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gao_GGD-98-4

gao_GGD-98-4_0

Such records are to be designed to furnish the information necessary to protect the legal and financial rights of the government and of persons directly affected by the agency’s activities.To do this, each agency is to establish and maintain an active, continuous records management program that provides effective controls over the creation, maintenance, and use of agency records that are sufficient to (1) document the persons, places, things, or matters dealt with by the agency; (2) facilitate action by agency officials and their successors in office; (3) make possible a proper scrutiny by Congress or other authorized agencies of the government; (4) protect the financial, legal, and other rights of the government and other affected persons; (5) document the formulation of agency policies and decisions; and (6) document important board, committee, or staff meetings. Under 44 U.S.C. Objectives, Scope, and Methodology Our objectives were to (1) determine how IRS applies the restrictions of section 6103 in reviewing and inventorying its records and (2) evaluate how IRS carries out its records management responsibilities. Our work focused on certain IRS management records, which were those records addressing agency policies, decisions, and operations. We did not review IRS’ field office records management operations because NARA reviewed field operations as part of its comprehensive 1995 review of IRS’ records program and found that the agency had generally handled and maintained tax returns and return information correctly. These records had been scheduled by IRS and appraised by NARA. NARA noted that IRS had extensive recordkeeping requirements in its Internal Revenue Manual and was developing a vital records program, and that the agency’s tax-processing records were well-managed and handled in accordance with approved disposition schedules. NARA made 58 recommendations to address the problems it found in IRS’ records management practices. According to a NARA official, as of May 1997, IRS had successfully completed 47 of these recommendations. In addition, NARA noted that there were a number of backlogged headquarters records stored on-site or at FRCs that could not be scheduled for disposition because IRS, on the basis of the access restrictions of section 6103, did not allow NARA to appraise the records’ contents. IRS and NARA engaged in a blind review of the 6103-protected records, whereby an IRS disclosure officer described the records’ contents to the NARA records appraiser who decided on the basis of this description whether the records had historical value. The 6103-nonprotected records were made available to NARA for appraisal. We observed that 36 percent of the records were in the first category, 59 percent were in the second category, and 5 percent were in the third category. Not all IRS records were stored in poor conditions. In August 1997, we toured IRS’ headquarters storage facilities again and found that progress in inventorying and scheduling these documents had been made. IRS Has Made Improvements to Its Records Management Program IRS acknowledged having some records management program problems. al., v. IRS and NARA) that was pending at the time of our review. NARA’s Comments NARA’s comments centered on two major points. However, IRS does not believe that section 6103 would allow NARA access to tax returns or return information for appraisal purposes.

Why GAO Did This Study Pursuant to a congressional request, GAO evaluated the Internal Revenue Service's (IRS) records management program, focusing on how IRS: (1) applies the restrictions of U.S. Code, title 26, section 6103, in reviewing and inventorying its records; and (2) carries out its records management responsibilities. What GAO Found GAO noted that: (1)the National Archives and Records Administration's (NARA) 1995 review of IRS' records program found that IRS had managed its overall records program according to NARA requirements, except for certain issues; (2) NARA found that certain management and policy documents, many of which IRS maintained were subject to the disclosure restrictions of section 6103, were not inventoried or scheduled for disposition as required, and that some documents were stored in unsatisfactory conditions; (3) NARA's review highlighted issues associated with its inability to appraise certain IRS records for historical value because of IRS' interpretation of section 6103 restrictions; (4) GAO's review confirmed that these problems existed, but identified progress being made by IRS, and confirmed that the controversy related to NARA's access remains unresolved; (5) certain IRS management that documented policymaking and high-profile programs and actions were not reviewed by NARA because IRS maintained that the documents potentially contained taxpayer-protected data; (6) NARA and IRS subsequently worked out a test method for appraising some of these management records; (7) IRS and NARA engaged in a "blind" review of the 6103-protected records, whereby an IRS official described the records' contents to the NARA records appraiser who decided on the basis of this description whether the records had historical value; (8) the nonprotected records were made available to NARA for appraisal; (9) GAO observed that 59 percent of the records were designated as historical and containing tax returns or return information, 36 percent were designated as historical and containing no tax return information, and 5 percent were designated as nonhistorical and could be destroyed after the applicable period; (10) at the time of NARA's and GAO's reviews, a substantial backlog of uninventoried records has accumulated at IRS; (11) in four of the six headquarters storage locations GAO observed in early 1996 , records were stored in no particular order and under poor conditions; (12) according to NARA, some of the records stored at IRS headquarters could have been less expensively stored at a federal records center; (13) early in 1996, IRS escalated its efforts to improve its records management program with NARA's assistance; (14) as of May 1997, IRS' last official reporting date, NARA said that IRS had completed action on 47 of NARA's 58 recommendations to improve records management and was making progress on the other recommendations; and (15) the two agencies agreed that less progress had been made on resolving NARA's access for appraisal purposes.

gao_GAO-12-819

gao_GAO-12-819_0

Five programs provide government contracting assistance to entrepreneurs, but our analysis did not identify significant overlap in the types of assistance these programs provide or the types of entrepreneurs they serve. Agencies often rely on intermediaries (that is, third-party entities such as nonprofit organizations, higher education institutions, or local governments that use federal grants to provide eligible assistance directly to entrepreneurs) to provide specific support to entrepreneurs, and these intermediaries vary in terms of their location and the types of assistance they provide. Some Entrepreneurs Struggle to Navigate Technical Assistance Programs As previously discussed, 35 programs distributed across the four agencies provide technical assistance, including business training and counseling. Several entrepreneurs and various technical assistance providers with whom we spoke—including agency field offices, intermediaries, and other local service providers—told us that the system can be confusing and that some entrepreneurs do not know what services are available or where to go for assistance. The agencies have taken initial steps to improve how they collaborate to provide technical assistance to entrepreneurs by, for example, entering into formal agreements with each other, but they have not pursued a number of other good collaborative practices we have previously identified, as the following examples illustrate: USDA and SBA entered into a formal agreement in April 2010 to coordinate their efforts aimed at supporting businesses in rural areas. However, the agencies’ business development programs that can support start-up businesses—USDA’s Rural Business Enterprise Grant and SBA’s Small Business Development Centers—have yet to determine roles and responsibilities, find ways to leverage each other’s resources, or establish compatible policies and procedures to collaboratively support rural businesses. Further, the agencies lack information on why some programs have failed to meet some or all of their goals. For example, some officials stated they do not rely on program information with this level of detail to make decisions about their programs. Rather, an intermediary may, for example, submit data summaries of the support they have provided during the reporting period in a narrative format—a format that cannot be easily aggregated or analyzed. However, without tracking more detailed program information, such as the specific type of support provided and the entrepreneurs served, agencies may not be able to make informed decisions or identify risks and problem areas within their programs based on factors such as how entrepreneurs make use of program services or funding. These programs include Commerce’s Economic Development/Support for Planning Organizations, HUD’s Indian Community Development Block Grant, SBA’s 504 loan, and USDA’s Rural Business Opportunity Grant programs. Appendix V provides more information on each program evaluation. However, navigating these overlapping and fragmented programs can be an ongoing challenge for some entrepreneurs. While the agencies have a number of interagency agreements in place, our review found that agency field staff do not consistently collaborate and may not be able to help entrepreneurs navigate the large number of programs available to them. Moreover, without enhanced collaboration and coordination, agencies may not be able to make the best use of limited federal resources and may not reach their intended beneficiaries in the most effective and efficient manner. This practice is not consistent with government standards for internal controls. GPRAMA requires agencies to set and measure annual performance goals, and recognizes the value of program evaluations because they can help agencies assess programs’ effectiveness and improve program performance. Recommendations To help improve the efficiency and effectiveness of federal efforts to support entrepreneurs, we make the following recommendations: The Director of the Office and Management and Budget, the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development, and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies. Commerce, HUD, and USDA provided written comments. First, we recommended that OMB, Commerce, HUD, SBA, and USDA work together to identify opportunities to enhance collaboration among programs, both within and across agencies. Finally, we recommended that Commerce, HUD, SBA, and USDA conduct more evaluations to better understand why programs have not met performance goals and their overall effectiveness. Appendix I: Objectives, Scope and Methodology This report discusses (1) the extent of overlap, fragmentation, and duplication and their effects on entrepreneurs, and agencies’ actions to address them; and (2) the extent to which agencies collect information necessary to track program activities and whether these programs have met their performance goals and been evaluated. To determine the extent of overlap and fragmentation among federal programs that fund economic development activities, we focused our analyses on 52 programs administered by the Departments of Agriculture (USDA), Commerce, and Housing and Urban Development (HUD) and the Small Business Administration (SBA) that are authorized to support entrepreneurs. We also interviewed agency officials to determine reasons why goals were not met (see app. To describe results from program evaluations related to the effectiveness of the 52 economic development programs that we reviewed, we requested all studies that have been conducted on these programs from the four agencies that administer the programs. 2.

Why GAO Did This Study Economic development programs that effectively provide assistance to entrepreneurs may help businesses develop and expand. GAO focused on 52 economic development programs, with an estimated $2.0 billion in funding, at Commerce, HUD, SBA, and USDA that support entrepreneurs. In response to a statutory requirement, this report discusses (1) the extent of overlap and fragmentation, the effects on entrepreneurs, and agencies' actions to address them; and (2) the extent of tracked program information and whether these programs have met their performance goals and been evaluated. To address these objectives, GAO analyzed program information and interviewed agency officials in headquarters and selected field offices, entrepreneurs, and third-party entities, such as nonprofits, that use federal grants to provide assistance directly to entrepreneurs. What GAO Found Federal efforts to support entrepreneurs are fragmented--including among 52 programs at the Department of Agriculture (USDA), Commerce, and Housing and Urban Development (HUD) and the Small Business Administration (SBA). All overlap with at least one other program in terms of the type of assistance they are authorized to offer, such as financial (grants and loans) and technical (training and counseling), and the type of entrepreneur they are authorized to serve. Some entrepreneurs struggle to navigate the fragmented programs that provide technical assistance. For example, some entrepreneurs and technical assistance providers GAO spoke with said the system can be confusing and that some entrepreneurs do not know where to go for assistance. Collaboration could reduce some negative effects of overlap and fragmentation, but field staff GAO spoke with did not consistently collaborate to provide training and counseling services to entrepreneurs. The agencies have taken initial steps to improve how they collaborate by entering into formal agreements, but they have not pursued a number of other good collaborative practices GAO has previously identified. For example, USDA and SBA entered into a formal agreement in 2010 to coordinate their efforts to support businesses in rural areas; however, the agencies' programs that can support start-up businesses--such as USDA's Rural Business Enterprise Grant program and SBA's Small Business Development Centers--have yet to determine roles and responsibilities, find ways to leverage each other's resources, or establish compatible policies and procedures. Without enhanced collaboration and coordination agencies may not be able to make the best use of limited federal resources in the most effective and efficient manner. Agencies do not track program information on entrepreneurial assistance activities for many programs, a number of programs have not met their performance goals, and most programs lack evaluations. In particular, the agencies do not generally track information on the specific type of assistance they provide or the entrepreneurs they serve, in part because they do not rely on this information to administer the programs. Rather, agencies may rely, for example, on data summaries in narrative format, which cannot be easily aggregated or analyzed. According to government standards for internal control, this information should be available to help inform management in making decisions and identifying risks and problem areas. GAO also found that 19 programs failed to meet their annual performance goals related to entrepreneurial assistance, including USDA's Rural Business Opportunity Grants, Commerce's Economic Development/Support for Planning Organizations, HUD's Indian Community Development Block Grants, and SBA's 504 loans to finance commercial real estate. Programs could potentially rely on results from program evaluations to determine the reasons why they have not met their goals, as well as to gauge overall effectiveness. However, the agencies lack program evaluations for 32 of the 52 programs. Therefore, information on program efficiency and effectiveness is limited, and scarce resources may be going toward programs that are less effective. In addition, without more robust program information, agencies may not be able to administer programs in the most effective and efficient manner. GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation. What GAO Recommends GAO recommends that the agencies and the Office of Management and Budget explore opportunities to enhance collaboration among programs, both within and across agencies; track program information; and conduct more program evaluations. Commerce, HUD, and USDA provided written comments and each neither agreed nor disagreed with the recommendations. However, USDA commented that the recommendations were not explicit. In the report, GAO provides specific actions that agencies can take to address each recommendation.

gao_GAO-14-335T

gao_GAO-14-335T_0

Fragmented Programs Overlap, and Agencies’ Efforts to Collaborate Have Been Limited Programs providing financial assistance to entrepreneurs are fragmented—which occurs when more than one agency or program is involved in the same broad area of national interest. Examples of programs in this category include SBA’s 7(a) Loan Program and USDA’s Business and Industry Loans. For example, Commerce’s Economic Adjustment Assistance program can provide grants to intermediaries, such as consortiums of local governments and nonprofits, which in turn provide technical or financial assistance to entrepreneurs. In our 2012 report, we examined entrepreneurs’ experiences with the four agencies’ technical assistance programs—which provide services such as helping with development of business plans or a loan package to obtain financing—and found that some struggle to navigate the fragmented programs. For example, some entrepreneurs and various technical assistance providers with whom we spoke—including agency field offices, intermediaries, and other local service providers—told us that the system can be confusing and that some entrepreneurs do not know what services are available or where to go for assistance. In addition, programs’ Internet resources can also be difficult to navigate. Given the fragmented nature of the federal programs that provide financial assistance to entrepreneurs, enhanced collaboration between agencies could help improve program efficiency. In addition, GPRAMA’s crosscutting framework requires that agencies collaborate in order to address issues, such as economic development, that transcend more than one agency, and GPRAMA directs agencies to describe how they are working with each other to achieve their program goals. However, the agencies have not implemented other good collaborative practices, such as establishing compatible policies and procedures to better support rural businesses. Agencies Lack Information to Track Program Activities and Have Not Evaluated Programs While the four agencies collect at least some information on program activities in either an electronic records system or through paper files, most were unable to summarize the information in a way that could be used to help administer the programs. Similarly, the agencies typically do not track detailed information on the characteristics of entrepreneurs that they serve, such as whether they are located in rural or economically distressed areas or the entrepreneurs’ type of industry. According to OMB, being able to track and measure specific program data can help agencies diagnose problems, identify drivers of future performance, evaluate risk, support collaboration, and inform follow-up actions. We also found that for fiscal year 2011, a number of programs that support entrepreneurs failed to meet some or all of their performance goals. GPRAMA requires agencies to develop annual performance plans that include performance goals for an agency’s program activities and accompanying performance measures. Further, from 2000 through 2012, the agencies had conducted program evaluations of 13 of the 30 financial assistance programs that support entrepreneurs we reviewed. Based on our review, we found that SBA has conducted program evaluation studies on 5 of its 10 programs. Program evaluations that systematically study the benefits of programs may help identify the extent to which overlapping and fragmented programs are achieving their objectives. To address the issues identified in our August 2012 report and to help improve the efficiency and effectiveness of federal efforts to support entrepreneurs, we made the following recommendations: The Director of the Office and Management and Budget; the Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development; and the Administrator of the Small Business Administration should work together to identify opportunities to enhance collaboration among programs, both within and across agencies. The Secretaries of the Departments of Agriculture, Commerce, and Housing and Urban Development and the Administrator of the Small Business Administration should consistently collect information that would enable them to track the specific type of assistance programs provide and the entrepreneurs they serve and use this information to help administer their programs. The agencies, together with the administration, have taken some steps to address our recommendations. One of the objectives under this goal is to use programs and resources across the federal government to improve and expand the reach of training, counseling, and mentoring services to entrepreneurs and small business owners. GAO Contacts and Staff Acknowledgements For further information on this testimony, please contact me at (202) 512- 8678 or [email protected].

Why GAO Did This Study Economic development programs that effectively provide assistance to entrepreneurs may help businesses develop and expand. In August 2012, GAO reported information on 52 programs at Commerce, HUD, SBA, and USDA that provided $2.0 billion in support to entrepreneurs in fiscal year 2011 ( GAO-12-819 ). Of these 52 programs, 30 programs distributed across the four agencies can provide financial assistance in the form of grants and loans. Inefficiencies in the administration of these programs could compromise the government's ability to effectively provide services and meet the shared goals of the programs. This testimony discusses (1) the extent of overlap, fragmentation, and duplication among these programs and the extent to which programs collaborate and (2) the extent to which agencies collect information necessary to track program activities and whether these programs have met their performance goals and have been evaluated. This testimony is based on GAO's August 2012 report and provides information on the agencies' actions to address recommendations GAO made in that report. What GAO Found Federal programs GAO reviewed that offer financial support to entrepreneurs, such as grants and loans, are fragmented and overlap based on the type of support they are authorized to offer and the type of entrepreneur they are authorized to serve. The Departments of Commerce (Commerce), Housing and Urban Development (HUD), and Agriculture (USDA); the Small Business Administration (SBA); and the Office of Management and Budget (OMB) have taken steps to collaborate more in administering these programs in response to a recommendation in GAO's August 2012 report. For example, OMB has established a Cross-Agency Priority goal for entrepreneurship and small business and an associated interagency working group. However, the four agencies have not implemented a number of good collaborative practices GAO has identified, such as establishing compatible policies and procedures to better support rural businesses. The Government Performance and Results Act Modernization Act of 2010 (GPRAMA) crosscutting framework requires that agencies collaborate in order to address issues such as economic development that transcend more than one agency, and GPRAMA directs agencies to describe how they are working with each other to achieve their program goals. Some entrepreneurs struggle to navigate the fragmented programs that provide technical assistance in the form of training and counseling. This difficulty can in turn affect referrals to other programs, including financial assistance programs. For example, some entrepreneurs and technical assistance providers GAO spoke with said the system can be confusing and that some entrepreneurs do not know where to go for technical assistance. Collaboration could reduce some negative effects of overlap and fragmentation, but field staff GAO spoke with did not consistently collaborate to provide training and counseling services to entrepreneurs. Without enhanced collaboration and coordination, agencies may not be able to use limited federal resources in the most effective and efficient manner and entrepreneurs may struggle to navigate these fragmented programs. While the four agencies collect at least some information on entrepreneurial assistance program activities, they do not track such information for many programs, a practice that is not consistent with government standards for internal controls. They typically do not track detailed information on the characteristics of entrepreneurs that they serve, such as whether they are located in rural or economically distressed areas or the entrepreneurs' type of industry. In addition, GAO found that from 2000 through 2012, the four agencies conducted program evaluations of 13 of the 30 financial assistance programs reviewed. GPRAMA requires agencies to set and measure annual performance goals and recognizes the value of program evaluations because they can help agencies assess programs' effectiveness and improve program performance. Without more robust program information, agencies may not be able to administer programs in the most effective and efficient manner, and scarce resources may be going toward programs that are less effective. What GAO Recommends In August 2012, GAO recommended that the four agencies and OMB explore opportunities to enhance collaboration among programs and that the four agencies track program information and conduct more program evaluations. The agencies neither agreed nor disagreed with the recommendations but did provide information on their plans to address them.

gao_NSIAD-97-29

gao_NSIAD-97-29_0

Full-time medics have also been assigned to the Brigade. The complete status of all corrective actions is included in appendixes I through V. Army Oversight Needs Improvement to Preserve Key Corrective Actions If the Army is to sustain the key corrective actions instituted after the accident in the future, it must institutionalize them. One important way to achieve this objective is to expand the focus of formal Army inspections to include testing or observing the key safety controls to determine whether they are working effectively. Priority for Officer Staffing Increased, but Enlisted Personnel Levels Are Lower Than Brigade Requests The Army plans to staff the Ranger Training Brigade at the required 90-percent level by February 1997 and submitted its plan for doing so to Congress in November 1996. Increased Officer Staffing Competes With Army Priorities for Allocating Personnel Shortages Officer shortages, such as those experienced by the Ranger Training Brigade, are not unique. Army policy is that units that are first to fight are first to be resourced. Although there is a higher level of attention to safety, for the most part, the safety cell organization established is no change from the oversight practice that was in place at the time of the accident. Current Brigade Approach Mirrors Existing Army Policy The act required the Army to establish an organizational entity known as a safety cell at each of the three phases of Ranger training, ensure that safety cell personnel at each location have sufficient continuity and experience in that area to understand local conditions and their potential effect on training safety, and assign sufficient numbers of safety cell personnel to serve as advisers to the officers in charge at each location in making daily “go” and “no-go” decisions on training. The act, however, did not establish specific criteria to guide decisions on the makeup of a safety cell. Even so, we noted that the personnel in these positions have limited continuity and experience in the local training areas. For example, the Brigade and battalion commanders normally rotate to new units every 2 years and enlisted personnel every 3 to 3.5 years. Because of the need for long-term continuity and other considerations, the Infantry Center and Brigade are considering requesting that four civilian and seven military personnel be added to the Brigade’s authorized personnel to serve as safety cell members. The Department said that the Brigade has identified the critical safety controls and the Secretary of the Army has directed that the chain of command and the Army Inspector General conduct periodic inspections of the Brigade to ensure that the safety controls and corrective actions are effective. Scope and Methodology To determine the status and implementation of corrective actions taken to improve Ranger training safety, we received briefings from Brigade officials, reviewed reports covering the Army’s investigation of the Ranger students’ deaths, observed each Ranger battalion’s training facilities, interviewed Army investigating officers and Brigade and battalion commanders and instructors, reviewed training safety controls and inspection procedures, and observed the site where the deaths occurred. 8. 9. 12. 4. 6. 7. Air, water surface, and ground evacuation procedures have been planned and rehearsed. 4. Develop a system to check packing list for medevac helicopters. 10. 2. Status of Actions to Increase Personnel Staffing 1. 2. 3. Required by the Fiscal Year 1996 National Defense Authorization Act.

Why GAO Did This Study Pursuant to a legislative requirement, GAO reviewed the Army's investigation of the February 1995 accident in which four Army Ranger Training Brigade students died while training in a Florida swamp, focusing on the: (1) status of all of the Army's corrective actions; (2) adequacy of Army oversight to ensure that the corrective actions instituted after the accident will be sustained in the future; (3) Army's progress in implementing the Fiscal Year 1996 National Defense Authorization Act's mandate to increase Brigade staffing to 90 percent of requirements; and (4) Army's progress in establishing safety cell organizations at the Brigade. What GAO Found GAO found that: (1) the Ranger Training Brigade has completed most of the corrective actions recommended by the Army; (2) the Brigade has improved safety by developing systems to better monitor and predict swamp conditions, and improved command and control by revising its procedures to move training exercises outside high-risk areas of the swamp, eliminate discretion to deviate from planned exercise locations, and incorporate the latest guidance on training safety; (3) evacuation procedures have been revised and rehearsed, new medevac helicopters and refueling capacity have been obtained, and medics have been assigned directly to the Brigade; (4) if the Army is to sustain the key corrective actions taken after the accident in the future, the actions must become institutionalized; (5) if the important corrective actions are to become institutionalized, formal Army inspections will have to be expanded to include testing or observing to determine whether they are working effectively; (6) the Army plans to fully staff the Ranger Training Brigade at the mandated 90-percent level by February 1997; (7) although the Army raised the Brigade's staffing priority subsequent to GAO's field work, high-risk training units generally are not recognized in Army personnel staffing priorities; (8) the Brigade's long-term ability to sustain the required number of officers may be hindered by competition with Army priorities given to units who are first to fight and with other important noncombatant units; (9) currently, members of the Ranger Training Brigade and battalion chains of command serve as the safety cell organization established pursuant to the act; (10) the act did not establish specific criteria to guide decisions on the makeup of a safety cell, and the option chosen by the Army represents little change from the safety oversight practice that was in place at the time of the accident; (11) personnel in these positions have limited experience in the local training areas due to the Army's policy of rotating them to new units every 2 or 3 years; and (12) the Army Infantry Center is considering requesting authorization for additional civilian and military positions to serve as full-time safety cell members.

gao_GAO-17-433

gao_GAO-17-433_0

As of December 31, 2016, DOD had obligated about $2.2 billion of the $2.3 billion Congress appropriated for ITEF in fiscal years 2015 and 2016 and had disbursed about $2 billion. ITEF Equipping Process and Responsibilities of DOD Components The process for providing ITEF-funded equipment to Iraq’s security forces generally falls into three phases: (1) acquisition and shipment, (2) staging in Kuwait and Iraq, and (3) transfer to the government of Iraq or the Kurdistan Regional Government (see fig. DOD Maintains Limited Visibility and Accountability of ITEF-funded Equipment Using SCIP DOD components do not ensure that SCIP consistently captures key transportation dates of equipment funded by ITEF during each of the three phases of the ITEF equipping process. According to the DSCA SAMM, DOD components should use SCIP to identify the status and track the transportation of all building partner capacity materiel, such as ITEF. DOD officials said that SCMS is not capturing such dates because of potential interoperability and data reporting issues in SCIP and other DOD data systems. DOD also could not fully account for ITEF-funded equipment transferred to the government of Iraq or the Kurdistan Regional Government because of missing or incomplete transfer documentation. First, SCMS may not be importing data correctly from other DOD data systems used by DOD components to track ITEF-funded equipment in phase 1. For example, according to USASAC officials, USASAC does not report any ITEF-funded transportation dates in EFTS or SCMS because they rely on other DOD data systems for this information which officials said should be captured in SCIP. DOD Is Not Capturing in SCIP Arrival Dates of ITEF-Funded Equipment to Kuwait and Iraq in Phase 2 of the ITEF Equipping Process Our analysis of 566 completed ITEF-funded requisitions recorded in SCIP’s SCMS as of February 10, 2017 found that DOD components are not following the SAMM to capture the arrival dates of ITEF-funded equipment to Kuwait or Iraq in phase 2 of the ITEF equipping process in SCIP. DOD Is Not Consistently Capturing in SCIP ITEF- Funded Equipment Transfer Dates to the Government of Iraq or the Kurdistan Regional Government in Phase 3 of the ITEF Equipping Process Our analysis of 566 completed ITEF-funded requisitions recorded in SCIP’s SCMS as of February 10, 2017 found that DOD components had not consistently followed the SAMM or a USCENTCOM order to capture the transfer dates of ITEF-funded equipment to the government of Iraq or the Kurdistan Regional Government in phase 3 of the ITEF equipping process in SCIP. Furthermore, DSCA officials said that SCIP users may need additional guidance for reporting all key transportation dates in SCIP. Without timely and accurate transit information on the status of ITEF-funded equipment, DOD cannot ensure that the equipment has reached its intended destination, nor can DOD program managers conduct effective oversight of the ITEF program. Identify the root causes, such as potential interoperability and data reporting issues within SCIP and other DOD data systems, for why DOD components are not ensuring that ITEF-funded equipment transportation dates are captured in SCIP. DOD concurred with our first two recommendations, to identify why DOD components are not ensuring that ITEF-funded equipment transportation dates are captured in SCIP and to develop an action plan for addressing these issues. To examine the extent to which DOD maintains visibility and accountability of ITEF-funded equipment, we reviewed DOD guidance in the Defense Security Cooperation Agency (DSCA)’s Security Assistance Management Manual (SAMM), including a requirement to report the transfer dates of building partner capacity materiel in the Enhanced Freight Tracking System (EFTS) within the Security Cooperation Information Portal (SCIP) or to DSCA. However, we did determine that the 566 requisitions marked as complete for supply and services were lacking key information, which we reported. Related GAO Products Iraq: Status of DOD Efforts to Train and Equip Iraq’s Security Forces.

Why GAO Did This Study In 2014, Congress authorized the creation of ITEF to provide equipment and other assistance to Iraq's security forces, including the Kurdistan Regional Government forces, to counter the expansion of the Islamic State of Iraq and Syria. As of December 2016, DOD had disbursed about $2 billion of the $2.3 billion Congress appropriated for ITEF in fiscal years 2015 and 2016 to purchase, for example, personal protective equipment, weapons, and vehicles for these forces. DOD's web-based SCIP provides U.S. government personnel and others transportation information on DOD equipment imported from other DOD data systems or reported by SCIP users. GAO was asked to review DOD's accountability of ITEF-funded equipment. This report assesses the extent to which DOD maintains visibility and accountability of ITEF-funded equipment from acquisition through transfer to the government of Iraq or the Kurdistan Regional Government. GAO analyzed DOD guidance, procedures, SCIP data, and transfer documentation and interviewed officials from DOD agencies with a role in the ITEF equipping process in the United States, Kuwait, and Iraq. What GAO Found The Department of Defense (DOD) maintains limited visibility and accountability over equipment funded by the Iraq Train and Equip Fund (ITEF). Specifically, DOD is not ensuring that the Security Cooperation Information Portal (SCIP) is consistently capturing key transportation dates of ITEF-funded equipment. DOD guidance states that DOD components should use SCIP to identify the status and track the transportation of all building partner capacity materiel, such as ITEF. DOD also issued an order in October 2016 requiring DOD components to ensure that equipment transfer dates are recorded in SCIP. The process for providing the equipment to Iraq's security forces generally falls into three phases: (1) acquisition and shipment, (2) staging in Kuwait and Iraq, and (3) transfer to the government of Iraq or the Kurdistan Regional Government. However, for the 566 ITEF-funded requisitions marked as complete in SCIP's management reporting system as of February 2017, GAO found that the system captured one of two key transportation dates for 256 of the requisitions in phase 1, and none of the transportation dates for these requisitions in phase 2 or phase 3 (see figure). DOD officials attributed the lack of key transportation dates in SCIP's management reporting system to potential interoperability and data reporting issues in all three equipping phases. Interoperability issues. DOD officials said that SCIP's management reporting system may not be importing transportation data correctly from other DOD data systems or from another shipment tracking system feature in SCIP. Data reporting issues. DOD officials said they are not reporting the arrival dates of equipment to Kuwait or Iraq because they rely on other DOD data systems and are not required to do so. DOD officials said they have had difficulty ensuring that SCIP has captured equipment transfer dates. In addition, DOD cannot fully account for ITEF-funded equipment transfers because of missing or incomplete transfer documentation. Without timely and accurate transit information, DOD cannot ensure that the equipment has reached its intended destination, nor can program managers conduct effective oversight of ITEF-funded equipment. What GAO Recommends GAO is making four recommendations that include identifying the root causes for addressing why DOD is not capturing ITEF-funded equipment transportation dates in SCIP and developing an action plan to address these issues. DOD generally concurred with GAO's recommendations and stated that it would develop a plan.

gao_NSIAD-98-52

gao_NSIAD-98-52_0

The AACB’s major test facilities study team concluded that, in most areas, the present number of major test facilities “very nearly represents the minimum required to conduct the aeronautical- and space-related research and development programs identified for this country.” The study team further stated that (1) closing facilities without eliminating programs does not generate big savings, (2) NASA and DOD are not on a common track to developing comparable facility-cost accounting, (3) there is inadequate coordination of investments, upgrades, and operations between NASA and DOD, and (4) NASA and DOD’s rocket propulsion test facilities have excess capacity for current and future workload. Notwithstanding a history of NASA/DOD cooperation on aerospace test facility-related issues prior to 1996, these goals collectively represent an effort to develop a broader national perspective on such issues. In September 1996, Congress added to this effort by requiring NASA and DOD to prepare a joint plan on rocket propulsion test facilities. Twenty months later, NASA and DOD signed agreements formally establishing these alliances. NASA and DOD Compete to Test Rocket Engines Despite the formation of the rocket propulsion alliance, NASA’s and DOD’s relationship over this type of testing has been recently marked by competition. Testing engines in the next phase of the EELV program was the focus of NASA and Air Force competition. The plan shall provide, to the extent practical, for the development of commonly funded and commonly operated facilities.” In a January 1997 response to congressional committees, DOD acknowledged that although NASA and the Air Force “do not yet have a formal plan,” a range of efforts was underway that would “form the basis for such a plan.” The efforts cited were Vision 21, the Quadrennial Defense Review, and the rocket propulsion alliance. The first two efforts cited are unlikely to form the basis of a joint plan because NASA is not a formal part of the Vision 21 review, and DOD does not intend that its 5-year plan to consolidate and restructure its laboratories and test and evaluation centers be a joint plan with other federal agencies. NASA also was not a formal part of the Quadrennial Defense Review of defense strategy. NASA and DOD Move Toward Joint Strategic Management of Aeronautical Test Facilities NASA and DOD took a step toward creating a national perspective on testing in the area of aeronautics by agreeing in May 1997 to consider joint strategic management of their test facilities. And in October 1997, NASA and Air Force officials reached a verbal understanding on the scope and approach for joint strategic management, but have yet to agree on key aspects of a management organization. The DOD assessment team proposed a new organization—National Aeronautical Facility Base—with members from the three military departments and NASA. However, basic questions remain about strategic joint management, including the new organization’s structure and authority to make binding decisions and recommendations. Charter of National Rocket Propulsion Test Alliance Comments From the Department of Defense The following are GAO’s comments on DOD’s letter dated December 23, 1997. 2. 3. As we stated in the report, ultimately, if joint strategic management of aeronautics test facilities is successfully established, its adaption to other types of test facilities could be considered.

Why GAO Did This Study GAO reviewed the National Aeronautics and Space Administration's (NASA) and Department of Defense's (DOD) cooperation in developing a national perspective on aerospace test facilities, focusing on: (1) the extent to which NASA/DOD working groups on major test facilities have been operating on a regular basis; (2) NASA's and DOD's actions in response to a future need to test an engine for new Air Force rockets; (3) whether NASA and DOD prepared a congressionally required joint plan on rocket propulsion test facilities; and (4) whether NASA and DOD are implementing a DOD assessment team's recommendation in March 1997 to jointly manage with NASA certain aeronautical test facilities. What GAO Found GAO noted that: (1) the promise of closer NASA/DOD cooperation and the development of a national perspective on aerospace test facilities remains largely unfulfilled because NASA and DOD: (a) have not yet convened most test facility alliances; (b) compete with each other to test engines for new rockets; and (c) did not prepare a congressionally required joint plan on rocket propulsion test facilities; (2) although NASA and DOD have agreed to go beyond cooperative alliances in aeronautics and jointly manage their aeronautical test facilities, they have not yet reached agreement on key aspects of management organization; (3) NASA and DOD took 20 months (May 1996 through December 1997) to negotiate and sign agreements formally establishing the six test facility-related cooperative alliances; (4) despite the formation of the rocket propulsion alliance, NASA and DOD compete against each other to test engines for new rocket programs; (5) a principal arena of competition is the next phase of the Air Force's Evolved Expendable Launch Vehicle program; (6) DOD did not prepare a legislatively mandated joint plan with NASA to coordinate rocket propulsion test facilities; (7) in a letter to congressional committee chairs and other members, DOD said that the bases of such a plan are: (a) ongoing activities such as Vision 21; (b) the May 1997 Quadrennial Defense Review of defense strategy; and (c) activities of the rocket propulsion alliance; (8) however, these efforts are unlikely to form the basis of a joint plan because NASA is not participating in either Vision 21 or the Defense Review; (9) in October 1997, NASA and Air Force officials took a step toward creating a national perspective on test facilities in the aeronautics area; (10) specifically, they reached an understanding on the scope and approach for joint strategic management of their aeronautical test facilities, including a new management organization; (11) however, they have not yet resolved basic issues, such as the organization's structure and authority; and (12) ultimately, if joint strategic management of aeronautics test facilities is successfully established, its adaption to other types of test facilities could be considered.

gao_GAO-02-36

gao_GAO-02-36_0

Background Before the airports’ transfer to the Metropolitan Washington Airports Authority (MWAA), Dulles and Reagan National were operated by the Federal Aviation Administration and financed with federally appropriated funds. Finally, MWAA does not use the 1993 guidance to award contracts involving non-concession-related goods and services. MWAA’s 1993 contracting guidance does not address this matter. Weaknesses in MWAA’s evaluations of contractor proposals also raise concern about whether contractors have been treated fairly in competing for MWAA’s contract awards. Likewise, MWAA’s (1) practice of improperly exercising contract options that MWAA did not compete as part of its initial solicitation, (2) use of existing contracts to obtain goods and services that are beyond the scope of work contained in its contract solicitations, and (3) improper use of sole-source awards fail to ensure that MWAA obtains the best value available in the marketplace for the goods and services it purchases and could result in MWAA’s paying higher prices than necessary. At the same time, Congress amended the Office of Federal Procurement Policy Act to declare that “full and open competition, when used with respect to a procurement, means that all responsible sources are permitted to submit sealed bids or competitive proposals on the procurement.” Two years later, upon consideration of the 1986 Metropolitan Washington Airports Act (which provided for the lease of Dulles and Reagan National), a senator from Virginia introduced the requirement for full and open competition at the airports. Instead, we focused our review on MWAA’s contracts for supplies and services, including construction. 15.

Why GAO Did This Study The Metropolitan Washington Airports Act of 1986 transferred operating responsibility for Dulles and Reagan National Airports from the federal government to the Metropolitan Washington Airports Authority (MWAA), an independent, nonfederal, public entity. MWAA, which has a 50-year lease to run the two airports, has entered into a wide range of contracts for supplies, construction, and other services. What GAO Found Although MWAA issued guidance in 1993 for the awarding of contracts and concession franchises, GAO found that the guidance does not adequately reflect competitive contracting principles and is out of date in many respects. Moreover, MWAA does not use its guidance to award contracts for non-concession goods and services. MWAA did not obtain full and open competition for 15 of the 35 contracts GAO reviewed, raising concerns about whether MWAA obtained the best value for the goods and services provided. The failure to obtain full and open competition also raises concerns about whether MWAA has (1) deprived prospective contractors of the chance to compete for contracts and (2) fairly evaluated all of the contractors that have competed for procurements. Finally, by not following recognized competitive principles, MWAA could be giving the appearance of favoritism in its contracting decisions.

gao_GAO-01-1011

gao_GAO-01-1011_0

School settings are perceived as particularly vulnerable for abuse because schools store attention disorder drugs for students needing medication while at school. Few Incidents of Diversion or Abuse of Attention Disorder Drugs Identified by Schools Based on our survey, an estimated 8 percent of principals in public middle schools and high schools in the United States reported at least one incident of diversion or abuse of attention disorder drugs during the current 2000-2001 school year. Most Schools Dispense Attention Disorder Medications and Follow Drug Security Procedures Most school officials reported that attention disorder medications are administered to students during the school day, most often by a nurse. Medication Administration Nationally, an estimated 90 percent of schools have school staff administering attention disorder medication to some students on a typical day, according to principals we surveyed. Cabinet and door locks school B Almost all (96 percent) of the school principals in schools that administer medications reported that students are observed when they are administered medication to assure that it is taken. We analyzed provisions in the 37 states and the District of Columbia based on five common statewide requirements for administering medication at schools: (1) whether schools must obtain authorization from the student’s parent or guardian to administer medication, (2) whether schools must obtain written orders or instructions from the student’s physician or other licensed medication prescriber to administer medication, (3) whether schools must receive and store prescription medication in an original container with proper pharmaceutical labeling, (4) whether schools must provide storage for medication that is secure and inaccessible except to authorized school personnel, and (5) whether schools must document the administration of medication to the student in a medication log. Only seven states have no applicable statutes, regulations, or policies (discretionary or mandatory) addressing the administration of medication in schools. Finally, the development of nonstimulants for attention disorders and increasing use of once-a-day stimulant medications may reduce the potential for diversion or abuse at school by reducing the need for the medications to be administered during school hours. For example, a nurse administers medications at an estimated 59 percent of the middle and high schools.

What GAO Found Children diagnosed with attention deficit disorders are often treated with stimulant medications, such as Ritalin or Adderall. These drugs are controlled substances under federal law because of their high potential for abuse. Many of these stimulant drugs must be taken several times a day to be effective, so children need medication during the school day. Concern has arisen that the increasing use of these medications in school might provide additional opportunities for drug abuse. No data exists on the extent to which attention disorder drugs have been diverted or abused at school, or the extent to which state laws or regulations guide local school officials in safely administering these drugs. Middle and high school principals reported little diversion or abuse of attention disorder drugs. For the first seven to nine months of school year 2000-2001, about eight percent of principals in public middle and high schools reported that attention disorder drugs had been diverted or abused at their school. Most of the principals reported that school officials administer attention disorder medications, with about two percent of the school's students on average being administered attention disorder drugs on a typical day. Medications are given by nurses in about 60 percent of the schools, and by non-health professionals, such as secretaries, in most of the remaining schools. Medications are kept locked in almost all (96 percent) of the schools, according to the principals, and students are observed while taking their medications. Thirty-seven states and the District of Columbia have either statutes, regulations, or mandatory policies addressing the administration of medication to students. State provisions require schools to obtain written parental authorization to administer medication, ensure that the medication is securely stored, and store prescription medication in the original pharmacy container.

gao_GAO-08-369

gao_GAO-08-369_0

Major federal government agencies, the Red Cross, NVOAD, and other voluntary organizations are included in the NRF. FEMA Became the Primary Mass Care Agency Because the Red Cross Cannot Direct Federal Resources, and the Shifting Roles Present Several Implementation Issues FEMA replaced the American Red Cross as the primary agency for mass care in large part because the two organizations agreed that the primary agency needs to be able to direct federal resources. In addition, the NRF places increased responsibility on FEMA for coordinating with voluntary organizations, but FEMA does not have sufficient staff resources to meet this responsibility. VALs are FEMA staff members who coordinate the activities of voluntary organizations with FEMA. A key FEMA official said that this standardized training should be complete by summer 2008. NVOAD Has Several Characteristics That Help It Carry Out Its ESF-6 Role, but Is Constrained by Limited Staff Resources NVOAD is in a unique position to coordinate voluntary organizations active in disaster assistance under ESF-6. Using lessons learned from Katrina, NVOAD has identified ways to potentially improve information sharing with its members, such as through enhanced use of web technology. We found that these conference calls were not an effective way of communicating after the hurricanes. For example, in response to the Act, FEMA hired a Disability Coordinator to integrate disability issues into federal emergency planning and preparedness efforts. Key Gaps in Federal and State Mass Care Planning Efforts for Individuals with Disabilities Were Identified after the Hurricanes After the 2005 Gulf Coast hurricanes, reports from the Senate Committee on Homeland Security and Governmental Affairs, DHS, and NCD identified a lack of planning as one of the most significant problems related to the provision of mass care to the disabled. FEMA Has Begun Addressing the Issues with Mass Care for the Disabled, but Has Generally Not Coordinated with NCD as Required FEMA has taken several steps to help improve planning for the disabled population. In response to such problems, the Red Cross has developed an intake form intended to assist volunteers in determining whether a particular shelter can meet an individual’s needs and also developed new training on serving the disabled. Other major national voluntary organizations that we examined had increased their attention to services for the disabled, but did not identify a need to improve their services for this population. The Red Cross Has Taken Steps to Help Local Chapter Officials Serve the Disabled, including Developing a Shelter Intake Form and Training After Hurricane Katrina, officials from the government and disability organizations identified two main concerns with the mass care services provided by the Red Cross to individuals with disabilities. Red Cross headquarters officials told us that some local chapters are still not fully prepared to serve individuals with disabilities after disasters. The Public Assistance reimbursement program was not designed for a disaster of Katrina’s magnitude because it only offered reimbursement to voluntary organizations in the disaster zone, even though evacuees dispersed throughout the country. Voluntary organizations also faced significant communication problems as they sought reimbursement, but FEMA has not taken steps to address these communication issues. In addition, we found that some of the information on FEMA’s Web site about the Public Assistance program was not presented in a user-friendly format that would help voluntary organizations successfully navigate reimbursement policies and procedures. If FEMA does not take steps to address these issues, it will encounter difficulties in meeting its NRF role of coordinating with voluntary organizations, and the nation is likely to see some of the same coordination problems that occurred after the Gulf Coast hurricanes. To obtain information about the rationale for, and implications of, the shift in the primary mass care role in the National Response Framework (NRF) from the Red Cross to the Federal Emergency Management Agency (FEMA), we reviewed letters between FEMA and the Red Cross documenting reasons for the shift in the primary agency role from the Red Cross to FEMA, the National Response Framework, information about the National Shelter System, the Post Katrina Emergency Management Reform Act, and information about the responsibilities of Voluntary Agency Liaisons. National Council on Disability.

Why GAO Did This Study Using lessons from the 2005 Gulf Coast hurricanes, the federal government released the National Response Framework (NRF) in January 2008. This report examines (1) why the primary role for mass care in the NRF shifted from the Red Cross to the Federal Emergency Management Agency (FEMA), and potential issues with implementation, (2) whether National Voluntary Organizations Active in Disasters (NVOAD)--an umbrella organization of 49 voluntary agencies--is equipped to fulfill its NRF role, (3) the extent to which FEMA has addressed issues with mass care for the disabled since the hurricanes, (4) the extent to which major voluntary agencies have prepared to better serve the disabled since the hurricanes, and (5) the extent to which FEMA has addressed issues voluntary agencies faced in receiving Public Assistance reimbursement. To analyze these issues, GAO reviewed the NRF and other documents, and interviewed officials from FEMA, voluntary agencies, and state and local governments. What GAO Found FEMA and the Red Cross agreed that FEMA should be the primary agency for mass care in the NRF because the primary agency should be able to direct federal agencies' resources to meet mass care needs, which the Red Cross cannot do. The shifting roles present several implementation issues. For example, while FEMA has enhanced responsibilities for coordinating the activities of voluntary organizations, it does not currently have a sufficient number of specialized staff to meet this responsibility. NVOAD has characteristics that help it carry out its broad role of facilitating voluntary organization and government coordination, but limited staff resources constrain its ability to effectively fulfill its role in disaster response situations. NVOAD held daily conference calls with its members after Hurricane Katrina, but these calls were not an effective means of sharing information, reflecting the fact that NVOAD had only one employee at the time of Katrina. FEMA has begun taking steps in several areas to improve mass care for the disabled based on lessons learned from the Gulf Coast hurricanes. For example, FEMA hired a Disability Coordinator to integrate disability issues into federal emergency planning and preparedness efforts. However, FEMA has generally not coordinated with a key federal disability agency, the National Council on Disability, in the implementation of various initiatives, as required by the Post-Katrina Emergency Management Reform Act of 2006. The Red Cross has taken steps to improve mass care services for the disabled, but still faces challenges. For example, the Red Cross developed a shelter intake form to assist staff in determining whether a particular shelter can meet an individual's needs. However, Red Cross officials said that some local chapters are still not fully prepared to serve individuals with disabilities. Other voluntary organizations had not identified a need to improve services for individuals with disabilities, and we did not identify concerns with their services. FEMA has partially addressed the issues faced by local voluntary organizations, such as churches, in seeking Public Assistance reimbursement for mass care-related expenses after the hurricanes. At the time of the hurricanes, a key FEMA reimbursement program was not designed for a disaster of Katrina's magnitude, but FEMA has changed its regulations to address this issue. Local voluntary organizations also had difficulty getting accurate information about reimbursement opportunities. Key FEMA staff had not received training on reimbursement policies and sometimes did not provide accurate information, and some of the information on FEMA's Web site was not presented in a user-friendly format. FEMA has not addressed these communication issues.

gao_GGD-95-75

gao_GGD-95-75_0

Agencies Officials’ Comments on Interagency Coordination Problems Officials of the federal agencies we contacted, some of which had a prior history of coordination problems, all opined that, based on their experience, they did not have extensive interagency coordination problems, such as overlapping or duplicate efforts, jurisdictional disputes, or noncooperation with other agencies in the fugitive apprehension area. USMS and FBI were pursuing the most fugitives wanted by more than one agency. Nevertheless, if such problems do exist, they could jeopardize fugitive apprehension efforts, endanger law enforcement officials and the general public, and waste limited law enforcement resources. We reviewed those findings and found none that dealt with interagency problems. The problem areas primarily involved FBI’s and USMS’ (1) failure to participate on each other’s task forces, (2) disagreements over responsibility for prison escapes when a conspiracy may have been involved, and (3) unwillingness at times to cooperate or withdraw from cases where both had separately been asked to assist in finding other countries’ fugitives who were suspected of being in the United States. OIAP was established, in part, to improve interagency coordination and eliminate waste and duplication in the fugitive area. We agreed with the requesters to focus on determining (1) the extent and nature of any interagency coordination problems among FBI, DEA, and USMS and other federal agencies involved in fugitive investigations and (2) if such problems existed, what actions had been or could be taken to address them. Coordination problems could include unnecessary duplicate or overlapping efforts, jurisdictional disputes, and noncooperation that could adversely affect the efficiency or effectiveness of efforts to apprehend fugitives. U.S. General Accounting Office P.O.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Justice's 1988 federal fugitive apprehension policy, focusing on interagency coordination problems and agencies' efforts to address those problems. What GAO Found GAO found that: (1) officials from all federal agencies involved in fugitive apprehension stated that they did not have extensive interagency coordination problems, overlapping or duplicate efforts, or jurisdictional disputes; (2) none of the agencies had empirical data on the 727 fugitives who were wanted by more than one agency; (3) interagency coordination problems could jeopardize fugitive apprehension efforts, endanger law enforcement officials and the general public, and waste limited law enforcement resources; (4) some interagency coordination problems such as the Federal Bureau of Investigation's (FBI) and the U.S. Marshals Service's (USMS) failure to participate in each other's fugitive task forces, disagreements over responsibility for prison escapes involving possible conspiracy charges, and agencies' failure to cooperate with the apprehension of other countries' fugitives adversely affected the effectiveness of federal fugitive apprehension efforts; (5) FBI and USMS have taken actions to deal with interagency problems to improve coordination and eliminate duplication; and (6) Justice established the Office of Investigative Agency Policies to resolve coordination problems, ensure efficiencies in overlapping efforts, and determine whether fugitive responsibilities are properly aligned among agencies.

gao_GAO-08-1087

gao_GAO-08-1087_0

Contract Costs Increased, Primarily Due to Added Requirements to Support Ongoing Operations in Iraq and Afghanistan For six of the seven contracts we reviewed, actual costs exceeded the initially estimated contract costs, primarily because of added requirements to support ongoing operations in Iraq and Afghanistan. Costs for these six contracts—three of which were extended—increased from an initial estimate of $783 million to an approximate actual total cost of $3.8 billion. Linguist Services In April 1999, the Army awarded a contract for linguist translation and interpretation services. Global Maintenance and Supply Services in Kuwait—Task Order 0001 In October 2004, the Army issued this task order for equipment maintenance and supply services in Kuwait under an umbrella indefinite- delivery/indefinite-quantity contract for Global Maintenance and Supply Services. Likewise, in September 2005 a requirement was added to the task order for tire assembly and repair. For example, in option years one and two, funding for the reset of equipment totaled approximately $54.2 million and $50.1 million, respectively. To meet the increased demands, additional contractor personnel were needed. Other Factors That Caused Cost Growth Other factors that contributed to individual contract cost growth among the contracts we reviewed included (1) short-term contract extensions, (2) the government’s inability to provide promised equipment, (3) changes in host country labor laws, and (4) having to pay for work to be performed multiple times because it did not meet required standards. The contractors felt it was too risky to obtain long-term leases for such things as vehicles and housing because there was no guarantee that the contract would be extended again. DOD’s Oversight of Some Contracts Has Been Inadequate DOD’s oversight of some of the contracts we reviewed has been inadequate because of a shortage of qualified oversight and contract administration personnel and because it did not maintain some contract files in accordance with applicable policy and guidance. Additionally, we found that for four of the contracts we reviewed, the contracting offices either did not maintain complete contract files documenting contract administration and oversight actions taken or did not follow quality assurance guidance. Due to the vacant property administrator position, some proper accounting of government-owned equipment was not performed. However, according to oversight officials, assigned contract oversight personnel for the linguist contract were unable to judge the performance of the contractor employees because they were generally unable to speak the languages of the contractor employees they were responsible for overseeing. Without adequate levels of qualified oversight personnel, complete and organized contract files, and consistent implementation of quality assurance principles, DOD’s ability to perform the various tasks needed to monitor contractor performance may be impaired. DOD Used Contractors Because Military Personnel and DOD Civilians Were Not Available DOD uses contractors to support contingency operations for several reasons, including the need to compensate for a decrease in the size of the force and a lack of expertise within the military services. For five of the seven contracts, DOD lacked sufficient personnel to meet increased requirements for services to support operations in Iraq and Afghanistan. According to Army officials, years ago the military did not anticipate such a large requirement for Arabic speakers. In May 2007 we reported that DOD and service officials attributed the increased use of contractors for support services to several factors, including (1) increased operations and maintenance requirements from the global war on terror and other contingencies, which DOD has met without an increase in active duty and civilian personnel; (2) federal government policy, which is to rely on the private sector for needed commercial services that are not inherently governmental in nature; and (3) DOD initiatives, such as its competitive sourcing and utility privatization programs. We also recommend that the Secretary of Defense direct each of the service secretaries to conduct a review of the contract administration functions that support contingency operations contracts to determine the prevalence of inadequate contract oversight and administration staffing levels and the extent to which guidance for maintaining contract files and quality assurance principles are not being consistently followed and take corrective actions as necessary. However, as we reported, the Army did not always document unacceptable contractor performance. To determine the extent to which DOD provided oversight of contracts that support contingency operations, we reviewed a variety of quality assurance and contract management regulations and guidance, including the Federal Acquisition Regulation, the Defense Federal Acquisition Regulation Supplement, the Army Quality Program regulation, and DOD’s Guidebook for Performance-Based Services Acquisition in the Department of Defense.

Why GAO Did This Study The Department of Defense (DOD) uses contractors to meet many of its logistical and operational support needs. With the global war on terrorism, there has been a significant increase in deployment of contractor personnel to areas such as Iraq and Afghanistan. In its fiscal year 2007 report, the House Appropriations Committee directed GAO to examine the link between the growth in DOD's operation and maintenance costs and DOD's increased reliance on service contracts. GAO determined (1) the extent to which costs for selected contracts increased and the factors causing the increases, (2) the extent to which DOD provided oversight for selected contracts, and (3) the reasons for DOD's use of contractors to support contingency operations. To address these objectives, GAO reviewed a nonprobability sample of seven DOD contracts for services that provide vital support to contingency operations in Iraq and Afghanistan. GAO reviewed contract requirements, funding documents and DOD guidance for these contracts and interviewed DOD and contractor personnel. What GAO Found Costs for six of the seven contracts GAO reviewed increased from an initial estimate of $783 million to about $3.8 billion, and one consistent and primary factor driving the growth was increased requirements associated with continued military operations in Iraq and Afghanistan. For example, the Army awarded a $218.2 million task order for equipment maintenance and supply services in Kuwait in October 2004. Since then, approximately $154 million of additional work was added to this task order for vehicle refurbishment, tire assembly and repair, and resetting of prepositioned equipment. Other factors that increased individual contract costs include the use of short-term contract extensions and the government's inability to provide contractually required equipment and services. For example, in three of the contracts GAO reviewed, short-term contract extensions (3 to 6 months) increased costs because the contractor felt it was too risky to obtain long-term leases for vehicles and housing. The actual cost of one contract we reviewed did not exceed the estimated cost for reasons such as lower than projected labor rates. GAO has frequently reported that inadequate staffing contributed to contract management challenges. For some contracts GAO reviewed, DOD's oversight was inadequate because it had a shortage of qualified personnel and it did not maintain some contract files in accordance with applicable guidance. For five contracts, DOD had inadequate management and oversight personnel. In one case, the office responsible for overseeing two contracts was short 6 of 18 key positions, all of which needed specialized training and certifications. In addition, for two other contracts, proper accounting of government owned equipment was not performed because the property administrator position was vacant. Second, DOD did not always follow guidance for maintaining contract files or its quality assurance principles. For four contracts, complete contract files documenting administration and oversight actions taken were not kept and incoming personnel were unable to determine how contract management and oversight had been performed and if the contractor had performed satisfactorily prior to their arrival. In addition, oversight was not always performed by qualified personnel. For example, quality assurance officials for the linguist contract were unable to speak the language so they could not judge the quality of the contractor's work. Without adequate levels of qualified oversight personnel, proper maintenance of contract files, and consistent implementation of quality assurance principles, DOD may not be able to determine whether contractors are meeting their contract requirements, which raises the potential for waste. DOD used contractors to support contingency operations for several reasons, including the need to compensate for a decrease in force size and a lack of capability within the military services. For example, an Army contract for linguist services had a requirement for more than 11,000 linguists because DOD did not have the needed linguists. According to Army officials, the Army phased out many interpreter positions years ago and did not anticipate a large need for Arabic speakers.

gao_T-RCED-96-115

gao_T-RCED-96-115_0

In 1994, this exposure resulted in motor vehicle accidents at crossings that killed 501 people and injured 1,764 others. The Congress has funded research to develop innovative technologies for improving railroad crossing safety. Many states, particularly those with many railroad crossings, face a dilemma. DOT’s educational initiatives are part of a larger plan to improve railroad crossing safety. The five proposals would (1) change the method used to apportion section 130 funds to the states, (2) use Surface Transportation Program funds to pay local governments a bonus to close crossings, (3) eliminate the requirement for localities to match a portion of the costs associated with closing crossings, (4) establish a $15 million program to encourage the states to improve rail corridors, and (5) use Surface Transportation Program funds to increase federal funding for Operation Lifesaver. Improving Track Safety Under the Federal Railroad Safety Act of 1970, as amended, FRA is responsible for regulating all aspects of railroad safety. In conclusion, safety at highway-railroad crossings, the adequacy of track safety inspections and enforcement, and the safety of passenger cars operated by commuter railroads and Amtrak will remain important issues for Congress, FRA, the states, and the industry to address as the nation continues its efforts to prevent rail-related accidents and fatalities. A recorded menu will provide information on how to obtain these lists.

Why GAO Did This Study GAO provided information on the safety of highway railroad crossings, commuter passenger rails and adequacy of track safety inspections. What GAO Found GAO found that: (1) the leading cause of death associated with the railroad industry involved railroad crossing accidents; (2) about half of rail-related deaths occur because of collisions between trains and vehicles at public railroad crossings; (3) in 1994, 501 people were killed and 1,764 injured in railroad crossing accidents; (4) to improve the safety of railroad crossings, the Department of Transportation (DOT) must better target funds to high-risk areas, close more railroad crossings, install new technologies, and develop educational programs to increase the public's awareness of railroad crossings; (5) DOT plans are costly and will require congressional approval; (6) the Federal Railroad Administration (FRA) is unable to adequately inspect and enforce truck safety standards or direct transportation officials to the routes with the highest accident potential because its database contains inaccurate information; and (7) Congress has directed FRA to establish sufficient passenger car safety standards by 1999.

gao_GAO-13-690T

gao_GAO-13-690T_0

F-35 Program Performance Improved in 2012 The F-35 program made progress in 2012 on several fronts. The F-35 program achieved 7 of its 10 primary objectives in 2012. The F-35 development flight test program also substantially met 2012 expectations with some revisions to original plans. Progress Made in Addressing Key Technical Risks In 2012, the F-35 program also made considerable progress in addressing four areas of technical risk that if left unaddressed could substantially degrade the F-35’s capabilities and mission effectiveness. 3. The program is testing some redesigned structures and planning other modifications. Manufacturing Process Metrics Improved Key manufacturing metrics and discussions with defense and contracting officials indicate that F-35 manufacturing and supply processes improved during 2012. While initial F-35 production overran target costs and delivered aircraft late, the latest data through the end of 2012 shows labor hours decreasing and deliveries accelerating. F-35 Program Still Faces Risks Ensuring that the F-35 is affordable and can be bought in the quantities and time frames required by the warfighter will be of paramount concern to the Congress, U.S. military and international partners. As we recently reported, the acquisition funding requirements for the United States alone are currently expected to average $12.6 billion per year through 2037, and the projected costs of operating and sustaining the F-35 fleet, once fielded, have been deemed unaffordable by DOD officials. In addition, the program faces challenges with software development and continues to incur substantial costs for rework to fix deficiencies discovered during testing. As testing continues additional changes to design and manufacturing processes will likely be required, while production rates continue to increase. While most of the aircraft’s software code has been developed, a substantial amount of integration and test work remain before the program can demonstrate full warfighting capability. As indicated in table 1, DOD continues to incur financial risk from its plan to procure 289 aircraft for $57.8 billion before completing development flight testing. DOD Actions On GAO Recommendations Have Varied, but F-35 Restructuring Was A Positive Step We have reported on F-35 issues for over a decade and have found that the magnitude and persistence of the program’s cost and schedule problems can be largely traced to (1) decisions at key junctures made without adequate product knowledge; and (2) a highly concurrent acquisition strategy that significantly overlapped development, testing, and manufacturing activities. DOD has implemented our recommendations to varying degrees. Although DOD disagreed with our recommendation at the time, it has since restructured the F-35 program and, among other things, deferred the production of hundreds of aircraft into the future, thus addressing the intent of our recommendation and reducing program risk. Ensuring overall affordability will be a challenge as more austere budgets are looming. length aircraft unit cost Key program event $55.2 Billion 18 years The program established a new acquisition program baseline and approved the continuation of system development, increasing costs for development and procurements and extending the period of planned procurements by 2 years. GAO-13-309. GAO-10-382. Tactical Aircraft: Opportunity to Reduce Risks in the Joint Strike Fighter Program with Different Acquisition Strategy.

Why GAO Did This Study The F-35 Lightning II, the Joint Strike Fighter, is DOD’s most costly and ambitious aircraft acquisition. The program is developing and fielding three aircraft variants for the Air Force, Navy, Marine Corps, and eight international partners. The F-35 is critical to long-term recapitalization plans as it is intended to replace hundreds of existing aircraft. This will require a long-term sustained funding commitment. Total U.S. investment is nearing $400 billion to develop and procure 2,457 aircraft through 2037. Fifty-two aircraft have been delivered through 2012. The F-35 program has been extensively restructured over the last 3 years to address prior cost, schedule, and performance problems. DOD approved a new acquisition program baseline in March 2012. This testimony is largely based on GAO’s recently released report, G AO-13-309. This testimony discusses (1) progress the F-35 program made in 2012, and (2) major risks that program faces going forward. GAO’s work included analyses of a wide range of program documents and interviews with defense and contractor officials. What GAO Found The new F-35 acquisition baseline reflects positive restructuring actions taken by the Department of Defense (DOD) since 2010, including more time and funding for development and deferred procurement of more than 400 aircraft to future years. Overall, the program progressed on several fronts during 2012 to further improve the current outlook. The program achieved 7 of 10 key management objectives and made substantial progress on one other. Objectives on aircraft deliveries and a corrective management plan were not met. The F-35 development test program substantially met expectations with some revisions to flight test plans and made considerable progress addressing key technical risks. Software management practices and some output measures improved, although deliveries to test continued to lag behind plans. Manufacturing and supply processes also improved--indicators such as factory throughput, labor efficiency, and quality measures were positive. While initial F-35 production overran target costs and delivered aircraft late, the latest data shows labor hours decreasing and deliveries accelerating. Going forward, the F-35 program still faces considerable challenges and risks. Ensuring that the F-35 is affordable and can be bought in the quantities and time required by the warfighter will be a paramount concern to the Congress, DOD, and international partners. With more austere budgets looming, F-35 acquisition funding requirements average $12.6 billion annually through 2037 (see below). Once fielded, the projected costs of sustaining the F-35 fleet have been deemed unaffordable by DOD officials; efforts to reduce these costs are underway. Software integration and test will be challenging as many complex tasks remain to enable full warfighting capability. The program is also incurring substantial costs for rework-currently projected at $1.7 billion over 10 years of production-to fix problems discovered during testing. With about two-thirds of development testing still to go, additional changes to design and manufacturing are likely. As a result, the program continues to incur financial risk from its plan to procure 289 aircraft for $57.8 billion before completing development flight testing. What GAO Recommends GAO’s prior reviews of the F-35 made numerous recommendations to help reduce risk and improve outcomes. DOD has implemented those recommendations to varying degrees.

gao_GAO-08-1073

gao_GAO-08-1073_0

SBIRS is to replace the existing infrared system, the Defense Support Program, which has provided early missile warning information since the 1970s. These difficulties have led DOD to restructure the program multiple times, including revising program goals in 2002, 2004, and 2005. By April 2007, in additional tests, the number of problems escalated well beyond what was expected. DOD Is Taking Steps to Mitigate Software Problems, Including Initiatives to Improve Program Oversight To mitigate the software problems, DOD has assessed various alternatives and developed an approach for implementing the software redesign effort and overseeing its development. DOD and the SBIRS contractor are taking steps to address problems, among others, with the original software architecture. DOD has redesigned the architecture, and is in the midst of developing additional software, and testing elements critical to the integration and test of systems. DOD has also undertaken several initiatives to improve its program oversight and to help it better manage the development, including addressing weaknesses in program management responsibility, accountability, and other areas. DOD’s Plan for Resolving the Software Problem Is Optimistic While DOD has estimated that the SBIRS program will be delayed by 15 months and cost $414 million to resolve the software problems, those estimates appear too optimistic, given the cost and schedule risks involved. For example, SBIRS contractors’ report low confidence that software can be produced in time to meet the December 2009 satellite launch goal. Finally, as of August 2008, DOD reported that SBIRS was already behind schedule on some software development efforts, and thousands of activities remain that must be integrated and tested across various systems, with cost and schedule implications, if problems or unintended consequences occur. Major Challenge and Risks to the Redesign and Development Effort Still Exist Based on an April 2008 review of the revised software designs and software development approach, the independent review teams— comprised of personnel from the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics; Aerospace Corporation; Lockheed Martin Corporate; Air Force Space and Missiles Systems Center Wing; and the Software Engineering Institute—concluded that the program should proceed with formal software coding, but also expressed concern about the ambitious schedule. Specifically, the review teams cited the program’s aggressive schedule as a major challenge because it allows “little margin for error” and concluded the program faces high risk of not meeting the schedule. These deviations from the disciplined development process allowed the program to shortcut important processes in order to meet the ambitious schedule goal, rather than follow a disciplined process to develop software. Recommendations for Executive Action To better ensure that SBIRS can meet the cost and schedule goals for resolving the flight software problems as well as launch the first satellite on schedule, we recommend that the Secretary of Defense revise the cost and schedule estimates based on more realistic assumptions to increase the confidence of success, and require that the contractor make adherence to disciplined software practices a priority to reduce program risk. As indicated in our report, SBIRS has been restructured several times because it underestimated the technical complexity and inherent challenges associated with software, among other technical elements.

Why GAO Did This Study In 1996, DOD initiated the Space Based Infrared System (SBIRS) to replace the nation's current missile detection system, and to provide expanded missile warning capability. Since then, SBIRS has been restructured several times to stem cost increases and schedule delays, including revising program goals in 2002, 2004, and 2005. These actions were partly due to the challenges of developing sophisticated technologies and software. In 2007, SBIRS had a major setback when flight software for the first satellite underwent testing and failed, a failure caused by design issues. DOD developed a plan for resolving these issues, and revised its cost and schedule goals. GAO has assessed (1) the approach used to mitigate the problems, and (2) the cost and schedule risks and challenges of that approach. To conduct our work, GAO has contacted, met with, and performed detailed work at numerous DOD and contractor offices; and reviewed technical documents on flight software. What GAO Found To mitigate the SBIRS flight software problems, DOD has assessed various alternatives and developed a way to implement the software redesign and oversee its development. In April 2008, DOD approved the redesign effort, which addressed problems with the original design that affected the timing of stored programs, distribution of control between processors, and failure at the hardware interface level. Six review teams comprised of 70 personnel in all evaluated the designs to ensure the technical solutions, development approach, and readiness of test facilities were adequate. DOD and its contractor are now implementing the simplified architecture, developing new software, and testing elements critical to the integration and test of systems. DOD is also improving its program oversight and better managing the SBIRS development, by acting on the recommendations of an Independent Program Assessment; addressing weaknesses in management responsibility, accountability and organizational structure; and establishing a central execution team. DOD has estimated that the SBIRS program will be delayed by 15 months and cost $414 million in funding to resolve the flight software problems, but these estimates appear optimistic. For example, confidence levels--based on the program's ability to develop, integrate, and test software in time to meet the schedule goal--have been assessed as low. Further, the review teams who approved the designs to start coding software report that the program's aggressive schedule is a major challenge because it allows "little margin for error." DOD has also introduced risk by granting waivers to streamline the software development processes to meet the aggressive schedule. These allow the program to deviate from disciplined processes in order to compress the schedule and meet the goal. In addition, some software elements are behind schedule, and thousands of software activities and deliverables remain to be integrated. Delay by these other programs could create unintended consequences for the SBIRS launch goal. If DOD should need additional time or encounter problems beyond what was planned for, more funds will be needed and launch of the first satellite in December 2009 could be jeopardized.

gao_GAO-08-886T

gao_GAO-08-886T_0

Bureau Has Taken Important Steps in Planning for a Paper- based Nonresponse Follow-up Operation, But Much Remains Uncertain On May 8, 2008 the Bureau issued its plans for conducting the 2010 Census paper-based nonresponse follow-up operation outlining key operational decisions. Among these is the need to develop an information system to manage the workload for a paper-based nonresponse follow-up operation and for additional field infrastructure, such as more telephones and computers to support this operation, to restructure the replacement mailing and the removal of late mail returns from the nonresponse follow- up workload, as well as the need for cognitive testing of the enumerator questionnaire used to collect data from nonrespondents. Officials said that they expect to review computer screen shots of the operations control system reports it will use to manage the nonresponse follow-up operation in January 2009; however, the Bureau has not yet determined when and how testing of the operations control system before nonresponse follow-up, which begins in April 2010, will occur. Consequently, depending on time and cost considerations, Bureau officials believe that the Bureau must conduct, at a minimum, a small scale simulation of the integration and communication between the Decennial Response Integration System and FDCA for such aspects as load testing for a paper-based operation, and interfaces such as when the paper is processed by the Decennial Response Integration System and when the check-in status is transmitted to individual local census offices through management reports processed by the FDCA program. The Bureau’s plans for nonresponse follow-up will also require changes in local census office infrastructure. The Bureau’s redesign has also changed the replacement mailing strategy which will be used in 2010. Prior to the redesign, the Bureau planned to send second mailings to all nonresponding households that initially received the census form in the mail. Not being able to test the paper-based nonresponse follow-up in the 2008 Dress Rehearsal introduces risk because the dress rehearsal will no longer be a dry-run of the decennial census. While the Bureau has carried out a paper-based follow-up operation in the past, there are now new procedures and system interfaces that, as a result of its exclusion from the dress rehearsal, will not be tested under census-like conditions. Bureau Has Improved Program Management and Oversight, but Cost Estimates Need Timely Reconciling The Bureau has taken steps to strengthen the FDCA program office leadership and expertise. The Bureau has also hired an outside IT expert, to provide advice and guidance to the FDCA program office. The Bureau has also implemented key activities to help improve management and transparency of contractor activities. The Bureau has obtained cost estimates for FDCA from both Harris and MITRE, based on the recent changes to the scope of the program. MITRE’s estimate is about $726 million, which is nearly $600 million less than the contractor’s rough order of magnitude estimate. The Bureau needs to act swiftly to finalize the FDCA program’s cost estimate and renegotiate the contract. In moving forward, it is important that the Bureau exercise diligence in finalizing the contract terms to ensure that the FDCA program is conducted in a timely and efficient manner for the 2010 decennial. Bureau’s Integrated Schedule Identified Activities and Associated Milestones but Did Not Address Risks and Costs The Bureau designed its 2010 Census Integrated Schedule, dated May 22, 2008, to provide information on its schedule framework and activity-level design as well as to describe the program complexity and methods that the Bureau will use to manage the 44 interdependent operations, incorporating over 11,000 unique activities, to conduct the 2010 Census. Nor does the schedule include a milestone for when testing of key activities related to nonresponse follow-up will take place. This is despite the fact that this represents the single largest field operation and will not be part of a dress rehearsal. The Bureau does recognize that it could include in its high-level summary schedule a key milestone for nonresponse follow-up testing activities. We are currently reviewing in greater detail the summary and integrated schedule of milestones and the recently revised program-level risk document provided on June 4, 2008.

Why GAO Did This Study On April 3, 2008, the Secretary of Commerce announced significant changes to how the Census Bureau (Bureau) would conduct nonresponse follow-up, its largest field operation, in which census workers interview households that do not return initial census forms for the 2010 decennial census, and to its Field Data Collection Automation (FDCA) contract. The Bureau has since issued a redesigned plan to conduct a paper-based follow-up operation, an integrated 2010 Census project schedule, and is working on revising the FDCA contract. These are major changes late in the decennial census cycle. This testimony discusses (1) the Bureau's plans for conducting a paper-based nonresponse follow-up operation, (2) management of the FDCA contract and its latest cost estimates, and (3) the status of the Bureau's integrated 2010 project schedule. This testimony is based on past work, recent interviews with Bureau officials, and a review of redesign documents. What GAO Found The Bureau has taken important steps to plan for a paper-based nonresponse follow-up operation, but several aspects remain uncertain. On May 8, 2008, the Bureau issued a paper-based nonresponse follow-up plan that details key components of the operation and describes processes for managing it and other operations. However, the plan envisions using an information system to manage the field operation workload, which experienced significant problems when tested earlier in the dress rehearsal. These problems make it more critical to test the system's capabilities for supporting the nonresponse follow-up operation. The Bureau will also institute new strategies--through second mailings and a new approach to remove late mail returns--but has only tested some aspects of these operations and will be unable to test them in a dress rehearsal, making it difficult to estimate their impact on operations in 2010. Ideally, the dress rehearsal should test almost all of the operations and procedures planned for the decennial under as close to census-like conditions as possible. Bureau officials expect that some small-scale testing will occur, particularly integration testing for its operations control system and cognitive testing of the forms used by enumerators for nonresponse follow-up, but what will be tested and when is not yet certain. The Bureau has taken several positive steps to address FDCA program management and oversight, but cost estimates need reconciling. The Bureau has taken actions to strengthen the FDCA program office leadership and expertise. To lead the program office, the Bureau has assigned an experienced Census program manager and hired an outside information technology expert to provide executive level guidance. The Bureau has also taken actions to improve communications and transparency of contractor activities. Further, the Bureau has obtained an independent government cost estimate based on the changes to the FDCA program's scope, which is nearly $600 million less than the contractor's rough order of magnitude estimate. After the contractor develops its detailed cost estimate, then the Bureau will need to reconcile the two cost estimates and renegotiate the contract. The Bureau will need to ensure that the final contract modifications and terms allow for FDCA program activities to be conducted in a timely and accurate manner for the 2010 decennial census. The Bureau's integrated schedule, dated May 22, 2008, identifies over 11,000 activities and milestones for the census. There is overlap in the testing and deployment schedule for the handheld device that will be used to collect address data in the field. Further, the Bureau's summary of key milestones does not include a milestone for when testing of key activities related to nonresponse follow-up will take place. Such milestones are important because nonresponse follow-up is the single largest field operation and will not be part of a dress rehearsal. The Bureau recognizes that it could include a key milestone for nonresponse follow-up testing activities. GAO is reviewing in greater detail the summary and integrated schedule of milestones and a summary of program risks provided on June 4th.

gao_GAO-04-308

gao_GAO-04-308_0

For in-school youth, local boards provided summer employment services linked to classroom learning more often than for out-of-school youth, while services for this latter population more often included occupational skills training and supportive services. Local boards reported that most youth received services primarily from community organizations and educational institutions. Labor reported that with some exceptions, states chose to focus the majority of resources on in- school youth, and our survey showed that about 81 percent of local areas served more in-school youth than out-of-school youth. Nationally, about 70 percent of youth served were in school, according to local boards we surveyed. According to officials in four states that we visited, WIA youth programs primarily targeted in-school youth because recruiting and retaining out-of- school youth for the WIA program was much more difficult and expensive. Over half of local boards nationwide used providers that did not deliver all services themselves, using formal or informal subcontracting arrangements to provide the range of services needed. The extent that providers coordinated with others to deliver services was related to the number of youth served in the local area. Labor’s Guidance Has Not Fully Addressed Implementation Challenges Faced by Local Areas Local areas continue to face challenges in implementing aspects of the WIA youth program despite guidance issued by Labor. We also had difficulty accessing and using the Web site to find information. Lack of Program Evaluations and Questionable Performance Data Prevent Assessments of WIA Youth Program Little is known about the effectiveness of the WIA youth program because Labor has not yet initiated an impact evaluation, and results from a planned evaluation will likely not be available until 2009, according to Labor officials. They believed that poor performance levels were due to problems with its information system, not its workforce development system. In the first year, states will be required to validate their annual reports and data submissions for the program year 2002 period. While the data validation initiative may improve the reliability of WIA performance data, several implementation concerns remain. To assist state and local WIA youth programs address ongoing implementation challenges, we recommend that the Secretary of Labor increase availability of guidance and technical assistance to local areas that continue to face challenges in serving out-of-school youth; disseminate guidance, including specific strategies, to help local areas provide effective mentoring services; and develop additional guidance on providing follow-up services and using interim measures to track program performance.

Why GAO Did This Study The Workforce Investment Act (WIA) has been in effect for several years and is currently undergoing reauthorization. In order to provide the Congress with information on the implementation and effectiveness of the WIA youth program, GAO was asked to explore how services have been delivered at the local level, whether the Department of Labor's guidance has addressed challenges faced by local areas, and how effective the program has been. What GAO Found Local areas primarily used the WIA program for dropout prevention and other efforts to improve academic achievement for in-school youth. Nationally, about 70 percent of youth served were in school, but percentages ranged from 38 to 86 percent by state. Officials in the five states GAO visited said that they focused on in-school youth because serving out-of-school youth was much more difficult and expensive, and less effective. Local areas emphasized learning-related summer employment for in-school youth and occupational skills training and supportive services for out-of-school youth. Over half of local boards nationwide used providers that had subcontracting arrangements with others to deliver youth services. The majority of youth were served primarily from educational institutions and community organizations. Despite Labor's guidance, local areas continue to face implementation challenges in identifying and retaining out-of-school youth, providing youth with mentoring and follow-up services, and using interim measures for ongoing program assessment. While Labor supports information exchange forums, a promising practices Web site, and technical assistance, some local areas may have difficulties gaining access to and using these resources. Little is known about the effectiveness of the WIA youth program because Labor has not yet conducted an impact evaluation. In addition, while the youth program exceeded most of its performance goals, these data were questionable because of problems with state information systems and inadequate oversight of data quality. While states will be required to verify data, concerns remain about their ability to fully implement the requirement and Labor's ability to monitor implementation consistently.

gao_GAO-14-728T

gao_GAO-14-728T_0

Background Located in FAA’s Office of Aviation Safety (Aviation Safety), the Aircraft Certification Service (Aircraft Certification) and Flight Standards Service (Flight Standards) issue certificates and approvals for new aviation products to be used in the national airspace system as well as for new operators in the system, such as air carriers, based on federal aviation regulations (see fig. Attempts have been made to provide FAA with additional funding from industry stakeholders for processing certifications and approvals. Most FAA Initiatives to Improve Its Aircraft Certification and Approval Process Are on Track In May 2012, the Certification Process Committee made six recommendations to Aircraft Certification to streamline and reengineer the product certification and approval processes, improve efficiency and effectiveness within Aircraft Certification, and redirect resources for support of certification. In August 2012, FAA reported its plan to Congress for addressing the Certification Process Committee’s recommendations, and, in July 2013, the agency issued an implementation plan with 14 initiatives. Most Initiatives Are on Track for Meeting Planned Completion Milestones Since the January update, Aircraft Certification has continued its efforts to address the recommendations to improve its certification and approval processes and is implementing the 14 initiatives. These initiatives touch on various aspects of Aircraft Certification’s work and, according to FAA several predate the committee’s recommendations and were part of on- going continuous efforts to address long-standing certification issues and to improve the certification process. The initiatives range from developing a comprehensive road map for major change initiatives, to improving the project sequencing process, to reorganizing the small aircraft certification regulation. Some Initiatives Will Not Meet or Are at Risk of Not Meeting Planned Milestones Although most initiatives are on track, according to FAA’s May 2014 interim update, 2 of the 14 initiatives will not meet planned milestones: Improve effectiveness of the ODA program: FAA and two aviation industry groups—the Aerospace Industries Association and General Aviation Manufacturers Association—developed a plan to improve the effectiveness of the ODA process, which is used to authorize organizations to act on behalf of FAA in conducting some safety certification work. According to FAA’s May 2014 update, 1 of the 14 initiatives was at risk of not meeting planned milestones, which increases the risk that FAA will miss its established implementation time frames for the initiative for addressing its associated recommendation. However, Aircraft Certification is relying on Flight Standards to complete the implementation plan for addressing the recommendations. For the third phase, working with the Aerospace Industries Association, FAA plans to develop metrics for measuring the global return on investment in implementing all of the initiatives, to the extent that such measurement is possible. FAA Has Made Some Progress in Addressing Recommendations to Improve the Consistency of Its Regulatory Interpretations, but Details Are Unclear Unlike FAA’s efforts to improve the certification process, although FAA has made some progress towards addressing the regulatory consistency recommendations, the details remain unclear about how FAA will structure its efforts. In July 2013, FAA reported to Congress on its plans for addressing the regulatory consistency recommendations, and included its preliminary plan for determining the feasibility of implementing these recommendations. A Master Source Guidance System The Regulatory Consistency Committee recommended that Aircraft Certification and Flight Standards (1) review all guidance documents and interpretations to identify and cancel outdated material and electronically link the remaining materials to its applicable rule, and (2) to consolidate Aircraft Certification’s and Flight Standards’ electronic guidance libraries into a master source guidance system, organized by rule, to allow FAA and industry users access to relevant rules and all active and superseded guidance material and related documents. FAA officials also discussed the agency’s conceptual approach and plans for establishing a board—likely by the end of calendar year 2014—to address these two recommendations. In this final section of this testimony, we discuss challenges for FAA in implementing the committees’ certification and approval and regulatory consistency recommendations that relate to these key practices. Commitment to Cultural Change FAA and industry representatives also cited FAA’s organizational culture as a primary challenge for FAA in successfully implementing these initiatives. As we have previously found, the implementation of recommendations that require a cultural shift for employees can be delayed if the workforce is reluctant in accepting such change. Setting Performance Measures FAA has not fully developed performance metrics to ensure that any initiatives it implements are achieving their intended outcomes. We have previously found that agencies that have been successful in assessing performance use measures that demonstrate results and provide useful information for decision making.that FAA had not completed developing performance measures for either the certification improvement or the regulatory consistency initiatives: Earlier in this testimony, we reported FAA had developed performance measures for 5 of the 14 certification process initiatives as of May 2014 and plans to further develop measures in three phases. Going forward, it is critically important that FAA develop outcome-based performance measures to determine what is actually being achieved through the current and future initiatives, thereby making it easier to determine the overall outcomes of each of the initiatives and to hold FAA’s field and headquarters offices and employees accountable for the results.

Why GAO Did This Study Among its responsibilities for aviation safety, FAA issues certificates for new aircraft and parts, and grants approvals for changes to air operations and aircraft, based on federal aviation regulations. Various studies, GAO's prior work, and industry stakeholders have raised questions about the efficiency of FAA's certification and approval processes, as well as the consistency of its staff in interpreting aviation regulations. Over time, FAA has implemented efforts to address these issues, but they persist as FAA faces greater industry demand and its overall workload has increased. The 2012 FAA Modernization and Reform Act required FAA to work with industry to resolve these issues. In response, FAA chartered two committees—one to address certification and approval processes and another to address regulatory consistency—which recommended improvements in 2012. In 2013, FAA published an implementation plan for addressing the certification and approval process recommendations and promised to publish an implementation plan for addressing the regulatory consistency recommendations at a later date. This testimony provides information on FAA's progress in implementing the (1) certification and approval process recommendations and (2) regulatory consistency recommendations. It also discusses future challenges industry stakeholders believe FAA will face in implementing these recommendations. This testimony is based on GAO products issued from 2010 to 2014, updated in July 2014 through reviews of recent FAA and industry documents and interviews of FAA officials and industry representatives. What GAO Found The Federal Aviation Administration's (FAA) Aircraft Certification Service (Aircraft Certification) is responsible for addressing the certification and approval process recommendations, and has made progress. Aircraft Certification is implementing and has set milestones for completing 14 initiatives, several of which were originally begun as part of earlier certification process improvement efforts. The initiatives range from developing a comprehensive road map for major change initiatives, to improving Aircraft Certification's process for prioritizing requests for certifications and approvals (project sequencing), to reorganizing the small aircraft certification regulation. According to an update prepared by FAA in May 2014, one initiative has been completed and most are on track to be completed within 3 years. However, according to this update, two initiatives will not meet planned milestones, including the one for improving FAA's program for delegating authority to organizations to carry out some certification activities. Also, a third initiative for improving consistency of regulatory interpretation was at risk of not meeting planned milestones. Two additional initiatives, while on track for meeting planned milestones in May 2014, faced challenges because of opposition by FAA's labor unions, including one for improving Aircraft Certification's project sequencing process. GAO found in October 2013 that Aircraft Certification continued to lack performance measures for many of these initiatives, a condition that persists. In 2010, GAO had previously recommended that FAA develop a continuous evaluative process with performance goals and measures. FAA agreed but has not yet fully addressed the recommendation. Aircraft Certification officials discussed plans to develop metrics in three phases, beginning in July 2014 and in the future, for measuring (1) the progress of implementing the initiatives throughout FAA, (2) the outcomes of each initiative, and (3) the return on investment for FAA and the industry resulting from implementing the initiatives as a whole. FAA's Flight Standards Service (Flight Standards) is responsible for addressing the regulatory consistency recommendations, is finalizing plans to do so. FAA has not published a detailed plan with milestones and performance metrics, and officials told GAO that they intend to publish a plan by August 2014. Flight Standards officials said they were making progress in addressing the committee's top priority recommendation—mapping all FAA policy and guidance to relevant federal aviation regulations and developing an electronic system that maintains this information and that is accessible by FAA and industry users. As part of this effort, officials told GAO that Flight Standards has begun eliminating obsolete guidance and linking existing policy and guidance to the regulations. Going forward, Aircraft Certification's and Flight Standards' efforts may face challenges that could affect successful implementation of the committees' recommendations. Many of these recommendations represent a significant shift in how FAA normally conducts business, and if the workforce is reluctant to implement such changes, FAA's planned initiatives for addressing the recommendations could be delayed. Also, the fact that FAA has not yet implemented performance measures for most of the initiatives is a concern for both GAO and the industry. As GAO concluded in October 2013, without performance measures, FAA will be unable to gather the appropriate data to evaluate the success of current and future initiatives.

gao_NSIAD-96-82

gao_NSIAD-96-82_0

However, the Air Force has not demonstrated that these benefits are compelling. Decision to Reduce Squadrons Was Not Based on Analysis The Air Force’s reduction in squadron size was neither evaluated in a systematic manner, nor supported by documented studies. Consolidating Fighter Squadrons Could Reduce Costs Organizing the fighter force into 24-aircraft squadrons reduces the total number of squadrons and results in more economical operations than squadrons of 18 aircraft. Feasible Alternatives Exist for Increasing Squadron Size The Air Force could modify its current configuration of fighter aircraft in a more cost-effective manner to increase the number of squadrons with 24 aircraft. This modification would entail consolidating some existing F-15 and F-16 squadrons with other squadrons to better maximize base utilization. These officials stated that because their bases previously had 24 aircraft per squadron and facilities were sized for 24 aircraft, returning to 24 would be little to no problem. These factors include keeping aircraft with the same state of modernization and mission characteristics together. The alternative of consolidating fighter squadrons worldwide would consolidate the F-15 and F-16 aircraft into 7 fewer squadrons than the Air Force currently plans and increase 17 squadrons to 24 aircraft and 2 squadrons to 30 aircraft. This alternative could save the Air Force a projected $115 million annually. Table I.4 compares the Air Force’s planned basing with alternative four. Comments From the Department of Defense Objectives, Scope, and Methodology The objective of this review was to evaluate the cost-effectiveness of operating the fighter forces in smaller squadron sizes and the implications this might have on the Secretary of Defense’s efforts to reduce defense infrastructure.

Why GAO Did This Study GAO reviewed the cost-effectiveness of the Air Force's reconfiguration of F-15 and F-16 fighters into smaller squadrons, focusing on the consequences this might have on the Secretary of Defense's efforts to reduce defense infrastructure costs. What GAO Found GAO found that: (1) while smaller 18-aircraft squadrons provide more deployment flexibility than 24-aircraft squadrons, the larger configuration provides enough deployment flexibility to meet the Air Force's needs; (2) the ability of squadron commanders to manage the personnel and tasks of 24-aircraft squadrons has not proved to be a problem; (3) the Air Force's decision to reduce squadron size from 24 to 18 aircraft was not based on organized analysis or documented studies; (4) using 24-aircraft squadrons instead of 18-aircraft squadrons could reduce costs; (5) by consolidating some existing F-15 and F-16 squadrons with other squadrons to better maximize base utilization, the Air Force could cost-effectively increase the number of 24-aircraft squadrons; (6) all 18-aircraft squadrons could return to their original size of 24 aircraft with little or no effort and expense; (7) if the Air Force consolidates its squadrons, it should keep aircraft with the similar modernization, mission characteristics, and engine types together; and (8) at least four alternatives exist to consolidate the Air Force's squadrons that could save between $25 million and $115 million annually.

gao_GAO-16-165

gao_GAO-16-165_0

Time Frames for Approving Plans Ranged from About 1 Month to Over 11 Years and Averaged 2 Years, with 19 Percent of Approved Mines Not Yet Operational Due to Various Factors The average length of time it took BLM and the Forest Service to complete the first three steps of the mine plan review process and approve 68 mine plans from fiscal years 2010 through 2014 was approximately 2 years. Of the 68 mine plans that BLM and the Forest Service approved over this period, 13 (19 percent) have not begun operations as of November 2015, according to the agencies’ data. BLM and Forest Service Officials in Our Review Experienced 13 Key Challenges That Affected the Time Needed to Review Mine Plans and Have Taken Some Actions but Could Do More BLM and Forest Service officials we interviewed in the 23 offices (19 BLM and 4 Forest Service) we selected for our review said they have experienced one or more of the 13 key challenges we identified that affected the length of time to review the hardrock mine plans approved from fiscal years 2010 through 2014 (see table 4). BLM and Forest Service officials said they have taken actions to address the two most frequently cited key challenges—the low quality of information operators provided in their mine plans and the agencies’ limited allocation of resources for their hardrock mining programs—but the agencies could do more. To address the limited allocation of resources, BLM and Forest Service officials are leveraging existing resources, but the agencies could more fully use their authorities to collect fees and possibly expedite the time it takes to review hardrock mine plans. However, some BLM and Forest Service officials in other states do not always meet with operators prior to their mine plan submittals to help mine operators to improve the quality of information in their mine plans. As a result, use of these meetings varies among BLM offices. Federal standards for internal control state that management should ensure there are adequate means of communicating with, and obtaining information from, external stakeholders that may have a significant impact on the agency achieving its goals. Without taking further actions to improve the quality of mine plan submissions by, for example, developing specific guidance to encourage offices to hold pre-mine plan submittal meetings whenever possible, BLM and the Forest Service may be missing opportunities to help expedite the mine plan review process. For example, BLM has worked to leverage existing resources by collaborating with other agencies, such as by requesting assistance from U.S. Further, the IOAA’s implementing guidance—Office of Management and Budget Circular A-25—notes that legislative proposals to permit fees to be retained by the agency may be appropriate. Without establishing fees for reviewing mine plans and the authority to retain these fees, the Forest Service may be missing opportunities to leverage additional revenue to bolster its resources to review hardrock mine plans. In addition, we recommend that the Secretary of the Interior direct the Director of BLM to take actions to improve the quality of mine plan submissions by, for example, developing guidance for mine operators and agency field officials that instructs them to hold pre-plan submittal meetings whenever possible; issue a rule that assesses fees associated with reviewing hardrock mine plans that involve conducting environmental assessments; and create new codes in its LR2000 database distinguishing between different types of mine plans to help track the length of time to complete the mine plan review process. Appendix I: Scope and Methodology This report examines (1) the number of mine plans the Bureau of Land Management (BLM) and the Forest Service approved from fiscal years 2010 through 2014, the time it took these agencies to complete the mine plan review process, and the extent to which these agencies track this process; and (2) the challenges, if any, that have affected the length of time for BLM and the Forest Service to complete the review process, and the actions, if any, these agencies have taken to address these challenges. We selected locations in each of the 12 western states where hardrock mining occurs.

Why GAO Did This Study The Mining Law of 1872 encouraged development of the West by opening up federal land to exploration, extraction, and development of hardrock minerals such as gold, silver, and copper. Because mining creates the potential for serious health, safety, and environmental hazards, BLM and the Forest Service have processes for reviewing mine plans submitted by operators to help prevent and mitigate these hazards. A mine plan details the proposed mine's operations, such as the methods for mining and reclaiming the site once operations have concluded. GAO was asked to assess the mine plan review process. This report examines (1) the number of mine plans BLM and the Forest Service approved from fiscal years 2010 through 2014, among other things, and (2) challenges that have affected the length of time for BLM and the Forest Service to complete the review process, as well as actions these agencies have taken to address these challenges. GAO obtained and analyzed mine plan review data from fiscal years 2010 through 2014, and interviewed agency officials in 23 offices, representing the 12 western states where hardrock mining occurs. The results are not generalizable to all locations conducting mine plan reviews. What GAO Found From fiscal years 2010 through 2014, the Department of the Interior's Bureau of Land Management (BLM) and the Department of Agriculture's Forest Service approved 68 mine plans of operation. The length of time it took the agencies to approve the mine plans ranged from about 1 month to over 11 years, and averaged approximately 2 years. Of the 68 approved mine plans, 13 had not begun operations as of November 2015. Agency officials attribute this to difficulties mine operators may face, such as obtaining other required federal and state permits. BLM and Forest Service officials GAO interviewed said they experienced 13 key challenges that affected the length of time to review hardrock mine plans. The two most frequently cited were (1) the low quality of information operators provided in their mine plans and (2) the agencies' limited allocation of resources for their hardrock mining programs. To address the low quality of information in mine plans, some BLM and Forest Service officials held pre-mine plan submittal meetings with operators. However, officials do not always do so because BLM does not have specific guidance on how to implement these meetings, and Forest Service does not have any guidance instructing them to do so. Federal standards for internal control state that management should ensure there are adequate means of communicating with, and obtaining information from, external stakeholders that may have a significant impact on the agency achieving its goals. Without taking further actions to improve the quality of mine plan submissions, BLM and the Forest Service may be missing opportunities to help expedite the review process. To address the limited allocation of resources, BLM and Forest Service officials are leveraging existing resources by collaborating with other agencies, among other actions, but neither agency has fully used its authority to collect fees for conducting mine plan reviews as authorized by law. In addition, Forest Service is not authorized to retain these fees, as BLM is, but has not proposed the legislative changes that would allow it to retain fees, as is suggested by Office of Management and Budget guidance. BLM officials said the agency has not prioritized cost recovery for certain types of environmental analyses, and Forest Service officials were unaware of these authorities. By not using these authorities, BLM and Forest Service may be missing opportunities to expedite the mine plan review process. What GAO Recommends GAO recommends, among other things, that the agencies take actions to improve the quality of mine plan submissions and seek additional recovery of the costs associated with conducting mine plan reviews. The agencies generally concurred with these recommendations.

gao_GAO-09-909T

gao_GAO-09-909T_0

Coordination Mechanisms Mechanisms and networks for collaboration and coordination on pandemic preparedness between federal and state governments and the private sector exist, but they could be better utilized. Efforts Are Underway to Improve the Surveillance and Detection Of Pandemic-Related Threats, but Targeting Assistance to Countries at the Greatest Risk Has Been Based on Incomplete Information International disease surveillance and detection efforts serve as an early warning system that could prevent the spread of an influenza pandemic outbreak. Federal Workforce Pandemic Planning The National Pandemic Implementation Plan required federal agencies to develop operational plans for protecting their employees and maintaining essential operations and services in the event of a pandemic. Other state and local officials have identified similar concerns. Further Actions Are Needed to Address the Capacity to Respond to and Recover from an Influenza Pandemic Improving the nation’s response capability to catastrophic disasters, such as an influenza pandemic, is essential. An outbreak will require additional capacity in many areas, including the procurement of additional patient treatment space and the acquisition and distribution of medical and other critical supplies, such as antivirals and vaccines for an influenza pandemic. Federal Agencies Have Provided Considerable Guidance and Pandemic-Related Information, but Could Augment Their Efforts The National Pandemic Implementation Plan emphasizes that government and public health officials must communicate clearly and continuously with the public throughout a pandemic. More recently, CDC has issued additional guidance on a number of topics related to responding to the H1N1 outbreak. Performance Monitoring and Accountability for Pandemic Preparedness Needs Strengthening While the National Pandemic Strategy and Implementation Plan identify overarching goals and objectives for pandemic planning, the documents are not altogether clear on the roles, responsibilities, and requirements to carry out the plan. This action would not directly result in developing, testing, and preparing to implement infection control campaigns. In addition, as discussed earlier, the National Pandemic Implementation Plan does not establish priorities among its 324 action items, which becomes especially important as agencies and other parties strive to effectively manage scarce resources and ensure that the most important steps are accomplished. We recently reported, however, that there is no mechanism in place to monitor and report on agencies’ progress in developing these plans. Concluding Observations The current H1N1 influenza pandemic should serve as a powerful reminder that the threat of a more virulent pandemic, which seemed to fade from public awareness in recent years, never really disappeared. While federal agencies have taken action on many of our recommendations, about half the recommendations that we have made over the past 3 years are still not fully implemented. DHS and HHS should also, in coordination with other federal agencies, continue to work with states and local governments to help them address identified gaps in their pandemic planning. While the current H1N1 pandemic seems to be relatively mild, the virus could become more virulent this fall or winter. Given this risk, the administration and federal agencies should use this opportunity to turn their attention to filling in some of the planning and preparedness gaps our work has pointed out, while time is still on our side. Attachment I: Open Recommendations from GAO’s Work on an Influenza Pandemic Influenza Pandemic: Increased Agency Accountability Could Help Protect Federal Employees Serving the Public in the Event of a Pandemic, GAO-09-404, June 12, 2009 The Homeland Security Council should request that the Secretary of Homeland Security monitor and report to the Executive Office of the President on the readiness of agencies to continue their operations while protecting their employees in the event of an influenza pandemic. Attachment II: Related GAO Products Influenza Pandemic: Greater Agency Accountability Needed to Protect Federal Workers in the Event of a Pandemic.

Why GAO Did This Study As the current H1N1 outbreak underscores, an influenza pandemic remains a real threat to our nation. Over the past 3 years, GAO conducted a body of work, consisting of 12 reports and 4 testimonies, to help the nation better prepare for a possible pandemic. In February 2009, GAO synthesized the results of most of this work and, in June 2009, GAO issued an additional report on agency accountability for protecting the federal workforce in the event of a pandemic. GAO's work points out that while a number of actions have been taken to plan for a pandemic, including developing a national strategy and implementation plan, many gaps in pandemic planning and preparedness still remain. This statement covers six thematic areas: (1) leadership, authority, and coordination; (2) detecting threats and managing risks; (3) planning, training, and exercising; (4) capacity to respond and recover; (5) information sharing and communication; and (6) performance and accountability. What GAO Found (1) Leadership roles and responsibilities for an influenza pandemic need to be clarified, tested, and exercised, and existing coordination mechanisms, such as critical infrastructure coordinating councils, could be better utilized to address challenges in coordination between the federal, state, and local governments and the private sector in preparing for a pandemic. (2)Efforts are underway to improve the surveillance and detection of pandemic-related threats, but targeting assistance to countries at the greatest risk has been based on incomplete information, particularly from developing countries. (3) Pandemic planning and exercising has occurred at the federal, state, and local government levels, but important planning gaps remain at all levels of government. At the federal level, agency planning to maintain essential operations and services while protecting their employees in the event of a pandemic is uneven. (4) Further actions are needed to address the capacity to respond to and recover from an influenza pandemic, which will require additional capacity in patient treatment space, and the acquisition and distribution of medical and other critical supplies, such as antivirals and vaccines. (5) Federal agencies have provided considerable guidance and pandemic-related information to state and local governments, but could augment their efforts with additional information on school closures, state border closures, and other topics. (6) Performance monitoring and accountability for pandemic preparedness needs strengthening. For example, the May 2006 National Strategy for Pandemic Influenza Implementation Plan does not establish priorities among its 324 action items and does not provide information on the financial resources needed to implement them. Also, greater agency accountability is needed to protect federal workers in the event of a pandemic because there is no mechanism in place to monitor and report on agencies' progress in developing workforce pandemic plans. The current H1N1 pandemic should serve as a powerful reminder that the threat of a pandemic influenza, which seemed to fade from public awareness in recent years, never really disappeared. While federal agencies have taken action on 13 of GAO's 24 recommendations, 11 of the recommendations that GAO has made over the past 3 years have not been fully implemented. With the possibility that the H1N1 virus could become more virulent this fall or winter, the administration and federal agencies should use this time to turn their attention to filling in the planning and preparedness gaps GAO's work has pointed out.

gao_GAO-05-21

gao_GAO-05-21_0

Also, National Guard personnel have served in a state active duty status in response to natural disasters. National Guard Has Been Adapting to Meet Current Warfighting Requirements, but Readiness Challenges Remain for Future Operations Both at home and overseas, the Army and the Air National Guard have been adapting in several ways to meet the demands of current warfighting requirements, but some of the measures taken may challenge the Army National Guard’s efforts to provide ready forces for future operations. The Air National Guard has also adapted to meet new warfighting requirements, but its readiness has not been as negatively affected because it has not experienced continued high usage as the Army National Guard has and because its units are more fully equipped and manned for war. Army Has Retrained Some Guard Units and Made Other Adjustments To meet the high demand for Army National Guard personnel for recent operations, the Army has alerted or mobilized over one-half of the Army National Guard’s personnel since September 11. By July 2004, the National Guard had initiated over 74,000 personnel transfers to meet the combatant commander’s needs. However, these measures will require additional funding. However, these initiatives are in the early stages of implementation and the extent to which they will alleviate the strain on Army National Guard forces due to the continuing high pace of operations is uncertain. Second, the Air National Guard has not been required to sustain the same high level of activations as the Army National Guard. National Guard Has Supported Homeland Security Needs, but Its Readiness for Future Homeland Missions Is Not Measured While Army and Air National Guard forces have, thus far, supported the nation’s homeland security needs, the Guard’s preparedness to perform homeland defense and civil support missions that may be needed in the future cannot be measured because its role in these missions is not defined, requirements have not been identified, and standards have not been developed against which to measure preparedness. Since September 11, the Guard has performed a number of missions, including flying patrols over U.S. cities and guarding critical infrastructure. However, state and National Guard officials voiced concerns about preparedness and availability of Guard forces as overseas deployments continue at a high pace. DOD plans to publish a comprehensive strategy for the homeland defense. Without this information, policy makers are not in the best position to manage risks to the nation’s homeland security by targeting investments to the highest priority needs and ensuring that the investments are having the desired effect. However, in the post-September 11 environment, Guard forces may be expected to perform missions that differ greatly from their warfighting or traditional state missions and may require different equipment, training, and specialized capabilities than they currently possess. The current demands for large numbers of fully manned and equipped forces to support overseas operations have forced the Guard to transfer personnel and equipment from nondeploying units to deploying units, degrading the readiness of the nondeployed units. This continued decline in readiness of nondeployed units hinders the Army National Guard’s ability to continue to provide the ready forces in the short term that DOD estimates will be needed to meet operational needs over the next 3 to 5 years. Until it has these standards and measures, DOD does not have the means to determine whether the Guard is prepared to meet homeland security needs with its current structure and assets. As DOD completes its homeland defense strategy and the Northern Command refines its concept and operational plans for homeland defense and support to civil authorities and defines requirements, we recommend that the Secretary of Defense direct the Under Secretaries of Defense for Policy and for Personnel and Readiness, in consultation with the Chairman of the Joint Chiefs of Staff, Commander of the U.S. Northern Command, Commander of the U.S. Pacific Command, the Chiefs of the Army and the Air Force, the Chief of the National Guard Bureau, and appropriate officials in the Department of Homeland Security, to take the following four actions: Establish the full range of the National Guard’s homeland missions, including those led by DOD and those conducted in support of civilian authorities. DOD partially agreed with our recommendation that DOD develop and submit to Congress a strategy that addresses the Army National Guard’s short- and long-term needs for the global war on terrorism, including the Army National Guard’s role, missions, and requirements for personnel and equipment, and its plans to manage the risk associated with the declining readiness of nondeployed Army National Guard forces.

Why GAO Did This Study The September 11, 2001, terrorist attacks and the global war on terrorism have triggered the largest activation of National Guard forces since World War II. As of June 2004, over one-half of the National Guard's 457,000 personnel had been activated for overseas warfighting or domestic homeland security missions in federal and state active duty roles. In addition to increased usage, the Guard has also experienced long deployments and high demand for personnel with specific skills, such as military police. The high pace of operations and the Guard's expanded role since September 11 have raised concerns about whether the Guard is capable of successfully performing its multiple missions within existing and expected resource levels, especially given the challenges it faces in meeting future requirements. GAO was asked to assess the extent to which the Guard is: (1) adapting to meet warfighting requirements in the post-September 11 security environment and (2) supporting immediate and emerging homeland security needs. What GAO Found The Army and the Air National Guard have begun adapting their forces to meet new warfighting requirements since the September 11 attacks, but some measures taken to meet short-term requirements have degraded the readiness of nondeployed units, particularly in the Army National Guard. To deploy ready units for overseas missions, the Army National Guard has had to transfer equipment and personnel from nondeploying units. Between September 11, 2001, and July 2004, the Army National Guard had performed over 74,000 personnel transfers. Similarly, as of May 2004, the Army National Guard had transferred over 35,000 equipment items to prepare deploying units, leaving nondeployed Army National Guard units short one-third of the critical equipment they need for war. The Army has developed plans, such as the Army Campaign Plan, to restructure its forces to better prepare them for future missions. However, it has not finalized detailed plans identifying equipment needs and costs for restructuring Guard units. Moreover, the Army is still structured and funded according to a resourcing plan that does not provide Guard units all the personnel and equipment they need to deploy in wartime, so the Army National Guard will be challenged to continue to provide ready units for operations expected in the next 3 to 5 years. The Air National Guard is also adapting to meet new warfighting requirements, but it has not been as negatively affected as the Army National Guard because it has not been required to sustain the same high level of operations. In addition, the Air National Guard generally maintains fully manned and equipped units. While the Army and the Air National Guard have, thus far, also supported the nation's homeland security needs, the Guard's preparedness to perform homeland security missions that may be needed in the future is unknown because requirements and readiness standards and measures have not been defined. Without this information, policy makers are not in the best position to manage the risks to the nation's homeland security by targeting investments to the highest priority needs and ensuring that the investments are having the desired effect. Since September 11, the Guard has been performing several unanticipated homeland missions, such as flying patrols over U.S. cities and guarding critical infrastructure. However, states have concerns about the preparedness and availability of Guard forces for domestic needs and natural disasters while overseas deployments continue at a high pace. The Department of Defense (DOD) plans to publish a comprehensive strategy for homeland security missions that DOD will lead. However, DOD has not reached agreement with multiple federal and state authorities on the Guard's role in such missions. Also, the National Guard Bureau has proposed initiatives to strengthen the Guard's homeland security capabilities. However, many of these initiatives are at an early stage and will require coordination and approval from other stakeholders, such as DOD and the states. In the absence of clear homeland security requirements, the Guard's preparedness to perform missions at home cannot be measured to determine whether it needs additional assets or training.

gao_GAO-10-242

gao_GAO-10-242_0

Medicare pays the difference between these amounts and the cost sharing required by the plans (see fig. CMS also allows plans participating in Part D to use a specialty tier in their formulary for high-cost drugs with negotiated prices exceeding a certain threshold, set at $500 per month in 2007 and $600 permonth in 2008 through 2010. Specialty tier–eligible drugs represent a limited number of drugs used by a small proportion of beneficiaries and commonly include immunosuppressant drugs, those used to treat cancer, and antiviral drugs. In 2007, Specialty Tier–Eligible Drugs Accounted for 10 Percent of Part D Spending and Most of That Spending Was for Prescriptions Filled by LIS Beneficiaries We found that specialty tier–eligible drugs accounted for about 10 percent, or $5.6 billion, of the $54.4 billion in total prescription drug spending under Part D MA-PD and PDP plans in 2007. 4.) While only 8 percent of Part D beneficiaries in MA-PD and PDP plans who did not use specialty tier–eligible drugs reached the catastrophic coverage threshold of the Part D benefit in 2007, 55 percent of beneficiaries who used at least one specialty tier–eligible drug reached the threshold. Differences in Plans’ Cost-Sharing Structures Result in Out-of-Pocket Costs for Non-LIS Beneficiaries That Vary Initially and Then Become Similar, but Different Structures Do Not Significantly Affect Out-of-Pocket Costs for LIS Beneficiaries Based on our review of typical cost-sharing structures, we found that, for non-LIS beneficiaries who use a given specialty tier–eligible drug, different cost-sharing structures can be expected to result in varying out-of-pocket costs during the benefit’s initial coverage period. However, as long as beneficiaries reach the catastrophic coverage threshold in a calendar year—as 31 percent of non-LIS beneficiaries using at least one specialty tier–eligible drug did in 2007—their annual out-of-pocket costs for that drug are likely to be similar regardless of their plans’ cost-sharing structures. For LIS Beneficiaries, Plans’ Cost-Sharing Structures Do Not Significantly Affect Out-of- Pocket Costs LIS beneficiaries’ out-of-pocket costs for all drugs, including specialty tier– eligible drugs, are not significantly affected by different plans’ cost-sharing structures because Medicare has established fixed limits on the cost- sharing amounts for all LIS beneficiaries, regardless of the plans in which they are enrolled. These are variations between drugs, variations across plans for the same drug, and variations from year to year. For example, in 2009—across our sample of 35 plans—non- LIS beneficiaries who took the cancer drug Gleevec for the entire year could have been expected to pay about $6,300 out-of-pocket because Gleevec had an average negotiated price of about $45,500 per year, while beneficiaries could have been expected to pay about $10,500 out-of-pocket over the entire year if they took the Gaucher disease drug Zavesca, which had an average negotiated price of about $130,000 per year. For example, the average negotiated price for a 1-year supply of Gleevec across our sample of plans increased by 46 percent, from about $31,200 in 2006 to about $45,500 in 2009. Correspondingly, the average out-of-pocket cost for a non-LIS beneficiary taking Gleevec for an entire year could have been expected to rise from about $4,900 in 2006 to more than $6,300 in 2009. Plan Sponsors Report Having a Limited Ability to Negotiate Price Concessions for Specialty Tier– Eligible Drugs but Frequently Use Practices to Manage Utilization All of the Part D plan sponsors we interviewed, including the seven that provided price concession data for our sample of specialty tier–eligible drugs, reported having a limited ability to negotiate price concessions with manufacturers of specialty tier–eligible drugs. The reasons they gave included a lack of competitors for many of these drugs, CMS formulary requirements that may limit plan sponsors’ ability to exclude drugs from their formularies in favor of competing drugs, and low utilization for some drugs, which limits incentives for manufacturers to provide price concessions. However, plan sponsors are able to employ practices, such as prior authorization, to manage beneficiaries’ utilization of specialty tier– eligible drugs, and they employ these practices somewhat more often for specialty tier–eligible drugs than for other drugs. In contrast, plan sponsors told us that they were more often able to negotiate price concessions for drugs in classes where there are more competing drugs on the market—such as for drugs used to treat rheumatoid arthritis, multiple sclerosis, and anemia. CMS agreed with portions of our findings, took issue with the amount of a deductible we present in one of our figures, and suggested additional information for us to include in our report. The plan sponsors provided technical comments, which we incorporated as appropriate. At the time our study began, the 2007 PDE data were the most recent available. and report development.

Why GAO Did This Study The Centers for Medicare & Medicaid Services (CMS) allows Part D plans to utilize different tiers with different levels of cost sharing as a way of managing drug utilization and spending. One such tier, the specialty tier, is designed for high-cost drugs whose prices exceed a certain threshold set by CMS. Beneficiaries who use these drugs typically face higher out-of-pocket costs than beneficiaries who use only lower-cost drugs. GAO was asked to provide information about high-cost drugs eligible for a specialty tier. This report provides information on these drugs including spending under Medicare Part D in 2007, the most recent year for which claims data were available; how different cost-sharing structures could be expected to affect beneficiary out-of-pocket costs; how negotiated drug prices could be expected to affect beneficiary out-of-pocket costs; and information Part D plan sponsors reported on their ability to negotiate price concessions and to manage utilization. GAO examined CMS data, including 2007 claims data, negotiated price and out-of-pocket cost data for selected drugs--including the 10 highest-utilization specialty tier-eligible drugs in 2007--and plans from 2006 through 2009, and formulary information provided to CMS by plan sponsors. GAO interviewed officials from CMS and 8 of the 11 largest plan sponsors, based on enrollment in 2008. Seven of the 11 plan sponsors provided data including price concessions for selected drugs for 2006 through 2008. What GAO Found High-cost drugs eligible for a specialty tier commonly include immunosuppressant drugs, those used to treat cancer, and antiviral drugs. Specialty tier-eligible drugs accounted for 10 percent, or $5.6 billion, of the $54.4 billion in total prescription drug spending under Medicare Part D plans in 2007. Medicare beneficiaries who received a low-income subsidy (LIS) accounted for most of the spending on specialty tier-eligible drugs--$4.0 billion, or 70 percent of the total. Among all beneficiaries who used at least one specialty tier-eligible drug in 2007, 55 percent reached the catastrophic coverage threshold, after which Medicare pays at least 80 percent of all drug costs. In contrast, only 8 percent of all Part D beneficiaries who did not use a specialty tier-eligible drug reached this threshold in 2007. Differences in plans' cost-sharing structures--flat copayments or coinsurance rates--can be expected to result in varying out-of-pocket costs for non-LIS beneficiaries only until they reach the catastrophic coverage threshold, which 31 percent of non-LIS beneficiaries did in 2007. After that point, non-LIS beneficiaries' annual out-of-pocket costs for a given drug are likely to be similar regardless of their plans' cost-sharing structures. LIS beneficiaries' out-of-pocket costs are generally not affected by their plans' cost-sharing structures because Medicare sets fixed limits on the cost-sharing amounts for these beneficiaries and pays any difference between these fixed amounts and the amount required under the plans' cost-sharing structures. Variations in negotiated drug prices--between different drugs, across plans for the same drug, and over time--can affect out-of-pocket costs. For example, the average negotiated price for Gleevec across our sample of plans increased by 46 percent between 2006 and 2009, from about $31,200 per year to about $45,500 per year. Correspondingly, the average out-of-pocket cost for a non-LIS beneficiary taking Gleevec for the entire year could have been expected to rise from about $4,900 in 2006 to more than $6,300 in 2009. Plan sponsors reported having little leverage to negotiate price concessions from manufacturers for most specialty tier-eligible drugs, although sponsors were more often able to negotiate price concessions for drugs with more competitors on the market--such as for drugs used to treat rheumatoid arthritis. One factor sponsors cited for this limited leverage was CMS requirements limiting sponsors' ability to exclude drugs from their formularies in favor of competing drugs. Finally, plan sponsors employ practices such as prior authorization to manage beneficiaries' utilization of specialty tier-eligible drugs, and sponsors reported employing those practices somewhat more frequently for these drugs than for lower-cost Part D drugs. GAO provided a draft of this report to CMS. CMS agreed with portions of GAO's findings and suggested additional information for us to include in our report, which we incorporated as appropriate.

gao_GAO-06-668

gao_GAO-06-668_0

In 2005, Venezuela was the world’s eighth largest exporter of crude oil. Venezuelan Government Actions Have Decreased Crude Oil Production, but Exports to the United States Have Changed Little Venezuelan oil production has fallen since 2001, largely as a result of actions by the Venezuelan government. The Venezuelan government announced plans in 2005 to expand its oil production and exports significantly by 2012, but most experts with whom we spoke doubted Venezuela’s ability to implement the expansion plan in the near term. For example, EIA data show that production decreased from 3.1 million barrels per day to 2.6 million barrels per day, reflecting a decrease of about .5 million barrels per day, or 16 percent. The Venezuelan government’s firing of thousands of PDVSA employees following the strike contributed to the decline in production. Venezuela’s Exports of Crude Oil and Refined Petroleum Products to the United States Have Remained Relatively Stable in Recent Years Since shortly after the Venezuelan strike ended, Venezuela’s exports of crude oil and refined petroleum products to the United States have remained close to the prestrike levels. Several oil industry officials and experts told us that national oil companies generally do not have the expertise of the international oil companies to develop heavy oil fields. A Sudden Drop in Venezuelan Oil Production Would Have Significant Worldwide and U.S. Impacts Given the current tight global supply and demand conditions, a sudden loss of all or most Venezuelan oil from the world market, for example due to a strike, would, all else remaining equal, result in a marked spike in world oil prices and a decrease in the growth rate of the U.S. economy as measured by GDP. However, since most replacement supplies are farther away than Venezuela, U.S. oil refiners would experience higher costs and delays in getting oil supplies; such an embargo would therefore increase U.S. consumer prices for gasoline and other petroleum products in the short term. EIA’s March 2005 analysis estimated that a Venezuelan oil embargo against the United States would cause the price of West Texas Intermediate crude oil (a commonly used benchmark oil) to increase in the short term by $4 to $6 per barrel from the then-current price of $53 per barrel—an increase of between 8 to 11 percent, as opposed to the 19 to 34 percent increase associated with a sudden and severe loss of oil. According to a U.S. company that produces oil in Venezuela, such an embargo would reduce PDVSA’s oil revenues from between $3–4 billion dollars per year due to the following factors: Refinery operations that Venezuela wholly and partly owns in the United States, which take about 70 percent of Venezuela’s oil exports to the United States, would be adversely affected by the embargo because they would have to obtain crude oil from locations farther away than Venezuela and the replacement crude oil would likely be of a different quality. Closure of Venezuela’s U.S. The impacts of shutting down CITGO refineries would continue until the closed refineries were reopened or new sources of refined petroleum products were brought on line. U.S. Government Programs and Activities to Ensure a Reliable Long-Term Supply of Crude Oil from Venezuela Have Been Discontinued, but the Government Has Options to Mitigate Supply Disruptions in the Short Term The U.S. government has programs and activities intended, in part, to ensure a reliable long-term supply of oil from Venezuela and other oil- producing countries to U.S. and world markets; these programs include bilateral technology and information exchange agreements, bilateral investment treaties, and multilateral energy initiatives. Most U.S. oil companies have not relied on assistance from the U.S. government to help with issues in Venezuela in recent years although, according to DOE officials, DOE stays in contact with companies regarding the situation in Venezuela, and senior DOE officials frequently report on the status of U.S. energy investment and overall energy production in Venezuela at senior-level meetings of the U.S. government. Officials in the Departments of Commerce and State, and in the Office of the U.S. Trade Representative, told us companies that might otherwise seek their assistance in negotiating with foreign governments do not do so in Venezuela because the companies do not believe that federal agency intervention would be helpful. The U.S. Government Has Options to Mitigate the Impacts of Short-Term Venezuelan Oil Supply Disruptions Key activities and programs that the U.S. government has used to mitigate the impacts of short-term oil supply disruptions include diplomacy, whereby U.S. government officials negotiate with senior officials in oil- producing countries to increase their supply of crude oil in case of a disruption; using oil in the U.S. Strategic Petroleum Reserve; and coordinating with the International Energy Agency, whose members hold stocks equal to 90 days or more of its net imports to address supply disruptions. If Venezuela fails to maintain or expand its current level of production, the world oil market may become even tighter than it is now, putting further pressure on both the level and volatility of energy prices. Overall, we disagree that our report, as written, presents an “alarmist view” of U.S. energy security. (2) What are the potential impacts of a reduction in Venezuelan oil exports, a Venezuelan embargo on oil exports to the United States, or sudden closure of Venezuela’s refineries in the United States?

Why GAO Did This Study Venezuela is the world's eighth-largest oil exporter and among the top 10 countries in total proven oil reserves. Venezuela also supplies about 11 percent of current U.S. imports of crude oil and petroleum products and wholly owns five refineries in the U.S. Consequently, Venezuela is a key player in the future energy security of the United States and the world. The current global oil market is tight and may be more susceptible to short-term supply disruptions and higher and more volatile prices. Recently, tension between Venezuela and the United States has caused concern about the stability of Venezuelan oil supplies. On several occasions, Venezuela's President has threatened to stop exporting oil to the U.S. or to close Venezuela's U.S.-based refineries. In this context, GAO analyzed: (1) how Venezuela's crude oil production and exports of crude oil to the U.S. has changed in recent years, (2) the potential impacts of a reduction in Venezuelan oil exports to the U.S., and (3) the status of U.S. government programs and activities to ensure a reliable supply of oil from Venezuela. Commenting on a draft of the report, the State and Commerce Departments generally agreed with the report, but DOE contended that the report presents an "alarmist view" of U.S. energy security. We disagree and believe the report presents a contextually balanced treatment of the issue. What GAO Found Venezuelan oil production has fallen since 2001, but exports of crude oil and petroleum products to the United States have been relatively stable--except during a 2-month strike in the winter of 2002-2003, during which the oil sector was virtually shut down and exports to the United States fell by about 1.2 million barrels. Energy Information Administration data show that total Venezuelan oil production in 2001 averaged about 3.1 million barrels per day, but by 2005 had fallen to about 2.6 million barrels per day. Following the strike, Venezuela's President ordered the firing of up to 40 percent of Venezuela's national oil company employees. U.S. and international oil industry experts told us that the resulting loss of expertise contributed to the decline in oil production. In 2005, the Venezuelan government announced plans to expand its oil production significantly by 2012, but oil industry experts doubt the plan can be implemented because Venezuela has not negotiated needed deals with foreign oil companies as called for in the plan. A model developed for the Department of Energy estimates that a 6-month disruption of crude oil with a temporary loss of up to 2.2 million barrels per day--about the size of the loss during the Venezuelan strike--would, all else remaining equal, result in a significant increase in crude oil prices and lead to a reduction of up to $23 billion in U.S. gross domestic product. A Venezuelan oil embargo against the United States would increase consumer prices for petroleum products in the short-term because U.S. oil refiners would experience higher costs getting replacement supplies. A shutdown of Venezuela's wholly-owned U.S. refineries would increase petroleum product prices until closed refineries were reopened or new sources were brought on line. These disruptions would also seriously hurt the heavily oil-dependent Venezuelan economy. U.S. government programs and activities to ensure a reliable supply of oil from Venezuela have been discontinued, but the U.S. government has options to mitigate short-term oil disruptions. For example, activities under a U.S.-Venezuela oil technology and information exchange agreement were stopped in 2003, in part, as a result of diplomatic decisions. In recent years, U.S. oil companies have not sought assistance from the U.S. government with issues in Venezuela because the companies do not believe that federal agency intervention would be helpful at this time. To mitigate short-term oil supply disruptions, the U.S. government could attempt to get oil-producing nations to increase their production to the extent possible, or could release oil from the U.S. Strategic Petroleum Reserve. While these options can mitigate short-term oil supply disruptions, long-term reductions in Venezuela's oil production and exports are a concern for U.S. energy security, especially in light of current tight supply and demand conditions in the world oil market. If Venezuela fails to maintain or expand its current level of production, the world oil market may become even tighter than it is now, putting further pressure on both the level and volatility of energy prices.

gao_GAO-04-974T

gao_GAO-04-974T_0

Rather, lead enters drinking water primarily as a result of the corrosion of materials containing lead in the water distribution system and in household plumbing. The Safe Drinking Water Act is the key federal law protecting public water supplies from harmful contaminants. Drinking water is provided to District of Columbia residents under a unique organizational structure: The U.S. Army Corps of Engineers’ Washington Aqueduct draws water from the Potomac River and filters and chemically treats it to meet EPA specifications. The District of Columbia Water and Sewer Authority buys its drinking water from the Aqueduct. In the case of drinking water in the District of Columbia, one of the key relationships is the one between WASA, the deliverer of water to District customers, and EPA’s Philadelphia Office, the regulator charged with overseeing WASA’s compliance with drinking water regulations. Aside from the tap water monitoring issue, EPA’s Philadelphia Office acknowledges that its oversight of WASA public notification and education efforts could have been better, noting that “In hindsight, EPA should have asked more questions about the extent, coverage and impact of DC WASA’s public education program, and reacted to fill the public education gaps where they were evident.” To address the problem, the Philadelphia Office reported on its website that it will have to make some improvements in the way it exercises its own oversight responsibilities. We will also examine interrelationships that include other key agencies, such as the Aqueduct and the D.C. Department of Health. We will also examine how other water systems in similar situations interacted with federal, state, and local agencies. These experiences may offer suggestions on how coordination can be improved among the agencies responsible for protecting drinking water in the District of Columbia. Experiences of Other Water Systems Highlight Effective Ways to Inform and Educate the Public WASA is not the first system to exceed the action level for lead. I would like to touch on the activities of two such systems, the Massachusetts Water Resources Authority and the Portland, Oregon, Water Bureau. Each of these systems has employed effective notification practices in recent years that may provide insights into how WASA, and other water systems, could improve their own practices. According to Portland Water Bureau officials, the program consists of four components: (1) water treatment for corrosion control; (2) free water testing to identify customers who may be at significant risk from elevated lead levels in drinking water; (3) a home lead hazard reduction program to prevent children from being exposed to lead from lead-based paint, dust, and other sources; and (4) education on how to prevent lead exposure targeted to those at greatest risk from exposure. However, according to a joint study by the D.C. Department of Health and the Centers for Disease Control and Prevention (CDC) published in March 2004, it is difficult to discern any effect of lead in drinking water on children’s blood lead levels because the older homes most likely to have lead service lines are also those most likely to have other lead hazards, such as lead in paint and dust. Researchers Face Gaps in Knowledge Regarding the Risks Posed by Lead in Drinking Water A good deal of research has been conducted on the health effects of lead, in particular on the effects associated with certain pathways of contamination, such as ingestion of leaded paint and inhalation of leaded dust. As we continue our work, we will examine the plans of EPA and other organizations to fill these and other key information gaps. For children with high levels of lead exposure from paint, soil, and dust, drinking water is thought to contribute a much lower proportion of total exposure. 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 Concerns have been raised about lead in District of Columbia drinking water and how those charged with ensuring the safety of this water have carried out their responsibilities. The 1991 Lead and Copper Rule (LCR) requires water systems to protect drinking water from lead by, among other things, chemically treating it to reduce its corrosiveness and by monitoring tap water samples for evidence of lead corrosion. If enough samples show corrosion, water systems officials are required to notify and educate the public on lead health risks and undertake additional efforts. The Washington Aqueduct, owned and operated by the U.S. Army Corps of Engineers, treats and sells water to the District of Columbia Water and Sewer Authority (WASA), which delivers water to D.C. residents. EPA's Philadelphia Office is charged with overseeing these agencies. GAO is examining (1) the current structure and level of coordination among key government entities that implement the Safe Drinking Water Act's regulations for lead in the District of Columbia, (2) how other drinking water systems conducted public notification and outreach, (3) the availability of data necessary to determine which adult and child populations are at greatest risk of exposure to elevated lead levels, and what information WASA is gathering to help track their health, and (4) the state of research on the health effects of lead exposure. The testimony discusses preliminary results of GAO's work. GAO will report in full at a later date. What GAO Found This statement discusses GAO's preliminary observations and highlights areas of further examination. One of the key relationships in the effort to ensure the safety of the District's drinking water is the one between WASA, the deliverer of water, and EPA's Philadelphia Office, which oversees WASA's compliance with drinking water regulations. Recent public statements and corrective actions by these parties clearly indicate that coordination and communication between them could have been better in the years preceding the current lead controversy. GAO's future work will examine (to the extent appropriate) the interrelationships among other key agencies (such as the Aqueduct and the D.C. Department of Health); how other water systems in similar situations interacted with federal, state, and local agencies; and what the experiences of these other jurisdictions may suggest concerning how improved coordination can better protect drinking water in the District of Columbia. Other water systems facing elevated lead levels used public notification and education practices that may offer lessons for conducting outreach to water customers. For example, some of the practices of the two water systems we have begun to examine--the Massachusetts Water Resources Authority and the Portland (Oregon) Water Bureau--include tailoring their communications to varied audiences in their service areas, testing the effectiveness of their communication materials, and linking demographic and infrastructure data to identify populations at greatest risk from lead in drinking water. WASA faces challenges in collecting the information needed to identify District citizens at greatest risk from lead in drinking water. Specifically, WASA has partial information on which of its customers have lead service lines, and is in the process of obtaining more complete information. GAO's future work will examine the efforts of other water systems to go one step further by linking data on at-risk populations (such as pregnant mothers, infants, and small children) with data on homes suspected of being served by lead service pipes and other plumbing fixtures that may leach lead into drinking water. Nationally, much is known about the hazards of lead once in the body and how lead from paint, soil, and dust enter the body, but little research has been done to determine actual lead exposure from drinking water, and the information that does exist is dated. In our future work, we will examine the plans of EPA and other organizations to fill this key information gap.

gao_GAO-03-784

gao_GAO-03-784_0

For its capital needs in excess of funds generated from operations, TVA was authorized to borrow by issuing bonds and notes. To determine whether TVA is properly accounting for the lease-leaseback arrangements for financial reporting purposes, we reviewed authoritative accounting literature related to accounting for leases. TVA has used lease-leaseback financing arrangements to refinance 24 combustion turbine power generators that are used during periods of peak demand for power. TVA Retains Legal Ownership of Assets, but Both TVA and the Private Equity Investors Are at Financial Risk The lease-leaseback financing arrangements allow TVA to retain legal title to the assets while transferring sufficient property interest in the assets to the private equity investors so that they may claim tax deductions that can be used to offset the taxable income from the lease payments and any potential gain on the sale of the assets. Under the lease-leaseback arrangements, TVA retains legal title to the assets but relinquishes sufficient interest in the assets so that the equity investors are entitled to certain tax benefits that are not available to TVA. In large part, who will benefit from this arrangement depends on the fair market value of these generating units at the end of the 20-year leaseback period. For example, if at the time of the 2017 early buyout option date, the fair market value of the assets is higher than expected, TVA can purchase the equity investor’s remaining interest in the assets at a set price established in the lease arrangement and avoid the possibility of paying additional value for the assets 4 years later at the end of the 20-year leaseback period. In addition, the lease-leaseback arrangements could have implications for the federal treasury. Lease-Leaseback Accounting Complies with Applicable Standards and Requirements TVA’s lease-leaseback arrangements are classified as liabilities in TVA’s financial statements, as required by GAAP, and are classified as debt for budgetary reporting purposes, as required by OMB guidance. All of TVA’s lease-leaseback arrangements are now treated as debt in the President’s Budget. Therefore, TVA’s decision that its lease-leaseback arrangements should not be treated as debt for purposes of the debt cap in section 15d(a) of the TVA Act is not unreasonable, even though these arrangements have the same impact on TVA’s financial condition and future competitiveness as traditional debt. Conclusions TVA has entered into substantial (about $945 million) lease-leaseback arrangements with private investors and is considering expanding its use of these and other nontraditional financing arrangements. While the lease- leaseback arrangements provide TVA with a lower cost of financing over the first 20 years, they also pose risks. Legal Ownership and Risk If the Lease- Leaseback Arrangements Do Not Work Out as Planned To determine who has legal ownership of the assets financed by lease- leaseback transactions, and who is at financial risk if the projects do not work out as planned, we obtained and reviewed copies of the fiscal years 2000 and 2002, and December 2002 lease-leaseback arrangements covering 20 of 24 power generating units; interviewed officials of TVA’s IG, Chief Financial Officer (CFO) Organization, and Office of General Counsel (OGC), OMB, and CBO; reviewed summary documents prepared by TVA’s OGC and IG that identify and explain the responsibility of the different parties to the agreements; reviewed an economic analysis of the fiscal year 2002 lease-leaseback arrangement prepared by TVA to compare its borrowing cost under traditional debt financing with its cost under the lease-leaseback arrangements; compared TVA’s cash flow under the fiscal year 2002 arrangement to traditional debt financing if TVA were to exercise the early buyout and termination options in the fiscal year 2002 arrangement; and analyzed the equity investor’s cash flows under the fiscal year 2002 arrangement.

Why GAO Did This Study Concern about the implications of the Tennessee Valley Authority's (TVA) debt on its future competitiveness prompted Representative Richard Baker to ask GAO to determine TVA's planned and actual use of nontraditional financing arrangements (which, to date, has consisted primarily of lease-leaseback arrangements), who is at risk under TVA's lease-leaseback arrangements, and whether TVA's accounting for the lease-leaseback arrangements complies with applicable standards and requirements. What GAO Found TVA has traditionally financed its operations with cash generated from operations, the issuance of bonds and notes, and in the past, appropriations. However, in fiscal year 2000, it began to use alternative forms of financing (primarily lease-leaseback arrangements) and is considering expanding their use. The lease-leaseback arrangements involve the refinancing of 24 combustion turbine power generators that are used during periods of peak demand for power. The lease-leaseback arrangements accounted for about $945 million of the $992 million raised by alternative financing arrangements as of May 31, 2003. After the power generators were constructed, TVA leased them to private investors for 50 years and simultaneously leased them back for 20 years. Under these lease-leaseback arrangements, TVA received cash from the private investors, which was obtained by issuing debt in the public market and through the investors' own equity. TVA is responsible for making lease payments for 20 years, at the end of which it has the option to purchase the private investors' interest in the assets. TVA retains legal title to the assets under the arrangements but relinquishes sufficient interest in the assets so that the equity investors are entitled to certain tax benefits. The equity investors pass on some of these benefits to TVA in the form of more favorable financing rates. As a result, TVA is able to lower costs over the first 20 years of the arrangement. However, to retain use of the assets after the 20-year period, TVA would have to purchase the equity investors' remaining interest in the assets at the assets' fair market value at that time. Depending on the fair market value, TVA is at risk of incurring higher overall costs than under traditional debt financing. In large part, the determination as to who will be the net beneficiary of these arrangements and the implications to the federal treasury will hinge on the future value of the assets. TVA's lease-leaseback arrangements have been accounted for and reported in compliance with applicable standards and requirements for financial reporting, budgetary reporting, and debt cap compliance. TVA's lease-leaseback arrangements are treated as liabilities in its financial statements and classified as debt in the President's Budget. However, they are not counted against the debt cap in the TVA Act. While the lease-leaseback arrangements are not considered debt for purposes of financial reporting and debt cap compliance, they have substantially the same economic impact on TVA's financial condition and future competitiveness as traditional debt financing.

gao_GAO-08-23

gao_GAO-08-23_0

In Washington, D.C., State headquarters provides guidance and training to prepare for evacuations. State’s primary crisis management guidance, the EPH, has limited usefulness in preparing overseas posts for evacuation. Post-produced estimates of American citizens in country are frequently inaccurate best guesses, and weaknesses in a State and DOD MOA need to be corrected to prepare for large-scale evacuations. However, we found almost 40 percent of posts who gave a date reported that it has been 18 months or longer since they most recently updated their EAP. However, we found weaknesses in the MOA (and its amendments) that could reduce State and DOD’s ability to quickly and effectively work together during a crisis. For example, officials from several posts reported that newer staff have not received training necessary to meet their assigned emergency responsibilities. In addition, over one-quarter of posts reported that EAC members have not received training necessary to meet their assigned emergency responsibilities. Although State headquarters has disseminated some ad hoc guidance based on lessons learned from prior evacuations, the guidance is sometimes vague and may be overlooked by posts due to the high volume of material they receive. Despite this explicit guidance, almost 60 percent of posts that have experienced an authorized or ordered departure in the past 5 years reported that they have not produced an after action report. Since post staff have limited institutional memory of prior evacuations, particularly at unaccompanied posts, it is important to have a process that captures and disseminates lessons learned from prior evacuations to all post staff. In addition, State lacks a systematic process to collect, analyze, and incorporate lessons learned from previous evacuations. Recommendations for Executive Action To help improve State planning, preparations for, and management of evacuations of post staff, dependents, and American citizens from overseas posts, we recommend the Secretary of State designate an entity within State to (1) ensure that EAPs are prepared annually, (2) ensure that posts generate standardized evacuation after action reports with lessons learned, and (3) systematically collect and analyze these reports to assess State’s performance and recommend modifications to State guidance, plans, training, and exercises, if direct posts to complete narrative sections in the F-77 report documenting the processes and data sources used to produce their estimates, as well as lessons learned on generating estimates for that particular country; review post and FSI crisis management training for EAC members to meet assigned emergency responsibilities, including planning and preparing for possible evacuation, and identify areas for improving training, particularly for less experienced EAC members; and strengthen CMEs by having posts play a greater role in designing them and incorporating the most likely threats to occur at the post into exercise scenarios. GAO staff who made contributions to this report are listed in appendix V. Appendix I: Scope and Methodology To examine the Department of State’s (State) efforts to plan, prepare for, and manage evacuations of post staff, dependents, and American citizens from overseas posts, we (1) assessed State’s guidance and plans to prepare for possible evacuations of post staff, dependents, and American citizens; (2) assessed the training, drills, and exercises used to prepare staff at overseas posts for crises, including possible evacuation; and (3) evaluated State’s efforts to collect, analyze, and incorporate lessons learned from previous evacuations into modifications of guidance and training. We conducted a survey of all Emergency Action Committees (EAC) at State embassies and consulates worldwide. Structured interview respondents had experienced many different crisis situations, including natural disasters, disease epidemics, war threats, and civil unrest. To review State and DOD’s planning, preparation for, and managing of evacuations, we examined State and DOD documents, including State’s Emergency Planning Handbook, numerous post Emergency Action Plans, several post-produced F-77 reports of potential evacuees, the Memorandum of Agreement between State and DOD on the Protection and Evacuation of U.S. Citizens and Nationals and Designated other Persons from Threatened Areas Overseas, and various other State cables and documents related to evacuations, including situation reports, lessons- learned cables, and other documents discussing lessons learned. We reported that more than three-quarters of posts said their last estimate was, at best, only somewhat accurate in its estimation of the American citizen population.

Why GAO Did This Study Since 1988, the Department of State (State) has ordered over 270 evacuations from overseas posts due to civil strife, terrorist incidents, natural disasters, conventional war threats, and disease outbreaks. To prepare for evacuation, overseas posts rely on a variety of guidance, plans, and training, such as Emergency Action Plans (EAP). GAO was asked to assess State's (1) guidance and plans to prepare for evacuation, (2) training and exercises to prepare post staff for crisis, and (3) efforts to collect, analyze, and incorporate evacuation lessons learned into guidance and training. GAO examined State and Department of Defense (DOD) documents, spoke with State and DOD officials, conducted a survey of 243 overseas posts, and completed 22 structured interviews with State personnel. What GAO Found Using its guidance and training, State has carried out numerous evacuations in the recent past--notably the safe evacuation of nearly 15,000 American citizens and family members from Lebanon. However, GAO found areas where State can improve its guidance, plans, and training to prepare for and manage evacuations of post staff, dependents, and American citizens. For example, posts do not find State's primary guidance particularly useful in preparing for evacuation. In addition, while State requires posts to update EAPs annually, almost 40 percent of posts surveyed have not updated their plans in 18 months or longer. Post-produced estimates of American citizens in a country are best guesses and more than three-quarters of posts said their last estimate was, at best, only somewhat accurate. We also found weaknesses in a memorandum of agreement (MOA) between State and DOD that could limit these agencies' ability to effectively work together during a large-scale evacuation. While State provides crisis management training to post staff, GAO found gaps in training related to preparing for evacuations. Over one-quarter of posts reported that Emergency Action Committee (EAC) members have not received training necessary to meet their emergency responsibilities. In addition, officials from several posts reported that newer staff have not received training for their EAC roles. Although posts reported that crisis management exercises are an important training tool, post staff said exercises should be more practical and reflect scenarios more likely to occur at post. State's evacuation preparations are constrained by the lack of a systematic process to collect, analyze, and incorporate evacuation lessons learned. Almost 60 percent of posts evacuated in the past 5 years said they did not produce an evacuation "after action" report, as required. Further, State has no entity to ensure posts are producing after action reports and no formal review process to analyze and incorporate lessons learned from these reports into guidance and training. Although State has developed some documents on evacuation lessons learned and distributed them to all U.S. overseas posts, the documents are sometimes vague and can be overlooked by posts due to the volume of material they receive. Limited institutional memory of prior evacuations at posts reinforces the need for a process to collect, analyze, and disseminate lessons learned from evacuations to all post staff.

gao_GAO-15-280

gao_GAO-15-280_0

AHRQ Has Taken Some Steps to Disseminate Comparative Clinical Effectiveness Research, but Has Not Taken Other Actions to Help It Fully Address Its Dissemination Requirements AHRQ has taken some steps to disseminate CER as required under PPACA, including the creation of systematic reviews to develop CER findings, tools to disseminate CER, plans for a website to list and provide links to research databases that include CER, and plans for receiving feedback from stakeholders to whom information is disseminated. For each systematic review AHRQ synthesizes CER findings from existing research, and the agency disseminates these findings to various targeted stakeholder groups. Tools to organize and disseminate CER. AHRQ’s marketing plans include various informational tools to disseminate CER. According to GAO’s Standards for Internal Control in the Federal Government, significant events need to be clearly documented to ensure management goals are carried out.which together describe the key activities of its dissemination process, including the steps the agency takes to identify key CER findings from systematic reviews, draft and finalize its marketing plans, and distribute its informational tools to the public. As of November 2014, AHRQ officials also have not developed and documented a specific implementation plan to create a publicly available database for CER. Additionally, AHRQ officials told us they have not determined how to address potential limitations with this new approach. ASPE Has Coordinated and Funded Projects to Build Data Capacity for Research, but Its Approach Lacks Key Elements Needed to Ensure Its Effectiveness ASPE has coordinated among various agencies to fund projects intended to build data capacity for CER. However, its approach to building data capacity for CER lacks key elements, such as defined objectives, milestones, and time frames, that are necessary to ensure effectiveness. Beginning in fiscal year 2013, ASPE officials worked with the Office of the National Coordinator for Health Information Technology (ONC) to develop a strategic road map to guide both the identification and selection of ASPE’s PCORTF projects beginning in fiscal year 2014 through fiscal year 2019. Standard practices for project management call for agencies to conceptualize, define, and document specific goals and objectives in the planning process, along with the appropriate steps, milestones, time frames, and resources needed to achieve those results. Specifically, ASPE identified several guiding principles, such as ensuring that data infrastructure projects are “non-duplicative of other related federal and non-federal investments” and “achieve synergy with PCORI and AHRQ.” It also included priority objectives, such as further enabling the collection of standardized clinical data, but many of the objectives were broad and not clearly defined—and did not specify milestones or time frames—as would be consistent with effective project management. Although ASPE identified and considered related, ongoing federal and non-federal data infrastructure investments in an attempt to identify needs or gaps, opportunities where contributions could be made, and ways to avoid duplication, its strategic road map was unclear on the timing and level of coordination necessary for its investments to work together with existing projects—such as PCORI’s PCORnet initiative—to improve data capacity. While HHS has a strategic road map with information on projects that it is funding to build the capacity for CER data, the road map does not include key elements, such as clearly defined objectives, milestones, and time frames needed to assess the agency’s progress toward the goal of building data capacity for CER, as would be consistent with practices for effective project management. Recommendations for Executive Action To help ensure that HHS fully addresses its dissemination requirements under PPACA, we recommend that the Secretary of Health and Human Services direct AHRQ to take the following four actions: 1. identify and document time frames for the implementation and distribution of marketing plans and informational tools; 2. expand dissemination efforts to federal and private health plans and vendors of health information technology focused on clinical decision support; 3. document and complete plans to develop a publicly available database, including plans to meet the needs of various potential users in the general public; and 4. develop specific plans on how it will collaborate with NIH on its dissemination activities. In addition, to ensure that HHS fully addresses the PPACA requirements to build data capacity for CER, the Secretary should direct ASPE to include clearly defined objectives, milestones, and time frames, or other indicators of performance, in its strategic road map that is used to identify its PCORTF projects. As noted in our findings, these plans include creating a web page to list and provide users with links to existing publicly available databases that could be used to search for these studies.

Why GAO Did This Study PPACA imposed new requirements on HHS related to CER—research that evaluates and compares health outcomes and the clinical effectiveness, risks, and benefits of two or more medical treatments or services. Among other things, PPACA required AHRQ to broadly disseminate findings from federally funded CER and the Secretary of HHS (who, by delegation, charged ASPE) to coordinate federal programs to build data capacity for CER. PPACA also mandated that GAO review HHS's CER activities. This report examines (1) AHRQ's activities to disseminate the results of federally funded CER and (2) ASPE's activities to coordinate federal programs to support CER by building the capacity to collect, link, and analyze data, among other objectives. GAO reviewed relevant legal requirements and HHS documentation; interviewed HHS officials; and obtained information from five stakeholder groups that AHRQ targeted to receive disseminated information or were otherwise involved in AHRQ's dissemination efforts. What GAO Found The Agency for Healthcare Research and Quality (AHRQ), an agency within the Department of Health and Human Services (HHS), has taken some steps to disseminate comparative clinical effectiveness research (CER), as required under the Patient Protection and Affordable Care Act (PPACA), but has not taken other actions to help it fully address its dissemination requirements. The steps it has taken include the creation of tools that organize and disseminate research findings to certain targeted stakeholder groups and the development of plans for a publicly available database that includes CER. For example, AHRQ's marketing plans—customized plans to help convey key messages about AHRQ's research—include various informational tools to disseminate CER, such as research summaries that communicate research findings to clinicians, consumers, caregivers, and policymakers. However, the agency has not clearly defined how to disseminate information to certain stakeholder groups specified in the law, nor has it identified and documented time frames to implement the marketing plans and distribute the associated informational tools, as would be consistent with federal internal control standards, which state that significant events need to be clearly documented to ensure management goals are carried out. Additionally, in order to implement PPACA's requirement for developing a publicly available database that contains CER evidence, AHRQ officials told GAO that they plan to create a web page to list and provide users with links to existing publicly available databases that could be used to search for CER, but they have not documented a specific implementation plan that includes time frames and strategies to address known potential limitations, such as difficulties that certain users may face in searching the databases for CER results. HHS's Assistant Secretary for Planning and Evaluation (ASPE) has coordinated among various agencies to fund projects intended to build data capacity for CER, but its approach lacks key elements needed to ensure its effectiveness. For example, these projects include an effort to better standardize data that could be used in multiple research projects. However, HHS's approach to building data capacity for CER lacks key elements, such as defined objectives, milestones, and time frames, that are necessary to ensure effectiveness. ASPE officials worked with the Office of the National Coordinator for Health Information Technology to develop a strategic road map to guide both the identification and selection of ASPE's projects beginning in fiscal year 2014 through fiscal year 2019. Although the February 2014 strategic framework for the road map highlighted several priority objectives, such as enabling the collection of standardized clinical data, these objectives were broad and not clearly defined. For example, although ASPE identified and considered related, ongoing federal and non-federal data infrastructure projects in an attempt to identify needs or gaps, among other things, its strategic road map is unclear on the timing and level of coordination that would be necessary for its projects to work together with these related projects to improve data capacity. Standard practices for project management call for agencies to conceptualize, define, and document specific goals and objectives in the planning process, along with the appropriate steps, milestones, time frames, and resources needed to achieve those results. What GAO Recommends GAO recommends that HHS direct (1) AHRQ to take several actions related to its dissemination efforts, including identifying and documenting time frames for the implementation and distribution of marketing plans and informational tools, and (2) ASPE to include clearly defined objectives, milestones, and time frames, or other indicators of performance, in its strategic road map used to identify its CER-funded projects. HHS concurred with the recommendations.

gao_RCED-97-45

gao_RCED-97-45_0

These factors vary by commodity program, and we have reported on them for cotton, peanuts, and sugar. Consequently, the 1990 farm act included a provision for step 2 payments to be made to exporters and domestic mills to offset higher U.S. prices. Marketing Loan Provisions May Eliminate Price Floors, but U.S. Cotton and Rice Prices Will Remain Higher Than Adjusted World Prices When alternative repayment rates are near or below the loan rates, the marketing loan provisions may prevent the loan rates from serving as price floors. Therefore, we believe that it is necessary to observe what happens to U.S. prices during a period when the adjusted world price falls significantly below the loan rate in order to confirm that the marketing loan provisions prevent the loan rate for cotton from serving as a price floor, despite the effects of other program features and market factors that keep the U.S. price above the adjusted world price. The Effect of Lower Loan Rates on U.S. Prices Will Vary by Commodity For all commodities, when U.S. prices and alternative repayment rates are above the loan rates, lower loan rates will have little if any effect on U.S. prices because producers can earn more by selling their commodities on the market than by forfeiting them to the government. Lower Loan Rate Would Not Eliminate the Use of Step 2 Payments, and Recent Changes to the Timing of Step 2 Payments May Diminish Their Effect on Exports In this example, the adjusted world price ($0.55) is less than 130 percent of the loan rate ($0.65). However, since other program features (such as government paid-storage and import restrictions) and market factors contribute to making U.S. prices higher than world cotton prices, lowering the loan rate alone will not eliminate the use of step 2 payments. Recent changes in the timing of USDA’s step 2 payments to exporters may diminish this tool’s effectiveness in enhancing exports. This price could be reduced further, which would result in lower U.S. prices that would be closer to world prices and would also result in reductions in government costs. As long as USDA continues to use the tariff-rate import quota as it has in the past to restrict imports and support U.S. prices above the level necessary to prevent forfeitures, the 1996 farm act’s changes (such as limits on the availability of nonrecourse loans) will have little if any impact on U.S. prices. Once increases in the tariff-rate import quota result in U.S. prices dropping to the loan rate, reductions in the loan rate would be necessary to reduce prices further. Major contributors to this report are listed in appendix V. Calculating the Benefits From Using the Marketing Loan Provisions This appendix provides an (1) explanation of how to calculate the net amount that producers receive from the government when they use nonrecourse loans without marketing loan provisions, (2) analysis of how the marketing loan provisions are intended to operate and prevent the loan rates from acting as price floors, and (3) illustration of the differences in marketing loan benefits under various market conditions and the relationship between the alternative repayment rates and U.S. prices. For this review, we used USDA’s proxies for the world price for cotton, rice, wheat, feedgrains, and oilseeds. To identify additional changes that could be made to make the peanuts and sugar programs more market-oriented, we reviewed legislation and regulations, as well as reports from USDA.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the impact of support provisions on selected commodity prices, focusing on: (1) whether marketing loan provisions prevent loan rates from acting as price floors and whether they allow U.S. prices to fall to levels closer to world prices; (2) the effect lower loan rates would have on the relationship between U.S. and world prices; (3) the affect of a lower loan rate on step 2 payments for cotton exports and the impact of recent changes in timing of payments on the program's effectiveness; and (4) the steps that could be taken to make the peanut and sugar programs more market-oriented. What GAO Found GAO found that: (1) when alternative repayment rates, which are derived from the U.S. Department of Agriculture's (USDA) proxies for world prices, are near or below the loan rates, the marketing loan provisions may prevent the loan rates from serving as price floors; (2) lowering the loan rates has little if any effect on U.S. prices when alternative repayment rates are above the loan rates; (3) however, when alternative repayment rates are near or below the loan rates, the effect on U.S. prices of lowering the loan rates differs by commodity; (4) for cotton and rice, the availability of nonrecourse loans, in combination with other program and market factors, keeps U.S. prices significantly higher than adjusted world prices; (5) therefore, lowering the loan rates is likely to allow U.S. prices to fall to levels that are closer to adjusted world prices; (6) for wheat, feedgrains, and oilseeds, most experts assert that the marketing loan provisions will work as intended to overcome the price-supporting effects of the nonrecourse loans; (7) for these crops, lowering the loan rates would have little if any impact on U.S. prices; (8) to the extent that a lower loan rate results in lower U.S. cotton prices, step 2 payments would be reduced but not eliminated; (9) step 2 payments would continue to be made because the marketing loan provisions have not been able to overcome the cotton program's other features, such as government-paid storage, that help keep U.S. cotton prices higher than adjusted world prices; (10) however, because of recent changes in how USDA makes step 2 payments to exporters, these payments may no longer directly offset higher U.S. prices and therefore may be less effective in enhancing exports; (11) further changes can be made to make the peanut and sugar programs more market-oriented; (12) additional reductions in the quota support price for peanuts will lower U.S. prices and increase economic efficiency; (13) an increase in the tariff-rate import quota for sugar, allowing more sugar to be imported at the lower tariff rate, or its elimination entirely (no import restrictions), would result in lower U.S. prices; and (14) once prices fall to the level of the loan rate, reductions in the loan rate would be necessary to reduce prices further.

gao_GAO-03-454

gao_GAO-03-454_0

Background Federal agencies are increasingly expected to demonstrate effectiveness in achieving agency or governmentwide goals. The first three classifications are represented in our case selection of ACF, NHTSA, and NSF. Administration for Children and Families (ACF) ACF, in the Department of Health and Human Services (HHS), oversees and helps finance programs to promote the economic and social well- being of families, individuals, and communities. Housing and Urban Development (HUD) The HUD Office of Community Planning and Development (CPD) provides financial and technical assistance to states and localities in order to promote community-based efforts to develop housing and economic opportunities. National Highway Traffic Safety Administration (NHTSA) To promote highway safety, DOT’s NHTSA develops regulations and provides financial and technical assistance to states and local communities. These elements include an evaluation culture, data quality, analytic expertise, and collaborative partnerships. Agencies demonstrated an evaluation culture through commitment to self- examination and learning through experimentation. Agency collaboration with federal and other program partners helped leverage resources and expertise for evaluation. HUD and the Coast Guard had more ad hoc arrangements in place when questions about specific initiatives or issues created the demand for evaluations. Analytic Expertise The agencies reviewed sought access to analytic expertise to ensure assessments of program results would be systematic, credible, and objective. Many agencies share goals with others. Second, they improved administrative systems or turned to special data collections to obtain better quality data. The Coast Guard selects experts who already have military experience. The Coast Guard also contracts for special studies with the agency’s Research and Development Center, the Center for Naval Analyses, and the American Bureau of Shipping. Providing Technical Expertise to Program Partners Because of their reliance on state and local agencies for both implementing and evaluating their programs, some of the reviewed agencies found it necessary, in order to improve data quality, to help develop state and local evaluation expertise. Building Collaborative Partnerships The five agencies used collaborative partnerships to obtain access to needed data and expertise for evaluations. Factors That Impede Building Evaluation Capacity Although agencies used a variety of strategies to maximize evaluation capacity, they also cited factors that impede conducting evaluations or improving evaluation capacity, including the following: Constraints on spending program resources on oversight: Some agency officials claimed that the lack of a statutory mandate or dedicated funds for evaluation impeded investing program funds to conduct studies or to improve administrative data. Observations The five agencies we reviewed employed various strategies to obtain useful evaluations of program effectiveness. As other agencies aim to develop evaluation capacity, the examples in this report may help them identify ways to obtain the data and expertise needed to produce useful and credible information on results. Office of National Drug Control Policy. Grant Programs: Design Features Shape Flexibility, Accountability, and Performance Information.

Why GAO Did This Study Agencies are increasingly asked to demonstrate results, but many programs lack credible performance information and the capacity to rigorously evaluate program results. To assist agency efforts to provide credible information, GAO examined the experiences of five agencies that demonstrated evaluation capacity in their performance reports: the Administration for Children and Families (ACF), the Coast Guard, the Department of Housing and Urban Development (HUD), the National Highway Traffic Safety Administration (NHTSA), and the National Science Foundation (NSF). What GAO Found In the five agencies GAO reviewed, the key elements of evaluation capacity were an evaluation culture--a commitment to self-examination, data quality, analytic expertise, and collaborative partnerships. ACF, NHTSA, and NSF initiated evaluations regularly, through a formal process, while HUD and the Coast Guard conducted them as specific questions arose. Access to credible, reliable, and consistent data was critical to ensure findings were trustworthy. These agencies needed access to expertise in both research methods and subject matter to produce rigorous and objective assessments. Collaborative partnerships leveraged resources and expertise. ACF, HUD, and NHTSA primarily partnered with state and local agencies; the Coast Guard partnered primarily with federal agencies and the private sector. The five agencies used various strategies to develop and improve evaluation: Commitment to learning from evaluation developed to support policy debates and demands for accountability. Some agencies improved administrative systems to improve data quality. Others turned to specialized data collection. All five agencies typically contracted with experts for specialized analyses. Some agencies provided their state partners with technical assistance. These five agencies used creative strategies to leverage resources and obtain useful evaluations. Other agencies could adopt these strategies--with leadership commitment--to develop evaluation capacity, despite possible impediments: constraints on spending, local control over flexible programs, and restrictions on federal information collection. The agencies agreed with our descriptions of their programs and evaluations.

gao_GAO-17-234

gao_GAO-17-234_0

At the end of fiscal year 2015, according to VA data, VA had over 427,000 pending appeals, approximately 81,000 of which were at the Board. About 20 percent of this growth occurred from fiscal year 2014 through 2015. In addition, the proportion of cases taking the longest to resolve (from when the Board receives the certified appeal to them making a final decision)—over 600 days— increased from 10 percent in fiscal year 2011 to 14 percent in fiscal year 2015 (see fig. VA Has Proposed Increased Staffing, Process Reform, and Updated IT to Improve Appeals Timeliness, and Has Taken Action for All Three Approaches VA has identified three broad approaches for addressing factors that it identified as having contributed to increased appeal inventories and reduced timeliness of appeals decisions, and has already taken action on all three fronts. Citing staffing levels that have not kept pace with workloads, VA secured additional Board staff for fiscal year 2017, and analyzed options for another hiring surge in fiscal 2018. VA Proposed Hiring More Staff to Address Increasing Workloads VA has proposed increasing staff at the Board, as well as VBA, to manage its increasing inventory of appeals and to address related declines in the timeliness of appeals resolutions. Specifically, as of October 2016, VA projected that if nothing else changes, and if the number of FTEs hold steady at the fiscal year 2017 number (922 FTEs for the Board and 1,495 for VBA), the inventory of appeals could exceed 1 million in fiscal year 2026, which would mean that veterans would wait an average of 8.5 years for a final appeals decision. To understand the need for and implications of a future hiring surge, VA modeled different staffing scenarios. Board and VSO officials also identified factors within VBA’s initial claim process—and outside of the Board’s control—that cause delays in veterans receiving final decisions on their appeal. Unlike the current process, in which the Board may remand appeals to VBA to consider new evidence, the Board would only remand appeals under the new process in cases in which the Board found that VBA failed, in its initial or supplemental claim processing, to meet VA’s “duty to assist” the veteran. VA Applied Several Sound Planning Practices in Its Efforts to Improve Its Appeals Processing Timeliness, but Fell Short in Other Areas VA Weighed Several Factors When Determining Its Need for More Staff, but Did Not Fully Assess Risks or Document Its Workforce Plans VA acted consistently with sound planning practices in determining its need for additional staff, but it did not fully consider risks and uncertainties in its approach. Because the Board did not consider alternate sets of assumptions, VA does not know the potential effect that variations in these key variables could have on staffing needs. VA also identified strategies and resources needed for recruiting, hiring, and training staff in fiscal year 2017; however, aspects of VA’s workforce planning fall short of sound workforce planning practices that suggest having timely written plans with a systematic approach and detailed steps, time frames, and mitigation strategies to help identify where resources and investments should be targeted. Recruitment and Hiring: Consistent with sound workforce planning practices, officials have worked to develop a center for excellence in hiring to coordinate workforce planning and develop strategies for recruiting and hiring staff quickly. However, in November 2016, officials reported that the Board was still in the process of updating various aspects of its training curriculum, such as how to support conducting work in a virtual environment, which is consistent with the agency’s plans to increase telework as a way to manage space restrictions for new staff. VA Collaborated with Stakeholders in Developing Its Proposed Streamlined Appeals Framework, but Lacks Strategies, Such as Pilot Testing, to Mitigate Risks VA collaborated with key stakeholders in developing its proposed appeals process reform framework and related implementation plans, which is consistent with sound practices for business process redesign. Sound practices for process redesign and change management also suggest having risk mitigation strategies—in particular, pilot testing—to ensure moving successfully to full implementation. VA’s rationale for not pilot testing centers on what they describe as widespread consensus that the current process is “fundamentally broken” and provides “inadequate service to veterans with a high percentage of wasted effort.” VA assumed that a pilot test authorized by Congress would include a sunset date with a default reversion to the current system, which they said would introduce uncertainty into the agency’s planning efforts and a reliance on subsequent, time consuming legislation before the conclusion of the pilot. VA Has Taken Steps Consistent With Sound Planning Practices while Updating Its IT, but Lacks Clear Schedules for Implementing IT Updates VA has generally planned the implementation of its Caseflow appeals system consistent with sound planning practices. Additionally, VA does not have any plans to pilot test its proposal—a sound and often necessary practice for experiencing, evaluating, and refining significant institutional change on a smaller scale prior to full implementation. At the same time, VA plans for hiring more staff and upgrading IT lack key details (for example, on how VA will train and find working space for new staff, or a schedule for when and how system changes might be integrated with the proposed streamlined process), exposing VA to risks of delays, inefficiencies, or other setbacks caused by not anticipating needs or a misalignment of efforts. Matter for Congressional Consideration To improve VA’s ability to successfully implement appeals process reform, Congress should consider requiring that reforms of the VA disability appeals process be subject to a pilot test. Ensure development of a timely, detailed workforce plan for recruiting, hiring and training new hires. Develop a strategy for assessing process reform—relative to the current process—that ensures transparency in reporting to Congress and the public on the extent to which VA is improving veterans’ experiences with its disability appeals process. While it is true that VA has made noteworthy progress developing an implementation plan to guide its efforts, we found the plan lacked important details, such as: how VA will monitor for interim success and trouble spots, including whether the agency has appropriately distributed resources among the new and old processes; how it will mitigate risk of implementation challenges or setbacks, and reduce their negative impact; and how it will measure whether the new process is improving overall appeals resolution timeliness from the veteran’s perspective. VA disagreed with a draft recommendation that it incorporate pilot testing of its proposed appeals process into implementation plans and pursue necessary legislative authority. In its comments, VA noted that the appeals process is broken and that piloting a new process would result in further delays to veterans appealing their disability decisions. We believe that the potentially negative consequences of delaying full implementation are far outweighed by the benefits that can be realized through piloting. In light of VA’s disagreement with our draft recommendation, we removed the recommendation and now pose a matter for congressional consideration. VA noted that, in addition to currently implementing a fiscal year 2017 workforce plan to hire additional staff, as discussed in the report, among other efforts it has recently launched new attorney training and continues to collaborate across the agency to identify space where new staff can be located. We believe additional action is needed to meet the intent of this recommendation; we also clarified the recommendation language to state that VA needs a more detailed plan. While it is true that the agile process can help mitigate risks and avoid cost overruns and delays, we do not believe this approach precludes VA from taking additional steps to consider the scope of potential changes required by a new appeals process and have a broad plan in place to ensure that all aspects of the new process are adequately supported by Caseflow. VA concurred in principle with our recommendation to develop a more robust plan for closely monitoring the implementation of its process reform, that includes metrics and interim goals to help VA track progress, evaluate efficiency and effectiveness, and pinpoint trouble spots. Further, because VA’s approach does not allow VA to compare the new process with the old or to determine whether the new process represents an improvement over the old process, we believe it does not promote transparency in reporting to the Congress and the public.

Why GAO Did This Study VA compensates veterans for disabling conditions incurred in or aggravated by military service. Veterans can appeal VBA's decisions on their compensation claims, first to VBA and then to the Board, a separate agency within VA. In fiscal year 2015, more than 427,000 appeals were pending and veterans waited over 3 years on average for decisions. Of this total, about 81,000 were pending at the Board and the average cumulative time veterans waited for a decision by the Board in 2015 was almost 5 years. This report examines VA's approaches to address challenges it identified as contributing to lengthy appeals processing times, and the extent to which those approaches are consistent with sound planning practices. GAO focused mainly on the Board, which experienced an increase in workload of about 20 percent from fiscal year 2014 to 2015. GAO reviewed VA's proposed plans and actions and compared them to sound practices relevant to workforce planning and implementing process redesign and new information technology identified in federal guidance, such as internal control standards, and prior GAO work. GAO also analyzed VA's data for fiscal years 2011-2015 (the most recent available) on appeals decision timeliness and workloads; reviewed relevant federal laws, regulations, and planning documents; and interviewed VA officials and veterans service organizations. What GAO Found The Department of Veterans Affairs' (VA) is taking steps to improve the timeliness of its benefit compensation appeals process, in which veterans who are dissatisfied with claims decisions by the Veterans Benefits Administration (VBA) can appeal first to VBA, and then to the Board of Veterans' Appeals (the Board). VA has taken actions related to increasing staff, reforming the process, and updating information technology (IT), which are consistent with relevant sound planning practices. However, gaps in planning exist, thereby reducing the agency's ability to ensure that these actions will improve the timeliness of disability appeals decisions. Increase staff : VA determined that staff resources have not sufficiently kept pace with increased pending appeals, and concluded that additional staff are needed, particularly at the Board, to improve timeliness and reduce its appeals inventory. The Board received approval to hire more staff in fiscal year 2017, and expects to need an additional hiring surge beginning in fiscal year 2018. As of October 2016, officials estimated that if the agency does not take any action, such as increasing staff in 2018, veterans may have to wait an average of 8.5 years by fiscal year 2026 to have their appeals resolved. Consistent with sound workforce planning practices, VA modeled different options for increasing staff levels to support its conclusion that staff increases in conjunction with process change would reduce the appeals inventory sooner. However, contrary to sound practices, VA often used fixed estimates for key variables in its models—such as staff productivity—rather than a range of estimates (sensitivity analysis) to understand the effect variation in these key variables could have on staffing needs. Also, VA's written workforce plans—which cover recruiting, hiring and training—did not include detailed steps, time frames, and mitigation strategies consistent with sound workforce planning practices. For example, while VA has established a center for excellence in hiring to focus on recruitment and hiring the agency has not finalized training or telework plans or otherwise mitigated space constraints that it encountered for hiring staff in fiscal year 2017. Without a timely, detailed workforce plan, VA risks delays in hiring and preparing staff to help manage workloads as soon as possible. Reform process: VA determined that new evidence—which a veteran can submit at any point during his or her appeal—inefficiently causes an additional round of reviews, and thus delays appeals decisions, and in response it proposed legislation (not enacted) to streamline the process. Consistent with sound practices for process redesign, VA worked with veterans service organizations (VSO) and other key stakeholders in developing the proposal, and continued to update VSOs about the development of its implementation plans. VA's proposed reform is promising, but there are several gaps in its implementation plans. In particular, VA plans to fully implement appeals process reform at the Board as well as at VBA regional offices across the country while it concurrently manages the existing appeals inventory, a hiring surge, and planned system changes discussed below. However, VA's plans run counter to sound redesign practices that suggest pilot testing the process changes in a more limited fashion before full implementation, in order to manage risks and help ensure successful implementation of significant institutional change. VA officials told GAO that pilot testing—which would require legislation to implement—will prolong a process that is fundamentally broken and delay urgently needed repairs. However, without pilot testing VA may experience challenges and setbacks on a broader scale, which could undermine planned efficiencies and other intended outcomes. In addition, VA has not sufficiently identified how it will monitor progress, evaluate efficiency and effectiveness, identify trouble spots, and otherwise know whether implementation of its proposed process change is on track and meeting expectations. The absence of a robust monitoring plan with success criteria is inconsistent with sound planning practices for redesign and places the agency at risk of not being able to quickly identify and address setbacks. In addition, the timeliness measures that VA currently plans to report to Congress and the public lack transparency because they focus on individual parts of the agency and pieces of the new process rather than overall appeals resolution time from the veterans' perspective. Without a strategy for assessing the proposed new process that includes comprehensive measures, VA, the public, and Congress cannot know the extent to which the proposed process represents an improvement over the old process. Update technology: VA determined that the computer system supporting its appeals process is outdated, prone to failures, and does not adequately support electronic claims processing. VA proposed a new IT system to reduce delays in appeals to the Board, and better integrate data from other systems. Consistent with sound practices, VA clearly laid out the scope and purpose of IT upgrades, and identified risks and strategies to mitigate them. However, the agency's plan lacks details for how and when its new system will be implemented, as suggested by sound planning practices for implementing new technology. Without a detailed schedule, VA risks not having new systems aligned with potential changes in the appeals process when they are implemented. What GAO Recommends GAO is making five recommendations to VA and one matter for congressional consideration. VA should: apply sensitivity analyses when projecting staff needs, develop a more timely and detailed workforce plan, develop a robust plan for monitoring process reform, develop a strategy for assessing process reform, and create a schedule for IT improvements that takes into account plans for potential process reform. VA concurred in principle with the five recommendations, but believes it has met the intent of those recommendations and does not need to take additional action. GAO disagrees and—while recognizing VA's ongoing efforts—believes further action is needed on all five recommendations to improve VA's ability to successfully implement reforms, as discussed in the report. VA disagreed with an additional draft recommendation that it incorporate pilot testing of its proposed appeals process into implementation plans and pursue necessary legislative authority. VA cited its perspective that the appeals process is broken and that piloting a new process would result in further delays to veterans appealing their disability decisions. GAO maintains that the benefits of pilot testing—which provides an opportunity to resolve implementation challenges and make refinements to the process on a smaller scale—outweigh the potentially negative consequences of delaying full implementation. Therefore, GAO removed the recommendation and added a matter for congressional consideration stating that Congress should consider requiring that appeals process reform be subject to a pilot test.

gao_GAO-13-520

gao_GAO-13-520_0

Prior to 2004, corporations were required to reconcile their book net income with tax net income reporting on Schedule M-1 of their income tax returns by comparing the book and tax return amounts of a limited number of income and expense items. Effective rates differ from statutory tax rates in that they attempt to measure taxes paid as a proportion of economic income, while statutory rates indicate the amount of tax liability (before any credits) relative to taxable income, which is defined by tax law and reflects tax benefits and subsidies built into the law. The statutory tax rate of 35 percent applying to most large U.S. corporations is sometimes referred to as the “headline rate,” because it is the rate most familiar to the public. A common measure of tax liability used in estimates based on financial statement data has been the current tax expense—either federal only or worldwide (which comprises federal, foreign, and U.S. state and local income taxes); however, some studies have used the total tax expense, and others have used cash taxes paid during the year. The typical measure of income for effective tax rate estimates based on financial statements has been some variant of pretax net book income. The inclusion of unprofitable firms, which pay little if any actual tax, can result in relatively high estimates because the losses of unprofitable corporations greatly reduce the denominator of the effective rate. The Average Effective Tax Rates for Profitable Large Corporations Were Well Below the Statutory Rate and Well Below the Effective Rates for All Large Corporations in Tax Years 2008 through 2010 For tax year 2010, profitable Schedule M-3 filers actually paid U.S. federal income taxes amounting to 12.6 percent of the worldwide income that they reported in their financial statements (for those entities included in their tax returns). The Average Effective Tax Rates Based on Book Income Are Lower When Unprofitable Corporations Are Excluded All of the effective tax rates based on book income for profitable filers are lower than the equivalent measures computed for all Schedule M-3 filers, shown on the right side of figure 4, because the inclusion of losses reduces the aggregate income for all Schedule M-3 filers. The Average Effective Tax Rates for Profitable Corporations Were Well Below the Federal Statutory Rate Even When Foreign and State and Local Income Taxes Were Included Past empirical studies comparing average effective tax rates across countries have focused on worldwide taxes (which add foreign and state and local income taxes to federal income taxes in the numerator). 2. 26 U.S.C. 26 U.S.C. Agency Comments We provided a draft of this report to IRS on April 25, 2013, for review and comment. After reviewing the draft report, IRS provided technical comments which we incorporated as appropriate. Among the differences reported on this line are those relating to differences in inventory accounting. Section 902 of the Internal Revenue Code (IRC) permits a U.S. corporation that owns at least 10 percent of the voting stock of a foreign corporation to take an indirect credit for foreign income taxes associated with dividends that it receives from that foreign corporation.

Why GAO Did This Study Proponents of lowering the U.S. corporate income tax rate commonly point to evidence that the U.S. statutory corporate tax rate of 35 percent, as well as its average effective tax rate, which equals the amount of income tax corporations pay divided by their pretax income, are high relative to other countries. However, GAO's 2008 report on corporate tax liabilities ( GAO-08-957 ) found that nearly 55 percent of all large U.S.-controlled corporations reported no federal tax liability in at least one year between 1998 and 2005. Given the difficult budget choices Congress faces and its need to know corporations' share of the overall tax burden, GAO was asked to assess the extent to which corporations are paying U.S. corporate income tax. In this report, among other things, GAO (1) defines average corporate ETR and describes the common methods and data used to estimate this rate and (2) estimates average ETRs based on financial statement reporting and tax reporting. To conduct this work, GAO reviewed economic and accounting literature, analyzed income and expense data that large corporations report on the Schedules M-3 that they file with Internal Revenue Service (IRS), and interviewed IRS officials. What GAO Found Effective tax rates (ETR) differ from statutory tax rates in that they attempt to measure taxes paid as a proportion of economic income, while statutory rates indicate the amount of tax liability (before any credits) relative to taxable income, which is defined by tax law and reflects tax benefits and subsidies built into the law. Lacking access to detailed data from tax returns, most researchers have estimated ETRs based on data from financial statements. A common measure of tax liability used in past estimates has been the current tax expense--either federal only or worldwide (which comprises federal, foreign, and U.S. state and local income taxes). The most common measure of income for these estimates has been some variant of pretax net book income. GAO was able to compare book tax expenses to tax liabilities actually reported on corporate income tax returns. For tax year 2010 (the most recent information available), profitable U.S. corporations that filed a Schedule M-3 paid U.S. federal income taxes amounting to about 13 percent of the pretax worldwide income that they reported in their financial statements (for those entities included in their tax returns). When foreign and state and local income taxes are included, the ETR for profitable filers increases to around 17 percent. The inclusion of unprofitable firms, which pay little if any tax, also raises the ETRs because the losses of unprofitable corporations greatly reduce the denominator of the measures. Even with the inclusion of unprofitable filers, which increased the average worldwide ETR to 22.7 percent, all of the ETRs were well below the top statutory tax rate of 35 percent. GAO could only estimate average ETRs with the data available and could not determine the variation in rates across corporations. The limited available data from Schedules M-3, along with prior GAO work relating to corporate taxpayers, suggest that ETRs are likely to vary considerably across corporations. What GAO Recommends GAO does not make recommendations in this report. GAO provided a draft of this report to IRS for review and comment. IRS provided technical comments which were incorporated as appropriate.

gao_AIMD-99-161

gao_AIMD-99-161_0

In addition, AAC risks certain types of unauthorized access not being detected because it had not completely corrected the user access monitoring weaknesses we previously identified. AAC had established a solid foundation for its computer security planning and management program by creating a centralized computer security group, developing a comprehensive security policy, and promoting security awareness. Although AAC had substantially corrected previously identified computer security weaknesses, we tested additional access and system software controls and found weaknesses that posed risks of unauthorized modification, disclosure, or destruction of financial and sensitive veteran medical and benefit information. A program to regularly test information system controls would also have allowed AAC to detect additional network security weaknesses. Addressing the remaining additional issues should help AAC ensure that an effective computer security environment is achieved and maintained. Conclusions AAC had made substantial progress in improving information system general controls. Until AAC completes implementing its computer security planning and management program by establishing a framework for continually assessing risks and routinely monitoring and evaluating the effectiveness of information system controls, it will not have adequate assurance that appropriate controls are established and operating effectively. AAC could have identified and corrected these types of weaknesses, which could also adversely affect other agencies that depend on AAC for computer processing support, had it fully implemented an effective computer security planning and management program. Recommendations We recommend that the Acting VA Chief Information Officer (CIO) work with the director of AAC to implement policies and procedures for assessing and managing risk on a establish processes for (1) monitoring compliance with established information system control policies and procedures, (2) testing the effectiveness of information system controls, and (3) improving information system controls based on the results of these activities; and expand the center’s user access activity monitoring program to identify and investigate unusual or suspicious patterns of successful access to sensitive data and resources for unauthorized access.

Why GAO Did This Study Pursuant to a legislative requirement, GAO assessed the effectiveness of information system general controls at the Department of Veterans Affairs' (VA) Austin Automation Center (AAC). What GAO Found GAO noted that: (1) AAC had made substantial progress in correcting specific computer security weaknesses that GAO identified in its previous evaluation of information system controls; (2) AAC had established a solid foundation for its computer security planning and management program by creating a centralized computer security group, developing a comprehensive security policy, and promoting security awareness; (3) however, AAC had not yet established a framework for continually assessing risks and routinely monitoring and evaluating the effectiveness of information system controls; (4) GAO also identified additional computer security weaknesses that increased the risk of inadvertent or deliberate misuse, fraudulent use, improper disclosure, and destruction of financial and sensitive veteran medical and benefit information on AAC systems; (5) an effective computer security planning and management program would have allowed AAC to identify and correct the types of additional weaknesses that GAO identified; (6) in addition, AAC continues to run the risk that unauthorized access may not be detected because it had not established a program to identify and investigate unusual or suspicious patterns of successful access to sensitive data and resources; (7) these weaknesses could also affect other agencies that depend on AAC information technology services; (8) AAC was very responsive to addressing new security exposures identified and corrected several weaknesses before GAO's fieldwork was completed; (9) the Acting Assistant Secretary for Information Technology said VA would implement all of GAO's recommendations by September 30, 1999; and (10) addressing the remaining issues will help ensure that an effective computer security environment is achieved and maintained.

gao_HEHS-98-90

gao_HEHS-98-90_0

On average, HBCUs have a higher student loan default rate than non-HBCUs, but the difference has narrowed somewhat. 1). Relative to parents of freshmen at all 4-year colleges and universities, parents of 4-year HBCU freshmen were more likely to be divorced or separated, less likely to have a college education, and more likely to earn less than $20,000 a year. 2). A comparison of the average 6-year graduation rate—another measure of academic preparedness—showed a 35-percent rate for 4-year HBCUs compared with 54 percent for 4-year non-HBCUs, a difference of 19 percentage points. 3). 5). 6). 7). Our comparisons showed that students at high-default-rate HBCUs consistently had more disadvantaged socioeconomic characteristics than students at HBCUs with low default rates. 8). 10). Department Measures to Reduce Defaults Are Aimed at All Schools According to Department officials, default reduction measures apply to all schools participating in federal student loan programs and are not specifically aimed at lowering high default rates at HBCUs. These measures were part of the default reduction initiative that the Department introduced in June 1989 in response to the rising default rates in federal student loan programs at that time. Fewer HBCUs Are at Risk of Losing Student Loan Program Eligibility In August 1993, we reported that 33 HBCUs had 1988-90 cohort default rates equal to or greater than the 25-percent statutory threshold. Of these 14 HBCUs, 8 were schools that were included in the 1988-90 cohorts that still remain at risk and 6 had not been at risk in the 1988-90 cohorts. We asked them what measures their schools had taken to reduce or minimize their student loan default rates. They most often cited loan counseling or early intervention with delinquent borrowers as the measures they had taken to address defaults. We were asked to address several issues regarding default rates at Historically Black Colleges and Universities (HBCU), including an analysis of these kinds of links. 9, No. Comparing Students at HBCUs With Those of All Colleges and Universities To determine how these academic preparation and socioeconomic characteristics of students enrolled at HBCUs compared with those of students at all colleges and universities, we reviewed the literature and identified one research study that reported academic and socioeconomic information by type of school. Department and HBCU Measures to Reduce Student Loan Default Rates We obtained information on measures the Department of Education has taken or planned to help HBCUs lower their default rates from federal regulations, Department publications, and interviews with Department officials. We reviewed the Department’s Default Management Report for 1993-95 cohorts to determine the current status of the 33 HBCUs identified in our earlier report as having the potential to lose their eligibility to participate in title IV loan programs because of high default rates. To determine the measures HBCUs were taking to reduce their default rates, we conducted a telephone survey of financial aid administrators at 26 HBCUs. Seventeen of these had been among the 33 HBCUs identified in our earlier report as being at risk of losing their eligibility but had subsequently lowered their default rates below the statutory level for at least 1 of the 3 1993-95 cohort years. Selected Academic Preparation and Socioeconomic Background Student Characteristics Linked to Student Loan Default From our review of research, we identified and selected academic preparation and socioeconomic student characteristics that have been shown to affect student loan default rates and for which data were available. Higher level of education linked to lower default rate. For comparing high- to low-default HBCUs, parents’ income is their adjusted gross income as reported on the 1995-96 school year Free Application for Federal Student Aid. 2.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed several issues regarding default rates at historically black colleges and universities (HBCU), focusing on: (1) a comparison of freshman students at HBCUs with those at all colleges and universities in terms of the academic and socioeconomic characteristics that have been linked to student loan defaults; (2) differences in socioeconomic characteristics among 4-year HBCUs, for undergraduate students with higher default rates compared with schools with lower default rates; (3) measures the Department of Education has taken or planned to help HBCUs reduce their student loan default rates; (4) the number of HBCUs that are potentially at risk of losing title IV student loan eligibility because of high default rates in 1993-95, and how many of these were potentially at risk in 1988-90; and (5) measures HBCUs have taken to reduce or minimize their student loan default rates. What GAO Found GAO noted that: (1) HBCUs have enrolled a higher percentage of freshmen who, compared with their peers at all institutions, are less prepared academically and come from more disadvantaged socioeconomic backgrounds; (2) the 1995 graduation rate for 4-year HBCUs (35 percent) was substantially below that of non-HBCU students (54 percent); (3) students at HBCUs were twice as likely to come from a home where parents were divorced or separated, and their parents generally had lower education and income levels than parents of students at all colleges and universities; (4) when the analysis is narrowed to only HBCUs, the same pattern is found; (5) in general, HBCUs with lower default rates enrolled students with more academic preparation and higher socioeconomic levels; (6) parents of students receiving federal financial aid at HBCUs with lower default rates generally had higher average adjusted gross incomes and more education and were more likely to be married; (7) the Department of Education employs a number of measures to help schools reduce student loan defaults; (8) these measures apply to all schools, as the Department has no separate or specific default reduction program for HBCUs; (9) the Department's primary efforts were introduced in 1989 as its default reduction initiative and include such activity as supporting schools' efforts to provide financial aid counseling to student borrowers and followup with delinquent borrowers; (10) according to the most recent computations available (for 1993-95), 14 HBCUs were potentially at risk of losing their student loan program eligibility because their default rates remained at or above 25 percent for 3 consecutive years; (11) this is fewer than the 33 HBCUs that GAO reported in August 1993 as potentially at risk on the basis of their 1988-90 default rates; (12) of these 33 HBCUs, 8 remained potentially at risk on the basis of their 1993-95 default rates (6 more subsequently became potentially at risk), 19 were no longer at risk and were eligible to participate in federal student loan programs, and 6 were no longer participating in the program; (13) financial aid administrators at 22 HBCUs GAO surveyed cited default reduction measures promoted by the Department--loan counseling and early intervention with delinquent borrowers--as the default reduction measures they most often used in managing their student loan default rates; and (14) this survey included administrators at 14 of the 33 HBCUs that GAO previously reported could be at risk of losing their student loan eligibility--if they were not subject to the exemption--based on their 1988-90 default rates.

gao_GAO-08-314

gao_GAO-08-314_0

Emergency-designated funds do not have to compete for scarce resources that are constrained by budget controls. Increased Use of Supplementals is Largely Attributable to Defense Funding As figure 1 showed, the use of supplementals has increased over the last several years. Over the 10-year period from fiscal year 1997 through fiscal year 2006, 25 supplemental appropriations laws were enacted providing about $612 billion ($557 billion net of rescissions) in new gross budget authority. Ninety-five percent of the total supplemental funds were appropriated to 11 departments, with the DOD receiving nearly 60 percent of the total (see fig. When the emergency-designated provisions were analyzed by the type of emergency prompting the need for the supplemental, not surprisingly, defense-related emergencies received over 50 percent of the funds. In comparison, 28 percent was directed to respond to natural or economic disasters and 16 percent went to antiterror, security, and post-9/11 activities. International humanitarian assistance, pandemic influenza, and other activities comprised 3 percent of the total emergency- designated supplemental funds provided over the 10-year period we studied. Additional Controls Could Reduce the Use of Supplementals and Increase Opportunities for Oversight Our analysis indicates that there are a number of issues to be addressed if the use of supplementals is to be limited to needs identified after the beginning of the fiscal year. Although Congress has specified criteria for the emergency designation in Budget Resolutions, these criteria are not self-executing and there are limited screening and enforcement processes. Such funds provide agencies with great flexibility but do not prompt the annual or periodic Congressional review and reconsideration typical of funds that are available for a limited amount of time. In our review of emergency-designated supplemental provisions enacted from fiscal years 1997 through 2006, we found provisions that were not clearly consistent with these criteria as well as provisions that did not contain sufficient information for us to make a determination. Some have questioned the use of the emergency designation for the funds provided for the ongoing military operations related to GWOT—noting that it is problematic for an ongoing event to be considered “sudden” or “unforeseen.” However, we do not address this in our analysis, because Congress has provided that some of the funds for overseas contingency operations related to GWOT can be designated emergency and are exempt from certain points of order and other budget enforcement provisions. In our review of supplementals over the 10-year period, we found that 35 accounts received supplemental appropriations in at least 6 of the 10 years studied, totaling over $375 billion. The majority of these accounts fell within DOD. In addition, the gross budget authority granted to these 21 DOD accounts ($258 billion) comprised over 40 percent of the total gross budget authority in supplemental appropriations enacted over the studied period. Some funds are available until expended (referred to as “no-year” funding). These experts generally agreed that reform was needed but differed on how best to achieve this. Second, our analysis showed that some supplementals contain emergency- designated provisions not related to the event/issue(s) that may have prompted the need for the supplemental. This raises questions as to whether “emergency” supplementals are not always used just to meet the needs of unforeseen emergencies but also include funding for activities that could be covered in regular appropriations acts, if funded at all. Over the 10-year period we examined, over one-third of the supplemental appropriations enacted were no-year funds. Therefore, controls should be in place to ensure that emergency supplementals are enacted for their intended purpose—to address unforeseen needs that arise suddenly after the start of a fiscal year. Appendix I: Objectives, Scope, and Methodology The objectives for this report were to evaluate (1) trends in supplemental appropriations enacted from fiscal years 1997–2006 and (2) steps that could be taken to increase transparency and establish additional controls over emergency supplemental appropriations. B— Emergency Supplemental Act, 2000) Defense Appropriations Act, 2001 (Title IX—Additional Fiscal Year 2000 Emergency Supplemental Appropriations for the Department of Defense) Supplemental Appropriations Act for Recovery from and Response to Terrorist Attacks on the United States Defense and Emergency Supplemental Appropriations for Recovery from and Response to Terrorist Attacks on the United States, 2002 (2nd $20 billion - 9/11 attacks) Wartime Supplemental Appropriations Act, 2003 Supplemental for Disaster Relief Act, 2003 Branch, 2003 (Title III— Emergency Supplemental Appropriations Act, 2003) Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief, 2005 Interior, Environment and Related Agencies Appropriations Act, 2006 (Title VI—Veterans Health Care) Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 of Defense Appropriations Act, 2007 (Title X— Fiscal Year 2006 Wildland Fire Emergency Appropriations) Appendix III: GAO Contacts and Staff Acknowledgments GAO Contact Acknowledgments In addition to the individual listed above, Carol Henn, Assistant Director; Tiffany Mostert; Elizabeth Hosler; Farahnaaz Khakoo; and John Stradling made significant contributions to this report.

Why GAO Did This Study Supplemental appropriations laws (supplementals) are a tool for policymakers to address needs that arise after the fiscal year has begun. Supplementals provide important and necessary flexibility but some have questioned whether supplementals are used just to meet the needs of unforeseen events or whether they also include funding for activities that could be covered in regular appropriations acts. GAO was asked to evaluate (1) trends in supplemental appropriations enacted from fiscal years 1997-2006 and (2) steps that could be taken to increase transparency and establish additional controls over emergency supplemental appropriations. Also, GAO consulted with budget experts to discuss options for reform. What GAO Found The use of supplementals has increased over the last several years, largely as a result of an increase in Department of Defense (DOD) funding and the use of supplementals to provide that funding for activities such as the Global War on Terrorism (GWOT). Over the 10-year period from fiscal year 1997 through fiscal year 2006, supplemental appropriations provided about $612 billion ($557 billion net of rescissions) in new gross budget authority, a five-fold increase over the previous 10-year period. Ninety-five percent of the total supplemental funds were appropriated to 11 departments, with DOD receiving nearly 60 percent of the total. Further, an analysis of the type of emergency prompting the need for the supplemental shows that defense-related emergencies received over 50 percent of the emergency-designated funds. In comparison, 28 percent was to respond to natural or economic disasters and 16 percent went to antiterror, security, and post-9/11 activities. International humanitarian assistance, pandemic influenza, and other activities comprised 3 percent of the total emergency-designated supplemental funds provided over the 10-year period. The majority of the supplemental funds appropriated over this 10-year period were designated as emergency. Emergency-designated funds do not have to compete for scarce resources that are constrained by budget controls. Although Congress has specified criteria for the emergency designation in Budget Resolutions, these criteria are not self-executing and there are limited screening and enforcement processes. The increased use of supplementals raises questions about the current incentives and controls surrounding their use. GAO reviewed emergency-designated supplementals and found provisions that were not clearly consistent with emergency designation criteria or did not contain sufficient information for us to make a determination. Also, GAO identified provisions that raise questions about whether supplemental appropriations bills can become vehicles for funding some activities that could be covered in the regular budget and appropriations process. For example, we found $710 million in emergency-designated provisions that appeared to be unrelated to the event/issue(s) that may have prompted the supplemental. In addition, we found that 35 accounts received supplemental appropriations in at least 6 of the 10 years studied, totaling over $375 billion. Twenty-one of these accounts were in DOD and the gross budget authority granted to these 21 accounts ($258 billion) comprised over 40 percent of the total gross budget authority in the supplemental appropriations enacted over the studied period. Finally, over one-third of the supplemental appropriations enacted were available until expended ("no-year" funds). Such no-year funds provide agencies with important flexibility but do not prompt the annual or periodic Congressional oversight typical of funds that are available for a fixed amount of time. If the use of supplemental appropriations is to be limited to addressing unforeseen needs that arise suddenly after the start of a fiscal year, additional controls and increased transparency are needed. Budget experts GAO consulted generally agreed reform was needed but differed on how best to achieve this.

gao_GAO-12-77

gao_GAO-12-77_0

EPA’s Framework for Integrating Environmental Justice EPA’s framework for integrating environmental justice into the agency’s missions includes four major plans: (1) EPA’s Fiscal Year 2011-2015 Strategic Plan, (2) Plan EJ 2014, (3) Plan EJ 2014’s Implementation Plans, and (4) Plan EJ 2014 Outreach and Communications Plan. Key stakeholders include the National Environmental Justice Advisory Council (NEJAC), the Federal Interagency Working Group on Environmental Justice (IWG), state agencies, and community groups. EPA has renewed its efforts to work with key environmental justice stakeholders to advance the agency’s environmental justice considerations. EPA Generally Followed Most of the Selected Leading Federal Strategic Planning Practices to Develop Its Environmental Justice Framework In developing a framework for incorporating environmental justice considerations into its policies, programs, and activities, EPA generally followed or partially followed the six leading federal strategic planning practices that we reviewed (see table 2). Ensure leadership involvement and accountability. Coordinate with other federal agencies. Specifically, EPA has not yet fully:  established a clear strategy for how it will define key environmental justice terms or identified the resources it may need to carry out its environmental justice implementation plans;  articulated clearly states’ roles in ongoing planning and environmental justice integration efforts; and  developed performance measures for eight of its nine implementation plans to track agency progress on its environmental justice goals. EPA has developed performance measures for one of its nine Plan EJ 2014 implementation plans to track progress on its environmental justice goals: its Resources Tools Development implementation plan. In carrying out these efforts, the agency has generally followed most of the leading practices we reviewed in federal strategic planning. However, without additional progress on these practices, EPA cannot assure itself, its stakeholders, and the public that it has established a framework to effectively guide and assess its efforts to integrate environmental justice into the fabric of the agency. Recommendations for Executive Action To ensure that EPA continues to make progress toward the effective integration of environmental justice considerations into the agency’s programs, policies, and activities, we recommend that the Administrator of EPA direct the appropriate offices to take the following four actions:  Develop a clear strategy to define key environmental justice terms in order to help the agency establish a consistent and transparent approach for identifying potential communities with environmental justice concerns.  Articulate clearly in its plans the roles and responsibilities of states and continue recently initiated outreach efforts to help ensure that states are meaningfully involved in ongoing environmental justice planning and the subsequent implementation of Plan EJ 2014. Agency Comments and Our Evaluation We provided a draft copy of this report to EPA for review and comment. EPA disagreed with two recommendations, partially agreed with one recommendation, and did not directly address one other recommendation in the report. Appendix I: Scope and Methodology To examine how EPA is implementing its environmental justice efforts, we analyzed key EPA documents to identify offices with environmental justice responsibilities.

Why GAO Did This Study The Environmental Protection Agency (EPA) is responsible for promoting environmental justice--that is, the fair treatment and meaningful involvement of all people in developing, implementing, and enforcing environmental laws, regulations, and policies. In January 2010, the EPA Administrator cited environmental justice as a top priority for the agency. GAO was asked to examine (1) how EPA is implementing its environmental justice efforts, and (2) the extent that EPA has followed leading federal strategic planning practices in establishing a framework for these efforts. To conduct this work, GAO reviewed EPA strategy documents and interviewed agency officials and key stakeholders. What GAO Found In recent years, EPA has renewed its efforts to make environmental justice an important part of its mission by developing a new strategy and approach for integrating environmental justice considerations into the agency's programs, policies, and activities. Under Plan EJ 2014, the agency's 4-year environmental justice implementation plan, EPA's program and regional offices are assuming principal responsibility for integrating the agency's efforts by carrying out nine implementation plans to put Plan EJ 2014 into practice. An important aspect of Plan EJ 2014 is to obtain input on major agency environmental justice initiatives from key stakeholders, including the National Environmental Justice Advisory Council, the Federal Interagency Working Group on Environmental Justice, impacted communities, and states. In developing its environmental justice framework, which consists of agency initiatives, including Plan EJ 2014 and the implementation plans, EPA generally followed most of the six leading federal strategic planning practices that we selected for review. For example, EPA has generally defined a mission and goals for its environmental justice efforts, ensured leadership involvement and accountability for these efforts, and coordinated with other federal agencies--all consistent with leading practices in federal strategic planning. However, EPA has not yet fully (1) established a clear strategy for how it will define key environmental justice terms or identified the resources it may need to carry out its environmental justice implementation plans, (2) articulated clearly states' roles in ongoing planning and environmental justice integration efforts, or (3) developed performance measures for eight of its nine implementation plans to track agency progress on its environmental justice goals. Without additional progress on these practices, EPA cannot assure itself, its stakeholders, and the public that it has established a framework to effectively guide and assess its efforts to integrate environmental justice across the agency. What GAO Recommends GAO is recommending that EPA develop a clear strategy to define key environmental justice terms; conduct a resource assessment; articulate clearly states' roles in ongoing planning and future implementation efforts; and develop performance measures to track the agency's progress in meeting its environmental justice goals. GAO provided a draft of this report to EPA for comment. EPA disagreed with two of GAO's recommendations, partially agreed with one recommendation, and did not directly address the remaining recommendation. GAO believes that the recommended actions will help EPA ensure clear, consistent, and measurable progress as it moves forward in implementing Plan EJ 2014.

gao_T-RCED-97-108

gao_T-RCED-97-108_0

HUD estimates that it will need $9.2 billion in budget authority in fiscal year 1998 to renew contracts for over half of all units assisted under Section 8. HUD’s current policy is to renew expiring Section 8 contracts for 1 year at a time. These include (1) $162 million allowance for contingencies to cover uncertainties in the number of units to be renewed; (2) $253 million to provide a 2-week funding allowance per housing unit to account for changes in economic conditions; (3) $116 million to account for the anticipated effects of welfare reform on tenants’ incomes and, in turn, on the rent that housing authorities can collect from these tenants. The Department expects to complete this process by March 31, 1997. This policy limits HUD’s ability to offset its budget request for contract renewals with accumulated unspent budget authority and raises the amount of budget authority that HUD must request. Premature Funding Requests Increase HUD’s Project-Based Contract Renewal Estimate HUD’s budget request for Section 8 contract renewal funding includes two line items for project-based housing assistance that HUD has since determined do not require renewal in fiscal year 1998. Justification for Increasing Size of Section 8 Program Is Unclear For fiscal year 1998, HUD has requested $305 million in budget authority to fund 50,000 incremental (new) certificates to help families required to move because of the Department’s Welfare-to-Work initiative. However, it is unclear how HUD determined that 50,000 vouchers would be needed to help families relocate or how HUD would distribute the new certificates to states and urban centers where this need is likely to be felt. Balances of Uncommitted Modernization Funding Have Decreased, but Some Housing Authorities’ Balances Have Increased For fiscal year 1998, HUD is requesting $2.5 billion for public housing capital activities, the same amount it received in fiscal year 1997. Currently, housing authorities have approximately $925 million in backlogged funding. Of the 22 PHAs reviewed, 6 have larger backlogs than they did 3 years ago, including the 3 PHAs noted above. The Empowerment Zone/Enterprise Community Program May Not Need Full Funding in Fiscal Year 1998 HUD’s fiscal year 1998 budget proposal includes $100 million for a second round of the Empowerment Zone/Enterprise Community (EZ/EC) program. This means that HUD’s request of $100 million in fiscal year 1998 could be premature. Conclusions HUD may not need all the budget authority that it has requested for the Section 8 program in fiscal year 1998 because it has built in several allowances to cover unexpected costs, while at the same time it has access to unspent budget authority from prior years that also can be used to address unexpected costs. Matters for Congressional Consideration The Congress may wish to consider not funding the various contingency allowances that HUD has proposed in its fiscal year 1998 budget request for tenant-based Section 8 contract renewals until HUD provides the Congress a more complete justification of the need for each contingency allowance, including HUD’s policy that allows housing authorities to retain large excess contract reserves. The Congress may also wish to review HUD’s need for budget authority in fiscal year 1998 of $100 million for the second round of the EZ/EC program and to seek assurances from HUD that the program will be ready to commit funds. Housing and Urban Development: Comments on HUD’s FY 1997 Budget Request (GAO/T-RCED-96-205, June 17, 1996). 3, 1995).

Why GAO Did This Study GAO discussed the Department of Housing and Urban Development's (HUD) fiscal year (FY) 1998 budget request, focusing on: (1) the estimates HUD used to develop its budget request for renewing Section 8 assisted housing contracts; (2) HUD's justification for 50,000 additional Section 8 certificates; (3) HUD's success in reducing the level of uncommitted public housing modernization funds held by housing authorities; and (4) HUD's request for $100 million to fund the second round of the Empowerment Zone/Enterprise Community (EZ/EC) program. What GAO Found GAO noted that: (1) HUD's FY 1998 budget request for $9.2 billion in budget authority to renew expiring Section 8 contracts for assisted housing includes amounts that may not be required or could be offset; (2) HUD's request contains allowances for contingencies, costs that may or may not accrue or that cannot be precisely estimated, with an estimated value of $531 million; (3) however, because HUD also allows housing agencies that administer the tenant-based program to retain a large portion of their unspent reserves for contingencies, HUD may not need funding for the contingencies noted above; (4) in developing this budget request, HUD may be able to offset (reduce) some of its current renewal needs after it has identified all unspent budget authority accumulated over prior years, an effort it plans to complete by March 31, 1997; (5) since its budget was released, HUD has found that two housing programs that provide project-based assistance do not need to be renewed in FY 1998, and therefore the programs do not require the $90 million that HUD budgeted for them; (6) HUD also has requested $305 million in budget authority for FY 1998 to fund 50,000 new Section 8 certificates; (7) according to HUD, the certificates will accommodate family relocation caused by HUD's Welfare-to-Work initiative, but it is unclear how HUD estimated the number of units or justified their need; (8) for example, HUD has neither given a basis for choosing 50,000 as its request nor provided a plan for distributing these certificates to states or urban centers according to their need; (9) in addition, HUD plans to request an additional 50,000 units over the next 4 years, adding approximately $2.4 billion in renewal costs through FY 2002 for the additional 100,000 certificates; (10) over the past 3 years, public housing authorities have decreased the amount of uncommitted public housing modernization funding that they have available for major modernization projects by approximately 30 percent; (11) despite this progress, approximately $925 million remains uncommitted; (12) in addition, several large troubled housing authorities have larger uncommitted balances than they did 3 years ago; (13) despite the pressure on HUD's budget because of the increasing need to renew Section 8 contracts, these housing authorities will continue to be granted additional funding in accordance with HUD's formula for awarding modernization grants; and (14) HUD's request for $100 million to fully fund a second round of the EZ/EC program appears premature as it is unlikely that HUD can commit this amount during FY 1998.

gao_GGD-96-61

gao_GGD-96-61_0

Key Recommendations for Tax Policy and Administration In our reports and testimonies, we suggested actions that if taken could improve compliance with the tax laws, assist taxpayers, enhance the effectiveness of tax incentives, improve Internal Revenue Service (IRS) management, and improve the processing of returns and receipts. 13, 1995). We did our work on tax policy and administration matters pursuant to 31 U.S.C. As of December 31, 1995, this bill had not been signed. Listing of Open Recommendations to Congress Before and During Fiscal Year 1995 Congress should amend the Internal Revenue Code to allow IRS to provide information to all responsible officers regarding its efforts to collect the trust fund recovery penalty from other responsible officers.

Why GAO Did This Study Pursuant to a legislative requirement, GAO summarized its work on tax policy and administration during fiscal year (FY) 1995, including: (1) actions federal agencies took in response to its recommendations as of December 31, 1995; (2) recommendations made to Congress before and during FY 1995 that remain open; and (3) assignments for which it received authorized access to tax information. What GAO Found GAO noted that its recommendations addressed specific actions that Congress and the administration could take to: (1) improve compliance with tax laws; (2) assist taxpayers; (3) enhance the effectiveness of tax incentives; (4) improve Internal Revenue Service management; and (5) improve the processing of returns and receipts.

gao_GAO-01-998T

gao_GAO-01-998T_0

National Formulary Standardization Not Yet Achieved While VA has made significant progress in establishing a national formulary, its oversight has not been sufficient to ensure that it is fully achieving its national formulary goal of standardizing its drug benefit nationwide. At one medical center, about 25 percent (286 drugs) of the national formulary drugs were not available as formulary choices. The third factor is that medical centers we visited inappropriately modified the national formulary list of drugs in the closed classes. Approval Processes for Nonformulary Drugs Have Weaknesses While the national formulary directive requires certain criteria for approval of nonformulary drugs, it does not prescribe a specific nonformulary approval process. As a result, the processes health care providers must follow to obtain nonformulary drugs differ among VA facilities regarding how requests are made, who receives them, who approves them, and how long it takes to obtain approval. In addition, some VISNs have not established processes to collect and analyze data on nonformulary requests. As a result, VA does not know if approved requests meet its established criteria or if denied requests are appropriate. Both the people involved and the length of time to approve nonformulary drugs varied. In addition, VA (1) drafted criteria for VISNs to use to determine the appropriateness of adding drugs to supplement the national formulary list, which it intends to include in a directive; (2) is developing a template for VISNs to document all VISN formulary additions; and (3) intends to review more quickly all new FDA- approved drugs for inclusion in the national formulary.

Why GAO Did This Study Although the Department of Veterans Affairs (VA) has made significant progress establishing a national formulary that has generally met with acceptance by prescribers and patients, VA oversight has not fully ensured standardization of its drug benefit nationwide. The three medical centers GAO visited did not comply with the national formulary. Specifically, two of the three medical centers omitted more than 140 required national formulary drugs, and all three facilities inappropriately modified the national formulary list of required drugs for certain drug classes by adding or omitting some drugs. In addition, as VA policy allows, Veterans Integrated Service Networks (VISN) added drugs to supplement the national formulary ranging from five drugs at one VISN to 63 drugs at another. However, VA lacked criteria for determining the appropriateness of the actions networks took to add these drugs. In addition to problems standardizing the national formulary, GAO identified weaknesses in the nonformulary approval process. Although the national formulary directive requires certain criteria for approving nonformulary drugs, it does not prescribe a specific nonformulary approval process. As a result, the processes health care providers must follow to obtain nonformulary drugs differ among VA facilities on how requests are made, who receives them, who approves them, and how long it takes to obtain approval. What GAO Found GAO found that the length of time to approve nonformulary drugs averages nine days, but it can be as short as a few minutes in some medical centers. Some VISNs have not established processes to collect and analyze data on nonformulary requests. As a result, VA does not know if approved requests meet its established criteria or if denied requests are appropriate. This testimony summarizes the December 1999 report, HEHS-00-34 and the January 2001 report, GAO-01-183 .

gao_GAO-07-546

gao_GAO-07-546_0

No JFCOM LAA Projects Approved since Prior GAO Report Very little has changed with regard to usage of JFCOM’s LAA since our November 2005 report was issued. Since LAA’s enactment over 3 years ago, JFCOM has received 12 LAA proposals and approved 6. A sixth project is ongoing with additional development remaining. The total funding obtained for the six projects has increased from $9 million in research, development, test, and evaluation funds in 2005 to $14 million through January 2007. No procurement funds had been used as of January 2007, although the ongoing speech translation project has identified a need for procurement funding. In response to a GAO questionnaire directed at recipients of JFCOM LAA capabilities, warfighters generally provided positive feedback about the process that JFCOM developed and implemented for LAA projects. DOD and JFCOM Face Several Challenges with LAA DOD and JFCOM face several challenges in continuing to implement LAA—one challenge goes to the role of LAA and the other challenges deal with how LAA is managed and operated. The two processes cover similar ground, and given that the JRAC process is expected to be expanded soon, they could overlap even more. Exemplifying the need for coordination, we analyzed the six approved LAA projects and concluded that JRAC might have also been able to accomplish most, if not all, of them. JFCOM Experiences Complications with Funding, Delegation, and Analysis of Projects’ Usefulness Finding Funding for LAA Projects Continues to Be Challenging Finding funding to develop, acquire, and sustain LAA projects was identified as a challenge in our prior report and remains so. Because LAA is an authority, not a program, LAA does not have budgeted funds. JFCOM officials have to either find other DOD organizations to pay for LAA projects or pay for them with funds budgeted for other JFCOM work. Failure to clarify these issues may impair JFCOM’s ability to carry out LAA efforts. Further complicating this joint rapid acquisition picture are the differing views on what LAA powers were delegated to JFCOM. Recommendations for Executive Action As DOD considers expanding JRAC’s coverage, we recommend that the Secretary of Defense take the following three actions: reassess the role of the JFCOM LAA in light of the expanding JRAC process, and determine whether and how JFCOM LAA should play a role in meeting joint urgent needs; to the extent JFCOM LAA is to continue to play a role in meeting joint urgent needs, assess and resolve, as appropriate, the funding, coordination, and delegation challenges identified in this report; and inform Congress of the results of the assessment and any resultant decisions in time for Congress to consider them in its deliberations on the National Defense Authorization Act for fiscal year 2008. Appendix I: Scope and Methodology To provide an update on the U.S. Joint Forces Command (JFCOM) limited acquisition authority (LAA) efforts since LAA was enacted, we obtained and analyzed information and documentation, and interviewed officials from a variety of organizations. To identify key challenges in operating and managing LAA, we obtained and analyzed information and documentation, and interviewed officials, from JFCOM; and Office of the Secretary of Defense—General Counsel, Comptroller, Under Secretary of Defense (Acquisition, Technology, and Logistics)/Defense Procurement and Acquisition Policy, Under Secretary of Defense (Acquisition, Technology, and Logistics)/Joint Rapid Acquisition Cell (JRAC), Under Secretary of Defense (Acquisition, Technology, and Logistics)/Director, Defense Research and Engineering, and the Joint Staff/J-8, Capabilities and Acquisition Division, which are located in Arlington, Virginia. We also determined if JRAC might have been able to process the six approved LAA projects if the JRAC process had existed at the time the projects were approved by JFCOM. Appendix II: Comments from the Department Of Defense

Why GAO Did This Study Over 3 years ago, Congress granted limited acquisition authority (LAA)--subject to delegation by the Secretary of Defense--to U.S. Joint Forces Command (JFCOM) for a 3-year period to expedite development and acquisition of certain warfighter equipment. Congress directed GAO to report on JFCOM LAA implementation. GAO's report, issued in November 2005, said JFCOM finished five LAA projects and was working on a sixth project, and that JFCOM had experienced difficulty finding funding to develop, acquire, and sustain LAA projects. Last year, Congress extended LAA through September 2008 and again directed GAO to report on LAA. This report updates the status of JFCOM LAA efforts since the authority was enacted and key LAA challenges. What GAO Found JFCOM has not approved any LAA projects since GAO's November 2005 report, and the LAA project that was incomplete as of then remains so. The projects generally fall under the category of battle management command, control, communications, and intelligence. Research funding provided for the six LAA projects has risen from $9 million in 2005 to $14 million as of January 2007. No procurement funds had been used for these projects as of then. Feedback from the projects' recipients--the warfighter--has been mostly positive about the LAA acquisition process and capabilities delivered. The Department of Defense (DOD) and JFCOM face several LAA challenges, one of which goes to the role of LAA. Shortly after LAA's enactment, the Deputy Secretary of Defense created the Joint Rapid Acquisition Cell (JRAC) to provide timely solutions for joint urgent warfighter needs. GAO analysis indicates that JRAC and JFCOM LAA cover similar ground and could overlap even more if JRAC is allowed to address needs other than for ongoing named operations. JRAC might have also been able to carry out most, if not all, of the six LAA projects had it existed when they were approved by JFCOM. Other challenges relate to how LAA is managed and operated. JFCOM officials said funding remains an issue because LAA is an authority without budgeted funds. JFCOM LAA staff tries to find funding for approved projects from other DOD organizations. When funding could not be found, JFCOM funded most of the six LAA projects with funds budgeted for other JFCOM work. The search for funding lengthens the time to get capabilities to the warfighter. JRAC does not have budgeted funds either, but has greater access to funding than JFCOM. Another challenge involves uncertainty between JFCOM and the Office of the Secretary of Defense regarding what LAA powers were delegated to JFCOM. Until the uncertainty is resolved, how JFCOM should carry out LAA efforts will remain unclear.

gao_GAO-15-25

gao_GAO-15-25_0

Most Federal Agencies Reported Access to and Commitment to Using Evidence but Fewer Reported Congressional Requests for Program Evaluation GPRA represents a central component of the enabling environment for U.S. government evaluation capacity by providing, for over 20 years, a statutory framework for performance management and accountability across the government. About half the agencies (11) reported committing resources to obtain evaluations by establishing a central office responsible for evaluating agency programs, operations, or projects. Most of these offices were said to be independent of program offices in making decisions about evaluation design, conduct, and reporting and to have access to analytic expertise through external experts or contractors, but about half were reported to have a stable source of funding (6). About one-quarter of agencies reported having agency-wide written policies or guidance for key issues addressed in those guides: ensuring internal or external evaluator independence and objectivity; ensuring completeness and transparency of evaluation reports; selecting and prioritizing evaluation topics; consulting program staff and subject matter experts; selecting evaluation approaches and methods; timely, public dissemination of evaluation findings and recommendations; or tracking implementation of evaluation findings. Two-thirds of the agencies reported evaluation coverage of less than half their performance goals; including 7 that reported having evaluations for none of their performance goals. Five agencies reported using evaluation to support all these activities to a moderate or greater extent on average. In fact, in its May 2012 memorandum, OMB encouraged agencies to designate a high-level official responsible for evaluation who can Conduct or oversee rigorous and objective studies; Provide independent input to agency policymakers on resource “Develop and manage the agency’s research agenda; allocation and to program leaders on program management; Attract and retain talented staff and researchers, including through flexible hiring authorities such as the Intergovernmental Personnel Act; and Refine program performance measures, in collaboration with program managers and the Performance Improvement Officer.” In addition, 4 of 11 agencies with a central office responsible for evaluation reported that this office started conducting evaluations after 2010. Half the Agencies Reported Increasing Their Use of Evaluations as Evidence in Decision Making after 2010 In line with the increases reported in capacity building activities and organizational resources, about half the agencies reported that their use of evaluation as supportive evidence had increased at least somewhat since 2010 (only a few reported great increases). PIOs Reported Hiring, Professional Networking, and Consulting with Experts Were Very Useful in Improving the Capacity to Conduct Evaluations Our survey asked the PIOs about the usefulness of 14 different actions or resources for improving their capacity to conduct evaluations, drawn from the literature and some GPRAMA provisions related to building agency capacity. PIOs Reported Engaging Program Staff and Holding Goal Leaders Accountable Were Very Useful for Building Capacity to Use Evaluations in Decision Making Previously, we found that experienced evaluators emphasized three basic strategies to facilitate evaluation’s influence on program management and policy: demonstrate leadership support of evaluation for accountability and program improvement, build a strong body of evidence, and engage stakeholders throughout the evaluation process. However, a third of PIOs stated that the agency did not use this vehicle. Those with centralized evaluation authority reported greater evaluation coverage and use in decision making, but additional effort will be required to expand agencies’ evaluation capacity beyond those that already possess evaluation expertise. In addition to hiring and training staff and consulting experts, promoting information sharing through informal and formal evaluation professionals’ networks offers promise for building agencies’ capacity to conduct evaluation in a constrained budget environment. Engaging program staff, regularly reviewing progress on agency priority goals, and holding goal leaders accountable can help build agency use of evaluation in decision making, as our survey results show. Engaging congressional and other stakeholders in evaluation planning might increase their interest in evaluation as well as their adoption of evaluation findings and recommendations. As we have noted before, congressional committees can also communicate their interest in evaluation in a variety of ways to encourage agencies to produce credible, relevant studies that inform decision making: consult with agencies on proposed revisions to their strategic plans and priority goals, as GPRAMA requires them to do every 2 years, to ensure that agency missions are focused, goals are specific and results-oriented, and strategies and funding expectations are appropriate and reasonable; request agency evaluations to address specific questions about the implementation and results of major program or policy reforms, in time to consider their results in program reauthorization; and review agencies’ annual evaluation plans or agendas to ensure that they address issues that will inform budgeting, reauthorization, and ongoing program management. Agency Comments We requested comments on a draft of this report from the Director of the Office of Management and Budget, whose staff provided technical comments that we incorporated as appropriate, and from the Director of the Office of Personnel Management, who provided none. The survey gave us information about agencies’ evaluation resources, policies, and activities, and the activities and resources they have found useful in building their evaluation capacity. Influencing Change: Building Evaluation Capacity to Strengthen Governance. Managing for Results: A Guide for Using the GPRA Modernization Act to Help Inform Congressional Decision Making.

Why GAO Did This Study To improve federal government performance and accountability, GPRAMA aims to ensure that agencies use performance information in decision making and holds them accountable for achieving results. The Office of Management and Budget (OMB) has encouraged agencies to strengthen their program evaluations– systematic studies of program performance–and expand their use in management and policy making. This report is one of a series in which GAO, as required by GPRAMA, examines the act's implementation. GAO examined federal agencies' capacity to conduct and use program evaluations and the activities and resources, including some related to GPRAMA, agencies found useful for building that capacity. GAO reviewed the literature to identify the key components and measures of evaluation capacity. GAO surveyed the PIOs of the 24 federal agencies subject to the Chief Financial Officers Act regarding their organizations' characteristics, expertise, and policies, and their observations on the usefulness of various resources and activities for building evaluation capacity. All 24 responded. GAO also interviewed OMB and Office of Personnel Management (OPM) staff about their capacity-building efforts. What GAO Found In a governmentwide survey of agency Performance Improvement Officers (PIO), GAO found uneven levels of evaluation expertise, organizational support within and outside the organization, and use across the government. The Government Performance and Results Act of 1993 (GPRA) is a key component of the enabling environment for federal evaluation capacity, having established a solid foundation of agency performance reporting and leadership commitment to using evidence in decision making. However, only half the agencies reported congressional interest in or requests for program evaluation studies. Eleven of the 24 agencies reported committing resources to obtain evaluations by establishing a central office responsible for evaluation of agency programs, operations, or projects, although only half these offices were reported to have a stable source of funding. Seven agencies reported having a high-level official responsible for oversight of evaluation. A quarter of agencies reported having agency-wide policies or guidance concerning key issues in study design, evaluator independence and objectivity, report transparency, or implementing findings. Two-thirds of the agencies reported evaluation coverage of less than half their performance goals. Over a third reported using evaluations to a moderate or greater extent as evidence in support of budget or policy changes or program management. Those agencies with centralized evaluation authority reported greater evaluation coverage and use of the results in decision making. Since the GPRA Modernization Act of 2010 (GPRAMA) was passed, 2 to 4 agencies established a central evaluation office or leader. Half the agencies reported increased efforts to improve their evaluation capacity through hiring, training, conference participation, and consulting experts, but 4 to 5 reported declines in hiring and conference participation. About half reported increased use of evaluations as supporting evidence for management and policy decisions. About a quarter of PIOs were not familiar with their agencies' various capacity- building activities but many of those that did respond rated hiring, professional networking, consulting with experts, reviewing progress on priority goals, and holding goal leaders accountable under GPRAMA most useful for building capacity to conduct evaluations. They rated engaging program staff in evaluation design, conduct, and reporting, and the GPRAMA priority goal review and accountability provisions most useful for building capacity to use evaluation. Based on our survey results, GAO observes that Promoting information sharing in professional networks and engaging program managers and staff in evaluation studies and priority goal reviews offer promise for building capacity in a constrained budget environment. Engaging congressional and other stakeholders in evaluation planning might increase their interest in and adoption of evaluation recommendations. Congressional committees can communicate their interest in evaluation by consulting with agencies on their strategic plans and priority goals, reviewing agency annual evaluation plans to ensure they address issues that will inform congressional decision making, and requesting evaluations to address specific questions of interest. What GAO Recommends GAO is not making recommendations. OMB staff provided technical comments on a draft of this report that were incorporated as appropriate. OPM provided no comments.

gao_GAO-12-122T

gao_GAO-12-122T_0

Between late 2007 and early 2009, the Federal Reserve Board created more than a dozen new emergency programs to stabilize financial markets and provided financial assistance to avert the failures of a few individual institutions. FRBNY implemented most of these emergency activities under authorization from the Federal Reserve Board. In a few cases, the Federal Reserve Board authorized FRBNY to lend to a limited liability corporation (LLC) to finance the purchase of assets from a single institution. In 2009, FRBNY, at the direction of the FOMC, began large-scale purchases of mortgage-backed securities (MBS) issued by the housing government- sponsored enterprises, Fannie Mae and Freddie Mac, or guaranteed by Ginnie Mae. The independent financial statement audits and other reviews did not identify significant accounting or financial reporting internal control issues concerning the emergency programs. Reserve Banks Would Benefit From Strengthening Guidance for Noncompetitive Contracts Awarded in Exigent Circumstances Reserve Banks Relied Extensively on Vendors to Establish and Operate the Emergency Programs, Particularly Those Designed to Assist Single Institutions From 2008 through 2010, vendors were paid $659.4 million across 103 contracts to help establish and operate the Reserve Banks’ emergency programs. Reserve Banks Awarded Largest Contracts Noncompetitvely and Would Benefit From Additional Guidance on Seeking Competition Most of the contracts, including 8 of the 10 highest-value contracts, were awarded noncompetitively, primarily due to exigent circumstances. FRBNY’s policy did not provide additional guidance on the use of competition exceptions, such as seeking as much competition as practicable and limiting the duration of noncompetitive contracts to the exigency period. For a significant portion of the fees, program recipients reimbursed the Reserve Banks or the fees were paid from program income. Opportunities Exist to Strengthen Conflict Policies for Employees, Directors, and Program Vendors During the crisis, FRBNY took steps to manage conflicts of interest related to emergency programs for its employees, program vendors, and members of its Board of Directors, but opportunities exist to strengthen its conflicts policies. During the crisis, FRBNY expanded its guidance and monitoring for employee conflicts. During our review, Federal Reserve Board and FRBNY staff told us that the Federal Reserve System plans to review and update the Reserve Banks’ Codes of Conduct as needed given the Federal Reserve System’s recently expanded role in regulating systemically significant financial institutions. In light of this ongoing effort, we recommended that the Federal Reserve System consider how potential conflicts from emergency lending could inform any changes. FRBNY Primarily Used Contract Protections to Manage Risks Related to Vendor Conflicts, and the Lack of a Comprehensive Policy Created Certain Limitations FRBNY managed risks related to vendor conflicts of interest primarily through contract protections and oversight of vendor compliance with these contracts, but these efforts have certain limitations. In May 2010, FRBNY implemented a new vendor management policy but had not yet finalized more comprehensive guidance on vendor conflict issues. Opportunities Exist to Strengthen Risk Management Policies and Practices for Future Emergency Programs The Federal Reserve Board approved key program terms and conditions that served to mitigate risk of losses and delegated responsibility to one or more Reserve Banks for executing each emergency lending program and managing its risk of losses. The Federal Reserve Board’s early broad- based lending programs—Term Auction Facility, Term Securities Lending Facility, and Primary Dealer Credit Facility—required borrowers to pledge collateral in excess of the loan amount as well as other features intended to mitigate risk of losses. Also, for the assistance to specific institutions, the Reserve Banks negotiated loss protections with the institutions and hired vendors to help oversee the portfolios collateralizing loans. While the Federal Reserve Board Took Steps to Promote Consistent Treatment of Participants, It Lacked Guidance and Documentation for Some Access Decisions The Federal Reserve Board and the Reserve Banks took steps to promote consistent treatment of eligible program participants and generally offered assistance on the same terms and conditions to eligible institutions in the broad-based emergency programs. The Federal Reserve Board Generally Has Not Provided Documented Guidance to Reserve Banks on Types of Program Decisions That Require Consultation with the Federal Reserve Board In authorizing the Reserve Banks to operate its emergency programs, the Federal Reserve Board has not provided documented guidance on the types of program policy decisions—including allowing atypical uses of broad-based assistance—that should be reviewed by the Federal Reserve Board. 3). 4). In its comments on our report, the Federal Reserve Board agreed to give our recommendations serious attention and to strongly consider how to respond to them.

Why GAO Did This Study The Dodd-Frank Wall Street Reform and Consumer Protection Act directed GAO to conduct a one-time audit of the emergency loan programs and other assistance authorized by the Board of Governors of the Federal Reserve System (Federal Reserve Board) during the recent financial crisis. This testimony summarizes the results of GAO's July 2011 report (GAO-11-696) examining the emergency actions taken by the Federal Reserve Board from December 1, 2007, through July 21, 2010. For these actions, where relevant, this statement addresses (1) accounting and financial reporting internal controls; (2) the use, selection, and payment of vendors; (3) management of conflicts of interest; (4) policies in place to secure loan repayment; and (5) the treatment of program participants. To meet these objectives, GAO reviewed program documentation, analyzed program data, and interviewed officials from the Federal Reserve Board and Reserve Banks (Federal Reserve System). What GAO Found On numerous occasions in 2008 and 2009, the Federal Reserve Board invoked emergency authority under the Federal Reserve Act of 1913 to authorize new broad-based programs and financial assistance to individual institutions to stabilize financial markets. Loans outstanding for the emergency programs peaked at more than $1 trillion in late 2008. The Federal Reserve Board directed the Federal Reserve Bank of New York (FRBNY) to implement most of these emergency actions. In a few cases, the Federal Reserve Board authorized a Reserve Bank to lend to a limited liability corporation (LLC) to finance the purchase of assets from a single institution. In 2009 and 2010, FRBNY also executed large-scale purchases of agency mortgage-backed securities to support the housing market. The Reserve Banks, primarily FRBNY, awarded 103 contracts worth $659.4 million from 2008 through 2010 to help carry out their emergency activities. A few contracts accounted for most of the spending on vendor services. For a significant portion of the fees, program recipients reimbursed the Reserve Banks or the fees were paid from program income. The Reserve Banks relied more extensively on vendors for programs that assisted a single institution than for broad-based programs. Most of the contracts, including 8 of the 10 highest-value contracts, were awarded noncompetitively, primarily due to exigent circumstances. These contract awards were consistent with FRBNY's acquisition policies, but the policies could be improved by providing additional guidance on the use of competition exceptions, such as seeking as much competition as practicable and limiting the duration of noncompetitive contracts to the exigency period. FRBNY took steps to manage conflicts of interest for its employees, directors, and program vendors, but opportunities exist to strengthen its conflict policies. In particular, FRBNY expanded its guidance and monitoring for employee conflicts, but new roles assumed by FRBNY and its employees during the crisis gave rise to potential conflicts that were not specifically addressed in the Code of Conduct or other FRBNY policies. As the Federal Reserve System considers revising its conflict policies given its new authority to regulate certain nonbank institutions, GAO recommended it consider how potential conflicts from emergency lending could inform any changes. FRBNY managed vendor conflict issues through contract protections and actions to help ensure compliance with relevant contract provisions, but these efforts had limitations. While the Federal Reserve System took steps to mitigate risk of losses on its emergency loans, opportunities exist to strengthen risk management practices for future crisis lending. The Federal Reserve Board approved program terms and conditions designed to mitigate risk of losses and one or more Reserve Banks were responsible for managing such risk for each program. Reserve Banks required borrowers under several programs to post collateral in excess of the loan amount. For programs that did not have this requirement, Reserve Banks required borrowers to pledge assets with high credit ratings as collateral. For loans to specific institutions, Reserve Banks negotiated loss protections with the private sector and hired vendors to help oversee the portfolios that collateralized loans. While the Federal Reserve System took steps to promote consistent treatment of eligible program participants, it did not always document processes and decisions related to restricting access for some institutions. GAO made seven recommendations to the Federal Reserve Board to strengthen policies for managing noncompetitive vendor selections, conflicts of interest, risks related to emergency lending, and documentation of emergency program decisions. The Federal Reserve Board agreed that GAO's recommendations would benefit its response to future crises and agreed to strongly consider how best to respond to them.

gao_GAO-15-376

gao_GAO-15-376_0

We also found that OCIE’s approach to developing and implementing a risk-based approach to oversight of FINRA did not follow all the components of a risk-management framework identified in our prior work. SEC generally agreed with our recommendation and has taken some steps to further incorporate the components into its risk-based approach, such as its risk-assessment process described later in this report. Risk management interrelates to an entity’s governance, performance management, and internal controls. FINRA Oversight Program Lacks Elements of an Effective Risk- Management Framework Since our 2012 report, Market Oversight has made further progress in transitioning its FINRA oversight program to a risk-based approach, including assessing the risk of various FINRA programs and using the assessment results to inform its oversight activities. As risks are identified and assessed, Market Oversight documents its risk-level determinations and oversight recommendations in a risk- assessment document. However, as discussed earlier, our 2012 report described the components of our risk-management framework and recommended that as Market Oversight developed its risk-based approach, it should follow all components of a risk-management framework. Furthermore, OCIE created and filled, within Market Oversight, the position of Senior Special Counsel-FINRA and New Markets to monitor FINRA generally and coordinate its FINRA oversight activities. OCIE also has transitioned its FINRA district office inspections to a risk- focused model and centralized responsibility for the inspections in Market Oversight. According to Market Oversight documents, in making recommendations to management as to which FINRA district offices to inspect in the most recent round of inspections, staff reviewed information and data requested from FINRA regarding general organization, regulatory operations, enforcement program, cooperation with state securities regulators, and internal auditing of FINRA’s 15 district offices, among others. Market Oversight documents also show that staff analyzed a variety of information in making their recommendations, such as the number of cause examinations and enforcement matters, the number of branch offices, and the number of high-risk firms in a district office’s jurisdiction. Planning Government Auditing Standards require a written audit plan for each audit. As a result, they considered this method to be generally consistent with the guidelines. SEC has taken steps to enhance its oversight of FINRA, which include completing inspections of all 10 Section 964 areas, incorporating oversight of these areas into inspections of other FINRA programs and operations, and conducting risk assessments to inform its oversight activities. Recommendations for Executive Action To improve SEC’s FINRA oversight program, the SEC Chair should direct the appropriate offices and divisions to incorporate additional risk- management practices by taking several actions, including: establishing specific performance goals for the program and performance measures and related targets to assess Market Oversight’s progress in meeting those goals; formalizing documentation of procedures, including procedures for making changes to the annual planned oversight activities and decision-making rationales; and modifying existing risk-assessment procedures to require an assessment of internal risks to successfully meeting the FINRA oversight program’s goals and objectives. Appendix I: Objectives, Scope, and Methodology Our objectives were to (1) assess the Securities and Exchanges Commission’s (SEC) implementation of its risk-based approach for overseeing the Financial Industry Regulatory Authority (FINRA), (2) review oversight of FINRA operations and programs, and (3) assess recent inspections of areas listed in Section 964 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). We also reviewed procedures for FINRA district office inspections and memorandums for district office selection. Finally, we interviewed FINRA officials to obtain general information on SEC’s oversight of FINRA. To assess OCIE’s oversight of FINRA programs and operations listed under Section 964 of the Dodd-Frank Act, we analyzed OCIE policies and procedures (for conducting inspections of self-regulatory organizations) that guided the inspections of the FINRA programs and operations listed in Section 964 (Section 964 area inspections) to determine if they were consistent with Government Auditing Standards.

Why GAO Did This Study The securities industry is generally regulated by a combination of federal and industry regulation and oversight. FINRA, a self-regulatory organization, is responsible for regulating securities firms doing business with the public in the United States. SEC oversees FINRA's operations and programs. Section 964 of the Dodd-Frank Act mandates GAO to triennially review and report on aspects of SEC's oversight of FINRA. GAO issued its first report in May 2012 ( GAO-12-625 ). This report (1) assesses SEC's implementation of a risk-based framework for overseeing FINRA; (2) reviews SEC oversight activities of FINRA operations; and (3) assesses recent inspections of areas listed in Section 964. GAO reviewed and compared SEC documentation on its risk-based oversight with generally accepted risk-management frameworks, and performance management and internal control standards. GAO analyzed SEC inspection procedures for self-regulatory organizations and inspections of four Section 964 areas, against Government Auditing Standards . GAO selected the four inspections partly based on SEC's FINRA risk assessment and frequency of SEC oversight. GAO also interviewed SEC and FINRA officials. What GAO Found Since GAO reported in May 2012, the Securities and Exchange Commission (SEC) has incorporated elements of a risk-management framework into its oversight program of the Financial Industry Regulatory Authority (FINRA). For example, SEC has developed and implemented procedures for identifying and assessing FINRA program risks, which then inform its annual oversight plan and activities for FINRA. In 2012, GAO found that SEC's approach to developing a risk-based approach to oversight of FINRA did not incorporate all the components of a risk-management framework. GAO recommended that SEC follow all components of a risk-management framework. While SEC has taken some actions, this report found that SEC's risk-based oversight program could be more robust and consistent with risk-management and federal internal control standards. Specifically, SEC has yet to develop specific performance goals and measures, with corresponding targets to monitor its progress toward the goal of enhancing FINRA oversight; formalize procedures for documenting its oversight determinations, such as selecting FINRA areas for inspections and any changes made to planned oversight activities; and Complementary to its implementation of risk-assessment procedures to assist in selecting FINRA programs and operations for oversight, SEC also has taken a number of other steps to enhance its oversight of FINRA. One such step was creating and filling the position of Senior Special Counsel-FINRA and New Markets to work with SEC management in coordinating FINRA oversight activities and reviewing information to inform the risk assessment. Another step was the transition of its FINRA district office inspections, which evaluate various FINRA regulatory programs, from a set schedule (or cycle-based) model to a risk-focused model. Under this risk-focused model, staff analyze information and data, such as the number of high-risk firms in a district, to identify risks and make recommendations for which offices to inspect. A third step SEC took was revising its process for assessing FINRA's broker-dealer examinations to inform its assessment of FINRA program risks. SEC also recently completed inspections of each of the areas listed in Section 964 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), such as governance and executive compensation. The inspections GAO reviewed were conducted in a manner generally consistent with Government Auditing Standards and the information gathered was further used to inform SEC's FINRA risk assessment. GAO did not validate the findings of the Section 964 area inspections it selected for review. What GAO Recommends SEC should establish specific performance goals and measures, enhance documentation of oversight determinations and changes, and conduct an assessment of internal risks. In response, SEC described the actions they plan to take.

gao_HEHS-97-130

gao_HEHS-97-130_0

1073 note). But, as previously indicated, savings to date show that not enough is being done to reach DOD’s projected resource sharing savings levels. For the future, DOD is planning far broader changes in MTF budgeting and support contracting, which are expected to further reduce reliance on resource sharing. One result of this approach will be to reduce reliance on resource sharing to lower support contract costs; but it also adds new challenges and does not eliminate, and may even exacerbate, resource sharing problems. More Contracting and Related Budgeting Changes Planned, With Broader Implications For the future, DOD plans other changes to simplify TRICARE contracting and MTF budgeting. No final decisions have been made yet. DOD Views Resource Sharing as One of Several Cost-Saving Features DOD officials acknowledged that resource sharing has not achieved the expected savings, but told us that lower than expected contract award amounts have led to more than $2 billion in other savings. While assessing TRICARE’s overall cost-effectiveness was beyond our review’s scope, there are reasons at this time to question the currency and analytical completeness of DOD’s savings claims. We reported that DOD lacked a formal methodology for developing the estimates, and we concluded overall that future health care costs likely would be greater. Thus, we support DOD’s plans to undertake a more current and complete cost analysis of MTF direct and contractor-provided care, based on recent program data, to bottom-line TRICARE’s current and future-year cost-effectiveness. Conclusions At their present results levels, for the existing contracts, DOD and the support contractor will achieve only about 5 percent of the expected $700 million in new savings, potentially causing shared financial losses and higher TRICARE costs. DOD’s policies, processes, and tools for use at the local level as well as the degree of DOD and contractor collaboration have not yet been sufficient to effectively resolve the approach’s obstacles. Recommendations We recommend that the Secretary of Defense direct the Assistant Secretary of Defense (Health Affairs) to determine whether any further resource sharing savings remain under the current contracts and, as appropriate, consummate promising agreements while seeking other mutually acceptable alternatives to resource sharing; determine, to the extent the new contracts with revised financing use resource sharing, whether any such agreements are available and, as appropriate, enter promising agreements while seeking effective alternatives to resource sharing; and incorporate, while planning for and implementing the next wave of MTF financing and contract management initiatives, such resource sharing lessons learned as the need for coherent, timely policies; clearly understood procedures; mutually beneficial incentives; and effective collaboration. As we said in the report, the approaches are still being defined and are yet to be tested. We reviewed DOD and contractor projections of resource sharing costs and savings, TRICARE policies and guidance, and various efforts by DOD to promote the overall resource sharing effort. A variety of reports may be useful in this regard. MTF Operations Study. For example, “This project is intended to expand Family Practice services within the hospital. These include (1) the type of RSA, (2) whether the agreement converts an inpatient partnership agreement that previously existed, (3) the option period (year) covered by the proposed agreement, (4) the number of outpatient visits or inpatient admissions enabled by the agreement, (5) the expected government risk-sharing responsibility percentage, (6) the estimated volume trade-off factor used to estimate CHAMPUS avoidance savings, (7) the estimated average government cost per unit for admissions and/or outpatient visits avoided in CHAMPUS for care covered by the agreement, (8) the expected contractor expenditure under the agreement, (9) the projected MTF marginal expenditures, (10) the contractor resource sharing workload credit assumed in the analysis, (11) the sum of the projected resource sharing expenditures for those agreements approved for the lead agent region as a whole, and (12) the expected MTF payment for the contractor’s costs and the MTF’s marginal costs if the resource is acquired under task order resource support rather than resource sharing.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) use of support contracts to help deliver health care and to control costs, focusing on: (1) whether resource sharing savings are meeting DOD's projections and thus helping control TRICARE costs; (2) what problems DOD might be encountering in pursuing resource sharing; and (3) actions and alternatives pursued by DOD to overcome those problems. GAO also considered the implications of resource sharing within the broader context of TRICARE's overall cost-effectiveness. What GAO Found GAO noted that: (1) DOD and the contractors have made agreements likely to save about 5 percent of DOD's overall resource sharing savings goals; (2) new agreements are being considered, but neither DOD nor the contractors are confident that pending agreements will be reached or that further cost savings can be attained; (3) because resulting TRICARE contract costs may be greater than anticipated, both parties may experience related financial losses; (4) problems impeding progress on resource sharing agreements and the related savings have included lack of clear program policies and priorities, uncertainty about cost effects on military hospitals, lack of financial rewards for the hospitals entering into such agreements, and changes in military hospital capacities after contractors developed bids; (5) in response, DOD has revised policies, improved training and analytical tools, and taken other steps to promote resource training under the contracts, but to date, these efforts have not been sufficient to bring needed results; (6) for the last two contracts, DOD is applying a revised financing approach that includes resource sharing but at a reduced level; (7) the new approach allocates more funds to the military hospitals and less to the contractors, enabling the hospitals to directly acquire and use outside resources rather than use resource sharing with the contractor; (8) how the military hospitals, other sources, and contractors interact under the new approach is still being defined and has not been tested; resource sharing problems will not be automatically eliminated and may be exacerbated when used in combination with revised financing; (9) for the future, DOD plans even broader changes intended to simplify military hospital budgeting and support contract operations; (10) while the military hospitals and contractors could still use resource sharing, it no longer would be the basis for projecting major savings and lowering bids at the contract's outset; (11) DOD officials acknowledged their resource sharing savings problems but told GAO that lower than expected contract award prices have led to over $2 billion in unexpected, offsetting savings; (12) while TRICARE's overall cost-effectiveness was beyond GAO's review scope, there are reasons to question the currency and analytical completeness of DOD's preliminary savings claims; and (13) GAO supports DOD's current plans to undertake a detailed analysis, based on more up-to-date cost data and estimates, of TRICARE's overall cost-effectiveness.

gao_RCED-96-96

gao_RCED-96-96_0

Available Estimates Show That Millions Are Affected by Foodborne Illnesses Between 6.5 million and 81 million cases of foodborne illness and as many as 9,100 related deaths occur each year, according to the estimates provided by several studies conducted over the past 10 years. Fourth, bacteria already recognized as sources of foodborne illnesses have found new modes of transmission. Fifth, some pathogens are far more resistant than expected to long-standing food-processing and storage techniques previously believed to provide some protection against the growth of bacteria. Finally, according to CDC officials, virulent strains of well-known bacteria have continued to emerge. Pathogens Cause Disabling Health Effects in Some People While foodborne illnesses are often brief and do not require medical treatment, they can also result in more serious illnesses and death. In a small percentage of cases, foodborne infections spread through the bloodstream to other organs, resulting in serious long-term disability or even death. Foodborne Illnesses Can Cost Billions of Dollars in Medical Expenses and Lost Productivity Annually While the overall annual cost of foodborne illnesses is unknown, the studies we reviewed estimate that it is in the billions of dollars. More uniform and comprehensive data on the number and causes of foodborne illnesses could form the basis of more effective control strategies. Current Data Do Not Provide Sufficient Detail on the Risk Posed by Foodborne Illnesses According to public health and food safety officials, the current voluntary reporting system does not provide sufficient data on the prevalence and sources of foodborne illnesses.

Why GAO Did This Study GAO reviewed the extent of foodborne illnesses caused by microbal contamination, focusing on: (1) the frequency, health consequences, and economic impacts of these illnesses; and (2) the extent of information available to develop effective control strategies. What GAO Found GAO found that: (1) between 6.5 million and 81 million cases of foodborne illness and as many as 9,100 related deaths occur each year; (2) the risk of foodborne illness is increasing due to changes in food supply and consumption, recognition of new causes of foodborne illnesses, new modes of transmission, increased resistance to long-standing food-processing and storage techniques, and emerging virulent strains of well-known bacteria; (3) while foodborne illnesses are most often brief and do not require medical care, a small percentage cause long-term disability or even death; (4) foodborne illness may cost billions of dollars every year in medical costs and lost productivity; (5) the current voluntary reporting system does not provide sufficient data on the prevalence and sources of foodborne illnesses; (6) efforts are under way to collect more and better data on the prevalence and sources of foodborne illnesses; and (7) more uniform and comprehensive data on the number and causes of foodborne illnesses could lead to more effective control strategies.

gao_GGD-99-64

gao_GGD-99-64_0

In order to provide a perspective of how the 7(a) markets compare with other secondary markets, we compared the two secondary markets in 7(a) loan portions to the secondary markets for single-family residential mortgages as follows: The secondary market for single-family residential mortgages which has federal mortgage insurance provided by the Federal Housing Administration (FHA), a government corporation within the Department of Housing and Urban Development (HUD). Secondary Loan Markets Generate Benefits and Concerns Secondary loan markets, which are resale markets for loans originated in primary markets, link borrowers and lenders in local markets to national capital markets, lower costs for funds, and help lenders manage risks. This linkage provides an additional source of funds for lenders that can increase lenders’ liquidity. The share of loans in a primary market that are sold in a secondary market depends on the benefits generated by the secondary market. The Secondary Markets in SBA 7(a) Loans Generate Benefits and Risks In linking 7(a) borrowers and lenders from local markets to the national capital markets, the 7(a) secondary markets--particularly the market for guaranteed portions--benefit lenders, borrowers, and investors. The 7(a) secondary markets can help borrowers and lenders by reducing regional imbalances and cyclical swings in credit availability and pricing. Investors in the guaranteed 7(a) market face prepayment risk, and investors and lenders in the unguaranteed 7(a) secondary market share prepayment and credit risks. The 7(a) Secondary Markets Generate Benefits for Many Depository and Nondepository Institutions In calendar year 1997, 1,540 SBA lenders sold 12,164 7(a) loans (about 45 percent of the 7(a) loans approved during the most recent fiscal year) in the guaranteed secondary market and collectively generated $2.7 billion in sales. These lenders generally lacked a sufficient deposit base to fund their loans. Investors in 7(a) pool certificates and securities benefit from greater liquidity and lower risks than they would get from investing directly in individual loans, because these instruments can be sold more easily than individual loans, and risks are dispersed among the pooled loans. Although the 7(a) Secondary Markets Help SBA Serve Small Business Borrowers, They Provide a Means for Concentration of Credit Risk The 7(a) secondary markets could also be instrumental in contributing to a concentration of credit risk for SBA. Compared to the secondary markets for 7(a) loans, the secondary markets for residential mortgages operate with greater incentives for lenders to sell the loans they originate. In 1997, about 11 percent of unguaranteed portions of 7(a) loans were sold in the secondary market compared to about 32 percent of nonconforming loans sold in the secondary mortgage market. Lenders participating in these markets can reduce funding costs, and they can pass along some of their savings in the form of more favorable loan terms to borrowers. In 1997, about $290 million in unguaranteed portions of SBA loans were sold on the secondary market compared to $2.7 billion dollars in guaranteed portions. Generally, securitizations of small business loans without federal guarantees have been limited. A final rule, promulgated February 10, 1999, and effective April 12, 1999, generally requires that a securitizer have sufficient capital to meet the definition of “well-capitalized” used by bank regulators (depository institution), or maintain a minimum applicable capital equal to at least 10 percent of its assets, excluding the guaranteed portion of its 7(a) loans and including any remaining balance in its portfolio or in any securitization pool (nondepository institution); retain for 6 years a subordinated interest in the securities, the amount of which is the greater of two times the securitizer’s loss rate on its 7(a) loans disbursed for the preceding 10-year period or 2 percent of the principal balance outstanding at the time of the securitization of the unguaranteed portions of the loans in the securitization; and be placed on probation for one quarter, and then suspended for at least 3 months from preferred lender status if the securitizer’s default rate crosses certain thresholds and fails to improve to SBA’s standards.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on the secondary markets for 7(a) small business loans guaranteed by the Small Business Administration (SBA), focusing on: (1) the benefits and risks of secondary loan markets to participants; (2) primary benefits and risks to participants in the guaranteed 7(a) secondary market and the unguaranteed 7(a) secondary market; and (3) a comparison of the guaranteed 7(a) secondary market with the secondary market for federally guaranteed residential mortgages, and the unguaranteed 7(a) secondary market with the secondary market for residential mortgages without a federal guarantee. What GAO Found GAO noted that: (1) the proportion of loans that are sold in a secondary market depends on the benefits generated by the secondary market and how the benefits and risks are distributed among market participants; (2) by linking borrowers and lenders to national capital markets, secondary markets benefit lenders, borrowers, and investors; (3) these markets: (a) tap additional sources of funds; (b) reduce dependence on availability of local funds; (c) help to lower interest rates paid by borrowers; and (d) help lenders manage risks; (4) they provide lenders a funding alternative to deposits and, by enhancing market liquidity, they can reduce regional imbalances in loanable funds; (5) secondary loan markets can benefit borrowers by increasing the overall availability of credit in the primary market and by lowering the interest rates borrowers pay on loans; (6) the secondary markets in 7(a) loans provide lenders a funding source that otherwise would not be available; (7) in calendar year 1997, 1,540 SBA lenders sold 12,164 SBA 7(a) loans in the guaranteed secondary market, generating $2.7 billion in sales of guaranteed portions; (8) about $290 million in sales of unguaranteed portions were made that year by a smaller number of lenders; (9) these were generally Small Business Lending Companies, which lack a deposit base, or banks that had not developed a sufficient deposit base as a funding source for their loans; (10) lenders participating in these markets can reduce funding costs, and investors in 7(a) pool certificates and securities can get greater liquidity and lower risk than they would from directly investing in individual loans; (11) in the guaranteed 7(a) market, investors face prepayment risk, and in the unguaranteed 7(a) secondary market, investors and lenders share prepayment and credit risk; (12) both 7(a) secondary markets can help lenders make more loans, which could contribute to a concentration of SBA's credit risk among a few lenders that originate a large percentage of 7(a) loans; (13) compared to the secondary markets for 7(a) loans, the secondary markets for residential mortgages operate with greater incentives for lenders to sell the loans they originate; (14) in 1997, about 45 percent of the guaranteed portions of 7(a) loans originated that year were pooled and sold on the secondary market compared to virtually all federally insured single-family residential mortgages; and (15) about 11 percent of the unguaranteed portions of 7(a) loans originated in 1997 were pooled and sold on the secondary market compared to about 32 percent of nonconforming residential mortgages.

gao_GAO-02-423

gao_GAO-02-423_0

Since the mid-1990s, however, DOD has shifted its focus to cleaning up contamination and generally has limited its efforts to search for potentially contaminated locations. On active installations, contamination was discovered as a result of construction or other operational activities. Concerns about Identifying and Addressing Contamination Highlight Need for Better Procedures and Communication Stakeholders raised no major concerns about DOD’s cleanup efforts on active military installations, but raised three major concerns about the Corps’ efforts to identify and address contamination on formerly used defense sites in Guam. The second concern is that DOD excludes from the restoration program debris that does not pose a threat to human health or the environment, even though it was caused by DOD and could place a financial burden on owners who incur costs to remove it. The third concern is the slow pace of funding environmental cleanup on formerly used defense sites included in the restoration program. During fiscal years 1984-2000, 4 percent of the total expected cost of locations the Corps approved for cleanup had been funded in Guam while, nationally, 16 percent had been funded, even though contaminated locations in Guam posed risks to human health and the environment that were similar to risks posed by such locations nationally. These uncertainties have been exacerbated by poor communication between the Corps and its stakeholders. For example, a Guam landowner discovered World War II-era chemical testing kits with diluted mustard gas and other chemicals on his property in July 1999.

What GAO Found Chemical testing kits from World War II containing diluted mustard gas and other chemicals have been discovered on Guam. The Department of Defense (DOD) is responsible for identifying and cleaning up contaminated military sites throughout the United States and its territories. In the mid-1990s, DOD scaled back its identification efforts nationally and focused its attention on Guam. It now relies on referrals from the Guam Environmental Protection Agency and on incidental discovery during construction and other operational activities. Stakeholders had three concerns about the Army Corps of Engineers' efforts to identify and address contamination on former defense sites. First, they were uncertain about the Corps' process for adding potentially contaminated locations to its Guam inventory. Second, some locations containing debris, such as metal and tires, were excluded even though the waste was caused by DOD and could place a financial burden on the owner to remove it. Third, stakeholders were concerned about the slow pace of funding for the program. Between fiscal years 1984 and 2000, only four percent of the total expected cost of cleaning up these locations had been funded in Guam, compared with 16 percent nationwide.

gao_GAO-10-328

gao_GAO-10-328_0

Department of Homeland Security Components That Address Alien Smuggling along the Southwest Border DHS ICE is responsible for investigating alien smuggling as well as detaining and removing aliens who are subject to removal from the United States. These responses result in little or no investigative work and instead involve transporting and processing aliens for possible removal. In 2006, to respond to immigration-related calls for assistance from state and local law enforcement agencies in the Phoenix metropolitan area, DRO developed the LEAR program. OI was previously the primary ICE office providing assistance to state and local law enforcement agencies in the Phoenix area. From October 1, 2008, to May 24, 2009, the LEAR program processed 3,776 aliens, aliens who OI would have had to process in the absence of the LEAR program. Alien Smuggling Asset Seizures Have Decreased since 2005; Opportunities Exist to Leverage Additional Financial Investigative and Seizure Techniques The Value of OI Alien Smuggling Asset Seizures Has Decreased since 2005 In 2005 we reported that OI and Treasury’s Executive Office for Asset Forfeiture anticipated that in fiscal year 2005 and in future years alien smuggling investigations would result in increasing volumes of asset seizures as OI applied its financial and money laundering expertise, which it acquired when elements of legacy INS components and U.S. Customs merged to form OI in 2003. According to data provided by OI, and shown in table 2, the value of alien smuggling seizures nationwide increased from about $11.2 million in fiscal year 2005 to $17.4 million in fiscal year 2007, but declined to $7.6 million in fiscal year 2009. According to OI officials in all four SAC offices we visited, OI had increased its efforts to identify and seize assets related to alien smuggling. Justice agreed with our recommendation. However, the OI’s Phoenix SAC has assigned one investigator to the Task Force. An overall assessment of whether and how these techniques may be applied in the context of disrupting alien smuggling could help ensure that ICE is not missing opportunities to take additional actions and leverage resources to support the common goal of countering alien smuggling. Regarding MIRP, in accordance with the 2004 MIRP MOU between the United States and Mexico the objectives are to remove aliens from the United States—apprehended during the summer months, generally the hottest and most dangerous time of year for border crossings— to the interior of Mexico to deter them from returning in order to reduce loss of life and to combat organized crime linked to the smuggling, trafficking, and exploitation of persons. ICE and CBP Have Not Fully Evaluated Progress in Meeting Alien Smuggling Objectives Taking Actions to Fully Measure Progress toward Achieving Objectives Would Help ICE and CBP to Evaluate Their Effectiveness along the Southwest Border Federal internal control standards call for agencies to establish performance measures and indicators in order to evaluate the effectiveness of their efforts. Although it did not establish a performance measure for alien smuggling enforcement consequences until fiscal year 2009, OI provided us with such data for the period from fiscal years 2005 through 2009. Although one of the objectives of OI’s alien smuggling investigations is to seize smugglers’ assets, OI does not have performance measures for asset seizures related to alien smuggling cases. CBP has not established performance measures for ATEP and Operation Streamline to assess progress toward achieving program goals. To determine whether ICE could utilize Arizona’s financial investigative techniques to address alien smuggling, direct HSTC or another ICE- designated entity to conduct an assessment of the Arizona Attorney General’s financial investigations strategy to identify any promising investigative techniques for federal use. By conducting a more complete study of the feasibility of expanding the program throughout the southwest border region and expanding the program if it deems it feasible, ICE would be in a better position to help ensure that its resources are more efficiently directed toward alien smuggling and other priority investigations. Accordingly, this report addresses the following three questions: Since fiscal year 2005, what has been the trend regarding the amount of investigative effort ICE’s Office of Investigations (OI) has devoted to alien smuggling along the southwest border, what have been the results, and is there an opportunity for ICE to use its investigative resources more effectively? In addition, we analyzed CBP ENFORCE Integrated Database data from fiscal year 2005 through May 2009 to determine the extent to which alien smugglers were reapprehended by CBP after being processed through the OASISS program.

Why GAO Did This Study Alien smuggling along the southwest border is a threat to the security of the United States and Mexico. Within the Department of Homeland Security (DHS), the Office of Investigations (OI)--part of U.S. Immigration and Customs Enforcement (ICE)--is the primary federal agency responsible for investigating alien smuggling along the southwest border. As requested, this report addresses, for the southwest border, (1) OI's efforts to counter alien smuggling since 2005, and opportunities, if any, for ICE to use its resources more effectively; (2) the progress DHS has made in seizing alien smugglers' assets since fiscal year 2005 and any promising techniques that could be applied to seize smugglers' assets; and (3) the extent to which ICE has objectives related to alien smuggling and measures to assess progress. GAO interviewed officials in all four OI offices along the southwest border and analyzed data on OI's cases and seizures, from fiscal years 2005 through 2009. What GAO Found OI work years spent investigating alien smuggling increased from 190 to 197 from fiscal years 2005 through 2009, and an opportunity exists to better leverage resources. Officials from two of the four OI offices GAO visited said that in addition to conducting criminal investigations, OI has been tasked to respond to calls from state and local law enforcement to process and transport aliens for possible removal, which diverts OI resources from conducting alien smuggling and other investigations. In 2006, the Office of Detention and Removal Operations (DRO), another ICE subcomponent, took over responsibility for responding to state and local law enforcement calls in the Phoenix metropolitan area, through the Law Enforcement Agency Response (LEAR) program. For this program, officials from DRO, not OI, transport and process aliens for removal. From October 1, 2008, to May 24, 2009, the LEAR program processed 3,776 aliens, aliens who OI would have otherwise had to process. By studying the feasibility of expanding the LEAR program, ICE would be in a better position to determine if it could more efficiently direct its OI resources toward alien smuggling and other investigations. OI's alien smuggling asset seizures have decreased since 2005; however, opportunities exist to leverage additional seizure and financial investigative techniques. According to OI data, alien smuggling seizures nationwide increased in value from about $11.2 million in 2005 to about $17.4 million in 2007, but declined to about $12.2 million in fiscal year 2008 and to about $7.6 million in fiscal year 2009. One opportunity to leverage financial techniques to disrupt alien smuggling and seize assets involves assessing the financial investigative techniques used by an Arizona task force. The task force seized millions of dollars and disrupted alien smuggling operations by following cash transactions flowing through money transmitters that serve as the primary method of payment to those individuals responsible for smuggling aliens. An overall assessment of whether and how these techniques may be applied in the context of disrupting alien smuggling could help ensure that ICE is not missing opportunities to take additional actions and leverage resources to support the common goal of countering alien smuggling. ICE has established objectives for its alien smuggling-related enforcement programs, but could do more to better measure progress toward achieving program objectives. For example, one of its components, DRO, has defined the objective of the Mexican Interior Repatriation Program (MIRP) as to remove aliens who are apprehended during the hot and dangerous summer months from the United States to the interior of Mexico to deter them from returning in order to reduce loss of life and to help disrupt alien smuggling operations; however, DRO has not established performance measures to evaluate its progress in meeting its objective consistent with internal control standards. Thus, ICE does not know the effectiveness of its efforts related to MIRP at deterring individuals from illegally returning to the United States. What GAO Recommends GAO recommends, among other things, that DHS evaluate the feasibility of expanding the LEAR program, assess the Arizona Attorney General's investigations strategy, and develop performance measures for MIRP. DHS agreed with four of five recommendations in this report directed to DHS but disagreed with establishing MIRP performance measures because it did not believe such action was appropriate. GAO believes this recommendation is consistent with the program's intent.

gao_GAO-17-404T

gao_GAO-17-404T_0

As we testified last year, the continued deterioration in USPS’s financial condition is due primarily to two factors. 2). 2. In this regard, USPS reported a 14 percent growth in Shipping and Packages volume in fiscal year 2016. Compensation and benefits comprise close to 80 percent of total USPS expenses. As previously discussed, USPS’s unfunded liabilities and debt have become a large financial burden, increasing from 99 percent of USPS revenues at the end of fiscal year 2007 to 169 percent of revenues at the end of fiscal year 2016. As of the end of fiscal year 2016, USPS’s liability for retiree health benefits was about $104.0 billion and the Postal Service Retiree Health Benefits Fund balance was $51.9 billion, with a resulting unfunded liability of $52.1 billion. USPS Will Remain Unlikely to Fully Make Required Retiree Health and Pension Payments USPS will remain unlikely to fully make its required retiree health and pension payments in the near future. As table 1 below shows, in fiscal year 2017, USPS will be required to make an estimated total of $10.3 billion in payments for retiree health and pension benefits under CSRS and FERS—about $3.3 billion more than what USPS paid in fiscal year 2016 for these benefit programs. In addition to declining mail volumes and increased expenses, USPS’s ability to make its required payments for these retirement programs will be further challenged due to: Expiration of a temporary rate surcharge: USPS has reported that the April 2016 expiration of a 4.3 percent “exigent” surcharge that began in January 2014 is reducing its revenues by almost $2 billion annually. No new major cost-savings initiatives planned: USPS has made efforts in recent years to right-size its operations to better adapt to declining mail volumes that are adversely affecting its financial position. However, USPS has no current plans to initiate new major initiatives to achieve cost savings in its operations. USPS has reported that without structural change to its business model and legislative change, it expects continuing losses and liquidity challenges for the foreseeable future. Large unfunded liabilities for postal retiree health and pension benefits— which were $73.4 billion at the end of fiscal year 2016—may ultimately place taxpayers, USPS employees, retirees and their beneficiaries, and USPS itself at risk. As we have previously reported, funded benefits protect the future viability of an enterprise such as USPS by not saddling it with bills after employees have retired. Further, since USPS retirees participate in the same health and pension benefit programs as other federal retirees, if USPS ultimately does not adequately fund these benefits and if Congress wants these benefits to be maintained at current levels, funding from the U.S. Treasury, and hence the taxpayer, would be needed to continue the benefit levels. This increases the risk that taxpayers may ultimately be called on to fund these benefits.” Alternatively, unfunded benefits could lead to pressure for reductions in benefits or in pay. Congress Faces Difficult Choices to Address USPS’s Financial Condition USPS’s financial situation leaves Congress with difficult choices and trade-offs to achieve the broad-based restructuring that will be necessary for USPS to become financially sustainable. USPS’s ability to make its required retiree health and pension payments requires a decrease in expenses or increase in revenues, or both. Compensation and benefits in an environment of revenue pressures: Key compensation and benefits costs for USPS employees have increased and continue to increase, while the volume for First-Class Mail—USPS’s most profitable product—has declined and continues to decline. There is no statutory requirement for USPS’s financial condition to be considered in arbitration. USPS’s dual role of providing affordable universal service while remaining self-financing: As an independent establishment of the executive branch, USPS has long been expected to provide affordable, quality, and universal delivery service to all parts of the country while remaining self-financing. Conclusion USPS management, unions, the public, community leaders, and Members of Congress need to take a hard look at what level of postal services residents and businesses need and can afford. The status quo is not sustainable. Appendix I: U.S.

Why GAO Did This Study USPS is a critical part of the nation's communication and commerce, delivering 154 billion pieces of mail in fiscal year 2016 to 156 million delivery points. However, USPS's mission of providing prompt, reliable and efficient universal services to the public is at risk due to its poor financial condition. USPS's net loss was $5.6 billion in fiscal year 2016, its tenth consecutive year of net losses. At the end of fiscal year 2016, USPS had $121 billion in unfunded liabilities, mostly for retiree health and pensions, and debt—an amount equal to 169 percent of USPS's revenues. In July 2009, GAO added USPS's financial condition to its list of high-risk areas needing attention by Congress and the executive branch. USPS's financial condition remains on GAO's High-Risk List. In previous reports, GAO has identified strategies and options for USPS to generate revenue, reduce costs, increase the efficiency of its delivery operations, and restructure the funding of USPS pension and retiree health benefits. GAO has also previously reported that a comprehensive package of actions is needed to improve USPS's financial viability. This testimony discusses (1) factors affecting USPS's deteriorating financial condition, (2) USPS's ability to make required retiree health and pension payments, and (3) considerations and choices Congress faces in addressing USPS's financial challenges. This testimony is based primarily on past GAO work that has examined USPS's financial condition—including its liabilities—and updated USPS financial information for fiscal years 2016 and 2017. What GAO Found The U.S. Postal Service's (USPS) deteriorating financial condition is unsustainable as a result of trends including: Declining mail volume : First-Class Mail—USPS's most profitable product—continues to decline in volume as communications and payments migrate to electronic alternatives. USPS expects this decline to continue for the foreseeable future. Growing expenses: Key USPS expenses such as salary increases and work hours continue to grow, due in part to growth in shipping and packages, which are more labor-intensive. Compensation and benefits comprise close to 80 percent of USPS's expenses. USPS's financial condition makes it unlikely it will be able to fully make its required retiree health and pension payments in the near future. In fiscal year 2016, when USPS was required to make $13.0 billion in retiree health and pension payments, it made $7.0 billion in payments—mainly due to not making a required retiree health payment of $5.8 billion. USPS's required payments have been restructured for fiscal year 2017 and are estimated to total $10.3 billion. USPS's ability to make these 2017 payments will be further challenged due to: Expiration of a temporary “exigent” rate surcharge: USPS has said the April 2016 surcharge expiration is reducing its revenues almost $2 billion annually. No new major cost savings initiatives planned: USPS made efforts in recent years to right-size its operations, but has no current plans to initiate major new initiatives to achieve cost savings in its operations. Large unfunded liabilities for postal retiree health and pension benefits—which were $73.4 billion at the end of fiscal year 2016—may ultimately place taxpayers, USPS employees, retirees and their beneficiaries, and USPS itself at risk. As GAO has previously reported, funded benefits protect the future viability of an enterprise such as USPS by not saddling it with bills after employees have retired. Further, with USPS retirees participating in the same health and pension benefit programs as other federal retirees, if USPS ultimately does not adequately fund these benefits and if Congress wants these benefits to be maintained at current levels, funding from the U.S. Treasury—and hence the taxpayer—would be needed to maintain the benefit levels. Alternatively, unfunded benefits could lead to pressure for reductions in USPS benefits or pay. Congress faces difficult choices and tradeoffs to address USPS's financial challenges. The status quo is not sustainable. Considerations for Congress include the (1) level of postal services provided to the public and the affordability of those services, (2) compensation and benefits for USPS employees and retirees in an environment of revenue pressures, and (3) tension between USPS's dual roles as an independent establishment of the executive branch required to provide universal delivery service and as a self-financing entity operating in a business-like manner.

gao_RCED-96-146

gao_RCED-96-146_0

Prospects for Opening WIPP in Mid-1998 Are Uncertain It is unclear whether DOE can accomplish all of the work needed to comply with EPA’s regulations for disposing of transuranic waste at WIPP on a schedule that would enable the Department to open the repository in April 1998. DOE does not expect to begin disposing of remote-handled waste until 2002. DOE Needs New Facilities and Equipment to Achieve Anticipated Disposal Rate Looking beyond the first few years of WIPP’s operations to the 25- to 35-year period over which DOE expects to ship waste to WIPP and emplace the waste in the repository for permanent disposal, DOE will not be able to significantly increase the rate at which it emplaces transuranic waste in WIPP until it has (1) developed the facilities and equipment at each site for retrieving, processing, and packaging the waste for shipment and (2) procured more numbers and varieties of transportation containers. This reduction includes $4.4 billion in its environmental management programs. As of May 1996, however, DOE still needed to complete several important quality-assurance-related activities before it will be prepared to submit an application for a certificate of compliance. Status of the Department of Energy’s Waste Isolation Pilot Plant (GAO/T-RCED-88-63, Sept. 13, 1988).

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the proposed opening of the Department of Energy's (DOE) Waste Isolation Pilot Plant (WIPP) in 1998, focusing on how well DOE is positioned to begin filling the repository in its first few years of operation as well as over the long term. What GAO Found GAO found that: (1) it is uncertain whether DOE can accomplish all of the work needed to comply with the Environmental Protection Agency's (EPA) regulations for disposing of transuranic waste at WIPP by April 1998; (2) before DOE can submit an application for a certificate of compliance to EPA, it must resolve various scientific issues; (3) due to the lack of available transportation containers and equipment at the storage sites for preparing waste for shipment and disposal, DOE will have limited disposal capability for the first several years of WIPP operations; (4) DOE does not expect to start disposing of remote-handled waste until 2002; and (5) it will cost DOE an estimated $11 billion over the next several decades to increase the rate at which it emplaces transuranic waste in WIPP.

gao_GAO-15-113

gao_GAO-15-113_0

SAMHSA, an agency within HHS, leads the federal government’s public health efforts related to behavioral health, which includes mental health. Eight Agencies Reported over 100 Programs That Can Support Individuals with Serious Mental Illness, but It Is Unlikely All Programs Were Identified Agencies Identified 112 Programs That Can Support Individuals with Serious Mental Illness, 30 of Which Specifically Target This Population Agencies identified 112 federal programs in fiscal year 2013—across eight federal agencies—that can support individuals with serious mental illness. It Is Unlikely That Agencies Identified All Programs for Individuals with Serious Mental Illness Agencies had difficulty identifying all programs supporting individuals with serious mental illness because they did not always track whether or not such individuals were among the population served by the program. Agencies also varied in how they defined their programs and in which programs they chose to include. However, program staff for the majority of the programs targeting serious mental illness reported taking steps to coordinate with other program-level staff. However, the steering committee has not met since 2009. HHS officials told us that the Behavioral Health Coordinating Council (BHCC) performs some functions previously carried out by the steering committee. Without such coordination and support, agencies do not have the necessary information to assess the reach and effectiveness of their programs or to determine whether or where there may be gaps or overlap in services for individuals with serious mental illness. While coordination at the program level is important to ensure that program staff are aware of the efforts of staff for other programs, it does not take the place of, or achieve the level of leadership, that we have noted in past work is key to successful coordination. Agencies Have Evaluated Less than One-Third of the 30 Programs Targeted for People with Serious Mental Illness Agencies completed few evaluations of the 30 programs that specifically targeted individuals with serious mental illness. Specifically, as of September 2014, 9 programs had a completed program evaluation, 4 programs had an evaluation underway, and 17 programs had no evaluation. 1.) Although SAMHSA—the agency within HHS that is required to promote coordination of programs relating to mental illness throughout the federal government—has made some effort to coordinate on mental health broadly, it has shown little leadership in coordinating federal efforts on behalf of those with serious mental illness. We have also reported many times on the importance of conducting formal program evaluations to inform program managers on the overall design and operation of the program and ensure that the program’s objectives are being met. Although about $5.7 billion was obligated by 4 agencies—DOD, HHS, DOJ, and VA—to support federal programs specifically targeting individuals with serious mental illnesses, less than one-third had a completed program evaluation. Recommendations To understand the full breadth of federal programs and the scope of federal resources expended on programs supporting those with serious mental illness, we recommend that the Secretary of HHS establish a mechanism to facilitate intra- and interagency coordination, including actions that would assist with identifying the programs, resources, and potential gaps in federal efforts to support individuals with serious mental illness. To help determine if programs are effective at supporting those individuals with serious mental illness, we recommend that the Secretaries of Defense, Health and Human Services, Veterans Affairs, and the Attorney General—which oversee programs targeting individuals with serious mental illness—document which of their programs targeted for individuals with serious mental illness should be evaluated and how often such evaluations should be completed. Our second recommendation on conducting program evaluations was directed to DOD, DOJ, HHS, and VA. HHS did not concur with this recommendation, while DOD, DOJ, and VA agreed. Identification of Federal Agencies To identify federal agencies that may have programs supporting individuals with serious mental illness or serious emotional disturbance, we reviewed the programs and agencies highlighted in the President’s New Freedom Commission on Mental Health “Major Federal Programs Supporting and Financing Mental Health Care,” reviewed our prior reports, other documents, such as reports from the Bazelon Center for Mental Health Law, and interviewed advocacy groups and agency Based on this review and our interviews, there were eight officials.agencies that were cited frequently as having programs supporting individuals with serious mental illness, and we included those agencies in our review: Department of Defense (DOD) Department of Education (Education) Department of Health and Human Services (HHS) Department of Housing and Urban Development (HUD) Department of Justice (DOJ) Department of Labor (DOL) Department of Veterans Affairs (VA), and Social Security Administration (SSA). Developing and Administering the Web- Based Questionnaire We developed a web-based questionnaire to collect detailed information on federal programs that support individuals with serious mental illness or serious emotional disturbance for fiscal year 2013. 2.) 3).

Why GAO Did This Study In 2013, about 10 million adults in the United States had a serious mental illness. The U.S. mental health care system includes a range of federal programs—across multiple agencies—for those with mental illness. Past efforts to develop a list of federal programs supporting individuals with serious mental illness have highlighted the difficulty of identifying such programs. GAO was asked to provide information on federal programs that support individuals with serious mental illness. This report identifies (1) the federal programs that support individuals with serious mental illness; (2) the extent to which federal agencies coordinate these programs; and (3) the extent to which federal agencies evaluate such programs. GAO developed and administered a web-based questionnaire to eight federal agencies regarding program goals, target populations, services offered, evaluations, and coordination. GAO also interviewed agency officials. What GAO Found Agencies identified 112 federal programs that generally supported individuals with serious mental illness in fiscal year 2013. The majority of these programs addressed broad issues, such as homelessness, that can include individuals with serious mental illness. The programs were spread across eight federal agencies: Department of Defense (DOD), Department of Education, Department of Health and Human Services (HHS), Department of Housing and Urban Development, Department of Justice (DOJ), Department of Labor, Department of Veterans Affairs (VA), and the Social Security Administration. Thirty of the 112 programs were identified by the agencies as specifically targeting individuals with serious mental illness. Four agencies—DOD, HHS, DOJ, and VA—reported that they obligated about $5.7 billion for programs that specifically targeted individuals with serious mental illness in fiscal year 2013. Agencies had difficulty identifying all programs supporting individuals with serious mental illness because they did not always track whether or not such individuals were among those served by the program. Agencies also varied in which programs they identified because they had different definitions of what such a program might be. Such inconsistency limits the potential comparability across programs. Interagency coordination for programs supporting individuals with serious mental illness is lacking. HHS is charged with leading the federal government's public health efforts related to mental health, and the Substance Abuse and Mental Health Services Administration is required to promote coordination of programs relating to mental illness throughout the federal government. In the past, HHS led the Federal Executive Steering Committee for Mental Health, with members from across the federal government. However, the steering committee has not met since 2009. HHS officials told us that the Behavioral Health Coordinating Council (BHCC) performs some functions previously carried out by the steering committee. The BHCC, however, is limited to HHS and is not an interagency committee. Other interagency committees were broad in scope and did not target individuals with serious mental illness. Staff for the majority of the programs targeting serious mental illness reported taking steps to coordinate with staff in other agencies. While coordination at the program level is important, it does not take the place of, or achieve the level of, leadership that GAO has previously found to be key to successful coordination and that is essential to identifying whether there are gaps in services and if agencies have the necessary information to assess the reach and effectiveness of their programs. Agencies completed few evaluations of the programs specifically targeting individuals with serious mental illness. Of the 30 programs specifically targeting individuals with serious mental illness, 9 programs had a completed program evaluation, 4 programs had an evaluation underway, and 17 programs had no evaluation completed and none planned. However, agency officials said they engaged in other efforts—such as drawing on evidence in published literature—to ensure their programs were effective. GAO's prior work has shown the significance of both performance monitoring activities and program evaluations and noted the importance of formal program evaluations to inform program managers about the overall design and operation of the program. What GAO Recommends GAO recommends that HHS establish a mechanism to facilitate interagency coordination across programs that support individuals with serious mental illness. GAO also recommends that DOD, HHS, DOJ, and VA document which programs targeting individuals with serious mental illness should be evaluated and how often such evaluations should be completed. HHS disagreed with both recommendations. DOD, DOJ, and VA agreed with the second recommendation. GAO continues to believe the recommendations are valid as discussed in the report.

gao_GAO-09-1049T

gao_GAO-09-1049T_0

U.S. Financial Regulatory System’s Failure to Keep Pace with Market Developments Underscores the Need for Reforms As a result of 150 years of changes to financial regulation in the United States, the regulatory system has become complex and fragmented. Today, responsibilities for overseeing the financial services industry are shared among almost a dozen federal banking, securities, futures, and other regulatory agencies, numerous self-regulatory organizations, and hundreds of state financial regulatory agencies. Various Market Developments Have Revealed Limitations in the Existing Regulatory Structure Several key developments in financial markets and products in the past few decades have significantly challenged the existing financial regulatory structure. Regulators have struggled, and often failed, to identify the systemic risks posed by large and interconnected financial conglomerates, as well as new and complex products, and to adequately manage these risks. In addition, regulators have had to address problems in financial markets resulting from the activities of sometimes less-regulated and large market participants—such as nonbank mortgage lenders, hedge funds, and credit rating agencies—some of which play significant roles in today’s financial markets. Further, the increasing prevalence of new and more complex financial products has challenged regulators and investors, and consumers have faced difficulty understanding new and increasingly complex retail mortgage and credit products. And despite the increasingly global aspects of financial markets, the current fragmented U.S. regulatory structure has complicated some efforts to coordinate internationally with other regulators. Our recent work has further revealed limitations in the current regulatory system, reinforcing the need for change and the need for an entity responsible for identifying existing and emerging systemic risks. In January 2009, we designated modernizing the outdated U.S. financial regulatory system as a new high-risk area to bring focus to the need for a broad-based systemwide transformation to address major economy, efficiency, and effectiveness challenges. Other Countries Have Adopted Various Structures for Their Regulatory Systems, but the Recent Crisis Is Prompting Additional Changes In response to consolidation in the financial services industry and past financial crises, other countries have previously made changes to their financial regulatory systems in the years before the most recent crisis. For the purposes of our study, we selected five countries—Australia, Canada, Sweden, the Netherlands, and the United Kingdom—that had sophisticated financial systems and different regulatory structures. The countries we reviewed chose one of two models—with some implementing an integrated approach, in which responsibilities for overseeing safety and soundness issues and business conduct issues are centralized and unified in usually a single regulator, and with others implementing what is commonly referred to as a “twin peaks” model, in which separate regulatory organizations are responsible for safety and soundness and business conduct regulation. However, regardless of the regulatory system structure, these and many other countries were affected to some extent by the recent financial crisis. However, regulators or financial institutions in some of these countries took steps that may have reduced the impact of the crisis on their institutions. Authorities in these five countries have taken actions or are contemplating additional changes to their financial regulatory systems based on weaknesses identified during the current financial crisis. appropriately comprehensive coverage to ensure that financial institutions and activities are regulated in a way that ensures regulatory goals are fully met; a mechanism for identifying, monitoring, and managing risks on a systemwide basis, regardless of the source of the risk or the institution in which it is created; an adaptable and forward-looking approach allows regulators to readily adapt to market innovations and changes and evaluate potential new risks; efficient oversight of financial services by, for example, eliminating overlapping federal regulatory missions, while effectively achieving the goals of regulation; consumer and investor protection as part of the regulatory mission to ensure that market participants receive consistent, useful information, as well as legal protections for similar financial products and services, including disclosures, sales practices standards, and suitability requirements; assurance that regulators have independence from inappropriate influence; have sufficient resources and authority, and are clearly accountable for meeting regulatory goals; assurance that similar institutions, products, risks, and services are subject to consistent regulation, oversight, and transparency; and adequate safeguards that allow financial institution failures to occur while limiting taxpayers’ exposure to financial risk. Various organizations have made proposals to reform the U.S. regulatory system, and several proposals have been introduced to the Congress. The administration’s proposal includes various elements that could potentially improve federal oversight of the financial markets and better protect consumers and investors. As discussed, the inability of regulators to take appropriate action to mitigate problems that posed systemic risk contributed to the current crisis. Although the Administration’s proposal would make various improvements in the U.S. regulatory system, our analysis indicated that additional opportunities exist to further improve the system exist. As we reported in our January 2009 report, having multiple regulators performing similar functions presents challenges. Appendix I: Framework for Crafting and Evaluating Regulatory Reform As a result of significant market developments in recent decades that have outpaced a fragmented and outdated regulatory structure, significant reforms to the U.S. regulatory system are critically and urgently needed. Financial Regulation: A Framework for Crafting and Assessing Proposals to Modernize the Outdated U.S. Financial Regulatory System. This is a work of the U.S. government and is not subject to copyright protection in the United States.

Why GAO Did This Study This testimony discusses issues relating to efforts to reform the regulatory structure of the financial system. In the midst of the worst economic crisis affecting financial markets globally in more than 75 years, federal officials have taken unprecedented steps to stem the unraveling of the financial services sector. While these actions aimed to provide relief in the short term, the severity of the crisis has shown clearly that in the long term, the current U.S. financial regulatory system was in need of significant reform. Our January 2009 report presented a framework for evaluating proposals to modernize the U.S. financial regulatory system, and work we have conducted since that report further underscores the urgent need for changes in the system. Given the importance of the U.S. financial sector to the domestic and international economies, in January 2009, we also added modernization of its outdated regulatory system as a new area to our list of high-risk areas of government operations because of the fragmented and outdated regulatory structure. We noted that modernizing the U.S. financial regulatory system will be a critical step to ensuring that the challenges of the 21st century can be met. This testimony discusses (1) how regulation has evolved and recent work that further illustrates the significant limitations and gaps in the existing regulatory system, (2) the experiences of countries with other types of varying regulatory structures during the financial crisis, and (3) how certain aspects of proposals would reform the U.S. regulatory system. What GAO Found The current U.S. financial regulatory system is fragmented due to complex arrangements of federal and state regulation put into place over the past 150 years. It has not kept pace with major developments in financial markets and products in recent decades. Today, almost a dozen federal regulatory agencies, numerous self-regulatory organizations, and hundreds of state financial regulatory agencies share responsibility for overseeing the financial services industry. Several key changes in financial markets and products in recent decades have highlighted significant limitations and gaps in the existing U.S. regulatory system. For example, regulators have struggled, and often failed, both to identify the systemic risks posed by large and interconnected financial conglomerates and to ensure these entities adequately manage their risks. In addition, regulators have had to address problems in financial markets resulting from the activities of sometimes less-regulated and large market participants--such as nonbank mortgage lenders, hedge funds, and credit rating agencies--some of which play significant roles in today's financial markets. Further, the increasing prevalence of new and more complex financial products has challenged regulators and investors, and consumers have faced difficulty understanding new and increasingly complex retail mortgage and credit products. Our recent work has also highlighted significant gaps in the regulatory system and the need for an entity responsible for identifying existing and emerging systemic risks. Various countries have implemented changes in their regulatory systems in recent years, but the current crisis affected most countries regardless of their structure. All of the countries we reviewed have more concentrated regulatory structures than that of the United States. Some countries, such as the United Kingdom, have chosen an integrated approach to regulation that unites safety and soundness and business conduct issues under a single regulator. Others, such as Australia, have chosen a "twin peaks" approach, in which separate agencies are responsible for safety and soundness and business conduct regulation. However, regardless of regulatory structure, each country we reviewed was affected to some extent by the recent financial crisis. One regulatory approach was not necessarily more effective than another in preventing or mitigating a financial crisis. However, regulators in some countries had already taken some actions that may have reduced the impact on their institutions. These and other countries also have taken or are currently contemplating additional changes to their regulatory systems to address weaknesses identified during this crisis. The Department of the Treasury's recent proposal to reform the U.S. financial regulatory system includes some elements that would likely improve oversight of the financial markets and make the financial system more sound, stable, and safer for consumers and investors. For example, under this proposal a new governmental body would have responsibility for assessing threats that could pose systemic risk. This proposal would also create an entity responsible for business conduct, that is, ensuring that consumers of financial services were adequately protected. However, our analysis indicated that additional opportunities exist beyond the Treasury's proposal for additional regulatory consolidation that could further decrease fragmentation in the regulatory system, reduce the potential for differing regulatory treatment, and improve regulatory independence.

gao_GAO-06-425

gao_GAO-06-425_0

EB is responsible for enforcing TCPA’s provisions and the commission’s rules and orders. FCC Has Recorded a Growing Number of Junk Fax Complaints, but Has Taken Limited Enforcement Action to Date In 2000, FCC recorded about 2,200 junk fax complaints; in 2005, that number had grown to more than 46,000. Despite this growth in junk fax complaints, the numbers of investigations and enforcement actions have generally remained the same. As table 1 indicates, FCC issued 261 citations covering 1,456 junk fax complaints from 2000 through 2005. EB officials cited competing demands, personnel reductions, and the increasing skill of violators in concealing their identity as reasons for the limited number of citations issued. For various reasons, five of the six forfeitures will never be collected. Focus on Customer Service and Documentation Is Time-consuming, and Data Entry Errors May Occur CGB has emphasized customer service by establishing multiple methods for consumers to report junk fax complaints to FCC, providing multiple sources of information about junk fax issues, and sending a letter in response to the majority of the junk fax complaints. Without analysis, FCC cannot explore the need for, or implement, changes to its rules, procedures, or consumer guidance that might help deter junk fax violations or give consumers a better understanding of the junk fax rules. FCC also has not established what it needs to do to be able to completely and accurately report the number of complaints it has received in carrying out its junk fax responsibilities as required under the 2005 Act. Because FCC’s junk fax enforcement efforts have data management issues, lack data analysis, and lack performance goals and measures, it is not possible to determine whether any additional enforcement measures would better protect consumers and businesses from receiving junk faxes. The latter actions are filed by the Department of Justice (DOJ) on behalf of FTC. The law prohibits deceptive subject lines and requires that the e-mail give recipients an opt- out method. As explained in the letter of this report, without FCC establishing performance goals and measures and analyzing complaint and enforcement data, it is not possible to explore the effectiveness of current enforcement measures. Scope and Methodology The Junk Fax Prevention Act of 2005 required GAO to report to Congress on FCC’s enforcement of the junk fax laws. (2) What are the strengths and weaknesses of FCC’s junk fax procedures? Additionally, we reviewed FCC’s guidance to complainants for submitting junk fax complaints as well as FCC’s procedures for receiving and documenting these complaints. To determine the strengths and weaknesses of FCC’s junk fax procedures, we analyzed these procedures, including those used to determine which junk fax complaints would be considered for further investigatory and enforcement actions.

Why GAO Did This Study The Telephone Consumer Protection Act of 1991 prohibited invasive telemarketing practices, including the faxing of unsolicited advertisements, known as "junk faxes," to individual consumers and businesses. Junk faxes create costs for consumers (paper and toner) and disrupt their fax operations. The Junk Fax Prevention Act of 2005 clarified an established business relationship exemption, specified opt-out procedures for consumers, and requires the Federal Communications Commission (FCC)--the federal agency responsible for junk fax enforcement0--to report annually to Congress on junk fax complaints and enforcement. The law also required GAO to report to Congress on FCC's enforcement of the junk fax laws. This report addresses (1) FCC's junk fax procedures and outcomes, (2) the strengths and weaknesses of FCC's procedures, and (3) FCC's junk fax management challenges. What GAO Found FCC has procedures for receiving and acknowledging the rapidly increasing number of junk fax complaints, but the numbers of investigations and enforcement actions have generally remained the same. In 2000, FCC recorded about 2,200 junk fax complaints; in 2005, it recorded over 46,000. Using its procedures to review the complaints, FCC's Enforcement Bureau (EB) issued 261 citations (i.e., warnings) from 2000 through 2005. EB has ordered six companies to pay forfeitures for continuing to violate the junk fax rules after receiving a citation. The six forfeitures totaled over $6.9 million, none of which has been collected by the Department of Justice for various reasons. EB officials cited competing demands, resource constraints, and the rising sophistication of junk faxers in hiding their identities as hindrances to enforcement. An emphasis on customer service, an effort to document consumers' complaints, and an attempt to target enforcement resources efficiently are the strengths of FCC's procedures; however, inefficient data management, resulting in time-consuming manual data entry, data errors, and--most important--the exclusion of the majority of complaints from decisions about investigations and enforcement, are weaknesses. FCC's guidance to consumers does not provide them with all of the information they need to support FCC's enforcement efforts. FCC faces management challenges in carrying out its junk fax responsibilities. The commission has no clearly articulated long-term or annual goals for junk fax monitoring and enforcement, and it is not analyzing the junk fax data. Without analysis, FCC cannot explore the need for, or implement, changes to its rules, procedures, or consumer guidance that might help deter junk fax violations or give consumers a better understanding of the junk fax rules. Most important, without performance goals and measures and without analysis of complaint and enforcement data, it is not possible to explore the effectiveness of current enforcement measures.

gao_GAO-01-1075

gao_GAO-01-1075_0

OPS Has Completed Some Statutory Requirements, but Other Important Requirements Remain Uncompleted OPS has made progress in implementing some of the 22 statutory requirements that it reported as open in our May 2000 report but has not fully implemented some significant, long-standing requirements. OPS does not plan to take action on the remaining open requirement to submit a report on underwater abandoned pipeline facilities, including a survey of where such facilities are located and an analysis of any safety hazards associated with them. The Safety Board Is Encouraged by OPS’ Efforts to Implement Recommendations, but Concerns Remain The Safety Board is encouraged by OPS’ recent efforts to improve its responsiveness, but it remains concerned about the amount of time OPS has been taking to implement recommendations. OPS continues to have the lowest rate of any transportation agency for implementing recommendations from the Safety Board; and, in May 2000 we reported that the Safety Board was concerned that OPS had not followed through on promises to implement recommendations. However, OPS officials believe that the agency’s progress is much greater than the Safety Board’s records indicate.

What GAO Found In a May 2000 report on the performance of the Department of Transportation's Office of Pipeline Safety (OPS), GAO found that the number of pipeline accidents rose four percent annually from 1989 to 1998--from 190 in 1989 to 280 in 1998. GAO also found that OPS did not implement 22 statutory requirements and 39 recommendations made by the National Transportation Safety Board. Since GAO's May report, OPS has fully implemented six of the 22 statutory requirements. However, 11 other requirements--including some that are significant and long-standing--have not been fully implemented. The agency does not plan to report on abandoned underwater pipeline facilities--a remaining open requirement--because it believes that insufficient data exists to conduct the study. The Safety Board is encouraged by OPS' recent efforts to improve its responsiveness, but the Board remains concerned about the amount of time OPS has taken to implement recommendations. OPS has the lowest rate of any transportation agency in implementing the Board's recommendations.

gao_GAO-08-699T

gao_GAO-08-699T_0

For federal agencies, such information includes e-mail messages that may have the status of federal records. These records, which include e-mail records, must be effectively managed. NARA has issued regulations that specifically address the management of e-mail records. Further, except for a limited category of “transitory” e-mail records, agencies are not permitted to store the recordkeeping copy of e-mail records in the e-mail system, unless that system has certain features, such as the ability to group records into classifications according to their business purposes and to permit easy and timely retrieval of both individual records and groupings of related records. Management of E-Mail Records Poses Challenges Because of its nature, e-mail can present particular challenges to records management. First, the information contained in e-mail records is not uniform: it may concern any subject or function and document various types of transactions. As a result, in many cases, decisions on which e-mail messages are records must be made individually. Second, the transmission data associated with an e- mail record—including information about the senders and receivers of messages, the date and time the message was sent, and any attachments to the messages—may be crucial to understanding the context of the record. Third, a given message may be part of an exchange of messages between two or more people within or outside an agency, or even of a string (sometimes branching) of many messages sent and received on a given topic. In such cases, agency staff need to decide which message or messages should be considered records and who is responsible for storing them in a recordkeeping system. Finally, the large number of federal e-mail users and high volume of e-mails increase the management challenge. A 2005 NARA-sponsored survey of federal agencies’ policy and practices for electronic records management concluded that procedures for managing e-mail were underdeveloped. Specifically, for 8 of the 15 senior officials we reviewed, e-mail messages that qualified as records were not being appropriately identified and preserved. Each of the four agencies generally followed a print and file process to preserve e-mail records in paper-based recordkeeping systems because their e-mail systems did not have required record-keeping capabilities. Factors contributing to this lack of compliance with recordkeeping requirements were the lack of adequate staff support and the volume of e-mail received—several of these officials had thousands or even tens of thousands of messages in their e-mail system accounts. However, by keeping every message, they were potentially increasing the time and effort that would be needed to search through and review all the saved messages in response to an outside inquiry, such as a Freedom of Information Act request. In summary, the increasing use of e-mail is resulting in records management challenges for federal agencies. For example, the large number of federal e-mail users and the high volume of e-mails present challenges, particularly in the current paper-based environment. While agency e-mail policies generally contained required elements, about half of the senior officials we reviewed were not following these policies and were instead maintaining their e-mail messages within their e-mail accounts, where records cannot be efficiently searched, are not accessible to others who might need the information in the records, and are at increased risk of loss. Several agencies are considering developing electronic recordkeeping systems, but until such systems are implemented, agencies may have reduced assurance that information that is essential to protecting the rights of individuals and the federal government is being adequately identified and preserved.

Why GAO Did This Study Federal agencies are increasingly using electronic mail (e-mail) for essential communication. In doing so, they are potentially creating messages that have the status of federal records, which must be managed and preserved in accordance with the Federal Records Act. To carry out the records management responsibilities established in the act, agencies are to follow implementing regulations that include specific requirements for e-mail records. In view of the importance that e-mail plays in documenting government activities, GAO was asked to testify on issues relating to the preservation of electronic records, including e-mail. As agreed, GAO's statement discusses challenges facing agencies when managing their e-mail records, as well as current policies and practices for managing e-mail messages that qualify as federal records. This testimony is primarily based on preliminary results of ongoing work, in which GAO is examining, among other things, e-mail policies at four agencies of contrasting sizes and structures (the Department of Homeland Security, the Environmental Protection Agency, the Federal Trade Commission, and the Department of Housing and Urban Development), as well as the practices of selected senior officials. What GAO Found E-mail, because of its nature, presents challenges to records management. First, the information contained in e-mail records is not uniform: it may concern any subject or function and document various types of transactions. As a result, in many cases, decisions on which e-mail messages are records must be made individually. Second, the transmission data associated with an e-mail record--including information about the senders and receivers of messages, the date and time the message was sent, and any attachments to the messages--may be crucial to understanding the context of the record. Third, a given message may be part of an exchange of messages between two or more people within or outside an agency, or even of a string (sometimes branching) of many messages sent and received on a given topic. In such cases, agency staff need to decide which message or messages should be considered records and who is responsible for storing them in a recordkeeping system. Finally, the large number of federal e-mail users and high volume of e-mails increase the management challenge. Preliminary results of GAO's ongoing review of e-mail records management at four agencies show that not all are meeting the challenges posed by e-mail records. Although the four agencies' e-mail records management policies addressed, with a few exceptions, the regulatory requirements, these requirements were not always met for the senior officials whose e-mail practices were reviewed. Each of the four agencies generally followed a print and file process to preserve e-mail records in paper-based recordkeeping systems, but for about half of the senior officials, e-mail records were not being appropriately identified and preserved in such systems. Instead, e-mail messages were being retained in e-mail systems that lacked recordkeeping capabilities. (Among other things, a recordkeeping system allows related records to be grouped into classifications according to their business purposes.) Unless they have recordkeeping capabilities, e-mail systems may not permit easy and timely retrieval of groupings of related records or individual records. Further, keeping large numbers of record and nonrecord messages in e-mail systems potentially increases the time and effort needed to search for information in response to a business need or an outside inquiry, such as a Freedom of Information Act request. Factors contributing to this practice were the lack of adequate staff support and the volume of e-mail received. In addition, agencies had not ensured that officials and their responsible staff received training in recordkeeping requirements for e-mail. If recordkeeping requirements are not followed, agencies cannot be assured that records, including information essential to protecting the rights of individuals and the federal government, is being adequately identified and preserved.

gao_RCED-98-132

gao_RCED-98-132_0

DOD provides over 50 percent of SBIR funding. It Appears That Agencies Are Adhering to Statutory Funding Requirements; However, the Definition of Extramural R&D on Which the Funding Levels Are Based May Not Be Consistently Applied The agencies’ SBIR officials reported that they have adhered to the act’s requirements that they not use SBIR funds to pay for the administrative costs of the program, such as salaries and expenses for support services used in processing awards. Only Two of the Agencies We Reviewed Have Conducted Audits of Their Extramural Budgets Of the five agencies we reviewed, only two—NSF and NASA—have recently audited their extramural R&D budgets. NSF estimated that these unallowable costs totaled over $100 million. Application Review Process and Current Funding Cycles Are Not Adversely Affecting Recipients’ Financial Status or the Commercialization of Projects The SBIR officials we interviewed felt that neither the application review process nor the current funding cycles are having an adverse effect on award recipients’ financial status or their ability to commercialize their projects. While the effects of the review processes and funding cycles on the recipients’ financial status and ability to commercialize projects were not specifically mentioned as problems, SBIR officials did state that some recipients had said that any interruption in funding awards, for whatever reason, affects them negatively. Overall, 515 respondents, or 35 percent, indicated that their projects had resulted in the sales of products or processes, while 691, or 47 percent, had received additional developmental funding. Multiple-Award Recipients Commercialize at Rates Similar to Those of Non-Multiple-Award Recipients Using SBA’s data, we determined the number of phase I award recipients who had received 15 or more phase II awards in the preceding 5 years. Both DOE’s and NASA’s SBIR officials reported that they did not receive any single proposals for this time period. All of the agencies we reviewed reported participating in activities targeted at women-owned or socially and economically disadvantaged small businesses. The other agencies believe that the research being conducted falls within one of the two lists. The geographic distribution of awards by state is presented in figure 1. Conclusions SBIR program officials have said that they are uncertain whether the agencies are correctly adhering to the requirements for establishing their extramural research budgets. Legislative Requirements Public law 102-564, dated October 28, 1992, mandated that the Comptroller General of the United States provide the Congress with a report on the Small Business Innovation Research program that containing the following: (1) a review of the progress made by federal agencies in meeting the requirements of section 9(f) of the Small Business Act (as amended by this Act), including increases in expenditures required by that subsection; (2) an analysis of participation by small business concerns in the third phase of SBIR programs, including a systematic evaluation of the techniques adopted by federal agencies to foster commercialization; (3) an analysis of the extent to which awards under SBIR programs are made pursuant to section 9(l) of the Small Business Act (as amended by section 103(h)) in cases in which a program solicitation receives only one proposal; (4) an analysis of the extent to which awards in the first phase of the SBIR program are made to small business concerns that have received more than 15 second phase awards under the SBIR program in the preceding 5 fiscal years, considering (A) the extent to which such concerns were able to secure federal or private sector follow-on funding; (B) the extent to which the research developed under such awards was commercialized; (C) the amount of commercialization of research developed under such awards, as compared to the amount of commercialization of SBIR research for the entire SBIR program; (5) the results of periodic random audits of the extramural budget of each such federal agency; (6) a review of the extent to which the purposes of this title and the Small Business Innovation Development Act of 1982 have been met with regard to fostering and encouraging the participation of women-owned small business concerns and socially and economically disadvantaged small business concerns (as defined in the Small Business Act) in technological innovation, in general, and the SBIR program, in particular; (7) an analysis of the effectiveness of the SBIR program in promoting the development of the critical technologies identified by the Secretary of Defense and the National Critical Technologies Panel (or its successor), as described in subparagraph 9(j)(2)(E) of the Small Business Act; (8) an analysis of the impact of agency application review periods and funding cycles on SBIR program awardees’ financial status and ability to commercialize; and (9) recommendations to the Congress for tracking the extent to which foreign firms, or United States firms with substantial foreign ownership interests, benefit from technology or products developed as a direct result of SBIR research or research and development. U.S. General Accounting Office P.O.

Why GAO Did This Study Pursuant to a legislative requirement, GAO provided a final report on aspects of the Small Business Innovation Research (SBIR) program, focusing on: (1) agencies' adherence to statutory funding requirements; (2) agencies' audits of extramural (external) research and development (R&D) budgets; (3) the effect of the application review process and funding cycles on award recipients; (4) the extent of companies' project activity after receiving SBIR funding and agencies' techniques to foster commercialization; (5) the number of multiple-award recipients and the extent of their project-related activity after receiving SBIR funding; (6) the occurrence of funding for single-proposal awards; (7) participation by women-owned businesses and socially and economically disadvantaged businesses; (8) SBIR's promotion of the critical technologies; (9) the extent to which foreign firms benefit from the results of SBIR; and (10) the geographical distribution of SBIR awards. What GAO Found GAO noted that: (1) the agencies' SBIR officials reported that they have adhered to the requirements that preclude them from using SBIR finds to pay for the administrative costs of the program; (2) the program officials also believe that they are adhering to statutory funding levels for the program; (3) however, some said that they are uncertain whether the agencies are correctly adhering to the requirements for establishing their extramural research budgets; (4) only two of the five agencies that GAO reviewed have conducted audits of their extramural research budgets; (5) in 1997, the Office of Inspector General at the National Science Foundation audited the agency's extramural budget and found that it contained over $100 million of unallowable costs; (6) while most of the SBIR officials GAO interviewed said that neither the application review process nor current funding cycles have had an adverse effect on award recipients' financial status or ability to commercialize their ideas, some recipients have said that any interruption in funding awards, for whatever reason, affects them negatively; (7) the companies responding to GAO's and the Department of Defense's (DOD) surveys reported that approximately 50 percent of their projects had sales of products or services related to the research or received additional developmental funding after receiving SBIR funding; (8) the number of companies receiving multiple awards, defined here as those phase I award recipients that also received 15 or more phase II awards in the preceding 5 years, grew from 10 companies in 1989 to 17 in 1996; (9) GAO found that the funding of single-proposal awards was rare; (10) all of the agencies GAO examined reported that they engaged in activities to foster the participation of women-owned businesses or socially and economically disadvantaged small businesses; (11) all of the agencies' SBIR officials GAO interviewed felt that the listings of critical technologies are used in developing their respective research topics or that the research being conducted falls within one of the two lists; (12) GAO found little evidence of foreign firms, or U.S. firms with substantial foreign ownership interests, benefiting from technology or products developed as a direct result of SBIR-funded research; (13) SBIR awards are concentrated in the states of California and Massachusetts; (14) however, every state received at least two awards; and (15) previous studies have linked the concentration of awards to local characteristics, such as the prevalence of small high-tech firms.

gao_GAO-08-944

gao_GAO-08-944_0

For example, if an animal feeding operation was a significant contributor of pollutants to federally regulated water, EPA could designate the operation as a CAFO. The Number of Large Farms Raising Animals Has Increased, but Specific Data on CAFOs Are Not Available Because no federal agency collects accurate and consistent data on the number, size, and location of CAFOs nationwide, it is difficult to determine precise trends in CAFOs over the last 30 years. According to USDA officials, the data USDA collects for large farms raising animals can be used as a proxy for estimating trends in CAFOs nationwide. Using these data, we determined that between 1982 and 2002, the number of large farms raising animals has increased sharply, from about 3,600 to almost 12,000. Table 1 shows the changes in the number of large farms by animal type for 1982 through 2002. Without a systematic and coordinated process for collecting and maintaining accurate and complete information on the number, size, and location of permitted CAFOs nationwide, EPA does not have the information it needs to effectively regulate these operations. EPA is currently working with the states to develop and implement a new national data system to collect and record operation-specific information. Large Farms That Raise Animals Can Produce Thousands of Tons of Manure Each Year, and Regional Clustering of Farms Can Exacerbate Manure Management Problems The amount of manure a large farm that raises animals can generate primarily depends on the types and numbers of animals raised on that farm, and the amount of manure produced can range from over 2,800 tons to more than 1.6 million tons a year. To further put this in perspective, the amount of manure produced by large farms that raise animals can exceed the amount of waste produced by some large U.S. cities. Studies Have Identified Impacts of Pollutants from Animal Waste, but EPA Has Not Assessed the Extent of Such Impacts Since 2002, at least 68 government-sponsored or peer-reviewed studies have been completed on air and water pollutants from animal feeding operations. Of these 68 studies, 15 have directly linked pollutants from animal waste generated by these operations to specific health or environmental impacts, 7 have found no impacts, and 12 have made indirect linkages between these pollutants and health and environmental impacts. Water quality. Furthermore, it is uncertain if and when EPA will develop a process-based model that considers the interaction and implications of all sources of emissions at an animal feeding operation. EPA’s first decision in this context was made in December 2007. The 2005 Waterkeeper Alliance Inc. v. EPA decision forced EPA to revise its 2003 rule for permitting CAFOs and abandon its approach of requiring all CAFO operators to obtain a permit. The Rapanos Decision Has Affected EPA’s Overall Ability to Regulate Pollutants Entering Federally Regulated Waters The Supreme Court’s 2006 Rapanos decision has also affected EPA’s enforcement of the Clean Water Act because the agency believes that it must gather significantly more evidence to establish which waters are subject to the act’s permitting requirements. In order to more effectively determine the extent of air emissions from animal feeding operations, the Administrator of the Environmental Protection Agency should reassess the current data collection efforts, including its internal controls, to ensure that the National Air Emissions Monitoring Study will provide the scientific and statistically valid data that EPA needs for developing its air emissions protocols; provide stakeholders with information on the additional data that it plans to use to supplement the National Air Emissions Monitoring Study; and establish a strategy and timetable for developing a process-based model that will provide more sophisticated air emissions estimating methodologies for animal feeding operations. Appendix I: Objectives, Scope, and Methodology For this report we were asked to determine the (1) trends in concentrated animal feeding operations (CAFOs) over the past 30 years; (2) amount of waste they generate; (3) findings of recent key academic, industry, and government research of the potential impacts of CAFOs on human health and the environment, and the extent to which the Environmental Protection Agency (EPA) has assessed the nature and severity of these identified impacts; (4) progress that EPA and states have made in regulating and controlling the air emissions of, and in developing protocols to measure, air pollutants from CAFOs that could affect air quality; and (5) extent to which recent court decisions have affected EPA and the states’ ability to regulate CAFO discharges that impair water quality. High concentrations of nutrients in waters are a result of CAFO manure and degrade water quality. U.S. Department of Interior. Does not address human impacts.

Why GAO Did This Study Concentrated Animal Feeding Operations (CAFO) are large livestock and poultry operations that raise animals in a confined situation. CAFOs can improve the efficiency of animal production but large amounts of manure produce can, if not properly managed, degrade air and water quality. The Environmental Protection Agency (EPA) is responsible for regulating CAFOs and requires CAFOs that discharge certain pollutants to obtain a permit. This report discusses the (1) trends in CAFOs over the past 30 years, (2) amounts of waste they generate, (3) findings of key research on CAFOs' health and environmental impacts, (4) EPA's progress in developing CAFO air emissions protocols, and (5) effect of recent court decisions on EPA's regulation of CAFO water pollutants. GAO analyzed U.S. Department of Agriculture's (USDA) data from 1982 through 2002, for large farms as a proxy for CAFOs; reviewed studies, EPA documents, laws, and regulations; and obtained the views of federal and state officials. What GAO Found Because no federal agency collects consistent, reliable data on CAFOs, GAO could not determine the trends in these operations over the past 30 years. However, using USDA data for large farms that raise animals as a proxy for CAFOs, it appears that the number of these operations increased by about 230 percent, going from about 3,600 in 1982 to almost 12,000 in 2002. Also, during this 20-year period the number of animals per farm had increased, although it varied by animal type. Moreover, GAO found that EPA does not have comprehensive, accurate information on the number of permitted CAFOs nationwide. As a result, EPA does not have the information it needs to effectively regulate these CAFOs. EPA is currently working with the states to establish a new national data system. The amount of manure generated by large farms that raise animals depends on the type and number of animals raised, but large operations can produce more than 1.6 million tons of manure a year. Some large farms that raise animals can generate more raw waste than the populations of some U.S. cities produce annually. In addition, according to some agricultural experts, the clustering of large operations in certain geographic areas may result in large amounts of manure that cannot be effectively used as fertilizer on adjacent cropland and could increase the potential of pollutants reaching nearby waters and degrading water quality. Since 2002, at least 68 government-sponsored or peer-reviewed studies have been completed that examined air and water quality issues associated with animal feeding operations and 15 have directly linked air and water pollutants from animal waste to specific health or environmental impacts. EPA has not yet assessed the extent to which these pollutants may be impairing human health and the environment because it lacks key data on the amount of pollutants that are being emitted from animal feeding operations. As a first step in developing air emissions protocols for animal feeding operations, in 2007, a 2-year nationwide air emissions monitoring study, largely funded by industry, was initiated. However, as currently structured, the study may not provide the scientific and statistically valid data it was intended to provide and that EPA needs to develop air emissions protocols. Furthermore, EPA has not established a strategy or timetable for developing a more sophisticated process-based model that considers the interaction and implications of all emission sources at an animal feeding operation. Two recent federal court decisions have affected EPA's ability to regulate water pollutants discharged by CAFOs. The 2005 Waterkeeper case required EPA to abandon the approach that it had proposed in 2003 for regulating CAFO water discharges. Similarly, the 2006 Rapanos case has complicated EPA's enforcement of CAFO discharges because EPA believes that it must now gather significantly more evidence to establish which waters are subject to the Clean Water Act's permitting requirements.

gao_GAO-07-281

gao_GAO-07-281_0

If inventory levels are too high, money is invested on items that may never be used. Actual Lead Times Varied Considerably from Estimated Lead Times for All Components The military components’ acquisition lead time estimates to acquire spare and repair parts varied considerably from the actual lead times experienced. The combined value of the lead time underestimates for all the components resulted in slightly over $12 billion in spare and repair parts arriving more than 90 days later than expected, which may have negatively affected equipment readiness and overall rates because units may not have had the necessary inventory to support and sustain ongoing military operations. If lead time estimates had been more accurate, orders could have been placed and funds obligated earlier, and in some instances readiness rates could potentially have been improved. Further, the combined value of the lead time overestimates resulted in the military components obligating almost $2 billion more than 90 days earlier than necessary, which could add to excess on-hand inventories, although spare parts that come in early could potentially improve readiness. The variances between the Army’s actual and estimated lead times occurred, in part, because of miscoding of late deliveries as not representative of future delivery times, lack of accurate lead time data in one of its computer systems, and data input errors. Management Actions and Initiatives to Reduce Lead Times from 2002 to 2005 Less Effective than Previous Initiatives from 1994 to 2002 USD (AT&L) and the military components’ management actions and initiatives to reduce lead times from 2002 to 2005 were less effective overall than previous initiatives from 1994 to 2002. Slower Rate of Reductions in Lead Times from 2002- 2005 than from 1994-2002 USD (AT&L) and the components’ management actions and initiatives to reduce lead times from 2002 to 2005 resulted in a slower rate of reduction in DOD-wide lead times of an average of 0.9 percent annually as compared to an average reduction of 5.6 percent annually from 1994 to 2002. These initiatives and actions generally fell into three areas of focus: streamlining internal administrative processes, improving oversight, and developing relationships with suppliers, as shown in table 8. Until USD (AT&L) takes steps to exercise oversight as it did from 1994 to 2002, such as reemphasizing guidance, establishing lead time reduction goals, collecting data and establishing metrics to measure progress toward meeting lead time reduction goals, measuring and reporting on the results of individual initiatives, and measuring the financial impact of lead time reductions, the components and USD (AT&L) will not have available the information needed to effectively manage and provide oversight of lead times, hampering their ability to reduce lead times. As a result, even as lead times were reduced by an average of 0.9 percent a year from 2002 to 2005, requirements to cover lead times rose. The additional lead time requirements potentially tied up $2.7 billion that could have been obligated for other needs. Absent actions by all of the military components to address these problems and institute corrective procedures, their acquisition lead time estimates will continue to vary greatly from their actual lead times. The military components have also slowed their efforts to reduce acquisition lead times as compared to earlier years. 2. 1. Moreover, DOD did not concur with our recommendation that the Under Secretary of Defense for Acquisition, Technology, and Logistics work closely with the Army and Navy to develop joint strategic relationships with suppliers that would be beneficial in reducing lead times. We further examined budget stratification data from the Army, Navy, Air Force, and the Defense Logistics Agency.

Why GAO Did This Study GAO has identified the Department of Defense's (DOD) management of its inventory as a high-risk area since 1990 due to ineffective and inefficient inventory systems and practices. Management of inventory acquisition lead times is important in maintaining cost-effective inventories, budgeting, and having material available when needed, as lead times are DOD's best estimate of when an item will be received. Under the Comptroller General's authority to conduct evaluations on his own initiative, GAO analyzed the extent to which (1) DOD's estimated lead times varied from actual lead times, and (2) current management actions and initiatives have reduced lead times as compared to past years. To address these objectives, GAO computed the difference between the components' actual and estimated lead times, and compared component initiatives to reduce lead times for 1994-2002 to 2002-2005. What GAO Found The military components' estimated lead times to acquire spare parts varied considerably from the actual lead times experienced. The effect of the lead time underestimates was almost $12 billion in spare parts arriving more than 90 days later than anticipated, which could negatively affect readiness rates because units may not have needed inventory. If orders had been placed earlier, readiness rates could potentially have been improved. While having spare parts arrive earlier than estimated could potentially improve readiness, the effect of lead time overestimates resulted in obligating almost $2 billion more than 90 days earlier than necessary. The Army underestimated lead times, the Defense Logistics Agency (DLA) overestimated lead times, and the Air Force and Navy both overestimated and underestimated lead times. The variances were due to problems such as miscoding late deliveries as not representative of future delivery times, lack of recorded lead time data, data input errors, estimates that did not reflect improvements made in actual lead times, and the use of standard default data instead of other data that may have been obtainable. Absent actions to address these problems, lead time estimates will continue to vary from actual lead times and will contribute to inefficient use of funds and potential shortages or excesses. The Under Secretary of Defense for Acquisition, Technology, and Logistics (USD (AT&L)) and the components' actions and initiatives to reduce lead times from 2002 to 2005 were less effective overall than previous efforts from 1994 to 2002. From 2002 to 2005, DOD-wide lead times were reduced by an average of 0.9 percent annually as compared to an average reduction of 5.6 percent annually from 1994 to 2002, potentially leading to an additional $2.7 billion in lead time requirements, tying up money that could have been obligated for other needs. The higher rate of reduction from 1994 to 2002 can be attributed to three areas of focus: streamlining internal administrative processes, oversight from USD (AT&L), and developing strategic relationships with suppliers. However, from 2002 to 2005, USD (AT&L) no longer provided active oversight such as establishing lead time reduction goals, reporting metrics, reporting the impact of specific initiatives, or estimating the financial impact of reduced lead times, as had been done previously. Until steps are taken to renew management focus on reducing lead times, the components may continue to experience spare parts shortages and increased inventory levels to cover lead times.

gao_GAO-05-272

gao_GAO-05-272_0

U.S. However, despite the progress made, some U.S. agricultural products continue to experience difficulties gaining access to the Mexican market, typically due to antidumping, SPS requirements, safeguards, and other trade measures Mexico has put in place. These difficulties are not unlike challenges U.S. agricultural exports face in other major markets, such as Canada or Japan. U.S. Agricultural Trade with Mexico Has Continued to Increase since NAFTA Since NAFTA’s implementation, total U.S. agricultural exports to Mexico have nearly doubled, rising from $4.1 billion in 1993—the last year prior to NAFTA’s implementation—to $7.9 billion in 2003 (adjusted for inflation). According to USDA, the nontariff measures that present the most significant barriers to market access for U.S. agricultural exports have been Mexico’s application of antidumping duties, SPS requirements, and safeguards. Mexico Enacted Various Agricultural Programs in Response to Trade Liberalization, but Structural Problems Impair Growth and Challenge NAFTA Implementation Since the early 1990s, the Mexican government has enacted several agricultural assistance programs to help farmers adjust to the changes brought by trade liberalization, including NAFTA. They oppose further tariff eliminations as called for under NAFTA and demand a renegotiation of the agricultural provisions of the agreement. This opposition presents challenges to Mexico’s successful transition to liberalized agricultural trade under NAFTA. Elimination of these tariffs provided U.S. agricultural exports even greater access to the Mexican market. Nevertheless, since 2001 the United States has supported collaborative efforts to promote economic development in the parts of Mexico where growth has lagged under the Partnership for Prosperity (P4P) initiative. Recognizing the importance of rural development to the successful implementation of NAFTA, State Department and USDA strategies for Mexico call for building on collaborative activities under P4P to pursue the related goals of rural development and trade liberalization under NAFTA; however, the P4P action plans do not set forth specific strategies and activities that could be used to achieve these goals. The lack of specific plans under P4P to pursue rural development in support of NAFTA is particularly noteworthy because USDA officials expressed concerns that Mexico’s lagging rural development presents a challenge to the successful transition to liberalized trade under NAFTA, including the elimination of remaining tariffs in 2008. This document also acknowledges the need to continue to underscore the benefits of free trade for Mexico under NAFTA while seeking ways to help Mexico address its rural development issues. In addition, our report covered a number of areas including collaborative activities of U.S. agencies in Mexico and concerns about the long-term success of NAFTA, as well as Mexican trade measures that impact U.S. agricultural exports to Mexico. 3). GAO Comments 1. 2.

Why GAO Did This Study In 1994, the North American Free Trade Agreement (NAFTA) created the world's largest free trade area and, among other things, reduced or eliminated barriers for U.S. agricultural exports to Mexico's vast and growing markets. As part of a body of GAO work on NAFTA issues, this report (1) identifies progress made and difficulties encountered in gaining market access for U.S. agricultural exports to Mexico; (2) describes Mexico's response to changes brought by agricultural trade liberalization and challenges to the successful implementation of NAFTA; and (3) examines collaborative activities and assesses strategies to support Mexico's transition to liberalized agricultural trade under NAFTA. What GAO Found U.S. agricultural exports have made progress in gaining greater access to Mexico's market as Mexico has phased out barriers to most U.S. agricultural products, and only a handful of tariffs remain to be eliminated in 2008. Total U.S. agricultural exports to Mexico grew from $4.1 billion in 1993 to $7.9 billion in 2003. Despite progress, some commodities still have difficulties gaining access to the Mexican market. GAO found that Mexico's use of antidumping, plant and animal health requirements, safeguards and other nontariff trade barriers, such as consumption taxes, presented the most significant market access issues for U.S. agricultural exports to Mexico. Mexico has put in place several programs to help farmers adjust to trade liberalization, but structural problems, such as lack of rural credit, continue to impede growth in rural areas, presenting challenges to full implementation of NAFTA. Lagging rural development fuels arguments that NAFTA has hurt small farmers, although studies, including some Mexican studies, do not support this conclusion. Opponents of NAFTA want to block further tariff eliminations and are demanding renegotiation of NAFTA's agricultural provisions. Concerned about such opposition, U.S. officials acknowledged the need to promote the benefits of NAFTA, while seeking ways to help Mexico address its rural development issues. Historically, U.S. agencies have undertaken many agriculture-related collaborative efforts with Mexico. Since 2001, U.S.-Mexico development activities have taken place under the Partnership for Prosperity (P4P) Initiative to promote development in parts of Mexico where economic growth has lagged. Recognizing the importance of rural development to the success of NAFTA, Department of State and USDA strategies for Mexico call for building on collaborative activities under the P4P to pursue the related goals of rural development and trade liberalization under NAFTA; however, the P4P action plans do not set forth specific strategies and activities that could be used to achieve these goals.

gao_GAO-06-478T

gao_GAO-06-478T_0

In its simplest form, this is evidence that (1) the warfighter’s needs are valid and can best be met with the chosen concept, and (2) the chosen concept can be developed and produced within existing resources—that is, proven technologies, design knowledge, adequate funding, and adequate time to deliver the product when needed. At the heart of a business case is a knowledge-based approach to product development that demonstrates high levels of knowledge before significant commitments are made. Objectives, Scope, and Methodology To develop the information on the Future Combat System program’s progress toward meeting established goals, the contribution of critical technologies and complementary systems, and the estimates of cost and affordability, we interviewed officials of the Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics); the Army G-8; the Office of the Under Secretary of Defense (Comptroller); the Secretary of Defense’s Cost Analysis Improvement Group; the Director of Operational Test and Evaluation; the Assistant Secretary of the Army (Acquisition, Logistics, and Technology); the Army’s Training and Doctrine Command; Surface Deployment and Distribution Command; the Program Manager for the Future Combat System (Brigade Combat Team); the Future Combat System Lead Systems Integrator; and other contractors. Improved Business Case Is Needed for the FCS’s Success An improved business case for the FCS program is essential to help ensure that the program is successful in the long run. The FCS is unusual in that it is developing 18 systems and a network under a single program office and lead system integrator in the same amount of time that it would take to develop a single system. Yet system-level requirements are not yet stabilized and will continue to change, postponing the needed match between requirements and resources. These difficulties underscore the gap between requirements and available resources that must be closed if the FCS business case is to be executable. In the 2003 technology assessment, 87 percent of FCS’s critical technologies were projected to be mature to a TRL 6 by 2005. Furthermore, this latest estimate does not include complementary programs that are essential for FCS to perform as intended, or all of the necessary funding for FCS spin-outs. It accounts for the restructure of the FCS program and its increased scope, the 4-year extension to the product development schedule, the reintroduction of four systems that had been previously deferred, and the addition of a spin-out concept whereby mature FCS capabilities would be provided, as they become available, to current Army forces. Originally, FCS annual funding was not to exceed $10 billion in any one year. The latest cost estimate does not include all the costs that will be needed to field FCS capabilities. These and other unfunded programs would have to compete for already tight funding. Adding these items brings the total required FCS investment to the $200 billion range. Through fiscal year 2006, the Army will have budgeted over $8 billion for FCS development. First, the program must proceed without exceeding its currently projected costs. FCS Business Arrangements Given the risks facing the FCS program, the business arrangements made for carrying out the program will be critical to protecting the government’s interests. The government has used the LSI approach on other programs that require system-of-systems integration. These decisions, including procurement decisions for major weapons systems, are now being made by the LSI with Army involvement. The Army plans to change the fee structure for the FCS program in the new contract. As the details are worked out, it is important that the new contract encourage meaningful demonstrations of knowledge and to preserve the government’s ability to act on knowledge should the program progress differently than planned.

Why GAO Did This Study The Future Combat System (FCS) is a networked family of weapons and other systems in the forefront of efforts by the Army to become a lighter, more agile, and more capable combat force. When considering complementary programs, projected investment costs for FCS are estimated to be on the order of $200 billion. FCS's cost is of concern given that developing and producing new weapon systems is among the largest investments the government makes, and FCS adds significantly to that total. Over the last five years, the Department of Defense (DOD) doubled its planned investments in such systems from $700 billion in 2001 to $1.4 trillion in 2006. At the same time, research and development costs on new weapons continue to grow on the order of 30 to 40 percent. FCS will be competing for significant funds at a time when Federal fiscal imbalances are exerting great pressures on discretionary spending. In the absence of more money being available, FCS and other programs must be executable within projected resources. Today, I would like to discuss (1) the business case needed for FCS to be successful and (2) related business arrangements that support that case. What GAO Found There are a number of compelling aspects of the FCS program, and it is hard to argue with the program's goals. However, the elements of a sound business case for such an acquisition program--firm requirements, mature technologies, a knowledge-based acquisition strategy, a realistic cost estimate and sufficient funding--are not yet present. FCS began product development prematurely in 2003. Since then, the Army has made several changes to improve its approach for acquiring FCS. Yet, today, the program remains a long way from having the level of knowledge it should have had before starting product development. FCS has all the markers for risks that would be difficult to accept for any single system, much less a complex, multi-system effort. These challenges are even more daunting in the case of FCS not only because there are so many of them but because FCS represents a new concept of operations that is predicated on technological breakthroughs. Thus, technical problems, which accompany immaturity, not only pose traditional risks to cost, schedule, and performance; they pose risks to the new fighting concepts envisioned by the Army. Many decisions can be anticipated that will involve trade-offs the Government will make in the program. Facts of life, like technologies not working out, reductions in available funds, and changes in performance parameters, must be anticipated. It is important, therefore, that the business arrangements for carrying out the FCS program--primarily in the nature of the development contract and in the lead system integrator (LSI) approach-- preserve the government's ability to adjust course as dictated by these facts of life. At this point, the $8 billion to be spent on the program through fiscal year 2006 is a small portion of the $200 billion total. DOD needs to guard against letting the buildup in investment limit its decision making flexibility as essential knowledge regarding FCS becomes available. As the details of the Army's new FCS contract are worked out and its relationship with the LSI evolves, it will be important to ensure that the basis for making additional funding commitments is transparent. Accordingly, markers for gauging knowledge must be clear, incentives must be aligned with demonstrating such knowledge, and provisions must be made for the Army to change course if the program progresses differently than planned.

gao_HEHS-96-128

gao_HEHS-96-128_0

Drawing from its experience with the demonstration projects, DOD designed TRICARE as its managed health care program. DOD has enrolled large numbers of beneficiaries in TRICARE Prime, including many of the active duty dependents DOD particularly wants to enroll. A delay in the TRICARE benefits package and higher than expected early enrollment together led to initial beneficiary confusion. Evaluating the cost-effectiveness of resource-sharing agreements is very difficult and complex. If adopted, this financing method would give facility commanders more control of CHAMPUS funds along with their direct care funds and, therefore, more flexibility to enter into resource support agreements. However, DOD and the contractor were not ready to perform this function at the start of health care delivery in the Northwest and Southwest Regions as planned. The Northwest Region’s utilization management program, which is handled by the military, was not implemented for over 5 months, but it is now under way. DOD Is Not Defining and Measuring How Many Former Nonusers Have Enrolled DOD also is not collecting the enrollment data needed to identify eligible beneficiaries who enroll in TRICARE but have not previously been users of the military health care system. Conclusions Despite initial beneficiary confusion caused by marketing and education problems, as well as problems with computer systems’ compatibility, early implementation of TRICARE is progressing consistent with congressional and DOD goals. However, the success of DOD’s current efforts to address the implementation of resource-sharing agreements and utilization management is critical to containing health care costs. Recommendations We recommend that the Secretary of Defense direct the Assistant Secretary of Defense for Health Affairs to collect data on the timeliness of appointments in order to measure TRICARE’s performance in improving beneficiary access against DOD’s standards and assess the impact of new beneficiaries who would not be using military health care if not for TRICARE, by defining these new users, identifying them, and estimating the cost implications of their use of military health care.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) implementation of its TRICARE managed health care program, focusing on: (1) whether early implementation produced the expected results; (2) how early outcomes may affect costs; and (3) whether DOD is capturing data needed to manage and assess TRICARE performance. What GAO Found GAO found that: (1) early implementation of TRICARE has resulted in large numbers of beneficiaries enrolling in TRICARE Prime, which DOD believes is cost-effective; (2) DOD has encountered many start-up problems, such as a delay in the TRICARE benefits package, higher than expected early enrollment, and computer systems' incompatibility; (3) DOD and TRICARE contractors have diligently addressed their start-up problems and have disseminated lessons learned from those problems; (4) DOD efforts to contain TRICARE costs may be hindered by uncertainties regarding resource-sharing arrangements and utilization management problems; (5) DOD is exploring the use of task order resource support as an alternative to resource sharing arrangements and giving hospital commanders more control over dependent-care funds to give military hospitals more flexibility in obtaining support services from TRICARE contractors; (6) DOD delayed implementing utilization management because it was not ready to perform this function in the northwest and southwest regions as planned; and (7) although DOD is defining TRICARE performance measures, it is not collecting key data on beneficiaries' access to care or the enrollment of former nonusers who are eligible to use the military health care system.

gao_GAO-04-745T

gao_GAO-04-745T_0

The fee demonstration program authorized the Bureau of Land Management, Fish and Wildlife Service, National Park Service, and the Forest Service to experiment with new ways to administer existing fee revenues and to establish new recreation entrance and user fees. According to the Department of the Interior’s latest estimates, the deferred maintenance backlog for its participating agencies ranged from about $5.1 billion to $8.3 billion. Table 1 shows the Department’s estimate of deferred maintenance for its agencies participating in the Recreational Fee Demonstration Program. Although the Park Service has used some of the revenues generated from the fee demonstration program to address its high-priority maintenance needs, without accurate and reliable data, it cannot demonstrate the effect of fee demonstration revenues in improving the maintenance of its facilities. In September 2003, we reported that the Forest Service (like the Park Service) had no effective means for measuring how much of the fee demonstration revenues it had spent on deferred maintenance or the impact that the fee program had had on reducing its deferred maintenance needs. Furthermore, the agency has not developed a process to track deferred maintenance expenditures from fee demonstration revenues. 3283 would provide participating agencies with a permanent source of funds to supplement existing appropriations and to better address maintenance backlogs. Furthermore, by making the program permanent, H.R. 3283 could provide participating agencies like the Forest Service with an incentive to develop a system to track their deferred maintenance backlogs. 3283 Provides Agencies Additional Flexibility in Distributing Collected Fee Revenues The existing fee demonstration program requires federal land management agencies to maintain at least 80 percent of the fee revenues for use on-site. H.R. 3283 provides the agencies with flexibility to reduce the percentage of revenues spent on-site down to 60 percent. In contrast, we warned that sites outside the demonstration program, as well as demonstration sites that did not collect as much in fee revenues, may have high-priority needs that remained unmet. To address this imbalance, we suggested that the Congress consider modifying the current requirement that 80 percent of fee revenue be maintained for use by the sites generating the revenues to allow for greater flexibility in using fee revenues. Our prior work has pointed to the need for more effective coordination and cooperation among the agencies to better serve visitors by making the payment of fees more convenient and equitable while at the same time, reducing visitor confusion about similar or multiple fees being charged at nearby or adjacent federal recreation sites. H.R. First, the act would standardize the types of fees that the federal land management agencies use. Second, it would create a single national pass that would provide visitors access to recreation sites managed by different agencies. Third, it would allow for the coordination of fees on a regional level for access to multiple nearby sites. H.R. 3283 Would Provide Interagency Coordination on the Regional Level H.R. H.R. While the fee demonstration program provides funds to increase the quality of the visitor experience and enhance the protection of resources by, among other things, addressing a backlog of needs for repair and maintenance, and to manage and protect resources, the program’s short and long-term success lies in the flexibility it provides agencies to spend revenues and the removal of any undesirable inequities that occur to ensure that the agencies’ highest priority needs are met.

Why GAO Did This Study In 1996, the Congress authorized an experimental initiative called the Recreational Fee Demonstration Program that provides funds to increase the quality of visitor experience and enhance resource protection. Under the program, the Bureau of Land Management, Fish and Wildlife Service, and National Park Service--all within the Department of the Interior--and the Forest Service--within the U.S. Department of Agriculture--are authorized to establish, charge, collect, and use fees at a number of sites to, among other things, address a backlog of repair and maintenance needs. Also, sites may retain and use the fees they collect. The Congress is now considering, through H.R. 3283, whether to make the program permanent. Central to the debate is how effectively the agencies are using the revenues that they have collected. This testimony focuses on the potential effect of H.R. 3283 on the issues GAO raised previously in its work on the Recreational Fee Demonstration Program. Specifically, it examines the extent to which H.R. 3283 would affect (1) federal agencies' deferred maintenance programs, (2) the management and distribution of the revenue collected, and (3) interagency coordination on fee collection and use. What GAO Found H.R. 3283 would provide agencies with a permanent source of funds to better address their maintenance backlog, and by making the program permanent, the act would provide agencies incentive to develop a system to track their deferred maintenance backlogs. According to the Department of the Interior's latest estimates, the deferred maintenance backlog for the Interior agencies participating in the fee demonstration program ranges from $5.1 billion to $8.3 billion, with the Park Service alone accounting for an estimated $4 to $7 billion. Likewise, the Forest Service, the other participating agency, estimates its total deferred maintenance backlog to be about $8 billion. GAO's prior work on the Park Service's and Forest Service's backlog has demonstrated that neither agency has accurate and reliable information on its deferred maintenance needs and cannot determine how much of the fee demonstration revenues it spends on reducing its deferred maintenance needs. Furthermore, some agency officials have hesitated to divert resources to develop a process for tracking deferred maintenance because the fee demonstration program is temporary. H.R. 3283 would allow agencies to reduce the percentage of fee revenue used on-site down to 60 percent, thus providing the agencies with greater flexibility in how they use the revenues. Currently, the demonstration program requires federal land management agencies to maintain at least 80 percent of the collected fee revenues for use on-site. This requirement has helped some demonstration sites generate revenue in excess of their high-priority needs, but the high-priority needs at other sites, which did not collect as much in fee revenues, remained unmet. GAO has suggested that the Congress consider modifying the current 80-percent on-site spending requirement to provide agencies greater flexibility in using fee revenues. H.R. 3283 would standardize the types of fees federal land management agencies may use and creates a single national pass that provides visitors general access to a variety of recreation sites managed by different agencies and allows for the regional coordination of fees to access multiple nearby sites. GAO's prior reports have demonstrated the need for more effective coordination and cooperation among the agencies to better serve visitors by making the payment of fees more convenient and equitable while reducing visitor confusion about similar or multiple fees being charged at nearby or adjacent federal recreation sites.

gao_GAO-07-986

gao_GAO-07-986_0

The Majority of Reported Costs Incurred Using MMA Funds Consisted Of Personnel-Related and Contractor Expenses, and Indirect Costs SSA reported spending the $500 million MMA funds from December 2003 through January 2006 on activities to implement the provisions specified in MMA. More than half of the funds were spent on personnel-related expenses for staff hours used on MMA activities at SSA’s headquarters and field offices. Once the $500 million was spent, MMA costs were funded by SSA’s LAE appropriation. As of February 2007, SSA reported it had completed 16 of the 22 tasks for implementing six provisions of MMA. SSA is continuing its implementation of the remaining six tasks using LAE funding. SSA Had Policies and Procedures for Tracking MMA Funds but They Were Not Complied with Consistently SSA had agencywide policies and procedures in place over its cost tracking and allocation, asset accountability, and invoice review and approval processes. SSA also established specific guidance to charge and allocate its costs to implement MMA. However, those policies and procedures were not always complied with consistently. We found that SSA did not effectively communicate the specific MMA-related guidance to all relevant staff. Although purchase card transactions and accountable asset purchases represented a small percentage of the total MMA administrative costs that were paid with MMA funds, having effective controls in place to ensure the proper approval, support, and accountability for these transactions is essential to reduce the risk of improper purchases and improperly accounted for assets. Recommendations for Executive Action To enhance SSA’s (1) ability to track the costs of program activities including MMA administrative costs, (2) controls over its review and approval processes for purchase card payments, and (3) tracking of its accountable assets, we recommend that the Commissioner of Social Security establish procedures to ensure better dissemination of policies and procedures to all relevant offices and staff; establish additional detailed procedures for a purchase card supporting documentation review and approval process to help ensure that purchase card payments are properly supported, allowable, and allocated; and reinforce existing policies and procedures for the purchase of accountable assets to ensure that accountable assets are bar coded, recorded in SSA’s asset inventory system, and inventoried periodically. Appendix I: Objectives, Scope, and Methodology To review the costs of the Social Security Administration’s (SSA) implementation of MMA activities, we reviewed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and discussed its impact with SSA to obtain an understanding of SSA’s responsibilities under the act. As a result, we focused our testing of transactions on contractor and vendor payments. Also, the summary page and pages 3, 12 and 13 of the report state that “SSA subsequently identified and corrected at least $4.6 million of amounts misallocated between MMA and other SSA program activities, but had not corrected approximately $313,000 misallocated credit card purchase transactions.” The fact is that $4.6 million was initially not correctly allocated to MMA.

Why GAO Did This Study The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) created a voluntary outpatient prescription drug benefit as part of the Medicare program, and appropriated up to $500 million for the Social Security Administration (SSA) to fund the start-up administrative costs in meeting its responsibilities to implement MMA. SSA was given a great deal of discretion in how to use the funds and the act provided little detail on how the funds were to be spent. You asked us to review SSA's costs for implementing MMA to determine (1) how the MMA funds were expended, (2) what procedures SSA has in place over the use of those funds, and (3) how SSA complied with those procedures related to contractor and vendor payments. What GAO Found SSA spent the $500 million in MMA funds from December 2003 through January 2006 to implement activities outlined in MMA. The majority of costs paid with MMA funds consisted of personnel-related expenses, contractors, and indirect costs. More than half of the funds were spent on payroll for staff hours used on MMA activities in SSA headquarters and field offices. Once the $500 million was spent, SSA began to use its general appropriation to fund the remaining costs of implementing MMA activities. SSA used its cost analysis system to track the total costs of its implementation of MMA activities. As of February 20, 2007, SSA had completed implementation of 16 of the 22 tasks for the six provisions under the act. SSA had agencywide policies and procedures in place for its cost tracking and allocation, asset accountability, and invoice review processes. It also established specific guidance to assign and better allocate SSA's costs in implementing MMA. There were some instances though where SSA did not comply with these policies and procedures. SSA did not effectively communicate the specific MMA-related guidance to all affected staff. SSA subsequently identified and corrected at least $4.6 million of costs that initially were incorrectly allocated to MMA, but had not corrected approximately $313,000 misallocated credit card purchase transactions. In addition, GAO found instances where accountable assets purchased with MMA funds, such as electronic and computer equipment, were not being properly tracked by SSA in accordance with its policies and instances where purchase card transactions were not properly supported. Although purchase card transactions and accountable asset purchases represented a small percentage of total MMA costs, proper approval and support for these types of transactions is essential to reduce the risk of improper payments.

gao_GAO-12-518

gao_GAO-12-518_0

Air Support Differences Were Greater among Locations Than among Customers or Missions OAM met 73 percent of the 38,662 total air support requests that it received in fiscal year 2010, according to our analysis of AMOR data.OAM tracks its ability to meet air support requests by location, customer, and mission in its AMOR system. As a result, Border Patrol may have more unmet requests than other agencies. For example, Border Patrol and ICE officials in one northern border location said they were generally satisfied with OAM’s air support. Lastly, OAM has taken actions to increase its ability to meet marine requests, including purchasing “all-weather” vessels and cold-weather marine gear. OAM Could Benefit from Reassessing Its Mix and Placement of Resources to Better Address Mission Needs and Threats OAM has not documented its analyses to support its resource mix and placement decisions across locations, and challenges in providing higher rates of support to high priority sectors indicate that a reassessment of its asset mix and placement may provide benefits. Furthermore, while OAM’s Fiscal Year 2010 Aircraft Deployment Plan stated that OAM deployed aircraft and maritime vessels to ensure its forces were While these positioned to best meet the needs of CBP field commanders and respond to the latest intelligence on emerging threats, OAM did not have documentation that clearly linked the deployment decisions in the plan to mission needs or threats. However, such documentation of significant events could help OAM improve the transparency of its resource allocation decisions to help demonstrate the effectiveness of these resource decisions in fulfilling its mission needs and addressing threats. For example, in fiscal year 2010, 50 percent of OAM’s assets and 59 percent of OAM’s flight hours were in the southwest border, Border Patrol’s highest-priority region. OAM’s fiscal year 2010 aircraft deployment plan stated that OAM deployed aircraft and maritime vessels to ensure its forces were positioned to best meet the needs of CBP Field Commanders and respond to emerging threats; however, our analysis indicates that OAM did not provide higher rates of air support in response to customer need in locations designated as high priority based on threats. As such, to the extent that the benefits outweigh the costs, reassessing the mix and placement of its assets and personnel, and using performance results to inform these decisions could help provide OAM with reasonable assurance that it is most effectively allocating its scarce resources and aligning them to fulfill its mission needs and related threats. In fiscal year 2010, for example, OAM reported that it exceeded its performance goal and met Border Patrol support requests greater than 98 percent of the time, but the actual rate of support based on our subsequent analysis was 82 percent. Across mission-related activities, 54 percent of responding units reported sharing intelligence on a frequent basis and 43 percent reported sharing schedules, on a frequent basis. However, our survey and interviews also highlighted activities where additional coordination could help leverage existing resources, eliminate unnecessary duplication and enhance operational efficiencies, including an assessment of whether proximate OAM and USCG units should be colocated. Thus, DHS could benefit from assessing actions it could take to improve coordination across a range of air and marine activities, including reconstituting the DHS Aviation Management Council and Marine Vessel Management Council. Recommendations for Executive Action To help ensure that OAM assets and personnel are best positioned to effectively meet mission needs and address threats, and improve transparency in allocating scarce resources, we recommend that the Commissioner of U.S. Customs and Border Protection take the following three actions: document analyses, including mission requirements and threats, that support decisions on the mix and placement of OAM’s air and marine resources; to the extent that benefits outweigh the costs, reassess the mix and placement of OAM’s air and marine resources to include mission requirements, performance results, and anticipated CBP strategic and technological changes; and disclose data limitations relating to the accuracy of OAM’s reported performance results for support provided. Specifically, we reviewed the extent that the Office of Air and Marine (OAM): (1) met air and marine support requests across locations, customers, and missions, (2) has taken steps to ensure that its mix and placement of resources met its mission needs and addressed threats, and (3) coordinated the operational use of its air and marine assets and personnel with the USCG. As part of this effort, GAO is reviewing the coordination between OAM and the U.S. Coast Guard (USCG). USCG guidance - Used?

Why GAO Did This Study Within DHS, the U.S. Customs and Border Protection’s (CBP) OAM deploys the largest law enforcement air force in the world. In support of homeland security missions, OAM provides aircraft, vessels, and crew at the request of the its customers, primarily Border Patrol, which is responsible for enforcing border security, and tracks its ability to meet requests. GAO was asked to determine the extent to which OAM (1) met its customers’ requests; (2) has taken steps to ensure its mix and placement of resources effectively met mission needs and addressed threats; and (3) coordinated the use of its assets with the USCG, which is to execute its maritime security mission using its assets. GAO reviewed DHS policies, interviewed OAM, Border Patrol, U.S. Immigration and Customs Enforcement, and USCG officials in headquarters and in 4 field locations selected on factors, such as threats and operating environments. Results from these field visits are not generalizable. GAO analyzed OAM support request data for fiscal year 2010, and surveyed OAM and USCG officials at 86 proximately located units to determine the extent of cooperation between the two agencies. This report is a public version of a law enforcement sensitive report GAO issued in February 2012. Information deemed sensitive has been redacted. What GAO Found GAO’s analysis of the Office of Air and Marine (OAM) data found that OAM met 73 percent of the 38,662 air support requests and 88 percent of the 9,913 marine support requests received in fiscal year 2010. The level of support differed by location, customers, and type of mission. For example, in its northern region OAM met air support requests 77 percent of the time and in its southeast region, it met these requests 60 percent of the time. The main reasons for unmet air and marine support requests were maintenance and adverse weather, respectively. OAM has taken actions, such as developing an aircraft modernization plan and purchasing all-weather vessels, to address these issues. OAM could benefit from taking additional steps to better ensure that its mix and placement of resources meets mission needs and addresses threats. GAO’s analysis of OAM’s fiscal year 2010 performance results indicate that OAM did not meet its national performance goal to fulfill greater than 95 percent of Border Patrol air support requests and did not provide higher rates of support in locations designated as high priority based on threats. For example, one high-priority Border Patrol sector had the fifth highest support rate across all nine sectors on the southwest border. OAM could benefit from reassessing the mix and placement of its assets and personnel, using performance results to inform these decisions. Such a reassessment could help provide OAM with reasonable assurance that it is most effectively allocating scarce resources and aligning them to fulfill mission needs and related threats. Additionally, OAM has not documented its analyses to support its asset mix and placement across locations. For example, OAM’s fiscal year 2010 deployment plan stated that OAM deployed aircraft and maritime vessels to ensure that its forces were positioned to best meet field commanders’ needs and respond to emerging threats, but OAM did not have documentation that clearly linked the deployment decisions in the plan to these goals. Such documentation could improve transparency to help demonstrate the effectiveness of its decisions in meeting mission needs and addressing threats. GAO’s analysis of OAM and U.S. Coast Guard (USCG) air and marine survey responses indicated that they coordinated with their proximately located counterparts more frequently for activities directly related to carrying out their respective agencies’ missions (mission-related activities) than for mission support activities. For example, within mission-related activities, 54 percent of the 86 respondents reported sharing intelligence on a frequent basis and, within mission-support activities, about 15 percent reported that they frequently coordinated for maintenance requests. Survey respondents, the Department of Homeland Security (DHS) analyses, and GAO site visits confirm that opportunities exist to improve certain types of coordination, such as colocating proximate OAM and USCG units, which currently share some marine and no aviation facilities. In addition, DHS does not have an active program office dedicated to the coordination of aviation or maritime issues. DHS could benefit from assessing actions it could take to improve coordination across a range of air and marine activities, including reconstituting departmental oversight councils, to better leverage existing resources, eliminate unnecessary duplication, and enhance efficiencies. What GAO Recommends GAO recommends, among other things, that CBP reassess decisions and document its analyses for its asset mix and placement, and that DHS enhance oversight to ensure effective coordination of OAM and USCG resources, and DHS concurred.

gao_GAO-09-475T

gao_GAO-09-475T_0

USPS’s Financial Condition and Outlook Are Deteriorating USPS’s financial condition has continued to deteriorate in the first 5 months of fiscal year 2009 and USPS expects its financial condition to continue deteriorating for the rest of the fiscal year, including: accelerating declines in mail volume after the first quarter, with a total decline of about 11 billion pieces; and accelerating losses after the first quarter, with a total loss of about $2 billion. USPS has updated its projections for fiscal year 2009, projecting a mail volume decline by a record 22.7 billion pieces (11.2 percent) from fiscal year 2008; a record $6.4 billion net loss, and an unprecedented $1.5 billion cash shortfall (i.e., insufficient cash to cover expenses and obligations), assuming cost-cutting targets of $5.9 billion are achieved; and plans to increase outstanding debt by $3 billion (the annual statutory limit) to $10.2 billion, or two-thirds of the total $15 billion statutory limit. USPS attributes much of its net loss this fiscal year to the economic recession that has resulted in unprecedented declines in mail volume and decreased revenues. The financial and housing sectors are major mail users, mailing bills, statements, and advertising such as credit card, mortgage, and home equity solicitations. In addition, USPS projects its financial difficulties will continue in fiscal year 2010 and result in an even greater cash shortfall at the end of that fiscal year, despite plans for additional cost-cutting and additional borrowing of $3 billion, which would bring USPS’s total debt to $13.2 billion. However, these savings and added revenue from rate increases were insufficient to fully offset the impact of declines in mail volume and rising costs from cost-of-living allowances (COLA) provided to postal employees covered by union contracts, as well as rising workers’ compensation and retirement costs. Action Is Needed on Options to Preserve USPS’s Financial Viability Action is needed on various options, as no single action will be sufficient for USPS to remain financially viable in the short and long term. The long-term challenge is to restructure USPS’s entire operations and networks to reflect the changes in mail volume, mailer preferences, and USPS’s capacity to cover its costs. A key factor in determining USPS’s financial viability is whether mail volume will rebound sufficiently once the economy improves, as volume has done in the past, so that USPS revenues will cover costs (see fig. 2). It is not clear that either of these options would be sufficient, because USPS projects it will operate on a thin margin. This means that even if such relief is provided, a cash shortfall could develop in either fiscal year 2009 and/or 2010 if USPS does not meet its ambitious cost-cutting goals, mail volume declines more than projected, or unexpected costs materialize, such as unexpected increases in fuel costs. Comprehensive Action Is Urgently Needed on Options to Keep USPS Viable Although USPS is taking unprecedented actions to cut costs, comprehensive action beyond USPS’s current efforts is urgently needed to maintain financial viability. Given the growing gap between revenues and expenses, USPS’s business model and its ability to remain self-financing may be in jeopardy. I want to emphasize that action is urgently needed to streamline USPS’s costs in two areas where it has been particularly difficult—compensation and benefits and the mail processing and retail networks. Closing postal facilities would be controversial, but is necessary to streamline costs. In addition, it is imperative for USPS and Congress to take informed action to review mail use, what future postal services will be needed, and what operational and statutory options are available to provide those services. We asked USPS to comment on a draft of our testimony. USPS generally agreed with the accuracy of our statement and provided technical comments, which we incorporated where appropriate.

Why GAO Did This Study When Congress passed the Postal Accountability and Enhancement Act in December 2006, the U.S. Postal Service (USPS) had just completed fiscal year 2006 with its largest mail volume ever--213 billion pieces of mail and a net income of $900 million. Two years later, USPS's financial condition has deteriorated. Mail volume declined by a record 9.5 billion pieces (4.5 percent) in fiscal year 2008, leading to a loss of $2.8 billion--the second largest since 1971. According to USPS, this was largely due to declines in the economy, especially in the financial and housing sectors, as well as shifts in transactions, messages, and advertising from mail to electronic alternatives. Declining mail volume flattened revenues despite rate increases, while USPS's cost-cutting efforts were insufficient to offset the impact of declining mail volume and rising costs in fuel and cost-of-living allowances for postal employees. USPS's initial fiscal year 2009 budget expected that the turmoil in the economy would result in more mail volume decline and a loss of $3.0 billion. This testimony focuses on (1) USPS's financial condition and outlook and (2) options and actions for USPS to remain financially viable in the short and long term. It is based on GAO's past work and updated postal financial information. We asked USPS for comments on our statement. USPS generally agreed with the accuracy of our statement and provided technical comments, which we incorporated where appropriate. What GAO Found USPS's financial condition has continued to deteriorate in the first 5 months of fiscal year 2009 and USPS expects its financial condition to continue deteriorating for the rest of the fiscal year. Key results include: (1) accelerating declines in mail volume after the first quarter, with a total decline of about 11 billion pieces, and (2) accelerating losses after the first quarter, with a total loss of about $2 billion. USPS's updated fiscal year 2009 projections suggest the magnitude of the challenges it faces: (1) mail volume will decline by a record 22.7 billion pieces (11.2 percent),(2) a record $6.4 billion net loss and an unprecedented cash shortfall of $1.5 billion, assuming that cost-cutting targets of $5.9 billion are achieved, and (3) plans to increase outstanding debt by $3 billion (the annual statutory limit) to $10.2 billion, or two-thirds of the $15 billion statutory limit. In addition, USPS projects its financial difficulties will continue in fiscal year 2010 and result in an even greater cash shortfall. USPS's most immediate challenge is to dramatically reduce costs fast enough to meet its financial obligations. USPS has proposed that Congress give it financial relief of $25 billion over 8 years by changing the statutory mandate for funding its retiree health benefits. GAO recognizes the need for immediate financial relief, but prefers 2-year relief so that Congress can determine what further actions are needed. It is not clear that either option would be sufficient because USPS projects it will operate on a thin margin, risking a larger cash shortfall if it does not meet its ambitious cost-cutting goals, mail volume declines more than projected, or unexpected costs materialize, such as fuel cost increases. Although USPS is taking unprecedented actions to cut costs, comprehensive action beyond USPS's current effort is urgently needed to maintain financial viability. Given the growing gap between revenues and expenses, USPS's business model and its ability to remain self-financing may be in jeopardy. Action is needed to streamline costs in two difficult areas: (1) compensation and benefits, which generate close to 80 percent of costs and (2) mail processing and retail networks, which have growing excess capacity. Closing postal facilities is controversial, but necessary, because the declining mail volume and growing deficits indicate that USPS cannot afford to maintain such an extensive network. Information will be critical to determine what other actions are needed, including options to cut costs as well as their impact on mail volume and mail users. It is also imperative to review mail use, what future postal services will be needed, and what options are available in many areas, including universal service, workforce costs, retail services, mail processing, delivery, transportation, and USPS's business model.

gao_GAO-09-231T

gao_GAO-09-231T_0

The subprime market segment generally serves borrowers with blemished credit and features higher interest rates and fees than the prime market. One of the main sources of information on the status of mortgage loans is the Mortgage Bankers Association’s quarterly National Delinquency Survey. The Emergency Economic Stabilization Act, passed by Congress and signed by the President on October 3, 2008, created TARP, which outlines a troubled asset purchase and insurance program, among other things. Default and Foreclosure Rates Have Reached Historical Highs and Are Expected to Increase Further National default and foreclosure rates rose sharply during the 3-year period from the second quarter of 2005 through the second quarter of 2008 to the highest level in 29 years (fig.1). Put another way, nearly half a million mortgages entered the foreclosure process in the second quarter of 2008, compared with about 150,000 in the second quarter of 2005. ARMs accounted for a disproportionate share of the increase in the number of loans in default and foreclosure in the prime and subprime market segments over the 3-year period. Default and foreclosure rates also varied significantly among states. Every state in the nation experienced growth in their foreclosure start rates from the second quarter of 2005 through the second quarter of 2008. The foreclosure start rate rose at least 10 percent in every state over the 3-year period, but 23 states experienced a increase of 100 percent or more. Several states in the “Sun Belt” region, such as Arizona, California, Florida, and Nevada, had among the highest percentage increases in foreclosure start rates. Treasury’s initial focus in implementing TARP was to stabilize the financial markets and stimulate lending to businesses and consumers by purchasing troubled mortgage-related assets— securities and whole loans—from financial institutions. Treasury planned to use its leverage as a major purchaser of troubled mortgages to work with servicers and achieve more aggressive mortgage modification standards. The recitals refer to the participating institutions’ future actions in general terms—for example, “the Company agrees to work diligently, under existing programs to modify the terms of residential mortgages as appropriate to strengthen the health of the U.S. housing market.” Treasury and the regulators have publicly stated that they expect these institutions to use the funds in a manner consistent with the goals of the program, which include both the expansion of the flow of credit and the modification of the terms of residential mortgages. But, to date it remains unclear how OFS and the regulators will monitor how participating institutions are using the capital injections to advance the purposes of the act. In our first 60-day report to Congress on TARP, mandated by the Emergency Economic Stabilization Act, we recommended that Treasury, among other things, work with the bank regulators to establish a systematic means for determining and reporting on whether financial institutions’ activities are generally consistent with the purposes of CPP. Treasury has established and appointed an interim chief for the Office of the Chief of Homeownership Preservation under OFS. Treasury has stated that it is working with other federal agencies, including FDIC, HUD, and FHFA to explore options to help homeowners under TARP. However, to date the Treasury has not completed its strategy for preserving homeownership. Treasury also points to challenges in financing any new proposal. We will continue to monitor Treasury’s efforts as part of our ongoing TARP oversight responsibilities. Appendix I: Examples of Federal Government and Private Sector Residential Mortgage Loan Modification Programs Eligible borrowers are those with loans owned or serviced by IndyMac Federal Bank Affordable mortgage payment achieved for the seriously delinquent or in default borrower through interest rate reduction, amortization term extension, and/or principal forbearance Payment must be no more than 38 percent of the borrower’s monthly gross income Losses to investor minimized through a net present value test that confirms that the modification will cost the investor less than foreclosure Borrowers can refinance into an affordable loan insured by FHA Eligible borrowers are those who, among other factors, as of March 2008, had total monthly mortgage payments due of more than 31 percent of their gross monthly income New insured mortgages cannot exceed 96.5 percent of the current loan-to-value ratio (LTV) for borrowers whose mortgage payments do not exceed 31 percent of their monthly gross income and total household debt not to exceed 43 percent; alternatively, the program allows for a 90 percent LTV for borrowers with debt-to-income ratios as high as 38 (mortgage payment) and 50 percent (total household debt) Requires lenders to write down the existing mortgage amounts to either of the two LTV Eligible borrowers are those who, among other factors, have missed three payments or more Servicers can modify existing loans into a Freddie Mae or Fannie Mac loan, or a portfolio loan with a participating investor An affordable mortgage payment, of no more than 38 percent of the borrower’s monthly gross income, is achieved for the borrower through a mix of reducing the mortgage interest rate, extending the life of the loan or deferring payment on part of the principal Eligible borrowers are those with subprime or pay option adjustable rate mortgages serviced by Countrywide and originated by Countrywide prior to December 31, 2007 Options for modification include refinance under the FHA HOPE for Homeowners program, interest rate reductions, and principal reduction for pay option adjustable rate mortgages First-year payments mortgage payments will be targeted at 34 percent of the borrower’s income, but may go as high as 42 percent Annual principal and interest payments will increase at limited step-rate adjustments Affordable mortgage payment achieved for the borrower at risk of default through interest rate reduction and/or principal forbearance Modification may also include modifying pay-option ARMs to 30-year, fixed-rate loans or interest-only payments for 10 years Modification includes flexible eligibility criteria on origination dates, loan-to-value ratios, rate floors and step-up adjustment features This program was created in consultation with Fannie Mae, Freddie Mac, HOPE NOW and its twenty-seven servicer partners, the Department of the Treasury, FHA and FHFA.

Why GAO Did This Study A dramatic increase in mortgage loan defaults and foreclosures is one of the key contributing factors to the current downturn in the U.S. financial markets and economy. In response, Congress passed and the President signed in July the Housing and Economic Recovery Act of 2008 and in October the Emergency Economic Stabilization Act of 2008 (EESA), which established the Office of Financial Stability (OFS) within the Department of the Treasury and authorized the Troubled Asset Relief Program (TARP). Both acts establish new authorities to preserve homeownership. In addition, the administration, independent financial regulators, and others have undertaken a number of recent efforts to preserve homeownership. GAO was asked to update its 2007 report on default and foreclosure trends for home mortgages, and describe the OFS's efforts to preserve homeownership. GAO analyzed quarterly default and foreclosure data from the Mortgage Bankers Association for the period 1979 through the second quarter of 2008 (the most recent quarter for which data were available). GAO also relied on work performed as part of its mandated review of Treasury's implementation of TARP, which included obtaining and reviewing information from Treasury, federal agencies, and other organizations (including selected banks) on home ownership preservation efforts. To access GAO's first oversight report on Treasury's implementation of TARP, see GAO-09-161 . What GAO Found Default and foreclosure rates for home mortgages rose sharply from the second quarter of 2005 through the second quarter of 2008, reaching a point at which more than 4 in every 100 mortgages were in the foreclosure process or were 90 or more days past due. These levels are the highest reported in the 29 years since the Mortgage Bankers Association began keeping complete records and are based on its latest available data. The subprime market, which consists of loans to borrowers who generally have blemished credit and that feature higher interest rates and fees, experienced substantially steeper increases in default and foreclosure rates than the prime or government-insured markets, accounting for over half of the overall increase. In the prime and subprime market segments, adjustable-rate mortgages experienced steeper growth in default and foreclosure rates than fixed-rate mortgages. Every state in the nation experienced growth in the rate at which loans entered the foreclosure process from the second quarter of 2005 through the second quarter of 2008. The rate rose at least 10 percent in every state over the 3-year period, but 23 states experienced an increase of 100 percent or more. Several states in the "Sun Belt" region, including Arizona, California, Florida, and Nevada, had among the highest percentage increases. OFS initially intended to purchase troubled mortgages and mortgage-related assets and use its ownership position to influence loan servicers and to achieve more aggressive mortgage modification standards. However, within two weeks of EESA's passage, Treasury determined it needed to move more quickly to stabilize financial markets and announced it would use $250 billion of TARP funds to inject capital directly into qualified financial institutions by purchasing equity. In recitals to the standard agreement with Treasury, institutions receiving capital injections state that they will work diligently under existing programs to modify the terms of residential mortgages. It remains unclear, however, how OFS and the banking regulators will monitor how these institutions are using the capital injections to advance the purposes of the act, including preserving homeownership. As part of its first TARP oversight report, GAO recommended that Treasury, among other things, work with the bank regulators to establish a systematic means for determining and reporting on whether financial institutions' activities are generally consistent with program goals. Treasury also established an Office of Homeownership Preservation within OFS that is reviewing various options for helping homeowners, such as insuring troubled mortgage-related assets or adopting programs based on the loan modification efforts of FDIC and others, but it is still working on its strategy for preserving homeownership. While Treasury and others will face a number of challenges in undertaking loan modifications, including making transparent to investors the analysis supporting the value of modification versus foreclosure, rising defaults and foreclosures on home mortgages underscore the importance of ongoing and future efforts to preserve homeownership. GAO will continue to monitor Treasury's efforts as part of its mandated TARP oversight responsibilities.

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Although Definitive Evidence Is Lacking on What Is Most Effective in Improving Financial Literacy, Some Initiatives Have Yielded Positive Results Relatively Few Evaluations Have Measured Financial Literacy Programs’ Effect on Consumer Behavior While there is a fairly extensive literature on financial literacy, relatively few evaluations of financial literacy programs have been published that use empirical evidence and even fewer evaluations measured a program’s impact on the participants’ behavior. The evaluations of financial literacy programs that are most reliable, useful, and definitive include three key elements, according to some experts with whom we spoke and literature that we reviewed: they measure behavioral change, track participants over time, and use a control group. For example, certain programs using approaches as diverse as individualized one-on-one credit counseling, employer-provided retirement seminars, and education provided in a classroom setting have each been shown to have effective outcomes. However, the heterogeneity among the programs evaluated and the nature of the evaluations themselves make generalizing or drawing conclusions about exactly which methods and strategies are most effective in improving financial literacy difficult. As a result, it appears that no single approach, delivery mechanism, or technology necessarily constitutes the best practice for improving financial literacy. Further, some of these programs have had a positive impact on participants’ financial behavior and not just on their knowledge. For example, in 2004, Treasury’s Office of Financial Education and Financial Access published a list of the elements of a successful financial education program, which was intended to guide financial education organizations in developing programs and strategies. Accessibility and cultural sensitivity. Trustee Program approves credit counseling agencies and debtor education providers to meet requirements of the U.S. Bankruptcy Code. The existence of the Trustee Program’s and HUD’s approval processes for credit counseling and debtor education and housing counseling organizations, respectively, suggests that it would be feasible for the federal government to implement an approval or certification process that would encompass financial literacy providers more broadly. However, initiating and developing such a process would require that Congress or the relevant federal agency or agencies address a number of issues, including the goals of the program, who would administer the process, what type of providers it would cover, what criteria or standards would apply to providers, and what degree of ongoing oversight would be put in place: What are the goals of the certification process? What entities would be covered? Further, some of these entities provide broad financial education, while others focus on very specific topics. Help consumers identify competent providers. Increase public awareness. Most notably, developing, implementing, and operating a federal process for certifying financial literacy providers would involve financial costs and staff resources for the federal agency administering the process. While each certification or approval process is unique, the experiences of the Trustee Program and HUD may offer insights into the potential resources that a broader certification process for financial literacy providers might entail. Appendix I: Scope and Methodology Our objectives were to examine (1) what is known about which methods and strategies are effective for improving financial literacy, and (2) the feasibility of a process for certifying financial literacy providers and the benefits and challenges of doing so. In addition to these studies, we reviewed other studies and papers that addressed strategies for improving financial literacy that are separate from financial education (such as changes in retirement default options) that we deemed sufficiently reliable for our work because they were published in peer-reviewed academic journals, written by noted experts in financial literacy, or widely cited in the field of financial literacy and education. We also conducted interviews with—and obtained documentation as applicable from—representatives of federal agencies whose missions involve consumer education and protection, including the Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, Board of Governors of the Federal Reserve System, Federal Trade Commission, Department of the Treasury, and Securities and Exchange Commission; the Financial Industry Regulatory Authority; nonprofit organizations that provide or advocate for financial literacy and education, including AARP, American Association of Family & Consumer Sciences, Consumer Federation of America, Employee Benefit Research Institute, Institute for Financial Literacy, Jump$tart Coalition for Personal Financial Literacy, Junior Achievement, National Endowment for Financial Education, National Foundation for Credit Counseling, and New America Foundation; one international organization, the Organization for Economic Co-operation and Development; and one financial services company, Freddie Mac.

Why GAO Did This Study Financial literacy plays an important role in helping ensure the financial health and stability of individuals and families, and efforts to improve consumers' financial literacy have grown in recent years. Currently, hundreds of nonprofit, private, and governmental entities provide some form of financial education to Americans. The federal government does not certify or approve organizations in general that provide financial literacy, although the U.S. Trustee Program and the Department of Housing and Urban Development (HUD) have approval processes for financial literacy providers for the purposes of meeting requirements of, respectively, the bankruptcy process and certain housing programs. In response to a mandate in the Dodd-Frank Wall Street Reform and Consumer Protection Act, this report addresses (1) what is known about which methods and strategies are effective for improving financial literacy, and (2) the feasibility of a process for certifying financial literacy providers. To address these objectives, GAO reviewed relevant literature, focusing on evidence-based evaluations of financial literacy programs or approaches; conducted interviews in the federal, nonprofit, private, and academic sectors; and examined the lessons learned from the approval processes of the Trustee Program and HUD. What GAO Found Relatively few evidence-based evaluations of financial literacy programs have been conducted, limiting what is known about which specific methods and strategies are most effective. Financial literacy program evaluations are most reliable and definitive when they track participants over time, include a control group, and measure the program's impact on consumers' behavior. However, such evaluations are typically expensive, time-consuming, and methodologically challenging. GAO's review of 29 evidence-based studies evaluating specific programs or approaches indicates that several have been effective in changing consumer knowledge or behavior. For example, several of these studies showed that individualized one-on-one credit counseling, employer-provided retirement seminars, and education provided in a classroom setting have had effective outcomes. However, the diversity of these programs and their evaluation methods makes drawing generalizable conclusions difficult. As a result, it appears that no one approach, delivery mechanism, or technology constitutes best practice, but there is some consensus on key common elements for successful financial education programs, such as timely and relevant content, accessibility, cultural sensitivity, and an evaluation component. In addition, several mechanisms and strategies other than financial education have also been shown to be effective in improving consumers' financial behavior, including financial incentives or changing default options, such as through automatic enrollment in employer retirement plans. The most effective approach may involve a mix of financial education and these other strategies. While a federal process for certifying financial literacy providers appears to be feasible, doing so would pose challenges. Initiating and developing such a process would necessitate that Congress or federal agencies determine which entity would administer the certification, the types of providers that would be covered, the degree of oversight required, and other aspects of the process. Some financial literacy stakeholders with whom GAO spoke cited potential benefits to federal certification. For example, some noted that it might help improve the quality of financial education providers, help consumers identify competent providers, or create greater public awareness about financial education. However, as the experiences of the Trustee Program's and HUD's approval processes show, federal certification would require financial and staff resources for administering the process. Moreover, most financial literacy stakeholders with whom GAO spoke cited additional concerns, including the potential cost and administrative burden to certified entities, the challenge of creating a single process for certifying such a diverse field, and skepticism that certification would improve the quality of financial education providers. Further, the lack of consensus about which financial literacy strategies and approaches are most effective would make certification challenging.

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In their fiscal year 2011 submissions, agencies reported the greatest number of IT investments in Information and Technology Management (1,536 investments), followed by Supply Chain Management (777 investments), and Human Resource Management (622 investments). GAO Has Previously Reported on Potential Duplication and the Challenges of Identifying Duplicative Investments During the past several years, we have issued multiple reports and testimonies and made numerous recommendations to OMB and federal agencies to identify and reduce duplication within the federal government’s portfolio of IT investments. In March 2011, we reported an overview of federal programs and functional areas where unnecessary duplication, overlap, or fragmentation existed. Selected Agencies Have Potentially Duplicative Investments; DOD and DOE Need to Do More to Address Them Although the Departments of Defense, Energy, and Homeland Security utilize various processes to prevent and reduce investment in duplicative programs and systems, potentially duplicative IT investments exist. Further complicating agencies’ ability to identify and address duplicative investments is miscategorization of investments within agencies. Each of the agencies has recently initiated plans to address many of these investments. DHS’s efforts have resulted in the identification and elimination of duplication, but DOD’s and DOE’s initiatives have not yet led to the elimination or consolidation of duplicative investments or functionality. Until DOD and DOE demonstrate progress on their efforts to identify and eliminate duplicative investments, and correctly categorize investments, it will remain unclear whether they are avoiding investment in unnecessary systems. Potentially Duplicative IT Investments Exist at Selected Agencies Each of the agencies we reviewed has IT investment management processes in place that are, in part, intended to prevent, identify, and eliminate unnecessary duplicative investments. Even with such investment review processes, of the 810 investments we reviewed, we identified 37 potentially duplicative investments at DOD and DOE within three FEA categories (Human Resource Management, Information and Technology Management, and Supply Chain Management). Specifically, we identified 31 potentially duplicative investments totaling approximately $1.2 billion at DOD, and 6 potentially duplicative investments totaling approximately $8 million at DOE. We did not identify any potentially duplicative investments at DHS within our sample; however, DHS has independently identified several duplicative investments and systems. Specifically, DHS officials have identified and, more importantly, reduced duplicative functionality in four investments by consolidating or eliminating certain systems within each of these investments, including a personnel security investment, time and attendance investment, human resources investment, and an information network investment. DHS officials have also identified 38 additional systems that they have determined to be duplicative. Similarly, DOE has plans under way to address each of the 6 investments we identified as potentially duplicative.

Why GAO Did This Study This testimony discusses the potentially duplicative information technology (IT) investments at selected agencies and actions these agencies are taking to address them. With at least $79 billion spent in fiscal year 2011 by the United States government on IT investments, it is important that federal agencies avoid investing in duplicative investments, whenever possible, to ensure the most efficient use of resources. Last year, we issued a comprehensive report that identified federal programs or functional areas where unnecessary duplication, overlap, or fragmentation exists; the actions needed to address such conditions; and the potential financial and other benefits of doing so. More recently, we reported on the Office of Management and Budget’s (OMB) and federal agencies’ oversight of IT investments and the initiatives under way to address potentially duplicative IT investments. Specifically, we recently reported that there are hundreds of IT investments providing similar functions across the federal government. For example, agencies reported about 1,500 investments that perform general information and technology functions, about 775 supply chain management investments, and about 620 human resource management investments. Congress asked us to testify on our report being released today that describes the extent to which potentially duplicative IT investments exist within these three categories, including the actions agencies are taking to address them. In this regard, this testimony specifically covers potentially duplicative investments we identified at three of the largest agencies with respect to number of investments–the Departments of Defense (DOD), Energy (DOE), and Homeland Security (DHS). What GAO Found Although the Departments of Defense, Energy, and Homeland Security utilize various processes to prevent and reduce investment in duplicative programs and systems, potentially duplicative IT investments exist. Further complicating agencies’ ability to identify and address duplicative investments is miscategorization of investments within agencies. Each of the agencies has recently initiated plans to address many of these investments. DHS’s efforts have resulted in the identification and elimination of duplication, but DOD’s and DOE’s initiatives have not yet led to the elimination or consolidation of duplicative investments or functionality. Until DOD and DOE demonstrate progress on their efforts to identify and eliminate duplicative investments, and correctly categorize investments, it will remain unclear whether they are avoiding investment in unnecessary systems. Each of the agencies we reviewed has IT investment management processes in place that are, in part, intended to prevent, identify, and eliminate unnecessary duplicative investments. Even with such investment review processes, of the 810 investments we reviewed,we identified 37 potentially duplicative investments at DOD and DOE within three FEA categories (Human Resource Management, Information and Technology Management, and Supply Chain Management). 31 potentially duplicative investments totaling approximately $1.2 billion at DOD, and 6 potentially duplicative investments totaling approximately $8 million at DOE. We did not identify any potentially duplicative investments at DHS within our sample; however, DHS has independently identified several duplicative investments and systems. Specifically, DHS officials have identified and, more importantly, reduced duplicative functionality in four investments by consolidating or eliminating certain systems within each of these investments, including a personnel security investment, time and attendance investment, human resources investment, and an information network investment. DHS officials have also identified 38 additional systems that they have determined to be duplicative.

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Anyone who uses the intellectual property of another without proper authorization is said to have ‘infringed’ the property. In addition to the traditional categories of intellectual property protections, government procurement regulations provide a layer of rights and obligations known as “data rights.” These regulations describe the rights that the government may obtain to two types of data, computer software and technical data, delivered or produced under a government contract. For example, if the government wants to minimize its costs of having supercomputers developed exclusively for government use, it could waive its rights in order to spur commercial development. These also include projects that affect safety and security. Both industry and agency officials covered by our review had concerns about the effectiveness and the efficiency of successfully negotiating contracts with intellectual property issues. These concerns include a lack of good planning and expertise within the government and industry’s apprehensions over certain government rights to data and inventions as well as the government’s ability to protect proprietary data. Some companies mentioned specific instances in which they delayed or declined participation in government contracts. Most agency officials said that intellectual property issues were at times hotly contested and could become the subject of intense negotiations. While agency officials indicated that problems related to intellectual property rights may have limited access to particular companies, they did not raise or cite specific instances where the agency was unable to acquire needed technology. Specifically, agencies could promote greater use of the flexibilities already available to them. The exceptional circumstances determination allows the pharmaceutical companies to retain the intellectual property rights to any discoveries coming out of these tests, rather than the performer of the tests.

What GAO Found Improperly defined intellectual property rights in a government contract can result in the loss of an entity's critical assets or limit the development of applications critical to public health or safety. Conversely, successful contracts can spur economic development, innovation, and growth, and dramatically improve the quality of delivered goods and services. Contracting for intellectual property rights is difficult. The stakes are high, and negotiating positions are frequently ill-defined. Moreover, the concerns raised must be tempered with the understanding that government contracting can be challenging even without the complexities of intellectual property rights. Further, contractors often have reasons for not wanting to contract with the government, including concerns over profitability, capacity, accounting and administrative requirements, and opportunity costs. Within the commercial sector, companies identified a number of specific intellectual property concerns that affected their willingness to contract with the government. These included perceived poor definitions of what technical data is needed by the government, issues with the government's ability to protect proprietary data adequately, and unwillingness on the part of government officials to exercise the flexibilities available concerning intellectual property rights. Some of these concerns were on perception rather than experience, but, according to company officials, they nevertheless influence decisions not to seek contracts or collaborate with federal government entities. Agency officials shared many of these concerns. Poor upfront planning and limited experience/expertise among the federal contracting workforce were cited as impediments. Although agency officials indicated that intellectual property rights problems may have limited access to particular companies, they did not cite specific instances where the agency was unable to acquire needed technology. Agency officials said that improved training and awareness of the flexibility already in place as well as a better definition of data needs on individual contracts would improve the situation.

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In addition, a 1997 IRS internal study found that actions taken against lower-level employees more closely conformed to the IRS table of penalties than actions taken against higher-graded employees. Alleged Delays by IRS Deputy Commissioner on Senior Executive Service Misconduct Cases On the basis of our review of SES cases, we did not find a case in which an individual who was ineligible to retire at the time an allegation was filed, retired while the case was pending with the Deputy Commissioner. In doing our analyses, we focused on actual retirements and did not reach general conclusions about eligibility to retire. Concerning allegations of IRS retaliation against taxpayers, we reported in 1996 and 1998 that IRS did not systematically capture information needed to identify, address, and prevent such taxpayer abuse. We could not determine the extent of reprisal against whistleblowers because IRS did not track information on whistleblower claims of reprisal. Alleged Improper Zeroing Out or Reduction of Recommended Tax With respect to allegations of improper zeroing out or reductions of recommended tax by IRS managers, we found no evidence to support the allegations in the eight specific cases referred to us by the IRS employees who testified at the hearings. On the other hand, IRS does not systematically collect data on the extent to which additional taxes recommended by IRS auditors are zeroed out or reduced without a basis in law or IRS procedure. Accordingly, our objectives were to (1) determine if senior Internal Revenue Service (IRS) managers received the same level of disciplinary action as line staff; (2) determine to what extent, if any, the IRS Deputy Commissioner might have delayed action on substantiated cases of employee misconduct until senior managers were eligible to retire; (3) ascertain the extent to which IRS employees might have retaliated against whistleblowers and against taxpayers or their representatives who were perceived as uncooperative; (4) determine the extent to which IRS employees might have zeroed out or reduced the additional tax recommended from examinations for reasons not related to the merits of the examinations; and (5) describe equal employment opportunity (EEO) issues in IRS offices in the Milwaukee metropolitan area.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on alleged misconduct by Internal Revenue Service (IRS) employees in their treatment of other IRS employees and taxpayers, focusing on: (1) the specific allegations made at the Senate Committee on Finance hearings; and (2) any underlying systemic or programmatic problems that need to be resolved to protect the rights of taxpayers and IRS employees. What GAO Found GAO noted that: (1) available data showed significant differences between Senior Executive Service and line staff disciplinary cases in terms of dispositions and processing times; (2) IRS found that actions taken against lower-level employees more closely conformed to its established table of penalties than actions taken against higher-graded employees; (3) regarding the allegation that the Deputy Commissioner delayed action on senior manager misconduct cases until the managers were eligible to retire, GAO focused on actual retirements and did not reach general conclusions about eligibility to retire; (4) GAO found no cases in which an individual who was ineligible to retire when an allegation was filed, retired while the case was pending with the Deputy Commissioner; (5) GAO could not determine the extent of reprisal against whistleblowers because IRS did not track whistleblowing reprisal cases; (6) regarding allegations of IRS retaliation against taxpayers, GAO previously reported that IRS information systems were not designed to identify, address, and prevent such taxpayer abuse; (7) with respect to allegations of improper zeroing out or reductions of recommended taxes by IRS managers, GAO found no evidence to support the allegations in the eight specific cases referred to GAO by the IRS employees who testified at the hearings; (8) on the other hand, IRS did not systematically collect data on how much additional taxes recommended by auditors were zeroed out or reduced by IRS employees without a basis in law or IRS procedure; (9) IRS has acknowledged equal employment opportunity-related problems, including problems in hiring and promotion, in its Midwest District Office and has begun addressing them; and (10) IRS' lack of adequate information systems and documentation in the areas of employee discipline, retaliation against whistleblowers and taxpayers, and zeroing out of recommended taxes prevented GAO from doing a more comprehensive analysis of these issues.

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Characteristics of Financial Services Institutions We identified a total of 22 financial services institutions as being appropriate for this study; the type of financial services the institutions were authorized to engage in; and whether the institution was a government corporation, a government-sponsored enterprise, or another type of government entity (see table 1). Oversight Mechanisms and Controls To determine the extent of oversight that these financial services institutions were subject to, we obtained from the institutions information on their coverage by, or their voluntary adherence to, selected oversight mechanisms and controls. Government-sponsored enterprises all had a safety and soundness regulator, but the government corporations tended to be subject to other oversight mechanisms and controls. All six of the government-sponsored enterprises had federal safety and soundness regulators. Only one of the government corporations, the Federal Crop Insurance Corporation, reported having a safety and soundness regulator. There were six safety and soundness regulators for the nine institutions (two of the regulators had responsibility for two or more of the financial services institutions), and their independence and regulatory authorities varied. To obtain a general indication of the potential exposure these financial services institutions pose to the federal government, we asked the institutions to provide information on (1) assets and liabilities from their audited 1996 financial statements; (2) commitments and contingencies reported in the notes to the 1996 financial statements; (3) explicit government backing of the institution’s liabilities, commitments, and contingencies; and (4) other financial information, such as borrowing authority (see table 5 and app. Of the 12 government corporations, 9 reported that their liabilities, commitments, and contingencies were in whole or in part explicitly guaranteed or backed by the federal government. The commitments and contingent liability amounts shown reflect the maximum theoretical exposure to the federal government. The 22 financial services institutions provided information regarding their status in achieving Year 2000 compliance using the 5 readiness phases and the corresponding recommended schedule for completing each phase that we described in our recent Year 2000 Assessment Guide (see table 6). The recommended completion date for the assessment phase was August 1997. The reported data indicated that the regulators had extensive efforts under way to monitor the Year 2000 conversion efforts of regulated institutions. Scope and Methodology To determine which financial services institutions are independent corporations, sponsored in whole or in part by the federal government, or corporations within the executive branch, we defined financial services institutions as entities whose enabling legislation authorized them to provide direct loans or credit, guarantee loans or mortgage-backed securities; insurance (deposits, pension funds, crops, etc. To provide information on the independence and authorities of any safety and soundness regulators for these financial services institutions, we used legal statutes, published regulations, and prior GAO reports to complete a DCI for each identified regulator. To provide information on the state of readiness of these institutions to achieve Year 2000 compliance and the regulators’ efforts in this area, we used both the institution and regulator DCIs. Its first concern was with the exclusion of numerous government entities that engage in financial services activities that result in potential liabilities. However, we feel that it is useful for this report to focus on financial services institutions that are independent corporations, sponsored in whole or in part by the federal government, or corporations within the executive branch because the oversight, issues, and concerns can be affected by an institution’s status as a corporation.

Why GAO Did This Study Pursuant to a congressional request, GAO provided information on selected financial services institutions, focusing on: (1) the potential financial exposure faced by the federal government as a result of financial services institutions sponsored, in whole or in part, by the federal government; (2) the institutions sponsored, in whole or in part, by the federal government or corporations within the executive branch that engage in financial services activities; (3) the extent to which these institutions are subject to oversight mechanisms and controls, such as a safety and soundness regulator and coverage by various statutes that promote accountability and control; (4) the independence and authorities of any safety and soundness regulators for these financial services institutions; (5) general indicators of potential exposure that these financial services institutions pose to the federal government, such as the maximum amount of theoretical losses associated with an institution's credit or insurance activities; and (6) the self-reported readiness of these institutions and regulatory efforts to achieve year 2000 compliance. What GAO Found GAO noted that: (1) it identified a total of 22 institutions that met the criteria of being independent corporations, sponsored in whole and in part by the federal government, or corporations within the executive branch and authorized to engage in activities of a financial nature; (2) the types of financial activities in which these institutions were authorized to engage fell into one or more of three basic categories: lending, insurance, and secondary markets; (3) the oversight mechanisms and controls that financial services institutions were subject to were related to their status as government-sponsored-enterprises or government corporations; (4) the six government-sponsored enterprises and one of the government corporations had federal safety and soundness regulators and were subject to external audits of their annual financial statements; (5) the independence of, regulatory authorities of, and fees charged by the six safety and soundness regulators of the nine institutions varied; (6) the safety and soundness regulators for the six government-sponsored enterprises generally had more regulatory authorities, such as enforcement and examination powers, than the regulators of the one government corporation and two other institutions; (7) the primary indicators that GAO obtained on the potential exposure posed by each of these financial services institutions to the federal government included total assets and liabilities, total commitments and contingencies, and explicit backing of the institution's liabilities, commitments, and contingencies by the federal government; (8) the institutions reported their state of readiness in achieving year 2000 compliance using five phases GAO described in its Year 2000 Assessment Guide; (9) most of the institutions reported that they had completed the awareness and assessment phases, which, according to the GAO assessment guide, should have been completed by the end of August 1997; (10) work in the other phases was either in process or not yet begun; and (11) in addition, the regulators reported various efforts under way to ensure that the regulated institutions would be ready for the year 2000 conversion.

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HUD’s fiscal year 1997 budget proposal requests about $22 billion in discretionary budget authority and plans about $33 billion in discretionary outlays. Updated Data May Assist in Evaluating HUD’s Multifamily Reengineering Cost Estimates HUD’s fiscal year 1997 budget request discusses how a planned, major restructuring of the multifamily housing program is likely to affect its budget over the next 6 years and beyond. However, HUD’s assumptions about its ability to quickly restructure properties with high subsidy costs appear overly optimistic and could be responsible for HUD underestimating its request for rental assistance for low-income families. HUD Needs More Time to Establish a Program of Performance Bonuses In its fiscal year 1997 budget, HUD requested $845 million in bonus funding for high-performing grantees in four of its six new block grants. III summarizes the details of the proposed bonus pools.) Implementing Performance Funds Will Be Complicated and Time-Consuming Some features inherent to block grants will complicate the implementation of a performance measurement system in fiscal year 1997. High-Risk Series: Department of Housing and Urban Development (GAO/HR-95-11, Feb. 1995).

Why GAO Did This Study GAO discussed the Department of Housing and Urban Development's (HUD) fiscal year 1997 budget request, focusing on: (1) HUD multifamily reengineering cost estimates; (2) proposed bonus pools for high-performing grantees who exceed established performance measures; and (3) HUD progress in addressing management deficiencies. What GAO Found GAO noted that: (1) HUD has requested about $22 billion in discretionary budget authority and plans about $33 billion in discretionary outlays; (2) overly optimistic cost control assumptions about the major restructuring of the multifamily housing program could affect the HUD budget request for rental assistance for low-income families; (3) HUD has requested $845 million in bonus funding for high-performing grantees in some its new block grants; (4) implementing HUD performance funds will be complicated and time-consuming; and (5) HUD has proposed various internal controls to address management deficiencies.

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gao_GAO-10-769_0

Naturally occurring perchlorate is produced through atmospheric processes and then settles on surface water or land as precipitation or dry deposits. EPA has the authority to regulate contaminants, such as perchlorate, in public drinking water systems. However, perchlorate has been found at varying levels across the nation in water and the food supply and is known to come from a variety of sources. Although there has been no nationwide sampling for perchlorate recently, nationwide sampling under EPA’s UCMR 1, which occurred between 2001 and 2005, detected perchlorate at or above 4 parts per billion in at least one sample in approximately 4.1 percent of the public drinking water systems tested. Sampling conducted at various times by federal agencies, including DOD, NASA, DOE, and EPA, has detected perchlorate in drinking water, groundwater, surface water, soil, and sediment. Specifically, DOD reported perchlorate detections at 284 of its installations, or almost 70 percent of the 407 installations sampled from fiscal years 1997 through 2009, with detections ranging from less than 1 part per billion to 2.6 million parts per billion. NASA reported the highest detection of 13,300 parts per billion in groundwater in 2002 at the Jet Propulsion Laboratory in California. Food and Drug Administration and Other Researchers Have Found Perchlorate in a Variety of Foods at Low Concentrations In addition to finding perchlorate in water and soil, Food and Drug Administration (FDA) and other researchers have found perchlorate in a variety of foods. Certain foods, such as tomatoes and spinach, had higher perchlorate levels than others. While the Likely Sources of Some Perchlorate Detections Are Known, Sources of Others Can Be Difficult to Determine According to the perchlorate researchers we spoke with, concentrations of perchlorate at or above 100 parts per billion are generally the result of activities involving man-made perchlorate, such as the use of perchlorate in manufacturing or as a solid rocket propellant. Researchers we contacted told us that perchlorate detected at levels above 100 parts per billion is generally man-made and is limited to a specific area. Concentrations of perchlorate below 100 parts per billion can result from the use of man-made perchlorate, natural processes, or the use of fertilizer containing naturally occurring perchlorate. According to DOD, DOE, and NASA officials, by complying with current federal and state waste disposal laws and regulations, they have lessened perchlorate releases. According to DOD’s current perchlorate policy, when detections in water equal or exceed an identified threshold level—currently EPA’s health advisory level of 15 parts per billion or a stricter state standard if identified by DOD—DOD is to conduct further investigations to determine whether additional action is warranted. Our analysis of data from DOD’s perchlorate database showed that military service officials had decided to take action beyond initial sampling at 48 of the 53 installations with perchlorate detections above 15 parts per billion. Finally, according to DOE officials, the agency has sampled and detected perchlorate at all five facilities where there was a potential for contamination based on the use of the chemical in high explosives research, development, and testing. DOE is continuing to monitor the levels of perchlorate in groundwater, according to agency officials. For example, in 1999, DOD’s Army Research, Development and Engineering Command began developing perchlorate substitutes for use in weapons simulators, flares, and rockets, according to DOD officials. In the Absence of a Federal Standard, Some States Have Set Drinking Water Standards and Guidance Levels for Perchlorate In the absence of a federal regulatory standard for perchlorate in drinking water, California and Massachusetts have adopted their own standards. California promulgated its drinking water standard for perchlorate of 6 parts per billion in 2007, and Massachusetts set a drinking water standard of 2 parts per billion in 2006. Several States Have Issued Guidance Levels for Perchlorate In addition to the regulatory standards set by California and Massachusetts, at least 10 states have established for various purposes guidance levels for perchlorate ranging from 1 part per billion to 18 parts per billion for drinking water and from 1 part per billion to 72 parts per billion for groundwater. Key contributors to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology This report examines (1) what is known about the extent to which perchlorate occurs in the nation’s water and food supply and its likely sources; (2) what actions the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA), and the Department of Energy (DOE) have taken to respond to or lessen perchlorate releases; and (3) the actions states, such as California and Massachusetts, have taken to regulate perchlorate. To determine what is known about the extent of perchlorate occurrence in water and other media at DOD, NASA, and DOE installations and facilities, we obtained data on perchlorate occurrence at facilities owned or managed by these agencies. 3.

Why GAO Did This Study Perchlorate is both a man-made and naturally occurring chemical. It is used in rocket fuel, explosives, fireworks, and other products. Naturally occurring perchlorate is produced through atmospheric processes and then settles on surface water or land. Perchlorate can disrupt the uptake of iodide in the thyroid, potentially interfering with thyroid function and negatively affecting fetal and infant brain development and growth. As of June 2010, there is no federal regulatory standard for perchlorate in drinking water, and the Environmental Protection Agency (EPA), which has the authority to regulate contaminants in public drinking water systems, had not determined whether to establish one. The Department of Defense (DOD), the National Aeronautics and Space Administration (NASA), and the Department of Energy (DOE) are the primary federal users of perchlorate. GAO was asked to examine (1) what is known about the extent to which perchlorate occurs in the nation's water and food supply and its likely sources; (2) what actions DOD, NASA, and DOE have taken to respond to or lessen perchlorate releases; and (3) what actions states, such as California and Massachusetts, have taken to regulate perchlorate. To address these questions, GAO analyzed data from EPA, DOD, NASA, and DOE, reviewed agency documents, and interviewed federal and state officials, researchers, and others. What GAO Found Perchlorate has been found in water and other media at varying levels in 45 states, as well as in the food supply, and comes from a variety of sources. EPA conducted one nationwide perchlorate sampling, between 2001 and 2005, and detected perchlorate at or above 4 parts per billion in 160 of the 3,865 public water systems tested (about 4.1 percent). In 31 of these 160 systems, perchlorate was found above 15 parts per billion, EPA's current interim health advisory level. Sampling by DOD, NASA, and DOE detected perchlorate in drinking water, groundwater, surface water, soil, and sediment at some facilities. For example, GAO's analysis of DOD data showed that perchlorate was detected at almost 70 percent of the 407 installations sampled from fiscal years 1997 through 2009, with detections ranging from less than 1 part per billion to 2.6 million parts per billion. A 2006 Food and Drug Administration study found perchlorate in 74 percent of 285 food items tested, with certain foods, such as tomatoes and spinach, having higher perchlorate levels than others. According to researchers, concentrations of perchlorate at or above 100 parts per billion generally result from activities involving man-made perchlorate, such as the use of perchlorate as a rocket propellant. Lower concentrations can result from the use of man-made perchlorate, atmospheric processes, or the use of fertilizer containing naturally occurring perchlorate. According to DOD, NASA, and DOE officials, the agencies have sampled, monitored and, at several sites, begun cleaning up perchlorate. When DOD detects perchlorate at or above threshold levels--currently 15 parts per billion for water--DOD is to investigate further and may take additional actions. DOD has taken actions beyond initial sampling at 48 of the 53 installations with perchlorate detections above 15 parts per billion. NASA is in the midst of a cleanup at the Jet Propulsion Laboratory in California and is monitoring the level of perchlorate in groundwater at three other facilities. In addition, DOE is cleaning up perchlorate at two facilities involved in high explosives research, development, and testing and is monitoring the level of perchlorate in groundwater at two other facilities. According to DOD, NASA, and DOE officials, the perchlorate detected at their facilities is largely the result of past disposal practices. Officials at these agencies told us that by complying with current federal and state waste disposal laws and regulations, they have lessened their perchlorate releases. In addition, DOD is developing perchlorate substitutes for use in weapons simulators, flares, and rockets. In the absence of a federal regulatory standard for perchlorate in drinking water, California and Massachusetts have adopted their own standards. California adopted a drinking water standard of 6 parts per billion in 2007, and Massachusetts set a drinking water standard of 2 parts per billion in 2006. The key benefits of a regulatory standard cited by state officials include protecting public health and facilitating cleanup enforcement. However, limited information exists on the actual costs of regulating perchlorate in these states. Also, at least 10 other states have established guidance levels for perchlorate in drinking water (ranging from 1 to 18 parts per billion) or in groundwater. This report contains no recommendations.

gao_GAO-11-345

gao_GAO-11-345_0

There are also “voluntary” carbon offset programs, where purchasers do not face legal requirements to limit emissions but may buy offsets for various reasons. Key Offset Quality Challenges Experts and stakeholders identified five key challenges to assessing the quality of offsets in existing programs. Fifth, the types of projects that are the most difficult to assess—forestry, international, and certain agriculture projects—may make up the majority of offsets in a future U.S. program, posing challenges for policymakers designing an offset program. Additionality Is the Primary Challenge According to many of the experts and stakeholders we interviewed, the primary challenge to assessing offset quality is determining whether offsets generate “additional” emissions reductions—reductions that would not have occurred without the incentives provided by the offset program. Measuring Emissions Can Be Challenging for Agricultural Soil, Forestry, and Other Types of Offset Projects As we have previously reported, it can be difficult to accurately measure emissions from some types of offset projects, particularly soil and forestry projects. Carbon Stored in Soils and Forests May Not Be Permanent As we have previously reported, projects that store, or “sequester,” carbon carry the risk that the stored carbon will be re-released into the atmosphere, known as a reversal. According to our review of literature, verification may be challenging because sellers of carbon offsets may have little incentive to report information accurately to program administrators, and buyers may have little incentive to investigate the quality of offsets. For example, some verifiers reported that it is sometimes difficult to verify whether project developers have legal ownership of land used in a project. Several Options Could Address Key Offset Quality Challenges, but Most Involve Trade-offs According to our review of the literature and interviews with experts, policymakers have several options to choose from in addressing challenges with offset quality, but many of these options could increase the cost of offsets and may involve other trade-offs. Nonetheless, addressing these challenges may be valuable since offsets, in principle, could substantially lower the cost of a program to limit greenhouse gases relative to the cost of a program without offsets. 2. Some experts and stakeholders suggested that a standardized approach may reduce administrative costs overall but may also involve higher up- front investments than a project-by-project approach. 3. One expert, for example, suggested that temporary credits would create ongoing compliance liabilities that offset buyers would be unwilling to carry. Programwide buffer pools. Some experts and stakeholders stressed the need for rigorous oversight to ensure verifications are effective and meet specified goals. Limiting the Quantity of Offsets Allowed According to our review of the literature, one way to mitigate the negative impacts of non-additional offsets, leakage, and other quality problems is to simply limit the use of offsets in a cap-and-trade program or other program to limit emissions. As a result, such limits could mean that regulated entities could use offsets for all of their required emissions reductions, assuming a sufficient supply of offsets was available. Second, some types of offsets that present quality assurance challenges—such as those in the forestry sector—also present large opportunities for emissions reductions. Challenges in quantifying offsets range from assessing additionality and setting emissions baselines to measuring and verifying emissions reductions. While ideally an offset program would have measures to address these issues, our previous work suggests that even a rigorous approval process can still allow a substantial number of offsets that do not meet quality criteria. An offset program could seek to compensate for this by estimating the percentage of offsets that do not meet quality standards in the program overall and then discounting all offsets by that percentage. For example, some proposals suggest applying a greater discount to forestry or international projects. Align incentives with goals. Promote transparency. Appendix I: Scope and Methodology This report examines (1) the key challenges in assessing the quality of different types of offset projects, and (2) options for addressing key challenges associated with offset quality if the United States adopted a program to limit greenhouse gas emissions. Stakeholders we interviewed included (1) program officials, (2) verifiers, and (3) offset project developers.

Why GAO Did This Study Carbon offsets are reductions in greenhouse gas emissions in one place to compensate for emissions elsewhere. Examples of offset projects include planting trees, developing renewable energy sources, or capturing emissions from landfills. Recent congressional proposals would have limited emissions from utilities, industries, or other "regulated entities," and allowed these entities to buy offsets. Research suggests that offsets can significantly lower the cost of a program to limit emissions because buying offsets may cost regulated entities less than making the reductions themselves. Some existing international and U.S. regional programs allow offsets to be used for compliance with emissions limits. A number of voluntary offset programs also exist, where buyers do not face legal requirements but may buy offsets for other reasons. Prior GAO work found that it can be difficult to ensure offset quality--that offsets achieve intended reductions. One quality criterion is that reductions must be "additional" to what would have occurred without the offset program. This report provides information on (1) key challenges in assessing the quality of different types of offsets and (2) options for addressing key challenges associated with offset quality if the U.S. adopted a program to limit emissions. GAO reviewed relevant literature and interviewed selected experts and such stakeholders as project developers, verifiers, and program officials. This report contains no recommendations. What GAO Found According to experts, stakeholders, and available information, key challenges in assessing the quality of offset projects include the following: (1) Additionality. According to many experts and stakeholders GAO interviewed, additionality is the primary challenge to offset quality. Assessing additionality is difficult because it involves determining what emissions would have been without the incentives provided by the offset program. Studies suggest that existing programs have awarded offsets that were not additional. (2) Measuring and managing soil and forestry offsets. For projects that store carbon in soils and forests, it is challenging to estimate the amount of carbon stored and to manage the risk that carbon may later be released by, for example, fires or changes in land management. Some studies have estimated that projects involving soils and forestry could constitute the majority of offsets under a U.S. program. (3) Verification. Experts and stakeholders said that verifying offsets in existing markets has presented several challenges. In particular, project developers and offset buyers may have few incentives to report information accurately or to investigate offset quality. According to experts, stakeholders, and available information, policymakers have several options to choose from in addressing challenges with offset quality. These approaches often involve fundamental trade-offs, such as increasing the cost of offsets. Nevertheless, some research indicates that including offsets in a program to limit emissions could provide substantial cost savings that would not be provided by a program without offsets. (1) Additionality. One way to assess additionality is project-by-project approval, a lengthy process that considers the individual circumstances of each project. Another approach is to group projects into categories and apply a standard to the entire group--for example, award offsets to all electricity generators with emissions below a certain level. While such standards may be less subjective and less costly to administer, they may also require a considerable up-front investment to collect data for various project types. (2) Measuring and managing soil and forestry offsets. To address these challenges a program could, for example, adjust the amount of offsets awarded based on measurement uncertainty, or establish a "buffer pool" of offsets to compensate for any re-released carbon. (3) Verification. To address this challenge, a program could, for example, hold verifiers liable for problems with offsets they have approved, contract with independent verifiers, and provide for rigorous oversight. Experts also identified options that could address multiple quality assurance challenges, such as limiting the quantity or type of offsets that can be used for compliance. However, limiting the supply of offsets could also raise their cost. Regardless of the program design, many experts said an offset program should clearly identify goals, align incentives with goals, promote transparency, and continuously evaluate progress.

gao_GAO-17-470

gao_GAO-17-470_0

The National Travel and Tourism Strategy In 2012, the President announced the National Travel and Tourism Strategy for expanding travel to and within the United States. CBP Has Collaborated with Stakeholders to Facilitate Traveler Entry and Implementation of Travel Initiatives Varies by Airport CBP and Stakeholders Jointly Implement Travel and Tourism Facilitation Initiatives at U.S. International Airports CBP and airport and airline stakeholders jointly implement a number of travel and tourism facilitation initiatives at U.S. international airports. Travelers scan their mobile device with a CBP officer to complete the inspections process at passport control. Various Airport-specific Factors Affect the Implementation of Travel and Tourism Facilitation Initiatives Various airport-specific factors can affect whether and how airports implement travel and tourism facilitation initiatives. These factors include the size and layout of the FIS facility, the infrastructure needed to support initiatives in the FIS facility, the willingness and ability of the airport stakeholders to pay for initiatives or pay for infrastructure to support them, and stakeholder discretion in how best to implement initiatives. CBP Has Implemented Mechanisms to Assess and Obtain Feedback on the Traveler Experience OFO has developed two internal airport travel facilitation goals: (1) improving customer service levels for international arrivals and (2) maintaining or reducing wait times. CBP Allocates and Manages Staff Using Various Tools and Stakeholders Provide Resources to Help Facilitate the Traveler Entry Process CBP Uses the Workload Staffing Model to Allocate Staff to POEs According to CBP headquarters officials, the agency uses the Workload Staffing Model (WSM) to help determine staffing requirements and make allocation decisions for CBP officers at POEs, including airports. Stakeholders Provide Various Resources to Facilitate the Traveler Entry Process Airport and airline stakeholders can pay for CBP officers to work overtime during peak travel hours or outside regular operational hours at the discretion of port leadership. CBP Reports Airport Wait Time Data but Could Take Steps to Improve the Usefulness of Reported Data CBP reports its airport wait time data on its public website to help travelers plan flights, including scheduling connecting flights, but the data has limited usefulness to travelers. Currently, CBP does not report wait times by traveler type, such as U.S. citizen or foreign visitor. Rather, CBP reports average hourly wait times for all travelers on arriving international flights to clear passport control. By reporting airport wait times for all categories of travelers combined, CBP is reporting wait times that are lower than those generally experienced by visitors. As shown in figure 11, according to our analysis of CBP wait time data for the 17 busiest U.S. international airports from May 2013 through August 2016, the average wait time was 13 minutes for U.S. citizens and 28 minutes for visitors, while the reported combined average wait time was 21 minutes. However, CBP monitors and reports wait times by traveler type for internal management purposes. In addition, it could provide additional transparency to allow CBP to work with stakeholders to determine how to improve the traveler experience and manage wait times. Given the differences in wait times between, for example, U.S. citizens and visitors, reporting wait times for different categories of travelers could improve the usefulness of CBP’s wait time data by providing travelers with more complete and accurate data on their wait times to help inform their flight plans, including scheduling connecting flights. Appendix I: Objectives, Scope, and Methodology The objectives of this report were to examine (1) how U.S. Customs and Border Protection (CBP) and stakeholders implemented airport travel and tourism facilitation initiatives at U.S. international airports; (2) how CBP and stakeholders manage staff to facilitate the traveler entry process at U.S. international airports; and (3) the extent to which CBP has mechanisms to monitor and report wait times at U.S. international airports. To examine how CBP and airport and airline stakeholders implemented these initiatives from 2007 through 2016, we reviewed CBP reports, including the Model Ports Program Report to Congress in 2010 and the Department of Commerce and the Department of Homeland Security’s (DHS) 2015 report to the President that defines a national goal to “provide a best-in-class arrivals experience.” We also reviewed CBP’s most recent version of its Airport Technical Design Standard; business requirements for APC kiosks; internal assessments and reports on initiatives such as Global Entry and MPC; and internal memorandums from the Model Ports program which directed officials at airports to test initiatives such as enhanced queueing and diplomatic processing lanes. We collected and analyzed CBP airport wait time data for the 17 airports from May 2013 through August 2016.

Why GAO Did This Study Over 326,000 passengers and crew entered the United States through 241 international airports on an average day in fiscal year 2016, according to CBP. In 2007, CBP started its Model Ports program to improve the international arrivals process for travelers to the United States by implementing technology to facilitate entry and expanding public-private partnerships, among other things. GAO was asked to review this program and subsequent airport travel and tourism facilitation initiatives at the 17 busiest U.S. international airports associated with the president's National Travel and Tourism Strategy. This report examines (1) how CBP and stakeholders have implemented airport travel and tourism facilitation initiatives, (2) how CBP and stakeholders manage staff to facilitate the traveler entry process, and (3) the extent to which CBP has mechanisms to monitor and report wait times at U.S. international airports. GAO collected data on the implementation of travel and tourism facilitation initiatives and analyzed CBP officer staffing and wait time data at the 17 airports from fiscal years 2014 through 2016. GAO also visited a nongeneralizable sample of 11 airports, selected based on traveler volume and variety of implemented initiatives, among other factors, and interviewed CBP, airport, and airline officials at 15 of the 17 airports. What GAO Found U.S. Customs and Border Protection (CBP), within the Department of Homeland Security, and airport and airline stakeholders jointly implement travel and tourism initiatives at U.S. international airports to facilitate the arrival of travelers. These initiatives include Automated Passport Control self-service kiosks that allow eligible travelers to complete a portion of the CBP inspection process before seeing a CBP officer, and Mobile Passport Control that allows eligible travelers to submit their passport and other information to CBP via an application on a mobile device. Various airport-specific factors can affect whether and how CBP and stakeholders implement travel and tourism facilitation initiatives at each airport. These factors include the size and layout of the airport facility, the infrastructure needed to support initiatives, the willingness and ability of the airport stakeholders to pay for initiatives or infrastructure to support them, as applicable, and stakeholder discretion in how to implement initiatives. CBP has two airport travel facilitation goals: (1) improving customer service levels for international arrivals and (2) maintaining or reducing wait times—and has implemented mechanisms to assess and obtain feedback on the traveler experience. CBP allocates and manages staff using various tools, and stakeholders provide resources to help facilitate the traveler entry process. For example, CBP uses its Workload Staffing Model to determine the staffing requirements and help make allocation decisions for CBP officers at ports of entry, including airports. CBP also uses its Enterprise Management Information System to monitor and make immediate staffing changes to meet any traveler volume and wait time concerns at airports. Airport and airline stakeholders can also enter into agreements to pay for CBP officers to work overtime during peak travel hours or outside regular operational hours. CBP monitors airport wait times and reports data on its public website to help travelers plan flights, including scheduling connecting flights, but the reported data have limited usefulness to travelers. Currently, CBP does not report wait times by traveler type, such as U.S. citizen or foreign visitor. Rather, CBP reports average hourly wait times for all travelers on arriving international flights. By reporting wait times for all categories of travelers combined, CBP is reporting wait times that are lower than those generally experienced by visitors. According to GAO's analysis of CBP wait time data for the 17 busiest airports from May 2013 through August 2016, the average wait time was 13 minutes for U.S. citizens and 28 minutes for visitors, while the combined reported average wait time was 21 minutes. Reporting wait times by traveler type could improve the usefulness of CBP's wait time data to travelers by providing them with more complete and accurate data on their wait times. This could help inform their flight plans and could provide additional transparency to allow CBP to work with stakeholders to determine what, if any, changes are needed, to improve the traveler experience and better manage wait times. This is a public version of a For Official Use Only—Law Enforcement Sensitive report that GAO issued in February 2017. Information DHS deemed For Official Use Only—Law Enforcement Sensitive has been redacted. What GAO Recommends GAO recommends that CBP report airport wait time data for different categories of travelers. CBP concurred with the recommendation and identified planned actions to address the recommendation.

gao_GGD-97-28

gao_GGD-97-28_0

Under section 127 of the IRC, the amount for educational assistance that employees receive from their employers is generally excludable from employees’ gross income. This form and schedule require employers to report information on (1) the number of employees eligible for such assistance, (2) the number of employees who received such assistance, and (3) the value of the assistance provided. Objectives, Scope, and Methodology Our objectives were to provide information about (1) employer-provided educational assistance, including the characteristics of employers providing educational assistance and employees eligible for and receiving it, and (2) other tax provisions related to employer-provided educational assistance and how they differ from section 127. Characteristics of Employers Providing Educational Assistance According to IRS, for each of the 3 years we reviewed, employers filed over 3,200 returns that reported information about educational assistance they provided their employees under section 127. These employers provided 99 percent of the dollar amount of section 127 assistance reported to IRS for 1992 through 1994. Undergraduate Students Received More Than Half of Total Section 127 Assistance According to NPSAS data, 74 percent of full-time employees receiving educational assistance in academic year 1992 to 1993 were undergraduates. Most Undergraduate Recipients Were in Clerical or Technical Occupations, and Most Graduates Were in Professional or Teaching Occupations Our analysis of the NPSAS data also showed that most undergraduates—about 64 percent (125,000)—worked for private, for-profit employers in clerical or technical occupations, whereas most graduates—about 89 percent (64,000)—were in professional, manager/administrative, or teaching occupations. Comparison of Application and Restrictions of Different Sections The major differences between section 127 and sections 62, 117, and 132 are related to the type of education being supported, employee eligibility, limits on the value of assistance provided, and the ease of administration. Table 3 summarizes major similarities and differences between Section 127 and the three other tax provisions relevant to employer-provided educational assistance.

Why GAO Did This Study Pursuant to a congressional request, GAO reported on employer-provided educational assistance between 1992 and 1994 under section 127 of the Internal Revenue Code (IRC), focusing on: (1) the characteristics of employers providing educational assistance, such as the number of providers and their size; (2) employees eligible for and receiving it, such as the number of recipients and their level of study; and (3) other tax provisions related to employer-provided educational assistance and the differences between them and section 127. What GAO Found GAO found that: (1) according to IRS data, employers annualy filed over 3,200 returns that reported information about educational assistance they provided their employees during 1992 through 1994; (2) employers filing returns varied in size, type of business, and amount of assistance provided; (3) large employers, those employing 250 or more employees, provided 99 percent of the dollar amount of the reported assistance to 98 percent of the employees who received it; (4) IRS data showed that about 900,000 employees received employer-provided educational assistance annually during 1992 through 1994, but few employees eligible for educational assistance under section 127 actually received it; (5) according to National Postsecondary Student Aid Study data, 74 percent of employees receiving educational assistance in academic year 1992 to 1993 were undergraduates, and about 64 percent of the undergraduates who identified their occupation were in clerical or technical occupations; (6) of employees receiving assistance who were graduate students and identified their occupation, about 89 percent were in professional, managerial, administrative, or teaching occupations; (7) generally, four tax provisions apply to employer-provided educational assistance; and (8) the major differences between section 127 and the three other provisions are related to the type of education supported, employee eligibility, limits on the value of assistance provided, and the ease of administration.

gao_RCED-96-200

gao_RCED-96-200_0

Specifically, this report (1) discusses the MPOs’ experiences in implementing ISTEA’s planning requirements and (2) examines the extent to which the U.S. Department of Transportation’s certification review process ensures that the MPOs in larger urban areas comply with ISTEA’s requirements. Despite these challenges, the MPOs we interviewed believe that their efforts to meet these requirements have been beneficial. The state transportation planning officials we interviewed were less unanimously supportive of these provisions, and the American Association of State Highway and Transportation Officials (AASHTO) advocates eliminating the requirement to financially constrain the long-term transportation plans. Also, successfully constraining a TIP requires reliable projections of revenue—projections that were not always available. Second, the MPOs had to obtain reliable estimates of the funds available from the state departments of transportation. Two MPOs said that the states continue to resist the MPOs’ and regional interests’ efforts to assume greater authority over project identification. While the MPOs we interviewed unanimously endorsed the continuation of the public participation, financial constraint, and project selection requirements, some states opposed the continuation of these requirements. AMPO supported the financial constraint requirement for the long-term (20-year) plan. FHWA’s and FTA’s Certifications of MPOs To ensure that urban transportation plans and programs are an outgrowth of the planning process that ISTEA prescribes, ISTEA required the Secretary of Transportation to conduct planning certification reviews at the MPOs in transportation management areas. However, in reviewing 55 certification reports, we found that the reports are of limited usefulness in assessing trends or problem areas in the ISTEA planning process. First, the certification reports vary widely in format and content because the Department did not develop standard formats for assessing or reporting the MPOs’ compliance. Second, three MPOs were certified despite significant deficiencies in the urban transportation planning process. Twenty-three MPOs were certified without qualification, and 31 were certified subject to certain corrective actions being taken. To date, one MPO has not been certified—the MPO for the Boston metropolitan area; its certification was held in abeyance. Recommendation We recommend that the Secretary of Transportation direct the Administrators of the Federal Highway Administration and the Federal Transit Administration to develop reporting formats for assessing and reporting on the MPOs’ compliance with ISTEA’s planning requirements in such a way that the Department can identity any nationwide patterns in planning deficiencies, the underlying causes of these planning deficiencies, and the extent to which the MPOs have made progress in meeting the requirements.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed: (1) metropolitan planning organizations' (MPO) implementation of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) planning requirements; and (2) whether the Department of Transportation's certification review process ensures that MPO in larger urban areas comply with those planning requirements. What GAO Found GAO found that: (1) the MPOs have found three of ISTEA's planning requirements particularly challenging to meet: (a) requiring greater involvement by citizens; (b) limiting short- and long-term transportation plans to reasonable revenue projections (the financial constraint requirement); and (c) selecting transportation projects; (2) the MPOs found that the requirement to involve citizens had ensured that their transportation plans better reflected their regions' transportation needs; (3) the financial constraint requirement led the MPOs to obtain more reliable revenue projections from the state departments of transportation and transit agencies and to exclude those projects that could not be financed within budget constraints; (4) ISTEA's project selection authority required the MPOs to become consensus builders, effectively working with the states, localities, and transit agencies in identifying projects; (5) in some cases, the efforts of the MPOs and the local officials to assume greater authority have encountered resistance from the states; (6) despite the difficulties encountered, the MPOs that GAO interviewed said that their efforts to meet these three planning requirements had improved their transportation plans; (7) the 13 MPOs that GAO interviewed unanimously endorsed the continuation of the ISTEA planning requirements; (8) in contrast, state department of transportation officials that GAO interviewed did not uniformly support the continuation of ISTEA's planning requirements; (9) as of January 1996, the Federal Highway Administration (FHwA) and the Federal Transit Administration (FTA) had reviewed 55 MPOs; (10) 23 were certified without qualification, and 31 were certified subject to certain corrective actions being taken; (11) the certification of one MPO was held in abeyance because of significant areas of noncompliance; (12) in reviewing 55 certification reports, GAO found that the reports are of limited usefulness in assessing trends or problem areas in the ISTEA planning process; (13) the certification reports vary widely in format and content because the Department did not develop standard criteria for assessing or reporting the MPOs' compliance; and (14) three MPOs were conditionally certified despite significant deficiencies in their urban transportation planning processes.

gao_GAO-05-876

gao_GAO-05-876_0

In May 2004, the President issued a National Security Presidential Directive, which stated that after the transition of power to the Iraqi government, the Department of State (State) through its ambassador to Iraq would be responsible for all U.S. activities in Iraq, with the exception of U.S. efforts relating to security and military operations, which would be the responsibility of the Department of Defense (DOD). Multiple and Diverse Funding Sources Support Iraq Reconstruction and Government Operations As of March 2005, U.S. appropriations, Iraqi revenues and assets, and international donor pledges totaling about $60 billion had been made available to support the relief and reconstruction and government operations of Iraq. International donor funds have been primarily used for public and essential service reconstruction activities; however, most of about $13.6 billion pledged over a 4-year period is in the form of potential loans that have not been accessed by the Iraqis. U.S. Appropriated Funding Focused on Infrastructure Repair and Training of Forces; Funding Has Been Reallocated as Priorities Changed As of March 2005, of the $24 billion in appropriated U.S. funds made available for relief and reconstruction in Iraq from fiscal years 2003 through 2005, about $18 billion had been obligated and about $9 billion had been disbursed. A smaller portion of the $23 billion—approximately $7 billion—was allocated for relief and reconstruction projects, primarily for the import of refined fuel products, security, regional programs, and oil and power projects. Of this amount, about $10 billion, or 70 percent, is in the form of loans, primarily from the World Bank and International Monetary Fund (IMF). Donors have pledged the remaining $3.6 billion as grants, to be provided multilaterally or bilaterally. As of March 31, 2005, Iraq had accessed $436 million of the available amount. Overall, the U.S. program in these sectors has accomplished activities that focused on essential services restoration, such as refurbishing and repairing oil facilities, increasing electrical generating capacity, restoring water treatment plants, and expanding the availability of basic health care. Implementation of the U.S. reconstruction program in these sectors continues to face challenges, such as security, sustainability, and the measurement of program results. Of the $2.7 billion in appropriated funds for the oil sector, the United States had obligated about $2 billion and disbursed $1.1 billion, as of March 31, 2005. Iraq’s overall power generation was lower through May 2005 than before the 2003 conflict, although power generation exceeded this level for the latter part of June 2005. Assessment Although some progress has been made in rehabilitating many Iraqi electric facilities as of May 2005, electricity production in Iraq was lower than before the March 2003 conflict. Progress in the Water Sector Is Difficult to Measure and Some Completed Projects Are Not Functioning U.S. reconstruction efforts in the water and sanitation sector focus on improving Iraq’s potable water, sewage, and sanitation systems. The United States has provided about $866 million in appropriated funds for health activities to reestablish, restore, and expand the availability of health care in Iraq. Further efforts to improve hospitals and clinics, procure equipment, and provide training are under way. Conclusions The United States, along with its coalition partners and various international organizations and donors, has undertaken a challenging and costly effort to stabilize and rebuild Iraq. In addressing the amount of U.S. funds that have been appropriated, obligated, and disbursed for the Iraq reconstruction effort, we collected funding information from the Department of Defense (DOD), including the Project and Contracting Office (PCO), the U.S. Army Corps of Engineers (USACE), and others; Department of State; the Department of the Treasury; U.S. Agency for International Development (USAID); and the Coalition Provisional Authority (CPA).

Why GAO Did This Study Rebuilding Iraq is a U.S. national security and foreign policy priority and constitutes the largest U.S. assistance program since World War II. Billions of dollars in grants, loans, assets, and revenues from various sources have been made available or pledged to the reconstruction of Iraq. The United States, along with its coalition partners and various international organizations and donors, has embarked on a significant effort to rebuild Iraq following multiple wars and decades of neglect by the former regime. The U.S. effort to restore Iraq's basic infrastructure and essential services is important to attaining U.S. military and political objectives in Iraq and helping Iraq achieve democracy and freedom. This report provides information on (1) the funding applied to the reconstruction effort and (2) U.S. activities and progress made in the oil, power, water, and health sectors and key challenges that these sectors face. What GAO Found As of March 2005, the United States, Iraq, and international donors had pledged or made available more than $60 billion for security, governance, and reconstruction efforts in Iraq. The United States provided about $24 billion (for fiscal years 2003 through 2005) largely for security and reconstruction activities. Of this amount, about $18 billion had been obligated and about $9 billion disbursed. The State department has reported that since July 2004, about $4.7 billion of $18.4 billion in fiscal year 2004 funding has been realigned from large electricity and water projects to security, economic development, and smaller immediate impact projects. From May 2003 through June 2004, the Coalition Provisional Authority (CPA) controlled $23 billion in Iraqi revenues and assets, which was used primarily to fund the operations of the Iraqi government. The CPA allocated a smaller portion of these funds--about $7 billion--for relief and reconstruction projects. Finally, international donors pledged $13.6 billion over 4 years (2004 through 2007) for reconstruction activities, about $10 billion in the form of loans and $3.6 billion in the form of grants. Iraq had accessed $436 million of the available loans as of March 2005. As of the same date, donors had deposited more than $1 billion into funds for multilateral grant assistance, which disbursed about $167 million for the Iraqi elections and other activities, such as education and health projects. The U.S. reconstruction effort in Iraq has undertaken many activities in the oil, power, water, and health sectors and has made some progress, although multiple challenges confront each sector. The U.S. has completed projects in Iraq that have helped to restore basic services, such as rehabilitating oil wells and refineries, increasing electrical generation capacity, restoring water treatment plants, and reestablishing Iraqi basic health care services. However, as of May 2005, Iraq's crude oil production and overall power generation were lower than before the 2003 conflict, although power levels have increased recently; some completed water projects were not functioning as intended; and construction at hospital and clinics is under way. Reconstruction efforts continue to face challenges such as rebuilding in an insecure environment, ensuring the sustainability of completed projects, and measuring program results.

gao_GAO-13-777

gao_GAO-13-777_0

Education awarded RTT grants in three phases. Twelve states received grants in 2010 in Phases 1 and 2 to support the design and implementation of their teacher and principal evaluation systems and other RTT reforms. Reviewers evaluated the state’s plan to ensure its participating RTT districts (1) measure student growth for each individual student; (2) design and implement evaluation systems, developed with teacher and principal involvement, that include multiple rating categories that take into account data on student growth as a significant factor; (3) evaluate teachers and principals annually and provide feedback, including student growth data; and (4) use these evaluations to inform decisions regarding professional development, compensation, promotion, retention, tenure, and certification. Education also provided examples of these supplemental measures, such as multiple observation-based assessments of teacher performance and high school graduation rates as a measure for evaluating principals. Six of 12 RTT States Fully Implemented Their Evaluation Systems by the 2012-13 School Year According to state officials, 6 of the 12 RTT states fully implemented both their teacher and principal evaluation systems by school year (SY) 2012- 13 (see fig. 2), though their success in meeting their original target date for implementation varied. The six states that did not fully implement both their teacher and principal evaluation systems in SY 2012-13 either piloted or partially implemented evaluation systems, according to state officials (see fig. Among the four districts we visited in Maryland, district officials said the percentage of teachers who participated in the districts’ pilots ranged from about 4 percent to 100 State or district officials in four of the six states expressed percent.some concerns about their readiness for full implementation. Most RTT States Cited Challenges with Developing and Using Certain Evaluation Measures, Addressing Teacher Concerns, and Building Capacity and Sustainability RTT States Struggled to Develop and Use Student Learning Objectives and Assess Teacher Professional Practice Consistently State or district officials in most RTT states (8 of the 12) said they had difficulty developing and using student learning objectives (SLOs) to assess student academic growth for teachers. Some RTT state and district officials said it was difficult to ensure that principals assess teacher professional practice consistently. Concerns about Magnitude of Change Challenged States’ Efforts State or district officials in 11 of the 12 RTT states discussed the difficulty of addressing teacher concerns about the scale of evaluation reform. Education Supports RTT State Implementation Efforts through Monitoring and Technical Assistance Education Monitors States Using a New Process to Hold Them Accountable for Quality of Implementation Education developed a new process to monitor RTT states’ progress toward meeting their RTT goals, including those related to teacher and principal evaluation systems. Education officials said that the RTT monitoring process differs from the department’s other monitoring efforts in that Education has more frequent contact with the states in order to identify and address implementation challenges. Officials from 8 of the 12 RTT states expressed generally positive views about Education’s RTT monitoring activities. To ensure that states are held accountable for meeting their RTT goals for teacher and principal evaluation systems, Education may take the following corrective actions for states that have not demonstrated adequate progress in implementing their systems: Conditional amendment approval. High-risk status. Officials from 10 of the 12 RTT states told us that Education’s technical assistance related to teacher and principal evaluation systems was generally helpful, and officials in several states said assistance had improved since the start of the contract. Education Plans to Provide RTT States and Nongrantees Additional Information to Support State Efforts Education plans to provide information to RTT states on sustaining teacher and principal evaluation systems and other reforms, but Education officials said they have not yet done so. In addition, Education obtained information on state sustainability strategies through RTT applications. student academic growth data. Race to the Top: Characteristics of Grantees’ Amended Programs and Education’s Review Process. GAO-10-57.

Why GAO Did This Study Education created RTT under the American Recovery and Reinvestment Act of 2009 to provide incentives for states to reform K-12 education in areas such as improving the lowest performing schools and developing effective teachers and leaders. In 2010, Education awarded 12 states nearly $4 billion in RTT grant funds to spend over 4 years. A state's RTT application and scope of work included the state's plans for development and implementation of teacher and principal evaluation systems by participating school districts. These systems assess teacher and principal effectiveness based on student academic growth and other measures, such as observation of professional practice. Currently, additional states are designing and implementing similar evaluation systems. GAO was asked to review RTT teacher and principal evaluation systems. This report examines (1) the extent to which the 2010 grantee states have implemented their teacher and principal evaluation systems, (2) the challenges the grantee states have faced in designing and implementing these systems, and (3) how Education has helped grantee states meet their RTT objectives for teacher and principal evaluation systems. GAO reviewed relevant federal laws, regulations, and guidance; analyzed RTT applications and documentation on each state's guidelines for their evaluation systems; and interviewed officials from all 12 states, selected districts, and Education. What GAO Found By school year 2012-13, 6 of 12 Race to The Top (RTT) states fully implemented their evaluation systems (i.e., for all teachers and principals in all RTT districts). However, their success in fully implementing by the date targeted in their RTT applications varied. Three of these states met their target date while three did not for various reasons, such as needing more time to develop student academic growth measures. The six states that did not fully implement either piloted or partially implemented. The scope of pilots varied. One state piloted to about 14 percent of teachers and principals while another piloted to about 30 percent of teachers. State or district officials in four of the six states expressed some concerns about their readiness for full implementation. Officials in most RTT states cited challenges related to developing and using evaluation measures, addressing teacher concerns, and building capacity and sustainability. State officials said it was difficult to design and implement rigorous student learning objectives--an alternate measure of student academic growth. In 6 states, officials said they had difficulty ensuring that principals conducted evaluations consistently. Officials in 11 states said teacher concerns about the scale of change, such as the use of student academic growth data and consequences attached to evaluations, challenged state efforts. State and district officials also discussed capacity challenges, such as too few staff or limited staff expertise and prioritizing evaluation reform amid multiple educational initiatives. Officials in 10 states had concerns about sustaining their evaluation systems. Education helps RTT states meet their goals for teacher and principal evaluation systems through a new monitoring process and through technical assistance. Education officials said the RTT monitoring process differs from other monitoring efforts in the frequency of contact with the states and the emphasis on continuous improvement and quality of RTT reforms. Officials from 8 of the 12 RTT states expressed generally positive views about Education's monitoring. When states have not demonstrated adequate progress, Education has taken corrective action. For example, Education designated two states as high-risk, which resulted in additional monitoring. Education provides technical assistance through a contractor; officials from 10 RTT states told us assistance related to evaluation systems was generally helpful. Education officials said they plan to provide RTT and nongrantee states with more information to support their efforts. What GAO Recommends GAO is not making recommendations in this report.

gao_GAO-16-45

gao_GAO-16-45_0

DOD Implemented BRAC 2005 Recommendations to Relocate Selected Training Functions but Missed Some Opportunities to Consolidate Training to Increase Jointness DOD implemented the BRAC 2005 recommendations we reviewed by requiring military services to relocate selected training functions; however we found that, although DOD’s justifications for collocating each of the six training functions that we reviewed mentioned jointness or inter-service training as a potential benefit, two of the six training functions took advantage of the opportunity provided by BRAC to consolidate training to increase jointness. The implementation of the remaining four BRAC recommendations that we reviewed relocated—moved separate functions to one location—but did not consolidate training functions. This guidance focused on movement of personnel or construction. DOD Cannot Determine Operating Cost Savings Resulting from BRAC 2005 Joint Training Recommendations Although we reported in 2012 that DOD had projected that four of the recommendations in our review would result in annual savings in operating costs, we found that DOD could not determine whether implementing the 2005 BRAC joint training recommendations that we reviewed resulted in savings in operating costs. By developing baseline operating costs, agencies can better evaluate whether they are achieving their cost savings targets. Although it can sometimes be difficult to attribute costs and savings to a specific event, such as a BRAC change, DOD will not be able to estimate whether it has achieved annual savings in operating costs if it does not collect complete baseline cost data with which to measure progress. Final Implementation Costs Reported to DOD for Some Joint Training Recommendations Likely Did Not Include All Implementation Costs In 2012, we reported on DOD’s estimates of its final implementation costs for the BRAC 2005 recommendations; however, for two of the six recommendations in this review—the Joint Strike Fighter Initial Training Site and the 7th Special Forces Group move to Eglin Air Force Base—we found that at least $110 million in implementation costs funded from outside of the BRAC account that likely should have been included were not reported to DOD by the business plan managers. Thus DOD’s previously reported total cost of $35.1 billion to implement BRAC 2005 is likely somewhat understated. DOD concurred with the recommendation, and in August 2010 the Deputy Under Secretary of Defense (Installations and Environment) issued a memo requiring BRAC business plan managers to submit all BRAC-related expenditures, including those funded from both inside and outside of the BRAC account. Housing. However, the Basing Directorate official further stated that it was up to the military departments to ensure that all BRAC implementation costs were accounted for, and that the military departments had the flexibility to determine which costs would be associated with the BRAC recommendation and which would be attributed to other actions. We found that this flexibility in determining which costs were to be reported as BRAC costs led to inconsistencies in what kinds of projects were counted as BRAC implementation costs. By clarifying in guidance what is to be included as a BRAC implementation cost, DOD can help ensure that it has an accurate accounting of the final costs for any future BRAC implementation and that DOD and Congress are able to determine how much money is actually spent on any future BRAC rounds. Unless DOD develops baseline cost data for the recommendations in any future BRAC rounds, it will be unable to determine the budgetary effect of its actions. Recommendations for Executive Action To make further progress toward taking full advantage of the opportunity of consolidating training in order to increase jointness following the implementation of the BRAC 2005 recommendations, for the training functions that did not consolidate training beyond colocation, we recommend that the Secretary of Defense direct the Under Secretary of Defense for Personnel and Readiness and the Secretaries of the military departments to provide guidance to the program managers on consolidating training, if DOD decides that taking advantage of an opportunity to increase jointness is still appropriate. Both DOD and the Commission develop such estimates for each recommendation and did so for these six recommendations. DOD did not concur with our second recommendation to develop and provide specific guidance for the military departments to use in implementing recommendations designed to consolidate training to increase jointness in the event of future BRAC rounds. GAO recommendation GAO-15-274—Military Base Realignments and Closures: Process for Reusing Property for Homeless Assistance Needs Improvements (Mar. Partial concur. Modify the recently issued guidance on the status of BRAC implementation to require the services and defense agencies to provide information on possible mitigation measures to reduce the effects of those challenges. Military Base Closures: Observations on Prior and Current BRAC Rounds.

Why GAO Did This Study The 2005 BRAC round was the fifth round of base closures and realignments undertaken by DOD since 1988, and it was the largest, most complex, and costliest. DOD has relied on the BRAC process to reduce excess infrastructure and realign bases to meet changing force structure needs. According to the Secretary of Defense, BRAC 2005 provided opportunities to foster jointness among the military services. House Report 113-446 included a provision for GAO to review the status of BRAC 2005 recommendations to reduce infrastructure and promote opportunities for jointness. This report evaluates the extent to which DOD has (1) implemented the recommendations requiring the services to relocate select training functions to increase opportunities for jointness and (2) determined if implementing these recommendations has achieved cost savings. GAO reviewed guidance, course listings, and cost data; interviewed DOD and service officials. What GAO Found For each of the six recommendations GAO reviewed from the 2005 Base Realignment and Closure (BRAC) round, the Department of Defense (DOD) implemented the recommendations by requiring military services to relocate select training functions; however, GAO found that two of the six training functions reviewed were able to take advantage of the opportunity provided by BRAC to consolidate training so that services could train jointly. In implementing the remaining four BRAC recommendations, DOD relocated similar training functions run by separate military services into one location, but the services did not consolidate training functions. For example, they do not regularly coordinate or share information on their training goals and curriculums. DOD's justification for numerous 2005 BRAC recommendations included the assumption that realigning military department activities to one location would enhance jointness—defined by DOD as activities, operations, or organizations in which elements of two or more military departments participate. For these four training functions, DOD missed the opportunity to consolidate training to increase jointness, because it provided guidance to move personnel or construct buildings but not to measure progress toward consolidated training. Without additional guidance for consolidating training, the services will not be positioned to take advantage of such an opportunity in these types of recommendations as proposed by DOD and will face challenges encouraging joint training activities and collaboration across services. DOD cannot determine if implementing the 2005 BRAC joint training recommendations that GAO reviewed has resulted in savings in operating costs. For three of the recommendations in this review, the services did not develop baseline operating costs before implementing the BRAC recommendations, which would have enabled it to determine whether savings were achieved. Without developing baseline cost data, DOD will be unable to estimate any cost savings resulting from similar recommendations in any future BRAC rounds. Further, costs reported to DOD by the training functions business plan managers for implementation of two of the six recommendations in this review likely did not include all BRAC-related costs funded from outside the BRAC account. A DOD memo requires BRAC business plan managers to submit all BRAC-related expenditures, including those funded from both inside and outside of the BRAC account. GAO identified at least $110 million in implementation costs that likely should have been reported to DOD in accordance with the memo but were not; therefore the $35.1 billion total cost reported for BRAC 2005 is likely somewhat understated. A DOD official stated that it was up to the military departments to ensure that all BRAC implementation costs were accounted for and that the military departments had the flexibility to determine which costs were associated with the BRAC recommendation and which were attributed to other actions. GAO found that this flexibility in determining which costs were to be reported as BRAC costs led to inconsistencies in what kinds of projects had their costs counted as BRAC implementation costs. By clarifying in guidance what is to be included as a BRAC implementation cost, DOD can help ensure that it has an accurate accounting of the final costs for any future BRAC implementation and that DOD and Congress are able to determine how much money is spent on any future BRAC rounds. What GAO Recommends To help improve the implementation of jointness-focused recommendations in any future BRAC rounds, GAO recommends that DOD provide additional guidance for consolidating training and reporting BRAC costs and require the development of baseline cost data. DOD partially concurred with the recommendation to clarify guidance for reporting BRAC costs but did not concur with the other recommendations, stating that GAO misunderstood its approach to joint training. GAO believes its findings and recommendations are valid and addresses these points in the report.

gao_GAO-14-776T

gao_GAO-14-776T_0

Highlights of GAO’s Work on EELV Because of the importance of the national security space launch enterprise, we have been asked to look at many aspects of the EELV program over the last 10 years. We reported that when DOD moved the EELV program from the research and development phase to the sustainment phase in the previous year, DOD eliminated various reporting requirements that would have provided useful oversight to program officials and Congress. We reported that the block buy acquisition approach may be based on incomplete information and although DOD was still gathering data as it finalized the new acquisition strategy, some critical knowledge gaps remained. We reported that DOD had numerous efforts underway to address the knowledge gaps and data deficiencies identified in our 2011 report. Of the seven recommendations we made to the Secretary of Defense, two had been completely addressed, four were partially addressed and one had no action taken. We reported on the status of DOD’s efforts to certify new entrants for EELV acquisitions.generally satisfied with the Air Force’s efforts to implement the process, they identified several challenges to certification, as well as perceived advantages afforded to the incumbent launch provider, ULA. We reported and testified that DOD’s new contract with ULA (sometimes referred to as the “block buy”) represented a significant effort on the part of DOD to negotiate better launch prices through its improved knowledge of contractor costs, and that DOD officials expected the new contract to realize significant savings, primarily through stable unit pricing for all launch vehicles. DOD and Congress are currently weighing the need to reduce U.S. reliance on rocket engines produced in Russia and the costs and benefits to produce a similar engine domestically. In other words, replacing the RD-180 could require the development of a new launch vehicle and potentially new launch infrastructure. Space launch vehicle development efforts are high risk from technical, programmatic, and oversight perspectives. For these reasons, it is imperative that any future development effort adopt disciplined practices and lessons learned from past programs. I would like to highlight a few practices that would especially benefit a launch vehicle development effort. First, decisions on what type of new program to pursue should be made with a government-wide and long-term perspective. Second, requirements and resources (for example, time, money, and people) need to be matched at program start. Third, the program itself should adopt knowledge-based practices during execution. Space: Launch Services New Entrant Certification Guide. Space Acquisitions: Uncertainties in the Evolved Expendable Launch Vehicle Program Pose Management and Oversight Challenges. 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 EELV program is the primary provider of launch vehicles for U.S. military and intelligence satellites. The DOD expects to spend about $9.5 billion over the next five years acquiring launch hardware and services through the program, during which time it will also be working to certify new launch providers. This investment represents a significant amount of what the entire U.S. government expects to spend on launch activities—including new development, acquisition of launch hardware and services, and operations and maintenance of launch ranges—for the same period. The United Launch Alliance (ULA) is currently the sole provider of launch services through the EELV program. However, DOD, the National Aeronautics and Space Administration (NASA), and the National Reconnaissance Office (NRO) are working to certify new launch providers who can compete with ULA for launch contracts. GAO was asked to discuss past work related to the EELV program, as well as best practices for acquiring new launch capabilities, as the Congress is currently weighing the need to reduce our reliance on rocket engines produced in Russia. What GAO Found GAO has reported extensively on the Evolved Expendable Launch Vehicle (EELV) program in the past. In 2008, GAO reported that when the Department of Defense (DOD) moved the EELV program from the research and development phase to the sustainment phase in the previous year, DOD eliminated various reporting requirements that would have provided useful oversight to program officials and the Congress. In 2011, GAO reported that the block buy acquisition approach may be based on incomplete information and although DOD was still gathering data as it finalized the new acquisition strategy, some critical knowledge gaps remained. In 2012, GAO reported that DOD had numerous efforts under way to address the knowledge gaps and data deficiencies identified in the 2011 GAO report, and found that two of GAO’s seven recommendations had been completely addressed, four partially addressed, and one had no action taken. In 2013, GAO reported on the status of DOD's efforts to certify new entrants for EELV acquisitions. While potential new entrants stated that they were generally satisfied with the Air Force’s efforts to implement the process, they identified several challenges to certification, as well as perceived advantages afforded to the incumbent launch provider. In 2014, GAO reported and testified that DOD's new contract with ULA (sometimes referred to as the “block buy”) represented a significant effort on the part of DOD tonegotiate better launch prices through improved knowledge of contractor costs. DOD officials expect the new contract to realize significant savings, primarily through stable unit pricing for all launch vehicles. Space launch vehicle development efforts are high risk from technical, programmatic, and oversight perspectives. It is imperative that any future development effort adopts disciplined practices and lessons learned from past programs. Practices that would especially benefit a launch vehicle development effort include the following: Decisions on what type of new program to pursue should be made with a government-wide and long-term perspective. Requirements and resources (for example, time, money, and people) need to be matched. The EELV program itself should adopt knowledge-based practices.

gao_GAO-04-121

gao_GAO-04-121_0

Finally, directors reported that many examiners need additional training in key analytical areas that are critical to disability decision-making, including assessing credibility of medical information, evaluating applicants’ symptoms, and analyzing applicants’ ability to function. Two-thirds of all directors stated that noncompetitive pay had contributed to examiner turnover. DDSs Face Difficulties in Recruiting and Hiring Partly Due to State- Imposed Personnel Restrictions In addition to facing high turnover and growing caseloads, more than three-quarters of all DDS directors (43) reported experiencing difficulties over a three-year period in recruiting and hiring enough people who could become successful examiners. Of these directors, more than three- quarters said that such difficulties contributed to decreased accuracy in disability decisions or to increases in job stress, claims-processing times, examiner caseloads, backlogs, or turnover. The Majority of DDSs Do Not Conduct Long- Term, Comprehensive Workforce Planning, and DDSs Cite Numerous Obstacles to Doing So Despite the workforce challenges facing them, a majority of DDSs do not conduct long-term, comprehensive workforce planning. Of the DDSs that engage in workforce planning that is longer-term, a majority have plans that lack key workforce planning strategies, such as those for recruiting, retention, or succession planning. Over half of all DDS directors said that lengthy state processes to approve DDS human capital changes made statewide DDS long-term workforce planning more difficult. SSA’s Workforce Efforts Have Not Sufficiently Addressed Present and Future Human Capital Challenges in the DDSs SSA’s workforce efforts have not sufficiently addressed both present and future DDS workforce challenges. Beyond training, SSA has not consistently provided other human capital assistance across the DDSs and faces difficulties negotiating human capital changes, such as increases in examiner salaries, with state governments. SSA’s Strategic and Workforce Plans Do Not Adequately Address DDS Human Capital Challenges SSA has not developed a nationwide strategic workforce plan that addresses present and future human capital challenges in the DDSs. Nevertheless, SSA’s strategic plan, as well as the agency’s annual performance plan and workforce plan, are all largely silent on the means and strategies the agency will use to recruit, develop, and retain a high-performing DDS workforce, even though the Government Performance and Results Act now requires agencies to include in their annual performance plans a description of the human capital strategies needed to meet their strategic goals. The length of time it takes to process these claims is unacceptable.” “SSA and the State DDSs will be faced with the continuing challenge of hiring and retaining a highly skilled and diverse workforce in what is expected to be a very competitive job market.” SSA’s Future Workforce Transition Plan “SSA’s Future Workforce Transition Plan was created…as a requirement of SSA’s strategic plan to outline how SSA will transition from the workforce we have today to the workforce we will need in the future.” SSA officials said in interviews that SSA is no longer pursuing two proposed strategies for improving training for disability examiners. We found that more than half of the DDS directors who received assistance said that such assistance was of limited effectiveness in each of the following areas: helping project trends in the nature of the disability workload (24 out of 34 assisting in negotiating easing of state restrictions (e.g., on hiring and travel) with the state government (19 out of 24 DDSs); providing guidance on roles and responsibilities for examiners with enhanced responsibilities (18 out of 26 DDSs); helping to design training and developing training materials for examiners with enhanced responsibilities and the staff who will be supporting them (16 out of 22 DDSs); assisting in allowing DDSs to reduce the total caseload level for examiners taking on enhanced responsibilities (13 out of 24 DDSs); helping in assessing readiness for transition to an examiner role with enhanced responsibilities (12 out of 14 DDSs); helping with workforce planning, including projecting separations and developing succession plans (11 out of 13 DDSs); and providing help in negotiating increases in examiner salaries with the state government (11 out of 16 DDSs). Regional office officials and DDS directors explained in interviews that the effectiveness of SSA and its regional offices in helping the DDSs negotiate human capital changes with the states can be limited by such factors as state budget problems, political concerns, and personnel rules. 2. Issue regulations that establish uniform minimum qualifications for new disability examiners. 3. A Model of Strategic Human Capital Management. Moreover, over one-half of all directors reported that turnover had increased claims-processing times. But over half of all DDS directors told us in our survey that examiner turnover in their offices was too high, and we found that examiner turnover was about twice that of federal employees performing similar work.

Why GAO Did This Study SSA oversees and fully funds primarily state-operated DDSs that determine whether applicants are eligible for disability benefits. The disability examiners employed by the DDSs play a key role in determining benefit eligibility. This report examines (1) the challenges the DDSs face today in retaining and recruiting examiners and enhancing their expertise; (2) the extent to which the DDSs engage in workforce planning and encounter obstacles in doing so; and (3) the extent to which SSA is addressing present and future human capital challenges in the DDSs. What GAO Found GAO found--through its survey of 52 of the 54 Disability Determination Service (DDS) directors and interviews with SSA officials and DDS staff--that the DDSs face three key challenges in retaining examiners and enhancing their expertise. High turnover: Over half of all DDS directors surveyed said that examiner turnover was too high in their offices. We found that examiner turnover was about twice that of federal employees performing similar work. Nearly twothirds of all directors reported that turnover has increased SSA's hiring and training costs and claims-processing times. And two-thirds of all directors cited stressful workloads and noncompetitive salaries as major factors that contributed to turnover. Recruiting and hiring difficulties: More than three-quarters of all DDS directors said they had difficulties over a three-year period in recruiting and hiring examiners. Of these, more than three-quarters said these difficulties contributed to increases in claims-processing times, examiner caseload levels, backlogs, and turnover. More than half of all directors reported that state-imposed compensation limits contributed to hiring difficulties. Gaps in key skills: Nearly one-half of all DDS directors said that at least a quarter of their examiners needed additional training in areas critical to disability decision-making. Over half of all directors cited factors related to high workload levels as obstacles to examiners' receiving additional training. Despite the workforce challenges facing them, a majority of DDSs do not conduct long-term, comprehensive workforce planning. In prior reports, GAO found that such planning should include key strategies for recruiting, retaining, training, and otherwise developing a workforce capable of meeting long-term agency goals. However, of the DDSs that engage in longer-term workforce planning, a majority have plans that lack such key workforce planning strategies. Directors cited numerous obstacles to long-term workforce planning, such as lengthy state processes to approve DDS human capital changes. SSA's workforce efforts have not sufficiently addressed current and future DDS human capital challenges. Federal law requires agencies to include in their annual performance plans a description of the human capital strategies needed to meet their strategic goals. However, GAO's review of key SSA planning documents shows they do not include a strategic human capital plan that addresses current and future DDS human capital needs. Thus, SSA does not link its strategic objectives to a workforce plan that covers the very people who are essential to accomplishing those objectives. GAO also found that SSA has not provided human capital assistance in a consistent manner across the DDSs and that SSA's effectiveness in helping the DDSs negotiate human capital changes with the states can be limited by such factors as state budget problems and personnel rules. Finally, SSA has not used its authority to establish uniform human capital standards, such as minimum qualifications for examiners, which would address, on a nationwide basis, some of the DDS challenges.

gao_AIMD-96-123

gao_AIMD-96-123_0

Opinion on RTC Management’s Assertion About the Effectiveness of Internal Controls We evaluated RTC management’s assertion about the effectiveness of its internal controls designed to safeguard assets against loss from unauthorized acquisition, use, or assure the execution of transactions in accordance with management’s authority and with laws and regulations that have a direct and material effect on the financial statements; and properly record, process, and summarize transactions to permit the preparation of reliable financial statements and to maintain accountability for assets. Specifically, the information describes (1) background on the savings and loan crisis and the creation of RTC, (2) the completion of RTC’s mission, (3) RTC’s estimated costs and funding, (4) RTC’s controls over contracting, (5) the cost of resolving the savings and loan crisis, and (6) remaining fiscal implications of the crisis. By the end of 1987, 505 savings and loan institutions were insolvent. In addition, FIRREA created a new insurance fund, the Savings Association Insurance Fund (SAIF). Another important part of RTC’s activities included ensuring that as many thrift violators as possible were brought to justice and that funds were recovered on behalf of taxpayers. RTC’s Estimated Costs and Funding As of December 31, 1995, RTC estimated that the total cost for resolving the 747 failed institutions was $87.9 billion. Of the $160.1 billion in total direct and indirect costs, approximately $132.1 billion, or 83 percent was provided from taxpayer funding sources. All of the funding for the estimated $152.6 billion in estimated costs related to FSLIC and RTC has been provided as of December 31, 1995. The annual interest expense on the $38.2 billion of bonds issued by FICO and REFCORP has and will continue to have a significant impact on taxpayers and the savings and loan industry. As a result, SAIF’s capitalization has been delayed, creating ongoing implications in terms of high deposit insurance premiums.

Why GAO Did This Study Pursuant to a legislative requirement, GAO audited the Resolution Trust Corporation's (RTC) financial statements for the years ended December 31, 1995 and 1994. GAO also reviewed: (1) RTC internal control weaknesses; (2) RTC mission and its completion; (3) RTC costs and funding; and (4) the cost of resolving the savings and loan crisis. What GAO Found GAO found that: (1) RTC financial statements were reliable in all material aspects; (2) although RTC internal controls need improvement, they were effective in safeguarding assets, ensured that transactions were in accordance with management authority and material laws and regulations, and ensured that there were no material misstatements; and (3) there was no material noncompliance with applicable laws and regulations. GAO also found that: (1) RTC essentially accomplished its mission of closing insolvent institutions, liquidating institution assets, insuring depositor accounts, and bringing many thrift violators to justice; (2) the estimated cost of RTC activities totalled $87.9 billion; (3) RTC contractor control weaknesses and performance problems could adversely affect receivership recoveries; (4) all of the $160.1 billion in estimated direct and indirect costs of RTC and Federal Savings and Loan Insurance Corporation activities have been provided for as of December 31, 1995; (5) the cost of present and future litigation resulting from the savings and loan crisis is unknown; (6) the annual interest expense on the $38.2 billion in Financing Corporation and Resolution Funding Corporation bonds will continue to significantly impact taxpayers and the savings and loan industry; and (7) because the Savings Association Insurance Fund has not been fully capitalized, thus deposit insurance premiums have remained high.

gao_GAO-10-458

gao_GAO-10-458_0

VA Exceeded Its Veteran Contracting Goals since FY07, but It Faces Challenges in Meeting Its Other Small Business Goals and Monitoring Interagency Agreements VA exceeded its VOSB and SDVOSB contracting goals since FY07 and made significant use of its veteran preferences authorities but faces challenges in continuing to meet its other small business contracting goals and monitoring interagency agreements. 3). 110-389 or the 2008 Act) amended the 2006 Act’s provisions to require that any agreements into which VA enters with other government entities to acquire goods or services on VA’s behalf on or after January 1, 2009, require the agencies to comply, to the maximum extent feasible, with VA’s contracting goals and preferences for VOSBs and SDVOSBs. However, VA does not have an effective process in place to ensure that all interagency agreements include the 2008 Act’s required language and to monitor the extent to which agencies comply with the requirements. VA Has Made Limited Progress in Implementing Its Verification Program and Has Not Developed a Thorough and Effective Program VA has made limited progress in implementing a program to verify the veteran status, control, and ownership of businesses. As of April 8, 2010, VA had verified about 2,900 businesses––approximately 14 percent of VOSBs and SDVOSBs in the VetBiz.gov database. VA’s procedures call for site visits to further investigate the ownership and control of higher- risk businesses, but the agency has a large and growing backlog of businesses awaiting site visits. 5, 2010) as a result of the verification program. VA Has Not Met Subcontracting Goals for VOSBs and SDVOSBs but Has Developed a Review Process to Help Increase Subcontracting Achievements VA has developed a mechanism to review prime contractors’ subcontracts with VOSBs and SDVOSBs, but the agency has not yet implemented it. The 2006 Act requires that VA “establish a review mechanism to ensure that, in the case of a subcontract of a Department contract that is counted for purposes of meeting a goal established pursuant to this section, the subcontract was actually awarded to a business concern that may be counted for purposes of meeting that goal.” For FY07, VA set agencywide goals for all subcontracts awarded of 7 percent for VOSBs and 3 percent for SDVOSBs; for FY08 and FY09, VA set goals of 10 percent for VOSBs and 7 percent for SDVOSBs. At the close of each fiscal year, VA staff will provide the form to prime contractors with approved subcontracting plans. However, VA contracting officers used the authorities to award contracts––totaling almost $4 million––to 11 businesses that had been denied verification. VA’s subcontracting accomplishments also have fallen short of goals for the past 3 years. However, it is too early to assess the effectiveness of VA’s subcontracting efforts. To better ensure that VA meets the requirement to use veteran preferences authorities with verified businesses only, as required by the 2006 Act, VA should develop a more effective system to ensure that contracting officers do not use veteran preferences authorities to award contracts to businesses that have been denied verification, and provide additional guidance and training to contracting officers as necessary. Key contributors to this report are listed in appendix V. Appendix I: Objectives, Scope, and Methodology Our report objectives were to review (1) the extent to which the Department of Veterans Affairs (VA) met its prime contracting goals for veteran-owned small businesses (VOSB) and service-disabled veteran- owned small businesses (SDVOSB) in fiscal years (FY) 2007, 2008, and 2009, and what, if any, challenges VA faced in meeting these goals; (2) VA’s progress in implementing procedures to verify the ownership, control, and, if applicable, service-disability status of firms in its mandated database of VOSBs and SDVOSBs; and (3) VA’s progress in establishing a review mechanism of prime contractors’ subcontracts with VOSBs and SDVOSBs. To respond to these objectives, we reviewed agency documents related to VA’s implementation of the Veterans Benefits, Health Care, and Information Technology Act of 2006 (Pub. Additionally, we conducted a file review of a sample of verified businesses to determine the extent to which VA followed procedures and to identify any deficiencies in the verification process.

Why GAO Did This Study The Veterans Benefits, Health Care, and Information Technology Act of 2006 (the 2006 Act) requires the Department of Veterans Affairs (VA) to give priority to veteran-owned and service-disabled veteran-owned small businesses (VOSB and SDVOSB) when awarding contracts to small businesses. The 2006 Act also requires GAO to conduct a 3-year study of VA's implementation of the act. GAO evaluated (1) the extent to which VA met its prime contracting goals for VOSBs and SDVOSBs in fiscal years 2007-2009; (2) VA's progress in implementing procedures to verify the ownership, control, and status of VOSBs and SDVOSBs in its mandated database; and (3) VA's progress in establishing a review mechanism of prime contractors' subcontracts with VOSBs and SDVOSBs. GAO obtained and analyzed data on VA's prime and subcontracting accomplishments, and reviewed a sample of verified businesses to identify any deficiencies in VA's verification program. What GAO Found While VA exceeded its contracting goals with VOSBs and SDVOSBs for the past 3 years, it faces challenges in continuing to meet its other small business contracting goals and monitoring agreements with other agencies that conduct contract activity on VA's behalf. While VA was able to exceed its contracting goals for VOSBs and SDVOSBs, its contracting with women-owned small businesses and HUBZone firms fell short of its goals during this period. In addition, GAO's review of interagency agreements found that VA lacked an effective process to ensure that interagency agreements include required language that the other agency comply, to the maximum extent feasible, with VA's contracting goals and preferences for VOSBs and SDVOSBsand to monitor the extent to which agencies comply with the requirements. VA has made limited progress in implementing an effective verification program. While the 2006 Act requires VA to use the veteran preferences authorities only to award contracts to verified businesses, VA's regulation does not require that this take place until January 1, 2012. In fiscal year 2009, 25 percent of the contracts awarded using veteran preferences authorities went to verified businesses. To date, VA has verified about 2,900 businesses--approximately 14 percent of businesses in its mandated database of VOSBs and SDVOSBs. Among the weaknesses GAO identified in VA's verification program were files missing required information and explanations of how staff determined that control and ownership requirements had been met. In addition, VA's procedures call for site visits to further investigate the ownership and control of higher-risk businesses, but the agency has a large and growing backlog of businesses awaiting site visits. Furthermore, VA contracting officers awarded contracts to businesses that had been denied verification. Finally, although site visit reports indicate a high rate of misrepresentation, VA has not developed guidance for referring cases of misrepresentation for investigation and enforcement action. Such businesses would be subject to debarment under the 2006 Act. To ensure a thorough and effective verification program, VA needs robust procedures for reviewing businesses, an effective system to ensure that contracting officers do not use veteran preferences authorities with denied businesses, and clear guidance for referring businesses potentially abusing the program. VA has developed a mechanism to review prime contractors' subcontracts with VOSBs and SDVOSBs, but the agency has not yet implemented it. For the past 3 years, VA fell substantially short of achieving subcontracting goals for VOSBs and SDVOSBs. The agency acknowledged shortcomings in this area and intends to use a review mechanism to confirm all subcontracting activities by prime contractors with approved subcontracting plans for a sampling of contracts awarded in fiscal year 2010. VA expects increased performance for subcontracting goal attainment as a result. It is too soon to assess the effectiveness of VA's subcontracting efforts.

gao_NSIAD-96-202

gao_NSIAD-96-202_0

We recently determined that excess capacity in the DOD depot maintenance system is about 40 percent for fiscal year 1996. The Navy awarded contracts to Hughes Missile Systems Company and United Defense Limited Partnership on July 19, 1996. Navy Plans Do Not Reduce Excess Capacity in the Public or Private Sector Because the Navy plans to privatize the Louisville depot’s current workload in place, neither excess capacity nor associated maintenance costs will be reduced at other DOD depots or the private sector. Privatizing-in-place transfers excess capacity to the private sector but does not eliminate it. DOD pays for this excess capacity, whether it is in the public or the private sector. The Navy’s estimate overstated the program’s cost estimate by $2.4 million. The Navy concluded that privatizing Louisville’s workload will be more cost-effective than transferring it to the naval facilities identified in the BRAC recommendation. In reviewing the Navy’s privatization-in-place plan, we asked Navy officials to explain how the plan complied with existing statutory restrictions. 2469 requirement for a public-private competition. Recommendations We recommend that the Secretary of Defense direct the Secretary of the Navy, before exercising any contract options for the Louisville depot maintenance workloads, to ensure military depots have the required capability needed to sustain core depot repair and maintenance capability and adequately document a risk assessment for privatizing mission-essential work being considered for privatization; at a minimum, revise the Navy’s cost analysis to reflect the annual cost savings from workload transfers on the workloads currently performed at those locations by spreading the fixed costs over the increased workload; and use competitive procedures, where applicable, to ensure the cost-effectiveness of the Louisville privatization-in-place initiative.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) plans to privatize-in-place the Navy's Louisville, Kentucky, depot maintenance workload, focusing on the: (1) impact on excess depot capacity and operating costs at remaining industrial facilities; (2) cost-effectiveness of this planned privatization-in-place option; and (3) statutory requirements affecting transfers of depot maintenance workloads to the private sector. What GAO Found GAO found that: (1) privatization-in-place is not cost-effective given the excess capacity in the DOD depot maintenance system; (2) the Navy's privatization plan for the Louisville depot will not reduce excess capacity at the remaining depots or in the private sector and may be more costly than transferring the work to other depots; (3) DOD pays for the excess capacity whether it is in the public or private sector; (4) privatizing the facility may not comply with statutory requirements for public-private competitions, since the Navy plans to use noncompetitive procurement procedures; (5) the Navy overstated the cost of transferring the Louisville workload to other depots by at least $66 million and generally assumed that privatization would save 20 percent, which is not likely to be realized; (6) the Navy's projection is based on conditions that are not relevant for most depot maintenance workloads and does not reflect the cost of excess capacity in the public sector; (7) the Navy did not assess the risk associated with contracting the depot's core workload, since the majority of the workload is mission essential; and (8) in July 1996, the Navy awarded contracts to Hughes Missile Systems Company and United Defense Limited Partnership for work in progress, but it did not verify that the privatization plan conformed with statutory requirements for public-private competition.

gao_GAO-03-434

gao_GAO-03-434_0

Background In the Veterans Entrepreneurship and Small Business Development Act of 1999, as amended, Congress established various programmatic requirements for The Veterans Corporation to address perceived shortfalls in federally provided services for veterans. Micro loan program. The Veterans Marketplace is an on-line purchase program for products and services produced by veteran-owned small businesses. Business Insurance Program. The Veterans Corporation’s Use of and Controls over Federal Funds Received In its first 2 years of operations, The Veterans Corporation received $8 million in federal appropriations and spent about $4.7 million of the federal funds primarily on start-up costs. Financial Self- Sufficiency Plan in Place but Too Early to Determine the Likelihood of Success To address the requirement to become a self-sustaining entity, The Veterans Corporation has developed a plan to become self-sufficient based on four major sources of revenue—an electronic marketplace, a credit card program, an insurance program, and fund-raising. At the time of our review, three of its efforts were just beginning to produce revenue. Further, according to the plan, total revenue from these activities is not expected to exceed expenses until the fourth quarter of fiscal year 2004. Further, VA officials stated that arrangements are under way to make this information available on their Web site. We did not evaluate the quality of the other auditor’s work on the financial statement or conduct our own tests of the financial statement balances; Reviewed The Veterans Corporation’s contract with the external auditor for the 2002 financial statement audit to understand the nature of the audit services to be provided and the extent of the auditor’s proposed work on internal control; Obtained and reviewed minutes of meetings of the board of directors and the board’s executive committee to determine the board’s policies as they related to the disbursement and use of federal funds; Communicated with The Veterans Corporation’s external auditor to, among other things, determine the extent of financial management deficiencies in The Veterans Corporation; and Interviewed the Chief Financial Officer (CFO) of The Veterans Corporation. Assist veterans, including service-disabled veterans, with the formation and expansion of small businesses. The Veterans Corporation’s Revenue and Expenses for Fiscal Years 2001 and 2002 As noted in table 2, The Veterans Corporation received federal appropriations of $4 million in each of fiscal years 2001 and 2002 and used approximately $1 million and $3.7 million in fiscal years 2001 and 2002, respectively.

Why GAO Did This Study The Veterans Entrepreneurship and Small Business Development Act of 1999 (Act) created the National Veterans Business Development Corporation (The Veterans Corporation) to address perceived gaps in providing small business and entrepreneurship assistance to veterans. The Act requires GAO to review The Veterans Corporation. GAO described The Veterans Corporation's (1) efforts to provide small business assistance to veterans, including service-disabled veterans; (2) use of and controls over federal funds in providing these services; and (3) efforts to become financially self- sufficient. What GAO Found The Veterans Corporation is providing veterans with entrepreneurial training, on-line educational resources, micro loans, business insurance, and an on-line marketplace. The Veterans Corporation identified initial challenges that slowed program progress, including getting information on transitioning military personnel; and veteran-owned businesses; and delays in making management appointments. Because the programs are new, it is too early to determine their effectiveness. During its first 2 years of operation, The Veterans Corporation spent about $5 of $8 million in total federal appropriations; about $1 million in fiscal year 2001; and about $4 million in fiscal year 2002, with the largest part of the increase due to salaries and program costs. An external audit for fiscal year 2001 identified internal control issues, such as the lack of adequate supporting documentation for disbursements and untimely reconciliation of bank accounts. According to the external auditor, all but one of the deficiencies was addressed in 2002. The Veterans Corporation has developed a financial self-sufficiency plan based on four major revenue sources--an on-line marketplace, a credit card program, an insurance service program, and fund-raising. At the time of GAO's review, most of these efforts were just beginning to produce revenue. According to the plan, The Veterans Corporation is not expected to achieve self-sufficiency until the fourth quarter of fiscal year 2004. If outcomes do not meet projections, Veterans Corporation officials stated that they would explore alternatives.

gao_HEHS-99-95

gao_HEHS-99-95_0

Nor does this debt have any of the economic effects of borrowing from the public. Social Security Financing The President proposes two changes in the financing of Social Security: a pledge of general funds in the future and a modest amount of investment in equities. General Fund Financing By, in effect, trading debt held by the public for debt held by the trust funds, the President is committing future general revenues to the Social Security program. Social Security Reform Is Still Needed Finally, it is important to note that the President's proposal does not alter the projected payroll tax and benefit imbalances in the Social Security program. In addition, it does not come close to “saving Social Security.” Benefit costs and revenues currently associated with the program will not be affected by even 1 cent. Conclusions Budget surpluses provide a valuable opportunity to capture significant long-term gains to both improve the nation’s capacity to address the looming fiscal challenges arising from demographic change and aid in the transition to a more sustainable Social Security program. The President’s proposal may prompt a discussion and decision on both how much of our current resources we want to save for the future and how we can best do so. A substantial share of the surpluses would be used to reduce publicly held debt, providing demonstrable gains for our economic capacity to afford our future commitments. In this way, the proposal would help us, in effect, prefund these commitments by using today’s wealth earned by current workers to enhance the resources for the next generations. The transfer of surplus resources to the trust fund, which the administration argues is necessary to lock in surpluses for the future, would nonetheless constitute a major shift in financing for the Social Security program, but it would not constitute real Social Security reform because it does not modify the program’s underlying commitments for the future. Moreover, the proposed transfer may very well make it more difficult for the public to understand and support the savings goals articulated. Several other nations have shown how debt reduction itself can be made to be publicly compelling, but only you can decide whether such an approach will work here. I am very concerned that enhancing the financial condition of the trust fund alone without any comprehensive and substantive program reforms may, in fact, undermine the case for fundamental program changes. In addition, explicitly pledging federal general revenues to Social Security will limit the options for dealing with other national issues.

Why GAO Did This Study Pursuant to a congressional request, GAO discussed the President's proposal for addressing social security and use of the budget surplus. What GAO Found GAO noted that: (1) the President's proposal: (a) reduces debt held by the public from current levels, thereby also reducing new interest costs, raising national saving, and contributing to future economic growth; (b) fundamentally changes social security financing by promising general funds in the future by, in effect, trading publicly held debt for debt held by the Social Security Trust Fund and by investing some of the trust fund in equities with the goal of capturing higher returns over the long term; (c) does not have any effect on the projected cash flow imbalance in the social security program's taxes and benefits which begins in 2013; and (d) does not represent a social security reform plan and does not come close to saving social security; (2) budget surpluses provide a valuable opportunity to capture significant long-term gains to both improve the nation's capacity to address the looming fiscal challenges arising from demographic change and aid in the transition to a more sustainable social security program; (3) the President's proposal may prompt a discussion and decision on both how much of the current resources the nation wants to save for the future and how it can best do so; (4) a substantial share of the surpluses would be used to reduce publicly held debt, providing demonstrable gains for the nation's economic capacity to afford future commitments; (5) in this way, the proposal would help the nation, in effect, prefund these commitments by using today's wealth earned by current workers to enhance the resources for the next generations; (6) the transfer of surplus resources to the trust fund, which the administration argues is necessary to lock in surpluses for the future, would nonetheless constitute a major shift in financing for the social security program, but it would not constitute real social security reform because it does not modify the program's underlying commitments for the future; (7) moreover, the proposed transfer may very well make it more difficult for the public to understand and support the savings goals articulated; (8) several other nations have shown how debt reduction itself can be made to be publicly compelling, but only Congress can decide whether such an approach will work in the United States; (9) GAO is very concerned that enhancing the financial condition of the trust fund alone without any comprehensive and substantive program reforms may in fact undermine the fundamental changes; and (10) explicitly pledging federal general revenues to social security will limit the options for dealing with other national issues.

gao_GAO-02-3

gao_GAO-02-3_0

Postal Service to help maintain accurate voter registration lists. In this chapter, we will describe (1) the frequency and availability of voting before election day, (2) the mail-in absentee voting process and challenges faced by election officials in conducting this type of voting, and (3) the types of in-person absentee and early voting programs available and the challenges encountered by election officials in administering these efforts. In close elections where there are a large number of ballots that vote counting equipment cannot read, questions may arise about the accuracy of the vote count, and recounts may be required or election results contested.

What GAO Found Events surrounding the 2000 presidential election raised concerns about the reliability of various types of voting equipment, the role of election officials, the disqualification of absentee ballots, and the accuracy of vote counts and recounts. As a result, public officials and various interest groups have proposed reforms to address perceived shortcomings. This report discusses: (1) voter registration; (2) absentee and early voting; (3) election day administration; and (4) vote counts, certification, and recounts.

gao_T-AIMD-96-77

gao_T-AIMD-96-77_0

As a result, some entities were subject to numerous grant audits each year while others were not audited for long periods. The objectives of the Single Audit Act are to improve the financial management of state and local governments receiving federal financial assistance; establish uniform requirements for audits of federal financial assistance provided to state and local governments; promote the efficient and effective use of audit resources; and ensure that federal departments and agencies, to the extent practicable, rely upon and use audit work done pursuant to the act. Ensuring Adequate Audit Coverage While Reducing Burden The criteria for determining which entities are to be audited is based solely on dollar amounts, which have not changed since the Act’s passage in 1984. Entities that fall below the audit threshold would still be required to maintain and provide access to records of the use of federal assistance. The proposed amendments would require OMB to develop a risk-based approach to target audit resources at the higher risk programs as well as focusing on the dollars expended. The proposed amendments would shorten this to 9 months. Additional Provisions The proposed amendments would also expand the Single Audit Act to include nonprofit organizations, thereby placing all entities receiving federal funds under the same ground rules.

Why GAO Did This Study GAO discussed proposed amendments to the Single Audit Act of 1984 and the act's importance. What GAO Found GAO noted that: (1) Congress enacted the act in response to state and local governments' poor accounting practices and lack of accountability for federal funds; (2) audits were not uniform and some grantees were subjected to multiple annual audits while others were not audited for long periods of time; (3) state and local governments have greatly improved their accountability and financial management under the act; (4) proposed amendments would reduce administrative burdens on grantees who receive comparatively small amounts by raising audit thresholds so that audit coverage returns to the 95-percent level; (5) grantees below the thresholds would still have to maintain records and be subject to monitoring; (6) the amendments require the Office of Management and Budget to develop a risk-based approach to targeting audit resources at higher-risk programs; (7) the amendments' required summary reports would increase audit timeliness and usefulness; (8) shortening the audits' due date to 9 months from the fiscal year's close would also improve the audits' timeliness; (9) bringing nonprofit organizations under the act would subject all grantees to uniform requirements; and (10) the proposed amendments would make the single audits the basis for other audits.

gao_NSIAD-98-102

gao_NSIAD-98-102_0

According to NASA and JPL officials, most deep space missions beyond Mars, including the Cassini mission, must use RTGs to generate electrical power. To obtain the necessary presidential approval to launch space missions carrying large amounts of radioactive material, such as Cassini, NASA is also required to convene an interagency review of the nuclear safety risks posed by the mission. Safety, Environmental Impact, and Launch Approval Processes for the Cassini Mission The processes used by NASA to assess the safety and environmental risks associated with the Cassini mission reflected the extensive analysis and evaluation requirements established in federal laws, regulations, and executive branch policies. After completion of the interagency review process, NASA requested and was given nuclear launch safety approval by the Office of Science and Technology Policy, within the Office of the President, to launch the Cassini spacecraft. Cassini Launch Approval Process Agencies planning to transport nuclear materials into space are required by a presidential directive to obtain approval from the Executive Office of the President before launch. To prepare for and support the approval decision, the directive requires that an ad hoc Interagency Nuclear Safety Review Panel review the lead agencies’ nuclear safety assessments. NASA’s Consideration of a Non-Nuclear Power Source for Its Cassini Mission NASA regulations require that, as part of the environmental analysis, alternative power sources be considered for missions planning to use nuclear power systems. The studies also noted that, even if the large arrays could have been launched to Saturn on the Cassini spacecraft, they would have made the spacecraft very difficult to maneuver and increased the mission’s risk of failure due to the array’s uncertain reliability over the length of the 12-year mission. Investments in Advanced Power Generation Systems Since 1968, NASA, DOE, and DOD have together invested more than $180 million in solar array technology, according to a JPL estimate. For example, in fiscal year 1998, NASA and DOD will invest $10 million for research and development of advanced solar array systems, and NASA will invest $10 million for research and development of advanced nuclear-fueled systems. Two improvements to solar array systems that are currently being developed could extend the range of some solar array-powered spacecraft and science operations beyond the orbit of Mars. Future Nuclear-Powered Space Missions NASA is currently studying eight future space missions between 2000 and 2015 that will likely use nuclear-fueled electrical generators. NASA and JPL officials also pointed out that planned future missions may not need to use Earth swingby trajectories. Scope and Methodology To obtain information about the processes used by NASA to assess the safety and environmental risks of the Cassini mission, NASA’s efforts and costs to develop non-nuclear power sources for deep space missions, and future space missions for which nuclear-fueled power sources will be used, we interviewed officials at NASA Headquarters in Washington, D.C.; JPL in Pasadena, California; and DOE’s Office of Nuclear Energy, Science, and Technology in Germantown, Maryland. According to National Aeronautics and Space Administration (NASA) and Department of Energy (DOE) officials, no radioactive fuel was released from the fuel cells, and the fuel was recycled and used on a subsequent space mission.

Why GAO Did This Study Pursuant to a congressional request, GAO reviewed the use of nuclear power systems for the Cassini spacecraft and other space missions, focusing on: (1) the processes the National Aeronautics and Space Administration (NASA) used to assess the safety and environmental risks associated with the Cassini mission; (2) NASA's efforts to consider the use of a non-nuclear power source for the Cassini mission; (3) the federal investment associated with the development of non-nuclear power sources for deep space missions; and (4) NASA's planned future nuclear-powered space missions. What GAO Found GAO noted that: (1) federal laws and regulations require analysis and evaluation of the safety risks and potential environmental impacts associated with launching nuclear materials into space; (2) as the primary sponsor of the Cassini mission, NASA conducted the required analyses with assistance from the Department of Energy (DOE) and the Department of Defense (DOD); (3) in addition, a presidential directive required that an ad hoc interagency panel review the Cassini mission safety analyses; (4) the directive also required that NASA obtain presidential approval to launch the spacecraft; (5) NASA convened the required interagency review panel and obtained launch approval from the Office of Science and Technology Policy, within the Office of the President; (6) while the evaluation and review processes can minimize the risks of launching radioactive materials into space, the risks themselves cannot be eliminated, according to NASA and Jet Propulsion Laboratory (JPL) officials; (7) as required by NASA regulations, JPL considered using solar arrays as an alternative power source for the Cassini mission; (8) engineering studies conducted by JPL concluded that the solar arrays were not feasible for the Cassini mission primarily because they would have been too large and heavy and had uncertain reliability; (9) during the past 30 years, NASA, DOE, and DOD have invested over $180 million in solar array technology, the primary non-nuclear power source; (10) in FY 1998, NASA and DOD will invest $10 million to improve solar array systems, and NASA will invest $10 million to improve nuclear-fueled systems; (11) according to NASA and JPL officials, advances in solar array technology may expand its use for some missions; however, there are no currently practical alternatives to using nuclear-fueled power generation systems for most missions beyond the orbit of Mars; (12) NASA is planning eight future deep space missions between 2000 and 2015 that will likely require nuclear-fueled power systems to generate electricity for the spacecraft; (13) none of these missions have been approved or funded, but typically about one-half of such planned missions are eventually funded and launched; (14) advances in nuclear-fueled systems and the use of smaller, more efficient spacecraft are expected to substantially reduce the amount of nuclear fuel carried on future deep space missions; and (15) thus, NASA and JPL officials believe these future missions may pose less of a health risk than current and prior missions that have launched radio isotope thermoelectric generators into space.

gao_GAO-01-902

gao_GAO-01-902_0

The Army Continues to Use Tank Division Training Funds for Other Purposes The Army is continuing to move training funds planned for its tank divisions to other purposes. The Army Is Taking Action to Restrict Moving Funds Out of Training Subactivities In fiscal year 2001, the Army implemented an initiative to protect training funds from being moved that should result in the Army’s using these training dollars for the purposes originally planned. The senior leadership also required that Army commands obtain prior approval from Army headquarters before reducing training funds. In our analysis of monthly readiness reports for fiscal years 1997 through 2000, we found that when armor units reported lower overall readiness the reason was usually personnel readiness. The Army has not been consistent about reporting these miles. Recommendations to an Executive Agency To better reflect Army funding needs and more fully portray all its tank training, we recommend that the Secretary of the Army reexamine the Army’s proposed use of funds in its annual O&M budget submission, particularly with regard to the funds identified for division training and for other activities such as base operations and real property maintenance and improve the information contained in the Army’s budget documentation by identifying more clearly the elements discussed in this report, such as (1) all funds associated with tank mile training; (2) the type of training conducted (home station, simulator, and National Training Center); (3) the training that could not be undertaken due to Balkan and any future deployments; (4) the budget subactivities within its O&M account that fund the training; and (5) the training conducted in and paid for in part by Kuwait. We also found that Army unit trainers plan their training events to focus on their mission essential tasks. Appendix II: Locations of the Army’s Divisions in Its Active Forces Appendix III: Comments From the Department of Defense

Why GAO Did This Study Congress has expressed concern about the extent to which the Department of Defense has moved funds that directly affect military readiness, such as those that finance training, to pay for other subactivities within its operation and maintenance (O&M) account, such as real property maintenance and base operations. This report reviews the (1) Army's obligation of O&M division training funds and (2) readiness of the Army's divisions. What GAO Found GAO found that the Army continued to use division training funds for purposes other than training during fiscal year 2000. However, the reduced funding did not interfere with the Army's planned training events or exercises. The Army's tank units also reported that, despite the reduced funding and their failure to meet their tank mileage performance goal, their readiness remained high. Specifically, many tank units reported that they could be fully trained for their wartime mission within a short time period. Units that reported that they would need more time to become fully trained generally cited personnel issues rather than the lack of training funds as the reason. Even so, starting in fiscal year 2001, the Army has taken action to restrict moving training funds by exempting unit training funds from any Army headquarters' adjustments and requiring prior approval before Army commands move any training funds.

gao_GAO-09-374

gao_GAO-09-374_0

In fiscal year 2007, about 160,000 contractors provided support to federal agencies. Factors Other Than Past Performance Generally Drive Contract Award Decisions Agencies considered past performance information in evaluating contractors for the contract solicitations we reviewed, but many of the officials we spoke with noted that past performance rarely, if ever, was the deciding factor in their contract award decisions. Their reluctance to base award decisions on past performance was due, in part, to their skepticism about the comprehensiveness and reliability of past performance information and difficulty assessing its relevance to specific acquisitions. Contracting officials also cited other challenges for not relying more on past performance information including 1) difficulty assessing relevance to the specific acquisition or offerors with no relevant past performance information, 2) lack of documented examples of past performance, and 3) lack of adequate time to identify, obtain, and analyze past performance information. Regardless of the source used, contracting officials agreed that for past performance information to be meaningful in contract award decisions, it must be documented, relevant, and reliable. Challenges Hinder Systematic, Governmentwide Sharing of Past Performance Information Our review of PPIRS data for fiscal years 2006 and 2007 found relatively little past performance information available for sharing and potential use in contract award decisions. Finally, lack of central oversight of PPIRS has undermined efforts to capture adequate past performance information. We estimated that the number of contracts that required a performance assessment in fiscal year 2007 for agencies we reviewed would have totaled about 23,000. A Lack of Standardized Evaluation Factors and Rating Scales Limits PPIRS Usefulness Differing number and type of rating factors and rating scales agencies use to document contractor performance limit the usefulness of the information in PPIRS. Efforts to Improve PPIRS and the Sharing of Performance Information Have Made Little Progress Since 2005, several efforts have been initiated to improve PPIRS and provide pertinent and timely performance information, but little progress has been made. Several broad goals for system improvement, established in 2005 by an OFPP interagency group, have yet to be met. However, little progress has been made in addressing these goals. GSA officials who oversee acquisition related systems, to include PPIRS, told us that as of February 27, 2009, efforts remain unfunded and no further action had been taken to make needed improvements. However, proposed changes to the FAR that would clarify past performance documentation requirements and require the use of PPIRS have been stalled. Establish policy for documenting performance-related information that is currently not captured systematically across agencies, such as contract terminations for default and a prime contractor’s management of its subcontractors. Develop system tools and metrics for agencies to use in monitoring and managing the documenting of contractor performance, such as contracts requiring an evaluation and information on delinquent reports.

Why GAO Did This Study In fiscal year 2007, federal agencies worked with over 160,000 contractors, obligating over $456 billion, to help accomplish federal missions. This reliance on contractors makes it critical that agencies have the information necessary to properly evaluate a contractor's prior history of performance and better inform agencies' contract award decisions. While actions have been taken to improve the sharing of past performance information and its use--including the development of the Past Performance Information Retrieval System (PPIRS)--concerns remain about this information. This report assesses agencies' use of past performance information in awarding contracts; identifies challenges that hinder systematic sharing of past performance information; and describes efforts to improve contractor performance information. In conducting this work, GAO analyzed 62 contract solicitations from fiscal years 2007 and 2008 and met with 121 contracting officials. While the solicitations represent a range of contracts and contractors, GAO's findings cannot be generalized to all federal contracts. What GAO Found Agencies considered past performance information in evaluating contractors for each of the 62 solicitations GAO reviewed. Generally, factors other than past performance, such as technical approach or cost, were the primary factors for contract award decisions. A majority of officials told us their reluctance to rely more on past performance was due, in part, to their skepticism about the reliability of the information and difficulty assessing relevance to specific acquisitions. Contracting officials agreed that for past performance information to be useful for sharing, it must be documented, relevant, and reliable. However, GAO's review of PPIRS data for fiscal years 2006 and 2007 indicates that only a small percentage of contracts had a documented performance assessment; in particular, we found little contractor performance information for orders against the General Services Administration's (GSA) Multiple Award Schedule. Other performance information that could be useful in award decisions, such as contract terminations for default and subcontract management, was not systematically captured across agencies. Some officials noted that a lack of accountability and lack of system tools and metrics made it difficult for managers to ensure timely performance reports. Variations in evaluation and rating factors have also limited the usefulness of past performance information. Finally, a lack of central oversight and management of PPIRS data has hindered efforts to address these and other shortcomings. Several efforts have been initiated to improve PPIRS, but little progress has been made. In 2005, an interagency work group established several broad goals for improving past performance information, including standardizing performance ratings used by various agencies. However, these goals have yet to be met, and no funding has been dedicated for this purpose. In April 2008, changes to federal regulations were proposed that would clarify past performance documentation requirements and require the use of PPIRS. However, as of February 2009, the proposed changes had not been finalized.

gao_GAO-17-17

gao_GAO-17-17_0

The inventory is to include a number of specific data elements for each identified activity, including the function and missions performed by the contractor; the contracting organization, the component of DOD administering the contract, and the organization whose requirements are being met through contractor performance of the function; the funding source for the contract by appropriation and operating agency; the fiscal year the activity first appeared on an inventory; the number of contractor employees (expressed as FTEs) for direct labor, using direct labor hours and associated cost data collected from contractors; a determination of whether the contract pursuant to which the activity is performed is a personal services contract; and a summary of the information required by subsection 2330a(a) of title 10 of the U.S. Code. Prior GAO Work Over the past five years, we have issued several reports on DOD’s efforts to compile and review its inventory of contracted services and made recommendations on a variety of issues related to the inventories. DOD concurred with our recommendation, but has not yet implemented it. For example, the level of detail and input provided on the use of the inventory to inform annual program reviews and budget processes varied. In addition, we continued to find significant differences and potential underreporting in the extent to which components identified instances of contractors providing services that are closely associated with inherently governmental functions in their inventories. As of July 2016, 40 DOD components reporting for fiscal year 2014 certified that they had reviewed their inventories. DOD’s guidance for fiscal year 2014, among other things, requires components to include six elements in their certification letters. Overall, in fiscal year 2014 components addressed more of DOD’s required elements in comparison to prior years, as 21 of the 40 components—or over half—addressed all required elements in their certification letters (see figure 3). In this regard, our analysis indicates that DOD obligated about $28 billion for contracts in the 17 product service codes that OFPP and GAO identified as more likely to include closely associated with inherently governmental functions. In comparison, of the 40 components reporting for fiscal year 2014, 25 components identified a total of $10.8 billion in obligations or dollars invoiced for contracts that included work identified as closely associated with inherently governmental functions—either within the 17 product service codes or for any other category of service. Continued Delays on Key Management Decisions Hinder Efforts to Develop Statutorily Required Plans to Use the Inventory to Inform Workforce and Budget Decisions The military departments generally have not developed plans to use the inventory of contracted services to inform workforce mix, strategic workforce planning, and budget decision-making processes, as required by the National Defense Authorization Act for Fiscal Year 2012. DOD has recently made progress in identifying accountable officials to develop plans and establish processes for using the inventories in decision making, a step we recommended in November 2014 to help ensure the inventory is integrated into key management decisions. Despite this effort, DOD faces continued delays to key steps in the implementation of the inventory process, including choosing the path forward for its underlying inventory data collection system, staffing its inventory management support office, and formalizing the roles and responsibilities of that office and its relationship to the military departments and other stakeholders. Collectively, these persistent delays hinder the department’s ability to use the inventory of contracted services as intended. The instruction notes that DOD components will submit an annual inventory of contracted services, and that the inventory and associated review are to be used to inform acquisition planning and workforce shaping decisions, but does not provide any specific guidance as to how the inventories are to contribute to such decisions, including guidance for identifying closely associated with inherently governmental activities. Further, more than two years since the support office was funded, DOD has yet to define the roles and responsibilities of the office. Agency Comments We are not making new recommendations in this report.

Why GAO Did This Study DOD is the government's largest purchaser of contractor-provided services. In 2008, Congress required DOD to compile and review an annual inventory of its contracted services to identify the number of contractors performing services and the functions contractors performed. In 2011, Congress required DOD to use that inventory to inform certain decision-making processes, including workforce planning and budgeting. GAO has previously reported on the challenges DOD faces in compiling, reviewing, and using the inventory. Since 2011, GAO made 13 recommendations intended to improve DOD's use of the inventory. Of these, DOD has yet to fully address 8 open recommendations. Congress included a provision in statute for GAO to report on DOD's required reviews and plans to use the inventory. This report assesses the extent to which DOD components (1) reviewed contracts and activities in the fiscal year 2014 inventory of contracted services, and (2) developed plans to use the inventory for decision making. GAO reviewed relevant laws and guidance and 40 components' inventory review certification letters, and interviewed DOD acquisition, manpower, and programming officials. What GAO Found In fiscal year 2014, 40 Department of Defense (DOD) components in total certified that they had conducted an inventory review. Components are required by DOD guidance to address six elements in their certification letters, including, for example, identifying any inherently governmental functions and unauthorized personal services contracts. More components—21 out of 40—addressed all of the required review elements compared to prior years. However, DOD components may continue to underreport the extent to which contractors were providing services that are closely associated with inherently governmental functions, a key review objective to help ensure that DOD has proper oversight in place. For example, GAO's analysis indicates that DOD obligated about $28 billion for contracts in 17 categories—such as professional and management support services—that the Office of Federal Procurement Policy and GAO identified as more likely to include closely associated with inherently governmental functions. In comparison, components identified a total of $10.8 billion in obligations or dollars invoiced for contracts that included work identified as closely associated with inherently governmental functions—either within the 17 categories or for any other category of service. Most of these functions were identified by the Army using its long-standing review process. The military departments have not yet developed plans to use the inventory to inform workforce mix, strategic workforce planning, and budget decision-making processes, as statutorily required. DOD has made some recent progress on requiring components to identify an accountable official to lead efforts to develop plans and establish processes for using their inventories in decision making, a step GAO recommended in November 2014. However, DOD faces continued delays in deciding on the path forward for its underlying inventory data collection system, staffing its inventory management support office, and formalizing the roles and responsibilities of that office and stakeholders (see figure). GAO previously recommended that DOD address these issues to improve the usefulness of the inventory. DOD concurred with these recommendations but has not yet addressed them. These continued delays hinder DOD's ability to use the inventory of contracted services as intended, including using the inventory data to inform workforce and budget decision-making processes. What GAO Recommends GAO is not making new recommendations in this report. In its comments, DOD noted that it intends to address GAO's eight open recommendations, including those related to determining its approach for compiling the inventory and defining the roles and responsibilities of a key support office and stakeholders.

gao_GAO-15-524

gao_GAO-15-524_0

Wholesale electricity markets are overseen by the Federal Energy Regulatory Commission (FERC). The Electricity Generation Mix Has Shifted Toward More Natural Gas, Wind, and Solar Sources, and Growth in Electricity Consumption Has Slowed According to our analysis of SNL data, the mix of energy sources used to generate electricity has generally shifted to include more natural gas, wind, and solar, but less coal and nuclear, from 2001 through 2013, though the extent of these changes varied by region. For example, California and Arizona accounted for over half of electricity generation from large solar power plants in 2013. This decreasing growth trend continued in the 2000s, with electricity retail sales growing by over 1 percent per year from 2001 through 2007, and fluctuating, but remaining largely flat from that time through 2014. Changes in the uses of electricity: Consumer uses of electricity have changed over the last decades, affecting the nature of electricity consumption. Some regions have recently experienced challenges in maintaining the delivery of natural gas supplies to power plants. For example, in January 2014, a severe cold weather event know as a “polar vortex” affected much of the central and eastern United States, causing significant outages at plants using various fuel sources and leading to higher than normal demand for natural gas for both electricity generation and home heating. However, challenges delivering fuel to natural-gas-fueled power plants posed significant concerns and resulted in outages at some natural-gas-fueled power plants. System operators took various steps to limit the effect of this event, including relying on power plants that utilize other fuel sources that were more readily available at that time, such as coal and oil, issuing public appeals for conservation, utilizing demand-response resources, and implementing certain emergency procedures. In this regard, representatives of Midcontinent Independent System Operator said they have been able to reliably accommodate larger amounts of wind generation without major operational challenges or the need for significant additional ancillary services because the large size of their grid and its extensive connections to neighboring grids provide a broad base of power plants that system operators can use to balance variations in the output of wind power plants.literature we reviewed and representatives of the largest utility in Hawaii, while that state has been able to reliably integrate high levels of wind and solar, its isolated island grids means it has no neighboring grids to turn to for balancing variations in the output of wind and solar electricity generation. Changes in Generation and Consumption Influence Electricity Prices, but the Net Effect Is Unclear Changes in generation and consumption, together with associated actions system operators have taken to maintain reliability, have influenced consumer electricity prices in complex, interrelated, and sometimes contradictory ways, and the net effect of these changes on consumer prices is unclear, based on our review of literature and discussions with stakeholders. expected to contribute to lower prices.regionally and over time based on, among other things, what alternative power plants exist in a region, the cost of those alternatives, and the amount of federal and state financial support for wind and solar development. Taken all together, the addition of wind and solar sources could have contributed to higher or lower consumer electricity prices at different times and in different regions. The agencies provided technical comments on early or final drafts, which we incorporated as appropriate. Our objectives were to describe what is known about (1) how electricity generation and consumption have changed since 2001, and (2) the implications of these changes on efforts to maintain reliability, and on electricity prices. To identify the implications of changes, we reviewed literature and interviewed stakeholders. We selected stakeholders to represent different perspectives and experiences regarding changes in the industry, and to maintain balance with respect to sources of electricity and stakeholders’ roles in the market. Energy Policy: Information on Federal and Other Factors Influencing U.S. Energy Production and Consumption from 2000 through 2013.

Why GAO Did This Study Electricity in the United States has traditionally been generated largely from coal, natural gas, nuclear, and hydropower energy sources. More recently, various federal and state policies, tax incentives, and research and development efforts have supported the use of renewable energy sources such as wind, solar, and geothermal. In addition, consumption of electricity has been affected by federal efforts to improve energy efficiency, changes in the economy, and other factors. GAO was asked to provide information on changes in the electricity industry. This report examines what is known about (1) how electricity generation and consumption have changed since 2001 and (2) the implications of these changes on efforts to maintain reliability, and on electricity prices. GAO analyzed data on electricity generation, consumption, and prices and reviewed literature. GAO also interviewed 21 stakeholders, including government officials, and industry representatives, selected to represent different perspectives and experiences regarding changes in the industry. GAO is not making recommendations in this report. The Department of Energy and Federal Energy Regulatory Commission reviewed a draft of this report and provided technical comments that GAO incorporated as appropriate. What GAO Found The mix of energy sources for electricity generation has changed, and the growth in electricity consumption has slowed. As shown in the figure below, from 2001 through 2013, natural gas, wind, and solar became larger portions of the nation's electricity generation, and the share of coal has declined. These changes have varied by region. For example, the majority of wind and solar electricity generation is concentrated in a few states—in 2013, California and Arizona accounted for over half of electricity generated at solar power plants. Regarding consumption, national retail sales of electricity grew by over 1 percent per year from 2001 through 2007 and remained largely flat from that time through 2014. The literature GAO reviewed and stakeholders GAO interviewed identified the following implications of these changes: Maintaining Reliability : System operators, such as utility companies, have taken additional actions to reliably provide electricity to consumers. For example, some regions have experienced challenges in maintaining the delivery of natural gas supplies to power plants. In particular, severe cold weather in the central and eastern U.S. in 2014 led to higher than normal demand for gas for home heating and to generate electricity. Challenges delivering fuel to natural-gas-fueled power plants resulted in outages at some plants. System operators took various steps to limit the effect of this event, including relying on power plants that utilize other fuel sources that were more readily available at the time, such as coal and oil-fueled power plants, and implementing certain emergency procedures. Prices : Increased gas-fueled generation has influenced electricity prices, with wholesale electricity prices and gas prices generally fluctuating in tandem over the past decade. The effect of the increased use of wind and solar sources on consumer electricity prices depends on specific circumstances. Among other things, it depends on the relative cost of wind and solar compared with other sources, as well as the amount of federal and state financial support for wind and solar development that can offset some of the amount that consumers might otherwise pay. Taken together, the addition of wind and solar sources could have contributed to higher or lower consumer electricity prices at different times and in different regions.

gao_GAO-08-609T

gao_GAO-08-609T_0

Representation of Women and Minorities in the SES and Its Developmental Pool as of Fiscal Year 2007 The data that we are reporting today provide a demographic snapshot of the career SES as well as the levels that serve as the SES developmental pool for October 2000 and September 2007. Table 1 shows the number of career SES as well as those in the developmental pool, including the percentages of women and minorities. In our 2003 report, we (1) reviewed actual appointment trends from fiscal years 1995 to 2000 and actual separation experience from fiscal years 1996 to 2000; (2) estimated by race, ethnicity, and gender the number of career SES who would leave government service from October 2000 through October 2007; and (3) projected what the profile of the SES would be if appointment and separation trends did not change. Table 3 shows SES representation as of October 2000, our 2003 projections of what representation would be at the end of fiscal year 2007, and actual fiscal year 2007 data. Fiscal year 2007 data show that increases did take place among those groups and that those increases generally exceed the increases we projected. The only decrease among minorities occurred in African American men, whose representation declined from 5.5 percent in 2000 to 5.0 percent at the end of fiscal year 2007. Representation of Women and Minorities in the PCES, EAS, and CSP Program As we have testified before the House Subcommittee on Federal Workforce, Postal Service, and the District of Columbia, Committee on Oversight and Government Reform, the Postal Service expects nearly half of its executives to retire within the next 5 years, which has important implications and underscores the need for effective succession planning. Table 5 updates information we provided last year for the PCES and EAS levels 22 and above, from September 1999 to September 2007, showing increases in the representation of women and minorities. The Service’s policy encourages selecting employees from the CSP program when it promotes employees to the PCES. The current CSP program—which first accepted participants in 2004—is intended to identify pools of potential successors for PCES positions and develop these employees so that they can promptly and successfully assume PCES positions as these positions become available. The Postal Accountability and Enhancement Act, enacted in 2006, expressed Congress’s interest in diversity in the Postal Service. Processes Used for Selecting SES and PCES Members Executive branch agencies have processes for selecting members into the SES and developmental programs that are designed to create pools of candidates for senior positions. The Postal Service also has processes for selecting PCES members and participants in its CSP program from which potential successors to the PCES could come. Each agency head is to appoint one or more Executive Resources Boards (ERB) to conduct the merit staffing process for initial SES career appointments. ERBs review the executive and technical qualifications of each eligible candidate and make written recommendations to the appointing official concerning the candidates. Instead, the Postal Service promotes EAS and other employees to the PCES when these employees are selected to fill PCES vacancies.

Why GAO Did This Study A diverse Senior Executive Service (SES), which generally represents the most experienced segment of the federal workforce, can be an organizational strength by bringing a wider variety of perspectives and approaches to policy development and decision making. In January 2003, GAO provided data on the diversity of career SES members as of October 2000 (GAO-03-34). In March 2000, GAO reported similar data for the Postal Career Executive Service (PCES) as of September 1999 (GAO/GGD-00-76). In its 2003 report, GAO also projected what the profile of the SES would be in October 2007 if appointment and separation trends did not change. In response to a request for updated information on diversity in the SES and the senior ranks of the U.S. Postal Service, GAO is providing data on race, ethnicity, and gender obtained from the Office of Personnel Management's (OPM) Central Personnel Data File and the Postal Service for (1) career SES positions as of the end of fiscal year 2007 and the SES developmental pool (i.e., GS-15 and GS-14 positions) as well as a comparison of actual fiscal year 2007 data to projections for fiscal year 2007 that GAO made in its 2003 report, and (2) the PCES, the Executive Administrative Schedule (EAS), and EAS participants in the Corporate Succession Planning (CSP) program. GAO also describes the process that executive agencies and the Postal Service use to select members into their senior ranks. What GAO Found Data in the Central Personnel Data File and provided by the U.S. Postal Service show that as of the end of fiscal year 2007, the overall percentages of women and minorities have increased in the federal career SES and its developmental pool for potential successors since 2000 as well as in the PCES and EAS levels 22 and above, from which PCES potential successors could come, since 1999. Actual fiscal year 2007 SES data show that representation increased from October 2000 among minorities and women and that those increases generally exceed the increases we projected in our 2003 report. The only decrease among minorities occurred in African American men, whose fiscal year 2007 actual representation (5.0 percent) was less than the October 2000 baseline (5.5 percent). For the developmental pool (GS-15s and GS-14s), fiscal year 2007 data show that increases also occurred generally among minorities and women since October 2000. Both executive branch agencies and the Postal Service have processes for selecting members into their senior ranks. Executive agencies use Executive Resources Boards to review the executive and technical qualifications of eligible candidates for initial SES career appointments and make recommendations on the best qualified. An OPM-administered board reviews candidates' qualifications before appointment to the SES. The Postal Service does not fall under the jurisdiction of OPM's board for promoting employees to the PCES. Instead, it promotes EAS and other employees to the PCES when they are selected to fill PCES vacancies. Most employees promoted to the PCES have been CSP program participants, consistent with Postal Service policy encouraging this practice. The CSP program is intended to identify and develop employees so that they can promptly and successfully assume PCES positions as these positions become available.

gao_GAO-01-314

gao_GAO-01-314_0

The West Valley Demonstration Project Act, enacted to assist in the cleanup of the facility, was signed into law in October 1980. 3.) As vitrification nears completion, DOE and the New York State energy authority are shifting their focus to the remaining cleanup tasks—decontaminating and decommissioning structures, remediating soil and groundwater, and removing nuclear wastes stored and buried on-site, among other activities. Off-site contamination at West Valley was generally within regulatory limits in the 1980s and 1990s, according to DOE. Several Factors Are Hindering Progress on the West Valley Cleanup Attempts to clean up West Valley are being hindered by several factors. The Department states that after cleaning up West Valley, it does not become owner of the site. According to DOE, under its proposal, (1) to settle all outstanding issues between the Department and the state, the Department would agree to assume a portion of New York State’s responsibility to pay for the disposal of the high-level waste in return for monetary and other valuable considerations from the state and (2) DOE would still have no obligation to take title to and dispose of West Valley’s high-level waste unless New York State enters into a disposal contract under the Nuclear Waste Policy Act and pays the disposal fee. West Valley’s Total Cleanup Costs and Schedule Cannot Be Estimated With Reasonable Certainty Until the Future of the Site Is Agreed On DOE’s estimates of West Valley’s total cleanup costs and a date for completing the cleanup have been uncertain and will remain so until strategic issues are agreed upon, including the extent to which the site is to be cleaned up and what it will then look like, how the land is to be used, what regulatory cleanup standards are to be used, and where the site’s nuclear wastes are to go. Funding constraints at West Valley are not unique. For West Valley, NRC is considering whether to deal with the incidental waste issue in its cleanup standards. Appendix I: Scope and Methodology As requested, we examined (1) the status of the cleanup, (2) factors that may be hindering the cleanup, (3) the degree of certainty in the Department of Energy’s (DOE) estimates of total cleanup costs and schedule, and (4) the degree to which the West Valley cleanup may reflect, or have implications for, larger cleanup challenges facing DOE and the nation.

What GAO Found The West Valley nuclear facility in western New York State was built in the 1960s to convert spent nuclear fuel from commercial reactors into reusable nuclear fuel. New York State, the owner of the site, and the Atomic Energy Commission--the predecessor of the Nuclear Regulatory Commission (NRC) and the Department of Energy (DOE)--jointly promoted the venture. However, the timing of the venture was poor because the market for reprocessed nuclear fuel was limited and because new, more restrictive health and safety standards raised concerns about the facility. West Valley was shut down in the 1970s, and Congress enacted the West Valley Demonstration Project Act in 1980, which brought DOE to West Valley to carry out cleanup activities. This report examines the: (1) status of the cleanup; (2) factors that may be hindering the cleanup; (3) degree of certainty in the Department's estimates of total cleanup costs and schedule; and (4) degree to which the West Valley cleanup may reflect, or have implications for, larger cleanup challenges facing DOE and the nation. DOE has almost completed solidifying the high-level wastes at West Valley, but major additional cleanup work remains. These tasks, which could take up to 40 years to complete, include decontaminating and decommissioning structures, remediating soil and groundwater, and removing nuclear wastes stored and buried onsite. The following three factors are hindering DOE's attempts to clean up West Valley: (1) DOE and New York State still have not agreed on the overall future of the site, (2) NRC cleanup standards for West Valley do not exist, and (3) cleanup planning has been limited by uncertainty about where West Valley's nuclear wastes are to go. In addition, DOE's estimates of the total costs and completion date for the West Valley cleanup are uncertain because of a lack of agreement on many strategic issues affecting the site, such as the extent to which the site is to be cleaned up, what it will then look like, how the land is to be used, and what regulatory cleanup standards are to be used. DOE's plan to deal with the underground high-level waste storage tanks at West Valley has potential implications for other DOE disposal efforts.

gao_GAO-14-158T

gao_GAO-14-158T_0

Available Evidence Does Not Support Whether Behavioral Indicators Can Be Used to Identify Aviation Security Threats In November 2013, we reported that (1) peer-reviewed, published research we reviewed did not support whether nonverbal behavioral indicators can be used to reliably identify deception, (2) methodological issues limited the usefulness of DHS’s April 2011 SPOT validation study, and (3) variation in referral rates raised questions about the use of indicators. Published Research on Behavioral Indicators In November 2013, we reported that our review of meta-analyses (studies that analyze other studies and synthesize their findings) that included findings from over 400 studies related to detecting deception conducted over the past 60 years, other academic and government studies, and interviews with experts in the field, called into question the use of behavior observation techniques, that is, human observation unaided by technology, as a means for reliably detecting deception. The meta- analyses we reviewed collectively found that the ability of human observers to accurately identify deceptive behavior based on behavioral cues or indicators is the same as or slightly better than chance (54 percent). We also reported on other studies that do not support the use of behavioral indicators to identify mal-intent or threats to aviation. DHS’s Validation Study Further, in November 2013, we found that DHS’s April 2011 validation study does not demonstrate effectiveness of the SPOT behavioral indicators because of methodological weaknesses. The validation study found, among other things, that some SPOT indicators were predictive of outcomes that represent high-risk passengers, and that SPOT procedures, which rely on the SPOT behavioral indicators, were more effective than a random selection protocol implemented by BDOs in identifying outcomes that represent high-risk passengers. While the April 2011 SPOT validation study is a useful initial step and, in part, addressed issues raised in our May 2010 report, methodological weaknesses limit its usefulness. Specifically, as we reported in November 2013, these weaknesses include, among other things, the use of potentially unreliable data and issues related to one of the study’s outcome measures. Without the data needed to assess the effectiveness of behavior detection activities or the SPOT program, we reported in November 2013 that TSA uses SPOT referral, LEO referral, and arrest statistics to help track the program’s activities. As a result, the impact of behavior detection activities on TSA’s overall security program is unknown.

Why GAO Did This Study This testimony discusses GAO's November 2013 report assessing the Department of Homeland Security (DHS) Transportation Security Administration's (TSA) behavior detection activities, specifically the Screening of Passengers by Observation Technique (SPOT) program. The recent events at Los Angeles International Airport provide an unfortunate reminder of TSA's continued importance in providing security for the traveling public. TSA's behavior detection activities, in particular the SPOT program, are intended to identify high-risk passengers based on behavioral indicators that indicate mal-intent. In October 2003, TSA began testing the SPOT program, and by fiscal year 2012, about 3,000 behavior detection officers (BDO) had been deployed to 176 of the more than 450 TSA-regulated airports in the United States. TSA has expended a total of approximately $900 million on the program since it was fully deployed in 2007. This testimony highlights the key findings of GAO's November 8, 2013, report on TSA's behavior detection activities. Specifically, like the report, this statement will address (1) the extent to which available evidence supports the use of behavioral indicators to identify aviation security threats, and (2) whether TSA has data necessary to assess the effectiveness of the SPOT program in identifying threats to aviation security. What GAO Found In November 2013, GAO reported that (1) peer-reviewed, published research we reviewed did not support whether nonverbal behavioral indicators can be used to reliably identify deception, (2) methodological issues limited the usefulness of DHS's April 2011 SPOT validation study, and (3) variation in referral rates raised questions about the use of indicators. GAO reported that its review of meta-analyses (studies that analyze other studies and synthesize their findings) that included findings from over 400 studies related to detecting deception conducted over the past 60 years, other academic and government studies, and interviews with experts in the field, called into question the use of behavior observation techniques, that is, human observation unaided by technology, as a means for reliably detecting deception. The meta-analyses GAO reviewed collectively found that the ability of human observers to accurately identify deceptive behavior based on behavioral cues or indicators is the same as or slightly better than chance (54 percent). GAO also reported on other studies that do not support the use of behavioral indicators to identify mal-intent or threats to aviation. GAO found that DHS's April 2011 validation study does not demonstrate effectiveness of the SPOT behavioral indicators because of methodological weaknesses. The validation study found, among other things, that some SPOT indicators were predictive of outcomes that represent high-risk passengers, and that SPOT procedures, which rely on the SPOT behavioral indicators, were more effective than a random selection protocol implemented by BDOs in identifying outcomes that represent high-risk passengers. While the April 2011 SPOT validation study is a useful initial step and, in part, addressed issues raised in GAO's May 2010 report, methodological weaknesses limit its usefulness. Specifically, as GAO reported in November 2013, these weaknesses include, among other things, the use of potentially unreliable data and issues related to one of the study's outcome measures.

gao_GAO-16-30

gao_GAO-16-30_0

Representation of Women on Boards Has Increased to About 16 Percent, but a Number of Factors May Hinder Further Progress Women’s Representation on Boards Has Increased 8 Percentage Points over the Past 17 Years but Greater Gender Balance May Take Time Based on our analysis, we found that women’s representation on boards of companies in the S&P 1500 has increased steadily over the past 17 years, from about 8 percent in 1997 to about 16 percent in 2014. As figure 2 illustrates, part of what is driving this increase is the rise in women’s representation among new board directors—directors who joined the board each year. When we projected the representation of women on boards into the future assuming that women join boards in equal proportion to men— a proportion more than twice what it currently is—we estimated it could take about 10 years from 2014 for women to comprise 30 percent of board directors and more than 40 years for the representation of women on boards to match that of men (see fig. Various Factors May Hinder Increased Representation of Women among Board Directors Based on our interviews with stakeholders, analysis of ISS board director data, and our review of relevant literature, we identified various factors that may hinder increases in women’s representation on corporate boards: boards not prioritizing diversity in recruitment efforts; lower representation of women in the traditional pipeline for board positions; and low turnover of board seats. Conducting board evaluations. Several Large Investors and Many Stakeholders We Interviewed Supported Improving Federal Disclosure Requirements on Board Diversity While most stakeholders we interviewed emphasized their preference for voluntary efforts by business to increase gender diversity on corporate boards over government mandates such as quotas, several large public pension fund investors and many stakeholders we interviewed (15 of 19) supported improving federal disclosure requirements on board diversity. According to SEC’s 2014-2018 Strategic Plan, one of the Commission’s objectives is to structure disclosure requirements to ensure that investors have access to useful, high-quality disclosure materials that facilitate informed investment decision-making. Several large public pension fund investors and many of the stakeholders we interviewed (12 of 19) called into question the usefulness of information companies provide in response to SEC’s current disclosure requirements. Approximately half of the companies reported defining diversity to include demographic factors such as gender, race, or ethnicity. Without specific information on board diversity that is concise and easy-to-use, investors may not be fully informed in making decisions. SEC officials told us they intend to consider the investor petition requesting changes to board diversity disclosure as part of its Disclosure Effectiveness Initiative—an ongoing review of all SEC disclosure requirements to improve them for the benefit of companies and investors. Agency Comments We provided a draft copy of this report to the Securities and Exchange Commission and the Equal Employment Opportunity Commission for review and comment. SEC staff provided technical comments that we incorporated, as appropriate. EEOC did not have comments. Appendix I: Analysis of Data for Boards of S&P 1500 Companies To identify trends in women’s representation on corporate boards and characteristics of male and female board directors, we analyzed a dataset from Institutional Shareholder Services, Inc. (ISS) that contained information about individual board directors at each company in the S&P Composite 1500 from 1997 through 2014, the years for which they collected these data.

Why GAO Did This Study Women make up almost half of the nation's workforce, yet research shows that they continue to hold a lower percentage of corporate board seats compared to men. Research highlights advantages to gender diverse boards, and some countries have taken steps to increase board gender diversity. The SEC requires companies to disclose certain information on board diversity. GAO was asked to review the representation of women on U.S. corporate boards. This report examines (1) the representation of women on boards of U.S. publicly-traded companies and factors that may affect it and (2) selected stakeholders' views on strategies for increasing representation of women on corporate boards. GAO analyzed a dataset of board directors at companies in the S&P 1500 from 1997 through 2014; and conducted interviews with a nongeneralizable sample of 19 stakeholders including CEOs, board directors, and investors. GAO selected stakeholders to reflect a range of experiences, among various factors. GAO also reviewed existing literature and relevant federal laws and regulations. GAO is not making recommendations in this report. SEC provided technical comments that were incorporated, as appropriate. The Equal Employment Opportunity Commission had no comments. What GAO Found Representation of women on the boards of U.S. publicly-traded companies has been increasing, but greater gender balance could take many years. In 2014, women comprised about 16 percent of board seats in the S&P 1500, up from 8 percent in 1997. This increase was partly driven by a rise in women's representation among new board directors. However, even if equal proportions of women and men joined boards each year beginning in 2015, GAO estimated that it could take more than four decades for women's representation on boards to be on par with that of men's. Based on an analysis of interviews with stakeholders, board director data, and relevant literature, GAO identified various factors that may hinder women's increased representation among board directors. These include boards not prioritizing recruiting diverse candidates; few women in the traditional pipeline to board service—with Chief Executive Officer (CEO) or board experience; and low turnover of board seats. Stakeholders GAO interviewed generally preferred voluntary strategies for increasing gender diversity on corporate boards, yet several large investors and most stakeholders interviewed (15 of 19) supported improving Securities and Exchange Commission (SEC) disclosure requirements on board diversity. SEC currently requires companies to disclose information on board diversity to help investors make investment and voting decisions. As stated in its strategic plan, one of SEC's objectives is to ensure that investors have access to high-quality disclosure materials to inform investment decisions. A group of large public pension fund investors and many stakeholders GAO interviewed questioned the usefulness of information companies provide in response to SEC's board diversity disclosure requirements. Consequently, these investors petitioned SEC to require specific disclosure on board directors' gender, race, and ethnicity. Without this information, some investors may not be fully informed in making decisions. SEC officials said they plan to consider the petition as part of an ongoing effort to review all disclosure requirements.

gao_GAO-09-865

gao_GAO-09-865_0

Strategic Plans Lack Elements Needed to Position the Depots to Meet Future Maintenance Requirements While the depot maintenance strategic plans developed by the Army and the Marine Corps identify key issues affecting the depots, they do not fully address all of the elements required to achieve a results-oriented management framework, and they are not fully responsive to OSD’s direction to the services for developing their plans. In addition, the plans are not fully responsive to OSD’s direction to the services for developing these plans. While the services’ strategic plans address key issues affecting the depots and contain mission statements, along with long-term goals and objectives, they do not fully address all the elements needed for sound strategic planning. The Army’s and Marine Corps’ depot maintenance strategic plans partially address logistics transformation, core logistics capability assurance, workforce revitalization, and capital investment—the four issues that OSD directed each service, at a minimum, to include in their plans. Army and Marine Corps officials involved with the development of the service strategic plans acknowledged that their plans do not fully address the OSD criteria, but they stated that the plans nevertheless address issues they believe are critical to maintaining effective, long-term depot maintenance capabilities. Strategic Plans Do Not Address Uncertainties in Workload That Affect the Depots’ Ability to Plan for Meeting Future Maintenance Requirements The Army’s and Marine Corps’ depot maintenance strategic plans do not provide strategies for mitigating and reducing uncertainties in future workloads that affect the depots’ ability to plan for meeting future maintenance requirements. These uncertainties stem primarily from a lack of information from the depots’ major commands on workload that will replace current work on legacy systems, which is expected to decline, as well as workload associated with new systems that are in the acquisition pipeline (which is discussed further in the next section of this report). Although the services have guidance, systems, and processes for workload planning, depot officials told us that the workload forecasts they receive from their major commands are unreliable beyond the current fiscal year. Officials cited various factors that contribute to workload uncertainties, such as the volatility in workload requirements; changing wartime environment; budget instability, including the timing of and heavy reliance on supplemental funding; and unanticipated changes in customer orders. The Plans Do Not Address Whether and How the Depots Will Have a Role in Planning for the Sustainment of New and Modified Weapon Systems Neither the Army’s nor the Marine Corps’ strategic plans address whether and how the depots will be integrated into the sustainment portion of the life cycle management planning process for new and modified weapon systems. According to depot officials, they are not involved in the program managers’ planning because no clear process exists that would enable them to have input. Conclusions The Army and Marine Corps face some challenges to ensure that their maintenance depots will remain operationally effective, efficient, and capable of meeting future maintenance requirements. Recommendations for Executive Action To provide greater assurance that the military depots will be postured and resourced to meet future maintenance requirements, we recommend that the Secretary of Defense direct the Secretary of the Army and the Commandant of the Marine Corps to take the following three actions to update the depot maintenance strategic plans: Fully address all elements needed for a comprehensive results-oriented management framework, including those elements partially addressed in the current plans-—such as the approaches for accomplishing goals and objectives, stakeholder involvement, external factors that may affect how goals and objectives will be accomplished, performance goals that are objective, quantifiable, and measurable, resources needed to meet performance goals, performance indicators used to measure outcomes and gauge progress, and an evaluation plan that monitors goals and objectives.

Why GAO Did This Study The Army and Marine Corps maintenance depots provide critical support to ongoing military operations in Iraq and Afghanistan and are heavily involved in efforts to reset the force. The Department of Defense (DOD) has an interest in ensuring that the depots remain operationally effective, efficient, and capable of meeting future maintenance requirements. In 2008, in response to direction by the Office of the Secretary of Defense (OSD), the Army and the Marine Corps each submitted a depot maintenance strategic plan. Our objective was to evaluate the extent to which these plans provide comprehensive strategies for meeting future depot maintenance requirements. GAO determined whether the plans were consistent with the criteria for developing a results-oriented management framework and fully addressed OSD's criteria. What GAO Found The depot maintenance strategic plans developed by the Army and Marine Corps identify key issues affecting the depots, but do not provide assurance that the depots will be postured and resourced to meet future maintenance requirements because they do not fully address all of the elements required for a comprehensive, results-oriented management framework. Nor are they fully responsive to OSD's direction for developing the plans. While the services' strategic plans contain mission statements, along with long-term goals and objectives, they do not fully address all the elements needed for sound strategic planning, such as external factors that may affect how goals and objectives will be accomplished, performance indicators or metrics that measure outcomes and gauge progress, and resources required to meet the goals and objectives. Also, the plans partially address four issues that OSD directed the services, at a minimum, to include in their plans, such as logistics transformation, core logistics capability assurance, workforce revitalization, and capital investment. Army and Marine Corps officials involved with the development of the service strategic plans acknowledged that their plans do not fully address the OSD criteria, but they stated that the plans nevertheless address issues they believe are critical to maintaining effective, long-term depot maintenance capabilities. The Army's and Marine Corps' plans also are not comprehensive because they do not provide strategies for mitigating and reducing uncertainties in future workloads that affect the depots' ability to plan for meeting future maintenance requirements. Such uncertainties stem primarily from a lack of information on (1) workload that will replace current work on existing systems, which is expected to decline, and (2) workload associated with new systems that are in the acquisition pipeline. According to depot officials, to effectively plan for future maintenance requirements, the depots need timely and reliable information from their major commands on both the amounts and types of workloads they should expect to receive in future years. Depot officials told us that the information they receive from their major commands on their future workloads are uncertain beyond the current fiscal year. Officials cited various factors that contribute to these uncertainties, such as volatility in workload requirements, changing wartime environment, budget instability, and unanticipated changes in customer orders. In addition, depot officials said that they are not involved in the sustainment portion of the life cycle management planning process for new and modified systems. No clear process exists that would enable them to have input into weapon system program managers' decisions on how and where new and modified systems will be supported and maintained in the future. Unless they are integrated in this planning process, these officials said, the depots will continue to have uncertainties about what capabilities they will need to plan for future workloads and what other resources they will need to support new and modified weapon systems.

gao_GAO-09-106

gao_GAO-09-106_0

Labor Lacks Reliable Data on Processing Times for the Whistleblower Program Labor lacks reliable information on processing times and, as a result, cannot accurately report how long it takes to investigate and close a case or decide on certain appeals. At all three agencies, certain factors, such as heavy caseloads, case complexity, and accommodating requests from the parties’ legal counsel, negatively affect case processing times. Specifically, the dates used to measure processing times are often inaccurately recorded in OSHA’s database or cannot be verified due to a lack of supporting documentation in the case files. OSHA does not have an effective mechanism to ensure that the data are accurately recorded in the system. Data on the timeliness of OALJ decisions, which were reliable, showed that OALJ completed 207 cases in fiscal year 2007 with an average of about 9 months per case. Whistleblowers Received a Favorable Outcome in a Minority of Cases, but OSHA’s Data Somewhat Overstate the Outcomes Whistleblowers received a favorable outcome in a small proportion of the complaints that were closed in fiscal year 2007, both in terms of initial decisions and on appeal, but the actual proportion may be slightly lower than Labor’s data show. At the appeals level, whistleblowers similarly won a minority of the cases closed in fiscal year 2007—not more than one-third of outcomes favored the whistleblower. OSHA’s data show that about 21 percent of the complaints resulted in dispositions favorable to the whistleblower—OSHA refers to the case as “having merit”— and nearly all of them were settled through a separate agreement involving the whistleblower and the employer. We found several problems in the way complaints were being recorded in OSHA’s database. For all other statutes, cases may generally be appealed to OALJ and, ultimately, to ARB. OSHA Faces Challenges in Ensuring the Quality and Consistency of the Program OSHA faces two key challenges in administering the whistleblower program—it lacks a mechanism to adequately ensure the quality and consistency of investigations, and many investigators report they lack certain resources they need to do their jobs—including equipment, training, and legal assistance. OSHA does not routinely conduct independent audits of the whistleblower program to ensure consistent application of policies and procedures. OSHA’s new field audit program has begun to address this need but is lacking in several key areas; in particular, it does not adequately provide for audit independence or for accountability in resolving audit findings. With respect to resources, nearly half of the investigators overall reported that the equipment they have does not meet the needs of the job, but these equipment needs vary from region to region. OSHA has not established minimum standards for investigator equipment, and we found that the equipment investigators lack varies from region to region. OSHA’s audit processes do not adequately provide for independence, an important aspect of an effective audit program and a key aspect of generally accepted government auditing standards. Whistleblower investigators reported that they need more training to address their complex cases. OSHA, OALJ, and ARB commented separately. Appendix I: Objectives, Scope, and Methodology The objectives for this engagement were to determine (1) what is known about the processing times for claims under the whistleblower statutes that the Department of Labor (Labor) administers and the factors that affect processing times, (2) what the outcomes were of those complaints, and (3) what key challenges Labor’s Occupational Safety and Health Administration (OSHA) faces in administering the program. Objective 1: Processing Times To determine what is known about processing times, we obtained and tested the reliability of databases on key information about whistleblowers’ cases from OSHA, the Office of Administrative Law Judges (OALJ) and the Administrative Review Board (ARB).

Why GAO Did This Study Workers who "blow the whistle" on prohibited practices play a role in enforcing federal laws, but these workers risk reprisals from their employers. The Whistleblower Protection Program at the Department of Labor's (Labor) Occupational Safety and Health Administration (OSHA) is responsible for investigating whistleblowers' complaints. OSHA's decisions generally may be appealed to the Office of Administrative Law Judges (OALJ) and, ultimately, the Administrative Review Board (ARB). GAO examined (1) what is known about processing times for complaints and what affects these times, (2) what outcomes resulted, and (3) what challenges OSHA faces in administering the program. To answer these questions, GAO analyzed electronic data files from OSHA, OALJ, and ARB; visited five OSHA regional offices; reviewed case files; conducted a Web-based survey of investigators; and interviewed key officials. What GAO Found Labor lacks reliable information on processing times and, as a result, cannot accurately report how long it takes to investigate and close a case or decide on certain appeals. OSHA does not have an effective mechanism to ensure that the data are accurately recorded in its database, and GAO's file reviews revealed that the key dates are often inaccurately recorded in the database or cannot be verified due to a lack of supporting documentation. For example, in one region visited, none of the case closed dates matched the documentation in case files. At the appeals level, the reliability of information on the processing times is mixed. Timeliness data at the OALJ level are reliable, and the OALJ completed appealed cases in an average of about 9 months in fiscal year 2007. In contrast, ARB data are unreliable, and the agency lacks sufficient oversight of data quality. GAO's file review found that ARB processing times ranged from 30 days to over 5 years. At all levels of the whistleblower program, GAO found that increasing caseloads, case complexity, and accommodating requests from the parties' legal counsel affect case processing times. Whistleblowers received a favorable outcome in a minority of cases that were closed in fiscal year 2007, both at initial decision and on appeal, but the actual proportion may be somewhat lower than Labor's data show. OSHA's data show that whistleblowers received a favorable outcome in 21 percent of complaints--nearly all settled through a separate agreement involving the whistleblower and the employer, rather than through a decision rendered by OSHA. However, GAO found several problems in the way settlements were being recorded in OSHA's database, and a review of settlement agreements suggests that the proportion of cases found to have merit may actually be about 19 percent. As with investigations, when whistleblower complaints were appealed, decisions favored the whistleblower in a minority of the cases--one-third or less of outcomes favored the whistleblower. With respect to administering the whistleblower program, OSHA faces two key challenges--it lacks a mechanism to adequately ensure the quality and consistency of investigations, and many investigators said they lack certain resources they need to do their jobs, including equipment, training, and legal assistance. OSHA does not routinely conduct independent audits of the program to ensure consistent application of its policies and procedures. OSHA's new field audit program has begun to address this need but is lacking in several key areas. For example, the current audit processes do not adequately provide for independence, an important aspect of an effective audit program. Moreover, OSHA is challenged to ensure that investigators in all regions have the resources they need to address their large and complex caseloads. OSHA has not established minimum equipment standards for its investigators, and nearly half of the whistleblower investigators reported that the equipment they have does not meet the needs of their jobs. Furthermore, investigators often cite the need for more training and legal assistance on the complex federal statutes that OSHA administers.

gao_NSIAD-98-26

gao_NSIAD-98-26_0

In May 1997, DOD completed its first QDR. This is the fourth straight budget year since 1995 that DOD has not met procurement goals established in previous FYDPs. Therefore, if DOD is to achieve real growth in the procurement accounts, it must reduce funding for its infrastructure activities. The 1998 FYDP shows that spending for infrastructure is projected to decline from 58 percent to about 55 percent of DOD’s budget from 1998 through 2001 and further decline to 54 percent through 2003. QDR Finds That Program Changes Must Be Made to Mitigate Known Cost Risks “Based on an assessment of recent patterns and the assumptions embedded in the current six-year plan, the QDR concluded that there was a potential for annual migration to unplanned expenses of as much as $10-$12 billion per year in the later years of the plan. Absent any further changes to the defense program, however, growth above $50 billion would be highly unlikely.” A principal resource management objective of the QDR was to understand the financial risk in DOD’s program plans and devise ways to manage that risk. DOD recognizes in the report that it will need congressional approval to accomplish some of the more significant cost-reduction measures, such as additional base closures and military personnel reductions. Fiscal Year 1998 Program Provides for Small Increase in Active Military Personnel By comparing the 1998 FYDP with the 1997 FYDP, we found that during fiscal years 1998-2001, active duty military personnel and the comparable military personnel accounts have net increases of 4,655 personnel and $929 million, respectively. The Air Force’s 1998 FYDP projections are higher than the 1997 FYDP projections in every year. Operational Changes in Bosnia Could Lead to Higher O&M Costs Part of the higher 1998 O&M level in the 1998 FYDP is due to DOD’s request for almost $1.5 billion for Bosnia operations. According to DOD officials, the savings were programmed by the Office of the Secretary of Defense, although details do not exist on how the savings will be achieved. Estimates for Lower Health Care Costs May Be Unrealistic The Defense Health Program, approximately 11 percent of projected annual O&M spending, changes considerably from the 1997 FYDP to the 1998 FYDP. Moreover, when the program in the 1998 FYDP is viewed in constant dollars, DOD projects no growth between fiscal year 1998 and 2001. This appears to be unrealistic, given that during fiscal years 1985-96, O&M funds in DOD’s health program increased 73 percent in real terms. Risks That Procurement Plans May Not Succeed The 1998 FYDP reflects a net decline in planned procurement during the 4 years common to the 1997 FYDP. However, DOD has not assigned these projected funds to specific programs. DOD’s plans for procurement spending in the 1998 FYDP also run counter to another historical trend. Figure 3 shows the historical trend and DOD’s FYDP projections. We continue to find examples of program projections that appear to be overly optimistic. Quadrennial Defense Review Initiatives The following sections describe proposed Quadrennial Defense Review (QDR) initiatives that could impact the Department of Defense’s (DOD) future programs. Most of these activities, including civilian pay, are funded from the operation and maintenance (O&M) appropriation. Request authority for two additional rounds of base closures and realignments. DOD recognizes the challenge it faces to achieve its modernization goals. Underwriting DOD’s extensive modernization effort and the Revolution in Military Affairs are plans for substantial future investments in research, development, test, and evaluation (RDT&E).

Why GAO Did This Study Pursuant to a congressional request, GAO compared the Department of Defense's (DOD) fiscal year (FY) 1998 Future Years Defense Program (FYDP) with the FYDP for FY 1997, focusing on: (1) how major programs were adjusted from the 1997 FYDP to the 1998 FYDP; (2) how these adjustments may affect programs in the future; and (3) proposed Quadrennial Defense Review (QDR) initiatives that may have been taken by the the committees on authorization and appropriations during their reviews of the FY 1998 defense budget request. What GAO Found GAO noted: (1) its comparison of the 4 years common to both DOD's FY 1998 FYDP and FY 1997 FYDP (1998-2001) shows that funding for military personnel, operation and maintenance, and research, development, test, and evaluation is projected to be higher, and funding for procurement is projected to be lower than anticipated 1 year ago; (2) for the fourth straight budget year since 1995, DOD has not met its procurement goals established in pervious FYDPs; (3) the 1998 FYDP retains substantial risk that DOD's program will not be executed as planned; (4) although the 1998 FYDP projects that a smaller percentage of DOD's total budget will be needed to pay for infrastructure activities than that projected in the 1997 FYDP, DOD's projections are questionable; (5) for example, the 1998 FYDP projects billions of dollars in savings due to management initiatives, but DOD does not have details on how all the savings will be achieved; (6) also, DOD projects no real growth in the cost of the Defense Health Program during 1998-2001, whereas this program increased 73 percent in real terms during 1985-96; (7) another reason GAO believes the 1998 FYDP poses risks is that the estimates for procurement spending, in relation to DOD's total budget and its operation and maintenance projections, run counter to DOD's experience over the last 30 years; (8) DOD acknowledged in its May 1997 Report of the QDR that the 1998 FYDP includes substantial financial risk; (9) the Secretary has stated that absent any further changes, the fiscal patterns and assumptions embedded in the 1998 FYDP are most likely not going to free up sufficient funds to achieve DOD's modernization goals; (10) according to DOD, compared to the 1998 FYDP, the QDR proposes a more balanced, modern, and capable defense program that can be achieved within currently proposed budgets; (11) to accomplish its goals, DOD proposes that it reduce personnel, make some modest changes in force structure, realize additional infrastructure saving through fundamental reforms and base realignments and closures, and continue to improve its business operations; (12) the success of these initiatives will require discipline, execution, and aggressive follow-through on the part of DOD management; and (13) on some important initiatives, such as base closures and military personnel reductions, DOD will need congressional approval.