) administered by the Department of Justice (Justice). Reductions in Human Capital Capacity Affected the Ability of Municipalities to Manage Federal Grants, but the Impact Varied All four municipalities experienced reductions in their human capital capacity due to fiscal crisis, but the effect of those reductions on the management of selected grants varied. According to Detroit officials, it was difficult for the staff that remained to carry out all of the department’s grant compliance and oversight responsibilities. A lack of employees with the skills to process procurement requests and administer grants caused some grant funds from FTA to remain unspent in accounts. Decreased Financial Capacity Reduced Some Municipalities’ Ability to Obtain Federal Grants A lack of financial capacity at two of the municipalities we reviewed—Flint and Stockton—reduced their ability to apply for federal grants that call for local resource investments or maintenance of effort provisions. Flint and Stockton did not apply for competitive federal grants with maintenance of effort requirements because their city governments were unable to ensure that they would maintain nonfederal funding at current levels. Limited Organizational Capacity, Demonstrated in Outdated Information Technology, Hampered Municipalities’ Ability to Oversee and Report on Federal Grants In two municipalities we reviewed, a chronic lack of investment in organizational capacity— specifically in information technology (IT) systems—challenged the ability of these communities to oversee and report on grants in an accurate and timely way. In Detroit’s 2011 and 2012 single audit reports, external auditors found IT deficiencies in every federal grant program they reviewed.general fund had to cover disallowed costs and federal grant de- obligations. In addition to taking steps that directly improve federal grant management—such as consolidating grant management processes and working with local nonprofits to apply for federal grants—some municipalities also recognized the need for making improvements to systemic financial and organization problems to set a proper foundation for sound grant management. It is important to note that agencies use these monitoring procedures for all grantees, not just those in fiscal crisis. All Eight Grant Programs Consistently Used or Had Recently Implemented a Risk-based Approach to Monitoring and Oversight Four of the programs—CDBG, HOME, JAG, and COPS—consistently assessed risk during this period when determining the amount and type of oversight they would provide their grantees. These programs considered a variety of risk factors. Some Selected Municipalities Did Not Implement the Required Federal Corrective Actions to Resolve Deficiencies, Resulting in Continued Grant Management Problems When program officials found deficiencies through monitoring, they typically required corrective actions from the grantee; however, selected municipalities did not always take corrective actions to address these deficiencies. Federal Actions Assisted Municipalities in Fiscal Crisis, but Efforts to Share Lessons Learned Are Limited The White House Working Group on Detroit and Selected Agencies Improved Collaboration with Municipalities Both the White House Working Group on Detroit and individual federal agencies took steps to improve collaboration with, and assistance to, municipalities experiencing fiscal crisis. For example, HUD provided in-depth technical assistance to help Flint and Detroit administer its grant programs. Recommendation for Executive Action We recommend that the Director of the Office of Management and Budget direct, as appropriate, federal agencies involved with the White House Working Group on Detroit, to collect good practices and lessons learned from their efforts to assist Detroit during its fiscal crisis and share them with other federal agencies and local governments. We are sending copies of this report to the heads of the Departments of Homeland Security, Housing and Urban Development, Justice, Transportation, Treasury, and OMB as well as interested congressional committees and other interested parties, including the state and local officials we contacted for this review. Appendix I: Objectives, Scope, and Methodology This report (1) identifies challenges that selected municipalities in fiscal crisis have experienced when managing federal grants and steps those municipalities took to address the challenges; (2) reviews the internal controls, monitoring, and oversight processes that federal agencies used to oversee selected grant programs to several municipalities in fiscal crisis; and (3) examines actions the White House Working Group on Detroit and selected federal agencies took to assist selected municipalities in fiscal crisis. To conduct this work, we focused on four municipalities in fiscal crisis as case examples: Detroit, Michigan; Flint, Michigan; Camden, New Jersey; and Stockton, California. To examine the actions the White House Working Group on Detroit and selected federal agencies took to assist selected municipalities in fiscal crisis, we interviewed local, state, and federal officials involved with grant management for the four selected municipalities and eight selected grant programs.

Why GAO Did This Study Similar to the federal and state sectors, local governments are facing long-term fiscal pressures. In cases of fiscal crisis, municipalities may be required to make significant cuts to personnel that may impact their oversight of federal grants. GAO was asked to review the oversight of federal grants received by municipalities in fiscal crisis. This report (1) identifies challenges that selected municipalities in fiscal crisis experienced when managing federal grants and steps taken by those municipalities; (2) reviews the monitoring processes that federal agencies used to oversee selected grants to selected municipalities; and (3) examines actions the White House Working Group on Detroit and selected federal agencies took to assist municipalities in fiscal crisis. For this review, GAO conducted site visits to four municipalities in fiscal crisis: Detroit, Michigan; Flint, Michigan; Camden, New Jersey; and Stockton, California. GAO focused on eight grant programs administered by DHS, HUD, Justice, and DOT. The basis for selecting these grant programs included dollar amount and grant type. GAO reviewed grant oversight policies and actions for fiscal years 2009-2013 and interviewed local, state, and federal officials, including those at Treasury and OMB. What GAO Found Grant management challenges experienced by municipalities in fiscal crisis. The diminished capacity of selected municipalities in fiscal crisis hindered their ability to manage federal grants in several ways. First, reductions in human capital capacity through the loss of staff greatly reduced the ability of some cities to carry out grant compliance and oversight responsibilities. Second, the loss of human capital capacity also led to grant management skills gaps. For example, in Detroit, Michigan, loss and turnover of staff with the skills to properly draw down funds caused some grant funds to remain unspent. Third, decreased financial capacity reduced some municipalities' ability to obtain federal grants. For example, both Flint, Michigan, and Stockton, California, did not apply for competitive federal grants with maintenance of effort requirements because their city governments were unable to ensure that they would maintain non-federal funding at current levels. Fourth, outdated information technology (IT) systems hampered municipalities' ability to oversee and report on federal grants. For example, Detroit's 2011 and 2012 single audits identified IT deficiencies in every federal grant program reviewed, which led to the city having to pay back some federal grant funds. In response to these challenges, the four municipalities GAO reviewed have taken a number of actions to improve their management of federal grants including centralizing their grant management processes and partnering with local nonprofits to apply for grants. Federal grant monitoring and oversight processes. The eight grant programs GAO reviewed used, or had recently implemented, a risk-based approach to grant monitoring and oversight. These approaches applied to all grantees not just those in fiscal crisis. The grant programs administered by the Department of Housing and Urban Development (HUD) and the Department of Justice (Justice) consistently assessed grantees against a variety of risk factors to help program officials determine the need for more in-depth monitoring actions such as onsite monitoring visits. When program officials at HUD, Justice, the Department of Transportation (DOT), and the Department of Homeland Security (DHS) found deficiencies through monitoring actions, they required corrective actions from their grantees. However, in some cases, local grantees did not implement these corrective actions, resulting in continued grant management problems. In such cases, federal program officials took actions such as increasing the level of financial oversight or withholding grant funds until the grantee improved its grant management processes. Actions taken to assist municipalities in fiscal crisis. The White House Working Group on Detroit—an interagency group assembled by the White House to assist Detroit—as well as selected agencies took a variety of actions to aid municipalities in fiscal crisis. These actions included improving collaboration between selected municipalities and federal agencies, providing flexibilities to help grantees meet grant requirements, and offering direct technical assistance. However, neither individual agencies nor the Office of Management and Budget (OMB), which was involved in the working group and has an interagency leadership role in achieving administration policy, have formal plans to document and share lessons learned from the efforts to assist Detroit with other federal agencies and local governments. What GAO Recommends GAO recommends that OMB direct federal agencies involved in the White House Working Group on Detroit to document and share lessons learned from federal efforts to assist Detroit. OMB neither agreed nor disagreed with this recommendation.

gao_GAO-12-173

gao_GAO-12-173_0

SSBCI is designed to strengthen state programs that support private financing to small businesses and small manufacturers that, according to Treasury, are not getting the loans or investments they need to expand and to create jobs. The act allowed Treasury to provide SSBCI funding for two state program categories: capital access programs (CAP) and other credit support programs (OCSP). In addition, each applicant was required to demonstrate a “reasonable expectation” that its participating programs, taken together, would generate an amount of private financing and investment at least 10 times its SSBCI funding (that is, a leverage ratio of 10:1) by the program’s end in December 2016. Most States Are Participating in SSBCI and Plan to Use the Funds to Support a Variety of Programs Nearly all of the states eligible for SSBCI funds submitted applications to Treasury. 3). 4). Venture capital programs are to receive the largest amount of SSBCI funds of any program type. States indicated that they expect SSBCI funds to result in a total of $18.7 billion in new private financing and investment throughout the life of the program. Treasury’s Evolving Processes Have Created Some Delays Treasury Revised Its Application Guidance and Review Procedures to Clarify Requirements and Thoroughly Reviewed Selected Applications With the enactment of the Small Business Jobs Act of 2010 on September 27, 2010, Treasury was tasked with quickly starting up an SSBCI program office and developing processes and guidance to implement this new program. Some states reported that they delayed submitting their applications until Treasury’s final application guidance was issued. According to our survey results, 37 states did not submit their final applications for SSBCI funds until June 2011, the month that applications were due. However, Treasury did not begin processing state requests for their second installment of funds until November 2011. Treasury Is Implementing a Plan to Monitor Recipient Compliance with Program Requirements Treasury is implementing a multi-step plan to monitor recipient compliance with SSBCI program requirements. Treasury officials told us they plan to sample states’ transaction-level data to help ensure the accuracy of state reporting. The Treasury Inspector General recently made recommendations to further enhance Treasury’s oversight of SSBCI recipients. Treasury Is in the Process of Developing Performance Measures for SSBCI Treasury officials told us that they have not yet established performance measures for the SSBCI program. Although Treasury plans to rely primarily on the department’s overall performance measures in evaluating the SSBCI program, officials noted they are considering several draft performance measures to assess the efficiency of the program. The importance of performance measures for gauging the progress of programs and projects is well recognized. Among other criteria, we have identified nine key attributes of successful performance measures. Given the preliminary nature of Treasury’s potential performance measures, assessing whether the measures will reflect the attributes of successful performance measures would be premature. Nevertheless, considering these attributes as it works to finalize SSBCI-specific performance measures could help Treasury to develop robust measures. Until such measures are developed and implemented, Treasury will not be able to determine whether the program is achieving its goals. Recommendation for Executive Action We are making one recommendation to Treasury to improve its implementation and oversight of the SSBCI program as follows: To help ensure that the performance measures for the SSBCI program are as robust and meaningful as possible, we recommend that the Secretary of the Treasury direct the SSBCI Program Manager to consider key attributes of successful performance measures as the program’s measures are developed and finalized. Appendix I: Objectives, Scope, and Methodology To determine which states applied for and received State Small Business Credit Initiative (SSBCI) funds and the planned uses of the funds, we developed a Web-based questionnaire to collect information from the 54 states and territories that filed a Notice of Intent to Apply for SSBCI funds with the Department of the Treasury (Treasury) by the November 26, 2010 deadline. By September 14, 2011, we had received completed questionnaires from 54 states and territories, for a 100 percent response rate. To review Treasury’s efforts to measure whether the SSBCI program achieves its goals of increasing small business investment and creating jobs, we discussed with Treasury their proposed performance metrics for the SSBCI program.

Why GAO Did This Study Congress enacted the Small Business Jobs Act of 2010 in September 2010 in response to concerns that small businesses have been unable to access capital that would allow them to create jobs. Among other things, the act aims to stimulate job growth by establishing the $1.5 billion State Small Business Credit Initiative (SSBCI) within the Department of the Treasury (Treasury) to strengthen state and territory (state) programs that support lending to small businesses and small manufacturers. Participating states are expected to leverage the SSBCI funds to generate an amount of private financing and investment at least 10 times the amount of their SSBCI funds (that is, a leverage ratio of 10:1). The act also requires GAO to audit SSBCI annually. Accordingly, this report examines (1) which states applied for SSBCI funds and the planned uses of those funds; (2) Treasury's implementation of SSBCI; and (3) Treasury's efforts to measure whether SSBCI achieves its goals. GAO surveyed state SSBCI applicants (for a 100 percent response rate), analyzed data from Treasury case files, and interviewed officials from Treasury and eight participating states. What GAO Found Fifty-four of the 56 eligible states and territories submitted applications requesting a total of about $1.4 billion in SSBCI funds. According to GAO's survey of SSBCI applicants, states plan to support 153 lending programs nationwide with SSBCI funds, 69 of which are new programs being created because of the SSBCI program. These lending programs include a variety of capital access programs and other credit support programs, with venture capital programs receiving the largest amount of funds among eligible program types. SSBCI applicants anticipate that their SSBCI funds will allow them to leverage up to $18.7 billion in new private financing and investment. Some applicants, however, expressed concern that achieving a 10:1 leverage ratio of private financing and investment to program funds could ultimately prove challenging, especially for states creating new programs. Treasury's procedures for SSBCI have evolved throughout its implementation of the program. Treasury began approving applications for SSBCI funds in January 2011 in accordance with guidance it issued in December 2010. However, Treasury did not finalize its application guidance and review procedures until April and May 2011, respectively. Some states indicated they delayed submitting their applications until Treasury's guidance was finalized, with 37 states not submitting an application until June 2011--the deadline for applications. In addition, Treasury did not finalize its procedures for disbursing subsequent installments of funds to states until November 2011, citing potential different legal interpretations of the act's disbursement requirements as the cause for the delay. Treasury is implementing a plan to monitor states' compliance with program requirements, which will include sampling transaction-level data to evaluate the accuracy of the states' annual reports. The Treasury Inspector General made recommendations in August 2011 to improve the tools Treasury will use to monitor state compliance. Treasury has not yet established performance measures for the SSBCI program. Treasury officials noted they are considering several draft performance measures to assess the efficiency of the program. However, Treasury has not finalized its plans for measuring the SSBCI program's performance. GAO and others have recognized the importance of using performance measures to gauge the progress of programs. GAO has also identified key attributes of successful performance measures. Given the preliminary nature of Treasury's potential performance measures, assessing whether the measures reflect the attributes of successful performance measures is premature. Nonetheless, considering these attributes as it works to finalize the SSBCI-specific performance measures could help Treasury to develop robust measures. Until such measures are developed and implemented, Treasury will not be able to determine whether the program is achieving its goals. What GAO Recommends GAO recommends that Treasury direct the SSBCI Program Manager to consider key attributes of successful performance measures when developing and finalizing SSBCI-specific performance measures. Treasury concurred with the report's recommendation.

gao_RCED-98-236

gao_RCED-98-236_0

Almost Two-Thirds of the Payments Made to Date Have Been Used for Damage Assessment and Cleanup or Habitat Acquisition As of September 30, 1997, $198 million, or 32 percent, of the amount paid by Exxon had been used to reimburse federal and state agencies for oil spill cleanup or damage assessment or to credit Exxon for similar work the company had done itself. About $99 million of Exxon’s payments through September 30, 1997, had not been disbursed. Most Funded Activities Are Consistent With the Agreement and Restoration Plan, but Some Exceptions Persist For the most part, the approved activities to help restore injured resources funded by the Trustee Council—habitat acquisition, general restoration, and monitoring and research—appear consistent with the agreement and the policies in the restoration plan. For the habitat acquisition activities, we reviewed the nine large parcel purchases and found that they were located in the oil spill area and were to either help or enhance damaged resources. Through the end of fiscal year 1997, the council had completed actions to acquire about 456,000 acres of land in fee simple and in easements in the spill area at an overall cost of $265 million. The council paid 2-1/2 times the government appraisal value for these three large parcels—about $88 million, compared with an appraised value of $34 million. Public Participation Process for Land Acquisition Similar to the Process for Other Restoration Activities The public participation processes followed by the Trustee Council for acquiring land and approving other restoration activities such as monitoring, research, and general restoration projects are similar. Return on Settlement Funds Could Be Increased Independent auditors hired by the Trustee Council have noted two opportunities for increasing the return on Exxon settlement funds. Funds disbursed from CRIS to Alaska for approved restoration activities are deposited in the State of Alaska, Exxon Valdez Oil Spill Settlement Trust. The Trustee Council disagreed with our statement that the funding of three research projects identified in the report—regarding sockeye salmon, killer whale, and pink salmon—appear questionable because the projects may not be sufficiently linked to the oil spill or should be considered part of a federal or state agency’s existing mission. We reviewed various documentation, including the memorandum of agreement between the federal government and Alaska and the Trustee’s Council restoration plan, which, in essence, represents the council’s implementing policies for carrying out council activities. In addition, we interviewed the Executive Director of the Trustee Council, council staff, and Department of Justice officials in Anchorage and in Washington, D.C. To determine whether the council has funded activities that may not be consistent with the memorandum of agreement, we examined the requirements of the agreement for funded projects as well as the council’s implementing policies, such as the restoration plan. To determine how the prices paid for land acquisitions compare with government land appraisals and whether the public participation process for the habitat protection acquisition program is similar to the public participation process for other types of restoration actions, we reviewed the council’s habitat acquisition plans for both large and small acquisitions; government appraisal documents that describe the appraisal process; council documents that show the location, acreage, type of property acquired for each acquisition, the government appraisal value, and the amount paid for each parcel. A recorded menu will provide information on how to obtain these lists.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the management of the Exxon Valdez settlement funds, focusing on: (1) how much Exxon had paid, to whom the funds had been disbursed, and how the money had been used; (2) whether the Trustee Council has funded activities that may not be consistent with the agreement and the council's implementing policies; (3) how the prices paid for land acquisitions compare with government land appraisals; (4) if the public participation process for the habitat acquisition program is similar to that used for other restoration actions; and (5) whether the trust funds are being managed to maximize the overall returns. What GAO Found GAO noted that: (1) through the end of fiscal year 1997, Exxon had made settlement payments of $620 million; (2) $521 million has been reimbursed or disbursed for various activities; (3) these funds were to: (a) reimburse agencies or credit Exxon for oil spill cleanup or damage assessment costs ($198 million); (b) buy land to protect or enhance damaged resources ($187 million); (c) conduct monitoring, research, or restoration projects ($116 million); and (d) provide administrative, science management, public information and related costs ($20 million); (4) the remaining $99 million represents funds not yet disbursed; (5) most of the activities funded by the Trustee Council appear consistent with the terms of the memorandum of agreement and the council's implementing policies; (6) all of the activities that dealt with habitat acquisition and general restoration and most research and monitoring activities appeared consistent with the agreement and restoration plan in that they were linked to the oil spill, limited to restoration of natural resources in Alaska, and included in the types of restoration activities specified in the memorandum of agreement between the federal government and the state of Alaska; (7) a few monitoring and research projects have been funded even though they have questionable linkage to the spill or appear to run counter to the Trustee Council's policy of not funding projects that would normally be funded by a federal or state agency; (8) the Trustee Council has paid about 56 percent above the government-appraised value for the lands it has acquired; (9) nearly all the amount paid above the government-appraised value is a result of five large parcel acquisitions; (10) for these five acquisitions, involving about 360,000 acres bought outright or containing some type of easement, the council paid from 2 to almost 4 times the government-appraised value; (11) the public participation process followed by the Trustee Council for acquiring land is similar to the process followed for decisions on other restoration activities; (12) GAO found that the council's processes for both habitat acquisition and other restoration activities appear to provide ample opportunities for the public to review information and comment; and (13) the Trustee Council's independent auditors have identified two major ways for increasing returns on settlement funds.

gao_GAO-14-142T

gao_GAO-14-142T_0

Background FAA’s Aircraft Certification Service (Aircraft Certification) and Flight Standards Service (Flight Standards) issue certificates and approvals for the operators and aviation products used in the national airspace system based on standards set forth in federal aviation regulations. FAA’s Certification and Approval Processes In 2010, we reported that many of FAA’s certification and approval processes contribute positively to the safety of the NAS, according to industry stakeholders and experts.and approval processes work well most of the time because of FAA’s long-standing collaboration with industry, flexibility within the processes, and committed, competent FAA staff. Industry stakeholders and experts noted that negative certification and approval experiences, such as duplication of approvals, although infrequent, can result in costly delays for them, which can disproportionately affect smaller operators. We made two recommendations to improve the efficiency of the certification and approval processes. FAA addressed one recommendation and partially addressed the other. We found that while FAA had taken actions to improve the efficiency of its certification and approval processes, it lacked outcome-based performance measures and a continuous evaluative process to determine if these actions were having the intended effects. It developed six recommendations, which called for FAA to develop comprehensive implementation plans for certification process improvement initiatives, including measuring the effectiveness of the implementation and benefits of improvements as well as developing a means to track and monitor initiatives and programs; continue to improve the effectiveness of delegation programs; develop an integrated, overarching vision of the future state for certification procedures; update Part 21 certification procedures to reflect a systems approach develop and implement a comprehensive change management plan to prepare the workforce for its new responsibilities in a systems safety approach to certification and oversight; and review continued operational safety and rulemaking processes and implement reforms to improve efficiency. We found these recommendations to be relevant, clear, and actionable. In response to the committee’s recommendations, FAA developed a plan that includes 14 initiatives to implement the committee’s recommendations and publicly reported the plan in July 2013. However, FAA’s initiatives and programs to implement the recommendations do not contain some of the elements essential to a performance measurement process. Without early performance measures, FAA will not be able to gather the appropriate data to evaluate the success of current and future initiatives and programs. Consistency of Regulatory Interpretation In 2010, we reported that variation in FAA’s interpretation of standards for certification and approval decisions is a long-standing issue that can result in delays and higher costs for industry. A second FAA-industry committee—the Consistency of Regulatory Interpretation Aviation Rulemaking Committee (regulatory consistency committee)—established to respond to Section 313 of the Act, identified three root causes of inconsistent interpretation of regulations—(1) unclear regulatory requirements; (2) inadequate and nonstandard FAA and industry training in developing regulations, applying standards, and resolving disputes; and (3) a culture that includes a general reluctance by both industry and FAA to work issues of inconsistent regulatory application through to a final resolution and a “fear of retribution.” The root causes are consistent with issues raised in our 2010 review and those raised by industry during that review. FAA reported on July 19, 2013, that it is determining the feasibility of implementing these recommendations. The agency told us that it expected to develop an action plan to address the recommendations and metrics to measure implementation by December 2013. Measuring outcomes can help in understanding if an action is having the intended effect. FAA faces challenges in implementing the committees’ recommendations and further improving its certification and approval processes. FAA’s certification and approval workload is expected to grow over the next 10 years because of activities such as the introduction of new technologies and materials, such as composite materials used in airplanes, according to one industry committee report. Having certification and approval processes that work well will allow FAA to better meet these increasing workload demands and better ensure aviation safety in an era of limited resources.

Why GAO Did This Study Among the agency's responsibilities for aviation safety, FAA issues certificates for new aircraft and parts and grants approvals for changes to air operations and aircraft. In 2010, GAO made recommendations to improve FAA's certification and approval processes. Subsequently, the Act required FAA to work with industry to assess the certification process and address some of the findings in GAO's report. In July 2013, FAA issued reports on its efforts, including those in response to committee recommendations and FAA's implementation plans. This testimony addresses FAA's responses to the recommendations made by GAO in 2010 and the two joint FAA-industry committees concerning (1) the certification and approval processes and (2) the consistency of regulatory interpretation. It also discusses future challenges facing FAA's certification and approval processes. This statement is based in part on GAO's 2010 report. More detailed information on the objectives, scope, and methodology for that work can be found in that report. In addition, for this statement, GAO interviewed industry representatives, reviewed the methodologies used to develop the committees' recommendations, and assessed the recommendations and FAA's planned responses to those recommendations in terms of whether they were relevant, clear, actionable, and feasible. GAO is not making any new recommendations in this testimony. What GAO Found In 2010, GAO reported that industry stakeholders and experts believed that the Federal Aviation Administration's (FAA) certification and approval processes contribute positively to the safety of the national airspace system. However, stakeholders and experts also noted that negative certification and approval experiences--such as duplication of approvals--although infrequent, can result in delays that industry says are costly. GAO made two recommendations requiring, among other things, that FAA develop a continuous evaluative process and a method to track submission approvals. FAA addressed one recommendation and partially addressed the other. An FAA-industry committee established in response to the FAA Modernization and Reform Act of 2012 (the Act) made six recommendations to improve the certification and approval processes, including establishing a performance measurement process. In response to recommendations from the certification process committee, FAA developed an implementation plan with 14 initiatives, but the initiatives do not contain some elements essential to a performance measurement process, such as performance measures. Without performance measures, FAA will be unable to evaluate current and future programs. GAO also reported in 2010 that variation in FAA's interpretation of standards for certification and approval decisions is a long-standing problem. A second FAA-industry committee, established in response to the Act, made recommendations concerning the consistency of regulatory interpretation. FAA reported that it is determining the feasibility of implementing the recommendations and expected to develop an action plan by December 2013. Further, FAA reported it would measure implementation, but not outcomes; measuring outcomes helps to understand if the action is having the intended effect. Among the challenges facing FAA, its certification and approval workload is expected to grow due to the introduction of new technologies and materials and expected progress in the deployment of the Next Generation Air Transportation System. Having efficient and consistent certification and approval processes would allow FAA to better use its resources to meet these increasing workload demands and better ensure aviation safety in an era of limited resources.

gao_GAO-12-153

gao_GAO-12-153_0

A&A and Housebound benefits both offer assistance that helps veterans function more independently, but A&A benefits are only for those who are in need of regular aid and attendance of another person, whereas Housebound benefits are for those who may be substantially confined to their homes. Enhanced Monthly Benefit Population Is Changing and Costs Are Growing VA data at the end of fiscal year 2010 showed that for the overall enhanced monthly benefit population (including veterans and survivors), most recipients were veterans, over age 65, receiving the benefit as part of their monthly pension benefit, and receiving the A&A supplement, but the composition and characteristics of the recipient population is changing (see fig. While veterans over age 65 comprised the majority of the overall enhanced monthly benefit population from fiscal years 2000 to 2010, there was an increased share of survivors, recipients age 65 or younger, those receiving the benefits under the disability compensation program, and those receiving the Housebound benefit enhancement. For fiscal years 2000 to 2010, the total VA paid for enhanced benefits increased from approximately $124 million to $409 million; however, VA does not know the portion of enhanced benefit costs paid specifically for A&A and Housebound benefits. VA stated that it does not separately compile and monitor costs specifically attributable to A&A and Housebound benefits because they are not “stand-alone” benefits. Enhanced Monthly Benefits Help Veterans Obtain Needed Services, but High Service Costs and Limited Availability of Services in Some Locations Can Pose Difficulties Veterans and family members who participated in our focus groups and one-on-one interviews said that enhanced monthly benefits help them obtain needed assistance in different ways. For example, these benefits helped them pay for in-home services by private providers, offset lost income of family members who provide care, or defray the costs of an assisted living facility. The cost of these services varies among and within states. Also, services are less available in some rural areas, which can limit recipients’ ability to obtain them. Many Elderly Veterans May Be Unaware of Enhanced Monthly Benefits Despite VA’s Outreach Efforts Many Elderly Veterans Reportedly Lack Awareness of Enhanced Monthly Benefits VA’s data for fiscal years 2000 to 2010 indicate that elderly veterans and their surviving family members are the primary recipients of enhanced monthly benefits, although many other potentially eligible elderly veterans likely are unaware of these benefits. Also, a 2004 VA study found that while 62 percent of pension recipients might be eligible for these benefits, only about 22 percent received them.925,000 veterans and between 940,000 and 1.38 million surviving family members would be eligible for, but would not be receiving, VA pension benefits. VA’s general outreach activities tend to focus on benefits such as health care, disability compensation, education, and home loans. During these elderly outreach activities, regional office staff may have one-on-one conversations with attendees and provide information on enhanced monthly benefits to those who indicate they need assistance to perform everyday living activities. Recommendation for Executive Action To enable VA to improve its efforts to educate veterans and their family members about enhanced monthly benefits, we recommend that the Secretary of VA direct the Undersecretary for Benefits to take steps to conduct more focused outreach to potential recipients, which could entail the following: Improving communication of and accessibility to information about enhanced monthly benefits. III), VA concurred with our recommendation and provided information on a number of actions the agency planned to take or explore to address it. Appendix I: Objectives, Scope, and Methodology The objectives of our review were to determine (1) characteristics of enhanced monthly benefit recipients, (2) how enhanced monthly benefits help veterans obtain needed services, and the associated difficulties they face in obtaining these services, and (3) the Department of Veterans Affairs’ (VA) efforts in educating veterans and their family members about the availability of the benefits. We reviewed relevant federal laws and regulations. We assessed VA’s print and online informational materials for clarity and the extent to which they provide complete information on eligibility and application requirements for enhanced monthly benefits.

Why GAO Did This Study The Department of Veterans Affairs (VA) offers Aid and Attendance (A&A) benefits to individuals who need regular assistance and the attendance of another person or Housebound benefits to individuals who are substantially confined to their homes. These benefits, which increase recipients’ monthly disability compensation or pension payments, are called enhanced compensation or enhanced pension, respectively—collectively referred to as enhanced monthly benefits. This report describes (1) characteristics of enhanced monthly benefit recipients; (2) how the benefits help veterans obtain needed services, and the associated difficulties they face in obtaining these services; and (3) VA’s efforts to educate veterans and their family members about the availability of the benefits. GAO’s work included analyzing VA case-level demographic data from fiscal years 2000 to 2010 on enhanced monthly benefit recipients, conducting facilitated focus groups with veterans and their family representatives, and interviewing VA headquarters and regional officials on VA’s outreach efforts for enhanced monthly benefits, as well as reviewing relevant federal laws and regulations. What GAO Found According to VA data during fiscal years 2000 to 2010, most enhanced monthly benefit recipients were veterans, over age 65, and receiving the A&A enhancement as part of their pension benefit. The recipient population is changing, however. In particular, the percentage of enhanced monthly benefit recipients age 65 or younger increased from 18 percent to 24 percent over the decade. Also, the percentage of recipients paid benefits under the disability compensation program increased from 15 percent to 26 percent. The cost of enhanced monthly benefits has increased from $124 million in fiscal year 2000 to $409 million in fiscal year 2010; however, VA does not know what portion of these costs was paid specifically for A&A and Housebound benefits. VA maintains data on enhanced monthly benefit recipients’ total payments but does not separately identify the amount awarded as an A&A or Housebound benefit. VA officials stated that under its current system, separately tracking the costs of these benefits would be complicated and difficult. Enhanced monthly benefits helped veterans obtain services to perform everyday living activities in different ways, but high service costs and limited service availability in some areas can make it difficult to acquire the services. Benefit recipients GAO spoke with said that they used their benefits to pay for in-home services by private providers, offset lost income from family members who provided care for them, or defray the costs of an assisted living facility. However, obtaining services from private providers can still pose difficulties for some recipients because of the generally higher cost of services in large urban areas or the limited availability of services in rural areas. VA conducts a number of outreach activities to educate veterans and their family members about available benefits; however, a large number of elderly veterans may not be aware of their potential eligibility for enhanced monthly benefits. A VA study found that of pension recipients—who are mainly elderly veterans—62 percent might be eligible for enhanced monthly benefits but only 22 percent received them, which the study primarily attributed to lack of awareness about the benefits. VA’s outreach efforts may not be sufficient to inform elderly veterans about enhanced monthly benefits because outreach activities do not typically focus on these benefits, some printed material lacks information on eligibility and application requirements for these benefits, and the extent to which regional offices conduct elderly outreach varies, among other reasons. What GAO Recommends GAO recommends that VA conduct more focused outreach to better educate potential recipients about enhanced monthly benefits. VA agreed with the recommendation and described a number of actions it would take or explore to address it, such as including more detailed information in its printed material on enhanced monthly benefits.

gao_GAO-11-64

gao_GAO-11-64_0

Background President’s Global Health Initiative In May 2009, the President announced the creation of a new Global Health Initiative (GHI) and proposed $63 billion in funding for all global health programs, including HIV/AIDS, malaria, tuberculosis, and maternal and child health, through 2014. Global AIDS Coordinator (OGAC). Although PEPFAR initially targeted 15 countries, known as focus countries, since its establishment PEPFAR has made significant investments in 31 partner countries and 3 regions. From 2001 through 2003, U.S. bilateral spending on global HIV/AIDS rose, while spending on other global health programs dropped slightly. As would be expected given PEPFAR’s significant investment, from fiscal years 2004 through 2008, U.S. bilateral HIV/AIDS spending showed the greatest increase in PEPFAR focus countries, relative to nonfocus countries and regions with PEPFAR operational plans and other countries receiving HIV/AIDS assistance. In addition, our analysis determined that U.S. spending for other health- related health assistance also increased most for PEPFAR focus countries. Spending on HIV/AIDS and Other Health Programs Grew Overall, Despite Decreases in Other Health Foreign Assistance Spending Overall, U.S. bilateral foreign assistance spending on both global HIV/AIDS and other health programs increased in fiscal years 2001 through 2008. U.S. spending on other health-related programs decreased from 2001 to 2003. 2004-2008. Spending Levels and Growth Rates Varied among Three Key Regions In fiscal years 2001 through 2008, the majority of U.S. bilateral HIV/AIDS program spending was in sub-Saharan Africa, Asia, and Latin America and the Caribbean—three regions where the 15 PEPFAR focus countries and 14 of the 16 nonfocus countries with PEPFAR operational plans are located—with the greatest U.S. spending on global HIV/AIDS foreign assistance programs in sub-Saharan Africa. Three Key HIV Treatment Costing Models Used to Inform Policy and Program Decisions To inform policy and program decisions related, in part, to expanding efforts to provide ART in developing countries, OGAC, USAID, and UNAIDS have adopted three different models for ART cost analyses. The report also provides information on models used to estimate HIV treatment costs. To examine trends in U.S. bilateral spending on global HIV/AIDS- and other health-related foreign assistance programs, we analyzed data from the Foreign Assistance Database (FADB) provided by the U.S. Agency for International Development (USAID), interviewed State Department, USAID, and Health and Human Services (HHS) officials in Washington, D.C., and Centers for Disease Control and Prevention (CDC) officials in Atlanta. The specific analyses presented in this report examine disbursement levels and growth trends from fiscal years 2001 to 2008 for bilateral HIV/AIDS and other health-related foreign assistance programs by time period (pre- PEPFAR and first 5 years of PEPFAR for all countries); PEPFAR country status (focus countries with PEPFAR operational plans, nonfocus countries with PEPFAR country or regional operational plans, and other nonfocus countries receiving HIV/AIDS-related foreign assistance from 2001 to 2008); and region (sub-Saharan Africa, Latin America and the Caribbean, and Asia, which received the majority of U.S. spending on bilateral HIV/AIDS-related foreign assistance). Global Health: Spending Requirement Presents Challenges for Allocating Prevention Funding under the President’s Emergency Plan for AIDS Relief.

Why GAO Did This Study U.S. funding for global HIV/AIDS and other health-related programs rose significantly from 2001 to 2008. The President's Emergency Plan for AIDS Relief (PEPFAR), reauthorized in 2008 at $48 billion through 2013, has made significant investments in support of prevention of HIV/AIDS as well as care and treatment for those affected by the disease in 31 partner countries and 3 regions. In May 2009, the President proposed spending $63 billion through 2014 on global health programs, including HIV/AIDS, under a new Global Health Initiative. The Office of the U.S. Global AIDS Coordinator (OGAC), at the Department of State (State), coordinates PEPFAR implementation. The Centers for Disease Control and Prevention (CDC) and the U.S. Agency for International Development (USAID), among other agencies, implement PEPFAR as well as other global health-related assistance programs, such as maternal and child health, infectious disease prevention, and malaria control, among others. Responding to legislative directives, this report examines U.S. disbursements (referred to as spending) for global HIV/AIDS- and other health-related bilateral foreign assistance programs (including basic health and population and reproductive health programs) in fiscal years 2001-2008. The report also provides information on models used to estimate HIV treatment costs. GAO analyzed U.S. foreign assistance data, reviewed HIV treatment costing models and reports, and interviewed U.S. and UNAIDS officials. What GAO Found In fiscal years 2001-2008, bilateral U.S. spending for HIV/AIDS and other health-related programs increased overall, most significantly for HIV/AIDS. From 2001 to 2003--before the establishment of PEPFAR--U.S. spending on global HIV/AIDS programs rose while spending on other health programs dropped slightly. From fiscal years 2004 to 2008, HIV/AIDS spending grew steadily; other health-related spending also rose overall, despite declines in 2006 and 2007. As would be expected, U.S. bilateral HIV/AIDS spending showed the most increase in 15 countries--known as PEPFAR focus countries--relative to other countries receiving bilateral HIV/AIDS assistance from fiscal years 2004 through 2008. In addition, GAO's analysis showed that U.S. spending on other health-related bilateral foreign assistance also increased most for PEPFAR focus countries. Spending growth rates varied among three key regions--sub-Saharan Africa, Asia, and Latin America and the Caribbean--as did these regions' shares of HIV/AIDS and other health foreign assistance spending following establishment of PEPFAR. OGAC, USAID, and UNAIDS have adopted three different models to estimate and project antiretroviral therapy (ART) costs. The three models--respectively known as the PEPFAR ART Costing Project Model, the HIV/AIDS Program Sustainability Analysis Tool, and Spectrum--are intended to inform policy and program decisions related, in part, to expanding efforts to provide ART in developing countries.

gao_GAO-07-618

gao_GAO-07-618_0

DOD Continues to Have Problems That Hinder Progress in Implementing Its Corrosion Prevention and Mitigation Strategy DOD has had long-standing problems in funding, identification of impacts, and development of metrics, and these are continuing. Third, the Corrosion Office has not developed results-oriented metrics, even though we have previously recommended that it do so. Without comprehensive reviews of the services’ corrosion-related programs and proposed funding requests, the Corrosion Office cannot fulfill its oversight and coordination role for the department. None of the four services has a designated official or office to oversee and coordinate corrosion activities, despite a recommendation by the Defense Science Board that they do so. To date, it has made some progress in identifying corrosion cost impacts. Without an action plan, DOD could miss opportunities for achieving long- term corrosion cost savings. Most Major Defense Acquisition Programs We Reviewed Have Not Incorporated Key Elements of Corrosion Prevention Planning The Corrosion Prevention and Control Planning Guidebook encourages the establishment of corrosion prevention and control plans and corrosion prevention advisory teams as early as possible in the acquisition process. However, only 14 of the 51 programs we reviewed actually had both plans and advisory teams. We found that one reason why most programs did not have corrosion prevention plans or corrosion prevention advisory teams is that while they are strongly suggested, these elements are not mandatory. In addition to this DOD guidance, the individual services have issued guidance that also calls for incorporating corrosion prevention planning during acquisition of weapon system programs. Moreover, these programs may be missing opportunities to prevent future corrosion and thereby mitigate the impacts of corrosion on the costs, readiness, and safety of military equipment. Without top DOD and service leadership commitment to addressing these issues, corrosion prevention and mitigation will remain an elusive goal and opportunities to reduce costs, enhance readiness, and avoid safety problems will be lost. To ensure that DOD’s Corrosion Office provides oversight and coordination of the services’ proposed funding requests for corrosion prevention and mitigation programs, we recommend that the Secretary of Defense: Direct the Under Secretary of Defense for Acquisition, Technology, and Logistics to require the military services to provide comprehensive data about their annual funding requirements for corrosion prevention and mitigation efforts to the DOD Corrosion Office, before annual funding requests are sent to Congress. To ensure that DOD does not miss opportunities for achieving long-term corrosion cost savings, we recommend that the Secretary of Defense: Direct the Under Secretary of Defense for Acquisition, Technology, and Logistics to develop an action plan for using the information contained in the Army ground vehicle and Navy ship segments of DOD’s cost impact study. Appendix II: Scope and Methodology To assess the Department of Defense’s (DOD) efforts to implement its corrosion prevention and mitigation strategy, including the oversight of funding; identification of cost, readiness, and safety impacts; and the development of results-oriented metrics, we reviewed DOD’s funding and progress for corrosion-related projects that it initiated during fiscal years 2005 and 2006.

Why GAO Did This Study Corrosion can have a deleterious effect on military equipment and infrastructure in terms of cost, readiness, and safety. Recognizing this concern, the Bob Stump National Defense Authorization Act of Fiscal Year 2003 required the Department of Defense (DOD) to designate an official or organization to oversee and coordinate efforts to prevent and mitigate corrosion. Recently, the National Defense Authorization Act of Fiscal Year 2006 directed GAO to examine the effectiveness of DOD's corrosion prevention and mitigation programs. In addition, GAO evaluated the extent to which DOD has incorporated corrosion prevention planning in acquiring weapon systems. GAO reviewed strategy documents, reviewed corrosion prevention planning for 51 recent major weapon system acquisitions, and interviewed DOD and military service officials. What GAO Found DOD continues to have problems that hinder progress in implementing its corrosion prevention and mitigation strategy. While it has created a Corrosion Policy and Oversight Office, that office lacks the ability to oversee and coordinate its efforts throughout DOD, as envisioned by Congress. For example, DOD's office does not review all of the services' proposed funding requests for corrosion programs, even though it is required to do so, because DOD has not directed the services to provide such information and none of the services has a designated official or office to oversee and coordinate servicewide corrosion activities. Without comprehensive reviews of the services' corrosion-related programs and proposed funding requests, the office cannot fulfill its oversight and coordination role. DOD has made some progress in identifying corrosion cost impacts, but it has not identified readiness and safety impacts. It recently completed corrosion cost impact studies for Army ground vehicles and Navy ships, identifying an estimated $4.5 billion in annual corrosion costs. Although the studies provided potentially useful data for reducing these costs, DOD has not developed an action plan to apply these data to developing corrosion prevention and mitigation strategies. Without an action plan, it could miss opportunities to achieve long-term cost savings. DOD has not yet developed results-oriented metrics, although GAO has previously recommended that it do so. Without top DOD and service leadership commitment to address these issues, corrosion prevention and mitigation will remain elusive goals and opportunities to reduce costs, enhance readiness, and avoid safety problems will be lost. Most of the weapon system acquisition programs GAO reviewed had not incorporated key elements of DOD corrosion prevention guidance. GAO found that only 14 of the 51 programs reviewed had both corrosion prevention plans and advisory teams, as encouraged in the DOD guidance. The primary reason most programs did not have these two elements is that they are not mandatory. As a result, these programs may be missing opportunities to prevent and mitigate corrosion.

gao_GAO-13-564

gao_GAO-13-564_0

Mission planning includes determining whether military or commercial aircraft will fly a mission. CRAF carriers generally have priority over non-CRAF carriers for movements of passengers and cargo. DOD’s Process for Monitoring Flying Hours Provides Information That Could Help It Determine When to Shift Eligible Missions to CRAF Participants DOD has exceeded the flying hours needed to meet military training requirements for fiscal years 2002 through 2010 due to increased operational requirements associated with Afghanistan and Iraq; however it does not know whether it used CRAF participants to the maximum extent practicable during this period. However, DOD does not use information from its process for monitoring flying hours to determine when it will use more hours than it has planned to meet training requirements and shift eligible airlift missions to CRAF participants to ensure that commercial sources are used to the maximum extent practicable, as required by DOD guidance. DOD Exceeded Its Required Military Training Hours for Fiscal Years 2002 through 2010, but Has Reduced the Percentage of Excess Hours in Recent Years The National Airlift Policy states that the “Department of Defense shall establish appropriate levels for peacetime cargo airlift augmentation in order to promote the effectiveness of the Civil Reserve Air Fleet and provide training within the military airlift system.” Consistent with that policy, DOD Instruction 4500.57 requires that DOD operate its fleet to meet its training requirements and also requires that it use commercial sources of transportation to the “maximum extent practicable.” DOD officials stated that they have been using military airlift beyond what was planned, because the operations in Afghanistan and Iraq created additional airlift requirements, many of which could not be met using U.S. commercial sources. After the drawdown in Afghanistan concludes, the need for airlift is expected to decline, which will reduce both training opportunities and the business available for CRAF participants. As a result, DOD may be using its military fleet more than necessary thereby risking reduced participation of commercial carriers in the CRAF program. DOD Restricts Partial Plane Loads on Channel Routes to Promote Efficiency, Meet Training Requirements, and Fulfill Peacetime Business Obligations to CRAF DOD provided several reasons for restricting commercial carriers from transporting partial plane loads of cargo over certain routes, based on its need to promote efficiency, meet its military airlift training requirements, and fulfill peacetime business obligations to CRAF participants. According to TRANSCOM officials, in 2001, DOD began restricting commercial air carriers from transporting partial plane loads of cargo over certain overseas channel routes in order to improve the efficiency and effectiveness of the cargo missions flown over these routes and keep cargo flights in the channel route system that DOD relies on to satisfy its training requirements and business obligations to CRAF participants. TRANSCOM officials stated that to maximize efficiency, DOD requires aircraft conducting channel route missions—whether they are military or commercial—to be completely full of cargo before takeoff. DOD’s policy of restricting commercial carriers from transporting partial loads over channel routes has allowed DOD to shift cargo into the channel route system, increase the number of channel route missions available for aircrews to satisfy flying hour training requirements, and address DOD’s flying hour shortage. This business consists, in part, of missions flown across channel routes. Adequacy of CRAF to Meet Future Mission Needs is Unclear until DOD Completes Several Assessments DOD is conducting several interrelated studies to determine its future airlift requirements; however it is unclear whether the planned size of CRAF will be adequate to meet future airlift requirements. DOD’s Mission Needs for CRAF Have Changed Since its Last Assessment of Future Requirements DOD reports that there are more aircraft committed to the CRAF program than are needed to fulfill the wartime requirements established by the Mobility Capability Requirements Study 2016 (MCRS–16), which was issued in 2010. DOD has taken a number of steps to strengthen the CRAF program while also ensuring that military aircrews receive required training. Recommendation for Executive Action To balance the use of military and civilian aircraft and ensure that commercial carriers participating in the CRAF program are used to the maximum extent practicable, we recommend that the Secretary of Defense direct the Secretary of the Air Force and the Commander, U.S. Transportation Command—in conjunction with the Commander, Air Mobility Command—to use the Air Mobility Command’s existing process for monitoring training hours to determine when it can shift eligible peacetime airlift workload from military to commercial sources. Agency Comments We provided a draft of this report to DOD for comment. In its written comments, reproduced in appendix IV, DOD concurred with our recommendation and stated that it believes implementing the recommendation will further improve the Civil Reserve Air Fleet program. To assess whether DOD has established future requirements for the CRAF program and how the planned size of CRAF compares with those requirements, we obtained and reviewed various studies conducted by DOD to assess its strategic airlift capabilities, such as DOD’s Mobility Requirements and Capabilities Study – 2016, and the AMC 2012 CRAF study. We also reviewed a provision in the National Defense Authorization Act for Fiscal Year 2013 that requires DOD to conduct a new study of mobility capabilities and requirements.

Why GAO Did This Study To move passengers and cargo, DOD supplements its military aircraft with cargo and passenger aircraft from volunteer commercial carriers participating in the CRAF program. Participating carriers commit their aircraft to support a range of military operations in exchange for peacetime business. A House Armed Services Committee mandated GAO to report on matters related to the CRAF program. GAO assessed whether DOD (1) met its military airlift training requirements while also using CRAF participants to the maximum extent practicable, (2) provided justification for restricting commercial carriers from transporting partial plane loads of cargo over certain routes, and (3) has established future requirements for CRAF and how the planned size of CRAF compares to those requirements. GAO reviewed guidance and policies pertaining to the program, flying hour data, and DOD-sponsored CRAF study reports. GAO also interviewed DOD and industry officials. What GAO Found DOD exceeded the flying hours needed to meet military training requirements for fiscal years 2002 through 2010 because of increased operational requirements associated with Afghanistan and Iraq; however it does not know whether it used Civil Reserve Air Fleet (CRAF) participants to the maximum extent practicable. DOD guidance requires it to meet training requirements and to use commercial transportation to the "maximum extent practicable." During fiscal years 2002 through 2010, DOD flew its fleet more than needed to train its crews, although its flying has more closely matched its training needs in recent years. DOD has also used CRAF participants extensively to supplement military airlift. Although DOD has taken steps to make more airlift business available to CRAF participants, officials said that overseas operations have provided enough missions to support both training and CRAF business obligations. However, with the drawdown in Afghanistan, DOD officials expect the need for airlift to decline by at least 66 percent--to pre-September 2001 levels--reducing both training hours available for DOD and business opportunities for CRAF. DOD does not use its process for monitoring flying hours to determine when it will exceed required training hours and allocate eligible airlift missions to CRAF participants. Therefore, it cannot determine whether it is using CRAF to the maximum extent practicable. As a result, DOD may be using its military fleet more than necessary--which officials say is less economical--while risking reduced CRAF participation. DOD provided several reasons for restricting commercial carriers from transporting partial plane loads of cargo over channel routes, including the need to promote efficiency, meet its military airlift training requirements, and fulfill peacetime business obligations to CRAF participants. Channel route missions are regularly scheduled airlift missions used to transport cargo and provide aircrew training time. These missions also help DOD provide business to CRAF participants. According to U.S. Transportation Command (TRANSCOM) officials, DOD generally requires aircraft conducting channel route missions to be completely full of cargo before takeoff. The policy restricting carriers from flying partial loads over channel routes allows DOD to consolidate cargo previously flown by commercial carriers in less than full plane loads and redirect that cargo into the channel route system, where it will be transported by either commercial or military aircraft as part of a full plane load mission. According to DOD, consolidating cargo into full loads flown over the channel route system has increased both the efficiency of these missions and the availability of missions that DOD uses to train its crews and fulfill its business obligations to CRAF. It is unclear whether the planned size of CRAF will be adequate to meet future airlift requirements. DOD last established its future requirements based on the wartime scenarios in the Mobility Capability Requirements Study 2016, issued in 2010. However, due to changing military strategy and priorities, the 2010 study does not reflect current mission needs. The National Defense Authorization Act for Fiscal Year 2013 requires DOD to conduct a new mobility capabilities and requirements study. DOD has not begun this study or finalized its ongoing reviews of the CRAF program's ability to support future requirements. Once they are finalized, these studies should allow DOD to better understand future requirements for CRAF and whether the CRAF program will meet future airlift requirements. What GAO Recommends GAO recommends that the Secretary of Defense direct the Secretary of the Air Force and the Commander, U.S. Transportation Command—in conjunction with the Commander, Air Mobility Command—to use its existing processes for monitoring training to determine when it can shift its distribution of peacetime airlift workload from military to commercial sources. In comments on a draft of this report, DOD concurred with GAO’s recommendation and stated that it believes implementing the recommendation will further improve the Civil Reserve Air Fleet program.

gao_GAO-09-39

gao_GAO-09-39_0

Most Commercial Property/Casualty Insurers and Reinsurers We Contacted Exclude or Limit Coverage for NBCR Risks, While Workers’ Compensation, Life, and Health Insurers Generally Are Required to Offer Such Coverage Commercial property/casualty insurers and reinsurers generally seek to exclude coverage for NBCR risks or place significant restrictions on such coverage. NBCR Coverage Generally Is Unavailable in Commercial Property/Casualty Insurance and Reinsurance Policies, but the Exclusions Used to Limit Coverage Could Be Challenged in Court While few market surveys that we identified specifically have addressed the availability of property/casualty insurance for terrorist attacks involving NBCR materials, our interviews with a range of industry participants suggests that such coverage continues to be limited. Similarly, we were told that group life insurers generally do not exclude NBCR coverage from their policies, according to regulators and industry participants. Potential Financial Consequences of NBCR Attacks Limit Property/Casualty Insurers’ Willingness to Offer Coverage; Insurers for Other Lines of Insurance Report Limited Capacity to Manage Associated Risks Commercial property/casualty insurers and reinsurers generally are not willing to provide coverage for NBCR attacks or place significant restrictions on the coverage they offer because of the uncertainties surrounding such attacks and their potential for generating catastrophic losses. Life and health insurers may also face challenges in managing NBCR risks, such as competitive market pressures and challenges in establishing appropriate premiums for their potential exposures. Because insurers and reinsurers face challenges in reliably estimating the severity and frequency of terrorist attacks involving NBCR materials and setting appropriate premiums, industry representatives reported that their companies focus on the most catastrophic attacks under scenarios with widespread financial losses. For example, an early version of the bill to reauthorize TRIA in 2007 would have required insurers to make NBCR coverage available and would have lowered their exposure to potential losses. Proposal 1: Amend TRIA to Require Insurers to Make NBCR Coverage Available with the Federal Government Assuming Greater Financial Responsibility for Potential Losses The House of Representatives initially passed an early version of the 2007 reauthorization of TRIA that would have amended the act to (1) require insurers to make NBCR coverage available to policyholders, and (2) require the federal government to assume a relatively high proportion of the associated financial risk. For example, a representative from one insurer said that unless mandated to do so, insurers would not offer coverage for NBCR risks. Some industry participants expressed particular concern about the impact that such a proposal would have on smaller insurers. Consequently, some industry participants said that insurers, faced with a mandate of providing NBCR coverage, might set premiums at rates they consider necessary to compensate for the risks of a catastrophic attack, which could deter many commercial entities from purchasing such coverage. Furthermore, although the RAND study concluded that costs to the federal government could be reduced by requiring insurers to offer NBCR coverage, the study noted that in the case of extremely large NBCR attacks, the federal government’s financial liability could be larger than if it did not participate in the market for terrorism insurance and require insurers to offer NBCR coverage. In their oral comments, Treasury officials said that they found the report informative and useful. NAIC provided written comments on a draft of this report, which have been reprinted in appendix II. However, NAIC reported a philosophical difference of opinion with comments in the draft report about the ability of workers’ compensation insurers to charge risk-based premiums for attacks involving NBCR weapons. However, the draft report in no way meant to imply that state insurance regulators succumb to voter and legislative pressures in approving rates, and simply reported that workers’ compensation insurers and some regulators we contacted for both our September 2006 report and this report said that they did not believe the permissible surcharges would be sufficient to cover the potential losses associated with an NBCR attack. Appendix I: Objectives, Scope, and Methodology Our objectives were to review (1) the extent to which insurers and reinsurers offer coverage for nuclear, biological, chemical, and radiological (NBCR) attacks; (2) the factors that contribute to the willingness of insurers and reinsurers to provide coverage for NBCR attacks and their ability to manage these risks; and (3) any public policy options for expanding coverage for these risks, given current insurance market conditions. We also reviewed the Department of the Treasury’s 2005 Report to Congress, Assessment: The Terrorism Risk Insurance Act of 2002 and its results from a survey of commercial property/casualty insurers on the coverage they offered for NBCR risks.

Why GAO Did This Study The Terrorism Risk Insurance Act of 2002 (TRIA) is credited with stabilizing insurance markets after the September 11, 2001, attacks by requiring insurers to offer terrorism coverage to commercial property owners (property/casualty insurance), and specifying that the federal government is liable for a large share of related losses. While TRIA covers attacks involving conventional weapons, insurers may use exceptions that may exclude coverage for attacks with nuclear, biological, chemical, or radiological (NBCR) weapons, which has raised concerns about the potential economic consequences of such attacks. TRIA's 2007 reauthorization directed GAO to review (1) the extent to which insurers offer NBCR coverage, (2) factors that contribute to the willingness of insurers to provide NBCR coverage, and (3) policy options for expanding coverage for NBCR risks. To do this work, GAO reviewed studies and reports and interviewed more than 100 industry participants about the availability of NBCR coverage in the market. GAO provided a draft of this report to the Department of the Treasury and the National Association of Insurance Commissioners (NAIC). Treasury and NAIC said that they found the report informative and useful. NAIC did express what it said was a philosophical difference of opinion with GAO's characterization of risk-based premiums for workers' compensation insurers. What GAO Found Consistent with the findings of a September 2006 GAO report on the market for NBCR terrorism insurance, property/casualty insurers still generally seek to exclude such coverage from their commercial policies. In doing so, insurers rely on long-standing standard exclusions for nuclear and pollution risks, although such exclusions may be subject to challenges in court because they were not specifically drafted to address terrorist attacks. Commercial property/casualty policyholders, including companies that own high-value properties in large cities, generally reported that they could not obtain NBCR coverage. Unlike commercial property/casualty insurers, insurers in workers' compensation, group life, and health lines reported generally providing NBCR coverage because states generally do not allow them to exclude these risks. Commercial property/casualty insurers generally remain unwilling to offer NBCR coverage because of uncertainties about the risk and the potential for catastrophic losses, according to industry participants. Insurers face challenges in reliably estimating the severity and frequency of NBCR attacks for several reasons, including accounting for the multitude of weapons and locations that could be involved (ranging from an anthrax attack on a single building to a nuclear explosion in a populated area) and the difficulty or perhaps impossibility of predicting terrorists' intentions. Without the capacity to reliably estimate the severity and frequency of NBCR attacks, which would be necessary to set appropriate premiums, insurers focus on determining worst-case scenarios (which with NBCR weapons can result in losses that would render insurers insolvent). For example, a nuclear detonation could destroy many insured properties throughout an entire metropolitan area. Workers' compensation, group life, and health insurers that generally cannot exclude NBCR coverage from their policies also face challenges in managing these risks. For example, workers' compensation insurers said they face challenges in setting premiums that they believe would cover the potential losses associated with an attack involving NBCR weapons. GAO reviewed two proposals that have been made to address the lack of NBCR coverage in the commercial property/casualty market. The first proposal, part of an early version of the bill to reauthorize TRIA in 2007, would have required insurers to offer NBCR coverage, with the federal government assuming a greater share of potential losses than it would for conventional attacks. Some industry participants supported this proposal because insurers otherwise would not offer NBCR coverage and because a substantial federal backstop was necessary to mitigate the associated risks. However, others said that some insurers might withdraw from the market if mandated to offer NBCR coverage, even with a substantial federal backstop. In a second proposal by some industry participants, the federal government would assume all potential NBCR risks through a separate insurance program and charge premiums for doing so. However, critics said the government might face substantial losses on such an NBCR insurance program because it might not be able to determine or charge appropriate premiums.

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Current Program Oversight Does Not Ensure That Manufacturer- Reported Prices or Price Determination Methods Are Consistent with Program Criteria The minimal oversight by CMS and OIG of manufacturer-reported prices and price determination methods does not ensure that those prices or methods are consistent with program criteria, as specified in the rebate statute, rebate agreement, and CMS program memoranda. CMS conducts limited reviews of prices and only reviews price determination methods when manufacturers request recalculations of prior rebates. Despite these limitations, in some instances OIG was able to identify some problems with the accuracy of manufacturers’ reported prices; however, CMS has not followed up with manufacturers to make sure that these problems with prices and price determination methods have been resolved. Manufacturer Price Determination Methods Varied: Some Could Have Led to Lower Rebates We found considerable variation in the methods that manufacturers used to determine best price and AMP. Manufacturers are allowed to make reasonable assumptions when determining best price and AMP, as long as those assumptions are consistent with the law and the rebate agreement. We found that in some cases manufacturers’ assumptions could have led to lower rebates and in other cases to higher rebates. Manufacturers can later revise their assumptions and request recalculations of previously paid rebates, which can result in states repaying any excess rebates. In some cases, not accounting for the effect of both price reductions—the prompt payment discount and the chargeback—in the determination of best price and AMP reduced rebates below what they otherwise would have been. This approach, which diverged from the rebate agreement and applicable CMS program memoranda, could have resulted in artificially high AMPs, which in turn could have raised rebates. Rebate Program Does Not Clearly Address Certain Financial Concessions Negotiated by PBMs The rebates that manufacturers pay to states are based on a range of prices and financial concessions that manufacturers make available to entities that purchase their drugs, but may not reflect certain financial concessions manufacturers offer to other entities in today’s complex market. The rebate program did not initially address these types of concessions, which are relatively new to the market. CMS’s subsequent guidance to manufacturers has not clearly stated how manufacturers should treat these concessions in their determinations of best price and AMP. Certain manufacturer financial concessions that are negotiated by PBMs on behalf of their third-party payer clients, such as employer-sponsored health plans and other health insurers, are not clearly reflected in best price or AMP. Within the current structure of the rebate formula, additional guidance on how to account for manufacturer payments to PBMs could affect the rebates paid to states, although whether rebates would increase or decrease as a result, and by how much, is uncertain. To determine the level of rebates that manufacturers pay to states, the rebate program relies on manufacturer-reported prices, which are based on the prices and financial concessions available in the private pharmaceutical market. Recommendations for Executive Action To help ensure that the Medicaid drug rebate program is achieving its objective of controlling states’ Medicaid drug spending, we recommend that the Administrator of CMS take the following two actions: Issue clear guidance on manufacturer price determination methods and the definitions of best price and AMP, and update such guidance as additional issues arise.

Why GAO Did This Study To help control Medicaid spending on drugs, states receive rebates from pharmaceutical manufacturers through the Medicaid drug rebate program. Rebates are based on two prices--best price and average manufacturer price (AMP)--reported by manufacturers. Both reflect manufacturers' prices to various entities, accounting for certain financial concessions like discounts. Concerns have been raised about rising Medicaid drug spending. GAO studied (1) federal oversight of manufacturer-reported best prices and AMPs and the methods used to determine them, (2) how manufacturers' determinations of those prices could have affected rebates, and (3) how the rebate program reflects financial concessions in the private market. What GAO Found Current rebate program oversight does not ensure that manufacturer-reported prices or price determination methods are consistent with program criteria specified in the rebate statute, rebate agreement, and Centers for Medicare & Medicaid Services (CMS) program memoranda. In administering the program, CMS conducts only limited checks for reporting errors in manufacturer-reported drug prices. In addition, CMS only reviews the price determination methods when manufacturers request recalculations of prior rebates. In four reports issued from 1992 to 2001, the Department of Health and Human Services' (HHS) Office of Inspector General (OIG) identified several factors that limited its ability to verify the accuracy of drug prices reported by manufacturers, including a lack of clear guidance on how AMP should be calculated. In some cases, OIG found problems with manufacturers' price determination methods and reported prices. However, CMS has not followed up with manufacturers to make sure that the identified problems with prices and methods have been resolved. There was considerable variation in the methods that manufacturers used to determine best price and AMP, and some methods could have reduced the rebates state Medicaid programs received. Manufacturers are allowed to make assumptions when determining best price and AMP, as long as they are consistent with the law and the rebate agreement. The assumptions often involve the treatment of discounts and other price reductions in best price and AMP. Some manufacturers combined price reductions associated with particular sales in their price determination methods, while others accounted for the reductions separately. Separate treatment of the reductions resulted in rebates to states that in some cases were lower than they would have been had the reductions been considered together. Some manufacturers made assumptions that diverged from the rebate agreement and CMS program memoranda that could have raised rebates. States could have to repay any excess rebates if manufacturers revise their assumptions and request recalculations of prior rebates. The rebates that manufacturers pay to states are based on prices and financial concessions manufacturers make available to entities that purchase their drugs but may not reflect certain financial concessions they offer to other entities. In particular, the rebate program does not clearly address certain manufacturer payments that are negotiated by pharmacy benefit managers (PBM) on behalf of third-party payers such as employer-sponsored health plans and other health insurers. These types of financial arrangements are relatively new to the market. CMS's guidance to manufacturers has not clearly stated how manufacturers should treat these payments in their determinations of best price and AMP. Within the current structure of the rebate formula, additional guidance on how to account for these payments to PBMs could affect the rebates paid to states, although whether rebates would increase or decrease as a result, and by how much, is uncertain.

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DOD Regional Centers’ Mission The five Regional Centers for Security Studies (Regional Centers) support DOD’s objective to build the defense capacity of partner nations. The Regional Centers’ activities include education, exchanges, research, and information sharing. DOD Organizations Administer Various Types of Training and Educational Programs and Activities DOD provides U.S. and foreign participants with a variety of training and educational programs and activities through its five Regional Centers, its professional military education and advanced degree-conferring institutions, and its professional development institutions. Regional Centers’ Programs and Activities Share Similarities and Differences with Those Offered by Other DOD Institutions Programs and activities administered by the Regional Centers and other DOD professional military education and advanced degree-conferring institutions as well as professional development institutions have similar features in that they all offer curriculum topics intended to help participants enhance knowledge and skills on security and military matters; target members of the military; and feature program formats that include in-residence courses; seminars, conferences, workshops; distance learning; and in-country instruction. In contrast, professional military education institutions generally focus on military operations and leadership; and advanced degree-conferring institutions and professional development institutions generally focus on professional knowledge, skills, and experiences. The Regional Centers’ audience is generally civilian and military officials from other countries. Although the Regional Centers generally offer shorter-duration courses on a range of security topics, some centers provide participants with opportunities to obtain credit for their attendance. DOD Has Taken Steps to Enhance Oversight of the Regional Centers Plans and Activities but Its Ability to Assess Their Progress Remains Limited DOD has taken some steps to enhance its oversight of the Regional Centers’ plans and activities, but it does not have a sound basis to evaluate their progress in achieving DOD priorities because it has not developed an assessment approach that includes measurable goals and objectives with metrics or established a methodology for using the performance information it collects. Our prior workhas found that achieving results in government requires a comprehensive oversight framework that includes clear goals, measurable objectives, and metrics for assessing progress, consistent with the framework established in the Government Performance and Results Act. OUSD Policy has not established a methodology for assessing the Regional Centers’ progress in achieving DOD priorities, to include clarifying how it will use performance data provided by the Regional Centers and clearly identifying the role of its governance board in the assessment process. For example, the governance body has not identified how it will consider the performance information provided by the Regional Centers in making decisions or demonstrated how the newly established planning process will integrate the performance information to assess the Regional Centers’ progress towards OUSD Policy strategic goals and priority objectives. While DOD has taken positive steps by establishing a new governance body and updating DOD guidance applying to the Regional Centers for fiscal year 2013, DOD does not yet have a process to assess the Regional Centers’ progress. Conducting routine assessments using measurable goals and objectives, with metrics to evaluate progress, and a methodology for using performance information to include defining the role of the governance board, would provide DOD a sounder basis for assessing the Regional Centers’ progress in achieving results and better determining the allocation of resources. Recommendations for Executive Action To enhance DOD’s ability to determine whether the Regional Centers are achieving departmental priorities, we recommend that the Secretary of Defense direct the Under Secretary of Defense for Policy to develop an approach to assess the Regional Centers’ progress in achieving DOD priorities, including identifying measurable goals and objectives, metrics, or other indicators of performance, and develop a methodology for using performance information, to include defining the role of the governance board in the process. If you or your staff have questions about this report, please contact Sharon L. Pickup at (202) 512-9619 or [email protected], or Charles Michael Johnson, Jr. at (202) 512-7331. First, we researched U.S. government programs, activities, and initiatives providing training and education to foreign civilian and military individuals. 1. To determine the extent to which DOD has developed and implemented an approach to oversee the Regional Centers and assess their progress in achieving DOD priorities, we evaluated relevant documentation and interviewed knowledgeable officials. To provide information about the process used by DOD and State to approve and monitor Regional Center requests to waive reimbursement of costs for nongovernmental and international organizations that participate in the Regional Centers’ activities, we reviewed relevant legislation and DSCA guidance identifying the procedures for submitting requests and the criteria applied to consideration of waivers for nongovernmental and international organizations.

Why GAO Did This Study DOD has emphasized innovative and low-cost approaches to build the defense capacity of foreign partners, and it uses its five Regional Centers to administer programs to foster partnerships and deepen foreign officials' understanding of U.S. objectives. The conference report accompanying the fiscal year 2013 National Defense Authorization Act (H.R. Conf. Rep. No. 112-705) mandated GAO to conduct a study of the Regional Centers. GAO's report (1) describes how the Regional Centers' activities compare with those of other DOD training and education organizations, and (2) evaluates the extent to which DOD has developed and implemented an approach to oversee and assess the Regional Centers' progress in achieving DOD priorities. This report also provides information on the process used to approve Regional Center requests to waive reimbursement of the costs for nongovernmental and international organizations that participate in the Regional Centers' activities. GAO reviewed public law and departmental directives and conducted an analysis comparing aspects of the Regional Centers with other selected DOD training and education institutions. What GAO Found The Department of Defense's (DOD) five Regional Centers for Security Studies (Regional Centers) share similarities and differences with other DOD institutions that provide training and education, including professional military education, advanced degree-conferring, and professional development institutions, in terms of curriculum topics, targeted audience, and program format. GAO found that they all offer training and educational programs and activities to help participants understand security and military matters and to enhance their knowledge, skills, and experiences in these matters. However, there are notable differences in that the Regional Centers generally focus on helping foreign participants understand and respond to regional security issues; generally target a foreign civilian and military personnel audience; and offer shorter and typically less formal courses of study. The Regional Centers support DOD policy objectives with curricula designed to enhance security and foster partnerships through education and exchanges. By contrast, other DOD training and education organizations focus their curricula on military operations and leadership. While the Regional Centers' target audience is foreign civilian and military officials, the other DOD educational organizations typically aim their programs and activities at U.S. servicemembers at all career levels. Regional Center participants generally do not earn credit toward a degree, and the offered courses, conferences, and workshops are of shorter duration ranging from days to weeks. DOD's professional military education and advanced degree-conferring institutions are accredited and generally offer longer, more formal courses that provide participants the opportunity to earn advanced degrees. DOD has taken some steps to enhance its oversight of the Regional Centers' plans and activities, but its ability to determine whether the Regional Centers are achieving departmental priorities remains limited because it has not developed an approach for assessing progress. DOD has defined roles and responsibilities, issued relevant guidance that reflects departmental objectives, and established a governance body and planning process to facilitate information sharing and to achieve more integrated decision making. However, DOD has not developed an approach that includes measurable goals and objectives, metrics for assessing performance, or a methodology to assess the Regional Centers' progress in achieving DOD priorities, to include clarifying how it will use performance data provided by the Regional Centers. GAO's prior work has found that achieving results in government requires a comprehensive oversight framework that includes clear goals, measurable objectives, and metrics for assessing progress, consistent with the framework established in the Government Performance and Results Act. The Regional Centers report various types of performance data, such as summaries of past activities. While DOD has established a governance body to assist in monitoring the Regional Centers' plans and activities, the body has not identified how it will use performance information to assess the Regional Centers' progress toward achieving department priorities. Conducting routine assessments using measurable goals and objectives, with metrics to evaluate progress, and a methodology for using performance information to include defining the role of the governance body would provide DOD a sounder basis for assessing the Regional Centers' progress in achieving results, and for better determining the allocation of resources. What GAO Recommends GAO recommends that DOD develop measurable goals linked to key programming priorities for the Regional Centers, metrics for assessing performance against these goals, and a methodology to assess the Regional Centers' progress in achieving DOD priorities. DOD generally agreed with the recommendations. or Charles Michael Johnson, Jr. at (202) 512-7331 or [email protected] .

gao_GAO-14-647

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The Secure Flight program uses SFPD to screen passengers and assign them a risk category: high risk, low risk, or unknown risk. TSA Has Implemented Oversight Mechanisms to Address Passenger Privacy Requirements, but Additional Actions Could Better Ensure Full Compliance TSA has taken steps to implement several of the privacy oversight mechanisms it planned to establish in 2009, when Secure Flight implementation began, but additional actions could allow TSA to sustain and strengthen its efforts. We also reported that TSA had designated a program privacy officer and a team of privacy experts to work on various aspects of the Secure Flight program, and planned to establish several privacy oversight mechanisms, including the following: privacy rules of behavior, which require that individuals handling PII use it only for a stated purpose; audit logs of system and user events to provide oversight of system activities, such as access to PII and transfer of PII into or out of the system; general privacy training for all Secure Flight staff and role-based privacy training for employees handling PII; periodic privacy compliance reports, intended to track and aggregate privacy concerns or incidents; and a system for tracking privacy issues that arise throughout the development and use of Secure Flight, and conducting follow-up analysis of significant privacy issues and providing resolution strategies for management consideration. TSA has also implemented privacy training for new Secure Flight staff and documented privacy issues and decisions through, for example, periodic compliance privacy reports. However, Secure Flight staff do not receive job-specific privacy refresher training after they complete the initial Secure Flight training. Providing at least annual job-specific privacy refresher training, consistent with OMB requirements, could further strengthen Secure Flight’s protection of PII. Documenting privacy issues: TSA documents some aspects of its privacy oversight mechanisms, such as scheduled destructions of SFPD and reviews of planned changes to the Secure Flight system. However, TSA does not have a mechanism to comprehensively document and track key privacy-related issues and decisions that arise through the development and use of Secure Flight—a mechanism TSA planned to develop when Secure Flight was implemented in 2009. Comprehensively documenting and tracking key privacy issues and decisions, as TSA planned when Secure Flight implementation began in 2009, could help ensure that these decisions, which have allowed it to successfully avoid privacy incidents to date, are carried into the future. DHS TRIP Addresses Inconveniences and Delays Related to TSDB-Based Lists, and Is Taking Actions to Reduce Case Processing Time Passengers who, through the DHS TRIP redress process, are determined to have been misidentified to a TSDB-based high-risk list are added to the TSA Cleared List, which allows them to be cleared (not identified as high risk) nearly 100 percent of time. The DHS TRIP process also allows passengers determined to have been either improperly placed or no longer appropriate for inclusion on a list (mislisted) to be removed from a TSDB-based list, reducing the likelihood they will be identified as matches during future travels. DHS TRIP is not able to provide redress for passengers who may have been misidentified to high-risk, rules-based lists and subsequently applied to DHS TRIP for redress. However, according to TSA officials, TSA procedures for using the high-risk, rules-based lists mitigate impacts on passengers who may have been misidentified to these lists. DHS Has Reduced Its Average Processing Time for Redress Cases, and Is Taking Actions to Reduce Processing Times for Appeals Cases In fiscal year 2013, DHS TRIP officials began working to reduce overall processing time and the backlog of redress and appeals cases. Consistent with its efforts to reduce processing time for redress, in January 2014, DHS TRIP reduced its target for one of the department’s key performance indicators—average number of days for DHS TRIP redress cases to be closed—from 93 to 78 days. However, the average total processing time for the appeals process for fiscal years 2011 through 2013 was 276 days, as shown in table 2. From fiscal year 2011—the first fiscal year in which DHS TRIP received a redress appeal—through fiscal year 2013, for appeals closed within that period, the average number of days, according to DHS TRIP data, for TSC to review an appeal package and submit a recommendation to TSA was about 154 days, as shown in table 2. Since TSA began implementing Secure Flight, in 2009, the program has made significant progress in addressing privacy protections. Recommendations for Executive Action We recommend that the Transportation Security Administration’s Administrator take the following two actions: to further protect personally identifiable information in the Secure Flight system, provide job-specific privacy refresher training for Secure Flight staff, and to ensure Secure Flight has complete information for effective oversight of its privacy controls, develop a mechanism to comprehensively document and track key Secure Flight privacy issues and decisions.

Why GAO Did This Study Since 2009, Secure Flight has changed from a program that identifies passengers as high risk solely by matching them against subsets of the TSDB, to one that uses PII and other information to assign passengers a risk category: high risk, low risk, or unknown risk. Secure Flight has established privacy oversight mechanisms to protect this PII. GAO was asked to assess the current status of the Secure Flight program. In July 2014, GAO reported on the status of the program's operations, including changes to the program since 2009, implementation of Secure Flight screening determinations at airport checkpoints, and program performance measures. This report examines (1) the extent to which TSA has implemented privacy oversight mechanisms to address Secure Flight privacy requirements, and (2) the extent to which DHS's redress process addresses any delays and inconveniences that result from Secure Flight screening. GAO analyzed TSA data for fiscal years 2011 through 2013 and documents—including Secure Flight privacy training materials, documentation of privacy protections, and processing times for redress cases—and interviewed relevant DHS officials. What GAO Found The Transportation Security Administration (TSA) has taken steps to implement several of the privacy oversight mechanisms it planned to establish when Secure Flight implementation began in 2009, but additional actions could allow TSA to sustain and strengthen its efforts. Overall, TSA has implemented mechanisms to identify privacy implications associated with program operations and address them as necessary. For example, TSA has regularly updated privacy documents to address changes in the Secure Flight program. TSA has also implemented privacy training for new Secure Flight staff, and all Department of Homeland Security (DHS) employees receive annual privacy training. However, existing Secure Flight staff do not receive job-specific privacy refresher training consistent with Office of Management and Budget (OMB) requirements. Providing job-specific privacy refresher training could further strengthen Secure Flight's protection of personally identifiable information (PII). TSA also documents some aspects of its Secure Flight privacy oversight mechanisms, such as scheduled destructions of passenger data and reviews of planned changes to the Secure Flight system. However, TSA does not have a mechanism to comprehensively document and track key privacy-related issues and decisions that arise through the development and use of Secure Flight—a mechanism TSA planned to develop when Secure Flight was implemented in 2009. Comprehensively documenting and tracking key privacy-related issues and decisions, in accordance with federal internal control standards, could help TSA ensure that these decisions are carried into the future in the event of a change in personnel. The DHS Traveler Redress Inquiry Program (DHS TRIP) affords passengers who may have been incorrectly matched to or listed on high-risk lists based on the Terrorist Screening Database (TSDB)—the U.S. government's consolidated list of known and suspected terrorists—an opportunity to seek redress. Passengers who, through the redress process, are determined to have been misidentified to a TSDB-based high-risk list are added to the TSA Cleared List, which allows them to be cleared (not identified as high risk) nearly 100 percent of time. The DHS TRIP process also allows passengers determined to have been improperly included on a TSDB-based list (mislisted) to be removed, minimizing the likelihood they will be identified as matches during future travels. Although DHS TRIP is not able to provide redress for passengers who may have been misidentified to high-risk, rules-based lists—TSA's lists of passengers who meet intelligence-driven criteria indicating they may pose a greater security risk—according to TSA officials, TSA procedures for using the lists mitigate impacts on these passengers. In fiscal year 2013, DHS TRIP began working to reduce processing time for its redress and appeals cases. In fiscal year 2014, DHS TRIP reduced its target for one of its key performance indicators—average number of days for DHS TRIP redress cases to be closed—from 93 to 78 days—and, for the first time, established a performance goal for the appeals process of 92 days. For fiscal years 2011 through 2013, the average total processing time for an appeals case was about 276 days. DHS TRIP plans to periodically review its progress in achieving its appeals performance goal and determine by February 2015 whether further changes to the appeals process are warranted. What GAO Recommends GAO recommends that TSA provide job-specific privacy refresher training for Secure Flight staff and develop a mechanism to document and track key Secure Flight privacy issues and decisions. DHS concurred with GAO's recommendations.

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We asked the experts to review each of the 12 methodologies and to categorize the methodology’s potential for use in adjusting the poverty measurement for geographic difference in COL. Additionally, we asked them to discuss the strengths and weaknesses of each methodology. Market Baskets Are the Foundation of a COL Index Market baskets of goods and services provide the foundation for determining COL. Methodologies Exist That Potentially Could Lead to a Geographic COL Index We identified 12 generic methodologies that, in some part, could contribute to the development of a COL index that potentially could be used to adjust the poverty measurement for geographic differences. Four methodologies identified baseline data, or developed a market basket that could be the basis for constructing a COL index by geographic area. Use of employer costs as a measure of living costs would introduce significant regional bias.” Many weaknesses, as well as several mixed responses, were noted for the remaining three methodologies—consumption data, family budgets, and consumer price index. Further, obtaining a consensus on what items should go into a COL index’s market baskets to reflect regional differences in consumption would be difficult. 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 statistical data requirements for constructing a cost-of-living (COL) index that could be used, at the federal level, to adjust for geographic differences in living costs. What GAO Found GAO found that: (1) the current measurement to determine poverty levels does not account for geographic COL differences; (2) market baskets, a measure used to evaluate relative economic standing, would provide the foundation for any measure of living costs; (3) obtaining a consensus on what should go into a market basket for a COL index would be difficult; (4) there are 12 methodologies that could be used to contribute to an index to adjust the poverty measurement to reflect geographic differences; (5) the methodologies include budgeting for representative market baskets, measuring consumer spending norms, examining housing data, family budgets, or consumption data, developing various geographically specific price indexes, polling, calculating the relative amounts of time worked for each of the components of compensation, and estimating or modelling; and (6) experts' opinions about the methodologies' strengths and weaknesses were diverse and sometimes conflicting.

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Thus, the type of testing network is only one of many variables that can influence an I&M program’s effectiveness. Officials from the other nine states required to implement enhanced I&M programs told us that while their states have conducted some audits and/or tampering surveys since 1992, these efforts were not designed to assess the relative effectiveness of different types of I&M networks and therefore could not be used, according to the officials, to compare test-only to test-and-repair programs. For example, in contrast to the Georgia study discussed earlier, which indicated that Atlanta’s I&M hybrid program was more effective in reducing emissions than EPA’s 50-percent discount would indicate, a California study found little difference in the effectiveness of a test-only program and a test-and-repair program and observed that both were less effective than EPA’s model program. Also in February 1995, EPA established credits for the states that require repairs to be performed by trained, certified mechanics, and for less costly testing systems. Additionally, in September 1995 EPA revised its 1992 rule to allow states to meet a new, less stringent performance standard as long as the states could still meet their overall targets for reducing emissions. They further suggested that we point out early in the report that recent legislation has eliminated any automatic discounts of test-and-repair networks. We found that only 2 (California and Georgia) of the 23 states that are required to implement an enhanced I&M program have developed data since November 1992, when EPA issued its enhanced I&M rule decreasing the number of credits assigned to test-and-repair networks by 50 percent.According to state air program officials, this 50-percent discount has not been more widely addressed for several reasons, which are discussed in this appendix. The principal researcher said this study was not designed to evaluate the relative effectiveness of test-and-repair and test-only I&M networks and therefore did not directly address the 50-percent discount. 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 50-percent penalty, also called a discount, that states suffer under the Environmental Protection Agency's (EPA) Clean Air Act enforcement for operating vehicle emissions inspection and maintenance (I&M) test-and-repair networks instead of test networks. What GAO Found GAO found that: (1) EPA issued the 50-percent discount rule after it found that test-and-repair networks were less effective in controlling motor vehicle emissions; (2) since issuing the rule, EPA has not conducted any studies to obtain new data on the effectiveness of test-and-repair networks; (3) 14 of the 23 states required to implement enhanced I&M programs have not conducted studies on the 50-percent discount, mostly because they implemented, or intended to implement, test-only programs; (4) the other 9 states did not conduct studies to assess the relative effectiveness of the two kinds of I&M networks; (5) California studied relative effectiveness and concluded that there was little difference between test-and-repair networks and test-only networks; (6) Georgia is conducting a study, and the preliminary findings lead Georgia to believe that it should suffer only a 35- to 45-percent discount for its hybrid I&M program; and (7) Congress enacted legislation to eliminate automatic discounts based on the type of testing network and allow states 18 months to study their I&M programs' effectiveness. GAO also found that EPA has allowed the states great flexibility in implementing enhanced I&M programs by: (1) providing I&M system models; (2) establishing credits for test-only networks, for states that require that only certified mechanics perform repairs, and for less costly testing systems; (3) relaxing performance standards for states that can still meet their overall targets for reducing emissions.

gao_GAO-06-1093

gao_GAO-06-1093_0

CFSA Has Met Some Court-Ordered Requirements, but Is Not Likely to Meet All Requirements by December 2006 CFSA has met some court-ordered requirements, but the agency is not likely to meet all of its requirements by December 2006, according to the recent court-monitor’s report and our work. For example, despite a benchmark set at 90 percent, only 29 percent of children in foster care had received medical evaluations as of April 2006, and data were not available for the percentage of children who received dental evaluations. This raises questions about the agency’s ability to meet the court-required benchmarks by December and to sustain the improvements it has made. Several Factors Hinder CFSA’s Progress in Meeting Performance Requirements Complex cases and shortages of health care providers and qualified foster and adoptive homes hinder CFSA’s ability to meet court-ordered requirements, according to CFSA officials, caseworkers, and the court monitor. While caseworkers’ caseloads have been reduced because of CFSA’s efforts to recruit and retain caseworkers, cases are complex, in part because of the high proportion of teenagers and children with medical or mental health needs. CFSA’s efforts to meet court-ordered time frames is further complicated in a small number of cases by difficulty in coordinating with the District’s Metropolitan Police Department. At the same time, CFSA officials told us that there is a shortage of health care providers to serve these children with health care needs, and the limited number of qualified foster and adoptive homes hinders CFSA’s ability to give children the most appropriate and timely placements. For example, caseworkers told us that they cannot close out investigations involving severe physical or sexual abuse without a report from the police department. CFSA Uses Routine Reports and Qualitative Studies to Monitor Its Progress toward Meeting Court-Ordered Requirements, but Current Data May Not Provide an Accurate Picture CFSA is generating a number of daily and monthly reports to show its progress in meeting court-ordered requirements. CFSA Has Implemented Several Initiatives to Help Achieve Unmet Requirements, but It May Be Too Soon to Know if They Will Yield Long-term Results In the last 2 years CFSA has implemented a number of initiatives to help address hindrances in meeting court-ordered requirements. CFSA has hired new staff and reorganized existing staff to focus resources in key areas. In addition, CFSA is beginning to take steps to hold its management staff as well as private contractors accountable for helping the agency meet specific performance requirements. Although CFSA has made some progress in improving the placement process for children, it is too soon to determine whether these efforts will yield long-term success. Recommendations for Executive Action To improve CFSA’s ability to serve the District’s children and to help meet court-ordered requirements, we recommend that the Mayor of the District of Columbia: direct CFSA to provide caseworkers with specialized training to help them develop the skills needed to address the complexities of their caseloads and explore options for increasing the pool of providers for mental health, medical, and dental services. We also interviewed (1) CFSA managers to learn about the strategies the agency has used to help guide its decisions on what data to gather and how to use these data; (2) CFSA’s Chief Information Officer to learn about CFSA’s automated child welfare information system, FACES, and its capacity for informing CFSA managers on the agency’s progress in meeting its performance requirements; and (3) the court-appointed monitor, the Center for the Study of Social Policy (CSSP), to gain its perspective on what CFSA has done and where it might improve in its efforts to develop data needed to assess its performance. To gather information on the extent to which CFSA has implemented initiatives or developed plans to achieve unmet requirements, we reviewed the court monitor’s reports and identified key requirements related to managing child welfare cases that had not been met as of December 2005. District of Columbia: Issues Associated with the Child and Family Services Agency’s Performance and Polices.

Why GAO Did This Study The District of Columbia's Child and Family Services Agency (CFSA) has a history of serious performance problems. A court case in 1989 set in motion sweeping efforts to improve the District's child welfare system. Since then, CFSA has worked to meet performance requirements ordered by the U.S. District Court. However, recent reports by the court monitor show that CFSA is not meeting performance requirements on many measures. To update Congress, we assessed (1) whether CFSA is likely to meet requirements by December 2006; (2) what factors, if any, hinder the agency from meeting requirements; (3) how CFSA is monitoring its progress; and (4) the extent to which CFSA has implemented initiatives to achieve unmet requirements. To conduct this work, we reviewed reports by CFSA and the court monitor and interviewed stakeholders, including the court monitor and CFSA managers, supervisors, and caseworkers. What GAO Found CFSA has made progress, but the agency is not likely to meet all of the court-ordered requirements by December 2006, based on the recent court monitor's report and our work. From December 2005 to April 2006, CFSA improved its performance and met some benchmarks. However, CFSA's performance on other requirements remains well below benchmarks, raising questions about the agency's ability to meet all of the court-ordered requirements by December and sustain the improvements it has made. For example, only 29 percent of children in foster care received medical evaluations within 30 days of placement in April 2006, despite a benchmark of at least 90 percent. Several factors--complex caseloads and shortages of health care providers and qualified foster and adoptive homes--hinder CFSA's ability to meet court-ordered requirements. CFSA's cases are complex, in part because of the high proportion of hard-to-place teenagers and children with medical or mental health needs in the District's child welfare system. Caseworkers reported that they do not have enough specialized training to help them develop the skills they need to address these caseload complexities. CFSA's effort to meet court-ordered time frames is complicated in a small number of cases--those involving severe physical or sexual abuse--by the difficulty of coordinating with the District's Metropolitan Police Department. At the same time, CFSA officials told us there is a shortage of health care providers to serve these children, and the limited number of qualified foster and adoptive homes hinders CFSA's ability to give children the most appropriate and timely placements. CFSA uses routine reports and qualitative studies to determine whether it is meeting requirements, but current data may not provide an accurate picture of the agency's progress. Implementing the agency's new Web-based case management system has been challenging and caseworkers reported that because of these implementation difficulties, they have not always entered complete and accurate data on their cases into the system. However, CFSA has recently taken a number of steps to resolve these issues, including, for example, issuing frequent system upgrades to address identified problems and developing enhanced system training for caseworkers. Within the past few years, CFSA has implemented several initiatives to address the challenges it faces and achieve remaining requirements, but it may be too soon to know if they will yield long-term results. CFSA has hired new staff and reorganized existing staff to focus on key areas. In addition, CFSA has implemented new practices, such as a tool to prioritize investigations based on risk. CFSA is also beginning to hold its management staff and private contractors accountable for helping the agency meet specific performance requirements. Many of these initiatives seem reasonable, but it is too soon to tell whether these efforts will help CFSA meet the remaining court-ordered requirements.

gao_GAO-08-931T

gao_GAO-08-931T_0

This will represent a significant change for many U.S. citizens living in Mexico, who have until recently been able to routinely cross between the United States and Mexico with more limited documentation. State Anticipates Significant Increases in Mission Mexico’s Nonimmigrant Visa and Passport Workload from Fiscal Years 2007 to 2011 Ten years after the first surge in demand for Border Crossing Cards began in fiscal year 1998, State anticipates another surge in NIV demand in Mexico as these cards begin to expire and millions of card holders apply for renewals at U.S. consulates. State’s forecasts, as of April 2008, anticipate that the upcoming surge in NIV demand will follow a pattern similar to the previous Border Crossing Card surge from fiscal years 1998 to 2002, as shown in figure 1. State has detailed data on the number of Border Crossing Cards issued during the previous surge and when they are expiring, which gives it a strong basis for its projections. First, State officials believe that the forecasts are conservative, with NIV demand likely to be lower than forecasted. According to State officials, the mission has already seen a significant increase in its passport workload as U.S. citizens living in Mexico have begun to apply for passports in response to the new documentary requirements. While State expects passport workload in Mexico to continue to increase significantly in the coming years, it is difficult to predict precisely what the magnitude of this increase will be. Additionally, there is a great deal of uncertainty regarding the number of U.S. citizens living in Mexico and the number of these citizens who are potential passport applicants. Based upon State’s estimates, Mission Mexico’s WHTI workload is projected to peak at 73,000 passport and CRBA applications in fiscal year 2009 with the implementation of WHTI at land ports of entry. In addition, rather than focusing on developing precise workload estimates in order to prepare for the surge, State has instead chosen to pursue strategies designed to provide it with the flexibility to respond to increases in workload as they occur—particularly as a more limited number of resources will be needed to cover increases in passport and CRBA applications than NIV applications, given their small share of Mission Mexico’s overall consular workload. State Is Adding Interviewing Windows and Temporary Adjudicators to Posts in Mexico to Keep Pace with Projected Workload Increases To keep pace with the expected NIV renewal surge, State is increasing the total number of hardened interview windows in the consulates’ NIV sections by over 50 percent before the demand peaks in 2011. Figure 4 shows the number of temporary adjudicators and career adjudicators planned for Mission Mexico in fiscal year 2011. Consequently, these posts would be at greatest risk of increased NIV backlogs if temporary adjudicator slots cannot be filled as needed or if their productivity is not as high as anticipated. State has neither established specific milestones for completing the pilot nor provided us with any metrics that would be part of an assessment of the potential impact on productivity, fraud, or security. Concluding Remarks In anticipation of the expected surge in demand for NIVs and U.S. passports in Mexico over the next several years, State has taken several steps to project workloads and expand the capacity of its consulates to avoid the type of backlogs that have occurred in Mission Mexico in the past. Several posts in Mexico will rely heavily on these additional staff to keep pace with expected demand for NIVs and avoid excessive wait times for interviews of applicants. In addition, Mission Mexico may reap productivity gains from a pilot program to outsource part of the NIV application process at off-site facilities and from State’s policy to waive interviews for some renewal applicants; however, these efforts are in their early stages and are not yet widely implemented. We discussed this testimony with State officials, who agreed with our findings.

Why GAO Did This Study The U.S. Mission in Mexico is the Department of State's largest consular operation. In fiscal year 2007, it processed 1.5 million of the 8 million nonimmigrant visas (NIV) State handled worldwide. The U.S. Mission in Mexico also provided services, including passport processing and emergency assistance, to 20,000 American citizens in fiscal year 2007. This already significant consular workload is expected to increase dramatically in the coming years as millions of NIV Border Crossing Cards issued in Mexico between fiscal years 1998 and 2002 expire and need to be renewed. In addition, the implementation of new travel requirements under the Western Hemisphere Travel Initiative (WHTI) will, for the first time, require U.S. citizens to carry passports, or other approved documentation, when traveling between the United States and Mexico. This testimony addresses (1) State's estimates of the workload for consulates in Mexico through 2012 resulting from, in particular, new travel requirements and the reissue of Border Crossing Cards; and (2) the actions State has taken to ensure consulates in Mexico keep pace with projected workload increases through 2012. This testimony is based on work currently in process that involves analyzing State's workload forecasts and forecast methodology, interviewing State officials, and visiting five posts in Mexico. GAO discussed this testimony with State officials, who agreed with GAO's findings. What GAO Found According to State forecasts, as of April 2008, the U.S. Mission in Mexico's (Mission Mexico) NIV demand will peak at slightly over 3 million applications in fiscal year 2011, about twice the number from fiscal year 2007. State acknowledges there are uncertainties regarding the number of Border Crossing Card holders who will renew their cards and the number of first time NIV applicants, which may affect the accuracy of its forecasts. State will be revising the forecasts on a periodic basis as new data become available. In addition to its increase in NIV workload, Mission Mexico will also be facing increases in its passport workload due to the implementation of WHTI. The exact magnitude of the increase in passport workload is more difficult to forecast than for NIVs, because there is not the same historical precedent. There is also a great deal of uncertainty as to how many U.S. citizens actually live in Mexico or the number of these citizens likely to apply for a passport. In anticipation of this surge in demand for NIVs and U.S. passports, State is taking steps to ensure consulates in Mexico keep pace, including adding consular interview windows to several high-demand posts and planning to hire about 100 temporary adjudicating officers. Consular officials GAO met with at several posts in Mexico generally agreed that these efforts to expand resources should be adequate for Mission Mexico to keep pace with expected workload increases, and GAO's analysis indicates the mission will generally have enough interviewing windows during the surge. Several posts will rely on the addition of temporary adjudicators to keep pace with increased NIV demand and would face backlogs if these slots cannot be filled or if the temporary staff are not as productive as expected. However, State is confident that it has an adequate pool of potential applicants. Mission Mexico may also gain additional capacity from a pilot program, currently under way at two posts, that outsources a portion of the NIV application process to off-site facilities; however, the pilot was implemented too recently to assess its potential impact on productivity, fraud, or security.

gao_GAO-01-817

gao_GAO-01-817_0

Concluding Observations Considering Medicare’s complexity, size, and statutory constraints, some contend that HCFA’s management of Medicare has—on balance—been satisfactory, while others argue that it has not been acceptable. There is evidence that HCFA’s success has been mixed and that the agency’s challenges are growing. Effective governance of Medicare depends on finding a balance between flexibility and accountability—that is, granting the agency adequate flexibility to act prudently while ensuring that it can be held accountable for its decisions and actions. Moreover, because Medicare’s future will play such a significant role in the nation’s fiscal future, we believe it prudent to make an adequate investment to ensure that Medicare is professionally and efficiently managed. Achieving such a goal will require that the day-to-day operations of Medicare’s traditional program are modernized and maintained, and that achieving program efficiency and effectiveness remains paramount.

What GAO Found Considering the complexity, the size, and the statutory constraints affecting the Medicare Program, some contend that the Health Care Financing Administration's (HCFA)--recently renamed the Centers for Medicare and Medicaid Services--management of Medicare has, on balance, been satisfactory. Others argue that HCFA's management has been unacceptable. HCFA's record has been mixed and the agency's challenges are growing. Effective management of Medicare depends on finding a balance between flexibility and accountability--that is, granting the agency adequate flexibility to act prudently while ensuring that it can be held accountable for its decisions and actions. Moreover, because Medicare will play such a significant role in the nation's fiscal future, it is prudent to make an adequate investment to ensure that Medicare is professionally and efficiently managed. Achieving this goal will require the modernization and maintenance of Medicare's traditional day-to-day operations.

gao_GAO-04-461

gao_GAO-04-461_0

Thus, the federal government has a major stake in protecting its existing investment in water infrastructure and ensuring that future investments go to utilities that are built and managed to meet key regulatory requirements. Using asset management concepts, utilities and other organizations responsible for managing capital infrastructure can minimize the total cost of designing, acquiring, operating, maintaining, replacing, and disposing of capital assets over their useful lives, while achieving desired service levels. For example: Life-cycle cost analysis. This report examines (1) the potential benefits of asset management for water utilities and the challenges that could hinder its implementation and (2) the role that the federal government might play in encouraging utilities to implement comprehensive asset management. The utilities reported benefiting from (1) improved decision making because they have better information about their capital assets and (2) improved relationships with governing authorities, ratepayers, and other stakeholders because they are better able to communicate information on infrastructure needs and improvement plans. Among the challenges of implementing asset management, utility officials cited the difficulty of (1) collecting the appropriate data and managing it efficiently and (2) making the cultural changes necessary to integrate information and decision making across departments. Finally, utilities may find that their efforts to focus on long-term planning conflict with the short-term priorities of their governing bodies. This is no small challenge. While utilities need complete and accurate data for decision making, they also need to balance data collection with data management. Currently, EPA sponsors several initiatives to promote the use of asset management, such as training and informational materials, technical assistance, and research. However, the officials raised concerns about the implications of mandating asset management as proposed in legislation being considered by the Congress. Water Industry Officials Favor an Expanded Role for EPA in Promoting Asset Management, but Raised Concerns About Additional Regulatory Requirements Water industry officials support a greater role for EPA in promoting asset management, both as a tool for better managing infrastructure and for helping drinking water and wastewater utilities meet existing or proposed regulatory requirements. Specifically, the Administrator should better coordinate ongoing and planned initiatives to promote comprehensive asset management within and across the drinking water and wastewater programs to leverage limited resources and reduce the potential for duplication; explore opportunities to take advantage of asset management tools and informational materials developed by other federal agencies; strengthen efforts to educate utilities on how implementing asset management can help them comply with certain regulatory requirements that focus in whole or in part on the adequacy of utility infrastructure and the management practices that affect it; and establish a Web site to provide a central repository of information on comprehensive asset management so that drinking water and wastewater utilities have direct and easy access to information that will help them better manage their infrastructure.

Why GAO Did This Study Having invested billions of dollars in drinking water and wastewater infrastructure, the federal government has a major interest in protecting its investment and in ensuring that future assistance goes to utilities that are built and managed to meet key regulatory requirements. The Congress has been considering, among other things, requiring utilities to develop comprehensive asset management plans. Some utilities are already implementing asset management voluntarily. The asset management approach minimizes the total cost of buying, operating, maintaining, replacing, and disposing of capital assets during their life cycles, while achieving service goals. This report discusses (1) the benefits and challenges for water utilities in implementing comprehensive asset management and (2) the federal government's potential role in encouraging utilities to use it. What GAO Found Drinking water and wastewater utilities that GAO reviewed reported benefiting from comprehensive asset management but also finding certain challenges. The benefits include (1) improved decision making about their capital assets and (2) more productive relationships with governing authorities, rate payers, and others. For example, utilities reported that collecting accurate data about their assets provides a better understanding of their maintenance, rehabilitation, and replacement needs and thus helps utility managers make better investment decisions. Among the challenges to implementing asset management, utilities cited collecting and managing needed data and making the cultural changes necessary to integrate information and decision making across departments. Utilities also reported that the shorter-term focus of their governing bodies can hamper long-term planning efforts. EPA currently sponsors initiatives to promote the use of asset management, including educational materials, technical assistance, and research. While this is a good first step, GAO found that EPA could better coordinate some activities. For example, EPA has no central repository to facilitate information sharing within and across its drinking water and wastewater programs, which would help avoid duplication of effort. Water industry officials see a role for EPA in promoting asset management as a tool to help utilities meet infrastructure-related regulatory requirements; they also noted that establishing an EPA Web site would be useful for disseminating asset management information to utilities. The officials raised concerns, however, about the implications of mandating asset management, citing challenges in defining an adequate asset management plan and in the ability of states to oversee and enforce compliance.

gao_GAO-07-917

gao_GAO-07-917_0

SAFETEA-LU also made changes to the New Starts program, including changes to its evaluation and rating process. 1). 2). FTA has also subsequently introduced a separate eligibility category within the Small Starts program for “Very Small Starts” projects. Small Starts projects that qualify as Very Small Starts are simple, low-cost projects that FTA has determined qualify for a simplified evaluation and rating process. 3). FTA Evaluated and Rated 14 New Starts Projects, and Recommended Funding for 10 Projects FTA’s Annual Report on New Starts: Proposed Allocations of Funds for Fiscal Year 2008 (annual report) identified 19 New Starts projects in preliminary engineering and final design. FTA recommended 10 New Starts projects for funding. FTA is considering different ideas on how to improve the New Starts process, some of which may address the concerns identified by project sponsors. The Number of Projects in the New Starts Pipeline Has Decreased, and the Types of and Funding for Projects Have Changed Since the fiscal year 2001 evaluation cycle, the number of projects in the New Starts pipeline—which includes projects that are in the preliminary engineering or final design phases—has decreased by more than one-half, from 48 projects in the fiscal year 2001 evaluation cycle to 19 projects in the fiscal year 2008 evaluation cycle. FTA and Project Sponsors Attributed the Decrease in the New Starts Pipeline to Different Factors FTA and project sponsors identified different factors for the decrease in the New Starts pipeline. FTA officials cited their increased scrutiny of applications to help ensure that only the strongest projects enter the pipeline, and said they had taken steps to remove projects from the pipeline that were inactive, not advancing, or did not adequately address identified problems. FTA officials told us that project sponsors are generally aware of FTA’s efforts to better manage projects in the pipeline. The most common reasons cited by project sponsors were that the New Starts process is too complex, costly, and time-consuming: Complexity and cost of the New Starts process: The majority of project sponsors we interviewed told us that the complexity of the requirements— including those for financial commitment projections and travel forecasts, which require extensive analysis and economic modeling—creates disincentives to entering the New Starts pipeline. The lengthy nature of the New Starts process is due, at least in part, to the rigorous and systematic evaluation and rating process established by law—which, as we have previously noted, could serve as a model for other transportation programs. According to the project sponsors, they will likely seek New Starts funding for almost three-fourths (72 percent, or 101) of these 141 planned New Starts, Small Starts, and Very Small Starts projects. Although the project sponsors we surveyed indicated that they were considering a range of alternative project types in their planning, the most commonly cited alternatives were bus rapid transit and light rail. Of the ongoing Small Starts and Very Small Starts projects for which respondents indicated they would be requesting New Starts funding, project sponsors definitively reported that they would have sought New Starts funding for only about one-quarter of those ongoing projects if the Small Starts program, including the eligibility category for Very Small Starts projects, had not been established. Project Sponsors Would Like FTA to Further Streamline the Small Starts Program In implementing the Small Starts program, FTA has taken steps to streamline the application and evaluation and rating processes for smaller- scale transit projects, as envisioned by SAFETEA-LU. In reviewing the Small Starts application process requirements, we also found that the application is not always tailored for Small Starts applicants and, in several instances, requests duplicate information. Appendix I: Scope and Methodology To address our objectives, we reviewed the Federal Transit Administration’s (FTA) guidance on the New Starts and Small Starts programs; the Advanced Notice of Proposed Rule Making for Small Starts; and the provisions of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users and prior law that address the New Starts program. Mass Transit: Status of New Starts Transit Projects With Full Funding Grant Agreements.

Why GAO Did This Study Through the New Starts program, the Federal Transit Administration (FTA) identifies and recommends new fixed-guideway transit projects for funding. The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) created a separate program, commonly called Small Starts, which is intended to offer a streamlined evaluation and rating process for smaller-scale transit projects. FTA subsequently introduced a separate eligibility category within the Small Starts program for "Very Small Starts" projects. These are simple, low-risk projects that qualify for a simplified evaluation and rating process. SAFETEA-LU requires GAO to annually review FTA's New Starts process. This report presents information on (1) FTA's fiscal year 2008 funding recommendations, (2) the extent to which the New Starts pipeline has changed over time, and (3) future projected trends for the New Starts and Small Starts pipelines. To address these objectives, GAO surveyed 215 project sponsors--78 percent of which responded--and interviewed FTA officials, 15 project sponsors, and 3 industry groups. What GAO Found For the fiscal year 2008 evaluation cycle, FTA recommended to Congress 10 New Starts and 4 Small Starts projects for funding. The administration's budget request of $1.40 billion is primarily allocated to New Starts projects with existing and pending full funding grant agreements. SAFETEA-LU made several changes to the New Starts evaluation and rating process, which FTA is implementing. Since the fiscal year 2001 evaluation and rating cycle, the New Starts pipeline--that is, projects in the preliminary engineering and final design phases--has changed in size and composition, responding to a variety of factors. The number of projects in the New Starts pipeline has decreased by more than one-half, and the types of projects in the pipeline have changed, with bus rapid transit replacing commuter or light rail as the most common type of project. FTA officials attributed the decrease in the number of projects to FTA's increased scrutiny of applications to help ensure that only the strongest projects enter the pipeline, and to FTA's efforts to remove projects from the pipeline that were not advancing or did not adequately address identified problems. Project sponsors that GAO interviewed cited other reasons for the pipeline's decrease, including the complexity, lengthiness, and cost of the New Starts process. The lengthy nature of the New Starts process is due, in part, to the rigorous and systematic evaluation and rating process established by law--which GAO has previously noted could serve as a model for other programs. Other reasons cited by project sponsors for the decrease in the pipeline include finding alternative sources of funding or opting not to apply because they realize their projects are unlikely to receive funding. FTA is considering different ideas on how to improve the New Starts process, some of which may address the concerns identified by project sponsors. Despite these concerns, GAO's survey of project sponsors indicated future demand for New Starts funding. Project sponsors reported having 141 planned New Starts, Small Starts, and Very Small Starts projects and will likely seek New Starts funding for almost three-fourths of these projects. Of these planned projects, project sponsors indicated that they intend to seek New Starts funding for 57 New Starts projects, 30 Small Starts projects, and 14 Very Small Starts projects. Project sponsors GAO surveyed also reported considering a range of alternative project types in their planning. Although project sponsors expressed appreciation for the creation of the Small Starts program, noting it filled a funding gap, they said the Small Starts application process is not tailored to the Small Starts program and is time-consuming, costly, and duplicative. GAO also found that the application is not always tailored for Small Starts applicants and, in several instances, requests duplicative information. FTA officials acknowledged that the Small Starts application process could be further streamlined, and they are working to decrease the burden.

gao_GAO-06-586T

gao_GAO-06-586T_0

Background The Social Security Act of 1935 authorized the Social Security Administration (SSA) to establish a record-keeping system to manage the Social Security program, which resulted in the creation of the SSN. The widespread disclosure of SSNs in public records has raised concern because it can put individuals at increased risk of identity theft. In addition, banks, securities firms, telecommunication firms, and tax preparers engage in third party contracting and sometimes share SSNs with their contractors for limited purposes. Government Entities Are Required by Laws and Regulations to Collect SSNs, and Use Them for Various Purposes As required by a number of federal laws and regulations, agencies at all levels of government frequently collect and use SSNs to administer their programs, to link data for verifying applicants’ eligibility for services and benefits, and to conduct program evaluations. Private Sector Entities Obtain SSNs from Public and Private Sources and Use Them for Various Purposes Private sector entities such as information resellers, CRAs, and health care organizations generally obtain SSNs from various public and private sources. Finally, health care organizations also use the SSN to help verify the identity of individuals. No Single Law Governs the Use and Disclosure of SSNs Although Various Laws Have Been Enacted That Help Protect SSNs Although no single law comprehensively governs the use and disclosure of SSNs, certain federal laws restrict the use and disclosure of personal information, including SSNs, by government agencies or private sector entities. Many states have begun to enact laws to restrict the use and display of SSNs. Subsequently, other states have enacted laws restricting the use and display of SSNs. Finally, Congress is currently considering consumer privacy legislation, which in some cases includes SSN restrictions. More Could Be Done To Protect SSNs Although laws at both state and federal levels have helped to restrict SSN display and protect individual’s personal information, clearly gaps remain. In our third party contractors’ review, we reported that federal regulation and oversight of SSN sharing varies across four industries we reviewed, revealing gaps in federal law and agency oversight for different industries that share SSNs with their contractors. We also found that there are few restrictions placed on certain entities’ abilities such as information resellers to resell SSNs in the course of their business. Some of these agencies have begun taking action to remove SSNs from identification cards. GAO Has Proposed Matters for Congressional Consideration and Recommendations In order to address the issues we found, GAO has proposed matters for congressional consideration and recommended that a federal agency take action. To date, OMB has implemented two of our three recommendations, but Congress is still considering what other actions to take. In our report on the display of SSNs on identification cards and in public records, we recommended that OMB identify all those federal activities that require or engage in the display of 9-digit SSNs on health insurance, identification, or any other cards issued to federal government personnel or program beneficiaries, and devise a governmentwide policy to ensure a consistent approach to this type of display. The lack of a broad, uniform policy allows for inconsistent, but persistent exposure of the SSN. Conclusions The use of SSNs by both public and private sector entities is likely to continue given that it is used as the key identifier by most of these entities and there is currently no other widely accepted alternative. SSNs are still widely used and publicly available, although becoming less so. Yet, more could be done to protect SSNs. Social Security Numbers: Private Sector Entities Routinely Obtain and Use SSNs, and Laws Limit the Disclosure of This Information. This is a work of the U.S. government and is not subject to copyright protection in the United States.

Why GAO Did This Study In 1936, the Social Security Administration established the Social Security number (SSN) to track worker's earnings for Social Security benefit purposes. Since its creation, the SSN has evolved beyond its original purpose and has become the identifier of choice for public and private sector entities. Today, the SSN is a key piece of information often sought by identity thieves. Once the SSN is obtained fraudulently, it can then be used to create false identities for financial misuse or assuming another individual's identity. Congress and some states have recognized the importance of restricting the use and display of SSNs. GAO has issued a number of reports and testimonies about the various aspects of SSN use in both public and private sectors and what could be done to further protect individual's SSNs. Accordingly, this testimony focuses on describing (1) the use of SSNs by government agencies and certain private sector entities, (2) the federal laws that regulate the use and disclosure of SSNs, and (3) the gaps that remain in protecting the SSN and what more could be done. What GAO Found SSN use is widespread by both the public and private sectors. Agencies at all levels of government frequently collect and use SSNs to administer their programs, verify applicants' eligibility for services and benefits, and perform research and evaluations of their programs. In addition, SSNs are available in a variety of public records. Certain private sector entities routinely obtain SSNs from various public and private sources, and use SSNs for various purposes, such as to build tools that verify an individual's identity or match existing records. In addition, private sector entities that engage in third party contracting sometimes share SSNs with their contractors for limited purposes. There is no one law that comprehensively regulates SSN use and protections. However, certain federal laws have been enacted to restrict the use and disclosure of consumers' personal information, including SSNs. In addition, certain states have begun to enact their own legislation restricting the use and display of SSNs by public and private sector entities, which has subsequently led other states to start enacting similar legislation. Finally, Congress is currently considering several proposals to restrict SSN use and display, similar to state legislation. Although some action has been taken at the federal and state level to protect SSNs, more could be done. In the course of this work, GAO found that there were gaps in the practices for protecting SSNs within government agencies and across industry sectors, such as a lack of uniformity at all levels of government to assure the security of the SSN; gaps in the federal law and oversight in different industries that share SSNs with their contractors; exposure of SSNs in public records and identification cards under the auspices of the government; and few restrictions on certain entities' abilities to obtain and use SSNs in the course of their business. To address some of these issues, GAO has made recommendations and proposed matters for congressional consideration. To date, OMB has implemented two of these recommendations and some agencies have begun to take steps to eliminate SSNs from their identification cards. Congress is still considering actions to take to address the issues that remain.

gao_GAO-07-309

gao_GAO-07-309_0

Compliance with Legislative Conditions The expenditure plan, including related documentation and program officials’ statements, satisfied four legislative conditions, partially satisfied four legislative conditions, and did not satisfy one legislative condition. In addition, the plan did not include activities, milestones, or costs for the northern border. However, one acquisition requirement not followed was that the SBInet systems integration contract did not contain a specific number of units that may be ordered or a maximum dollar value. SBInet’s acquisition approach calls for considerable concurrency among related planned tasks and activities. Legislative condition 9: Include a review by GAO (satisfied). DHS’s approach to SBInet introduces additional risk because the program’s schedule entails a high level of concurrency. OMB approved the plan on December 4, 2006. Satisfying the legislative conditions is important because the expenditure plan is intended to provide Congress with the information needed to effectively oversee the program and hold DHS accountable for program results. Satisfying the legislative conditions is also important to minimize the program’s exposure to cost, schedule, and performance risks. The current expenditure plan offers a high-level and partial outline of a large and complex program that forms an integral component of a broader multi-year initiative. Recommendations To ensure that Congress has the information necessary to effectively oversee SBInet and hold DHS accountable for program results, and to help DHS manage the SBInet program and ensure that future SBInet expenditure plans meet the legislative requirements, we recommend that the Secretary of Homeland Security direct the U.S. Customs and Border Protection Secure Border Initiative Program Management Office Executive Director to take the following three actions: ensure that future expenditure plans include explicit and measurable commitments relative to the capabilities, schedule, costs, and benefits associated with individual SBInet program activities; re-examine the level of concurrency and appropriately adjust the acquisition strategy; and modify the SBInet systems integration contract to include a maximum quantity or dollar value.

Why GAO Did This Study In November 2005, the Department of Homeland Security (DHS) established the Secure Border Initiative (SBI) program to secure U.S. borders and reduce illegal immigration. One element of SBI is SBInet, the program responsible for developing a comprehensive border protection system. By legislative mandate, DHS developed a fiscal year 2007 expenditure plan for SBInet to address nine legislative conditions, including a review by GAO. DHS submitted the plan to the Appropriations Committees on December 4, 2006. To address the mandate, GAO assessed the plan against federal guidelines and industry standards and interviewed appropriate DHS officials. What GAO Found The SBInet expenditure plan, including related documentation and program officials' statements, satisfied four legislative conditions, partially satisfied four legislative conditions, and did not satisfy one legislative condition. Satisfying the legislative conditions is important because the expenditure plan is intended to provide Congress with the information needed to effectively oversee the program and hold DHS accountable for program results. Satisfying the legislative conditions is also important to minimize the program's exposure to cost, schedule, and performance risks. SBInet's December 2006 expenditure plan offered a high-level and partial outline of a large and complex program that forms an integral component of a broader multiyear initiative. However, the plan and related documentation did not include explicit and measurable commitments relative to capabilities, schedule, costs, and benefits associated with individual SBInet program activities. In addition, the SBInet systems integration contract did not contain a specific number of units that may be ordered or a maximum dollar value as required by Federal Acquisition Regulation. Further, DHS's approach to SBInet introduces additional risk because the program's schedule entails a high level of concurrency among related planned tasks and activities.

gao_GAO-17-22

gao_GAO-17-22_0

This program is currently the largest federal direct loan program with $912 billion in outstanding loans as of June 2016. Repayment periods are extended up to 30 years, thereby lowering monthly payments. The percent of borrowers participating in IDR plans more than doubled over the same time period to 24 percent. Education’s Budget Estimates of IDR Plan Costs Are Growing, but Actual Costs Will Not Be Known for Many Years Education Estimates That Loans in IDR Plans Will Have Substantial Costs to the Government Through our analysis of data underlying the President’s fiscal year 2017 budget, we found that Education estimates that Direct Loans in IDR plans will cost the government about $74 billion over their repayment term. Our results show that current estimated IDR plan costs are more than double what was originally expected for these cohorts. 3. This assumption conflicts with the fact that borrowers can switch into or out of IDR plans at any time, and IDR plan participation has grown in recent years. For instance, we found that the decision not to adjust borrower income forecasts for inflation causes IDR plan budget estimates to be $17 billion higher than they otherwise would be. Such testing can help identify weaknesses so that they can be addressed, and help ensure that estimates are reasonable. Further, Education conducted sensitivity analysis on only one key assumption—borrower incomes—at the request of OMB. Developing a sound set of assumptions is, of course, important. We also found that expected IDR plan costs have doubled from $25 to $53 billion for loans issued from fiscal years 2009 through 2016— primarily due to the growing volume of loans expected to be repaid in IDR plans. Given growth in IDR plan cost estimates over time due to the rising volume of loans expected to be repaid in these plans, it would also be useful to disclose that current estimates assume that no borrowers will switch from other repayment plans into IDR plans in the future. Some uncertainty is unavoidable when anticipating long- term loan costs, but we found numerous shortcomings in Education’s estimation approach and quality control practices that call into question the reliability of its budget estimates and affect the quality of information Congress has to make informed budget decisions. More specifically, until Education assesses and improves the quality of data and methods it uses to forecast borrowers’ future incomes and accounts for inflation in its estimates, its IDR plan budget estimates may be unreliable. In addition, until Education’s planned revisions to its student loan model have been completed and tested to ensure reasonableness, the agency’s IDR plan budget estimates will not reasonably reflect participation trends in IDR plans, particularly the extent to which borrowers in other repayment plans may switch into them. 5. Education generally agreed with our recommendations, stating that in light of growing IDR plan participation, the agency has focused efforts on improving IDR plan budget estimates. Appendix I: Objectives, Scope, and Methodology This appendix discusses in detail our methodology for addressing (1) the U.S. Department of Education’s (Education’s) current Income-Driven (IDR) Repayment plan budget estimates and how they have changed over time and (2) the extent to which Education’s approach to estimating IDR plan costs and its quality control practices help ensure reliable budget estimates. We also reviewed supplemental unpublished data from Education to illustrate current IDR plan subsidy cost estimates for loans issued in fiscal years 1995 through 2017 using assumptions underlying their estimates for the President’s fiscal year 2016 and 2017 budget. Objective 2: Review of Education’s Approach to Estimating IDR Plan Costs and Sensitivity Analysis of Education’s IDR Repayment Model Evaluation of Education’s Estimation Approach To understand and evaluate Education’s approach to estimating the cost of loans in IDR plans, we first reviewed available documentation from Education on the supplementary model Education created to estimate repayment patterns of loans in IDR plans (referred to as the IDR plan repayment model in this appendix). For instance, we did not receive Treasury’s computer code or the actual tax data.

Why GAO Did This Study As of June 2016, 24 percent of Direct Loan borrowers repaying their loans (or 5.3 million borrowers) were doing so in IDR plans, compared to 10 percent in June 2013. Education expects these plans to have costs to the government. GAO was asked to review Education's IDR plan budget estimates and estimation methodology. This report examines: (1) current IDR plan budget estimates and how those estimates have changed over time, and (2) the extent to which Education's approach to estimating costs and quality control practices help ensure reliable estimates. GAO analyzed published and unpublished budget data covering Direct Loans made from fiscal years 1995 through 2015 and estimated to be made in 2016 and 2017; analyzed and tested Education's computer code used to estimate IDR plan costs; reviewed documentation related to Education's estimation approach; and interviewed officials at Education and other federal agencies. What GAO Found For the fiscal year 2017 budget, the U.S. Department of Education (Education) estimates that all federally issued Direct Loans in Income-Driven Repayment (IDR) plans will have government costs of $74 billion, higher than previous budget estimates. IDR plans are designed to help ease student debt burden by setting loan payments as a percentage of borrower income, extending repayment periods from the standard 10 years to up to 25 years, and forgiving remaining balances at the end of that period. While actual costs cannot be known until borrowers repay their loans, GAO found that current IDR plan budget estimates are more than double what was originally expected for loans made in fiscal years 2009 through 2016 (the only years for which original estimates are available). This growth is largely due to the rising volume of loans in IDR plans. Education's approach to estimating IDR plan costs and quality control practices do not ensure reliable budget estimates. Weaknesses in this approach may cause costs to be over- or understated by billions of dollars. For instance: Education assumes that borrowers' incomes will not grow with inflation even though federal guidelines for estimating loan costs state that estimates should account for relevant economic factors. GAO tested this assumption by incorporating inflation into income forecasts, and found that estimated costs fell by over $17 billion. Education also assumes no borrowers will switch into or out of IDR plans in the future despite participation growth that has led budget estimates to more than double from $25 to $53 billion for loans made in recent fiscal years. Predicting plan switching would be advisable per federal guidance on estimating loan costs. Education has begun developing a revised model with this capability, but this model is not complete and it is not yet clear when or how well it will reflect IDR plan participation trends. Insufficient quality controls contributed to issues GAO identified. For instance: Education tested only one assumption for reasonableness, and did so at the request of others, although such testing is recommended in federal guidance on estimating loan costs. Without further model testing, Education's estimates may be based on unreasonable assumptions. Due to growing IDR plan popularity, improving Education's estimation approach is especially important. Until that happens, IDR plan budget estimates will remain in question, and Congress's ability to make informed decisions may be affected. What GAO Recommends GAO is making six recommendations to Education to improve the quality of its IDR plan budget estimates. These include adjusting borrower income forecasts for inflation, completing planned model revisions and ensuring that they generate reasonable predictions of participation trends, and testing key assumptions. Education generally agreed with GAO's recommendations and noted actions it would take to address them.

gao_NSIAD-96-98

gao_NSIAD-96-98_0

Our specific objectives were to determine whether the operational deficiencies in the F/A-18C/D that the Navy cited in justifying the E/F program have materialized and, if they have, the extent to which the F/A-18E/F would correct them; ascertain whether the F/A-18E/F will provide an appreciable increase in operational capability over the F/A-18C/D; and review the reliability of the cost estimates for the F/A-18E/F and compare those estimates with the costs of potential alternatives to the E/F program. F/A-18C carrier recovery payload deficiency has not occurred as the Navy predicted. 2.3.) 2.4.) Although survivability improvements for the F/A-18E/F are planned, the F/A-18E/F was not justified to counter a particular military threat that could not be met with current F/A-18C/Ds or F/A-18C/Ds that will be enhanced by additional planned survivability features. The Joint Strike Fighter Is Predicted to Be More Affordable and More Capable Than the F/A-18E/F The JAST program office is developing technology for a family of affordable next generation JSF aircraft for the Air Force, Marine Corps, and Navy. JSF Predicted to Cost Less Than the F/A-18E/F The driving focus of JAST is affordability. Historically, reductions in annual production rates have increased the per unit procurement cost of aircraft. Operational deficiencies in the F/A-18C/D cited by the Navy in justifying the need for the F/A-18E/F—range, carrier recovery payload, survivability, and system growth—either have not materialized as projected or can be corrected with nonstructural changes to the F/A-18C/D. The E/F’s increased range is achieved at the expense of combat effectiveness and increased F/A-18E/F payload capability has created weapons release problems that, if not resolved, will reduce the F/A-18E/F’s payload capability compared to the F/A-18C/D. Pursuing other alternatives, rather than proceeding with the F/A-18E/F program, would save billions of dollars. Continued procurement of the Navy’s less expensive F/A-18C/D aircraft (the fiscal year 1996 unit recurring flyaway cost of F/A-18C/Ds is $28 million compared to $53 million for the F/A-18E/F) could be done only to the level needed to sustain inventories until the next generation strike fighter becomes available.

Why GAO Did This Study GAO reviewed the Navy's plan to procure with F/A-18E/F aircraft, focusing on: (1) whether operational deficiencies in the F/A-18C/D cited by the Navy to justify the need for the F/A-18E/F have materialized and, if they have, the extent to which the F/A-18E/F would correct them; (2) whether the F/A-18E/F will provide an appreciable increase in operational capability over the F/A-18C/D; and (3) the reliability of the cost estimates for the F/A-18E/F and a comparison of those estimates with the costs of potential alternatives. What GAO Found GAO found that: (1) the F/A-18C/D could achieve strike ranges greater than required by the F/A-18E/F system specifications; (2) F/A-18C/D aircraft in service in Bosnian operations have achieved a carrier recovery payload capacity greater than the Navy's predicted carrier recovery payload capacity; (3) while the F/A-18E/F is predicted to have improved survivability over the F/A-18C/D, the F/A-18E/F was not justified on the basis that it was needed to counter a particular military threat that could not be met with current capabilities, and planned F/A-18E/F survivability might be better attained at less cost with the next-generation strike fighter; (4) despite the Navy's prediction, the F/A-18C/D has the additional space required for new avionics systems; (5) F/A-18E/F payload capability may not occur until air flow problems are corrected; (6) the next-generation Joint Strike Fighter is projected to cost less per aircraft, and be more capable than the F/A-18E/F; (7) reducing the total number of F/A-18E/F aircraft to be bought and the annual production rate to levels tat are more realistic than the Navy estimated will result in the F/A-18E/F costing about $9.6 million more per aircraft than originally estimated; and (8) the Navy would save $17 billion in recurring flyaway costs if it procured F/A-18C/D aircraft rather than F/A-18E/F aircraft.

gao_GAO-15-208

gao_GAO-15-208_0

Payment recovery. For example, states are increasingly contracting with managed care plans to deliver services to Medicaid enrollees (such plans are hereafter referred to as Medicaid managed care plans), and may delegate TPL responsibilities to such plans. An Estimated 7.6 Million Medicaid Enrollees Had Private Insurance in 2012 and This Number Is Expected to Increase with the Medicaid Expansion Based on responses to the U.S. Census Bureau’s ACS, we estimate that 7.6 million Medicaid enrollees—13.4 percent—also had a private source of health insurance in 2012. However, the prevalence of private health insurance varied among four Medicaid eligibility categories that we analyzed—children, adults, disabled, and aged. Selected states and CMS have taken various steps to address some of these challenges; however, selected states and stakeholders suggested that further CMS guidance and efforts to facilitate information sharing among states could improve TPL efforts nationwide. Selected States Have Taken Various Actions to Address Challenges with Coverage Identification, Managed Care Plan TPL Activities, and Coverage Denials State Actions to Address Challenges with and Improve Coverage Identification As the identification of Medicaid enrollees with private health insurance is a critical first step for achieving TPL cost savings, many states nationwide conduct electronic data matches of Medicaid enrollment files with insurer files themselves or through a contract with a vendor that conducts matches on the state’s behalf. For example, in five of the eight states in our review, individuals with third- party coverage may be eligible to enroll in Medicaid managed care plans The laws and certain TPL responsibilities are delegated to these plans. However, according to a representative of the National Association of Medicaid Directors, it can be difficult for states to work with Medicaid managed care plans and insurers as needed to strengthen state oversight. While CMS Has Taken Action to Support State TPL Efforts, Additional Federal Action Could Benefit TPL Efforts Nationwide CMS has taken steps, including issuing additional guidance, to address certain challenges that states face in ensuring that Medicaid is the payer of last resort. While the effective state practices CMS solicited and shared with states included information on initiatives implemented as of 2013, other state initiatives underway were not included. States have front-line responsibility for ensuring that Medicaid is the payer of last resort and are required to take steps to identify individuals with other health insurance and ensure that other insurance pays to the extent of its liability. Recommendations In light of the federal interest in ensuring that Medicaid should pay only after other liable third parties; state initiatives to improve TPL efforts, such as coverage identification strategies; and states’ increasing use of managed care, we recommend that the Secretary of Health and Human Services direct CMS to take the following two additional actions to oversee and support state TPL efforts: Routinely monitor and share across all states information regarding key TPL efforts and challenges. Provide guidance to states on their oversight of TPL efforts conducted by Medicaid managed care plans. Appendix I: Scope and Methodology of the American Community Survey (ACS) Analysis To assess the extent to which Medicaid enrollees have private health insurance, we utilized the ACS, an annual survey conducted by the U.S. Census Bureau. We analyzed data from the most recent ACS Public Use Microdata Sample (PUMS) that was available at the time we conducted our work, which covered calendar year 2012. Specifically, tables 1 and 2 provide estimates of the number and percentage of Medicaid enrollees with other sources of health coverage by Medicaid eligibility category and by state.

Why GAO Did This Study In fiscal year 2013, Medicaid—jointly financed by states and the federal government—provided health care coverage to over 70 million individuals at a total cost of about $460 billion. Congress generally established Medicaid as the health care payer of last resort, meaning that if enrollees have another source of health care coverage—such as private insurance—that source should pay, to the extent of its liability, before Medicaid does. This is referred to as third-party liability (TPL). There are known challenges to ensuring that Medicaid is the payer of last resort. GAO was asked to provide information on the prevalence of private insurance among Medicaid enrollees and on state and CMS efforts to ensure that Medicaid is the payer of last resort. This report examines (1) the extent to which Medicaid enrollees have private insurance, and (2) state and CMS initiatives to improve TPL efforts. GAO analyzed the 2012 ACS; interviewed Medicaid officials from eight states with high program spending or enrollment that used managed care; interviewed CMS officials and stakeholders; and reviewed relevant laws, regulations, and CMS guidance. What GAO Found Based on responses to the 2012 U.S. Census Bureau's American Community Survey (ACS)—the most recent available at the time the work was conducted—GAO estimates that 7.6 million Medicaid enrollees (13.4 percent) had private health insurance in 2012. The estimated prevalence of private health insurance varied among Medicaid eligibility categories, which may differ with respect to Medicaid benefits and costs. The number of Medicaid enrollees with private health insurance is expected to increase with the expansion of Medicaid. Selected states reported taking various steps to address challenges to ensuring that Medicaid is the payer of last resort and acknowledged recent Centers for Medicare & Medicaid Services (CMS) support, while also suggesting additional federal action. Four of the eight reviewed states reported various initiatives to improve coverage identification, such as arranging to participate in a data registry that allows participants to identify individuals with overlapping coverage. CMS has taken steps to issue TPL guidance and share some information on effective state practices, and such federal efforts should be ongoing to ensure that evolving approaches are captured and shared across states. In addition, officials in five states reported that enrollees with third-party coverage may be eligible to enroll in Medicaid managed care—in which states contract with health plans to provide services to enrollees and may delegate TPL activities such as payment recoveries to these plans. One of the five states had initiated a program to oversee plans' TPL recoveries, while other states did not report similar oversight. The National Association of Medicaid Directors reported that, in the absence of explicit CMS guidance in this area, it can be difficult for states to work with plans to improve TPL oversight and has recommended CMS provide such guidance. What GAO Recommends GAO recommends that the Secretary of the Department of Health and Human Services (HHS) direct CMS to (1) routinely monitor and share across all states information regarding key TPL efforts and challenges, and (2) provide guidance on state oversight of TPL efforts conducted by Medicaid managed care plans. HHS concurred with GAO's recommendations and noted plans to address them.

gao_GGD-00-16

gao_GGD-00-16_0

In contrast, nonbank subsidiaries of bank holding companies are not subject to regularly scheduled compliance examinations by any agency. FRB has general legal authority under the Bank Holding Company Act and other statutes to examine nonbank mortgage subsidiaries of bank holding companies. Issue of High Denial and Low Lending Rates for Minorities Was Raised in All Six Mergers As shown in table 1, consumer and community groups raised the issue of perceived high denial and low lending rates to minorities in all six cases. Concerns About Steering Raised in Three Mergers In three of the merger cases, consumer and community groups alleged that minorities were being directed or steered disproportionately to the holding company lender that offered the highest-priced loans or the least amount of service. In two of the mergers, the allegations focused on steering between the banks and the holding companies’ nonbank mortgage companies engaged in sub-prime lending. The group stated that this created a “regulatory blindspot.” Other Fair Lending Issues Were Raised on Some of the Mergers Consumer and community groups raised prescreening and marketing issues in four mergers. Concerns about the discriminatory treatment of minority applicants were raised in two of the mergers. In each of the six mergers, FRB staff obtained and reviewed additional information provided by the bank holding companies to assess the fair lending issues raised by consumer and community groups. This request was made in response to a group’s concerns about the compliance of a nonbank mortgage subsidiary with fair lending and consumer protection laws. These examinations covered the fair lending compliance of the banks and their subsidiaries with the fair lending laws and regulations. Moreover, nonbank mortgage subsidiaries of bank holding companies are not routinely examined for fair lending compliance by any federal regulatory or enforcement agency. In two cases, FRB had conducted prior investigations of nonbank mortgage subsidiaries involved in proposed mergers we studied. Second, routine examinations of the nonbank subsidiaries would be costly. Specifically, FRB did not routinely provide the primary banking regulators, FTC, and HUD with the comment letters it received during the merger applications process regarding the fair lending compliance of the banks and nonbank mortgage subsidiaries of the holding companies involved in the six mergers. Its role could be especially valuable in monitoring the lending activity of nonbank mortgage subsidiaries. Recommendations To enhance the consideration of fair lending issues during the bank holding company merger approval process, we recommend that the Board of Governors of the Federal Reserve System develop a policy statement and procedures to help ensure that all parties asked to provide information or views about the fair lending performance of entities within the bank holding companies are given or directed to sources for structural information about the holding companies, and all federal agencies responsible for helping to ensure the fair lending compliance of entities involved in the proposed merger are asked for consumer complaints and any other available data bearing on the fair lending performance of those entities. These issues involved (1) credit scoring, (2) automated loan underwriting, and (3) mortgage brokers. The Federal Trade Commission (FTC) and the Department of Housing and Urban Development (HUD) are responsible for fair lending enforcement of independent finance companies, which are not addressed in this study.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed large bank holding company mergers and regulatory enforcement of the Fair Housing Act and the Equal Credit Opportunity Act, focusing on the: (1) fair lending issues raid by consumer and community groups during the application process for six large bank holding company mergers; and (2) Federal Reserve Board's (FRB) consideration of those issues. What GAO Found GAO noted that: (1) in each of the six mergers, consumer and community groups raised the issue of perceived high loan denial and low lending rates to minorities by banks, bank subsidiaries, and nonbank mortgage subsidiaries involved in the mergers; (2) in four merger cases, community and consumer groups were concerned about alleged potential discriminatory practices of the holding companies' nonbank mortgage subsidiaries; (3) nonbank mortgage subsidiaries are not subject to routine examinations by federal regulators for compliance with fair lending and other consumer protection laws and regulations; (4) the fair lending laws generally confer enforcement, authority for nonbanking companies with the Federal Trade Commission, Department of Housing and Urban Development, or Department of Justice and do not specifically authorize any federal agency to conduct examinations of nonbanking companies for compliance with these laws; (5) the consumer and community groups were concerned that: (a) sub-prime lending activities of the nonbank mortgage subsidiaries had resulted or could result in minorities being charged disproportionately higher rates and fees; and (b) minority loan applicants were being "steered" between the affiliated banking or nonbank subsidiaries of the holding company to the lender that charged the highest rates or offered the least amount of services; (6) other fair lending issues included alleged discriminatory prescreening and marketing, low lending rates to minority-owned small businesses, discriminatory treatment of applicants, and redlining; (7) FRB considered these fair lending issues in the six merger cases by analyzing information from various sources, including the bank holding companies involved in the mergers and other federal and state agencies; (8) FRB staff analyzed Home Mortgage Disclosure Act data provided annually by the banks and nonbank mortgage subsidiaries involved in the mergers; (9) FRB staff stated that they placed heavy emphasis on prior and on-going compliance examinations performed by the appropriate primary banking regulators for the banks involved in the merger; (10) examinations for nonbank mortgage subsidiaries were generally not available because these entities are not routinely examined by any federal agency; (11) in two of the six mergers in GAO's review, FRB has previously performed compliance investigations of nonbank mortgage subsidiaries involved in the mergers; and (12) according to FRB staff, FRB had used its general examination and supervisory authority for bank holding companies to conduct these particular investigations.

gao_GAO-03-144

gao_GAO-03-144_0

Smart cards are plastic devices about the size of a credit card that contain an embedded integrated circuit chip capable of both storing and processing data. According to information obtained from GSA, OMB, and other federal agencies, as of November 2002, 18 federal agencies were planning, testing, operating, or completing a total of 62 smart card projects. Although there is no work under way to include optical stripe technology as an option within the Government Smart Card Interoperability Specification, the guidance does not preclude the use of this technology. Maintaining the Security of Smart Card Systems and Privacy of Personal Information Although concerns about security are a key driver for the adoption of smart card technology in the federal government, the security of smart card systems is not foolproof and must be addressed when agencies plan the implementation of a smart card system. Conclusions Progress has been made in implementing smart card technology across government, with increasingly ambitious projects, such as DOD’s CAC, being initiated in recent years as federal managers focus on implementing smart cards to enhance security across organizations. To successfully implement smart-card-based systems, agency managers have faced a number of substantial challenges, including sustaining executive-level commitment, obtaining adequate resources, integrating physical and logical security practices, achieving interoperability among smart card systems, and maintaining system security and privacy of personal information. Although OMB has statutory responsibility to develop and oversee policies, standards, and guidelines used by agencies for ensuring the security of federal information and systems, it has not issued any guidance or policy on governmentwide adoption of smart cards since 1996, when it designated GSA the lead for promoting federal adoption of the technology. GSA continues to play an important role in assisting agencies as they assess the potential of smart cards and move to implement them. Its implementation strategy and administrative guidance have not been kept up to date and do not address current priorities and technological advances. We recommend that the Administrator, GSA, improve the effectiveness of its promotion of smart card technologies within the federal government by developing an internal implementation strategy with specific goals and milestones to ensure that GSA’s internal organizations support and implement smart card systems, based on internal guidelines drafted in 2002, to provide better service and set an example for other federal agencies; updating its governmentwide implementation strategy and administrative guidance on implementing smart card systems to address current security priorities, including minimum security standards for federal facilities, computer systems, and data across the government; establishing guidelines for federal building security that address the role of smart card technology; and developing a process for conducting ongoing evaluations of the implementation of smart-card-based systems by federal agencies to ensure that lessons learned and best practices are shared across government.

Why GAO Did This Study Smart cards--credit-card-like devices that use integrated circuit chips to store and process data--offer a range of potential uses for the federal government, particularly in increasing security for its many physical and information assets. GAO was asked to review the use of smart cards across the federal government (including identifying potential challenges), as well as the effectiveness of the General Services Administration (GSA) in promoting government adoption of smart card technologies. What GAO Found Progress has been made in implementing smart card technology across government. As of November 2002, 18 federal agencies had reported initiating a total of 62 smart card projects. These projects have provided a range of benefits and services, ranging from verifying the identity of people accessing buildings and computer systems to tracking immunization records. To successfully implement such systems, agency managers have faced a number of substantial challenges: (1) sustaining executive-level commitment in the face of organizational resistance and cost concerns; (2) obtaining adequate resources for projects that can require extensive modifications to technical infrastructures and software; (3) integrating security practices across agencies, a task requiring collaboration among separate and dissimilar internal organizations; (4) achieving smart card interoperability across the government; and (5) maintaining the security of smart card systems and privacy of personal information. In helping agencies to overcome these challenges, not only GSA but also the Office of Management and Budget (OMB) and the National Institute of Standards and Technology (NIST) have roles to play. As the federal government's designated promoter of smart card technology, GSA assists agencies in assessing the potential of smart cards and in implementation. Although GSA has helped agencies significantly by implementing a governmentwide, standards-based contracting vehicle, it has not kept guidance up to date and has not addressed important subjects, such as building security standards, in its guidance. Further, OMB, which is responsible for setting policies for ensuring the security of federal information and systems, has not issued governmentwide policy on adoption of smart cards. In its role of setting technical standards, NIST is responsible for the government smart card interoperability specification, which does not yet address significant emerging technologies. Updated guidance, policy, and standards would help agencies to take advantage of the potential of smart cards to enhance security and other agency operations.

gao_GAO-15-230

gao_GAO-15-230_0

We selected three of the top four agencies for further review. The Army, Navy, VA and GSA accounted for almost 75 percent of the total $28 billion obligated for construction contracts in fiscal year 2013. To identify what is known about the prevalence of bid shopping on federal construction projects, we interviewed agency contracting officials, prime contractor and subcontractor trade associations, prime contractors and subcontractors; and reviewed GAO reports, articles, academic literature, and congressional testimonies addressing bid shopping. However, we did not determine whether agencies’ construction contract oversight was effective. For the purposes of this report, we refer to the prime contractor’s offer to the government as a proposal; we refer to the subcontractor’s offer to the prime contractor as a bid. After a construction contract is awarded, the federal government is represented in the contracting process by a contracting officer, who has authority to modify or terminate contracts on behalf of the government. No Conclusive Evidence Exists on the Use of Bid Shopping on Federal Construction Projects We were not able to determine if bid shopping occurs or does not occur on federal construction projects, and thus were not able to determine the prevalence of bid shopping. Government officials at the agencies we reviewed stated that they were not aware of bid shopping occurring on their construction projects. Prime contractors told us that in preparing their proposals, they try to obtain multiple subcontractor bids from each trade (e.g., electrical, plumbing, mechanical). Further, most of the subcontractors we interviewed told us that if they have not done business with and are unfamiliar with a specific prime contractor’s negotiation procedures or if a prime contractor is known to shop bids, they may propose an inflated price under the assumption that the prime contractor will negotiate that price down during the buyout process. Agencies Have a Variety of Tools to Monitor Project Quality and Methods to Address or Correct Unsatisfactory Contractor Performance Subcontractors have suggested that bid shopping leads to poor quality construction, however we found that the selected agencies have existing tools to hold the prime contractor accountable for a project’s work quality and progress and, when performance is unsatisfactory, have methods to address or correct deficiencies. The government can be protected from poor quality construction if it appropriately uses the various tools at its disposal to manage and address deficiencies. Examples of oversight tools include onsite agency representatives, daily construction progress reports and periodic inspection reports. Further, one tool that is used by some states to prevent the poor quality construction allegedly caused by bid shopping is bid listing—whereby the prime contractor must name the subcontractors in its proposal to the state government. However, as past analyses of the use of bid listing in the federal government have found, the benefit of requiring it for the prevention of bid shopping is questionable in part because of the administrative burden. Monthly progress payment reports. Agencies’ Use of Bid Listing May Provide Insight into Potential Instances of Bid Shopping, However Benefit Is Questionable Bid listing is a practice whereby the potential prime contractors are required to identify certain subcontractors in their proposals that it will use if awarded the contract, which moves their selection and initial negotiations with subcontractors to earlier in the contracting process than if bid listing was not used. GSA testified in 2000 that bid listing would create more harm than benefit and strongly opposed bid-listing requirements for a number of reasons, such as adverse affect on the timeliness and cost of contract performance and increase in the government’s administrative expenses. After the prime contractor is awarded a fixed-price contract, it must manage the subcontractors to complete the job within the established contract price and schedule. None provided comments on this report.

Why GAO Did This Study In fiscal year 2014, the federal government obligated almost $32 billion for construction projects using primarily competitive, fixed-price contracts. In these contracts, the government holds the prime contractor fully responsible for project delivery at the agreed-to price and schedule. Once a construction contract is awarded, the prime contractor must manage subcontractors that typically perform 60 to 90 percent of the work on a construction project. Bid shopping—whereby a prime contractor uses one subcontractor's price in its proposal but negotiates a lower price with a subcontractor after the contract award for the purpose of retaining the difference for its benefit—is considered an unethical business practice by the construction industry. Subcontractors have alleged that bid shopping leads to poor quality construction. GAO was asked to review the government's insight into subcontractor selection and oversight of subcontractor performance on federal construction contracts. This report covers (1) what is known about the prevalence of bid shopping on federal construction projects and (2) what tools the federal government has to monitor and address contractor performance. GAO judgmentally selected and reviewed construction contracts from three of the four federal agencies that obligated the most funds for construction contracts in fiscal year 2013. GAO also interviewed agency and state contracting officials and construction industry representatives. GAO is not making recommendations in this report. The agencies in this review did not provide comments on this report. What GAO Found GAO was not able to determine if bid shopping occurs or does not occur when prime contractors select subcontractors on federal construction projects, but found that the selection process could lead to subcontractors' perceptions of bid shopping. GAO's review of selected contract files did not reveal evidence of bid shopping. Further, officials at the agencies GAO reviewed stated they were not aware of bid shopping occurring on their contracts. Many of the construction contractors that GAO spoke with said that bid shopping occurs, but could not furnish evidence of specific instances. Negotiation procedures between prime contractors and subcontractors may create the impression of bid shopping among subcontractors that submit bids. Specifically, prime contractors explained that they receive multiple subcontractor bids for each trade (e.g., electrical, plumbing) up to minutes before their proposal is submitted to the government; and they typically do not use a specific subcontractor's price in their proposal, but a price informed by the subcontractors' bids. After award, the prime contractor negotiates and selects a subcontractor for each trade during the “buyout process,” as shown below. To hold the prime contractor accountable for a project's work quality and progress, selected agencies use oversight tools such as agency representatives deployed on site, daily progress reports, and When performance is unsatisfactory, agencies use a number of methods to address or correct deficiencies. For example, agencies can withhold progress payments to the prime contractor or report poor contractor performance in government databases. Further, the government can be protected from poor quality construction if it appropriately uses the oversight tools at its disposal. To address bid shopping, some states are using bid listing, which requires the prime contractor to name certain subcontractors in its proposal to the state government. But the benefit of requiring bid listing in the proposal solely for the prevention of bid shopping is not certain, as past analyses of its use in the federal government have found it adversely affects the timeliness and cost of contract performance, and increases the government's administrative expenses.

gao_GAO-17-495T

gao_GAO-17-495T_0

DHS and CBP Have Established Collaborative Mechanisms Along the Southwest Border, but Could Strengthen Coordination of Predator B UAS Operations DHS and CBP Have Implemented a Variety of Collaborative Mechanisms to Coordinate Border Security Efforts DHS and its components have used various mechanisms over time to coordinate border security operations. We found that through these collaborative mechanisms, DHS and CBP had coordinated border security efforts in information sharing, resource targeting and prioritization, and leveraging of assets. Additionally, DHS has used these task forces to coordinate various border security activities, such as use of Predator B UAS, as we reported in February 2017 and discuss below. Specifically, participants identified three barriers that most frequently hindered effective collaboration within their mechanisms: (1) resource constraints, (2) rotation of key personnel, and (3) lack of leadership buy- in. For example, officials from 11 of 12 partner agencies we interviewed reported coordination challenges related to the STC and ACTT, such as limited resource commitments by participating agencies and lack of common objectives. We recommended that DHS establish written agreements for some of these coordination mechanisms and a strategic-level oversight mechanism to monitor interagency collaboration. DHS and CBP Could Strengthen Efforts to Assess Use of Resources and Programs to Secure the Border Border Patrol Could Benefit From Improving Its Methodology to Assess Effectiveness of its Consequence Delivery System Program In January 2017, we reported that Border Patrol agents use the CDS to classify each alien apprehended illegally crossing the border and then apply one or more post-apprehension consequences determined to be the most effective and efficient to discourage recidivism, that is, further apprehensions for illegal cross-border activity. Specifically, Border Patrol’s methodology for calculating recidivism—the percent of aliens apprehended multiple times along the southwest border within a fiscal year—does not account for an alien’s apprehension history over multiple years. To better inform the effectiveness of CDS implementation and border security efforts, we recommended that, among other things, (1) Border Patrol strengthen the methodology for calculating recidivism, such as by using an alien’s apprehension history beyond one fiscal year and excluding aliens for whom there is no record of removal; and (2) the Assistant Secretary of ICE and Commissioner of CBP collaborate on sharing immigration enforcement and removal data to help Border Patrol account for the removal status of apprehended aliens in its recidivism rate measure. However, CBP has not developed metrics that systematically use these data, among other data it collects, to assess the contributions of its pedestrian and vehicle border fencing to its mission. Developing metrics to assess the contributions of fencing to border security operations could better position CBP to make resource allocation decisions with the best information available to inform competing mission priorities and investments. To ensure that Border Patrol has the best available information to inform future investments and resource allocation decisions among tactical infrastructure and other assets Border Patrol deploys for border security, we recommended, among other things, that Border Patrol develop metrics to assess the contributions of pedestrian and vehicle fencing to border security along the southwest border using the data Border Patrol already collects and apply this information, as appropriate, when making investment and resource allocation decisions. CBP Has Taken Actions to Assess the Effectiveness of Its Predator B UAS and Aerostats for Border Security, but Could Improve Its Data Collection Efforts In February 2017, we found that CBP has taken actions to assess the effectiveness of its Predator B UAS and tactical aerostats for border security, but could improve its data collection efforts. We also found that CBP has not updated its guidance for collecting and recording mission information in its data collection system to include new data elements added since 2014, and does not have instructions for recording mission information such as asset assists. We reported that updating guidance and fully training users, consistent with internal control standards, would help CBP better ensure the quality of data it uses to assess effectiveness. Border Security: DHS Surveillance Technology Unmanned Aerial Systems and Other Assets. Border Security: Progress and Challenges in DHS’s Efforts to Implement and Assess Infrastructure and Technology. Border Security: Opportunities Exist to Strengthen Collaborative Mechanisms along the Southwest Border. 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 Securing U.S. borders is the responsibility of DHS, in collaboration with other federal, state, local, and tribal entities. Within DHS, CBP is the lead agency for border security and is responsible for, among other things, keeping terrorists and their weapons, criminals and their contraband, and inadmissible aliens out of the country. In recent years, GAO has reported on a variety of DHS collaborative mechanisms and efforts to assess its use of border security resources. This statement addresses (1) DHS's efforts to implement collaborative mechanisms along the southwest border and (2) DHS's efforts to assess its use of resources and programs to secure the southwest border. This statement is based on GAO reports and testimonies issued from September 2013 through February 2017 that examined DHS efforts to enhance border security and assess the effectiveness of its border security operations. GAO's reports and testimonies incorporated information GAO obtained by examining DHS collaborative mechanisms, reviewing CBP policies and procedures for coordinating use of assets, analyzing DHS data related to enforcement programs, and interviewing relevant DHS officials. What GAO Found The Department of Homeland Security (DHS) and its U.S. Customs and Border Protection (CBP) have implemented various mechanisms along the southern U.S. border to coordinate security operations, but could strengthen coordination of Predator B unmanned aerial system (UAS) operations to conduct border security efforts. In September 2013, GAO reported that DHS and CBP used collaborative mechanisms along the southwest border—including interagency Border Enforcement Security Task Forces and Regional Coordinating Mechanisms—to coordinate information sharing, target and prioritize resources, and leverage assets. GAO interviewed participants from the various mechanisms who provided perspective on successful collaboration, such as establishing positive working relationships, sharing resources, and sharing information. Participants also identified barriers, such as resource constraints, rotation of key personnel, and lack of leadership buy-in. GAO recommended that DHS take steps to improve its visibility over field collaborative mechanisms. DHS concurred and collected data related to the mechanisms' operations. Further, as GAO reported in June 2014, officials involved with mechanisms along the southwest border cited limited resource commitments by participating agencies and a lack of common objectives. Among other things, GAO recommended that DHS establish written interagency agreements with mechanism partners, and DHS concurred. Lastly, in February 2017, GAO reported that DHS and CBP had established mechanisms to coordinate Predator B UAS operations but could better document their coordination procedures. GAO made recommendations for DHS and CBP to improve coordination of UAS operations, and DHS concurred. GAO recently reported that DHS and CBP could strengthen efforts to assess their use of resources and programs to secure the southwest border. For example, in February 2017, GAO reported that CBP does not record mission data consistently across all operational centers for its Predator B UAS, limiting CBP's ability to assess program effectiveness. In addition, CBP has not updated its guidance for collecting and recording mission information in its data collection system since 2014. Updating guidance consistent with internal control standards would help CBP better ensure the quality of data it uses to assess effectiveness. In January 2017, GAO found that methodological weaknesses limit the usefulness for assessing the effectiveness of CBP's Border Patrol Consequence Delivery System. Specifically, Border Patrol's methodology for calculating recidivism—the percent of aliens apprehended multiple times along the southwest border within a fiscal year—does not account for an alien's apprehension history over multiple years. Border Patrol could strengthen the methodology for calculating recidivism by using an alien's apprehension history beyond one fiscal year. Finally, CBP has not developed metrics that systematically use the data it collects to assess the contributions of its pedestrian and vehicle border fencing to its mission. Developing metrics to assess the contributions of fencing to border security operations could better position CBP to make resource allocation decisions with the best information available to inform competing mission priorities and investments. GAO made recommendations to DHS and CBP to update guidance, strengthen its recidivism calculation methodology, and develop metrics, and DHS generally concurred. What GAO Recommends GAO has previously made numerous recommendations to DHS to improve the function of collaborative mechanisms and use of resources for border security, and DHS has generally agreed. DHS has taken actions or described planned actions to address the recommendations, which GAO will continue to monitor.

gao_GAO-04-654

gao_GAO-04-654_0

That incident has resulted in $70 million in liability claims. Limited Liability Companies Are Licensees for 31 of the 103 Operating Commercial Nuclear Power Plants in the United States Thirty-one commercial nuclear power plants nationwide are licensed to limited liability companies. In total, 11 limited liability companies are licensed to own nuclear power plants. Three energy corporations—Exelon, Entergy, and the Constellation Energy Group—are the parent companies for 8 of these limited liability companies. These eight subsidiaries are licensed or co-licensed to operate 27 of the 31 plants. NRC Has Specific Requirements and Procedures to Ensure That All Licensees Comply with the Price- Anderson Act’s Liability Provisions NRC requires licensees of nuclear power plants to comply with the Price- Anderson Act’s liability insurance provisions by maintaining the necessary primary and secondary insurance coverage. All the nuclear power plant licensees purchase their primary insurance from American Nuclear Insurers. The bond for payment of retrospective premiums is a contractual agreement between the licensee and American Nuclear Insurers that obligates the licensee to pay American Nuclear Insurers the retrospective premiums. Each licensee signs this bond and furnishes NRC with a certified copy. NRC Treats Limited Liability Companies the Same as Other Licensees, but the Insurance Industry Has Added Important Requirements for These Companies NRC applies the same rules to limited liability companies that it does to other licensees of nuclear power plants with respect to liability requirements under the Price-Anderson Act. Limited liability companies, like other licensees, are required to show that they are maintaining the $300 million in primary insurance coverage and provide NRC a copy of the bond for payment of retrospective premiums or other approved evidence of guarantee of retrospective premium payments. According to NRC officials, if licensees have the financial resources to cover these two larger expenses, they are likely to be capable of paying their retrospective premiums. American Nuclear Insurers goes further than NRC and requires licensees that are limited liability companies to provide a letter of guarantee from their parent or other affiliated companies with sufficient assets to cover the retrospective premiums. These letters state that the parent or an affiliated company is responsible for paying the retrospective premiums if the limited liability company does not. If the parent company or other affiliated company of a limited liability company does not provide a letter of guarantee, American Nuclear Insurers could refuse to issue the bond for payment of retrospective premiums and the company would have to have another means to show NRC proof of secondary insurance. American Nuclear Insurers informs NRC that it has received these letters of guarantee. NRC estimates that it will complete its study by the end of summer 2004. II), NRC stated that it believes the report accurately reflects the present insurance system for nuclear power plants. To determine NRC’s requirements for ensuring that licensees of nuclear power plants comply with the Price-Anderson Act’s liability requirements, we reviewed relevant statutes and NRC regulations and interviewed NRC officials responsible for ensuring that licensees have primary and secondary insurance coverage. GAO posts this list, known as “Today’s Reports,” on its Web site daily.

Why GAO Did This Study An accident at one the nation's commercial nuclear power plants could result in human health and environmental damages. To ensure that funds would be available to settle liability claims in such cases, the Price-Anderson Act requires licensees for these plants to have primary insurance--currently $300 million per site. The act also requires secondary coverage in the form of retrospective premiums to be contributed by all licensees to cover claims that exceed primary insurance. If these premiums are needed, each licensee's payments are limited to $10 million per year and $95.8 million in total for each of its plants. In recent years, limited liability companies have increasingly become licensees of nuclear power plants, raising concerns about whether these companies--by shielding their parent corporations' assets--will have the financial resources to pay their retrospective premiums. GAO was asked to determine (1) the extent to which limited liability companies are the licensees for U.S. commercial nuclear power plants, (2) the Nuclear Regulatory Commission's (NRC) requirements and procedures for ensuring that licensees of nuclear power plants comply with the Price-Anderson Act's liability requirements, and (3) whether and how these procedures differ for licensees that are limited liability companies. What GAO Found Of the 103 operating nuclear power plants, 31 are owned by 11 limited liability companies. Three energy corporations--Exelon, Entergy, and the Constellation Energy Group--are the parent companies for eight of these limited liability companies. These 8 subsidiaries are the licensees or colicensees for 27 of the 31 plants. NRC requires all licensees for nuclear power plants to show proof that they have the primary and secondary insurance coverage mandated by the Price-Anderson Act. Licensees obtain their primary insurance through American Nuclear Insurers. Licensees also sign an agreement with NRC to keep the insurance in effect. American Nuclear Insurers also has a contractual agreement with each of the licensees to collect the retrospective premiums if these payments become necessary. A certified copy of this agreement, which is called a bond for payment of retrospective premiums, is provided to NRC as proof of secondary insurance. It obligates the licensee to pay the retrospective premiums to American Nuclear Insurers. NRC does not treat limited liability companies differently than other licensees with respect to the Price-Anderson Act's insurance requirements. Like other licensees, limited liability companies must show proof of both primary and secondary insurance coverage. American Nuclear Insurers also requires limited liability companies to provide a letter of guarantee from their parent or other affiliated companies with sufficient assets to pay the retrospective premiums. These letters state that the parent or affiliated companies are responsible for paying the retrospective premiums if the limited liability company does not. American Nuclear Insurers informs NRC it has received these letters. In light of the increasing number of plants owned by limited liability companies, NRC is studying its existing regulations and expects to report on its findings by the end of summer 2004. In commenting on a draft of this report, NRC stated that it accurately reflects the present insurance system for nuclear power plants.

gao_PEMD-95-26

gao_PEMD-95-26_0

Principal Findings The Completed State Experiments Have Tested Only Some of the Proposed Welfare Reforms The welfare-to-work experiments we reviewed tested many of the provisions in welfare reform proposals (including H.R. 4), such as conducting some form of work program that may provide support services such as child care and requiring adult AFDC recipients to participate in that work program and to cooperate with child support enforcement. Combining a Broad Range of Employment-Related Services and Supports Yielded the Best, Though Modest, Results The most successful welfare-to-work programs—those with the largest and most consistent effects—offered participants an expanded mix of education, training, and employment services; increased child care assistance; and mandated some form of client participation. However, after 3 years only one fourth of its participants had achieved self-sufficiency by being both employed and off welfare. New York’s program successfully increased employment and earnings but did not reduce welfare receipt. Similarly, Alabama’s Avenues to Self-Sufficiency through Employment and Training Services (ASSETS) program increased work incentives and strengthened its work registration and child support cooperation requirements. This program has had no significant effects on welfare receipt or average payment so far, although the evaluation is not yet complete. For example, imposing a strict limit on the length of time a family can receive benefits might influence participants’ work behavior. Although federal funds for AFDC benefits have not been capped before, the states have limited the funds available for their work programs. On the first point, we agree that some features of the proposed reforms have not been tested, but we believe that the states’ experiences with the program features that would be included under some of the current proposals, as well as with other features that might be discouraged, are relevant to consideration of these reforms. The first step entailed locating state welfare-to-work experiments and screening them to identify rigorous evaluation studies with reliable results in terms of the intended outcomes. GAO Comments 1. 2. 3. 5. 6. 7. 8. 1. From Welfare to Work.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the evaluations of numerous state welfare-to-work experiments completed since 1988, focusing on: (1) how these experiments resemble current welfare reforms; and (2) the approaches that have been effective in increasing employment and earnings or reducing benefits among welfare clients. What GAO Found GAO found that: (1) state welfare-to-work experiments and current federal welfare reform proposals both include work programs for welfare recipients, stricter requirements for participation in work programs and child support enforcement, and increasing work incentives; (2) states are testing proposals, such as limiting the length of time a family can receive benefits, but their evaluations are not yet complete; (3) some states have evaluated features of welfare-to-work programs, such as providing a broad mix of employment services, that go beyond some of the current proposals; (4) although the states' experiences provide information regarding some current reform features, it is not possible to project the likely effects of the entire package of reform proposals; (5) the programs that consistently showed the best employment and welfare-related outcomes for participants combined many employment-related activities and support services with some form of participation mandate and had adequate funding to serve their clients; (6) it has been difficult to move welfare recipients to self-supporting employment; (7) only one fourth of participants were self-sufficient in being both employed and off welfare after 3 years in welfare-to-work programs; and (8) the approach of increasing both work incentives and access to employment has had mixed results among states that have attempted such actions.

gao_GAO-08-571T

gao_GAO-08-571T_0

In this regard, FISMA requires that agencies implement information security programs that, among other things, include periodic assessments of the risk; risk-based policies and procedures; subordinate plans for providing adequate information security for networks, facilities, and systems or groups of information systems, as appropriate; security awareness training for agency personnel, including contractors and other users of information systems that support the operations and assets of the agency; periodic testing and evaluation of the effectiveness of information security policies, procedures, and practices, performed with a frequency depending on risk, but no less than annually; a process for planning, implementing, evaluating, and documenting remedial action to address any deficiencies; procedures for detecting, reporting, and responding to security incidents; plans and procedures to ensure continuity of operations. OMB has provided instructions to federal agencies and their IGs for preparing annual FISMA reports. Agencies Report Progress in Performing Control Activities, but Some IGs Report that Weaknesses Exist Major federal agencies have continued to report steady progress over the past several years in performing information security control activities, although IGs at several agencies identified inconsistencies with reported information. According to OMB and agency FISMA reports, the federal government continued to improve information security performance in fiscal year 2007 relative to key performance metrics established by OMB. 1). In addition, IGs at several agencies sometimes disagreed with the information reported by the agency and have identified weaknesses in the processes used to implement these and other security program activities. 3). Certification and Accreditation Federal agencies continue to report an increasing percentage of systems that have been certified and accredited. Most agencies did not implement controls to sufficiently prevent, limit, or detect access to computer networks, systems, or information. However, 22 agencies did not always configure network devices and services to prevent unauthorized access and ensure system integrity, or patch key servers and workstations in a timely manner. In addition, 18 agencies did not always segregate incompatible duties to different individuals or groups so that one individual does not control all aspects of a process or transaction. Agencywide Security Programs Were Not Fully Implemented An underlying cause for information security weaknesses identified at federal agencies is that they have not yet fully or effectively implemented all the FISMA-required elements for an agencywide information security program. Our analysis determined that 21 of 24 major federal agencies had weaknesses in their agencywide information security programs. Consequently, federal systems and information are at increased risk of unauthorized access to and disclosure, modification, or destruction of sensitive information, as well as inadvertent or deliberate disruption of system operations and services. Opportunities Exist for Enhancing Federal Information Security In prior reports, GAO and IGs have made hundreds of recommendations to agencies for actions necessary to resolve prior significant control deficiencies and information security program shortfalls. The Information Systems Security Line of Business: The goal of this initiative is to improve the level of information systems security across government agencies and reduce costs by sharing common processes and functions for managing information systems security. Opportunities also exist to enhance policies and practices related to security control testing and evaluation, FISMA reporting, and the independent annual evaluations of agency information security programs required by FISMA. As a result, OMB and Congress lack information that could identify governmentwide issues regarding patch management. In summary, agencies have reported progress in implementing control activities, but persistent weaknesses in agency information security controls threaten the confidentiality, integrity, and availability of federal information and information systems, as illustrated by the increasing number of reported security incidents. Opportunities exist to improve information security at federal agencies. OMB and certain federal agencies have initiated efforts that are intended to strengthen the protection of federal information and information systems.

Why GAO Did This Study Information security is especially important for federal agencies, where the public's trust is essential and poor information security can have devastating consequences. Since 1997, GAO has identified information security as a governmentwide high-risk issue in each of our biennial reports to Congress. Concerned by reports of significant weaknesses in federal computer systems, Congress passed the Federal Information Security Management Act (FISMA) of 2002, which permanently authorized and strengthened information security program, evaluation, and annual reporting requirements for federal agencies. GAO was asked to testify on the current state of federal information security and compliance with FISMA. This testimony summarizes (1) the status of agency performance of information security control activities as reported by major agencies and their inspectors general (IG), (2) the effectiveness of information security at federal agencies, and (3) opportunities to improve federal information security. In preparing for this testimony, GAO analyzed agency, IG, Office of Management and Budget (OMB), and GAO reports on information security and reviewed OMB FISMA reporting instructions, information technology security guidance, and information on reported security incidents. What GAO Found Over the past several years, 24 major federal agencies have consistently reported progress in performing information security control activities in their annual FISMA reports. For fiscal year 2007, the federal government continued to report improved information security performance relative to key performance metrics established by OMB. For example, an increasing percentage of systems governmentwide had been tested and evaluated, had tested contingency plans, and had been certified and accredited. However, IGs at several agencies sometimes disagreed with the agency reported information and identified weaknesses in the processes used to implement these and other security program activities. Despite agency reported progress, major federal agencies continue to experience significant information security control deficiencies that limit the effectiveness of their efforts to protect the confidentiality, integrity, and availability of their information and information systems. Most agencies did not implement controls to sufficiently prevent, limit, or detect access to computer networks, systems, or information. In addition, agencies did not always effectively manage the configuration of network devices to prevent unauthorized access and ensure system integrity, patch key servers and workstations in a timely manner, assign duties to different individuals or groups so that one individual did not control all aspects of a process or transaction, and maintain complete continuity of operations plans for key information systems. An underlying cause for these weaknesses is that agencies have not fully or effectively implemented agencywide information security programs. As a result, federal systems and information are at increased risk of unauthorized access to and disclosure, modification, or destruction of sensitive information, as well as inadvertent or deliberate disruption of system operations and services. Such risks are illustrated, in part, by an increasing number of security incidents experienced by federal agencies. Nevertheless, opportunities exist to bolster federal information security. Federal agencies could implement the hundreds of recommendations made by GAO and IGs to resolve prior significant control deficiencies and information security program shortfalls. In addition, OMB and other federal agencies have initiated several governmentwide initiatives that are intended to improve security over federal systems and information. For example, OMB has established an information systems security line of business to share common processes and functions for managing information systems security and directed agencies to adopt the security configurations developed by the National Institute of Standards and Technology and Departments of Defense and Homeland Security for certain Windows operating systems. Opportunities also exist to enhance policies and practices related to security control testing and evaluation, FISMA reporting, and the independent annual evaluations of agency information security programs required by FISMA.

gao_GAO-07-1091

gao_GAO-07-1091_0

However, EPA’s second program does not incorporate other items. EPA also agreed to test for contaminants in dust. EPA Is Not Assessing the Extent of WTC Contamination, and It Did Not Agree to Evaluate Risk in Workplaces Though EPA expanded the number of contaminants tested for in its second program, it did not adopt recommendations and additional input from the EPA Inspector General or the expert panel that addressed the following issues: Evaluating risks in geographic areas north of Canal Street and in Brooklyn. Some expert panel members had suggested that EPA investigate whether it was feasible to develop a method for distinguishing between normal urban dust and WTC dust. Beginning in 2004—almost 3 years after the disaster—EPA conducted this investigation into developing a WTC dust signature. Two Factors Limited the Expert Panel’s Ability to Meet Its Goals The expert panel’s ability to meet its goals was limited by two factors: (1) EPA officials’ belief that some panel goals were more appropriately addressed by other agencies and (2) EPA’s approach to managing the panel process. Furthermore, the majority of expert panel members do not believe the panel successfully met any of its goals. According to all expert panel members who responded to our follow-up inquiry regarding EPA’s second program (10 out of 10 members), this program does not respond to the concerns of residents and workers affected by the collapse of the WTC towers. While EPA stated that the number of samples in its first program exceeding risk levels for airborne asbestos was “very small,” EPA did not provide the following additional information to help inform residents’ decisions regarding participation in the second program: Voluntary program participation. Without complete explanations of EPA’s sampling data, residents who could have elected to participate might have decided not to do so. EPA Is Implementing the Second Program with $7 Million and Did Not Complete a Cost Estimate to Determine Whether This Was an Appropriate Amount EPA is implementing its second program with the funding remaining after completion of its first program—approximately $7 million—but EPA did not determine whether this amount would support the effective implementation of its second program. EPA Has Taken Preparedness Actions, but Some Concerns Remain EPA has acted upon lessons learned from the WTC disaster to prepare for future disasters, such as clarifying internal roles and responsibilities and improving health-related cleanup benchmarks. However, EPA’s approach to emergency response does not differentiate between indoor and outdoor contamination, and therefore it is difficult to determine how EPA’s preparedness actions have improved EPA’s readiness to respond specifically to indoor contamination. Appendix II: Objectives, Scope, and Methodology We were asked to determine (1) the extent to which the Environmental Protection Agency (EPA) incorporated recommendations and additional input from the expert panel and its Inspector General in its second program; (2) what factors, if any, limited the expert panel’s ability to meet its goals; (3) the completeness of information EPA provided to the public in its second plan; (4) the way EPA estimated the resources needed to conduct the second program; and (5) the extent to which EPA has acted upon lessons learned to better prepare for indoor contamination that could result from future large-scale disasters. 11.

Why GAO Did This Study The September 11, 2001, terrorist attacks and World Trade Center (WTC) collapse blanketed Lower Manhattan in dust from building debris. In response, the Environmental Protection Agency (EPA) conducted an indoor clean and test program from 2002 to 2003. In 2003, EPA's Inspector General (IG) recommended improvements to the program and identified lessons learned for EPA's preparedness for future disasters. In 2004, EPA formed an expert panel to, among other goals, guide EPA in developing a second voluntary program; EPA announced this program in 2006. As requested, GAO's report primarily addresses EPA's second program, including the (1) extent to which EPA incorporated IG and expert panel member recommendations and input; (2) factors, if any, limiting the expert panel's ability to meet its goals; (3) completeness of information EPA provided to the public; (4) way EPA estimated resources for the program; and (5) extent to which EPA has acted upon lessons learned regarding indoor contamination from disasters. What GAO Found EPA has incorporated some recommendations and input from the IG and expert panel members into its second program, but its decision not to include other items may limit the overall effectiveness of this program. For example, while EPA agreed to test for more contaminants, it did not agree to evaluate risks in areas north of Canal Street and in Brooklyn. EPA reported that it does not have a basis for expanding the boundaries of its program because it cannot distinguish between normal urban, or background, dust and WTC dust. The expert panel's ability to meet its goals was limited by two factors: (1) EPA officials' belief that some panel goals were more appropriately addressed by other agencies, and (2) EPA's approach to managing the panel process. Furthermore, the majority of expert panel members believe the panel did not meet any of its goals, and that EPA's second program does not respond to the concerns of residents and workers affected by the disaster. EPA's second plan does not fully inform the public about the results of its first program. EPA concluded that a "very small" number of samples from its first program exceeded risk levels for airborne asbestos. However, EPA did not provide information such as how representative the samples were of the affected area. Residents who could have participated in this voluntary second program might have opted not to do so because of EPA's conclusion about its first program. EPA did not develop a comprehensive cost estimate to determine the resources needed to carry out its second program. EPA is implementing this program with $7 million remaining from its first program. While EPA has acted upon lessons learned following this disaster, some concerns remain about its preparedness to respond to indoor contamination following future disasters. Specifically, EPA has not developed protocols on how and when to collect data to determine the extent of indoor contamination, one of the concerns raised by panel members.

gao_GAO-13-147

gao_GAO-13-147_0

Background The HCTC, which pays a portion of health plan premiums for certain eligible workers and retirees, is set to expire at the end of 2013 when certain PPACA provisions, including PPACA premium tax credits, cost- sharing subsidies, and expansion of Medicaid eligibility, are implemented. Individuals potentially eligible for the HCTC include manufacturing and service workers who lost their jobs due to foreign import competition and were eligible for TAA benefits (representing about 51 percent of all potentially eligible individuals), and certain retirees between the ages of 55 and 64 whose pensions from a former employer were terminated and are now paid by the PBGC (representing about 47 percent of all potentially eligible individuals). When the HCTC Expires Most HCTC Participants Will Likely Be Ineligible for a PPACA Premium Tax Credit or Eligible for a Credit Less Generous Than the HCTC The expiration of the HCTC and implementation of the PPACA premium tax credits and Medicaid expansion will affect HCTC participants’ costs for health plans in multiple ways. Projections from our analysis of 2010 IRS data show that about 69 percent of HCTC participants will likely either be ineligible for a PPACA premium tax credit or Medicaid, or will be eligible for a PPACA premium tax credit that is less generous than the HCTC. On the other hand, at least 27 percent of HCTC participants will be eligible for a PPACA premium tax credit more generous than the HCTC or be eligible for Medicaid. However, up to 12,141 participants will likely receive a credit similar to or greater than the HCTC. The expiration of the HCTC and implementation of PPACA cost-sharing subsidies will also affect HCTC participants’ out-of-pocket costs for health plans. Projections from our analysis of 2010 IRS data show that up to 28 percent of all HCTC participants who are eligible for the PPACA premium tax credit will likely also be eligible for a PPACA cost-sharing subsidy in 2014 to help pay for deductibles and copays, depending in part on whether or not their state expands Medicaid. In addition to being eligible for the PPACA premium tax credit, based on projections from our analysis of 2010 IRS data, up to 30 percent of all HCTC nonparticipants may also be eligible for a PPACA cost-sharing subsidy in 2014 to help pay for deductibles and copays, depending in part on whether or not their state expands Medicaid and whether they meet all other eligibility criteria for the PPACA premium tax credits. Health Plan Coverage under PPACA Will Be Comparable to HCTC Plans, but Participants May Have an Incentive to Change Their Level of Coverage The health plan coverage available under PPACA will be comparable to coverage in current HCTC-qualified health plans. Specifically, the categories of services that plans purchased through the PPACA exchanges will be required to cover are comparable to those currently covered by most HCTC plans, and the actuarial values of HCTC plans are likely above the minimum level of coverage that will be required in PPACA exchange plans. However, under PPACA, HCTC participants may have an incentive to choose plans through the exchanges that have different levels of coverage than their HCTC plans. HCTC Plans’ Actuarial Values Are Likely above PPACA’s Minimum Level of Value The vast majority of HCTC participants in 2012 were likely enrolled in plans with actuarial values that were above the minimum level of 60 percent (bronze) required for plans purchased through the PPACA exchanges, including many who were likely enrolled in plans that had actuarial values of 80 percent (gold) or higher. For example: Some HCTC participants eligible for PPACA premium tax credits could have an incentive to change to a higher level of coverage. For example, if the HCTC participants who have coverage at the 80 percent (gold) or 90 percent (platinum) levels of coverage are eligible for a PPACA premium tax credit and want to purchase a plan through a PPACA exchange with a comparable actuarial value, they will have to pay the difference between the premium for a plan with an actuarial value of 80 percent (gold) or 90 percent (platinum) and their PPACA premium tax credit. Again, this is because the PPACA premium tax credit amount will be based on the reference plan premium (the second-lowest-cost 70 percent plan) for their exchange. Agency Comments We provided draft copies of this report to HHS and IRS for review, and both provided technical comments, which we incorporated as appropriate. Appendix I: Characteristics of Health Coverage Tax Credit (HCTC) Participants and Nonparticipants in 2010 We identified HCTC participants and nonparticipants by age groups, household income based on a percentage of the federal poverty level (FPL), and HCTC eligibility type using 2010 Internal Revenue Service (IRS) data. Medicaid Expansion: States’ Implementation of the Patient Protection and Affordable Care Act.

Why GAO Did This Study The HCTC pays 72.5 percent of health plan premiums for certain workers who lost their jobs due to foreign import competition and for certain retirees whose pensions from their former employers were terminated and are now paid by the Pension Benefit Guaranty Corporation. A small share of individuals who are potentially eligible for the HCTC participate. In 2010 there were 43,864 participants and 469,168 nonparticipants. The HCTC program will expire at the end of 2013 when premium tax credits and cost-sharing subsidies become available to eligible individuals who purchase health plans through health insurance exchanges under PPACA. PPACA also expands Medicaid eligibility to nonelderly individuals who meet specific income requirements to the extent that states choose to implement this provision. Therefore, the costs for health plans and coverage available to individuals potentially eligible for the HCTC will change when the HCTC expires. This report examines (1) how the HCTC’s expiration and the implementation of the PPACA premium tax credit, cost-sharing subsidies, and Medicaid expansion will affect HCTC participants and nonparticipants, and (2) how the coverage that will be available through the PPACA exchanges compares to HCTC participants’ health plan coverage. GAO analyzed 2010 HCTC program data and individual tax filer data. GAO also compared the services and actuarial values of the plans that will be available through the exchanges to HCTC plans. What GAO Found Expiration of the Health Coverage Tax Credit (HCTC) and implementation of Patient Protection and Affordable Care Act (PPACA) premium tax credits, cost-sharing subsidies, and Medicaid expansion will affect HCTC participants' costs for health plans in multiple ways. Projections from GAO's analysis of 2010 Internal Revenue Service (IRS) data show that most HCTC participants in 2014 will likely be eligible for less generous tax credits under PPACA than the HCTC. Specifically, about 69 percent of HCTC participants will likely be ineligible for either a PPACA premium tax credit or Medicaid, or they will likely receive a PPACA premium tax credit less generous than the HCTC. On the other hand, GAO's analysis also found that at least 23 percent will likely be eligible for PPACA premium tax credits more generous than the HCTC. In addition to the PPACA premium tax credit, up to 28 percent of all HCTC participants will likely be eligible for PPACA cost-sharing subsidies--subsidies that will help them pay for deductibles and copays--depending in part on whether or not their state expands Medicaid under PPACA. For HCTC nonparticipants, the projections from GAO's analysis of 2010 IRS data show that as many as 30 percent may be eligible for either Medicaid or a PPACA premium tax credit more generous than the HCTC in 2014, depending in part on whether or not their state expands Medicaid and whether they meet all other eligibility criteria for the PPACA premium tax credits. In general, the health plan coverage that will be available through the PPACA exchanges will be comparable to coverage in HCTC participants' current plans; however, HCTC participants may have an incentive to choose plans through the exchanges that have different levels of coverage than their HCTC plans. Plans purchased through the PPACA exchanges will be required to provide essential health benefits--including coverage for specific service categories, such as ambulatory care, prescription drugs, and hospitalization--and most HCTC plans cover these categories of services. In addition, the vast majority of HCTC plans in 2012 likely had actuarial values--the expected percentage of costs that a plan will incur for services provided to a standard population--above the minimum actuarial value of 60 percent that health plans sold through the PPACA exchanges will be required to meet. However, because the PPACA premium tax credit amount will be based on a plan with an actuarial value of 70 percent, HCTC participants who currently have plans with either higher or lower actuarial values and are eligible for PPACA premium tax credits may have an incentive to choose plans that will have different levels of coverage than their HCTC plans. For example, those who have HCTC plans with actuarial values that are higher than 70 percent may have an incentive to shift to health plans with an actuarial value of 70 percent to avoid paying any difference in premiums that could result from choosing plans with higher actuarial values. Similarly, those who now have plans with actuarial values below 70 percent could have the opposite incentive and may purchase plans that offer a higher level of coverage than their current HCTC plans. We provided draft copies of this report to the Department of Health and Human Services and IRS for review, and both provided technical comments, which we incorporated as appropriate.

gao_GAO-06-824

gao_GAO-06-824_0

The BEA Program Reportedly Produces Benefits, but Available Evidence Suggests That the Program’s Impact Has Likely Not Been Significant Treasury officials and some BEA award recipients we interviewed said that the BEA program provides banks with incentives to increase their investments in CDFIs and lending in distressed communities. However, determining the program’s impact is difficult because other economic and regulatory incentives also encourage banks to undertake award-eligible activities. For example, for large banks, a BEA award (when compared with total bank assets) is small and likely not large enough to have much influence on such banks’ overall investment and lending decisions. Available Evidence Suggests That the BEA Program’s Impact Has Likely Not Been Significant Although it is difficult to determine the BEA program’s impact, the available evidence we reviewed suggests that the program’s impact has likely not been significant for large traditional banks, although it may allow for incremental increases in award-eligible activities. As shown in table 2, the size of a BEA award when compared with the assets of large traditional banks (those with over $1 billion in assets) was .0004 percent of assets in 2005. For these banks, the prospect of receiving a BEA award, independent of any economic and regulatory incentives the banks may have, is unlikely to serve as a significant financial incentive for increased CDFI investment or distressed community lending. Specifically, we found that Treasury has limited controls in place to help ensure that bank applicants finance properties located in eligible distressed communities. We found that Treasury also provides limited guidance to its application review staff to identify potential errors in the reporting of a financed property’s location and does not require the reviewers to completely document their work. BEA Program Performance Measures Likely Overstate Program Impact To assess the BEA program’s performance, Treasury publicly reports bank applicants’ total reported increase in CDFI investments and distressed community lending. For example, in 2005, Treasury attributed a reported $100 million increase in award-eligible activities to BEA awards of approximately $10 million distributed that year. By not accounting for such factors, Treasury’s performance measure likely overstates the BEA program’s impact. Without sufficient controls to help ensure that properties are located in eligible distressed communities, the BEA program is vulnerable to making improper payments. Conclusions Because of other economic and regulatory incentives that also affect bank behavior, it remains difficult to isolate and determine the BEA program’s impact on banks’ decisions to invest in CDFIs and lend in distressed communities. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to (1) examine the extent to which the Bank Enterprise Award (BEA) program may have provided banks with financial incentives to increase their investments in community development financial institutions (CDFIs) and lending in distressed communities and (2) assess the BEA program’s performance measures and certain internal controls designed to ensure proper award payments. We also compared the BEA program’s internal controls to GAO’s Standards for Internal Control in the Federal Government.

Why GAO Did This Study Established in 1994, the Department of the Treasury's Bank Enterprise Award (BEA) program provides cash awards to banks that increase their investments in community development financial institutions (CDFI) and lending in economically distressed communities. CDFIs are specialized institutions that provide financial services to areas and populations underserved by conventional lenders and investors. In 2005, Treasury provided nearly $10 million in BEA awards. The BEA program has faced longstanding questions about its effectiveness and experienced significant declines in funding in recent years. This report (1) examines the extent to which the BEA program may have provided banks with financial incentives and (2) assesses the BEA program's performance measures and internal controls. To complete this study, GAO reviewed relevant award data; interviewed Treasury, bank, and CDFI officials; and assessed the BEA program's performance measures and internal controls against GAO's standards for effective measures and controls. What GAO Found The extent to which the BEA program may provide banks with incentives to increase their investments in CDFIs and lending in distressed communities is difficult to determine, but available evidence GAO reviewed suggests that the program's impact has likely not been significant. Award recipients GAO interviewed said that the BEA program lowers bank costs associated with investing in a CDFI or lending in a distressed community, allowing for increases in both types of activities. However, other economic and regulatory incentives also encourage banks to undertake award-eligible activities, and it is difficult to isolate and distinguish these incentives from those of a BEA award. For example, banks may have economic incentives to lend in distressed communities because of the potential profitability of such lending. Although it is difficult to determine the BEA program's impact, available evidence suggests that the impact likely has not been significant. For example, the size of a BEA award for large banks (which was .0004 percent of assets in 2005) suggests that a BEA award does not have much influence on such banks' overall investment and lending decisions. However, BEA awards may allow large banks to incrementally increase their award-eligible investments and lending. The BEA program's performance measures likely overstate its impact, and GAO identified weaknesses in certain program internal controls. To assess the BEA program's performance, Treasury, among other measures, annually aggregates the total reported increase in CDFI investments and distressed community loans by all applicants but does not account for other factors, such as economic and regulatory incentives that also affect bank decisions. GAO also found that Treasury has limited controls in place to help ensure that BEA program applications contain accurate information. In particular, Treasury provides limited guidance to application review staff to identify potential errors and does not require the reviewers to completely document their work. As a result, GAO found that the BEA program is vulnerable to making improper payments.

gao_GAO-11-487T

gao_GAO-11-487T_0

Potential Challenges with Reorganization of Oil and Gas Functions Interior’s ongoing reorganization of bureaus with oil and gas functions will require time and resources, and undertaking such an endeavor while continuing to meet ongoing responsibilities may pose new challenges. Historically, BLM managed onshore federal oil and gas activities, while MMS managed offshore activities and collected royalties for all leases. In May 2010, the Secretary of the Interior announced plans to reorganize MMS into three separate bureaus. Interior recently began implementing this restructuring effort, transferring offshore oversight responsibilities to the newly created BOEMRE and revenue collection to ONRR. Interior plans to continue restructuring BOEMRE to establish two additional separate bureaus—the Bureau of Ocean and Energy Management, which will focus on leasing and environmental reviews, and the Bureau of Safety and Environmental Enforcement, which will focus on permitting and inspection functions. While this reorganization may eventually lead to more effective operations, we have reported that organizational transformations are not simple endeavors and require the concentrated efforts of both leaders and employees to realize intended synergies and accomplish new organizational goals. Given that, as of December 2010, Interior had not implemented many recommendations we made to address numerous weaknesses and challenges, we are concerned about Interior’s ability to undertake this reorganization while (1) providing reasonable assurance that billions of dollars of revenues owed to the public are being properly assessed and collected and (2) maintaining focus on its oil and gas oversight responsibilities. Challenges of Balancing Oil and Gas Development with Environmental Stewardship We have reported that Interior has experienced several challenges in meeting its obligations to make federal oil and gas resources available for leasing and development while simultaneously meeting its responsibilities for managing public lands for other uses, including wildlife habitat, recreation, and wilderness. In January 2010, we reported that while BLM requires oil and gas operators to reclaim the land they disturb and post a bond to help ensure they do so, not all operators perform such reclamation. For fiscal years 1988 through 2009, BLM spent about $3.8 million to reclaim 295 orphaned wells, and BLM has identified another 144 wells yet to be reclaimed. Human Capital Challenges We have reported that BLM and MMS have encountered persistent problems in hiring, training, and retaining sufficient staff to meet Interior’s oversight and management responsibilities for oil and gas operations on federal lands and waters. For example, in March 2010, we reported that BLM and MMS experienced high turnover rates in key oil and gas inspection and engineering positions responsible for production verification activities. As a result, Interior faces challenges meeting its responsibilities to oversee oil and gas development on federal leases, potentially placing both the environment and royalties at risk. Moreover, the human capital issues we identified with BLM’s management of onshore oil and gas continue, and these issues have not yet been addressed in Interior’s reorganization plans. Concerns over Revenue Collection Federal oil and gas resources generate billions of dollars annually in revenues that are shared among federal, state, and tribal governments; however, we found Interior may not be properly assessing and collecting these revenues. In September 2008, we reported that Interior collected lower levels of revenues for oil and gas production in the deep water of the U.S. Gulf of Mexico than all but 11 of 104 oil and gas resource owners whose revenue collection systems were evaluated in a comprehensive industry study—these resource owners included other countries as well as some states. We also reported in March 2010 that Interior was not taking the steps needed to ensure that oil and gas produced from federal lands was accurately measured. For example, we found that neither BLM nor MMS had consistently met their agency goals for oil and gas production verification inspections. Development of Existing Leases In October 2008, we reported that Interior could do more do encourage the development of existing oil and gas leases. Federal leases contain one provision–– increasing rental rates over time for offshore 5-year leases and onshore leases—to encourage development. In addition to using increasing rental rates, some states undertake additional efforts to encourage lessees to develop oil and gas leases more quickly, including shorter lease terms and graduated royalty rates—royalty rates that rise over the life of the lease.

Why GAO Did This Study The Department of the Interior oversees oil and gas activities on leased federal lands and waters. Revenue generated from federal oil and gas production is one of the largest nontax sources of federal government funds, accounting for about $9 billion in fiscal year 2009. For onshore leases, Interior's Bureau of Land Management (BLM) has oversight responsibilities. For offshore leases, the newly created Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE), has oversight responsibilities. Prior to BOEMRE, the Minerals Management Service's (MMS) Offshore Energy and Minerals Management Office oversaw offshore oil and gas activities, while MMS's Minerals Revenue Management Office collected revenues from all oil and gas produced on federal leases. Over the past several years, GAO has issued numerous recommendations to the Secretary of the Interior to improve the agency's management of oil and gas resources. In 2011, GAO identified Interior's management of oil and gas resources as a high risk issue. GAO's work in this area identified challenges in five areas: (1) reorganization, (2) balancing responsibilities, (3) human capital, (4) revenue collection, and (5) development of existing leases. What GAO Found Reorganization: Interior's reorganization of activities previously overseen by MMS will require time and resources and may pose new challenges. Interior began a reorganization in May 2010 that will divide MMS into three separate bureaus--one focusing on revenue collection, another on leasing and environmental reviews, and yet another on permitting and inspections. While this reorganization may eventually lead to more effective operations, GAO has reported that organizational transformations are not simple endeavors. GAO is concerned with Interior's ability to undertake this reorganization while meeting its revenue collection and oil and gas oversight responsibilities. Balancing Responsibilities: GAO has reported that Interior has experienced several challenges with meeting its responsibilities for providing for the development of oil and gas resources while managing public lands for other uses, including wildlife habitat. In January 2010, GAO reported that, while BLM requires oil and gas operators to reclaim the land they disturb and post a bond to help ensure they do so, not all operators perform reclamation. For fiscal years 1988 through 2009, BLM spent about $3.8 million to reclaim 295 so-called "orphaned" wells--because reclamation had not been done, and other resources, including the bond, were insufficient to pay for it. Human Capital: GAO has reported that BLM and MMS have encountered persistent problems in hiring, training, and retaining sufficient staff to meet their oversight and management responsibilities for oil and gas operations. For example, in March 2010, GAO reported that BLM and MMS experienced high turnover rates in key oil and gas inspection and engineering positions responsible for production verification activities. As a result, Interior faces challenges meeting its responsibilities to oversee oil and gas development on federal leases, potentially placing both the environment and royalties at risk. Revenue Collection: While federal oil and gas resources generate billions of dollars in annual revenues, past GAO work has found that Interior may not be properly assessing and collecting these revenues. In September 2008, GAO reported that Interior collected lower levels of revenues for oil and gas production in the deep water of the U.S. Gulf of Mexico than all but 11 of 104 oil and gas resource owners whose revenue collection systems were evaluated in a comprehensive industry study. Nonetheless, Interior has not completed a comprehensive assessment of its revenue collection policies and processes in over 25 years. Additionally, in March 2010, GAO reported that Interior was not consistently completing inspections to verify volumes of oil and gas produced from federal leases. Development of Existing Leases: In October 2008, GAO reported that Interior could do more to encourage the development of existing oil and gas leases. Federal leases contain one provision--increasing rental rates over time for offshore 5-year leases and onshore leases--to encourage development. In addition to escalating rental rates, states undertake additional efforts to encourage lessees to develop oil and gas leases more quickly, including shorter lease terms and graduated royalty rates.

gao_GAO-03-230

gao_GAO-03-230_0

National-Level Office Supply Contract Has Not Been Fully Implemented The Postal Service has not been successful in implementing its national-level contract to purchase most office supplies from Boise. As shown in figure 1, during fiscal year 2001 less than 40 percent of the $125 million in office supplies was purchased from the contract. Postal Service Did Not Take Sufficient Actions to Ensure Contract Would Be Used Although the Postal Service conducted market research that supported the implementation of a national-level contract for office supplies, it did not take sufficient actions to ensure that the contract would be used as anticipated. The Postal Service claimed savings of up to $28 million for fiscal year 2001 using these estimates. Boise Is Not Achieving Subcontracting Plan Goals Boise and the Postal Service have not paid sufficient attention to the subcontracting goals under the national office supply contract. The subcontracting plan was carelessly constructed, and it contains obvious ambiguities. In fact, Postal Service and Boise officials do not agree on the basic subcontracting goals. Boise has fallen far short of achieving the 30 percent goal. In fiscal year 2001, Boise reported achievements of only 2.6 percent. Boise has also fallen short of its specific goals for minority and woman-owned businesses. The language in the plan includes goals for “small, disadvantaged businesses” and “small, woman-owned businesses.” In practice, however, the Postal Service and Boise report achievements for “minority” and “woman-owned” firms, which may be small or large. Actions to Improve Subcontracting Performance The Postal Service and Boise recognize that the performance on the subcontracting plan is not satisfactory and have started to take some actions to improve Boise’s achievements under the current contract. Despite the Postal Service’s reported statistics, we could not determine the extent to which the Postal Service is buying from SMW businesses. While Boise and the Postal Service have taken some actions to address SMW achievement, it is highly unlikely that Boise will be able to reach its subcontracting goal. Recommendations We recommend that the Postmaster General of the United States determine why the national contract is not being used as a mandatory source of office supplies; reassess the cost effectiveness of a national office supply contract and measure actual savings from using the contract rather than applying the outdated estimating formulas initially established; develop mechanisms to track employees’ compliance with the mandatory use of the contract, if analysis indicates that the national-level contract is beneficial; and direct that the contract be modified to include a revised subcontracting plan that accurately and clearly reflects realistic goals for small, minority, and woman-owned businesses, consistent with the Postal Service’s supplier diversity program. Boise also noted that sales to SMW businesses with the Postal Service increased from fiscal year 1999 to fiscal year 2001. To assess the extent to which the Postal Service is buying office supplies directly from SMW businesses, we reviewed Postal Service supplier diversity policy and guidance.

Why GAO Did This Study Over the past 2 years, the Postal Service has experienced growing financial difficulties. In an effort to transform the organization to reduce costs and increase productivity, the Postal Service awarded a national-level office supply contract to Boise Corporation. In addition, the Postal Service required Boise to submit a subcontracting plan, which outlines how small, minority-, and woman-owned businesses will be reached through the contract. GAO was asked to assess the status of the Postal Service's implementation of the Boise contract and Boise's achievement of its subcontracting plan. GAO also reviewed the extent to which the Postal Service is buying office supplies directly from small, minority-, and woman-owned businesses. What GAO Found The Postal Service has not been successful in implementing its national-level contract to purchase most office supplies from Boise. Although the national contract was intended to be a mandatory source of office supplies, the Postal Service purchased less than 40 percent of its office supplies from Boise in 2001. GAO found that the Postal Service did not perform as planned under the contract because it did not take sufficient actions to ensure that the contract would be used. As a result, the Postal Service has not been able to realize its estimated annual savings of $28 million. In fact, it was only able to provide documentation for $1 million in savings for 2001. Boise and the Postal Service have not paid sufficient attention to the subcontracting plan. The plan contains obvious ambiguities, and, in fact, Postal Service and Boise officials disagree on its goals. The Postal Service maintains that the goal is 30 percent of Boise's annual revenue from the contract. Boise has fallen far short of this goal, reporting that only 2.6 percent of subcontracting dollars were awarded to small, minority-, and woman-owned businesses in fiscal year 2001. Postal Service and Boise officials recognize that the performance on the subcontracting plan is not satisfactory and are taking a number of steps to achieve the plan's goals. Nevertheless, it is highly unlikely that the current subcontracting goals will be met. The Postal Service reported that its small, minority-, and woman-owned business achievements have declined from fiscal years 1999 to 2001. Despite the Postal Service's reported statistics, we could not determine the extent to which it is buying directly from these businesses because the data are unreliable.

gao_GAO-14-687T

gao_GAO-14-687T_0

Costs of Providing Disaster Assistance Have Increased, but FEMA Has Not Taken Recommended Action to Control Its Administrative Costs We reported in September 2012 that FEMA’s administrative costs had been increasing for all sizes of disasters. According to FEMA, administrative costs include, among other things, the salary and travel costs for its disaster workforce, rent and security expenses associated with establishing and operating its field office facilities, and supplies and information technology support for its deployed staff. To address these rising costs, FEMA issued guidelines and targets intended to improve the efficiency of its efforts and to help reduce administrative costs. Specifically, based on our analysis of the 539 disaster declarations during fiscal years 2004 through 2011, we found that 37 percent of the declarations exceeded the 2010 administrative cost percentage targets. As a result, in September 2012, we recommended that FEMA implement goals for administrative cost percentages and monitor performance to achieve these goals. However, as of July 2014, FEMA had not taken steps to implement our recommendation. In December 2013, FEMA officials stated that they are implementing a system called FEMAStat to, among other things, collect and analyze data on the administrative costs associated with managing disasters to enable managers to better assess performance and progress within the organization. As part of the FEMAStat effort, in 2012 and 2013, FEMA collected and analyzed data on the administrative costs associated with managing disasters. However, as of July 2014, FEMA is still working on systematically collecting the data and utilizing them to develop a model for decision making. As a result, it is too early to assess whether this effort will improve the efficiencies or reduce the cost associated with administering assistance in response to disasters. Opportunities to Increase the Effectiveness of FEMA’s Workforce We have also reported on opportunities to strengthen and increase the effectiveness of FEMA’s workforce. More specifically, we previously reported on various FEMA human capital management efforts (as well as human capital management efforts across the federal government) and have made a number of related recommendations for improvement. FEMA has implemented some of these, but others are still underway. We recommended that FEMA: identify long-term quantifiable mission- critical goals that reflect the agency’s priorities for workforce planning and training; establish a time frame for completing the development of quantifiable performance measures related to workforce planning and training efforts; establish lines of authority for agency-wide workforce planning and training efforts; and develop systematic processes to collect and analyze workforce and training data. DHS concurred with all the recommendations and FEMA is still working to address them. Some of these efforts were highlighted during Hurricane Sandy when FEMA executed one of the largest deployments of personnel in its history. In 2012, FEMA also created a new disaster assistance workforce component called the FEMA Corps. FEMA’s deployment of its disaster assistance workforce during the response to Hurricane Sandy revealed a number of challenges and, as a result, FEMA is analyzing its disaster assistance workforce structure to ensure the agency is capable of responding to large and complex incidents, as well as simultaneous disasters and emergencies. As part of our ongoing work, we will be evaluating FEMA’s efforts to address the challenges identified during the agency’s response to Hurricane Sandy and assessing their impact. Opportunities to Increase the Efficiency of Preparedness Grant Administration In March 2011, we reported on another area of opportunity for FEMA to increase the efficiency of its operations—the management of its preparedness grants. As we again reported in February 2012, four of FEMA’s largest preparedness grants (Urban Areas Security Initiative, State Homeland Security Program, Port Security Grant Program, and Transit Security Grant Program) which have similar goals, fund similar types of projects, and are awarded in many of the same urban areas, have application review processes that are not coordinated. In March 2014 in our annual update to our duplication and cost savings work in GAO’s Online Action Tracker, we reported that FEMA has attempted to capture more robust data from grantees during applications for the Port Security Grant Program and the Transit Security Grant Program—because applicants provide project-level data. FEMA has proposed, through the President’s budget requests to Congress, to consolidate its preparedness grant programs to streamline the grant application process, responding to a recommendation we made in March 2011 by eliminating the need to coordinate application reviews. committees, however, expressed concern that the consolidation plan lacked detail, and the NPGP was not approved for either fiscal year 2013 or 2014. Federal Disaster Assistance: Improved Criteria Needed to Assess a Jurisdiction’s Capability to Respond and Recover on Its Own. Disaster Assistance Workforce: FEMA Could Enhance Human Capital Management and Training.

Why GAO Did This Study Preparing for, responding to, and recovering from disasters is becoming increasingly complex and costly. GAO reported that from fiscal years 2002 through 2013, the federal government appropriated about $41 billion for preparedness grant programs and $6.2 billion to FEMA's Disaster Relief Fund in fiscal year 2014. In addition, FEMA obligated over $80 billion in federal disaster assistance for major disasters declared from fiscal years 2004 through 2011 and responded to more disasters than in any other year in its history during fiscal year 2011. The larger number and size of disasters has required increasingly complex and costly FEMA operations and processes to prepare for and respond to these events. For example, Hurricane Sandy in September 2012 required one of the largest deployment of disaster personnel in FEMA's history. Similarly, FEMA's own administrative costs—such as the cost to house and deploy its disaster personnel—have also increased. This testimony discusses GAO's work on opportunities to enhance efficiencies in FEMA's operations in three areas: (1) disaster administrative costs, (2) workforce management, and (3) preparedness grant management. This testimony is based on previous GAO reports issued from 2008 to 2014 with selected updates and preliminary observations from GAO's ongoing work on disaster administrative costs and workforce management issues in response to Hurricane Sandy. What GAO Found GAO's recent and ongoing work examining the Federal Emergency Management Agency's (FEMA) administrative costs of providing disaster assistance highlights opportunities to increase efficiencies and potentially reduce these costs. In September 2012, GAO reported that FEMA's administrative costs for disaster assistance had doubled in size as a percentage of the overall cost of the disasters since fiscal year 1989, and often surpassed its targets for controlling administrative costs. GAO also concluded that FEMA's administrative costs were increasing for all sizes of disasters and for all types of disaster assistance. FEMA issued guidelines intended to improve the efficiency of its efforts and to help reduce administrative costs. However, FEMA did not make this guidance mandatory because it wanted to allow for flexibility in responding to a variety of disaster situations. In 2012, GAO recommended that the FEMA Administrator implement goals for administrative cost percentages and monitor performance to achieve these goals. However, as of June 2014, FEMA had not taken steps to implement GAO's recommendation. GAO's ongoing work indicates that FEMA is implementing a new system to, among other things, collect and analyze data on the administrative costs associated with managing disasters to enable managers to better assess performance. However, according to officials, FEMA is still working on systematically collecting the data. As a result, it is too early to assess whether this effort will improve efficiencies or reduce administrative costs. GAO has also reported on opportunities to strengthen and increase the effectiveness of FEMA's workforce management. Specifically, GAO reviewed FEMA human capital management efforts in 2012 and 2013 and has made a number of related recommendations, many of which FEMA has implemented; some of which are still underway. For example, GAO recommended that FEMA identify long-term quantifiable mission-critical goals and establish a time frame for completing the development of quantifiable performance measures for workforce planning and training, establish lines of authority for agency-wide efforts related to workforce planning and training, and develop systematic processes to collect and analyze workforce and training data. FEMA concurred and is still working to address these recommendations. For example, FEMA's deployment of its disaster assistance workforce during the response to Hurricane Sandy revealed a number of challenges. In response, according to agency officials, FEMA is, among other things, analyzing its disaster assistance workforce structure to ensure the agency is capable of responding to large and complex incidents. GAO will continue to evaluate these efforts to assess their effectiveness. In March 2011, GAO reported that FEMA could enhance the coordination of application reviews of grant projects across four of the largest preparedness grants (Urban Areas Security Initiative, State Homeland Security Program, Port Security Grant Program, and Transit Security Grant Program) which have similar goals, fund similar types of projects, and are awarded in many of the same urban areas. GAO recommended that FEMA coordinate the grant application process to reduce the potential for duplication. FEMA has attempted to use data to coordinate two programs and also proposed to consolidate its preparedness grant programs, but FEMA's data system has been delayed, and Congress did not approve FEMA's consolidation proposal for either fiscal year 2013 or 2014.

gao_GAO-03-388

gao_GAO-03-388_0

While this basic funding structure is still in place, several changes have been made since the late 1990s. In addition, states no longer have to spend 80 percent of federal grant funds on work activities for ABAWDs. While nationwide data on the number of and characteristics of Food Stamp E&T participants are not available, state and local officials in the 15 states we reviewed described the population as generally hard to employ because they have little education, a limited work history, and are prone to substance abuse problems and homelessness. Food Stamp E&T Participants Are a Small Proportion of the Food Stamp Population and Usually Receive Benefits Only from the Food Stamp Program Food Stamp E&T participants comprise less than 9 percent of the food stamp population because most food stamp recipients are exempted from work requirements, such as registering for work or participating in the Food Stamp E&T Program. While states may provide participants with a range of employment and training activities, in 2001, states most often placed participants in job search and work experience. Participants engaged in work experience activities are required to work without pay in exchange for food stamp benefits. Legislative Changes May Affect Services Provided to Participants Legislative changes enacted by the 2002 Farm Bill may affect the services that states provide to program participants by reducing the total amount of Food Stamp E&T federal funds available to states to $110 million—or $274 million lower than funds they had available in fiscal year 2001. Services Are Delivered through a Variety of Local Entities and Are Not Necessarily Linked to Other Employment and Training Programs In 13 of the 15 states we contacted, the agency that administers the TANF block grant also oversees the Food Stamp E&T Program; in the 2 other states, the Food Stamp E&T Program is administered by the workforce development system. While all but 1 of the states we contacted delivered at least some of their Food Stamp E&T services at the one-stops, the extent to which states use the one-stops to deliver these services varies considerably. In other counties, services are delivered at welfare offices. While employment and training programs at the one-stops offer some of the activities that Food Stamp E&T participants need, officials from 12 of the 15 states we contacted told us that most participants are not ready for these activities, in part, because they lack basic skills (such as reading and computer literacy) that would allow them to successfully participate. For example, the Department of Health and Human Services (HHS) is conducting evaluation studies on early childhood programs, and the Department of Labor recently evaluated the impact of the Job Corps program on student employment outcomes. Little nationwide data exist to tell us who is participating or if they are getting a job. Even less is known about whether the services provided by the program make a difference in program outcomes. In addition, outcome data provide the Congress with key information necessary to evaluate the effectiveness of federal employment and training programs.

Why GAO Did This Study Since the late 1990s, many funding changes have been made to the Food Stamp E&T Program. In 1997, legislation required states to spend 80 percent of their funds on participants who lose their food stamp benefits if they do not meet work requirements within a limited time frame. The legislation also increased funds by $131 million to help states serve these participants. But spending rates for the program declined until, in 2001, states spent only about 30 percent of the federal allocation. In 2002, the Congress reduced federal funds to $110 million a year. While it is too soon to know the impact of these changes, GAO was asked to determine whom the program serves, what services are provided, and what is known about program outcomes and effectiveness. What GAO Found Food Stamp Employment and Training (E&T) participants are a small proportion of the food stamp population and do not usually receive cash assistance from other programs. While the U.S. Department of Agriculture (USDA) does not collect nationwide data on the number and characteristics of Food Stamp E&T participants, program officials in the 15 states GAO contacted described the population as generally hard to employ because they have little education and a limited work history. States may provide program participants with a range of employment and training activities that qualify them for food stamp benefits. USDA data show that, in fiscal year 2001, job search accounted for about half of all participant activities. Work experience--whereby participants receive food stamp benefits in exchange for work--accounted for about 25 percent. Food Stamp E&T services are delivered through a variety of local entities, such as welfare offices or one-stop centers--sites designed to streamline the services of many federal employment and training programs. While all but 1 of the 15 states delivered at least some of their Food Stamp E&T services at the one-stops, Food Stamp E&T participants do not usually engage in intensive services provided by other programs at the one-stops. Program officials from most of the 15 states noted that Food Stamp E&T participants generally lack basic skills that allow them to use other program services successfully. No nationwide data exist on whether the Food Stamp E&T Program helps participants get a job. While some outcome data exist at the state level, it is not clear the outcomes were the result of program participation. USDA has no plans to evaluate the effectiveness of the program nor have the Departments of Labor or Health and Human Services included Food Stamp E&T participants in their studies of the hardest-to-employ.

gao_GAO-15-815

gao_GAO-15-815_0

Background FDA may order a postapproval study for a device at the time FDA approves that device for marketing through its premarket approval (PMA) process or its humanitarian device exemption (HDE) process (for devices that treat rare diseases or conditions).the length of a postapproval study, but according to FDA guidance, the There are no statutory limits on device manufacturer and FDA agree on the study plan, which includes a study design (e.g., randomized clinical trial or other study design), the study’s data source, and time frame for when the manufacturer will complete required reports. In contrast, FDA may order a postmarket surveillance study at the time of approval or clearance for certain devices or any time thereafter as long as certain criteria are met. FDA Ordered Most Postapproval Studies for Cardiovascular Devices and Most Were Making Adequate Progress FDA Ordered Most Postapproval Studies for Cardiovascular Devices and Most Were Designed as Prospective Cohort Studies Cardiovascular devices, such as stents and heart valves, accounted for 56 percent of the 313 postapproval studies ordered from January 1, 2007, through February 23, 2015. 1.) In general, FDA orders a postapproval study to obtain specific information on the postmarket performance of or experience with an approved device. February 23, 2015, were for devices approved through the PMA process. In terms of study design, more than two-thirds (69 percent) of the 313 postapproval studies ordered during the timeframe we examined were prospective cohort studies—that is, studies in which a group using a particular device was compared to a second group not using that device, over a long period of time. 2.) Most of the Postapproval Studies FDA Ordered Were Ongoing and Making Adequate Progress, According to FDA About 72 percent of the postapproval studies we examined (or 225 of the 313 studies ordered) were categorized as ongoing as of February 2015. An additional 20 percent were completed and the remaining 8 percent were inactive. 3.) Further analysis of FDA data on the 225 ongoing postapproval studies showed 81 percent (or 182 studies) to be progressing adequately, while the remaining 19 percent (43 studies) were delayed as of February 2015. According to FDA officials, a key reason for a study’s delay may be limited patient enrollment into the postapproval study. As table 5 shows, on average, these completed postapproval studies took about 36 months, or 3 years, with the longest study taking almost 7 years. FDA Ordered Most Postmarket Surveillance Studies for Orthopedic, General/Plastic Surgery, and Obstetrics/ Gynecology Devices and Many Were Consolidated into Ongoing Studies FDA Ordered Most Postmarket Surveillance Studies for Orthopedic, General/Plastic Surgery, and Obstetrics/Gynecology Devices Resulting from Concerns about Metal-on- Metal Implants and Certain Kinds of Implantable Surgical Mesh FDA ordered 392 postmarket surveillance studies, half of which (196 studies) were for orthopedic medical devices, from May 1, 2008, through February 24, 2015. In 2011 alone, FDA ordered 176 studies for orthopedic devices following safety concerns about metal-on-metal hip implants, including potential bone or tissue damage from metal particles. An additional 40 percent (or 158 studies) of the postmarket surveillance studies FDA ordered were for devices used in general and plastic surgery and obstetrics and gynecology procedures. FDA ordered 121 postmarket surveillance studies for devices in these medical specialties in 2012, following safety concerns about the use of implanted surgical mesh used for urogynecologic procedures, such as severe pain. A study might be categorized as inactive, for example, because it had been consolidated, meaning that a manufacturer was able to combine an order for a postmarket surveillance study with other related study orders into a single study. The inactive category for postmarket surveillance studies includes studies with one of four FDA study statuses: (1) other—that is, the study status does not fit another category, because, for example, the device is no longer being marketed or is being redesigned; (2) consolidated—that is, the study was one of many postmarket surveillance studies ordered and the manufacturer, with the approval of FDA, consolidated these multiple studies into a single study; (3) terminated—that is, studies that were terminated by FDA because they were no longer relevant (e.g., the manufacturer changed the indication for use that was the subject of the postmarket surveillance study); or (4) withdrawn—that is, studies that were withdrawn because the manufacturer demonstrated the objective of the study using publicly available data and FDA agreed with the results. While 88 percent of the postmarket surveillance studies in our analysis were inactive, the remaining 12 percent (or 48 studies) were either still ongoing or completed as of February 24, 2015. Of the 40 ongoing postmarket surveillance studies, more than half were progressing adequately, while the rest were delayed. The 19 ongoing postmarket surveillance studies that FDA considered to be delayed had been ongoing for an average of 49 months or about 4 years. According to FDA, postmarket surveillance studies may be delayed for reasons similar to postapproval studies, such as difficulty enrolling patients into the study. Agency Comments We provided a draft of this report to the Secretary of Health and Human Services. HHS provided technical comments that were incorporated, as appropriate.

Why GAO Did This Study Americans depend on FDA—an agency within the Department of Health and Human Services (HHS)—to oversee the safety and effectiveness of medical devices sold in the United States. FDA's responsibilities begin before a new device is brought to market and continue after a device is on the market. As part of its postmarket efforts, FDA may order manufacturers to conduct two types of studies: (1) postapproval studies, ordered at the time of device approval, and (2) postmarket surveillance studies, generally ordered after a device is on the market. GAO was asked to report on the characteristics and status of postmarket studies. This report describes (1) the types of devices for which FDA has ordered a postapproval study and the status of these studies, and (2) the types of devices for which FDA has ordered a postmarket surveillance study and the status of these studies. GAO analyzed FDA data—including data on medical specialty and study status as of February 2015—for (1) postapproval studies ordered from January 1, 2007, through February 23, 2015, and (2) postmarket surveillance studies ordered from May 1, 2008, through February 24, 2015. These represent the time periods for which FDA reported consistently tracking study data. GAO also reviewed documents, such as FDA guidance, and interviewed FDA officials. HHS provided technical comments that were incorporated, as appropriate. What GAO Found Fifty-six percent of the 313 medical device postapproval studies—studies that are ordered at the time of device approval—the Food and Drug Administration (FDA) ordered from January 1, 2007, through February 23, 2015, were for cardiovascular devices and most were making adequate progress. Postapproval studies are ordered to obtain additional information not available before devices are marketed, such as a device's performance over the course of long-term use. In terms of study design, 69 percent of the 313 postapproval studies ordered were prospective cohort studies—that is, studies in which a group using a particular device was compared to a second group not using that device, over a long period of time. Most (72 percent) of the postapproval studies were ongoing as of February 2015, 20 percent of studies were completed, and 8 percent were inactive because, for example, the device is no longer marketed. Ongoing postapproval studies that GAO reviewed had been ongoing for an average of a little more than 3 years; FDA considered most of them (182 studies) to be progressing adequately and the rest (43 studies) to have inadequate progress or to otherwise be delayed. According to FDA officials, a key reason for a study's delay may be limited patient enrollment in the postapproval study. On average, manufacturers completed postapproval studies in about 3 years, with the longest study taking almost 7 years, for the studies that GAO reviewed. Ninety percent of the 392 medical device postmarket surveillance studies FDA ordered from May 1, 2008, through February 24, 2015, were for orthopedic devices and devices such as certain kinds of implantable surgical mesh following concerns with these types of devices, and many were consolidated into ongoing studies. Unlike postapproval studies, FDA may order postmarket surveillance studies at the time or after a device is approved or cleared for marketing—for example, if FDA becomes aware of a potential safety issue. Safety concerns about metal-on-metal hip implants, including potential bone and tissue damage from metal particles, led to an increase in such studies ordered in 2011. Forty percent of the 392 ordered studies were for implanted surgical mesh and other devices used in general and plastic surgery and obstetrics and gynecology procedures. FDA ordered most of these studies in 2012, following safety concerns associated with implanted surgical mesh, such as severe pain. Eighty-eight percent of the postmarket surveillance studies GAO analyzed were inactive as of February 2015. Inactive studies include those that were consolidated (108 studies), meaning that a manufacturer was able to combine an order for a postmarket surveillance study with other related study orders into a single study, such as combining studies of multiple device models into a single study; and those that were inactive for other reasons, such as if the order was for a device that is no longer marketed. The remaining 12 percent of the postmarket surveillance studies were either still ongoing (40 studies) or completed (8 studies). Of the 40 ongoing studies, more than half were progressing adequately, according to FDA, and had been ongoing for an average of a little less than 3 years; the rest were delayed and had been ongoing for an average of about 4 years as of February 2015. According to FDA, postmarket surveillance studies may be delayed for reasons similar to postapproval studies, such as difficulty enrolling patients into the study.

gao_GAO-10-281

gao_GAO-10-281_0

According to the Patient Safety Act, users can access non-identifiable patient safety data only in accordance with the confidentiality protections established by the Patient Safety Act. However, few of the 17 PSOs we randomly selected to interview had entered into contracts or other business agreements with providers to serve as their PSO, and only 3 PSOs reported having begun receiving patient safety data or providing feedback to providers. Some PSOs are still establishing various aspects of their operations; some are waiting for the common formats for collecting patient safety data to be finalized by AHRQ; and some are still engaged in marketing their services and educating providers about the federal confidentiality protections offered by the Patient Safety Act. By July 2009, AHRQ had listed 65 PSOs in 26 states and the District of Columbia. AHRQ Is in the Process of Implementing the NPSD and Has Developed Preliminary Plans for Using NPSD Data AHRQ is in the process of implementing the NPSD and developing its associated components that are necessary before the NPSD can receive patient safety data—(1) the common formats PSOs and providers will be required to use if submitting patient safety data to the NPSD and (2) a method for making these data non-identifiable. AHRQ officials could not provide a time frame for when they expect the NPSD to be able to receive patient safety data from other providers. AHRQ also has preliminary plans for how to allow the NPSD to serve as an interactive resource for providers and PSOs and for how AHRQ will analyze NPSD data to help meet its reporting requirements under the Patient Safety Act. If each of these components is completed on schedule, AHRQ officials expect that the NPSD could begin to receive patient safety data from hospitals by February 2011. The Patient Safety Act also requires that data submitted to the NPSD be made non-identifiable by removing information that could be used to identify individual patients, providers, or facilities. However, AHRQ has yet to develop plans for more detailed analyses of NPSD data that could be useful for identifying strategies to reduce medical errors. Appendix I: Examples from Established Patient Safety Reporting Systems Because the Agency for Healthcare Research and Quality’s (AHRQ) efforts to list Patient Safety Organizations and implement the Network of Patient Safety Databases are relatively new but some other patient safety reporting systems are already established, we identified examples of how selected established patient safety reporting systems encourage reporting of patient safety event information by providers and facilitate the development of improvements in patient safety. After selecting the systems, we conducted structured interviews with representatives of these systems to identify examples of ways that these systems encouraged providers to submit patient safety data for analysis and used the data collected by their systems to help develop improvements in patient safety.

Why GAO Did This Study The Institute of Medicine (IOM) estimated in 1999 that preventable medical errors cause as many as 98,000 deaths a year among hospital patients in the United States. Congress passed the Patient Safety and Quality Improvement Act of 2005 (the Patient Safety Act) to encourage health care providers to voluntarily report information on medical errors and other events--patient safety data--for analysis and to facilitate the development of improvements in patient safety using these data. The Patient Safety Act directed GAO to report on the law's effectiveness. This report describes progress by the Department of Health and Human Services, Agency for Healthcare Research and Quality (AHRQ) to implement the Patient Safety Act by (1) creating a list of Patient Safety Organizations (PSO) so that these entities are authorized under the Patient Safety Act to collect patient safety data from health care providers to develop improvements in patient safety, and (2) implementing the network of patient safety databases (NPSD) to collect and aggregate patient safety data. These actions are important to complete before the law's effectiveness can be evaluated. To do its work, GAO interviewed AHRQ officials and their contractors. GAO also conducted structured interviews with officials from a randomly selected sample of PSOs. What GAO Found AHRQ has made progress listing 65 PSOs as of July 2009. However, at the time of GAO's review, few of the 17 PSOs randomly selected for interviews had entered into contracts to work with providers or had begun to receive patient safety data. PSO officials told GAO that some PSOs were still establishing aspects of their operations; some were waiting for AHRQ to finalize a standardized way for PSOs to collect data from providers; and some PSOs were still engaged in educating providers about the confidentiality protections offered by the Patient Safety Act. AHRQ is in the process of developing the NPSD and its associated components--(1) the common formats PSOs and providers will be required to use when submitting patient safety data to the NPSD and (2) a method for making patient safety data non-identifiable, or removing all information which could be used to identify a patient, provider, or reporter of patient safety information. If each of these components is completed on schedule, AHRQ officials expect that the NPSD could begin receiving patient safety data from hospitals by February 2011. AHRQ officials could not provide a time frame for when they expect the NPSD to be able to receive patient safety data from other providers. AHRQ also has preliminary plans for how to allow the NPSD to serve as an interactive resource for providers and PSOs and for how AHRQ will analyze NPSD data to help meet certain reporting requirements established by the Patient Safety Act. According to AHRQ officials, plans for more detailed analyses that could be useful for identifying strategies to reduce medical errors will be developed once the NPSD begins to receive data.

gao_GAO-01-359

gao_GAO-01-359_0

Project Grants Awarded in Fiscal Years 1996 Through 1999 Were Concentrated in Five Grant Categories and on Three Types of Recipients EPA awarded about 17,000 project grants totaling $2.8 billion in fiscal years 1996 through 1999. Project grant funds were concentrated in five categories—investigations, surveys or studies; research; Superfund site cleanup support; senior environmental employment program; and training, which accounted for $2.3 billion, or 80 percent of all funds. Approximately 82 percent of the $1.4 billion in project grants EPA awarded in fiscal years 1999 and 2000 that were assigned a PRC concentrated in 4 of EPA’s 10 goals: clean air, clean and safe water, waste management, and sound science. For 7 of the 100 grants we reviewed, the relationship between the activities funded by the grant and the goal(s), objective(s), and subobjective(s) that EPA identified was not clear. Most Project Grants Aligned With One of Four Results Act Goals EPA assigned PRCs to approximately $1.2 billion of the project grants made in fiscal years 1999 and 2000. EPA Frequently Used Its Authority to Deviate From Relevant Regulations EPA approved at least one deviation from its regulations for 25 of the 100 grants we reviewed, and for 15 grants EPA authorized more than one deviation. To determine the extent EPA used its authority to deviate from regulations, we reviewed the same 100 randomly selected grants. Appendix IV: Comments From the Environmental Protection Agency

Why GAO Did This Study This report provides information on the Environmental Protection Agency's (EPA) management and oversight of project grants. Specifically, GAO examines (1) the dollar amounts of project grants EPA awarded in fiscal years 1996 through 1999 and the program activities they funded, by grantee type; (2) how the activities funded by the project grants align with the Government Performance and Results Act goals and objectives identified by EPA; and (3) the extent to which EPA uses its authority to deviate from relevant regulations in awarding grants. What GAO Found GAO found that EPA awarded about 17,000 project grants totaling more than $2.8 billion in fiscal years 1996 through 1999. Five categories accounted for nearly 80 percent of all project grant funds (1) general investigations, surveys or studies involving air and water quality; (2) research; (3) studies and cleanups of specific hazardous waste sites; (4) nonprofit organizations; and (5) training activities. EPA identified about 82 percent of the $1.4 billion in project grants awarded in fiscal years 1999 and 2000 as supporting four strategic goals under the Results Act. GAO found this to be the case in 93 of 100 grants reviewed. EPA used its authority to deviate from regulations in awarding 25 of the 100 grants GAO reviewed.

gao_GAO-15-126

gao_GAO-15-126_0

NNSA is currently evaluating alternatives to replacing enriched uranium operations at the Y-12 plant with a single facility. NNSA Identified a Number of Factors That Contributed to the Space/Fit Issue In January 2013, NNSA completed a review to identify the factors that contributed to the space/fit issue. Specifically, NNSA determined that it did not have adequate staff to perform effective technical oversight of the project, and requests and directives from NNSA to the UPF contractor were not always implemented because NNSA did not always follow up. Design integration. NNSA found that the design inputs from subcontractors for the contractor’s 3D computer model, used to allocate and track space usage within the facility, were not well integrated. For example, the contractor did not always provide timely notification to the NNSA project office of emerging concerns and did not engage NNSA in development of plans to address these concerns. NNSA found that the contractor’s management processes and procedures did not formally identify, evaluate, or act on technical concerns in a timely manner. NNSA and the UPF Contractor Have Taken Some Actions to Address Factors That Contributed to the Space/Fit Issue, and NNSA Has Begun to Share Lessons Learned In response to NNSA’s review of the factors that contributed to the space/fit issue, NNSA and the UPF contractor have both taken some actions to address the factors identified by the review. In addition, NNSA has begun to share lessons learned from the UPF project consistent with both DOE’s project management order, which states that lessons learned should be captured throughout the course of capital asset construction projects, as well as our prior recommendation to ensure that future projects benefit from lessons learned. NNSA has taken actions to improve its oversight of the UPF project to ensure that it is aware of emerging technical issues and the steps the contractor is taking to address them by, among other things, increasing staffing levels for the UPF project office from 9 FTEs in 2012 to more than 50 FTEs as of January 2014. According to NNSA officials, many of the additional staff members are technical experts in areas such as engineering and nuclear safety, and these additional staff have enabled NNSA to conduct more robust oversight of the contractor’s design efforts than was previously possible. For example, in July 2013, NNSA used some of these additional staff to conduct an in-depth assessment of the UPF contractor’s design solution for the space/fit issue. According to NNSA and UPF contractor officials, the UPF contractor took steps to better integrate the efforts of the subcontractors conducting design and engineering work on different elements of the facility. For example, in late 2012, the UPF contractor hired a model integration engineer to integrate the subcontractors’ design work and ensure that all design changes are incorporated into the model so that it accurately reflects the most current design. According to NNSA, the contractor also developed a monthly space/fit assessment process to evaluate and report on space utilization in the facility. According to an NNSA official, communications between NNSA and the contractor significantly improved after the space/fit issue was identified, and the contractor kept NNSA better informed of emerging concerns and its plans to address these concerns. Management processes and procedures. According to the UPF contractor, it developed formal processes for identifying and tracking the status of major technical and engineering issues. For example, according to NNSA and contractor officials, the contractor implemented a process for tracking the project’s highest-priority action items, as determined by the project’s management team, including certain issues related to space/fit. In addition, according to NNSA and the UPF contractor, the contractor uses a separate system to track the status of non-technical issues that are identified by project reviews. NNSA has also recently begun to share lessons learned from the space/fit issue. More recently, the UPF Federal Project Director conducted a presentation on lessons learned from the UPF project, including lessons learned from the space/fit issue, at a July 2014 training session for federal project directors. Agency Comments and Our Evaluation We are not making any new recommendations in this report.

Why GAO Did This Study NNSA conducts enriched uranium activities—including producing components for nuclear warheads—at the Y-12 National Security Complex in Tennessee. NNSA has identified key shortcomings in the Y-12 plant's current uranium operations, including rising costs due to the facility's age. In 2004, NNSA decided to build a new facility—the UPF—to consolidate and modernize its enriched uranium activities. In July 2012, the UPF contractor concluded that the UPF's processing equipment would not fit into the facility as designed, and that addressing this issue—which NNSA refers to as a “space/fit” issue—would cost an additional $540 million. The Fiscal Year 2013 National Defense Authorization Act mandated that GAO periodically assess the UPF. This is the fourth report, and it assesses (1) factors NNSA identified that contributed to the UPF space/fit issue and (2) actions, if any, NNSA and the UPF contractor have taken to address the space/fit issue. GAO reviewed NNSA and contractor documents, visited the Y-12 plant, interviewed NNSA and UPF contractor representatives, and observed the computer model NNSA and the UPF contractor use to track space usage within the facility. GAO is not making any new recommendations. In commenting on a draft of this report, NNSA generally agreed with GAO's findings. What GAO Found In January 2013, the National Nuclear Security Administration (NNSA) completed a review to identify the factors that contributed to the space/fit issue with the Uranium Processing Facility (UPF), and identified a number of factors within both NNSA and the contractor managing the UPF design at that time. NNSA's review identified shortcomings in 1) federal oversight of the project, 2) design integration, 3) communications, and 4) the UPF contractor's management processes and procedures. For example, NNSA determined that it did not have adequate federal staff to perform effective oversight of the project, and that the design inputs for the computer model the contractor used to allocate and track space utilization within the facility were not well integrated. NNSA also found that communications shortcomings occurred because the contractor did not always provide timely notification to the NNSA project office of emerging concerns, and that the contractor's management processes and procedures did not formally identify, evaluate, or act on technical concerns in a timely manner. NNSA and the UPF contractor took actions to address the factors that contributed to the space/fit issue, and NNSA has begun to share lessons learned from the space/fit issue, consistent with both Department of Energy (DOE) guidance and GAO's prior recommendation to ensure that future projects benefit from lessons learned. Specifically, NNSA has taken actions to improve its oversight of the project by increasing federal staffing levels for the UPF project office from 9 full-time equivalents (FTE) in 2012 to more than 50 FTEs as of January 2014. According to NNSA officials, these additional staff enabled NNSA to conduct more robust oversight of the contractor's design efforts than was previously possible. The contractor also took steps to better integrate the efforts of the four subcontractors that are conducting design and engineering work on different elements of the facility. For example, in late 2012 the contractor hired an engineer to integrate the subcontractors' design work and ensure that all design changes were incorporated into the contractor's computer model. The contractor also improved design integration by developing a monthly assessment process to evaluate and report on space utilization in the facility. In addition, according to an NNSA official, communications between NNSA and the contractor significantly improved after the space/fit issue was identified as the contractor kept NNSA better informed of emerging concerns and its plans to address them. The contractor also developed formal management processes for identifying and tracking the status of major technical and engineering issues. For example, the contractor implemented processes for tracking the identification and resolution of both technical and non-technical issues during the design process. In addition, NNSA has recently begun to share lessons learned from the space/fit issue, consistent with DOE guidance and our prior recommendation to ensure that future projects benefit from lessons learned. For example, in July 2014, the UPF federal project director conducted a presentation on lessons learned from the UPF project, including lessons learned from the space/fit issue, at a training session for NNSA federal project directors.

gao_GAO-14-385

gao_GAO-14-385_0

Background The National Aeronautics and Space Administration Authorization Act of 2010 directed NASA to develop a Space Launch System as a follow-on to the Space Shuttle and as a key component in expanding human presence beyond low-earth orbit. The Act also directed NASA to continue development of a multi-purpose crew vehicle for use with that system.that end, NASA plans to incrementally develop three progressively-larger SLS launch vehicle capabilities—70-, 105- and 130-metric ton (MT) variants—complemented by the Orion and supporting ground systems. Limited Scope of Exploration Program Estimates Does Not Capture Life Cycle Costs NASA’s preliminary cost estimates for the SLS, Orion, and associated GSDO programs do not provide a complete picture of the costs required to develop and operate the programs through the entire course of their respective life cycles. These preliminary estimates include the funding required for the scope of work related to initial capabilities—that is, development and operations through 2017 for the SLS launch vehicle and ground systems and through 2021 for the Orion. NASA also expects to use this same limited scope of work to develop the SLS, Orion, and GSDO baseline cost estimates. In contrast, best practices for cost estimation call for “cradle to grave” life cycle cost estimates in order to help assess a program’s long-term affordability. NASA’s Estimates Do Not Include Life Cycle Costs NASA’s preliminary cost estimates for SLS, Orion, and GSDO provide no information about the longer-term, life cycle costs of developing, manufacturing, and operating the launch vehicle, crew capsule, and ground systems: The SLS estimate does not cover the cost to build the second 70- metric ton vehicle and conduct EM-2 in 2021 with that vehicle. The Orion estimate does not address costs for production, operations, or sustainment of additional crew capsules after 2021 nor does it address prior costs incurred when Orion was being developed as part of the now-defunct Constellation program. During approximately 4 years that the capsule’s development occurred under Constellation, the agency spent about $4.7 billion for the capsule’s design and development. The GSDO estimate does not address the costs to develop or operate SLS ground systems infrastructure beyond EM-1 in 2017, although NASA intends to modify ground architecture to accommodate all SLS variants. According to NASA, the agency is developing a tailored definition for life cycle cost estimating that is allowed by NASA requirements. We recognize that defining life cycle costs can be difficult when uncertainties exist. Even when uncertainties exist, best practices maintain that a high-quality cost estimate takes into account those uncertainties while forecasting the minimum and maximum range of all life cycle costs. Because NASA expects to continue with a limited scope for the SLS, Orion, and baseline estimates, however, cost growth over time within the programs will be difficult to identify and could be masked as growth in the SLS capability if the most current cost estimate did not contain the same content as the baseline estimate. Best practices for cost estimating look favorably on the incremental development approach NASA has chosen for SLS, and they also state that programs following such an approach should clearly define the characteristics of each increment of capability so that a rigorous life cycle cost estimate can be developed. These programs represent a significant investment for the country—as much as $22 billion for initial capabilities and potentially billions more to field increased capabilities over time as envisioned in the 2010 NASA Authorization Act. The limited scope that NASA has chosen to use as the basis for formulating the programs’ cost baselines, however, does not provide the transparency necessary to assess long-term affordability and will hamper oversight by those tasked with assessing whether the agency is progressing in a cost-effective and affordable manner. Because NASA intends to use the increased capabilities of the SLS, Orion, and GSDO efforts well into the future and has chosen to estimate costs associated with achieving the capabilities, establish separate cost and schedule baselines for each additional capability that encompass all life cycle costs, to include operations and sustainment. Agency Comments and Our Evaluation NASA provided written comments on a draft of this report. In responding to a draft of our report, NASA partially concurred with our three recommendations, citing among other reasons that actions already in place at the time of our review such as establishing SLS, Orion, GSDO as separate programs and a block upgrade approach for SLS—and actions it plans to take to track costs—met the intent of our recommendations. In most cases, the actions that NASA plans to take do not fully address the issues we raised in this report. We believe it is important to treat Orion and GSDO with the same significance as SLS because this trio of programs is expected to work in concert now and in the future to achieve NASA’s goals for human space exploration.

Why GAO Did This Study NASA is undertaking a trio of closely-related programs to continue human space exploration beyond low-Earth orbit: the SLS vehicle; the Orion capsule, which will launch atop the SLS and carry astronauts; and the supporting ground systems. As a whole, the efforts represent NASA's largest exploration investment over the next decade, potentially as much as $22 billion, to demonstrate initial capabilities. Beyond 2021, NASA plans to incrementally develop progressively more-capable SLS launch vehicles complemented by Orion capsules and ground systems. GAO was asked to assess the costs of NASA's human exploration program. This report examines the scope of NASA's preliminary cost estimates for the three programs. To conduct this work, GAO reviewed NASA information on cost estimates for the three programs, discussed the estimates with NASA officials, and assessed the estimates against best practices criteria in GAO's cost estimating guidebook as well as NASA's own requirements and guidance. What GAO Found The scope of the National Aeronautics and Space Administration's (NASA) preliminary cost estimates for the Space Launch System (SLS), Orion Multi-Purpose Crew Vehicle (Orion), and associated ground systems encompasses only the programs' initial capabilities and does not include the long-term, life cycle costs associated with the programs or significant prior costs: The SLS estimate is based on the funding required to develop and operate the initial 70-metric ton variant through first flight in 2017 but not the costs for its second flight in 2021. NASA is now incurring some costs related to the second flight, but it is not currently tracking those costs for life cycle cost estimating purposes. Furthermore, the estimate does not include costs to incrementally design, develop, and produce future 105- and 130-metric ton SLS variants which NASA expects to use for decades. NASA is now funding concept development and analysis related to these capabilities. The Orion estimate does not include costs for production, operations, or sustainment of additional crew capsules, despite plans to use and possibly enhance this capsule after 2021. It also does not include $4.7 billion in prior costs incurred during the approximately 4 years when Orion was being developed as part of NASA's now-defunct Constellation program. The ground systems estimate excludes costs to develop or operate the ground systems infrastructure beyond 2017, although NASA intends to modify ground architecture to accommodate all SLS variants. NASA expects to use this same limited scope of work to establish the programs' baseline cost estimates in 2014. According to NASA, the agency is developing a tailored definition for the programs' life cycle cost estimates as allowed by NASA requirements. Agency officials stated that NASA chose its approach in part due to uncertainties about the programs' end dates and missions beyond 2021. GAO recognizes that defining life cycle costs can be difficult when uncertainties exist, and that best practices for cost estimating look favorably on evolutionary development. Even so, best practices expect that a high-quality cost estimate will account for program uncertainties, forecast a minimum and maximum range for all life cycle costs, and clearly define the characteristics of each increment of capability so that a rigorous life cycle cost estimate can be developed. According to these practices as well as NASA's requirements and guidance, life cycle cost estimates should encompass all past, present, and future costs for a program, including costs for operations, support, and disposal. The limited scope that the agency has chosen for constructing preliminary and baseline cost estimates, however, means that the estimates are unlikely to serve as a way to measure progress and track cost growth over the life of the programs. For example, cost growth on the current SLS variant could be masked as the addition of scope associated with work for future variants, and the baseline estimate would no longer be applicable. Insight into program costs helps decision makers understand the long-term affordability of programs—a key goal of the National Space Transportation Policy—and helps NASA assess management of its portfolio to achieve increasing capabilities as directed in the NASA Authorization Act of 2010. What GAO Recommends NASA should establish separate cost baselines that address the life cycle of each SLS increment, as well as for any evolved Orion or ground systems capability, among other actions to enable assessment of affordability and enhance oversight. In commenting on a draft of this report, NASA partially concurred with GAO's recommendations, citing that actions taken to structure the programs and track costs met their intent. However, GAO believes NASA's responses do not fully address the issues raised in this report.

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CDC and SAMHSA award MAI grants directly to grantees. MAI Grantees Provided Services Similar to Those Provided with Core HIV/AIDS Funding MAI grantees in our sample reported providing mostly support services, similar to the types of support services grantees provided with core HIV/AIDS grants. These support services included community outreach and education, and staff or provider training. A fraction of the grantees reported providing medical services to their clients. The services provided by MAI grantees were similar to those provided by grantees awarded HRSA’s and CDC’s core HIV/AIDS funding. Available Data Suggest MAI and Core HIV/AIDS Grantees Provide Services Primarily to Minorities The limited demographic information available from the HHS agencies and offices that could provide data suggests that the majority of those served with both MAI and core HIV/AIDS grants are racial and ethnic minorities. This is consistent with the overall demographics of the HIV-positive population in the United States, in which racial and ethnic minorities represented 72 percent of new HIV infections and 74 percent of all AIDS diagnoses in 2011.While the data are insufficient to conclusively determine the extent to which each program serves minority clients, the data suggest that both primarily serve minority populations. The fragmented nature of MAI and core HIV/AIDS funding caused administrative challenges for grantees by often forcing grantees to manage grants from several sources. These funding sources required them to complete multiple administrative requirements. For example, the city of Chicago received nine grants from HHS to provide HIV/AIDS services. MAI grantees face challenges in managing the multiple administrative requirements for each of these grants. HRSA officials stated that several grantees reported that their reasons for not applying for MAI funds were that the small size of MAI grants did not provide enough funding to implement a program and justify the additional administrative requirements. MAI Grantees and Stakeholder Organizations Reported a Variety of Best Practices for Community Outreach and Capacity Building MAI grantees from our sample, as well as stakeholder organizations, reported best practices for community outreach and capacity building that at times led to improved client recruitment and improved capacity to provide care. MAI Grantees and Stakeholder Organizations Reported Best Practices for Community Outreach to Improve Client Recruitment MAI grantees from our sample of 100 grantees, as well as some of the six stakeholder organizations we interviewed, reported best practices for community outreach that included targeting specific communities, broadening outreach and education strategies, utilizing social media forums, collaborating with other organizations, and using various HIV testing strategies that at times led to increased recruitment for HIV testing and other services to communities disproportionately affected by HIV/AIDS. Some stakeholder organizations that we interviewed also reported conducting evaluations and providing training to improve the capacity of organizations to provide services to minority communities. Conclusions Since 1998, MAI grants have been awarded in addition to core HIV/AIDS grants in order to improve HIV-related health outcomes and reduce HIV- related health disparities for racial and ethnic minority populations. In this case, a single department is funding the services, but it is doing so across multiple agencies and offices with multiple funding streams. Such a situation raises the possibility of inefficiencies and requires unnecessarily duplicative administrative processes of grantees that could otherwise be using their resources to provide needed services. Recommendations for Executive Action In order to reduce the administrative costs associated with a fragmented MAI grant structure that diminishes the effective use of HHS’s limited HIV/AIDS funding, and to enhance services to minority populations, HHS should take the following two actions: Consolidate disparate MAI funding streams into core HIV/AIDS funding during its budget request and allocation process, and Seek legislation to amend the CARE Act or other provisions of law, as necessary, to achieve a consolidated approach. Appendix I: Minority AIDS Initiative (MAI) Funding, Activities, and Grantees Funded, Fiscal Years 1999-2011 The Ryan White HIV/AIDS Treatment Extension Act of 2009 requires us to report on the history of MAI program activities within each relevant Department of Health and Human Services (HHS) agency and to provide a description of activities conducted and types of grantees funded. Three HHS agencies, the Centers for Disease Control (CDC), the Health Resources and Services Administration (HRSA), and the Substance Abuse and Mental Health Services Administration (SAMHSA), reported using their own MAI program funds to award grants to provide services in communities disproportionately affected by human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS). In addition, the Office of HIV/AIDS and Infectious Disease Policy (OHAIDP), acting on behalf of the HHS Office of the Secretary, distributed SMAIF funding to HRSA, CDC, SAMHSA, and seven other HHS agencies and offices which, in turn, awarded MAI grants to provide services for communities disproportionally affected by HIV/AIDS.

Why GAO Did This Study According to CDC data, racial and ethnic minorities in the United States--particularly Blacks/African-Americans and Hispanics/Latinos--have been disproportionately affected by HIV/AIDS, representing 72 percent of new HIV infections and 74 percent of all AIDS diagnoses in 2011. In addition to core funding programs through CDC and HRSA that are intended to provide services to all qualifying individuals affected by HIV/AIDS, MAI seeks to improve HIV-related health outcomes and reduce health disparities for minority communities through the provision of grant funds. MAI grants are distributed to a variety of entities. The Ryan White HIV/AIDS Treatment Extension Act of 2009 required GAO to (1) examine the services provided, population served, and administrative challenges faced by MAI grantees, and (2) describe the best practices identified by grantees and other stakeholders for community outreach and capacity building. GAO conducted a review of services reported in fiscal year 2011 MAI grantee annual reports from a generalizable sample of 100 grantees, and interviewed agency officials and other stakeholders. GAO also reviewed grant administrative requirements, and data on MAI grant amounts and populations served. What GAO Found Minority AIDS Initiative (MAI) grantees reported providing services similar to the medical services, support services, and HIV testing and prevention services provided with core HIV/AIDS funding, which is provided by the Health Resources and Services Administration (HRSA) and the Centers for Disease Control and Prevention (CDC) to grantees. In addition, MAI grantees faced administrative challenges managing HIV/AIDS funding that was fragmented across several grants. Various agencies within the Department of Health and Human Services (HHS) awarded MAI grants to grantees. The agencies included CDC, HRSA, the Substance Abuse and Mental Health Services Administration, and seven other offices within HHS. The MAI grantees in GAO's sample reported providing mostly support services with their MAI grants, similar to the types of support services grantees provided with core HIV/AIDS funding from CDC and HRSA. These support services included community outreach and education, and staff or provider training. Twenty percent of the grantees also reported providing medical services to their clients. According to the limited data HHS agencies and offices maintain on the demographics of the population served with MAI grants, the majority of recipients of MAI services were from racial and ethnic minority groups, as is also the case with recipients of services provided with core HIV/AIDS funds. MAI grantees faced administrative challenges because the fragmented nature of MAI and core HIV/AIDS funding required them to manage funding from several sources, each of which required them to complete multiple application and reporting requirements. For example, one city received nine HHS grants to provide HIV/AIDS services - six MAI grants and three core HIV/AIDS grants - and for each of these grants, that city had to complete separate administrative requirements. In this case, while HHS is funding all of the services, it is doing so across multiple funding streams, which raises the possibility of inefficiencies and requires unnecessarily duplicative application and reporting requirements of grantees that could otherwise be using their resources to provide needed services. Additionally, according to HRSA officials, these administrative challenges discouraged some grantees from applying for MAI grants. HRSA officials stated that some of the states receiving core HIV/AIDS grants chose not to request MAI grants because the grants' small size did not justify the additional reporting or other administrative requirements that would accompany them. MAI grantee reports that GAO reviewed, as well as stakeholder organizations GAO interviewed, described a variety of best practices for community outreach and capacity building that at times led to improved client recruitment and improved capacity of community based organizations to serve communities disproportionately affected by HIV/AIDS. For instance, MAI grantees reported targeting specific communities, broadening outreach strategies, utilizing social media forums, and using various HIV testing strategies as best practices for community outreach that at times led to improved recruitment for HIV testing and other services. Grantees and some of the stakeholders reported that upgrading technology and providing training to grantee staff were the best methods to improve capacity to serve clients. What GAO Recommends To enhance HIV/AIDS services to minority populations, HHS should consolidate MAI funding into core HIV/AIDS funding and seek legislation as necessary to achieve a consolidated approach. HHS stated that GAO's recommendations align with the National HIV/AIDS Strategy.