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gao_GAO-02-527T | gao_GAO-02-527T_0 | Ethanol blended fuels (gasohol) are partially exempt from the standard excise tax on gasoline (18.4 cents). TEA-21 guaranteed specific levels of funding for highway programs from fiscal year 1999 through fiscal year 2003, on the basis of projected receipts of the Highway Account. Treasury’s Excise Tax Distributions to the Highway Trust Fund for the First 9 Months of Fiscal Year 2001 Are Reasonable
The Secretary of the Treasury transfers applicable excise tax receipts, including receipts from gasoline and other highway taxes, from the General Fund to the excise tax related trust funds, including the Highway Trust Fund, on a monthly basis. However, Treasury has made and continues to make improvements to this process. $600 Million Error in RABA Adjustment Occurred Outside of Treasury’s Models
In January 2002, the administration announced that the fiscal year 2003 RABA adjustment would be a negative $4.965 billion. The administration subsequently announced that an error had been made in calculating the RABA adjustment and that the correct amount was a negative $4.369 billion—a $600 million difference. Second, 2.5 cents of the tax received on each gallon of gasohol sold is transferred to the General Fund. Ways to Reduce Highway Funding Fluctuations and Industry Proposals to Increase Revenues
As the Congress considers the reauthorization of surface transportation programs, there are several ways it could restructure the RABA adjustment to reduce fluctuations in highway funding. Ultimately, the Congress and the administration must weigh the advantages and disadvantages of changing the RABA adjustment and/or Highway Trust Fund revenue streams. | What GAO Found
The Highway Trust Fund "guarantees" specific annual funding levels for most highway programs on the basis of projected receipts to the fund. It also makes annual adjustments to these funding levels on the basis of actual receipts and revised projections of trust fund revenue. These adjustments are called the Revenue Aligned Budget Authority (RABA). GAO concludes that the fiscal year 2003 RABA calculation appears reasonable. Although the RABA adjustment is clearly severe, it reflects the many ways in which an economic downturn affects the calculation. In late January 2002, the administration announced that the fiscal year 2003 RABA adjustment would be a negative $4.965 billion. Within a few days of the announcement, the administration reported that an error had been made and the correct amount was a negative $4.369 billion--a $600 million difference. Treasury is taking steps to improve its internal controls in order to prevent this type of error from reoccurring. The use of ethanol blended fuel instead of gasoline reduces Highway Trust Fund revenue because it is partially exempt from the standard excise tax on gasoline and 2.5 cents of the tax received on each gallon of gasohol sold is transferred to the General Fund. Gasohol use is projected to rise and the impact of these tax provisions will grow as well. The RABA adjustment could be changed in several ways to help reduce fluctuations in highway funding. However, Congress and the administration must weigh the advantages and disadvantages of these and other ways to stabilize highway funding and increase Highway Trust Fund revenues. |
gao_GAO-09-280 | gao_GAO-09-280_0 | U.S. These efforts were intended to help ensure that the MOI and ANP are directed by professional staff that can successfully manage and sustain a national police force in Afghanistan. The officer corps reform program reduced the oversized MOI-ANP officer corps from about 17,800 to about 9,000 personnel, reformed the ANP’s top-heavy rank structure, and increased police pay. Expansion of New Approach to Training Afghan Police Constrained by Shortage of Military Personnel
CSTC-A has begun retraining ANP through its Focused District Development (FDD) program, which is intended to build professional and fully capable police units. FDD is achieving promising results in most participating districts, according to Defense status reports. However, a shortage of military personnel is constraining CSTC-A’s plans to expand FDD and similar programs into the rest of Afghanistan by the end of 2010. Defense has identified a shortage of about 1,500 military personnel to expand FDD and similar police development programs. In February 2009, Defense assessed 19 percent of the units retrained through the FDD program as capable of conducting primary operational missions, 25 percent as capable of conducting primary operational missions with international support, 31 percent as capable of partially conducting primary operational missions with international support, an 25 percent as not yet capable of conducting primary operational missions. However, the demand for personnel for use in Afghan army training programs is likely to increase because Afghanistan, the United States, and other international partners have agreed to increase the Afghan army from 80,000 to 134,000 personnel. U.S. Agencies Screened MOI and ANP Officers but Did Not Systematically Compile Records of Background Checks
MOI and ANP officers were screened by Defense and State as part of a rank reform program intended to promote institutional and organizational reform, but State did not systematically compile records of background checks conducted as part of the screening effort. At least 55 percent of the almost 17,800 officers tested passed, according to data provided by CSTC-A. At least 9,797 (55 percent) of these officers passed. Efforts to Enhance MOI and ANP Pay Systems Face Challenges of Limited Cooperation and Lack of a Nationwide Bank System
U.S.-supported pay system efforts are intended to (1) validate the status of reported MOI and ANP personnel rosters and (2) help ensure that MOI and ANP wages are distributed reliably and fairly. Despite some progress, these efforts face challenges that include limited ANP cooperation and a shortage of commercial banks. Although U.S. contractor personnel have validated the status of almost 47,400 current MOI and ANP personnel, they have been unable to validate the status of almost 29,400 additional personnel—paid in part by U.S. contributions to LOTFA—because of a lack of cooperation from certain ANP commanders. As of January 2009, about 97 percent of reported MOI and ANP personnel had enrolled in a new U.S.-supported electronic payroll system, and 58 percent had enrolled in a new electronic funds transfer system to have salaries deposited directly into their bank accounts. Appendix I: Objective, Scope, and Methodology
This report assesses U.S. government efforts to help the government of Afghanistan (1) restructure the Ministry of Interior (MOI) and the Afghan National Police (ANP), (2) retrain selected ANP units, (3) screen MOI and ANP personnel, and (4) enhance MOI and ANP identification and pay systems. To assess the status of U.S. efforts to restructure the MOI and ANP, we reviewed the Department of Defense’s (Defense) Afghan National Campaign Plan, a draft joint mentor coordination plan prepared by Defense’s Combined Security Transition Command-Afghanistan (CSTC-A) and the European Union Police Mission to Afghanistan, and CSTC-A’s MOI Development Plan. In Washington, D.C., we met with officials from Defense, State, and DEA. | Why GAO Did This Study
The United States has invested more than $6.2 billion in the Afghan Ministry of Interior (MOI) and Afghan National Police (ANP). The Department of Defense's (Defense) Combined Security Transition Command-Afghanistan (CSTC-A), with the Department of State (State), leads U.S. efforts to enhance MOI and ANP organizational structures, leadership abilities, and pay systems. This report assesses the status of U.S. efforts to help Afghanistan (1) restructure MOI and ANP, (2) retrain ANP units, (3) screen MOI and ANP personnel, and (4) enhance MOI and ANP pay systems. GAO reviewed Defense, State, and United Nations (UN) data and met with officials in the United States and Afghanistan.
What GAO Found
U.S. agencies and Afghanistan have achieved their goals of restructuring and reducing a top-heavy and oversized MOI and ANP officer corps, modifying police wages, and planning a reorganization of MOI headquarters. These efforts are intended to help ensure that the MOI and ANP are directed by professional staff that can manage a national police force. U.S. agencies and MOI cut the officer corps from about 17,800 to about 9,000, reduced the percentage of high-ranking officers, and increased pay for all ranks. MOI is scheduled to implement a U.S.-supported headquarters reorganization. CSTC-A has begun retraining ANP units through its Focused District Development (FDD) program, which is intended to address district-level corruption that impeded previous efforts to retrain individual police. FDD is achieving promising results, according to Defense status reports. In February 2009, Defense assessed 19 percent of FDD-retrained units as capable of conducting missions, 25 percent as capable of doing so with outside support, 31 percent as capable of partially doing so with outside support, and 25 percent as not capable. However, a lack of military personnel is constraining CSTC-A's plans to expand FDD and similar programs into the rest of Afghanistan by the end of 2010. Defense has identified a shortage of about 1,500 military personnel needed to expand FDD and similar police development programs. CSTC-A has previously obtained military personnel for ANP training by redirecting personnel from its Afghan army training program. However, the army program's demand for personnel is likely to increase as the Afghan army grows from 80,000 to 134,000 personnel. MOI and ANP officers were screened by Defense and State, but the full extent of the screening is unclear because State did not systematically compile records of its efforts. The screening effort was intended to improve the professionalism and integrity of the officer corps through testing by CSTC-A and background checks by State. At least 9,797 (55 percent) of the nearly 17,800 officers who took the tests passed, according to CSTC-A. State was unable to provide us with statistics concerning the results of background checks because it did not systematically compile its records. U.S.-supported pay system efforts are intended to validate MOI and ANP personnel rosters and ensure that wages are distributed reliably. Despite progress, these efforts face challenges that include limited ANP cooperation and a shortage of banks. U.S. contractors have validated almost 47,400 MOI and ANP personnel but have been unable to validate almost 29,400 personnel--who were paid in part by $230 million in U.S. contributions to a UN trust fund--because of a lack of cooperation from some ANP commanders. As of January 2009, 97 percent of all reported MOI and ANP personnel had enrolled in an electronic payroll system and 58 percent had enrolled to have their salaries deposited directly into their bank accounts. However, growth of the direct deposit system may be constrained because almost 40 percent of ANP personnel lack ready access to banks. |
gao_GAO-17-494T | gao_GAO-17-494T_0 | However, as we have previously reported, investments in federal IT too often result in failed projects that incur cost overruns and schedule slippages, while contributing little to the desired mission-related outcomes. FITARA Can Improve Agencies’ Acquisition of IT
Recognizing the importance of issues related to government-wide management of IT, FITARA was enacted in December 2014. The law was aimed at improving agencies’ acquisitions of IT and could help enable Congress to monitor agencies’ progress and hold them accountable for reducing duplication and achieving cost savings. Specifically, between fiscal years 2010 and 2015, we made 803 recommendations to OMB and federal agencies to address shortcomings in IT acquisitions and operations, including many to improve the implementation of the recent initiatives and other government-wide, cross-cutting efforts. For example, as of December 2016, OMB and the agencies had fully implemented 366 (or about 46 percent) of the 803 recommendations. In addition, in fiscal year 2016, we made 202 new recommendations, thus further reinforcing the need for OMB and agencies to address the shortcomings in IT acquisitions and operations. Opportunities Exist to Improve Acquisition of IT
Given the magnitude of the federal government’s annual IT budget, which is projected to be more than $89 billion in fiscal year 2017, it is important that agencies leverage all available opportunities to ensure that IT investments are made in the most effective manner possible. However, in our November 2016 report, we determined that five agencies that we selected for in-depth analysis had not fully implemented key workforce planning steps and activities. In addition, none of these agencies had fully assessed their workforce competencies and staffing needs regularly or established strategies and plans to address gaps in these areas. The weaknesses identified were due, in part, to these agencies lacking comprehensive policies that required such activities, or failing to apply the policies to IT workforce planning. OMB generally agreed with this recommendation. IT Dashboard Can Improve the Transparency into and Oversight of Major IT Acquisitions
To facilitate transparency across the government in acquiring and managing IT investments, OMB established a public website—the IT Dashboard—to provide detailed information on major investments at 26 agencies, including ratings of their performance against cost and schedule targets. Among other things, agencies are to submit ratings from their CIOs, which, according to OMB’s instructions, should reflect the level of risk facing an investment relative to that investment’s ability to accomplish its goals. Most agencies have agreed with our recommendations. Most recently, in June 2016, we determined that 13 of the 15 agencies selected for in-depth review had not fully considered risks when rating their major investments on the IT Dashboard. Specifically, our assessments of risk for 95 investments at 15 selected agencies matched the CIO ratings posted on the Dashboard 22 times, showed more risk 60 times, and showed less risk 13 times. Seven agencies’ rating processes did not focus on active risks. Increasing the Use of Incremental Development Practices Can Help Agencies Better Achieve Cost, Schedule, and Performance Goals for IT Acquisitions
OMB has emphasized the need to deliver investments in smaller parts, or increments, in order to reduce risk, deliver capabilities more quickly, and facilitate the adoption of emerging technologies. In 2010, it called for agencies’ major investments to deliver functionality every 12 months and, since 2012, every 6 months. Subsequently, in August 2016, we reported that agencies had not fully implemented incremental development practices for their software development projects. Specifically, we noted that, as of August 31, 2015, 22 federal agencies had reported on the IT Dashboard that 300 of 469 active software development projects (approximately 64 percent) were planning to deliver usable functionality every 6 months for fiscal year 2016, as required by OMB guidance. Accordingly, we recommended that four agencies establish a policy and process for the certification of major IT investments’ adequate use of incremental development. In addition to implementing FITARA, applying key IT workforce planning practices could improve the agencies’ ability to assess and address gaps in knowledge and skills that are critical to the success of major acquisitions. Information Technology Reform: Agencies Need to Increase Their Use of Incremental Development Practices. High-Risk Series: An Update. | Why GAO Did This Study
The federal government is projected to invest more than $89 billion on IT in fiscal year 2017. Historically, these investments have frequently failed, incurred cost overruns and schedule slippages, or contributed little to mission-related outcomes. Accordingly, in December 2014, IT reform legislation was enacted, aimed at improving agencies' acquisitions of IT. Further, in February 2015, GAO added improving the management of IT acquisitions and operations to its high-risk list.
This statement focuses on the status of federal efforts in improving the acquisition of IT. Specifically, this statement summarizes GAO's prior work primarily published between June 2013 and February 2017 on (1) key IT workforce planning activities, (2) risk levels of major investments as reported on OMB's IT Dashboard, and (3) implementation of incremental development practices, among other issues.
What GAO Found
The Federal Information Technology Acquisition Reform Act (FITARA) was enacted in December 2014 to improve federal information technology (IT) acquisitions and can help federal agencies reduce duplication and achieve cost savings. Successful implementation of FITARA will require the Office of Management and Budget (OMB) and federal agencies to take action in a number of areas identified in the law and as previously recommended by GAO.
IT workforce planning. GAO identified eight key IT workforce planning practices in November 2016 that are critical to ensuring that agencies have the knowledge and skills to successfully acquire IT, such as analyzing the workforce to identify gaps in competencies and staffing. However, GAO reported that the five selected federal agencies it reviewed had not fully implemented these practices. For example, none of these agencies had fully assessed their competency and staffing needs regularly or established strategies and plans to address gaps in these areas. These weaknesses were due, in part, to agencies lacking comprehensive policies that required these practices. Accordingly, GAO made specific recommendations to the five agencies to address the practices that were not fully implemented. Four agencies agreed and one partially agreed with GAO's recommendations.
IT Dashboard. To facilitate transparency into the government's acquisition of IT, OMB's IT Dashboard provides detailed information on major investments at federal agencies, including ratings from Chief Information Officers (CIO) that should reflect the level of risk facing an investment. GAO reported in June 2016 that 13 of the 15 agencies selected for in-depth review had not fully considered risks when rating their investments on the IT Dashboard. In particular, of the 95 investments reviewed, GAO's assessments of risks matched the CIO ratings 22 times, showed more risk 60 times, and showed less risk 13 times. Several factors contributed to these differences, such as CIO ratings not being updated frequently and using outdated risk data. GAO recommended that agencies improve the quality and frequency of their ratings. Most agencies agreed with GAO's recommendations.
Incremental development. An additional reform initiated by OMB has emphasized the need for federal agencies to deliver investments in smaller parts, or increments, in order to reduce risk and deliver capabilities more quickly. Specifically, since 2012, OMB has required investments to deliver functionality every 6 months. In August 2016, GAO determined that, for fiscal year 2016, 22 agencies had reported on the IT Dashboard that 64 percent of their software development projects would deliver useable functionality every 6 months. However, GAO determined that only three of seven agencies selected for in-depth review had policies regarding the CIO certifying IT investments' adequate implementation of incremental development, as required by OMB. GAO recommended, among other things, that four agencies improve their policies for CIO certification of incremental development. Most of these agencies agreed with the recommendations.
What GAO Recommends
Between fiscal years 2010 and 2015, GAO made 803 recommendations to OMB and federal agencies to address shortcomings in IT acquisitions and operations. The significance of these recommendations contributed to the addition of this area to GAO's high-risk list. As of December 2016, OMB and the agencies had fully implemented 366 (or about 46 percent) of the 803 recommendations. In fiscal year 2016, GAO made 202 new recommendations, thus further reinforcing the need for OMB and agencies to address the shortcomings GAO has identified. |
gao_GAO-13-304 | gao_GAO-13-304_0 | The planned 520-mile high- speed rail system will operate between San Francisco and Los Angeles at speeds up to 220 miles per hour (see fig.1). Authority Substantially or Partially Met GAO’s Best Practices for Producing Reliable Cost Estimates, but Can Make Improvements
Reliable Cost Estimates Are Critical to Successful Project Planning, Funding, and Oversight, but Little FRA Guidance Is Available
The Authority estimates that Phase 1 of the high-speed rail project in California will cost $68.4 billion to construct and hundreds of millions of dollars to operate and maintain annually. Since the project’s financing plan, as articulated in the April 2012 revised business plan, will depend on an additional estimated nearly $38.7 billion in federal funds, it is vital that the Authority, FRA, and Congress be able to rely on these cost estimates for project planning, funding, and oversight. Moreover, the limited guidance that was provided did not reflect best practices included in our Cost Guide. By not following all best practices, there is increased risk of such things as cost overruns, missed deadlines, and unmet performance targets. For example, the Authority met the best practice for including in the cost estimates the major components of the project’s construction and operating costs. However, the Authority will need to complete several additional updates to improve its model and the resulting forecasts for the 2014 business plan. For the purposes of our assessment, we identified generally accepted travel-demand-modeling practices for high-speed rail projects from a variety of sources and developed criteria based on these practices to assess the reasonableness of the approach used to create the ridership and revenue models for the California high-speed rail project. Specifically, the Authority revised model assumptions to reflect changes in current and anticipated future conditions for airfares and airline service frequencies, decreases in gasoline price forecasts, and anticipated declines in the growth rates for population, number of households, and employment. Next Business Plan Will Not Reflect All Planned Improvements to Ridership Forecasts
The Authority has plans to complete future improvements to its ridership and revenue forecasts, including completing a new travel preference survey and developing a second generation travel demand model. The Authority’s Funding Plan Faces Uncertainty
The project’s funding, which relies on both public and private sources of financing, faces uncertainty about whether those funds can be obtained in a tight federal and state budget environment. In the latter stages, the Authority will also rely on private-sector financing, but will require more reliable operating cost estimates and revenue forecasts to determine whether, and the extent to which, the system will be profitable, as well as the value of any private investment. The Authority’s financing plan recognizes the uncertainty of the current funding environment so the Authority is building the project in phases and has identified an alternative funding source that is also uncertain. Public-private partnerships for intercity passenger rail, such as what the Authority is planning for, have been proposed but not implemented in the United States. For example, the plan identified potential user impacts such as travel time reliability for high-speed rail users and non- user impacts such as the effects on highway congestion and economic development around stations. These include the following:
Future project decisions. We also found some limitations in the specific economic analyses prepared by the Authority. In particular, the April 2012 BCA has shortcomings that could limit its usefulness to decision makers. Constructing a high-speed rail system is not expected to meet all of California’s future intercity travel demand. Recommendation
We recommend that the Secretary of Transportation direct the Administrator of FRA to improve its guidance for high-speed rail project sponsors to better ensure that cost estimates that are submitted by applicants seeking federal funding are accurate, comprehensive, well- documented, and credible according to the best practices detailed in GAO’s Cost Guide. DOT neither agreed nor disagreed with our recommendation. In an e-mailed response, DOT said it was pleased that the Authority met many of the criteria in the Cost Guide for producing accurate, comprehensive, well-documented, and credible cost estimates; that ridership and revenue forecasts were reasonable; and that the Authority did a comprehensive job in identifying potential economic impacts. GAO staff who made major contributions to this report are listed in appendix V.
Appendix I: Objectives, Scope, and Methodology
This report assesses (1) the reliability of the California High-Speed Rail Authority’s (Authority) estimates of the project’s costs; (2) the reasonableness of the Authority’s passenger rail ridership and revenue forecasts; (3) the risks to the Authority’s plan to fund the project; and (4) the comprehensiveness with which the Authority identified potential economic impacts of the project. To assess the reliability of the project cost estimates, we analyzed the Authority’s cost estimating approach against GAO’s best practices found in the 2009 GAO Cost Estimating and Assessment Guide (Cost Guide). However, some cost elements had little or no supporting documentation. | Why GAO Did This Study
The planned 520-mile California high-speed rail project, which would link San Francisco to Los Angeles, would be designed to operate at speeds up to 220 miles per hour. At an estimated cost of $68.4 billion (in year-of-expenditure dollars), it is expected to be one of the most expensive transportation projects undertaken in the United States. The Authority is responsible for implementing the project and federal funding is being provided from the FRAs High-Speed Intercity Passenger Rail program. GAO reviewed (1) the reliability of project cost estimates, (2) the reasonableness of revenue and passenger rail ridership forecasts, (3) the risks attendant with the projects funding plan, and (4) the comprehensiveness with which the projects economic impacts were identified.
GAO obtained documents from and conducted interviews with federal officials and officials from the Authority related to cost, financing, ridership and revenue modeling and estimation, and business plans and analyses related to potential economic impacts. GAO also interviewed state and local officials as well as the projects peer review group members.
What GAO Found
The California High-Speed Rail Authority (Authority) met some, but not all of the best practices in GAO's Cost Estimating and Assessment Guide (Cost Guide) for producing cost estimates that are accurate , comprehensive , well documented , and credible . By not following all best practices, there is increased risk of such things as cost overruns, missed deadlines, and unmet performance targets. The Authority substantially met the criteria for the accurate characteristic by, for example, the cost estimate's reflecting the current scope of the project. However, the Authority partially met the criteria for the other three characteristics since the operating costs were not sufficiently detailed ( comprehensive ), the development of some cost elements were not sufficiently explained ( well documented ), and because no systematic assessment of risk was performed ( credible ). The Federal Railroad Administration (FRA) issued limited guidance for preparing cost estimates, and this guidance did not reflect best practices in the Cost Guide . The Authority plans to improve its cost estimates.
GAO found the Authority's ridership and revenue forecasts to be reasonable; however, additional updates are necessary to refine the ridership and revenue model for the 2014 business plan. GAO also found the travel-demand-modeling process used to generate these forecasts followed generally accepted travel- demand-modeling practices. For example, the Authority revised several assumptions, such as gasoline price forecasts, to reflect changes in current and anticipated future conditions. However, additional updates, such as the development of a new travel survey, will be necessary to further refine these forecasts and improve the model's utility to make future decisions. External peer review groups have also recommended additional updates.
The project's funding, which relies on both public and private sources, faces uncertainty, especially in a tight federal and state budget environment. Obtaining $38.7 billion in federal funding over the construction period is one of the biggest challenges to completing this project. In the latter stages, the Authority will also rely on $13.1 billion in private-sector financing, but will require more reliable operating cost estimates and revenue forecasts to determine whether, or the extent to which, the system will be profitable. The Authority's plan recognizes the uncertainty of the current funding environment and is building the project in phases. The Authority has also identified an alternative funding source. However, that funding source is also uncertain.
The Authority did a comprehensive job in identifying the potential economic impacts of the high-speed rail project. This includes identification of user impacts, such as effects on travel time reliability, and non-user impacts, such as effects on highway congestion. However, the nature of specific economic impacts will depend on a number of factors, including future project decisions. GAO also found limitations in the Authority's benefit-cost analysis of the project that could limit its usefulness to decision makers. Finally, GAO found that construction of the high-speed rail project will not eliminate the need for additional improvements to meet future statewide-travel demand, but current statewide- transportation assessments and planning have given little consideration to this issue.
What GAO Recommends
To produce reliable cost estimates, FRA should improve its guidance so it is in line with the best practices in GAO's Cost Guide . The Department of Transportation did not agree or disagree with the recommendation but said, with further analysis, applying the Cost Guide would be feasible. The Authority said it will incorporate many of the report's findings into future cost and ridership estimates. |
gao_T-HEHS-98-113 | gao_T-HEHS-98-113_0 | Given the magnitude of the financial problems facing the system, the nature of the proposals for change, and the growing interest in these topics across the country, we can expect the debate over Social Security’s financing and structure to continue and intensify in the coming years. SSA is in a unique position to inform policymakers and the public about the long-term financing issues, yet we have reported that the agency has not undertaken the range of research, evaluation, and policy analysis needed to fully contribute to the debate. For example, from 1988 to 1996, SSA’s disability programs grew significantly. In its current strategic plan, SSA committed itself to a new goal: “to . . . conduct effective policy development, research, and program evaluation.” The agency is taking steps to strengthen its capacity in these areas. It has increased its funding for external research; plans to expand its ability to use modeling techniques to predict the effects of proposed program changes; and, by the end of this fiscal year, plans to have established a research consortium to advise it on relevant research and policy activities. However, these efforts have a long lead time before useful products will become available. In the meantime, SSA will not be fully contributing to the current debate on Social Security reform. The program’s complex policies and SSA’s insufficient management attention exacerbate these problems. Disability Programs Require Process Overhaul and Heightened Focus on Work
SSA’s disability programs face several challenges. We have supported SSA’s efforts to improve consistency and have also recommended that SSA develop a performance goal to measure and report its progress in doing so. Consequently, more than 4 million beneficiaries were due or overdue for CDRs by 1996. In 1997, we found that SSA’s experience in conducting CDRs was encouraging. Observations
Overall, our work suggests that SSA recognizes each of the challenges we have identified and, in almost every case, has taken some action to address them. To effect meaningful change, SSA must address the root causes of its problems and ensure sustained management oversight. The new Commissioner will need to effectively lead the agency to move with a sense of urgency to address its long-standing problems. Social Security Administration: Significant Challenges Await New Commissioner (GAO/HEHS-97-53, Feb. 20, 1997). | Why GAO Did This Study
Pursuant to a congressional request, GAO discussed the Social Security Administration's (SSA) progress in addressing its management challenges, focusing on: (1) SSA's need to strengthen its research and policy capacity in order to address the future solvency of the Social Security Trust Funds; (2) SSA's management and oversight problems with its Supplemental Security Income (SSI) program; (3) its disability programs; and (4) its future workload demands.
What GAO Found
GAO noted that: (1) SSA recognizes the challenges GAO has identified and has taken or plans to take steps to address many of these problems; (2) in 1997, for example, SSA conducted even more eligibility reviews of disabled beneficiaries than it had planned; (3) also, after changes in the childhood disability program were enacted, SSA rapidly reviewed the cases of over 260,000 children receiving SSI benefits; (4) nevertheless, the pace at which the agency is moving does not seem adequate to resolve most of its challenges within a meaningful timeframe; (5) for example, SSA's efforts to bolster its research, evaluation, and policy analysis capabilities have a long lead time before useful products will be available; (6) in the meantime, SSA will not be able to fully contribute to the current debate on social security reform; (7) in addition, in some areas, SSA's efforts have also been too limited; (8) its steps to date, for example, to address deep-seated problems in its SSI program have been piecemeal and have not addressed the root causes of the SSI problems; and (9) given the long-standing nature of challenges SSA faces and their far-reaching implications for current and future beneficiaries, the new Commissioner will need to assert strong leadership to spell out the expected changes and marshal the agency's resources to translate SSA's plans into timely action. |
gao_GAO-10-609T | gao_GAO-10-609T_0 | These activities include (1) ensuring compliance with BSA requirements to report suspicious activity, (2) collecting and storing reported information, and (3) taking enforcement actions or conducting investigations of criminal financial activity. In 1996, FinCEN required banks and other depository institutions to report, on a SAR form, certain suspicious transactions involving possible violations of law or regulation, including money laundering. Law enforcement agencies housed in DOJ and the Department of Homeland Security use SARs for investigations of money laundering, terrorist financing, and other financial crimes. Federal and multiagency law enforcement teams, which may include state and local law enforcement representatives, also use SAR data to provide additional information about subjects during ongoing investigations. Multiple Factors Contributed to Increases in Depository Institutions’ SAR Filings
From 2000 through 2007, depository institutions filed an increasing number of SARs each year and representatives from federal regulators, law enforcement, and depository institutions with whom we spoke attributed the increase to a number of factors. According to FinCEN data, SAR filings by depository institutions increased from approximately 163,000 in 2000 to more than 732,000 in 2008. Representatives of federal banking regulators, law enforcement agencies, and depository institutions most frequently attributed the increase to two factors: technological advances and the effect of public enforcement actions on institutions. According to the representatives, automated transaction monitoring systems can flag multiple indicators of suspicious activity and identify much more unusual activity than could be identified manually. The representatives suggested additional factors as contributing to the increase, including greater awareness of BSA requirements after September 11, 2001, more regulator guidance for BSA examinations, and more BSA-related training at the institutions. FinCEN and Law Enforcement Agencies Have Acted to Educate Filers about The Usefulness of SARs and Improve the Quality of Their Filings
FinCEN and law enforcement agencies have taken multiple actions to educate filers about SARs usefulness and improve the quality of SAR filings. Since 2000, FinCEN has issued written products with the purpose of educating filers and making filings more useful to law enforcement. FinCEN representatives regularly participate in outreach events on BSA and anti- money laundering issues, including events on SARs. Federal law enforcement agency representatives said they improved SARs’ usefulness by conducting outreach events and establishing relationships with depository institutions in their local areas to communicate with staff about crafting useful SAR narratives. Federal Agencies Use SARs in a Variety of Ways and Have Taken a Number of Actions in Recent Years to Make Better Use of Them
FinCEN, law enforcement agencies, and banking regulators use SARs in investigations and depository institution examinations and took steps in recent years to make better use of them. FinCEN uses SARs to provide a number of public and nonpublic analytical products to law enforcement agencies and depository institution regulators. FinCEN’s Initial Steps in New Form Revision Process Did Not Include Some Important Collaborative Practices and Mechanisms
We reported in 2009 that FinCEN encountered a number of problems in its 2006 revision of the SAR form and in 2008, developed a new process for form revisions. In 2008, FinCEN developed a new process that it planned to use in future revisions of BSA forms, including SARs. Early documentation for the process suggested some greater stakeholder involvement at early stages, but subsequent documentation we reviewed did not indicate that FinCEN fully incorporated certain GAO-identified practices that can enhance and sustain collaboration among federal agencies. We recommended that the Secretary of the Treasury direct the Director of FinCEN to further develop and document its strategy to fully incorporate certain of these practices into the revision process and distribute that documentation to all stakeholders. For example, in addition to collaboration with IRS information technology staff we previously identified, current documentation indicates that FinCEN has collaborated in more detail with federal law enforcement agency representatives, federal financial regulators, representatives from SAR review teams and other multiagency law enforcement teams, and prosecutors to determine the content of a revised SAR form. However, because FinCEN has not yet completed implementation of its form revision process, it is too soon to determine the effectiveness of the process. | Why GAO Did This Study
To assist law enforcement agencies in their efforts to combat money laundering, terrorist financing, and other financial crimes, the Bank Secrecy Act (BSA) requires financial institutions to file suspicious activity reports (SAR) to inform the federal government of transactions related to possible violations of law or regulation. Depository institutions have been concerned about the resources required to file SARs and the extent to which SARs are used. The Subcommittee asked GAO to discuss our February 2009 report on suspicious activity reporting. Specifically, this testimony discusses (1) factors affecting the number of SARs filed, (2) actions agencies have taken to improve the usefulness of SARs, (3) federal agencies' use of SARs, and (4) the effectiveness of the process used to revise SAR forms. To respond to the request, GAO relied primarily on the February 2009 report titled Bank Secrecy Act: Suspicious Activity Report Use Is Increasing, but FinCEN Needs to Further Develop and Document Its Form Revision Process (GAO-09-226), and updated it with additional information provided by FinCEN. In that report, GAO recommended that FinCEN work to further develop a strategy that fully incorporates certain GAO-identified practices to enhance and sustain collaboration among federal agencies into the forms-change process.
What GAO Found
In 2000 through 2008, total SAR filings by depository institutions increased from about 163,000 to 732,000 per year; representatives from federal regulators, law enforcement, and depository institutions with whom GAO spoke attributed the increase mainly to two factors. First, automated monitoring systems can flag multiple indicators of suspicious activities and identify significantly more unusual activity than manual monitoring. Second, several public enforcement actions against a few depository institutions prompted other institutions to look more closely at client and account activities. Other factors include institutions' greater awareness of and training on BSA requirements after September 11, 2001 and more regulator guidance for BSA examinations. FinCEN and law enforcement agencies have taken actions to improve the quality of SAR filings and educate filers about their usefulness. Since 2000, FinCEN has issued written products with the purpose of making SAR filings more useful to law enforcement. FinCEN and federal law enforcement agency representatives regularly participate in outreach on BSA/anti-money laundering, including events focused on SARs. Law enforcement agency representatives said they also establish relationships with depository institutions to communicate with staff about crafting useful SAR narratives. FinCEN, law enforcement agencies, and financial regulators use SARs in investigations and financial institution examinations and have taken steps in recent years to make better use of them. FinCEN uses SARs to provide public and nonpublic analytical products to law enforcement agencies and depository institution regulators. Some federal law enforcement agencies have facilitated complex analyses by using SAR data with their own data sets. Federal, state, and local law enforcement agencies collaborate to review and start investigations based on SARs filed in their areas. Regulators use SARs in their examination process to assess compliance and take action against abuse by depository institution insiders. After revising a SAR form in 2006 that could not be used because of information technology limitations, in 2008, FinCEN developed a new process for revising BSA forms, including SARs, that may increase collaboration with some stakeholders, including some law enforcement groups concerned that certain of the 2006 revisions could be detrimental to investigations. Available documentation on the process did not detail the degree to which the new process would incorporate GAO-identified best practices for enhancing and sustaining federal agency collaboration. For example, it did not specify roles and responsibilities for stakeholders or depict monitoring, evaluating, and reporting mechanisms. According to FinCEN officials, it is taking some additional steps toward obtaining greater collaboration with law enforcement agency representatives, prosecutors, and multi-agency law enforcement teams and others to determine the contents of the form, but it is too soon to determine the effectiveness of the process. |
gao_AIMD-95-77 | gao_AIMD-95-77_0 | This is an important gain, and the increased use of electronic claims submission should be encouraged; however, this method also increases the need for more innovative controls to curtail fraud. For example, to avoid detection by this technology, a fraudulent provider may have to ensure that (1) the bills submitted for a patient are for services consistent with other treatments received by the patient, (2) the sequence and timing of the patient’s Medicare bills makes sense, and (3) referring providers listed on claims forms are also billing for that patient’s care. The antifraud system used by PBS allows the carrier with the opportunity to identify fraudulent patterns of billing behavior. Rising Medicare Fraud in Florida Offers Opportunity for Operational Test of Antifraud Technology
Despite efforts to halt rising fraud, information from HCFA, law enforcement agencies, carriers, and health insurance organizations, indicates that Medicare fraud in Florida has mushroomed out of control over the past few years and may be costing taxpayers hundreds of millions of dollars every year. The South Florida area has been a particular target of fraud against Medicare. The workgroup has undertaken the “South Florida Project” to identify specific problems and recommend corrections. If Medicare is to be proactive in detecting and preventing fraud, it must continually modify its systems’ capabilities to keep pace with new fraud schemes and the changing health care environment. As our report discusses, while these systems have some capabilities that may identify potential fraud, including suspending duplicate claims, these systems were primarily designed to process and pay Medicare claims. 4. 5. 6. A recorded menu will provide information on how to obtain these lists. | Why GAO Did This Study
Pursuant to a congressional request, GAO provided information on how the Medicare program detects and prevents fraud, focusing on: (1) the tools Medicare uses, as well as the other available technologies, to combat fraudulent billing; and (2) rising Medicare fraud in south Florida and the actions being taken to mitigate the problem.
What GAO Found
GAO found that: (1) Medicare's controls against fraud have not kept pace with the rising number of claims processed; (2) while electronic claims processing is critical for efficiency, the extreme volume of Medicare claims requires more innovative controls to curtail fraud; (3) existing Medicare controls have inherent limitations in detecting attempted fraud, since they are designed primarily to identify overutilized services; (4) there are new antifraud systems available to private insurers which recognize patterns in paid claims data and identify fraudulent relationships; (5) it is believed that these systems may be cost-beneficial in combatting emerging types of fraud; and (6) south Florida has been victimized by new types of fraud, resulting in the Health Care Financing Administration's (HCFA) formation of an interagency workgroup to identify specific problems and coordinate enforcement actions. |
gao_GAO-05-631T | gao_GAO-05-631T_0 | Under this presidential directive, DHS is now the lead agency for the chemical infrastructure sector, a change from national strategies issued in July 2002 and February 2003, which named EPA as the lead federal agency. Experts Agree that Chemical Facilities Are an Attractive Target for Terrorists
Experts agree that the nation’s chemical facilities present an attractive target for terrorists intent on causing massive damage. Terrorist attacks involving the theft or release of certain chemicals could have a significant impact on the health and safety of millions of Americans. Similarly, a 2002 Brookings Institution report ranks an attack on toxic chemical plants behind only biological and atomic attacks in terms of possible fatalities. In addition to the potential loss of life, a terrorist attack on a chemical facility could also disrupt the local or regional economy or impact other critical infrastructures. Currently, no one has comprehensively assessed security across the nation at facilities that house chemicals. In total, about 15,000 RMP facilities produce, use, or store more than threshold amounts of one or more of the 140 toxic and flammable chemicals that EPA has estimated pose the greatest risk to human health and the environment if accidentally released into the air. For example, about 2,000 of these facilities are community water systems that are part of the water infrastructure sector. Some facilities may be at higher risk of a terrorist attack than others because of the chemicals they house and their proximity to population centers. These estimates include the residential population located within the range of a toxic gas cloud produced by a “worst-case” chemical release, called the “vulnerable zone.” According to 2003 EPA data, 123 chemical facilities located throughout the nation had toxic “worst-case” scenarios where more than one million people would be in the “vulnerable zone” and could be at risk of exposure to a cloud of toxic gas. While officials believe these scenarios are overstated, there are situations where an attack could result in larger consequences. Few Federal Requirements Address Security at the Nation’s Chemical Facilities
Currently, few federal requirements address security at U.S. chemical facilities. While some chemical facilities must comply with the Public Health Security and Bioterrorism Response Act of 2002 (Bioterrorism Act) and the Maritime Transportation Security Act of 2002 (MTSA), many are not subject to any federal security requirements. According to the Coast Guard, 238 chemical facilities are located on waterways and handle “bulk liquid chemicals” are subject to MTSA requirements. While the federal government does not require all chemical facilities to take security measures to protect against a terrorist attack, it does impose safety and emergency response requirements on chemical facilities, which may incidentally reduce the likelihood and mitigate the consequences of terrorist attacks. DHS’ Information Analysis and Infrastructure Protection Directorate has a number of initiatives underway to develop a strategy for protecting the chemical sector, identify high-risk facilities, and integrate chemical sector protection efforts into a national program. Without specific authority to require that chemical facilities make security improvements, DHS has worked voluntarily with the chemical industry to provide financial assistance, share information about critical infrastructure protection, provide training and exercises, and assess facility vulnerabilities and recommend security improvements. The primary security initiative undertaken by the industry directs participating chemical facilities to assess vulnerabilities and develop security plans to address them. Despite these efforts, the overall extent of security preparedness at chemical facilities is unknown. In this context, a comprehensive national chemical security strategy that would, among other actions, identify high-risk facilities and require facilities to assess their vulnerabilities and take any needed corrective actions would help to ensure that security vulnerabilities at chemical facilities are addressed. Both the federal government and the chemical industry have taken steps to improve security at chemical facilities. However, these efforts have not involved all facilities with significant quantities of hazardous chemicals on site. | Why GAO Did This Study
Terrorist attacks on chemical facilities could severely damage the U.S. economy and public health. About 15,000 facilities produce, use, or store large amounts of chemicals that pose the greatest risk to human health and the environment. While the Environmental Protection Agency (EPA) formerly had the lead role in federal efforts to ensure chemical facility security, the Department of Homeland Security (DHS) is now the lead federal agency responsible for coordinating government and private efforts to protect these facilities from terrorist attacks. This testimony is based on GAO's past work on chemical facility security and focuses on (1) the attractiveness of chemical facilities as terrorist targets, (2) their diversity and risks, (3) federal security requirements for these facilities, and (4) federal and industry efforts to improve facility security.
What GAO Found
Experts agree that the nation's chemical facilities are attractive targets for terrorists. The theft or release of certain chemicals could disrupt the local economy, impact other critical infrastructures that rely on chemicals, or impact the health and safety of millions of Americans. For example, a 2002 Brookings Institution report ranks an attack on toxic chemical plants behind only biological and atomic attacks in terms of possible fatalities. While several efforts are underway, no one has yet comprehensively assessed security at the nation's chemical facilities. The chemical sector includes a variety of facilities and risks. The 15,000 facilities with large amounts of the most dangerous chemicals include chemical manufacturers, water supply facilities, and fertilizer facilities, among others. Some facilities may be at higher risk of a terrorist attack than others because of the specific chemicals on site and their proximity to population centers. According to 2003 EPA data, 123 U.S. chemical facilities had "worst-case" scenarios where more than one million people could be at risk of exposure to a cloud of toxic gas. While EPA and DHS believe that these scenarios overstate the potential consequences of a chemical release, there are situations where an attack could have potentially more severe consequences. Only about one-sixth of the 15,000 facilities with large amounts of dangerous chemicals are covered by federal security requirements. About 2,000 community water systems and 238 facilities that are located on waterways and handle "bulk liquid chemicals" must conduct vulnerability assessments, among other things, under the Public Health Security and Bioterrorism Response Act of 2002 and the Maritime Transportation Security Act of 2002, respectively. However, the federal government places requirements on chemical facilities to address accidental releases, which may also reduce the likelihood and mitigate the consequences of terrorist attacks. A number of federal and industry efforts are underway to enhance chemical facility security. DHS is developing a strategy to protect the chemical sector, identify high-risk facilities, and integrate chemical sector protection efforts into a national program. With no authority to require facilities to improve security, DHS has provided the industry with financial assistance, information, and training, assessed facility vulnerability, and recommended security improvements. About 1,100 facilities participate in a voluntary industry effort in which they assess vulnerabilities, develop security plans, and undergo a third party verification that the facilities implemented the identified physical security enhancements. The extent to which the remaining facilities are addressing security is unclear and the extent of chemical facilities' security preparedness is unknown. In this context, a comprehensive national strategy to identify high-risk facilities and require facilities to assess their vulnerabilities, among other actions, would help to ensure that security vulnerabilities at chemical facilities are addressed. |
gao_GAO-06-896T | gao_GAO-06-896T_0 | According to federal officials, cooperating entities traditionally shared suppression costs on the basis of the proportion of acres burned in each entity’s protection area because the method was relatively easy to apply and works well when the lands affected by a wildland fire are similar. Unclear Guidance and Inconsistent Application of Cost- Sharing Methods Can Have Significant Financial Consequences for Entities Involved
Federal and nonfederal entities included in our review used a variety of methods to share the costs of fighting fires that burned or threatened both federal and nonfederal lands and resources. Although master agreements between federal and nonfederal entities typically listed several cost- sharing methods, the agreements often lacked clear guidance for officials to follow in deciding which cost-sharing method to apply to a specific fire. The type of cost-sharing method chosen is important because it can have significant financial consequences for the federal and nonfederal entities involved. Master Agreements Provided Cost-Sharing Framework, but Those We Reviewed Lacked Clear Guidance
Master agreements provide the framework for federal and nonfederal entities to work together and share the costs of fighting wildland fires. The costs for the two fires that we reviewed in Utah were shared using two different methods, although both fires had similar characteristics. Methods used to share suppression costs for fires with similar characteristics also varied among states. In Colorado, federal and nonfederal officials agreed to share suppression costs for both of the fires we reviewed in that state using guidance they had developed and officially adopted in 2005, called “fire cost share principles.” Under these principles, aviation costs for fires burning in the wildland-urban interface are shared equally for 72 hours, and other fire suppression costs, such as firefighting personnel and equipment, are shared on the basis of acres burned. Current Cost-Sharing Framework Raises Several Concerns
Federal and nonfederal agency officials we interviewed raised a number of concerns about the current cost-sharing framework. Finally, some federal officials expressed concern that the current framework for sharing costs insulates state and local governments from the cost of protecting the wildland-urban interface, thereby reducing their incentive to take steps that could help mitigate fire risks and reduce suppression costs in the wildland-urban interface. Lack of Clear Guidance Can Lead to Difficulties in Sharing Costs
Some federal officials said that the lack of clear guidance can make it difficult to agree to use a cost-sharing method that they believe equitably distributes suppression costs between federal and nonfederal entities, particularly for fires that threaten the wildland-urban interface. As discussed, different cost-sharing methods were used for the two fires we reviewed in Utah, even though both fires required substantial suppression efforts to protect the wildland-urban interface. Nonfederal Officials Were Concerned about Increased Costs and Equity among States
While federal officials expressed the need for further guidance on how to share costs, nonfederal officials were concerned that the emergence of alternative cost-sharing methods was leading state and local entities to bear a greater share of suppression costs than in the past, and they questioned whether such an increase was appropriate. Federal and nonfederal officials said that because some states use particular cost-sharing methods more often than other states, the proportion of costs borne by federal and nonfederal entities likely varies from state to state, resulting in nonfederal entities’ paying a higher proportion of costs in some states and a lower proportion in other states. Officials’ Concerns May Reflect Ambiguity over Financial Responsibilities
On the basis of our review of previous federal reports and interviews with federal and nonfederal officials, we believe that the concerns we identified may reflect a more fundamental issue—that federal and nonfederal firefighting entities have not clearly defined their fundamental financial responsibilities for wildland fire suppression, particularly those for protecting the wildland-urban interface. | Why GAO Did This Study
Wildland fires can burn or threaten both federal and nonfederal lands and resources, including homes in or near wildlands, an area commonly called the wildland-urban interface. Agreements between federal and nonfederal firefighting entities provide the framework for working together and sharing the costs of fire suppression efforts. GAO was asked to (1) review how federal and nonfederal entities share the costs of suppressing fires that burn or threaten both of their lands and resources and (2) identify any concerns that these entities may have with the existing cost-sharing framework. This testimony is based on GAO's May 2006 report Wildland Fire Suppression: Lack of Clear Guidance Raises Concerns about Cost Sharing between Federal and Nonfederal Entities (GAO-06-570).
What GAO Found
Federal and nonfederal entities used a variety of methods to share the costs of fighting wildland fires affecting both of their lands and resources. Cooperative agreements between federal and nonfederal firefighting entities--which are developed and agreed to by the entities involved--provide the framework for cost sharing and typically list several cost-sharing methods available to the entities. The agreements GAO reviewed, however, often lacked clear guidance for federal and nonfederal officials to use in deciding which method to apply to a specific fire. As a result, cost-sharing methods were applied inconsistently within and among states, even for fires with similar characteristics. For example, GAO found that in one state, the costs for suppressing a large fire that threatened homes were shared solely according to the proportion of acres burned within each entity's area of fire protection responsibility, a method that traditionally has been used. Yet, costs for a similar fire within the same state were shared differently. For this fire, the state agreed to pay for certain aircraft and fire engines used to protect the wildland-urban interface, while the remaining costs were shared on the basis of acres burned. In contrast to the two methods used in this state, officials in another state used yet a different cost-sharing method for two similar large fires that threatened homes, apportioning costs each day for personnel, aircraft, and equipment deployed on particular lands, such as the wildland-urban interface. The type of cost-sharing method ultimately used is important because it can have significant financial consequences for the entities involved, potentially amounting to millions of dollars. Both federal and nonfederal agency officials raised a number of concerns about the current cost-sharing framework. First, some federal officials were concerned that because guidance is unclear about which cost-sharing methods are most appropriate in particular circumstances, it can be difficult to reach agreement with nonfederal officials on a method that all parties believe distributes suppression costs equitably. Second, some nonfederal officials expressed concerns that the emergence of alternative cost-sharing methods is causing nonfederal entities to bear a greater share of fire suppression costs than in the past. In addition, both federal and nonfederal officials believed that the inconsistent application of these cost-sharing methods has led to inequities among states in the proportion of costs borne by federal and nonfederal entities. Finally, some federal officials also expressed concern that the current framework for sharing costs insulates state and local governments from the increasing costs of protecting the wildland-urban interface. Therefore, nonfederal entities may have a reduced incentive to take steps that could help mitigate fire risks, such as requiring homeowners to use fire-resistant materials and landscaping. On the basis of a review of previous federal reports and interviews with federal and nonfederal officials, GAO believes that these concerns may reflect a more fundamental issue--that federal and nonfederal entities have not clearly defined their basic financial responsibilities for wildland fire suppression, particularly those for protecting the wildland-urban interface. |
gao_GAO-10-6 | gao_GAO-10-6_0 | Some state requirements or guidance for voting in long-term care facilities may help to protect against voter fraud and undue influence, according to researchers. A Large Majority of States Reported Having Requirements or Guidance to Facilitate Voting for Long-term Care Facility Residents
According to our survey, 44 states reported having at least one requirement or guidance to facilitate voting for long-term care facility residents. The most commonly reported state requirements or guidance were to require or provide guidance to election officials to provide long- term care facility residents with accommodations to assist them in absentee voting processes, provide accommodations for voter registration, and provide special accommodations to assist elderly voters in meeting voter identification requirements (see fig. About Half of All States Reported Training Local Officials, While Fewer Reported Conducting Oversight of Local Adherence to State Requirements or Guidance
While most states reported that they provide general training to local election officials on assisting voters with disabilities, about half of the states reported providing training to local election officials specifically on state requirements or guidance to facilitate voting for long-term care facility residents. Among the states, 17 conducted one or more oversight activities to ensure localities were adhering to state long-term care facility voting requirements or following state long-term care facility voting guidance. Some researchers believe that absentee voting, especially by long-term care facility residents who require assistance casting their absentee ballots, is susceptible to voter fraud and undue influence. Specifically, they reported facilitating voting for long-term facility residents by supporting facility staff in assisting residents with the voting process and through direct voting services to facility residents, some of which may help to ensure voting integrity. Most Localities We Surveyed Reported Providing Long-term Care Facilities with Voting Guidance or Other Information and Other Voting Assistance, Some of Which May Help to Ensure Voting Integrity
Localities we surveyed reported taking a number of actions to facilitate the voting process in long-term care facilities. Localities We Visited Used a Range of Strategies to Facilitate and Protect Voting for Long-term Care Facility Residents and Faced Some Implementation Challenges
The seven localities we visited commonly implemented targeted efforts to facilitate voting for long-term care facility residents for the November 2008 federal election. Specifically, these strategies included coordination with stakeholders, such as long-term care facility staff and others, deployment of election teams, and implementation of procedures to protect and ensure voting integrity. In some localities we visited, local election workers and facility staff faced challenges in providing voting assistance to residents with cognitive limitations. However, at the same time, states and localities vary in the extent to which they ensure that the ballots of these voters in long-term care facilities are not fraudulently completed by someone else, or that these voters are not subjected to undue influence by facility staff or family members. Appendix I: Scope and Methodology
Our objectives were to identify the actions taken to facilitate and protect voting for long-term care facility residents at (1) the state level and (2) the local level. In addition, there are several federal laws that provide broad protections of the rights of people with disabilities, which indirectly apply to voting. | Why GAO Did This Study
Voting is fundamental to the U.S. democratic system and federal law provides broad protections for people with disabilities, including older voters. Many long-term care facility residents, who often have physical or cognitive impairments, vote by absentee or early ballot. Concerns have been raised about the extent to which states and localities are helping the increasing number of facility residents exercise their right to vote, especially those requiring voting assistance, who may be subject to undue influence or unauthorized completion of their ballot by facility staff or relatives. Given these concerns, GAO was asked to identify the actions taken to facilitate and protect voting for long-term care facility residents at (1) the state level and (2) the local level. To address these objectives, GAO interviewed federal officials, national organizations, and researchers; reviewed Election Assistance Commission (EAC) guidance on voting in long-term care facilities; surveyed state and local election officials; and visited seven localities in the weeks prior to the November 2008 federal election to observe the voting process in long-term care facilities.
What GAO Found
Most states have requirements or guidance to facilitate voting for long-term care facility residents, and some states also provide training and conduct oversight of localities' adherence to state requirements or guidance. States reported that they most commonly provided requirements or guidance for accommodations for absentee voting for residents of long-term care facilities, followed by accommodations for voter registration and voter identification procedures. Almost one-half of the states reported providing training to local election officials specifically on state requirements or guidance to facilitate voting for long-term care facility residents. Additionally, 17 states reported that they conducted one or more oversight activities to ensure that localities were adhering to state long-term care voting requirements or guidance. According to researchers, some of these state requirements or guidance for voting in long-term care facilities may help to protect against voter fraud and undue influence. Localities also used a variety of actions to facilitate voting for long-term care facility residents, including some that may decrease the likelihood of fraud and undue influence. In our survey, 78 of the 92 localities reported taking actions to facilitate voting for long-term care facility residents. The most common actions included supporting facility staff in assisting residents with the absentee or early voting process, including providing staff with early and absentee voting information or guidance. Localities also reported providing services directly to residents. For example, close to one-half of localities we surveyed brought election officials to facilities to assist with the voting process. The seven localities we visited prior to the November 2008 federal election used a range of strategies to facilitate voting for long-term care facility residents, including coordination with facility staff and other stakeholders; the deployment of election teams to facilities; and implementation of procedures to protect and ensure voting integrity, such as requiring bipartisan voting assistance and signed affidavits to document voting assistance. Some local officials reported challenges to implementing these strategies, such as difficulty providing voting assistance to residents with cognitive impairments. |
gao_HEHS-97-15 | gao_HEHS-97-15_0 | VA Pharmacies Provide an Assortment of OTC Products
VA physicians prescribed OTC products for veterans more than 7 million times in fiscal year 1995, accounting for about one-fifth of all VA prescriptions. The most frequently dispensed OTC products included (1) the medications aspirin, acetaminophen, and insulin; (2) the dietary supplements Sustacal and Ensure; and (3) the supplies alcohol prep pads, lancets, and glucose test strips. Other Health Care Plans Provide Few, If Any, OTC Products
Unlike VA, other public and private health care plans cover few, of any, OTC products for their beneficiaries. VA recovered an estimated $7 million of total OTC costs (about 4 percent) through veterans’ copayments. Opportunities to Reduce Federal Expenditures
A variety of actions could help reduce the level of federal resources devoted to the provision of OTC products. VA pharmacies could dispense considerably fewer OTC products. Reducing OTC Product Handling Costs
VA pharmacies could significantly reduce their OTC product dispensing costs of $48 million by providing more economical quantities of medications and supplies. As previously discussed, each VA facility offers a different assortment of OTC products. Over the last 3 years, 45 pharmacies have reduced the number of OTC products provided to veterans. Interestingly, wide disagreement exists within VA about providing OTC products on an outpatient basis. Recommendations to the Secretary
We recommend that the Secretary of Veterans Affairs require the Under Secretary of Health to limit OTC products for nonservice-connected conditions to those most directly related to VA hospitalizations or those considered most essential to prevent hospitalization; standardize the availability of OTC products to give veterans more consistent levels of access to them systemwide; reduce VA’s dispensing costs for OTC products by (1) providing, when appropriate, more economical quantities (more than a 90-day supply) of medications and supplies and (2) limiting mail service to certain situations; require veterans to make copayments at the time OTC products are direct facilities to apply the statutory income threshold to determine which veterans owe medication copayments. | Why GAO Did This Study
GAO reviewed the Department of Veterans Affairs' (VA) provision of over-the-counter (OTC) medications, medical supplies, and dietary supplements to veterans, focusing on: (1) what OTC products VA pharmacies dispense; (2) how VA provision of OTC products compares with that of non-VA health care providers; (3) how much VA spends on OTC products and how much VA recovers through veterans' copayments; and (4) opportunities to reduce federal expenditures for OTC products.
What GAO Found
GAO found that: (1) all VA pharmacies provide some OTC products that are available through other local outlets; (2) the most frequently dispensed OTC products were medications, dietary supplements, and medical supplies; (3) individual VA pharmacies offer a different assortment of OTC products; (4) some pharmacies restrict which veterans may receive OTC products or in what quantity; (5) other public and private health care plans cover few, if any, OTC products for beneficiaries; (6) in fiscal year (FY) 1995, VA pharmacies dispensed OTC products more than 15 million times at an estimated cost of $165 million, including $48 million in handling costs; (7) VA recovered about $7 million through veterans' copayments; and (8) to reduce the resources devoted to dispensing OTC products, VA could more narrowly define when to provide OTC products, more efficiently dispense OTC products and collect copayments, and further reduce the number of OTC products dispensed on an outpatient basis. |
gao_GAO-10-57 | gao_GAO-10-57_0 | 1). Grant Monitoring at Education
Education describes its grant management processes as a “cradle-to-grave” strategy. Education’s grant monitoring practices and procedures require that program office staff undertake numerous activities to monitor grantees for compliance with administrative, financial, and performance regulations and requirements to protect against fraud, waste, and abuse of federal resources. Education Has Made Uneven Progress in Implementing a Department-wide, Risk-based Approach to Grant Monitoring
Education allows individual program offices to develop their own procedures for assessing grantee risk. While the department has not yet provided department-wide guidance on grantee risk assessment, the Risk Management Service (RMS) is planning to introduce several new efforts designed to help in this area. In 2007, the department’s Grants Pilot Project Team recommended the establishment of a coordinated, comprehensive, and department-wide approach to risk-based grant monitoring for discretionary and formula grants. The Secretary created RMS in October 2007 to work with all components of the department to ensure that each office has effective procedures in place to assess and mitigate risk among its grantees. Specifically, RMS is to develop tools to assess grantee risk for use throughout the department and train department staff to use the tools. While some of Education’s program offices are making progress assessing and managing grantee risk as discussed above, staff in three other program offices described significant limitations of the risk assessment process in place for their grant programs: Program specialists in one office told us that experienced program specialists rely on their skills and experience to determine what to look for. Limitations in Financial Expertise and Training Hinder Education’s Ability to Effectively Monitor Grantees
Directors and supervisors in the program offices we visited noted that while their staff generally have the expertise needed to perform their monitoring duties, limited financial expertise and training hinder effective monitoring of grantees’ compliance with financial requirements. While monitoring protocols aid in reviewing compliance with basic financial requirements, the ability to verify or evaluate what grantees report about their use of funds is limited by a lack of expertise. 1) on financial compliance issues. Education has not assessed the effectiveness of using contractors to conduct fiscal monitoring. 3). While management staff in some offices said they share information on promising practices through informal contacts and networks, managers in four of the offices we visited said that a means to share such information more systematically would be helpful to all offices and a good way to improve grant monitoring practices. Conclusions
Since it created RMS in October 2007, Education has made progress in developing a risk-based approach to monitoring its more than 18,000 grantees. Appendix I: Comparison of Grant Funding in the Department of Education’s Principal and Program Offices
Each pie chart in figure 4 represents a principal office in Education that awards grants to state and local educational agencies, institutions of higher education, and other eligible entities. The unlabeled slices represent the program offices that were not included in our review. | Why GAO Did This Study
The Department of Education (Education) awards about $45 billion in grants each year to school districts, states, and other entities. In addition, the American Recovery and Reinvestment Act of 2009 provided an additional $97 billion in grant funding. In a series of reports from 2002 to 2009, Education's Inspector General cited a number of grantees for failing to comply with financial and programmatic requirements of their grant agreements. GAO was asked to determine: (1) what progress Education has made in implementing a risk-based approach to grant monitoring, (2) to what extent Education's program offices have the expertise necessary to monitor grantees' compliance with grant program requirements, and (3) to what extent information is shared and used within Education to ensure the effectiveness of grant monitoring. To do this, GAO reviewed agency documentation related to Education's internal controls and interviewed senior Education officials and staff in 12 of the 34 offices that monitor grants.
What GAO Found
In October 2006, Education began to look at ways to improve the efficiency and effectiveness of the department's grant management processes; in particular, it sought ways to more effectively monitor its grants after they were made. In 2007, Education created the Risk Management Service (RMS) to work with all components of the department to ensure that each office has an effective risk management strategy in place. Effective monitoring protocols and tools based on accepted control standards are key to ensuring that waste, fraud, and abuse are not overlooked and program funds are being spent appropriately. Such tools include identifying the nature and extent of grantee risks and managing those risks, having skilled staff to oversee grantees to ensure they are using sound financial practices and meeting program objectives and requirements, and using and sharing information about grantees throughout the organization. Our review of Education's current grant monitoring processes and controls found that it: (1)Has made uneven progress in implementing a department-wide, risk-based approach to grant monitoring. Education has not disseminated department-wide guidance on grantee risk assessment, but it has planned some new efforts in this area. In the absence of guidance on a department-wide risk assessment strategy, individual program offices have developed their own strategies for assessing and managing risk that vary in rigor. (2) Has limited financial expertise and training, hindering effective monitoring of grantees' compliance with financial requirements. Education has monitoring tools that aid in reviewing basic financial compliance, but the lack of staff expertise limits the ability to probe more deeply into grantees' use of funds. (3) Lacks a systematic means of sharing information on grantees and promising practices in grant monitoring throughout the department. These shortcomings can lead to weaknesses in program implementation that ultimately result in failure to effectively serve the students, parents, teachers, and administrators those programs were designed to help. |
gao_HEHS-99-24 | gao_HEHS-99-24_0 | However, DOD did not require all of its animal research activities, such as those involving clinical training or investigations, to be reported to the DTIC database. Problems With DOD’s Animal Use Information
The fiscal year 1996 BRD had a number of problems, including inaccurate and incomplete disclosure of information about DOD’s animal use projects. Alternatively, we identified 19 projects in the fiscal year 1996 BRD related to medical research for biological defense that did not involve the use of animals that year (although they did involve animals in other years). For instance, it does not provide the numbers and species of animals used for DOD projects nor does it include information about the pain to which animals were subjected. We also found variations in the levels of specificity reported on the projects in the BRD. Specifically, the Secretary should improve the data collection and reporting procedures to ensure that the BRD contains accurate, detailed information about individual animal research projects, including information on the number and species of animals used in each project, the research goal and justification, and the pain categories for each project as identified in House Report 103-499. Scope and Methodology
In the course of our work examining issues related to DOD’s oversight of its animal research programs, we are reviewing the BRD because it contains information on individual animal use projects. | Why GAO Did This Study
Pursuant to a congressional request, GAO examined several issues related to the Department of Defense's (DOD) administration of its animal research programs, focusing on: (1) the extent to which DOD's research using animals addresses validated military objectives, does not unnecessarily duplicate work done elsewhere, and incorporates methods to reduce, replace, and refine the use of animals; and (2) problems with the accuracy of information in the Biomedical Research Database (BRD).
What GAO Found
GAO noted that: (1) the BRD provides improved public access to information about DOD's use of animals in its research activities; (2) GAO found instances in which the information in the BRD was inaccurate, incomplete, and inconsistent, resulting in inadequate public disclosure; (3) specifically, the fiscal year 1996 BRD: (a) misstated the number of animal use projects because it omitted some projects that used animals and included others that did not involve animals; (b) did not include information, such as the numbers and types of animals used, that was identified in House Report 103-499; and (c) contained significant differences in specificity reported for the research projects; and (4) although GAO did not quantify the full extent of these problems, the problems it has identified suggest a need for DOD action to improve the accuracy and extent of the information in the database. |
gao_GGD-97-122 | gao_GGD-97-122_0 | Customer Service
IRS’ “Customer Service Vision” guides its efforts to improve customer service. 6, 1996). IRS, the Department of the Treasury, and the Office of Management and Budget needed to ensure that IRS’ information management initiatives are promptly and fully implemented;
Congress should consider limiting IRS funding for TSM to critical and cost-effective projects; and the National Commission on Restructuring the Internal Revenue Service would have a leading role in evaluating IRS’ operations and recommending organizational, management, and operating changes. This information updated what we had reported in 1993. Individual and Business Tax Issues
Tax Administration: Income Tax Treatment of Married and Single Individuals (GAO/GGD-96-175, Sept. 3, 1996). Accounts Receivable/ Collections
IRS Tax Collection Reengineering (GAO/GGD-96-161R, Sept. 24, 1996). Tax Expenditures and Preferences
Insular Areas Update (GAO/GGD-96-184R, Sept. 13, 1996). | Why GAO Did This Study
GAO summarized the studies it issued during fiscal year 1996 to Congress and the Internal Revenue Service (IRS) and the statements it made before Congress and the National Commission on Restructuring the Internal Revenue Service.
What GAO Found
GAO noted that it published 50 reports in 6 broad areas: (1) IRS management and budget; (2) individual and business tax issues; (3) customer service; (4) submission processing; (5) accounts receivable/collections; and (6) tax expenditures and preferences. |
gao_GAO-10-179 | gao_GAO-10-179_0 | DOD Organizations Have Issued Coordinated Plans and Established Processes and New Organizations to Facilitate the Drawdown from Iraq
A number of DOD organizations have issued orders outlining a phased drawdown from Iraq that meet the time frames set forth in the Security Agreement and presidential guidance, while being responsive to security conditions on the ground. In support of these plans, processes have been established to monitor, coordinate, and facilitate the retrograde of equipment out of Iraq. DOD organizations reported that their efforts to reduce personnel, retrograde equipment, and close bases in the initial months of the drawdown have exceeded targets. For example, since May 2009, the number of U.S. servicemembers in Iraq has been reduced by 5,300. While DOD’s progress since May 2009 has exceeded its targets, a large amount of personnel, equipment, and bases remain to be drawn down within the established timelines. To meet the presidential target of reducing the number of U.S. forces in Iraq to 50,000 by August 31, 2010, MNF-I must reduce its forces by almost 60 percent by next summer. Figure 2 below illustrates the numbers of U.S. forces, contractor personnel, tracked and wheeled vehicles, and bases that have been drawn down since the initiation of drawdown; that must be drawn down by the August 31, 2010, change of mission date; and that must be drawn down before December 31, 2011. Efficient Execution of the Drawdown Requires the Resolution of Several Key Issues
Efficient execution of the drawdown from Iraq may be complicated by crucial challenges regarding several unresolved issues that, if left unattended, may hinder MNF-I’s ability to meet the time frames set by the President, the Security Agreement, and MNF-I’s phased drawdown plan. These challenges include: contract services that have not been fully identified; potential costs and other concerns of transitioning key contracts that may outweigh potential benefits; longstanding shortages of contract oversight personnel; some key decisions about the disposition of equipment that have not yet been made; longstanding information technology system weaknesses; and a lack of precise visibility over some equipment. However, as GAO has previously reported, the drawdown of forces may create additional requirements for contracted support, and officials in Iraq have acknowledged that additional contractor personnel will be needed to provide services currently being provided by U.S. forces. Execution of the Drawdown Is Dependent Upon Key Decisions over the Disposition of Equipment
MNF-I’s execution of the drawdown from Iraq in accordance with established timelines depends on its obtaining clear guidance as to what equipment can and will be provided to the Government of Iraq and what will be retained by the U.S. military; identification of the mechanisms that are to be used to transfer equipment to the Government of Iraq; determinations of what will be done with certain types of non-standard equipment, such as Mine Resistant Ambush Protected vehicles (MRAP); and resolution of other decisions related to the Army’s modernization and reset plans. DOD’s Lack of Precise Visibility Over Its Inventory of Equipment and Shipping Containers Inhibits Planning for Retrograde from Iraq
The execution of the drawdown may also be affected by the lack of a complete and accurate inventory of three broad types of equipment. Concluding Observations
As I have stated today, much has been done in Iraq and Kuwait to facilitate the drawdown effort. | Why GAO Did This Study
The United States and the Government of Iraq have signed a Security Agreement calling for the drawdown of U.S. forces from Iraq. Predicated on that agreement and U.S. Presidential guidance, Multi-National Force-Iraq (MNF-I) has issued a plan for the reduction of forces to 50,000 U.S. troops by August 31, 2010, and a complete withdrawal of forces by the end of 2011. The drawdown from Iraq includes the withdrawal of approximately 128,700 U.S. troops, over 115,000 contractor personnel, the closure or transfer of 295 bases, and the retrograde of over 3.3 million pieces of equipment. Today's statement will focus on (1) the extent to which the Department of Defense (DOD) has planned for the drawdown in accordance with timelines set by the Security Agreement and presidential directive; and (2) factors that may impact the efficient execution of the drawdown in accordance with established timelines. This statement is based on GAO's review and analysis of DOD and MNF-I plans, and on interviews GAO staff members conducted with DOD officials in the United States, Kuwait, and Iraq. It also draws from GAO's extensive body of issued work on Iraq and drawdown-related issues.
What GAO Found
While DOD's primary focus remains on executing combat missions and supporting the warfighters in Iraq, several DOD organizations have issued coordinated plans for the execution of the drawdown within designated time frames. In support of these plans, processes have been established to monitor, coordinate, and facilitate the retrograde of equipment from Iraq. DOD's organizations have reported that their efforts to reduce personnel, retrograde equipment, and close bases have thus far exceeded targets; since May 2009, for example, DOD reports that the number of U.S. servicemembers in Iraq has been reduced by 5,300, and another 4,000 are expected to be drawn down in October. However, many more personnel, equipment items, and bases remain to be drawn down. For U.S. forces, contractor personnel, selected vehicles, and bases, the graphic below depicts drawdown progress since May 2009, as well as what remains to be drawn down by August 31, 2010 and December 31, 2011, respectively. Efficient execution of the drawdown from Iraq, however, may be complicated by crucial challenges that, if left unattended, may hinder MNF-I's ability to meet the time frames set by the President, the Security Agreement, and MNF-I's phased drawdown plan. First, DOD has yet to fully determine its future needs for contracted services. Second, the potential costs and other concerns of transitioning key contracts may outweigh potential benefits. Third, DOD lacks sufficient numbers of contract oversight personnel. Fourth, key decisions about the disposition of some equipment have yet to be made. Fifth, there are longstanding incompatibility issues among the information technology systems that may undermine the equipment retrograde process. And sixth, DOD lacks precise visibility over its inventory of some equipment and shipping containers. While much has been done to facilitate the drawdown effort, the efficient execution of the drawdown will depend on DOD's ability to mitigate these challenges. We will continue to assess DOD's progress in executing the drawdown from Iraq and plan to issue a report. |
gao_NSIAD-98-14 | gao_NSIAD-98-14_0 | Army Officials and Field Personnel Do Not Have Ready Access to Needed MWO Information
The Army does not currently maintain centralized information to track the status of equipment modifications. Army Headquarters Officials Do Not Have Information They Need to Properly Oversee the Program
Army headquarters and Army Materiel Command officials responsible for formulating the MWO program budget and for ensuring that upgraded and enhanced equipment is available to satisfy the Army’s force structure have limited information about what MWO funds have been spent, what equipment has been modified, and what equipment still needs to be modified. The lack of timely information on equipment configuration could have potential adverse effects. This occurs because program sponsors do not always order initial spare parts for the supply system when they procure MWO kits. In addition, program sponsors and supply system personnel do not always follow policies and procedures to ensure that supply system records are updated to show the addition of new items and the deletion of replaced items. When the supply system records are inaccurate, the Army’s budget may not reflect accurate requirements for new spare parts to repair and maintain modified weapon systems and equipment. Field Maintenance Personnel Experience Problems in Implementing the MWO Program
Field maintenance personnel cited numerous problems in modifying their weapon systems and equipment. For example, they stated that (1) the completion of multiple MWOs on the same piece of equipment is not always coordinated, or not all equipment is modified at the same time; (2) they do not always receive adequate notice of MWOs; and (3) modified equipment does not always work together with other equipment once the modification takes place. Army headquarters and Army Materiel Command officials believe these problems are also occurring because of their loss of oversight and control over the program and the inconsistent implementation of policies and procedures by program sponsors, especially in negotiating fielding plans with the affected organizations. As a result, the program was disrupted, and additional labor hours were expended, according to a National Guard official. Maintenance personnel also noted that inefficiencies had resulted when not all modifications were done at the same time. As a result, field maintainers have experienced difficulty in obtaining spare parts and current technical information and have experienced inefficiencies in getting their weapon systems and equipment modified. Recommendations
In considering the upcoming results of the MWO process action team, we recommend that the Secretary of the Army direct actions necessary to provide managers at all levels ready access to the information they need to oversee, manage, and implement the MWO program and to ensure compliance with Army policies and procedures; clarify regulations to ensure that program sponsors and supply system personnel provide proper logistical support for modified equipment, including (1) ordering appropriate initial spare parts when MWO kits are ordered, (2) updating technical information and providing it to units when MWO kits are installed, and (3) properly phasing out old spare parts and adding new items to its supply system; and establish an effective mechanism for program sponsors to coordinate and schedule their MWOs, among themselves and their customers, to reduce the amount of manpower and to minimize the reportable mission time required to complete the MWOs. | Why GAO Did This Study
Pursuant to a congressional request, GAO provided information on the Army's management of its modification work order (MWO) program, focusing on: (1) the availability of information needed by Army headquarters and field personnel to effectively oversee and manage the MWO program; (2) the availability of spare parts needed by personnel in the field to maintain modified equipment; and (3) field personnel's experiences in implementing the MWO program.
What GAO Found
GAO noted that: (1) Army headquarters officials and Army Materiel Command officials no longer have the information they need to effectively oversee and manage the MWO program; (2) this occurred because the centralized database to track installation and funding was discontinued; control over modification installation funding was transferred from the headquarters level to individual program sponsors; and the authority over configuration control boards, which ensured the completeness and compliance of MWOs with policy, was transferred to individual program sponsors; (3) as a result, Army officials do not have an adequate overview of the status of equipment modifications across the force, funding requirements, logistical support requirements, and information needed for deployment decisions; (4) the lack of information is also a problem at field units; (5) maintenance personnel have not always known which modifications should have been made to equipment or which modifications have actually been made; (6) in addition, maintainers of equipment have not always received the technical information they need in a timely manner to properly maintain modified equipment; (7) maintenance personnel in the field have had difficulty obtaining spare parts to maintain modified equipment because program sponsors frequently had not ordered initial spare parts when they acquired modification kits; (8) Army officials believe these problems occurred because they lost oversight and control of the program and policies and procedures were not being consistently applied by the individual program sponsors; (9) because spare parts have often not been available, maintenance personnel have made additional efforts to maintain modified equipment; (10) supply system personnel have not always followed policies and procedures to ensure that supply system records were updated to show the addition of new spare parts and the deletion of replaced spare parts; (11) as a result, the Army's budget for spare parts may not reflect accurate requirements for new components to repair and maintain modified weapon systems and equipment; (12) maintenance personnel in the field have also experienced a variety of problems in implementing MWOs; (13) maintainers have not always received adequate notice of pending modifications, and training schedules and equipment maintenance have been adversely affected; (14) GAO was told that various items of equipment did not always work together once some modifications were made; and (15) according to Army officials, these problems also occurred because of their loss of oversight and control. |
gao_GAO-14-396T | gao_GAO-14-396T_0 | This reform effort comprises seven overarching goals: consolidate functions (shared services) common to DOD; deliver more-integrated health care in areas with more than one establish more-standardized processes; more-closely align financial incentives with health and readiness match other resources with missions; deliver more primary care and other health services; and better coordinate care over time and across treatment settings. As a result, in March 2013, the Assistant Secretary of Defense for Health Affairs chartered the MHS Governance Transition Organization to provide oversight, management, and support for the implementation of MHS governance reforms. The formation of this MHS Governance Transition Organization addresses an issue we previously reported on—that DOD had not formed an overarching team to manage the implementation of the 2006 attempt to improve the department’s medical governance structure. DOD Does Not Have an Accurate Baseline Assessment of Current Staffing to Determine Potential Savings and Future Staffing Needs of the DHA
As we reported in November 2013, DOD has not conducted an accurate baseline assessment of the headquarters personnel currently working in the MHS—that is, personnel working at each military service’s headquarters and at the Office of the Secretary of Defense. In its September 2011 analysis of options to reform the MHS, DOD identified anticipated personnel savings as part of the rationale for the reform effort and estimated a resulting estimated annual personnel cost savings of $46.5 million. In the final submission which we reviewed for this statement, DOD did not include a baseline assessment of the number of personnel currently working in the MHS headquarters across the services and the Office of the Secretary of Defense, nor did it include an estimate of the staffing needs once the DHA is fully operational in 2015. Instead, DOD reported that the DHA would include 1,941 military and civilian personnel as of its initial operating capability on October 1, 2013. According to GAO’s Business Process Reengineering Assessment Guide, an initial business case is a high-level document aimed at convincing customers and stakeholders that reengineering the selected business process is the appropriate means for achieving performance and cost-savings goals. In addition, business-case analyses should demonstrate the sensitivity of the outcome to changes in assumptions, with a focus on the dominant benefit and cost elements and the areas of greatest uncertainty. DOD’s analysis did not assess the risk that estimated implementation costs may increase. In our November 2013 report, we recommended that DOD develop a more thorough explanation of the potential sources of cost savings from the implementation of its shared-services projects and monitor the cost of the implementation process, and DOD concurred with our recommendations.submission did not provide additional information concerning the potential sources of cost savings, nor did it clarify its plan to monitor implementation costs. In February 2014, a DOD representative told us that DOD has developed a process for leadership to monitor implementation costs, and we plan to review DOD’s process to determine if it addresses our recommendation. DOD’s third implementation plan submission contained additional timeline activities for its reform goal concerning the implementation of shared services, with milestones leading up to each shared services’ initial operating capability. Specifically, DOD did not develop explanations for how each measure relates to the goals of the reform effort; did not define the specific measure to be developed; did not provide a baseline assessment of the current performance that is to be measured; and, most importantly, did not identify quantifiable targets for assessing the progress of each reform goal. In our November 2013 report, we recommended that DOD provide more detailed information on its performance measures—specifically, that DOD develop and present to Congress measures that are clear, quantifiable, objective, and include a baseline assessment of current performance.the third submission of its implementation plan, DOD provided some additional information, such as baselines and performance targets, for the performance measures under two of its seven reform goals. Fully developed performance measures are key to senior leaders’ ability to assess if DOD’s reform effort is achieving its goals or if corrective action is required. Finally, the completion of a set of fully developed performance measures across all seven of DOD’s stated goals for the DHA would ensure that DOD’s senior leaders and other decision makers have the necessary information to assess DOD’s progress in creating a more cost- effective and integrated MHS. Related GAO Products
Defense Health Care Reform: Additional Implementation Details Would Increase Transparency of DOD’s Plans and Enhance Accountability. | Why GAO Did This Study
DOD’s MHS costs almost $50 billion annually and is expected to grow to $70 billion by 2028. The MHS governance structure has been the subject of many studies, some recommending major changes. In 2006, DOD considered potential governance structure changes but left its existing structure in place, approving instead a shared-services directorate to consolidate common MHS functions (e.g., shared information-technology services) that ultimately was never developed. In 2012, DOD announced the creation of the DHA by October 1, 2013, with seven main goals: (1) consolidate functions (shared services) common to DOD, (2) deliver more-integrated health care in areas with more than one military service, (3) establish more-standardized processes, (4) more-closely align financial incentives with health and readiness outcomes, (5) match other resources with missions, (6) deliver more primary care and other health services, and (7) better coordinate care over time and across treatment settings. Section 731 of the National Defense Authorization Act for Fiscal Year 2013 required DOD to provide three submissions in March, June, and September 2013, detailing its plan to reform the MHS.
This testimony addresses the additional actions that would increase transparency and enhance accountability of DOD’s reform plans. It is based primarily on (1) GAO’s November 2013 report which assessed DOD’s first two submissions of its reform plans to Congress and (2) selected updates. For the updates, GAO analyzed DOD’s third reform plan and interviewed a DOD representative.
What GAO Found
Department of Defense (DOD) senior leadership has demonstrated a commitment to oversee implementation of its military health system’s (MHS) reform and has taken a number of actions to enhance the reform efforts. For example, in March 2013, DOD chartered the MHS Governance Transition Organization to provide oversight, management, and support for the implementation. This entity is chartered to exist until October 2015, when the Defense Health Agency (DHA) is expected to reach full operating capability. Formation of this entity addresses an issue GAO reported on in April 2012—that DOD did not form such a team to oversee its 2006 MHS reform effort.
GAO’s November 2013 report identified several areas in DOD’s implementation plan where sustained senior leadership attention is needed to help ensure the reform achieves its goals including:
Undetermined staffing requirements : DOD did not have the data to determine how the creation of the DHA will affect the total number of MHS headquarters staff because it had not conducted an accurate baseline assessment of current staffing levels. Notwithstanding, using data that service officials later believed were inaccurate, in 2011, DOD identified anticipated annual personnel savings of $46.5 million as part of the rationale for creating the DHA.
Unclear cost estimates : DOD’s cost savings estimates were missing key details such as the source of the savings. DOD aggregated the separate functions of its shared services, which obscures the size and cost of planned efficiencies for each function. A business case analysis requires detailed information to convince customers and stakeholders that the selected business process is the appropriate means for achieving performance. In addition, business-case analyses should demonstrate the sensitivity of the outcome to changes in assumptions. However, DOD did not assess the risk that implementation costs could increase.
Incomplete performance measures : DOD did not develop explanations for how each measure relates to the goals of the reform effort, did not define the specific measure to be developed; did not provide a baseline assessment of the current performance that is to be measured; and, most importantly, did not identify quantifiable targets for assessing progress. In its third submission, DOD provided some additional information, but did not provide fully developed performance measures for any of its seven reform goals.
DOD concurred with all of GAO’s recommendations, including: (1) develop a baseline assessment of the number of personnel currently working within the MHS headquarters and an estimate for the DHA at full operating capability; (2) develop a more thorough explanation of the potential sources of cost savings from DOD’s implementation of shared services; and (3) develop performance measures that are clear, quantifiable, objective, and include a baseline assessment of current performance. In February 2014, a DOD representative said that DOD has taken action to address the recommendations, but it has not completed implementation. GAO continues to believe that it is imperative for DOD to complete these actions so decision makers will have complete information to gauge reform progress. |
gao_GAO-13-446 | gao_GAO-13-446_0 | Ex-Im Methodology to Estimate the Number of Jobs It Supports Is Based on Export Values and Labor Statistics
To estimate the number of U.S. jobs associated with the exports it helps finance, Ex-Im uses a methodology based on the input-output approach. Second, it determines the total value of exports Ex-Im supports for each industry. Third, it multiplies these export values by BLS’s jobs ratio for each industry to obtain the jobs for that industry. Finally, it aggregates across all industries to produce an overall estimate. Using this process, Ex-Im estimated 255,000 jobs supported in 2012. Moreover, the documentation accompanying the ERT also describes several limitations and assumptions to those data, including the following:
The employment data are a count of jobs, not of persons employed, and treat full-time, part-time, and seasonal jobs equally. Furthermore, the ERT data assume average industry relationships; however Ex-Im’s clients could be different than the typical firm in the same industry. 1), Ex-Im determines the industry associated with each transaction. Finally, according to government officials and trade policy researchers, the methodology that Ex-Im uses does not answer the question of what would have happened without Ex-Im financing. Ex-Im Does Not Describe Limitations or Fully Detail Assumptions in Its Reporting on Employment Effects
Ex-Im reports the number of jobs its financing supports and the methodology it uses but does not describe the limitations or fully detail the assumptions related to its data or methodology. Conclusions
Ex-Im’s primary mission is to support U.S. jobs through the exports that it finances, and it estimates the number of jobs supported by its financing in order to provide Congress and the public with a broad sense of its impact on U.S. employment. The lack of detailed reporting reduces the ability of congressional and public stakeholders to fully understand what the jobs number represents and the extent to which Ex-Im’s financing may have affected U.S. employment. Recommendation for Executive Action
To ensure better understanding of its jobs calculation methodology, the Chairman of Ex-Im Bank should increase transparency by improving reporting on the assumptions and limitations in the methodology and data used to calculate the number of jobs Ex-Im supports through its financing. Ex-Im further stated that it will begin implementation of the recommendation this fiscal year with its 2013 annual report, which will include greater information on the assumptions and limitations of its methodology. Ex-Im will provide this information in annual reports and on its website. Appendix I: Objectives, Scope, and Methodology
The objectives of this report were to (1) describe the methodology and processes the Export-Import Bank of the United States (Ex-Im) uses to calculate the effects of its financing on employment in the United States, (2) examine the limitations of Ex-Im’s approach and how Ex-Im reports on its methodology, and (3) describe alternative methodologies and their limitations. In addition, we reviewed GAO’s Standards for Internal Control in the Federal Government to assess Ex- Im’s communication regarding its jobs calculation methodology. | Why GAO Did This Study
Ex-Im provides loans, guarantees, and insurance to U.S. exporters. One of Ex-Im's primary missions is to support U.S. jobs through exports. In its 2012 annual report, Ex-Im stated that its financing helped support an estimated 255,000 export-related U.S. jobs.
In 2012, Congress passed the Export-Import Bank Reauthorization Act of 2012. The act required GAO to report on the process and methodology used by Ex-Im to calculate the effects of export financing on U.S. employment. This report (1) describes the methodology and processes Ex-Im uses to calculate the effects of its financing on U.S. employment and (2) examines the limitations of Ex-Im's approach and how Ex-Im reports on its methodology, and provides additional related information.
To address these objectives, GAO reviewed relevant Ex-Im documents, obtained and reviewed the data Ex-Im uses for its calculations, and interviewed agency officials and trade policy researchers.
What GAO Found
The U.S. Export-Import Bank's (Ex-Im) methodology to calculate the number of U.S. jobs associated with the exports it helps finance has four key steps. First, Ex-Im determines the industry associated with each transaction it finances. Second, Ex-Im calculates the total value of exports it supports for each industry. Ex-Im implements these first two steps using its own data. Third, Ex-Im multiplies the export value for each industry by the Bureau of Labor Statistics (BLS) ratio of jobs needed to support $1 million in exports in that industry--a figure known as the "jobs ratio." Finally, Ex-Im aggregates across all industries to produce an overall estimate.
Ex-Im reports the number of jobs its financing supports and the methodology it uses but does not describe limitations of the methodology or fully detail its assumptions. Although the BLS data tables that Ex-Im relies on are based on a commonly used methodology, this methodology has limitations. For example, the employment data are a count of jobs that treats full-time, part-time, and seasonal jobs equally. In addition, the data assume average industry relationships, but Ex-Im's clients could be different from the typical firm in the same industry. Further, the underlying approach cannot answer the question of what would have happened without Ex-Im financing. Ex-Im does not report these limitations or fully detail the assumptions related to its data or methodology. GAO's Standards for Internal Controls in the Federal Government states that, in addition to internal communication, management should ensure adequate communication with external stakeholders, which could include Congress and the public. Because of a lack of reporting on the assumptions and limitations of its methodology and data, Congressional and public stakeholders may not fully understand what the jobs number that Ex-Im reports represents and the extent to which Ex-Im's financing may have affected U.S. employment.
What GAO Recommends
To ensure better understanding of its jobs calculation methodology, GAO recommends that Ex-Im improve reporting on the assumptions and limitations in the methodology and data used to calculate the number of jobs Ex-Im supports through its financing. Ex-Im agreed with the recommendation and stated that it would begin reporting more detailed information in its fiscal year 2013 annual report. |
gao_NSIAD-96-237 | gao_NSIAD-96-237_0 | Aviation security is a shared responsibility. FAA and the aviation community rely on a multifaceted approach that includes information from various intelligence and law enforcement agencies; contingency plans to meet a variety of threat levels; and the use of screening equipment, such as conventional X-ray devices and metal detectors. For flights within the United States, basic security measures include the use of walk-through metal detectors for passengers and X-ray screening of carry-on baggage; these measures are augmented by additional procedures that are based on an assessment of risk. Because the threat of terrorism had been considered greater overseas, FAA has mandated more stringent security measures for international flights. FAA is still developing systems to screen cargo and mail at airports. Detecting liquid explosives. These devices may be available within 2 years. Two procedures that are routinely used on many international flights and could be implemented in the short term for domestic flights are passenger profiling and passenger-bag matching. The Congress, the Administration, and the Aviation Industry Need to Agree on Actions to Improve Security and Who Will Pay for It
Aviation security has become an issue of national importance, but no agreement currently exists among the Congress, the administration—including FAA and the intelligence community, among others—and the aviation industry on the steps necessary to meet the threat and improve security in the short and long terms or who will pay for new security initiatives. Depending on the option selected, FAA estimated that costs would range from $1 billion to more than $6 billion over a 10-year period. | Why GAO Did This Study
Pursuant to a congressional request, GAO discussed aviation security, focusing on the measures needed to reduce potential security threats.
What GAO Found
GAO noted that: (1) the threat of terrorism is increasing in the United States; (2) aviation security responsibilities are shared by the Federal Aviation Administration (FAA), airlines, and airports; (3) FAA and the aviation community rely on information from various intelligence and law enforcement agencies, depend on contingency plans to meet a variety of threats, and use screening equipment to detect bombs and explosives; (4) basic security measures for domestic flights include the use of walk-through metal detectors and x-ray screening equipment; (5) FAA is considering passenger profiling and bag matching to ensure that passengers checking carry-on baggage actually board a flight; (6) FAA has mandated additional security measures for international flights; (7) conventional x-ray screening is limited and offers little protection against sophisticated explosive devices; (8) new explosive detectors are being developed and could be available within the next 2 years; (9) the cost of adopting these new technologies will cost at least $6 billion over the next 10 years; (10) recent events underscore the need for improved airline security; and (11) Congress and the aviation and intelligence communities need to agree on a strategy for combating terrorism and funding new security measures. |
gao_GAO-06-886T | gao_GAO-06-886T_0 | NRC and the licensees of nuclear power plants share the responsibility for ensuring that commercial nuclear power reactors are operated safely. NRC Uses Various Tools and Takes a Graded and Risk- Informed Approach to Ensuring the Safety of Nuclear Power Plants
NRC uses various tools to oversee the safe operation of nuclear power plants, generally consisting of physical plant inspections of equipment and records and objective indicators of plant performance. These tools are risk-informed in that they are focused on the issues considered most important to plant safety. Based on the results of the information it collects through these efforts, NRC takes a graded approach to its oversight, increasing the level of regulatory attention to plants based on the severity of identified performance issues. The majority of these inspection efforts were spent on baseline inspections, which all plants receive on an almost continuous basis. The inspection procedures are risk-informed to focus inspectors’ efforts on the most important areas of plant safety in four ways: 1) areas of inspection are included in the set of baseline procedures based on, in part, their risk importance, 2) risk information is used to help determine the frequency and scope of inspections, 3) the selection of activities to inspect within each procedure is informed with plant-specific risk information, and 4) the inspectors are trained in the use of risk information in planning their inspections. When NRC becomes aware of one or more performance problems at a plant that are assigned a risk color greater-than-green (white, yellow, or red), it conducts supplemental inspections. NRC conducts special inspections when specific events occur at plants that are of particular interest to NRC because of their potential safety significance. These objective numeric measures of plant operations are designed to measure plant performance related to safety in various aspects of plant operations. NRC Has Continually Identified Problems at Nuclear Power Plants but Few Have Been Considered Significant to Safe Operation of the Plants
The ROP has identified numerous performance deficiencies as inspection findings at nuclear power plants since it was first implemented, but most of these were considered to be of very low risk to safe plant operations. Of more than 4,000 inspection findings identified between 2001 and 2005, 97 percent were green. In contrast to the many green findings, NRC has identified 12 findings of the highest risk significance (7 yellow and 5 red), accounting for less than 1 percent of the findings since 2001. On the basis of its inspection findings and performance indicators, NRC has subjected more than three quarters of the 103 operating plants to at least some level of increased oversight (beyond the baseline inspections) for varying amounts of time. In assessing the results of the ROP data, we found that all plants subjected to NRC’s highest level of oversight also had a substantive cross-cutting issue open either prior to or during the time that it was subjected to increased oversight inspections. While NRC communicates the results of its oversight process on a plant-specific basis to plant managers, members of the public, and other government agencies through annual public meetings held at or near each site and an internet Web site, it does not publicly summarize the overall results of its oversight process, such as the total number and types of inspection findings and performance indicators falling outside of acceptable performance categories, on a regular basis. It has several mechanisms in place to incorporate feedback from both external and internal stakeholders and is currently working on improvements in key areas of the process, including better focusing inspections on areas most important to safety, improving its timeliness in determining the risk significance of its inspection findings, and modifying the way that it measures some performance indicators. NRC is also working to address what we believe is a significant shortcoming in its oversight process by improving its ability to address plants’ safety culture, allowing it to better identify and address early indications of deteriorating safety at plants before performance problems develop. An audit by the NRC Inspector General, a review by a special task group formed by NRC, and feedback from other stakeholders have pointed to several significant weaknesses with the SDP. Largely as a result of this event, in August 2004, the NRC Commission directed the NRC staff to enhance the ROP by more fully addressing safety culture. For example, the nuclear power industry has expressed concern that the changes could introduce undue subjectivity to NRC’s oversight, given the difficulty in measuring these often intangible and complex concepts. NRC officials view this effort as the beginning step in an incremental approach and acknowledge that continual monitoring, improvements, and oversight will be needed in order to better allow inspectors to detect deteriorating safety conditions at plants before events occur. | Why GAO Did This Study
The Nuclear Regulatory Commission (NRC) has the responsibility to provide oversight to ensure that the nation's 103 commercial nuclear power plants are operated safely. While the safety of these plants has always been important, since radioactive release could harm the public and the environment, NRC's oversight has become even more critical as the Congress and the nation consider the potential resurgence of nuclear power in helping to meet the nation's growing energy needs. Prior to 2000, NRC was criticized for having a safety oversight process that was not always focused on the most important safety issues and in some cases, was overly subjective. To address these and other concerns, NRC implemented a new oversight process--the Reactor Oversight Process (ROP). NRC continues to modify the ROP to incorporate feedback from stakeholders and in response to other external events. This statement summarizes information on (1) how NRC oversees nuclear power plants, (2) the results of the ROP over the past several years, and (3) the aspects of the ROP that need improvement and the status of NRC's efforts to improve them. This statement discusses preliminary results of GAO's work. GAO will report in full at a later date. GAO analyzed program-wide information, inspection results covering 5 years of ROP operations, and detailed findings from a sample of 11 plants.
What GAO Found
NRC uses various tools to oversee the safe operation of nuclear power plants, including physical plant inspections and quantitative measures or indicators of plant performance. To apply these tools, NRC uses a risk-informed and graded approach--that is, one considering safety significance in deciding on the equipment and operating procedures to be inspected and employing increasing levels of regulatory attention to plants based on the severity of identified performance problems. The tools include three types of inspections--baseline, supplemental, and special. All plants receive baseline inspections of plant operations almost continuously by NRC inspectors. When NRC becomes aware of a performance problem at a plant, it conducts supplemental inspections, which expand the scope of baseline inspections. NRC conducts special inspections to investigate specific safety incidents or events that are of particular interest to NRC because of their potential significance to safety. The plants also self-report on their safety performance using performance indicators for plant operations related to safety, such as the number of unplanned reactor shutdowns. Since 2001, NRC's ROP has resulted in more than 4,000 inspection findings concerning nuclear power plant licensees' failure to comply with regulations or other safe operating procedures. About 97 percent of these findings were for actions or failures NRC considered important to correct but of low significance to overall safe operation of the plants. In contrast, 12 of the inspection findings, or less than 1 percent, were of the highest levels of significance to safety. On the basis of its findings and the performance indicators, NRC has subjected more than three-quarters of the 103 operating plants to oversight beyond the baseline inspections for varying amounts of time. NRC has improved several key areas of the ROP, largely in response to independent reviews and feedback from stakeholders. These improvements include better focusing its inspections on those areas most important to safety, reducing the time needed to determine the risk significance of inspection findings, and modifying the way that some performance indicators are measured. NRC also recently undertook a major initiative to improve its ability to address plants' safety culture--that is, the organizational characteristics that ensure that issues affecting nuclear plant safety receive the attention their significance warrants. GAO and others have found this to be a significant shortcoming in the ROP. Although some industry officials have expressed concern that its changes could introduce undue subjectivity to NRC's oversight, given the difficulty in measuring these often intangible and complex concepts, other stakeholders believe its approach will provide NRC better tools to address safety culture issues at plants. NRC officials acknowledge that its effort is only a step in an incremental approach and that continual monitoring, improvements, and oversight will be needed to fully detect deteriorating safety conditions before an event occurs. |
gao_GAO-13-236 | gao_GAO-13-236_0 | Objectives, Scope, and Methodology
Our objectives were to determine whether participating judges’ contribution rates for the 2008, 2009, and 2010 plan years funded 50 percent of the JSAS costs and, if not, what adjustments in the contribution rates would be needed to achieve the 50 percent ratio. To satisfy our objectives, we used the normal cost rates determined by actuarial valuations of the system for each of the 3 plan years and determined the judges’ normal cost share of the plan’s total normal cost rate. History of JSAS
JSAS was created in 1956 to help provide financial security for the families of deceased federal judges. Judges’ Share of JSAS Normal Cost Was Less Than Half of Plan’s Costs
For JSAS plan years 2008 to 2010, the participating judges’ share of normal cost was, on average, about 41 percent of the plan’s costs. However, increasing the judges’ contribution rates could adversely affect participation in the plan, which would be contrary to one of the major reasons for the structural changes made to JSAS over the years. The federal government’s share of JSAS normal costs increased over the years included in our review, from approximately 53 percent in plan year 2008, to 61 percent in plan year 2009, and to approximately 64 percent in plan year 2010. The government’s average share of total normal costs for the 3-year period under review was about 59 percent. Most of the increase in the recommended federal government’s contribution rate over the 3 years under review was due to (1) less favorable actual economic and demographic outcomes over this period than predicted by the actuarial assumptions (known as losses from economic and demographic “experience”) and (2) changes in actuarial assumptions regarding future economic and demographic outcomes. Adjustment That Would Be Needed in Judges’ Contribution Rates
Based on our review of the judges’ contribution rates for JSAS, we determined that to cover 50 percent of the projected JSAS costs, based on an average of the past three actuarial valuations, the participating judges’ contribution rates would have to be increased 0.66 percentage points above the current rates. Although AOUSC’s AFSD provided to the actuary the number of participants who enrolled during the open season, AFSD did not notify the actuary that these judges contributed 2.75 percent of pay as authorized by the 2009 act, instead of the 2.2 percent required by the Federal Courts Administration Act of 1992. To prevent these errors from occurring in the future, AOUSC issued revised procedures in November 2012 that incorporated internal controls to help ensure that information provided to the actuary for future actuarial valuation reports is complete and accurate. We determined that the revised procedures developed by AOUSC, if properly implemented, are sufficient to address the issues we identified in this report. Consequently, we are not making any recommendations in this report. AOUSC’s Director also stated that AOUSC has implemented several improvements to strengthen the administration of JSAS, including the incorporation of better internal controls, improved communication and coordination between offices with JSAS responsibilities, and documentation of the new process. We are sending copies of this report to interested congressional committees and the Director of the Administrative Office of the United States Courts. This percentage is JSAS’s normal cost rate. | Why GAO Did This Study
JSAS was created in 1956 to provide financial security for the families of deceased federal judges. JSAS is administered by AOUSC. Active and senior judges currently contribute 2.2 percent and 2.75 percent of their salaries to JSAS, depending on when they elected coverage, and retired judges contribute 3.5 percent of their retirement salaries to JSAS.
Pursuant to the Federal Courts Administration Act of 1992 (Pub. L. No. 102-572), GAO was required to review JSAS costs every 3 years and determine whether the judges' contributions fund at least 50 percent of the plan's costs during the 3-year period. If the contributions funded less than 50 percent of these costs, GAO was to determine what adjustments to the contribution rates would be needed to achieve the 50 percent ratio. GAO used the normal cost rates determined by actuarial valuations of the system and compared the judges' normal cost rate against the plan's total normal cost rate. On December 28, 2012, the GAO audit requirement was repealed by the GAO Mandates Revision Act of 2012 (Pub. L. No. 112-234). Thus, this is the final GAO report.
What GAO Found
GAO found that for the 2008 to 2010 time frame covered by this review, the participating judges' share of normal cost was, on average, about 41 percent of the Judicial Survivors' Annuities System (JSAS) total normal costs, and the federal government's share of normal cost was about 59 percent of JSAS total normal costs. The federal government's share of JSAS normal costs increased over the years included in GAO's review, from approximately 53 percent in plan year 2008, to 61 percent in plan year 2009, and to approximately 64 percent in plan year 2010. The increase was a result of (1) less favorable actual economic and demographic outcomes over this period than predicted by the actuarial assumptions and (2) changes in actuarial assumptions regarding future economic and demographic outcomes.
GAO determined that to cover one-half of the projected JSAS costs, based on an average of the past three actuarial valuations, the participating judges' contribution rates would have to be increased 0.66 percentage points above the current rates. However, increasing the judges' contribution rates could adversely affect participation in the plan, which would be contrary to one of the major reasons for the structural changes made to JSAS over the years.
GAO also identified errors in the actuarial valuation report for plan year 2010 and the Administrative Office of the United States Courts (AOUSC) actuary subsequently issued a corrected report. To prevent these errors from occurring in the future, AOUSC revised its procedures for the preparation of the actuarial valuation reports in November 2012 that incorporated appropriate internal controls to help ensure that information provided to the actuary for future actuarial valuation reports is complete and accurate. GAO determined that the revised procedures developed by AOUSC, if properly implemented, are sufficient to address the errors identified.
What GAO Recommends
GAO is not making any recommendations in this report. In his comments on the draft report, the Director of AOUSC stated that the report accurately reflects the federal governments and participating judges contribution rates. He further commented that AOUSC has implemented several improvements to strengthen the administration of JSAS. |
gao_AIMD-99-20 | gao_AIMD-99-20_0 | Answer: Defense considered only a narrow range of alternatives for improving personnel operations before deciding to regionalize personnel centers. After it decided to regionalize, Defense did not follow a sound process for selecting regions, it did not require services and agencies to base their decisions on data-driven analyses. Before embarking on a major, costly initiative to improve personnel management, sound practices call for examining a range of improvement options, including those that would radically change the current way of doing business. For example, in addition to, or instead of regionalizing, Defense could have considered (1) outsourcing its personnelist computer operations or all of its civilian personnel management services, (2) integrating its personnel/payroll management systems, (3) creating regions that cross-service between agencies and the military services, (4) consolidating local personnel offices that are near each other to provide face-to-face services to multiple bases or installations out of the same office, and/or (5) centralizing all, or portions of, civilian personnel management in DOD. Instead, it considered only the possibility of outsourcing computer operations with the National Finance Center. This option was determined to be infeasible.Defense did not analyze other alternatives, including cross-servicing, integrating payroll/personnel systems, collocating personnel offices, DOD-wide management of personnel operations, or outsourcing all of its personnel operations. CPMS officials held that this did not allow time to develop objective data and rigorously examine alternatives. Some Defense components have already found this alternative to be beneficial. In fact, after considering the potential benefits of this alternative and its feasibility, the Defense Science Board recommended it as a solution for military personnel in 1996. However, Defense did not perform an economic analysis before acquiring the new system. Answer: DCPDS is not a duplicate of OPM’s Employee Express system. Answer: Defense has not identified and mitigated significant risks associated with its acquisition. Additionally, because Defense did not adequately estimate and evaluate costs, benefits, and returns, there is not adequate assurance that its decision to replace the legacy system with the Oracle COTS package is optimal. Specifically, business alternatives considered should include (1) use of regions and local offices to serve specific agencies or services, (2) use of regions or local offices to serve multiple agencies and services, (3) centralizing all or parts of personnel management operations that currently operate at component headquarters and major commands, (4) integrating DOD’s civilian personnel and payroll management systems, (5) outsourcing civilian personnel computer operations, (6) outsourcing all civilian personnel management services, and (7) acquiring other commercially available products. However, because these analyses did not fully consider the costs and benefits of numerous alternative business and systems approaches for improving the servicing ratios, the Department may not have selected the most cost-effective improvement approach. 6. 8. 9. Scope and Methodology
To analyze how Defense determined the number and locations for civilian personnel regional service centers and why there is a wide disparity in the number of regional centers among the services, we interviewed Office of the Secretary of Defense, military service, and Defense agency officials and reviewed guidance mandating regionalization, the services’ and Defense agencies’ regionalization studies, and their rationale for determining the number and location of regions. These five centers were Ft. Riley, Kansas; Aberdeen Proving Ground, Maryland; Silverdale, Washington; Randolph AFB, Texas; and Washington, D.C.
To assess whether Defense is applying the Clinger-Cohen Act in overseeing, managing, and developing DCPDS, we compared Defense’s actions taken on DCPDS to the investment principles included in the act. To determine whether (1) Defense’s civilian personnel management requirements are sufficiently different to require extensive modification of the commercial-off-the-shelf software (COTS) application which Defense selected as the foundation for developing DCPDS and (2) Defense leadership was aware of the extent and cost of modifications that would be needed, we interviewed the Functional and Acquisition Program managers and their staff as well as representatives of the Oracle Corporation to solicit information on the selection, acquisition, and modification of the Oracle COTS product. | Why GAO Did This Study
Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) efforts to reduce the costs associated with civilian personnel management, focusing on: (1) how DOD determines the number and locations for civilian personnel regional service centers and why is there a wide disparity in the number of regional centers among the services; (2) whether DOD is applying the investment principles of the Clinger-Cohen Act in overseeing, managing, and developing the Defense Civilian Personnel Data System (DCPDS); (3) whether DCPDS duplicates the Office of Personnel Management's (OPM) Employee Express System: (4) whether DOD leadership is aware of the extent and cost of the needed modifications to the commercial-off-the-shelf (COTS) software applications; and (5) whether DOD identified and mitigated the risks associated with the major COTS modifications.
What GAO Found
GAO noted that: (1) DOD's current initiative can potentially improve civilian personnel operations and achieve cost savings; (2) however, because the Department has not examined other business process alternatives that could have potentially achieved even greater savings and process efficiencies, there is no assurance that this is the best alternative for civilian personnel operations; (3) before embarking on its costly initiative to improve personnel management, DOD examined two alternatives: (a) outsourcing personnel computer operations to the Department of Agriculture's Finance Center; and (b) regionalizing personnel centers; (4) DOD determined that it would take the National Finance Center about 6 years to prepare for transferring computer operations and that some new functionality built into its legacy system would be lost; (5) however, DOD did not examine several other potentially effective alternatives, including: (a) continuing to centralize all or parts of its personnel management operations to reduce duplicative layers of oversight at the components and ensure more consistent operations DOD-wide; (b) integrating its personnel and payroll management systems; (c) restructuring its regional offices to serve multiple components rather than perpetuating regional offices dedicated to only one component; (d) restructuring local personnel offices to serve multiple bases or installations (they now serve only one base or installation); and (e) outsourcing all civilian personnel operations to the private sector; (6) these alternatives are feasible and may have helped DOD to achieve even greater savings and efficiencies than the current approach; (7) in addition, the Defense Science Board determined that integrating payroll and personnel systems was a viable and cost beneficial option for military personnel; (8) the Civilian Personnel Management Service (CPMS) officials who were responsible for the personnel initiative said that they did not consider these business processing alternatives because: (a) CPMS did not have authority to require the military services and DOD agencies to adopt such approaches; (b) DOD did not allow sufficient time to rigorously examine alternatives; and (c) DOD lacked basic cost and performance data needed to study the alternatives; (9) after it decided on its approach, DOD did not follow a sound process for selecting regions; (10) DOD did not adequately consider a full range of technical options before deciding to replace its legacy system with the Oracle COTS product; and (11) after DOD acquired the Oracle system, it did not mitigate critical technical risks. |
gao_GAO-15-839 | gao_GAO-15-839_0 | Figure 1 provides an overview of the fee application and review process in Chapter 11 bankruptcy, including cases subject to the 2013 guidelines. Both the USTP and the bankruptcy judge are responsible for ensuring that fees are reasonable and necessary, and may review any submitted documentation associated with fees to assist in that determination. According to senior USTP officials, the USTP began to develop the 2013 guidelines in 2010 in an effort to address concerns about the size of attorneys’ fees in large Chapter 11 cases. Attorneys Generally Observed the 2013 Guidelines; Opinions Regarding Their Effects Vary by Stakeholder Group
Our analysis of USTP data and interviews with bankruptcy stakeholders (AUSTs, judges, and attorneys) indicate that attorneys’ fee applications for guidelines cases have generally contained the information requested by the 2013 guidelines. Bankruptcy stakeholders we interviewed had mixed perspectives on the overall value of the guidelines and on their potential effect on the efficiency and transparency of the Chapter 11 bankruptcy process, or the fees awarded. Attorneys Generally Observed the 2013 Guidelines
Analysis of USTP data and interviews with bankruptcy stakeholders indicate that attorneys’ fee applications for guidelines cases (those cases with assets and liabilities each of $50 million or more) have generally contained the information requested by the 2013 guidelines. The budget and staffing plan provision of the 2013 guidelines was cited by 26 of the 57 bankruptcy stakeholders we interviewed as a provision likely to have a positive effect on the fee review process. In contrast, 16 of the 20 attorneys and judges who noted that the budgeting provision is unlikely to have an effect explained that bankruptcy cases are unpredictable, a fact that limits the value of a budget. The most frequently cited factors—including prior court rulings, the preferences of lenders, and judge experience—all contribute to overall predictability in a case and can provide some insights into what to expect from a court as a case proceeds through the bankruptcy process. As discussed previously, companies filing for bankruptcy have several options available to them when determining the court, or venue, in which to file their case, including their place of incorporation, principal place of business or assets, or where an affiliate has filed a Chapter 11 bankruptcy case. For example, knowing a judge’s level of experience with large cases and how a court has ruled on certain matters can help an attorney advise a client about how a court is likely to respond to issues in a specific case. Professional Fees
Eight of the 39 attorneys and judges we interviewed identified perceived court attitudes on professional fees as a significant factor in venue selection. Bankruptcy Attorneys, Judges, and Academic Research Identify Positive and Negative Effects of Venue Selection Outcomes
Bankruptcy attorneys and judges we interviewed and academic research we reviewed identified both positive and negative effects of the concentration of cases in the SDNY and Delaware. The positive effect most commonly cited by attorneys (5 of 14) and judges (10 of 25) we interviewed was the significant large case experience developed by judges in the SDNY and Delaware. The negative effects most commonly cited by attorneys (9 of 14) were the difficulty local bankruptcy firms face in maintaining a bankruptcy practice outside of the SDNY and Delaware and the lack of opportunity for courts to develop precedent and expertise outside of these jurisdictions. Trustee Program (USTP) officials, regarding the guidelines’ key provisions and their effects? What do bankruptcy attorneys, judges, and available research identify as factors that contribute to venue selection and the effects, if any, of venue selection in large Chapter 11 cases? Of these cases, 94 were filed after the 2013 guidelines went into effect (guidelines cases). To determine whether selected local court rules incorporated the key provisions of the 2013 guidelines, we reviewed local court rules and guidelines on fee applications and the compensation of professionals in bankruptcy cases for the 15 bankruptcy courts in our scope. Additional information regarding the jurisdictions in the scope of this report is provided later in this appendix. To further address question 2, we reviewed relevant academic literature on the factors that contribute to venue selection and the effects of the concentration of cases in the Southern District of New York (SDNY) and the District of Delaware (Delaware). | Why GAO Did This Study
Since 2010, there have been at least 765 Chapter 11 bankruptcy filings by large companies. The associated fees for bankruptcy professionals, including attorneys, can run into the hundreds of millions of dollars. The size of these fees has raised questions about whether professionals have charged a premium for large bankruptcies and used the venue selection process to file in courts where they believed they would receive higher fees. The USTP, a Department of Justice component, is responsible for, among other things, reviewing whether fees requested by professionals in bankruptcy cases are reasonable and necessary in accordance with the Bankruptcy Code. In 2013, the USTP issued new guidelines governing its review of attorney fee applications in large Chapter 11 cases.
GAO was asked to review the USTP's 2013 guidelines. This report examines (1) the extent to which fee applications observed the 2013 guidelines and bankruptcy stakeholders' opinions regarding the guidelines' key provisions and their effects, and (2) what bankruptcy stakeholders and available research identify as contributing factors and effects of venue selection in large Chapter 11 cases. GAO conducted 57 nongeneralizable interviews with bankruptcy judges, attorneys, and AUSTs in 15 bankruptcy court jurisdictions responsible for large Chapter 11 cases. GAO also reviewed USTP data and court documents on cases subject to the 2013 guidelines, and relevant academic literature on professional fees and venue selection. The USTP generally agreed with GAO's findings.
What GAO Found
GAO's analysis of U.S. Trustee Program (USTP) data and interviews with bankruptcy stakeholders including Assistant U.S. Trustees (AUST), selected bankruptcy judges, and attorneys indicate that attorneys' fee applications for cases subject to the USTP's 2013 fee guidelines (cases involving assets and liabilities each of $50 million or more) have generally contained the information requested by the guidelines. This information is intended to assist the courts in determining whether requested fees are reasonable and necessary. Specifically, in the data GAO reviewed, the USTP identified no issues in submitted fee applications in 47 of the 94 cases filed since the guidelines went into effect in November 2013. Attorneys resolved almost all of the issues in the other 47 cases by providing an explanation or additional information. Bankruptcy stakeholders had mixed perspectives of the overall value of the guidelines and of their potential effect on the efficiency and transparency of the Chapter 11 bankruptcy process, or the fees awarded. Similarly, opinions regarding the effect of specific provisions of the 2013 guidelines also varied by group. For example, 15 of 18 AUSTs said the provision requesting that attorneys provide budgets was likely to have a positive effect on the fee review process, while 10 of 14 attorneys said it was unlikely to have an effect. For example, stakeholders with a positive view said the budgeting provision encourages early communication in a case, while those with a negative view said that the unpredictability of bankruptcy cases limit the value of a budget.
Bankruptcy attorneys and judges GAO interviewed and academic research identify several factors that contribute to venue selection—the process of choosing where to file. Companies filing for bankruptcy have several options available to them when determining the venue, or court, in which to file their case, including their place of incorporation, principal place of business or assets, or where an affiliate has filed a Chapter 11 case. The most frequently cited factors—prior court rulings, the preferences of lenders, and judge experience—all contribute to overall predictability in a case and can provide some insights into what to expect from a court as a case proceeds through the bankruptcy process. For example, knowing a judge's level of experience with large cases and how a court has ruled on certain matters can help an attorney advise a client about how a court is likely to respond to issues in a specific case. Eight of the 39 attorneys and judges GAO interviewed cited perceived court attitudes on professional fees as a significant factor in venue selection. Approximately 61 percent of large Chapter 11 bankruptcy cases filed since October 2009 were filed in two jurisdictions–the Southern District of New York (SDNY) and the District of Delaware (Delaware). Bankruptcy attorneys and judges and academic research identified both positive and negative effects of the concentration of cases in these two jurisdictions. The positive effect most commonly cited by attorneys and judges was the significant large case experience developed by judges in the SDNY and Delaware. In contrast, the negative effects most commonly cited by attorneys were the difficulty local bankruptcy firms face in maintaining a bankruptcy practice outside of the SDNY and Delaware and the lack of opportunity for courts outside of these jurisdictions to develop precedent and expertise. |
gao_RCED-95-191 | gao_RCED-95-191_0 | The plan established a national goal of reducing crossing accidents and fatalities by 50 percent from 1994 to 2004. This report (1) analyzes the progress made at reducing accidents and fatalities at crossings; (2) discusses federal and state strategies—funds distribution, technologies, and education—that have the potential for reducing railroad crossing accidents and fatalities; and (3) assesses DOT’s progress in implementing its action plan for improving railroad crossing safety. Railroad Crossing Accidents and Fatalities Have Declined Significantly, But Problems Still Persist
Since 1974, when the Rail-Highway Crossing Program began, the number of accidents and fatalities at public railroad crossings has declined by 61 and 34 percent, respectively. However, a significant portion of the progress made in reducing crossing accidents and fatalities was realized during the first 10 years of the program. However, since 1985, progress in reducing crossing deaths has been limited. Strategies DOT and the states are using that have the potential to improve safety include targeting federal funds to states with the highest incidence of accidents and fatalities; closing more railroad crossings; installing advanced technologies at the most dangerous intersections; concentrating crossing improvements and closings on specific rail corridors; and improving public education and law enforcement to change motorists’ dangerous behavior. In addition, DOT has not developed an evaluation approach to assess the impact of the plan in contributing to railroad crossing safety. The action plan contains 55 action proposals for improving railroad crossing safety. The success of federal efforts to ensure the accuracy of the DOT/AAR National Highway-Rail Crossing Inventory also depends on the states’ cooperation. | Why GAO Did This Study
Pursuant to a congressional request, GAO examined federal efforts to improve railroad crossing safety, focusing on: (1) the progress made in reducing railroad crossing accidents and fatalities; (2) federal and state strategies that have the potential for reducing railroad crossing accidents and fatalities; and (3) the Department of Transportation's (DOT) progress in implementing its action plan for improving railroad crossing safety.
What GAO Found
GAO found that: (1) the annual number of accidents and fatalities at public railroad crossings has declined by 61 and 34 percent, respectively, since the Rail-Highway Crossing Program began in 1974; (2) progress in increasing railroad crossing safety has been limited, since states improved the most dangerous crossings during the first 10 years of the program; (3) DOT is developing new ways to distribute funds to those states with the most dangerous crossings and encourage improvements along specific rail corridors; (4) the states are working to close more crossings and strengthen public education and law enforcement efforts to change motorists' dangerous behavior; (5) DOT has set a national goal of reducing railroad crossing accidents and fatalities by 50 percent from 1994 to 2004; and (6) the success of the DOT action plan depends on states' and railroads' cooperation in implementing 55 separate proposals, adequate financing, and the development of an evaluation component to assess the effect of the actions taken. |
gao_GAO-11-395 | gao_GAO-11-395_0 | The timing of a state’s economic downturn is determined by its individual economic condition and revenue structure, which can also affect a state’s capacity to fund its Medicaid program. To help states meet additional Medicaid program needs, and to provide fiscal relief, Congress established temporary FMAP increases for states in 2003, 2009, and 2010. Increased FMAPs help states maintain their Medicaid programs during downturns. The enactment of PPACA affects federal and state funding of the Medicaid program. Past Recessions in 2001 and 2007 Hampered States’ Ability to Fund Medicaid
Past recessions hampered states’ ability to fund increased Medicaid enrollment and maintain existing services. For example, due to the 2007 recession, total state tax revenues declined by 10.2 percent from the fourth quarter of 2007 to the fourth quarter of 2009. Over this same period, North Dakota’s tax revenue increased by 6.9 percent. Recovery Act Funds Were More Responsive to State Medicaid Needs than Previous Assistance
Increased FMAP funds provided by the Recovery Act were better timed and targeted for state Medicaid needs than were funds provided following the 2001 national recession. Overall, the Recovery Act funds were timed for state Medicaid needs because assistance began during the 2007 national recession while nearly all states were experiencing Medicaid enrollment increases and revenue decreases. In contrast, the increased FMAP funds for the 2001 recession were provided well after the recession ended and not targeted on the basis of need. Recovery Act Funds Were Targeted to Increased Medicaid Enrollment, but Not to State Revenue Decreases
The increased FMAP funds provided by the Recovery Act were targeted for increases in states’ unemployment, but did not target the varying degrees of state revenue decreases that occurred during the 2007 recession. Therefore, the Recovery Act did not distinguish among states with varying degrees of reduced revenue capacity in the allocation of assistance. Although the increased FMAP following the 2001 recession coincided with states’ needs due to increased Medicaid enrollment, it was not timed to assist states in responding to decreased revenues as indicated by lower total wages and salaries. Past Recessions Offer Insights on Improving the Responsiveness of FMAP Adjustments
States’ experiences with past recessions offer insights for improving the responsiveness of FMAP adjustments. More responsive assistance can aid states in addressing increased Medicaid enrollment resulting from a national recession, as well as addressing reductions in states’ revenues. Starting Increased FMAP Assistance Closer to Onset of Recession Could Help States Avoid Program Cuts
Although the Recovery Act assistance timing was an improvement over the assistance for the 2001 recession, an automatic trigger (a provision that would start the assistance program without the need for legislation) that would provide an increased FMAP to states close to the onset of an NBER- designated recession has additional advantages. As we noted earlier, increased Medicaid enrollment and decreased revenue continued after both the 2001 and 2007 recessions ended. Adding several quarters of transitional assistance and gradually reducing the percentage of increased FMAP provided could help mitigate the effects of a slower recovery. A more responsive increased FMAP would calculate the increased funding needed on the basis of the economic conditions of each state. Agency Comments and Our Evaluation
In commenting on a draft of this report, the Department of Health and Human Services stated that it agreed with the analysis and goals of the report while emphasizing that any changes to the FMAP formula must be authorized by statute and implemented by the Assistant Secretary for Planning and Evaluation in HHS. The department further stated its belief that it is critical to as closely as possible align changes in the FMAP formula to individual state circumstances in order to avoid unintended consequences for beneficiaries as well as provide budget planning stability for states. We agree that statutory changes would be necessary to implement any adjustments to the FMAP, but we do not make recommendations regarding particular actions in this report. In this report, we use the acronym CHIP to refer to the program. | Why GAO Did This Study
In response to the most recent U.S. recession, from December 2007 to June 2009, Congress passed the American Recovery and Reinvestment Act of 2009 (Recovery Act). To help states maintain their Medicaid programs and provide states with general fiscal relief, the Recovery Act temporarily increased the federal share of Medicaid funding for states. The federal funding states receive for Medicaid is determined by a statutory formula--the Federal Medical Assistance Percentage (FMAP). The Recovery Act also required GAO to study options for providing a temporary increased FMAP in response to future recessions. GAO reviewed how past recessions affected states' ability to fund Medicaid, examined the responsiveness of past increased FMAP assistance to state needs, and identified options for adjusting the increased FMAP formula for use during future recessions. To conduct this work, GAO reviewed its previous reports on recessions and the increased FMAP and similar work from other organizations. GAO analyzed federal Medicaid data and enrollment data provided by state Medicaid directors. GAO also analyzed labor market data from the Bureau of Labor Statistics, state revenue data from the Census Bureau, and the Federal Reserve Bank of Philadelphia's Coincident Indexes to assess states' ability to fund Medicaid during economic downturns. GAO identifies options for Congress to consider but does not make recommendations in this report.
What GAO Found
Past recessions hampered states' ability to fund increased Medicaid enrollment and maintain existing services. Both the 2001 and 2007 recessions resulted in increased Medicaid enrollment and decreased revenues, though states' experiences varied. During the 2007 recession, total state tax revenues declined by 10.2 percent from the fourth quarter of 2007 to the second quarter of 2009, with individual state experiences varying. For example, North Dakota had a revenue increase of 6.9 percent while Arizona had a decline of 23.1 percent. In addition, the effect of increased Medicaid enrollment and decreased revenues persisted after the recessions ended, causing states to further adjust their Medicaid programs. The increased FMAP funds provided by the Recovery Act were more responsive to state Medicaid needs than were funds provided after the 2001 recession. Overall, the Recovery Act funds were timed for state Medicaid funding needs. Assistance began during the recession while nearly all states were experiencing Medicaid enrollment increases as indicated by rising unemployment and revenue decreases as indicated by declining wages and salaries. The FMAP funds were targeted for Medicaid enrollment growth, but did not distinguish among states with varying degrees of reduced revenue in the allocation of assistance. The increased FMAP following the 2001 recession was provided well after the recession ended and was not targeted for state Medicaid needs. Past recessions offer options for improving the responsiveness of temporary FMAP increases to state Medicaid program needs. More responsive assistance can aid states in addressing increased Medicaid enrollment resulting from a national recession, as well as addressing decreases in states' revenues. GAO has revised a prototype formula for temporary FMAP increases it developed in 2006. The revised formula would address the timing and targeting of funds, and further improve the responsiveness of the increased FMAP funding. In particular, these revisions (1) use an automatic trigger to start the assistance program closer to the onset of a national recession, (2) add several quarters of transitional assistance before ending the increased FMAP assistance, and (3) target assistance by calculating the increased funding needed on the basis of the economic conditions of each state. In commenting on a draft of this report, the Department of Health and Human Services (HHS) agreed with the analysis and goals of the report while emphasizing that changes to the FMAP formula must be authorized by statute. HHS also stated that it is critical to align changes in the FMAP formula to individual state circumstances in order to avoid unintended consequences for beneficiaries as well as provide budget planning stability for states. GAO agrees that statutory changes would be necessary to implement any adjustments to the FMAP, but does not make recommendations regarding particular actions in this report. |
gao_GAO-03-905 | gao_GAO-03-905_0 | Assistance was also available to students through two federal higher education tax credits, the HOPE and Lifetime Learning tax credits. Most of the 2.3 Million Adult Undergraduate Students Who Enrolled Less Than Halftime Needed to Balance School and Other Responsibilities, and Many Were Unable to Complete Their Programs
In 1999-2000, one-third of adult undergraduate students, about 2.3 million, enrolled less than halftime, and most worked fulltime and needed to balance the demands of school with other responsibilities. Compared with adult students enrolled halftime or more, the typical less-than-halftime adult student was older, more likely to be working and married, and had a higher household income. Most adults who intended to complete a degree or certificate and enrolled on a less-than-halftime basis during their first year of postsecondary education left school without completing a degree or certificate. 4.) Most Less-Than- Halftime Adult Students Received Some Assistance with Postsecondary Costs, Typically from Work- Related Sources
In 1999-2000, about 7 in 10 of the nation’s less-than-halftime adult students received assistance equaling about 44 percent of their school costs, typically from sources other than federal and state student aid. Sources of Assistance Received by Less-Than- Halftime Adults Varied by Household Income, but Their School Costs and Amount of Assistance Were Similar
Few adults who enrolled less-than-halftime in 1999-2000 had incomes below 150 percent of the federal poverty guideline, and those who did received the bulk of assistance with their school costs from student financial aid—in contrast to the majority of less-than-halftime adult students who had incomes well above federal poverty guidelines and who relied chiefly upon work-related sources of assistance to meet school costs. Another proposed change would be to allow less-than-halftime students to participate in the Stafford Loan programs. The total federal budget cost of changing Pell Grant policy for less-than-halftime students would be approximately $25 million for the 2003-2004 academic year. Changes to the Stafford Loan Program Will Increase Program Costs and May Result in Disadvantages to Students and Institutions
While current law does not permit less-than-halftime students to participate in the Stafford loan programs, some have proposed that these students be allowed to participate. Other contacts and staff acknowledgments are listed in appendix V.
Appendix I: Objectives, Scope, and Methodology
We were asked to determine: (1) the extent to which adults enroll less than halftime, the characteristics and factors associated with less-than- halftime enrollment, and the rates of completion among these students; (2) the extent to which adult students enrolled less than halftime receive federal, state, and other assistance to help them meet the costs of postsecondary education; and (3) the implications, including the budgetary impact, of changing the Pell Grant Program to allow room and board and miscellaneous personal expenses to be considered in the calculation of grant amounts for less-than-halftime students and changing the Stafford loan programs to permit participation by less-than-halftime students. For the purposes of this report, adult students are those who are 24 years or older. | Why GAO Did This Study
Despite the availability of federal, state, and other sources of student aid, concerns have been raised that adult undergraduates--those 24 and older--receive inadequate assistance in meeting the costs of postsecondary education, particularly those adults who take one to five credits per term (or less than halftime). These concerns have been raised because less-than halftime adult students are unable to participate in the largest federal student loan programs, the Stafford Loan programs, and they are eligible to receive only one of the two federal higher education tax credits, the Lifetime Learning tax credit. To better understand the needs of these adult students, GAO was asked to identify (1) the extent to which adults enroll less than halftime, the characteristics and factors associated with less-than- halftime enrollment, and the rates of completion among these students; (2) the extent to which adult students enrolled less than halftime receive federal, state, and other assistance to help them meet the cost of postsecondary education; and (3) the implications, including the budgetary impact, of changing the Pell Grant Program to allow less-than-halftime students to count room and board costs and personal expenses in their application for federal financial aid, and changing the Stafford loan programs to permit participation by less-than-halftime students.
What GAO Found
In the 1999-2000 school year, 2.3 million adults enrolled in undergraduate education on a less-than-halftime basis, many seeking to balance school with other responsibilities. Compared with other adult students, the typical less-than-halftime adult student was more likely to work fulltime, be married, and have a household income over $30,000. Though 3 out of 4 less-than-halftime adult students expect to complete a degree or certificate program when they begin their education, most leave school without completing one. About 70 percent of less-than halftime adult students received some assistance--about 44 percent of their schooling costs--typically from sources other than federal or state student aid. The sources of assistance they received varied by household income: lower-income adult students enrolled less than halftime relied primarily upon student financial aid in meeting school costs, while higher-income households were assisted primarily by work-related sources such as the Lifetime Learning tax credit or employer assistance. We estimate that proposed changes to the Pell Grant programs would cost the federal government a minimum of $25 million for the 2003-2004 school year. Allowing less-than-halftime students to participate in the Stafford Loan programs would cost about $113 million per year. College administrators expressed reservations about expanding Stafford Loan eligibility due to concerns about increasing default rates. In commenting on our draft report, Education noted that they found it to be thorough and useful. |
gao_GGD-97-62 | gao_GGD-97-62_0 | Even so, the amount of taxes recommended (in constant dollars) dropped 23 percent per audit hour and 7 percent per audited return. In addition, IRS’ no-change rate doubled from 8 percent to 16 percent. Further, for the 7-year period, we computed that IRS assessed, on average, 27 percent of the additional taxes that IRS revenue agents recommended in these audits. Factors Affecting Assessment Rate and Audit Results
We identified four factors that affected the assessment rate and/or audit results, such as the lower recommended taxes per audit hour in 1994 compared to 1988. However, when a revenue agent tried to recommend taxes without sufficient support, such recommended taxes would not likely be sustained in Appeals, and the assessment rate would be lower. Tax Law Complicates IRS’ Audits of Large Corporations
IRS and large corporate taxpayers can have legitimate differences over how tax laws should be interpreted. Although they worked alone, these revenue agents received little assistance from district counsel or their group managers. Also, IRS’ approach for classifying and selecting these large corporate returns did not help ensure that revenue agents spent their audit time on the most noncompliant returns. In combination, these circumstances made it difficult for revenue agents to recommend taxes that had enough support to be assessed without investing a lot of time. Two reasons help explain this limited sharing with Examination staff. Conclusions
Our analysis of questionnaire responses and interviews with IRS officials identified at least four factors that contributed to the low assessment rate or decline in audit results for 1988 to 1994. IRS is taking action on both of these recommendations. Fourth, the Appeals and Examination functions did not always share information. Recommendations
To improve the audits of tax returns filed by large corporations, we recommend that the IRS Commissioner provide more specific objective criteria and procedures to guide the selection of large corporate tax returns and classification of tax issues with high audit potential across the districts; develop criteria and procedures to guide the evaluation across the districts of the impacts of groups specializing in audits of large corporations; encourage District Examination management to work with District Counsel officials on finding cost-effective ways to provide revenue agents with the necessary legal assistance; require Appeals to notify Examination of new information received from a large corporation that could cause the appealed issues to not be fully sustained, and require Examination to (1) indicate whether it wishes to review the new information and, if so; (2) review the information and notify Appeals of the results of the review as soon as possible; and require Examination management to provide feedback to its revenue agents on the final settlements that Appeals reaches with large corporations. (1) (2) (3) (4) (5) (6)
The revenue agent's workload The revenue agent's group/case manager's workload The revenue agent's skills and knowledge The complexity of the tax laws e. Appeals resolution of disputed issues from a prior audit of this taxpayer Appeals resolution of disputed issues from a different taxpayer g. Other (Specify)
In your opinion, to what extent, if at all, do audits of large corporations unreasonably burden those taxpayers selected for audit? Similar issues for different 24. Did this return have any related entities? 11. 12. 25. | Why GAO Did This Study
GAO reviewed the Internal Revenue Service's (IRS) program to audit the tax returns of about 45,000 large corporations that are not in the Coordinated Examination Program (CEP), focusing on factors that contributed to the assessment rate and audit results.
What GAO Found
GAO noted that: (1) IRS invested 25 percent more hours in audits of large corporations during 1994 than it did in 1988, yet it recommended 23 percent less additional tax per hour and doubled the rate at which it closed audits with no tax changes; (2) during this 7-year period, IRS assessed 27 percent of the additional taxes revenue agents recommended; (3) GAO's analysis of questionnaire responses and interviews of officials from across IRS identified at least four factors that had a negative effect on both the audit results and the assessment rate; (4) the complexity and vagueness of the tax code caused legitimate differences in interpretation between IRS and corporations over the correct tax liability; (5) this complexity and vagueness made it difficult for IRS revenue agents to find the necessary evidence to clearly support any additional recommended taxes without investing a lot of audit hours; (6) such recommended taxes were less likely to survive the IRS Office of Appeals process and be assessed; (7) also, complex and vague tax laws increased the tax burden on large corporations by increasing their uncertainty about what actions they had to take to comply with the tax code; (8) the IRS Examination Division and Office of Appeals used different performance measures; (9) this difference in measures resulted in a lower assessment rate; (10) these revenue agents worked alone on complex audits without much assistance from district counsel or their group managers, who tended to be responsible for managing all types of audits; (11) further, audit staff had a limited basis on which to classify and select returns that had the most audit potential; (12) IRS' approach for these large corporate returns gave a great deal of discretion to audit staff, however the staff had little information on previously audited corporations or industry issues to serve as guideposts; (13) all these aspects can contribute to a reduction in the amount of taxes recommended per audit hour and, with the possible exception of the problems in selecting returns, can affect the assessment rate; (14) Appeals usually did not share with Examination information that could be used to educate revenue agents; (15) even if Appeals did share information, revenue agents did not always have time to review the new information due to time pressures to do other audits; (16) although Appeals usually shared the final settlement on disputed issues, Examination management often did not distribute those results to the revenue agents; and (17) such feedback can help agents decide whether and how to audit similar issues in the future with better support of any recommended taxes. |
gao_GAO-05-4 | gao_GAO-05-4_0 | Most Colleges and Schools Offer a Mix of Credit and Noncredit Academic and Training Programs
The majority of community colleges and technical schools responding to our survey reported offering a wide range of academic and training programs in addition to their college credit curriculum. 1). While students were often enrolled in more than one type of program, the median percent of students enrolled in academic credit programs was 49 percent, and the median percent of students enrolled in occupational, professional, or technical training programs for credit was 33 percent. 2.) States report continuing demand for remedial education. More than three-quarters of schools responding to our survey offered contract training in the 2002-03 academic year. States Are the Largest Funding Source, but Many Schools Reported Receiving Less State Funding for Some Types of Noncredit Courses
State funding has been a major source of revenue for public community colleges for years. Excluding federal student financial aid, federal funding provided about 5 percent of total public community college revenue between 1992-93 and 2000-01 as previously shown in figure 6. Differences in Community College and Technical School and State Data Collection Efforts Place Reliance on National Studies for Measuring Overall Student Outcomes
Most community colleges and technical schools responding to our survey have systems in place to measure education and employment outcomes for students enrolled in at least some programs, but differences in how these schools and states measure and report such data preclude using them to report nationally on the proportion of community college and technical school students who graduate, transfer to 4-year institutions, pass licensing examinations, or gain employment. The best national outcome data, which stem from studies conducted by the National Center for Education Statistics, show that between half and two-thirds of community college students seeking an academic credential were successful in doing so or in transferring to a 4-year institution within 6 to 8 years of enrolling in community college programs. However, much less is known about the outcomes of contract and noncredit training initiatives—and because many of these efforts are customized to meet specific local employer needs, national studies may not be the most appropriate methodology. The Survey
To document the academic preparation and workforce training programs offered by public community colleges and technical schools, the students they serve, the education and employment outcomes of former students in these programs and efforts to measure outcomes, as well as to obtain information on the state policies and federal funds that support schools’ workforce development activities, we conducted a Web-based survey of all public, regionally accredited, less than 4-year institutions throughout the country and received a 71 percent response rate. | Why GAO Did This Study
The goal of most American workers--a well-paying job--will be increasingly linked to adequate training in the coming years. Such training will be key to competing for the 21 million new jobs the Department of Labor projects will be created in the 2002 to 2012 period. People already in, or seeking to enter, the workforce often turn to the nation's more than 1,100 public community colleges and technical schools to obtain needed skills. Nearly 6 million students were enrolled in for-credit courses in the fall term 2000 and millions more participated in noncredit courses at these schools. GAO was asked to examine: (1) the extent to which community colleges and technical schools are involved in remedial education and workforce training efforts as well as academic preparation activities; (2) how state and federal funding support these academic and training efforts; and (3) what is known about schools' efforts to measure outcomes, including the rates at which students graduate, transfer to 4-year institutions, pass occupational licensing exams, and gain employment. The scope of our review included a Web-based survey of 1,070 public community colleges and technical schools, 758 (71 percent) of which completed the survey.
What GAO Found
The majority of community colleges and technical schools are offering a broad spectrum of academic and training programs--everything from traditional courses for degree-seeking students to remedial education and contract training customized for individual employers. In addition, 61 percent of schools offer noncredit occupational, professional, or technical training. States have long provided the greatest share of funding for public community colleges between 40 and 45 percent of schools' total revenue, while federal funding, exclusive of student financial assistance, has been much smaller about 5 percent. Most states provide more funding for credit programs than noncredit programs. Most community colleges and technical schools track some education and employment outcomes for their students, but differences in state reporting requirements preclude aggregating these outcomes nationally. However, national studies of representative samples or cohorts of students conducted by the National Center for Education Statistics show that between half and two-thirds of community college students seeking some type of academic or occupational credential succeed in transferring to a 4-year institution or earning a degree, license, certificate, or diploma within 6 to 8 years of initiating studies. GAO's survey indicated that more than half of students enrolled in remedial and 3 types of basic skills courses completed them successfully. |
gao_GAO-07-516 | gao_GAO-07-516_0 | Legislative branch operations generate greenhouse gas emissions from the combustion of fossil fuels in the Capitol Power Plant; business travel in government-owned and -leased vehicles; the use of heavy machinery; the release of VOCs in furniture and print shops; fugitive emissions, such as leaks in refrigeration equipment and fuel tanks; the combustion of fossil fuels in emergency generators; and the consumption of purchased electricity, natural gas, steam, and chilled water. Legislative Branch Operations Generated 316,000 Metric Tons of Greenhouse Gas Emissions in 2006, a 4 Percent Increase from Base Year Levels
Legislative branch operations generated about 316,000 metric tons of greenhouse gas emissions (expressed in carbon dioxide equivalents) in fiscal year 2006. The second-largest source of emissions was the combustion of fossil fuels—primarily coal and natural gas—in the Capitol Power Plant to produce steam for the majority of the legislative branch buildings. Overall, greenhouse gas emissions generated by legislative branch operations in fiscal year 2006 increased 4 percent from the annual average quantity emitted in fiscal years 1998 through 2001 (see fig. A Strategy for Reducing Emissions Generated by Legislative Branch Operations Includes Conducting Energy Audits and Evaluating Other Projects
A strategy for reducing emissions includes conducting energy audits to identify and evaluate energy-efficiency and renewable-energy projects, as well as evaluating other emissions reduction projects that may fall outside the scope of energy audits. The strategy would also involve developing an implementation plan that considers cost-effectiveness, the extent to which the projects reduce emissions, and funding options. Energy Audits Are Key to Addressing Largest Sources of Emissions
Conducting energy audits would assist the legislative branch in addressing the largest sources of emissions—the consumption of purchased electricity and fossil fuel combustion in the Capitol Power Plant—because these audits identify cost-effective systemwide energy-efficiency and renewable-energy projects. AOC, GAO, and GPO commissioned six preliminary, four targeted, and one comprehensive energy audit of some of their facilities from fiscal years 1998 through 2006. However, most of these projects have not been implemented. Evaluating Other Projects Could Identify Additional Ways to Reduce Emissions
In addition to projects identified through energy audits, a strategy would include evaluating other projects to reduce emissions that may fall outside the scope of energy audits, such as (1) projects to reduce electricity emissions by curtailing energy use, purchasing high-efficiency appliances, using renewable electricity, and considering the energy efficiency of facilities when constructing new facilities and before entering into leases; (2) projects to reduce emissions from the combustion of fossil fuels in the Capitol Power Plant by adjusting the fuel mix; (3) projects to reduce vehicle emissions by acquiring fuel-efficient vehicles and vehicles that run on renewable fuel; and (4) projects to reduce overall emissions by purchasing offsets. The cost-effectiveness, emissions reductions, and funding options for each of these projects would have to be evaluated on a case-by-case basis. While all legislative branch agencies recognize the benefits of energy audits to reduce emissions, the agencies have varied in the extent to which they have used such audits. Consequently, each agency would benefit from a schedule to conduct audits regularly and a plan for implementing and financing the most cost-effective projects identified through the audits. We selected the average annual amount emitted in fiscal years 1998 through 2001 for the base year because this is the time period set by the Chicago Climate Exchange, a voluntary greenhouse gas reduction program. The Architect of the Capitol leases space within the Government Printing Office’s building. | Why GAO Did This Study
Because of concerns about changes in Earth's climate due to greenhouse gas emissions and the potential economic and environmental consequences of these changes, GAO (1) inventoried greenhouse gas emissions generated by legislative branch operations in fiscal year 2006, as well as identified trends in emissions starting from a base year of the average annual amount emitted in fiscal years 1998 through 2001, and (2) identified a strategy for reducing emissions. To perform this work, GAO followed the Greenhouse Gas Protocol and additional guidance from the Environmental Protection Agency, using data provided by officials responsible for legislative branch operations and the General Services Administration.
What GAO Found
Legislative branch operations generated about 316,000 metric tons of greenhouse gas emissions (expressed in carbon dioxide equivalents) in fiscal year 2006. The amount of greenhouse gas emissions generated by legislative branch operations is equal to the emissions produced by about 57,455 cars and represents an increase of about 4 percent from the average annual quantity emitted in fiscal years 1998 through 2001. The largest source of these emissions (63 percent) was the consumption of electricity purchased from an external provider that relies primarily on fossil fuel combustion to generate the electricity. The second-largest source of emissions (32 percent) was the combustion of fossil fuels in the Capitol Power Plant to produce steam for the majority of the legislative branch buildings. The remaining 5 percent of emissions came from other sources that each generated 1 percent or less of emissions, such as natural gas and chilled water purchased from outside sources and business travel in government-owned and -leased vehicles. While emissions in 2006 increased 4 percent over the base year levels, emissions in the intervening years varied depending on factors such as fluctuations in weather, the fuel mix used at the Capitol Power Plant, and the quantity of renewable energy used by legislative branch operations. A strategy for reducing emissions includes conducting energy audits to identify and evaluate energy efficiency and renewable energy projects, as well as evaluating other emissions-reduction projects that may fall outside the scope of energy audits. Such a strategy would also involve developing an implementation plan that considers cost-effectiveness, the extent to which the projects reduce emissions, and funding options. Energy audits are a key step because the projects identified through the audits would address the largest sources of emissions--purchased electricity and fossil fuel combustion in the Capitol Power Plant--and would include information on cost-effectiveness and the potential for reducing emissions. Agencies could finance these projects through direct appropriations or contracts with utility or energy service companies. Since fiscal year 1998, the Architect of the Capitol, GAO, and the Government Printing Office have commissioned 11 energy audits of some of their facilities, but the audits have generally not been comprehensive and the agencies have varied in the extent to which they have implemented the projects identified through the audits. Another part of a strategy would involve evaluating the cost-effectiveness, emissions reduction, and funding options of projects that may fall outside the scope of energy audits--such as acquiring fuel-efficient vehicles--on a case-by-case basis. The energy audits and evaluations of other projects would provide information for legislative branch agencies to develop plans for implementing projects to reduce emissions. |
gao_GAO-07-242 | gao_GAO-07-242_0 | Deposit Insurance System
In addition to adding sections 38 and 39 to FDIA to address capital inadequacy and safety and soundness problems at depository institutions, FDICIA also required FDIC to establish a system—the deposit insurance system—to assess the risk of federally insured depository institutions and charge premiums to finance a deposit insurance fund meant to protect depositors in the event of future bank and thrift failures. No bank or thrift failed from June 2004 through January 2007. Regulators Used PCA Appropriately in Cases We Reviewed and Other Enforcement Actions Generally Preceded Declines in These Institutions’ PCA Capital Categories
For the sample of banks and thrifts we reviewed, we found that regulators generally implemented PCA in accordance with section 38. For example, when institutions failed to meet minimum capital requirements, regulators required them to submit capital restoration plans or imposed restrictions through PCA directives or other enforcement actions. In response, FDIC issued a notice informing the bank of the restrictions applicable to critically undercapitalized institutions under section 38. Regulators said that PCA was most effective when it was used to close or require the sale or merger of institutions as a means of minimizing or preventing losses to the insurance fund. Regulators Used Other Enforcement Actions to Address Deficiencies in Sampled Institutions Prior to Declines in Their PCA Capital Categories
Although PCA requires regulators to take regulatory action when an institution fails to meet established minimum capital requirements, capital is a lagging indicator and thus not necessarily a timely predictor of problems at banks and thrifts. Regulators Have Made Limited and Targeted Use of the Noncapital Supervisory Actions Available under Sections 38 and 39
Under section 38 regulators have the ability to reclassify an institution’s capital category and dismiss officers and directors from deteriorating banks and thrifts. Under section 39, regulators can require institutions to implement plans to address deficiencies in their compliance with regulatory safety and soundness standards. Industry officials and academics to whom we spoke and selected organizations that submitted comment letters to FDIC generally supported the concept of the new system. The New System Links Risk and Premiums More Closely
To tie institutions’ insurance premiums more directly to the risk each presents to the insurance fund, FDIC created a system that generally (1) differentiates between large and small institutions, specifically between institutions with current credit agency ratings and $10 billion or more in assets and all other institutions; (2) for institutions without credit agency ratings, forecasts the likelihood of a decline in financial health (referred to throughout this report as the general method); (3) for institutions with credit agency ratings, uses those ratings, plus potentially other financial market information, to evaluate institutional risk (referred to throughout this report as the large-institution method); and (4) requires all institutions to pay premiums based on their individual risk. Appendix I: Objectives, Scope, and Methodology
The objectives of this report were to (1) describe trends in the financial condition of banks and thrifts and federal regulators’ oversight of these institutions since the passage of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA), (2) evaluate how federal regulators used the capital or prompt corrective action (PCA) provisions of FDICIA to resolve capital adequacy issues at the institutions they regulate, (3) evaluate the extent to which federal regulators use the noncapital provisions of FDICIA to identify and address weaknesses at the institutions they regulate, and (4) describe the Federal Deposit Insurance Corporation’s (FDIC) deposit insurance system and how recent changes to the system affect the determination of depository institutions’ risk and insurance premiums. To determine the extent to which federal regulators have used the noncapital supervisory actions of sections 38 and 39 of FDIA to address weaknesses at the institutions they regulate, we reviewed regulators’ policies and procedures related to sections 38(f)(2)(F) and 38(g)—the provisions for dismissal of officers and directors and reclassification of a capital category, respectively—and section 39, which gives regulators authority to address safety and soundness deficiencies. | Why GAO Did This Study
The Federal Deposit Insurance Reform Conforming Amendments Act of 2005 required GAO to report on the federal banking regulators' administration of the prompt corrective action (PCA) program under section 38 of the Federal Deposit Insurance Act (FDIA). Congress created section 38 as well as section 39, which required regulators to prescribe safety and soundness standards related to noncapital criteria, to address weaknesses in regulatory oversight during the bank and thrift crisis of the 1980s that contributed to deposit insurance losses. The 2005 act also required GAO to report on changes to the Federal Deposit Insurance Corporation's (FDIC) deposit insurance system. This report (1) examines how regulators have used PCA to resolve capital adequacy issues at depository institutions, (2) assesses the extent to which regulators have used noncapital supervisory actions under sections 38 and 39, and (3) describes how recent changes to FDIC's deposit insurance system affect the determination of institutions' insurance premiums. GAO reviewed regulators' PCA procedures and actions taken on a sample of undercapitalized institutions. GAO also reviewed the final rule on changes to the insurance system and comments from industry and academic experts.
What GAO Found
In recent years, the financial condition of depository institutions generally has been strong, which has resulted in the regulators' infrequent use of PCA provisions to resolve capital adequacy issues of troubled institutions. Partly because they benefited from a strong economy in the last decade, banks and thrifts in undercapitalized and lower capital categories decreased from 1,235 in 1992, the year regulators implemented PCA, to 14 in 2005, and none failed from June 2004 through January 2007. For the banks and thrifts GAO reviewed, regulators generally implemented PCA in accordance with section 38. For example, regulators identified when institutions failed to meet minimum capital requirements, required them to implement capital restoration plans or corrective actions outlined in enforcement orders, and took steps to close or require the sale or merger of those institutions that were unable to recapitalize. Although regulators generally used PCA appropriately, capital is a lagging indicator and thus not necessarily a timely predictor of problems at banks and thrifts. In most cases GAO reviewed, regulators had responded to safety and soundness problems in advance of a bank or thrift's decline in required PCA capital levels. Under section 38 regulators can take noncapital supervisory actions to reclassify an institution's capital category or dismiss officers and directors from deteriorating institutions, and under section 39 regulators can require institutions to implement plans to address deficiencies in their compliance with regulatory safety and soundness standards. Regulators generally have made limited use of these authorities, in part because they have chosen other informal and formal actions to address problems at troubled institutions. According to the regulators, other tools, such as cease-and-desist orders, may provide more flexibility than those available under sections 38 and 39 because they are not tied to an institution's capital level and may allow them to address more complex or multiple deficiencies with one action. Regulators' discretion to choose how and when to address safety and soundness weaknesses is demonstrated by their limited use of section 38 and 39 provisions and more frequent use of other informal and formal actions. Recent changes to FDIC's deposit insurance system tie the premiums a bank or thrift pays into the insurance fund more directly to the estimated risk the institution poses to the fund. In the revised system, FDIC generally (1) differentiates between larger institutions with current credit agency ratings and $10 billion or more in assets and all other, smaller institutions and (2) requires all institutions to pay premiums based on their individual risk. Most bankers, industry groups, and academics GAO interviewed and many of the organizations and individuals that submitted comment letters to FDIC on the new system generally supported making the system more risk based, but also had some concerns about unintended effects. FDIC and the other federal banking regulators intend to monitor the new system for any adverse impacts. |
gao_GAO-04-477T | gao_GAO-04-477T_0 | Several of these material weaknesses (referred to hereafter as material deficiencies) resulted in conditions that continued to prevent us from forming and expressing an opinion on the U.S. government’s consolidated financial statements for the fiscal years ended September 30, 2003 and 2002. Major challenges include the federal government’s inability to properly account for and report property, plant, and equipment and inventories and related property, primarily at the Department of Defense (DOD); reasonably estimate or adequately support amounts reported for certain liabilities, such as environmental and disposal liabilities and related costs at DOD, and ensure complete and proper reporting for commitments and contingencies; support major portions of the total net cost of government operations, most notably related to DOD, and ensure that all disbursements are properly recorded; fully account for and reconcile intragovernmental activity and balances; demonstrate how net outlay amounts reported in the consolidated financial statements were related to net outlay amounts reported in the underlying federal agencies’ financial statements; and effectively prepare the federal government’s financial statements, including ensuring that the consolidated financial statements are consistent with the underlying audited agency financial statements, balanced, and in conformity with GAAP. Three major impediments to an opinion on the consolidated financial statements are (1) serious financial management problems at DOD, (2) the federal government’s inability to fully account for and reconcile transactions between federal government entities, and (3) the federal government’s ineffective process for preparing the consolidated financial statements. Truth and Transparency in the Fiscal Outlook
Our nation’s large and growing long-term fiscal imbalance, which is driven largely by known demographic trends and rising health care costs— coupled with new homeland security and defense commitments—serves to sharpen the need to fundamentally review and re-examine basic federal entitlements, as well as other mandatory and discretionary spending, and tax policies. Current financial reporting does not clearly and transparently show the wide range of responsibilities, programs, and activities that may either obligate the federal government to future spending or create an expectation for such spending and provides an unrealistic and even misleading picture of the federal government’s overall performance and financial condition. In addition, too many significant federal government commitments and obligations, such as Social Security and Medicare, are not fully and consistently disclosed in the federal government’s consolidated financial statements and budget, and current federal financial reporting standards do not require such disclosure. Proper accounting and reporting practices are essential in the public sector. After all, the U.S. government is the largest, most diverse, most complex, and arguably the most important entity on earth today. Its services—homeland security, national defense, Social Security, mail delivery, and food inspection, to name a few—directly affect the well- being of almost every American. But sound decisions on the future direction of vital federal government programs and policies are made more difficult without timely, accurate, and useful financial and performance information. A top-to- bottom review of government activities to ensure their relevance and fit for the 21st century and their relative priority is long overdue. As I have spoken about in the past, the federal government needs a three-pronged approach to (1) restructure existing entitlement programs, (2) reexamine the base of discretionary and other spending, and (3) review and revise the federal government’s tax policy and enforcement programs. New accounting and reporting approaches, budget control mechanisms, and metrics are needed for considering and measuring the impact of spending and tax policies and decisions over the long term. The requirement for timely, accurate, and useful financial and performance management information is greater than ever as our nation faces major long-term fiscal challenges that will require tough choices in setting priorities and linking resources to results. Problems in accounting for liabilities affect the determination of the full cost of the federal government’s current operations and the extent of its liabilities. | Why GAO Did This Study
GAO is required to audit the consolidated financial statements of the U.S. government. Proper accounting and reporting practices are essential in the public sector. The U.S. government is the largest, most diverse, most complex, and arguably the most important entity on earth today. Its services--homeland security, national defense, Social Security, mail delivery, and food inspection, to name a few--directly affect the well-being of almost every American. But sound decisions on the future direction of vital federal government programs and policies are made more difficult without timely, accurate, and useful financial and performance information. Until the problems discussed in GAO's audit report on the U.S. government's consolidated financial statements are adequately addressed, they will continue to (1) hamper the federal government's ability to accurately report a significant portion of its assets, liabilities, and costs; (2) affect the federal government's ability to accurately measure the full cost as well as the financial and nonfinancial performance of certain programs while effectively managing related operations; and (3) significantly impair the federal government's ability to adequately safeguard certain significant assets and properly record various transactions.
What GAO Found
As in the 6 previous fiscal years, certain material weaknesses in internal control and in selected accounting and reporting practices resulted in conditions that continued to prevent GAO from being able to provide the Congress and American citizens an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated in conformity with U.S. generally accepted accounting principles. Three major impediments to an opinion on the consolidated financial statements continue to be (1) serious financial management problems at DOD, (2) the federal government's inability to fully account for and reconcile transactions between federal government entities, and (3) the federal government's ineffective process for preparing the consolidated financial statements. For fiscal year 2003, 20 of 23 Chief Financial Officers (CFO) Act agencies received unqualified opinions, the same number received by these agencies for fiscal year 2002, up from 6 for fiscal year 1996. However, only 3 of the CFO Act agencies had neither a material weakness in internal control, an issue involving compliance with applicable laws and regulations, nor an instance of lack of substantial compliance with Federal Financial Management Improvement Act requirements. The requirement for timely, accurate, and useful financial and performance management information is greater than ever as the nation faces major long-term fiscal challenges that will require tough choices in setting priorities and linking resources to results. Given the nation's large and growing long-term fiscal imbalance, which is driven largely by known demographic trends and health care costs, coupled with new homeland security and defense commitments, the status quo is unsustainable. Current financial reporting does not clearly and transparently show the wide range of responsibilities, programs, and activities that may either obligate the federal government to future spending or create an expectation for such spending and provides an unrealistic and even misleading picture of the federal government's overall performance and financial condition. In addition, too many significant federal government commitments and obligations, such as Social Security and Medicare, are not fully and consistently disclosed in the federal government's financial statements and budget, and current federal financial reporting standards do not require such disclosure. A top-to-bottom review of government activities to ensure their relevance and fit for the 21st century and their relative priority is long overdue. The federal government needs a three-pronged approach to (1) restructure existing entitlement programs, (2) reexamine the base of discretionary and other spending, and (3) review and revise the federal government's tax policy and enforcement programs. New accounting and reporting approaches, budget control mechanisms, and metrics are needed for considering and measuring the impact of spending and tax policies and decisions over the long term. |
gao_RCED-98-118 | gao_RCED-98-118_0 | FAA conducted a study in 1994 to assess the benefits and costs of installing a surveillance radar at the airport. FAA’s Decision-Making Process for Installing Surveillance Radars at Airports
FAA uses a multifaceted process to determine which airports should get surveillance radars. For example, after conducting the 1994 benefit-cost study and determining that the airport met FAA’s cost-effectiveness criteria, agency officials prematurely concluded that Cherry Capital qualified for a radar. Factors FAA Considered When Conducting Benefit-Cost Studies
In accordance with its decision-making process, FAA used its investment criteria to identify the factors to consider when conducting the 1994, 1996, and 1997 benefit-cost studies for the Cherry Capital Airport. Therefore, the resulting average annual growth rate used in the 1996 and 1997 studies was about 1 percent. Impact of Other Air Traffic Projections on the 1997 Benefit-Cost Study
Since air traffic projections were the most critical factors influencing the results of the benefit-cost studies for the Cherry Capital Airport, we requested air traffic projections developed by the state of Michigan and Traverse City transportation planning officials to determine what impact their projections would have had on the results of FAA’s 1997 study. Actions FAA Has Taken to Address Safety Concerns at the Cherry Capital Airport
In response to the safety concerns raised by Members of Congress and controllers at the Cherry Capital Airport, such as the greater risk of aircraft collisions that results from increased air traffic, FAA installed a Terminal Automated Radar Display and Information System (TARDIS) in 1997 to help the controllers locate and identify aircraft approaching or departing the airspace around the airport. FAA Plans to Replace Surveillance Radars at Airports With Fewer Total Air Traffic Operations Than the Cherry Capital Airport
Beginning in 1999 and continuing through 2004, FAA plans to retire all of the older airport surveillance radars (ASR), specifically ASR-7 and ASR-8, which were installed in the 1960s and 1970s. We noted that FAA officials routinely conduct benefit-cost studies using air traffic operations as one of the critical factors in deciding whether it would be cost-effective to install surveillance radars at airports without radars. But they said they have no plans to conduct such studies because they believe that it would be very difficult to discontinue radar operations at an airport found not to qualify because the public’s perception would be that safety was being reduced, even if safety was not compromised and other circumstances warranted the discontinuance of radar operations. Although installing and retaining radars at some of the airports with fewer total air traffic operations than the Cherry Capital Airport might be justified, conducting benefit-cost studies and revalidating the operational needs would ensure that (1) radars are installed or replaced first at the airports that have the greatest needs and (2) FAA is not spending millions of dollars to replace radars when continued operation of the existing radars might not be justified. Conclusions
An overstatement of projected air traffic growth was the primary reason the Cherry Capital Airport met FAA’s cost-effectiveness criteria in 1994, and agency officials prematurely concluded that the airport qualified for a surveillance radar. Recommendation
Because of current budget constraints and the future expenditures associated with installing radars as part of the effort to modernize the nation’s air traffic control system, we recommend that the Secretary of Transportation direct the Administrator of the Federal Aviation Administration to conduct benefit-cost studies to validate the cost-effectiveness and revalidate the need for the radars at airports scheduled to receive replacement radars and to use the results of the studies in prioritizing the replacement of the radars at qualifying airports. | Why GAO Did This Study
Pursuant to a legislative requirement, GAO reviewed the benefit-cost studies that the Federal Aviation Administration (FAA) conducted for the Cherry Capital Airport in 1994, 1996, and 1997, focusing on: (1) FAA's decisionmaking process for installing surveillance radars at airports; (2) the factors, including costs, benefits, and air traffic projections, that FAA considered when conducting the 1994, 1996, and 1997 studies; (3) the impact, if any, that air traffic projections developed by other sources would have had on the results of the 1997 study; (4) actions FAA has taken to address safety concerns at the airport; and (5) FAA's plans to replace surveillance radars at airports with fewer total air traffic operations than the Cherry Capital Airport.
What GAO Found
GAO noted that: (1) FAA uses a multifaceted process to determine which airports should get surveillance radars; (2) this process includes completing a benefit-cost study, assessing an airport's need for a surveillance radar compared with the needs of other airports, and determining the availability of radar equipment or funds to purchase needed radar equipment; (3) in its 1994 benefit-cost study for the Cherry Capital Airport, FAA officials overstated the projected air traffic growth; (4) this overstated growth was the primary reason FAA concluded that the airport met its cost-effectiveness criteria; (5) moreover, in 1994, FAA officials did not follow the agency's decisionmaking process and prematurely concluded that the Cherry Capital Airport qualified for a surveillance radar; (6) when conducting the 1994, 1996, and 1997 benefit-cost studies, FAA considered the potential efficiency and safety benefits; (7) with the higher growth rate used in the 1994 study, the benefits exceeded the costs of installing a surveillance radar, so the Cherry Capital Airport met FAA's cost-effectiveness criteria; but with the lower growth rate used in the 1996 and 1997 studies, it did not qualify; (8) the air traffic projections were the most critical factors influencing the results of FAA's benefit-cost studies; (9) to address the safety concerns, FAA installed an automated display and information system at the Cherry Capital Airport in 1997; (10) while the controllers told GAO that the equipment can help them better manage air traffic and improve safety, they have difficulty using it because information on aircraft identification and altitude is sometimes unreadable on the display monitor; (11) beginning in 1999, FAA plans to replace the existing surveillance radars installed in the 1960s and 1970s at 101 airports as part of its efforts to modernize its air traffic control system; (12) seventy-five of the 101 airports had fewer total air traffic operations in 1996 than the Cherry Capital Airport did; (13) although FAA conducts benefit-cost studies and uses air traffic operations as a basis for determining the cost-effectiveness of installing surveillance radars at airports, agency officials did not conduct similar studies to determine whether it would be cost-effective to replace existing radars at the 101 airports or to prioritize the replacement of the radars; and (14) FAA has no plans to undertake such efforts because agency officials believe that it would be very difficult to discontinue radar operations at an airport because of the public's perception that safety would be reduced. |
gao_GAO-11-567T | gao_GAO-11-567T_0 | Background
Several federal departments and agencies have responsibilities for assessing the threat of CBRN agents and determining requirements and priorities for developing and acquiring medical countermeasures for these agents, as part of their mission and, in some cases, as specifically required by law. PHEMCE is a federal interagency decision-making body responsible for providing recommendations to the Secretary of HHS on (1) prioritized requirements for CBRN medical countermeasures, (2) coordination of medical countermeasure development and acquisition activities to address the requirements, and (3) strategies for distributing medical countermeasures held in the U.S. Strategic National Stockpile (SNS), the national repository of medications, medical supplies, and equipment for use in a public health emergency. In addition, PHEMCE includes officials from DHS, the Department of Defense (DOD), the Department of Veterans Affairs, the Department of Agriculture, and the Executive Office of the President. Within HHS, ASPR is responsible for leading federal government efforts to research, develop, evaluate, and acquire public health emergency medical countermeasures to prevent, treat, or mitigate the potential health effects from exposure to CBRN agents. HHS, Through PHEMCE, Uses a Four-Step Process to Determine Acquisition Priorities for Medical Countermeasures and Oversees Their Development
HHS coordinates and leads federal efforts to determine CBRN medical countermeasure priorities and develop and acquire CBRN medical countermeasures, primarily through PHEMCE. HHS’s medical countermeasure acquisition strategy is based on a four-step process: (1) identify and assess the threat of CBRN agents, (2) assess medical and public health consequences of attacks with these agents, (3) establish medical countermeasure requirements, and (4) identify and prioritize near-, mid-, and long-term development and acquisition programs. Because desired CBRN medical countermeasures may not be immediately available for acquisition, HHS oversees and supports the various stages of research and development of these countermeasures, also under PHEMCE. 1.) In the third step, PHEMCE uses the consequence modeling results to determine requirements for needed medical countermeasures, including the needed quantity and the desired characteristics, such as how they would be used and stored. In this stage, potential medical countermeasures are further evaluated in animal studies to demonstrate safety and effectiveness for preventing, diagnosing, or treating disease in humans. Challenges to Development and Acquisition of Medical Countermeasures Include High Failure Rates in Research and Difficulties Meeting Regulatory Requirements
The federal government faces a variety of challenges in developing and acquiring medical countermeasures, such as the high failure rate in research and development and difficulties meeting regulatory requirements. One scientific challenge is that, as with other medical products, the failure rate for development of certain CBRN medical countermeasures can be high, depending on the stage of scientific research and development. HHS estimates that the failure rate for development and licensure of most drugs, vaccines, and diagnostic devices in the early development stage can be more than 80 percent, with an increasing probability of success as the product moves further through development. Given the high risk of failure in research, as well as a lack of a commercial market for most CBRN countermeasures, attracting companies experienced in meeting the complex requirements necessary to develop a new product is also challenging. As a result, FDA officials told us that they have to provide more regulatory and scientific guidance to these companies than they might provide to larger pharmaceutical companies, which generally have more experience with bringing products through the regulatory process. There are also several challenges related to the regulatory processes for evaluating the development of promising medical countermeasures. For example, researchers face challenges proving the effectiveness of potential countermeasures because they cannot ethically or feasibly test the effectiveness of countermeasures on humans due to the dangers posed by CBRN agents. Determining appropriate doses of CBRN countermeasures for children, who may be more vulnerable to the adverse effects of a CBRN agent, also involves regulatory challenges. Finally, CDC faces the logistical challenge of ongoing replenishment of expiring medical countermeasures in the SNS. | Why GAO Did This Study
The anthrax attacks of 2001 and a radiation leak after the recent natural disaster in Japan highlighted concerns that the United States is vulnerable to threats from chemical, biological, radiological, and nuclear (CBRN) agents, which can cause widespread illness and death. Medical countermeasures--such as drugs, vaccines, and diagnostic devices--can prevent or treat the health effects of exposure, but few are currently available for many of these CBRN agents. GAO was asked to testify on the Department of Health and Human Services' (HHS) CBRN medical countermeasure development and acquisition activities. This statement focuses on (1) how HHS determines needed CBRN medical countermeasures and priorities for development and acquisition and (2) selected challenges to medical countermeasure development and acquisition. This statement of preliminary findings is based on ongoing work. To do this work, GAO examined relevant laws and presidential directives, analyzed federal agency documents and reports from advisory boards and expert groups, and interviewed officials from HHS and the Department of Homeland Security (DHS) about the processes for developing and acquiring CBRN medical countermeasures and the challenges related to those efforts. GAO shared the information in this statement with HHS. HHS provided technical comments, which GAO incorporated as appropriate.
What GAO Found
HHS coordinates and leads federal efforts to determine CBRN medical countermeasure priorities and develop and acquire CBRN medical countermeasures, primarily through an interagency body that includes other federal agencies with related responsibilities, such as DHS and the Department of Defense. HHS's medical countermeasure acquisition strategy is based on a four-step process: (1) identify and assess the threat of CBRN agents, (2) assess medical and public health consequences of attacks with these agents, (3) establish medical countermeasure requirements, and (4) identify and prioritize near-, mid-, and long-term development and acquisition. Through these processes, HHS determines which countermeasures to buy for specific CBRN agents, including the desired characteristics of these countermeasures--such as how many doses a vaccine requires to confer immunity--the needed quantity of certain medical countermeasures, and the acquisition priorities. While a few CBRN countermeasures can be immediately acquired, most have not yet been developed. Therefore, HHS and the interagency body support and oversee several stages of research and development to try to obtain usable countermeasures. These include basic cellular and biological research to understand the effects of these agents on humans; applied research to validate approaches, such as testing the effectiveness of treatment in animals; early development to assess the safety of potential countermeasures; and advanced development, in which the products are more fully evaluated for safety and effectiveness, including their formulation and manufacturing processes. The federal government faces a variety of challenges in developing and acquiring medical countermeasures, such as the high failure rate in research and development and difficulties meeting regulatory requirements. For example, the failure rate for development and licensure of most drugs, vaccines, and diagnostic devices can be more than 80 percent, depending on the stage of scientific research and development. Given this risk, as well as a lack of a commercial market for most medical countermeasures, attracting large, experienced pharmaceutical firms to research and develop them is challenging. Smaller biotechnology companies are more likely to be developing medical countermeasures, but HHS must provide more guidance to these less experienced small companies than might be typical with larger companies. In addition, several challenges exist related to regulatory processes for evaluating promising medical countermeasures. These challenges include (1) proving a countermeasure's effectiveness using animals as proxies for humans, because humans cannot ethically be used in studies involving CBRN agents; (2) determining appropriate doses of countermeasures for children, who may be more vulnerable to exposure to CBRN agents; and (3) evaluating the safety and effectiveness of medical countermeasures for use in a public health emergency if they have not yet been approved or licensed. Finally, HHS faces the logistical challenge of ongoing replenishment of expiring medical countermeasures in the U.S. Strategic National Stockpile, the national repository of medications, medical supplies, and equipment for public health emergencies. |
gao_GAO-15-446 | gao_GAO-15-446_0 | The Council Carries Out Its Responsibilities in a Number of Ways but Faces Challenges
The Council carries out its statutory and regulatory responsibilities in a number of ways, including by developing requirements documents on the size and composition of the nuclear weapons stockpile, providing oversight of nuclear weapons refurbishment programs, and coordinating budget matters to support the stockpile. The National Defense Authorization Act for Fiscal Year 2013 gave the Council several new budget-related responsibilities, such as certifying to Congress whether the annual budget request for NNSA meets stockpile program requirements, and approving programming and budget matters pertaining to nuclear weapons programs between DOD and DOE. Specifically, the Council faces challenges in (1) carrying out several new budget-related responsibilities; (2) planning and providing oversight for more nuclear weapon refurbishment programs than it has in the past; and (3) adjusting program priorities in response to budget pressures. Also, some NNSA nuclear weapon programs have experienced delays and cost growth during the past 5 years. However, we identified two areas where the Council’s actions are partially but not fully consistent with key practices or related key considerations for implementing collaborative mechanisms: (1) having up-to-date, written agreements and guidance that establishes compatible policies, procedures, and other means to operate across agency boundaries and defines roles and responsibilities and (2) regularly including all relevant participants. DOD and DOE signed a 1997 memorandum of agreement to guide the Council’s efforts. According to DOD and NNSA officials, the Council has not updated the 1997 memorandum of agreement or developed other formal guidance to reflect the processes it will use to carry out its responsibilities, because some officials do not believe it is necessary and want to preserve the Council’s flexibility in how it carries out its responsibilities by minimizing written guidance. Without an updated memorandum of agreement that describes the roles, responsibilities, structure, and functions of the Council’s two support committees, how the Council and these groups are to work together, and the general processes and time frames the Council and its support committees should follow to carry out statutory responsibilities, it may be difficult for the Council to provide greater clarity to its members and the support committees on how to conduct their work—particularly for recently-added responsibilities such as certifying the annual budget request for NNSA. The Council Does Not Fully Follow Collaboration Practice of Routinely Including All Relevant Participants
A key consideration when implementing collaborative mechanisms is whether all relevant participants have been included. However, they said that representatives from NNSA’s budget and program evaluation offices are invited at the discretion of NNSA members and generally do not attend Standing and Safety Committee and Action Officers Group meetings. Without requiring the consistent and routine participation of budget and program evaluation officials to provide their expertise, the attendance of these officials is left to the discretion of the inviting members, and the Council’s support committees may be limited in their ability to deal with budget and cost questions as they arise, particularly when the issues on the agenda do not appear to be directly budget-related. Also, the Council may be limited in its ability to carry out its new budget-related responsibilities if DOD and NNSA budget and program evaluation officials are not required to attend all meetings of the Standing and Safety Committee and the Action Officers Group. Conclusions
The Council’s important role as the focal point for interagency activities is becoming more challenging as the nuclear weapons stockpile, delivery systems, and infrastructure all age, while budgets remain constrained. The Council has taken steps to coordinate programs across DOD and DOE, but its actions are not fully consistent with some key practices and considerations for interagency collaboration. Recommendations for Executive Action
To enhance collaboration between DOD and NNSA, we recommend that the Secretaries of Defense and Energy update the 1997 memorandum of agreement for the Council, and, as part of this update, take the following two actions: describe the roles, responsibilities, structure, and functions of the Council’s two support committees, how the Council and these groups are to work together, and the general processes and time frames the Council and its support committees should follow to carry out statutory responsibilities and include a requirement that budget and program evaluation officials from both DOD and NNSA will consistently and routinely attend all meetings of the Council’s two support committees. Appendix I: Objectives, Scope, and Methodology
Our review assessed: (1) how the Nuclear Weapons Council (Council) carries out its statutory and regulatory responsibilities and any challenges it faces in doing so and (2) the extent to which the Council’s actions are consistent with key practices for interagency collaboration. To address these objectives, we reviewed relevant laws, agreements, and guidance and interviewed officials from the Council; the Department of Defense (DOD); the Department of Energy (DOE), including the National Nuclear Security Administration (NNSA); and the Office of Management and Budget. To evaluate the extent to which the Council’s actions are consistent with key practices for interagency collaboration, we reviewed documents that described Council processes, including the 1997 memorandum of agreement between DOD and DOE; DOD’s unofficial Nuclear Matters Handbook; and the Council’s Procedural Guideline for the Phase 6.X Process and interviewed DOD and NNSA officials about the Council’s structure and processes. | Why GAO Did This Study
DOD and DOE's NNSA are jointly responsible for managing aspects of the U.S. nuclear weapons stockpile. The Council, established by Congress in 1986, includes five senior officials from both departments; it facilitates coordination between DOD and NNSA and establishes program priorities. DOD and NNSA are working to modernize the nuclear enterprise, including delivery systems and nuclear weapons that are aging and being used longer than originally intended. DOD and NNSA project this work will cost about $332 billion through 2025.
House Report 113-446 included a provision for GAO to review the Council's role, responsibilities, and effectiveness. This report addresses: (1) how the Council carries out its statutory and regulatory responsibilities and any challenges it faces in doing so and (2) the extent to which the Council's actions are consistent with key practices for interagency collaboration. GAO reviewed laws, agreements, and Council documents such as reports and compared Council actions with key practices and considerations for interagency collaboration that GAO identified in 2005 and 2012.
What GAO Found
The Nuclear Weapons Council (Council)—which serves as the focal point of Department of Defense (DOD) and National Nuclear Security Administration (NNSA) interagency activities to maintain the U.S. nuclear weapons stockpile—carries out its statutory and regulatory responsibilities in a number of ways, but faces challenges in doing so. The Council's actions to carry out its responsibilities include documenting requirements for the size and composition of the nuclear weapons stockpile and setting stockpile priorities. The Council also provides oversight of refurbishment programs through periodic program reviews and coordinates budget matters between DOD and NNSA to support the stockpile. However, the Council faces several challenges in carrying out its responsibilities. The Council's challenges include carrying out several new budget-related responsibilities, such as certifying to Congress whether the annual budget request for NNSA meets stockpile requirements; providing oversight for two more refurbishment programs than it has previously; and adjusting program priorities in response to budget pressures, such as delays and cost growth experienced by some NNSA nuclear weapons programs.
The Council's actions to coordinate DOD's and NNSA's nuclear weapons stockpile responsibilities are generally consistent with most key practices for interagency collaboration, but the Council's actions are not fully consistent with those practices and related key considerations in two areas. First, key practices for interagency collaboration call for agencies to define their respective roles, responsibilities, and steps for decision making and to have a current written agreement on how they will collaborate. The Council does not have an up-to-date agreement that reflects the processes it uses to carry out its responsibilities. The 1997 memorandum of agreement between DOD and the Department of Energy (DOE) that is to guide the Council's efforts has not been updated, although the Council's responsibilities were expanded in 2013, and it does not define the roles, responsibilities, structure, and functions of the two support committees that conduct the Council's day-to-day operations. Council officials said they have not updated the agreement because they do not believe it is necessary and that doing so could restrict their flexibility by being too prescriptive. However, other officials said there has been confusion and disagreement over some Council processes such as certifying the budget request for NNSA and that updating the memorandum of agreement might improve the clarity and consistency of the Council's processes. Without an updated memorandum of agreement that describes Council processes, it may be difficult for the Council to provide greater clarity to support committee members on how their work is to be conducted. Second, a key consideration when implementing collaborative mechanisms is whether all relevant participants have been included in the effort. However, DOD and NNSA budget and program evaluation officials are not required to attend Council support committee meetings. DOD budget and program evaluation officials are invited and generally attend, but NNSA budget and program evaluation officials generally do not attend because they are invited at the discretion of NNSA support committee members. Without a requirement that both DOD and NNSA budget and program evaluation officials consistently attend all support committee meetings, the Council may be limited in its ability to manage and respond to unanticipated budget questions as they arise at meetings.
What GAO Recommends
GAO recommends that DOD and DOE update the Council's 1997 memorandum of agreement to (1) describe Council processes and its two support committees' roles, responsibilities, structure, and functions and (2) require that DOD and NNSA budget and program evaluation officials attend all support committee meetings. DOD and NNSA generally agreed with GAO's recommendations. |
gao_GAO-02-774 | gao_GAO-02-774_0 | The Board is a federal agency, responsible for maintaining the stability of financial markets, supervising financial and bank holding companies and state-chartered banks that are members of the Federal Reserve and the U.S. operations of foreign banking organizations, and overseeing the operations of the Reserve Banks. The report identified areas that had potential for reducing the Federal Reserve’s costs. Since 1996, the Federal Reserve has consolidated the management of the services provided by the individual Reserve Banks, particularly payment services. For example, payment system products and new technologies are now managed on a systemwide basis. Federal Reserve officials explained that many of their initiatives have the effect of consolidating functions of the Federal Reserve without consolidating the 12 Reserve Banks. The Federal Reserve has taken or begun a number of actions in response to the findings and recommendations in our 1996 report. The Federal Reserve has continued to engage in its benchmarking process. The Federal Reserve Has Continued Its Policy of Not Charging for Bank Examinations
Our 1996 report noted that the Federal Reserve’s revenues, and hence its return to the taxpayers, would be enhanced by charging fees for bank examinations. While we continue to believe that a strong argument exists for industry funding of federal supervision and regulation, we also recognize the benefits of the dual banking system. Ultimately, however, it is up to Congress to decide how to fund federal regulation and to balance the differences among the different bank regulators. | What GAO Found
In a 1996 report, GAO made a number of recommendations to the Board of Governors of the Federal Reserve System for reducing spending and improving the operations of the Federal Reserve System (Federal Reserve). The Federal Reserve has taken actions responsive to most of the 1996 report's recommendations. The Federal Reserve has retained its structure but has sought to consolidate operations and bring common management practices to the 12 Federal Reserve District Banks. In particular, the Federal Reserve now manages the payment services it provides to banks on a systemwide basis. The Federal Reserve has also changed its budgeting, internal oversight, and cost accounting processes in an effort to increase accountability. It has taken other steps to decrease costs in areas identified by the 1996 report. Specifically, the Reserve Banks have consolidated their purchase of some services, such as prescription drug coverage, to take advantage of volume discounts, rather than continuing with the former practice of each individual Reserve Bank purchasing services separately. The Federal Reserve, however, continues not charging for bank examinations. Federal Reserve officials explained that they continue to believe that charging for bank examinations would tip the current balance against state charter banks, and thus be inconsistent with maintaining the dual banking system of state and nationally charter banks. Although a strong argument exists for industry funding of federal supervision and regulation, GAO recognizes the benefits of the dual banking system. Ultimately, it is up to Congress to decide how to fund federal regulation and to balance the differences among the different bank regulators. |
gao_NSIAD-98-118 | gao_NSIAD-98-118_0 | The primary goal of the current working capital fund financial structure is to focus the attention of all levels of management on the full costs of carrying out certain critical DOD business operations and the management of those costs. SMAG procures, manages, and sets the prices that customers will pay for these wholesale items. To evaluate the accuracy and consistency of SMAG’s accounting and budgetary reports, we (1) obtained and analyzed the Defense Working Capital Fund Accounting Report (1307), the Air Force Defense Business Operations Fund Chief Financial Officer Annual Financial Statement, and the Air Force’s Working Capital Fund budget justification report for fiscal years 1992 through 1996, (2) interviewed Air Force and Defense Finance and Accounting Service (DFAS) officials to determine why reports covering the same period provided widely different results, and (3) analyzed the DOD Working Capital Fund report, dated September 1997, that was prepared in response to the National Defense Authorization Act for Fiscal Year 1997, to determine the actions DOD is planning to improve the accuracy of the working capital fund’s accounting report. To evaluate the Air Force’s Working Capital Fund’s cash management practices, including its practice of advance billing customers, we (1) collected and analyzed financial information related to the cash balances, advance billings, collections, disbursements, accounts receivable, and accounts payable from fiscal year 1992 through fiscal year 1997, (2) obtained and analyzed DOD and Air Force guidance on managing cash, and (3) interviewed officials in the Office of the Under Secretary of Defense (Comptroller), Air Force Headquarters, and AFMC concerning the cash management practices and the Air Force’s continual need to advance bill customers to alleviate the cash shortage problem. The Department of Defense provided written comments on a draft of this report. Without reliable financial reports, DOD cannot be certain if SMAG’s prices will recover the costs of providing inventory to its customers. The cost of goods sold is an important factor used in arriving at the group’s annual net operating results (revenue less expenses, which include the cost of goods sold, equals net operating results). This information could then be summarized for reporting on the supply management activity groups’ financial operations in DOD’s monthly accounting reports. Two Separate Processes Used to Develop Customers’ Funding Levels and Prices for Individual Items
The two primary objectives of SMAG’s price-setting process are to ensure that (1) prices charged for individual items reflect the expected cost of providing these items to customers and (2) SMAG’s composite, or aggregate, price change is identified—so that it can be properly factored into customer budgets. As a result, although the Air Force has already adjusted customer funding levels once, these officials acknowledged that they will have to continue to monitor budget execution data and to make further adjustments if necessary. Since 1993, the working capital funds have advance billed customers because they have not been able to generate enough cash to pay their bills. The Air Force developed specific action items for the Depot Maintenance, Information Services, and Supply Management Activity Groups. AFMC officials acknowledged that they need better management tools for projecting cash outlays for all types of SMAG outlays. However, the activity groups have not generated sufficient cash to eliminate the practice of advance billing customers. | Why GAO Did This Study
Pursuant to a congressional request, GAO reviewed the financial operations of the Department of Defense (DOD) Working Capital Fund, focusing on the: (1) accuracy and consistency of the Air Force supply management activity group's (SMAG) accounting and budgetary reports; (2) group's price-setting process; and (3) Air Force Working Capital Fund's cash management practices.
What GAO Found
GAO noted that: (1) the Air Force has had difficulties producing reliable financial information on the supply management activity group's operations, setting prices for inventory the group sells to customers, and generating sufficient cash to help discontinue the Air Force Working Capital Fund's practice of advance billing its customers since 1993; (2) these weaknesses impair the Air Force's ability to: (a) ensure that customers can purchase inventory items when needed; and (b) achieve the goals of the working capital funds, which are to focus management attention on the full costs of carrying out operations and to manage those costs effectively; (3) at the core of many of the supply management activity group's financial management weaknesses is its inability to produce reliable information on its cost of goods sold and net operating results; (4) this financial information is critical since the activity group must set prices that reflect the expected costs of providing inventory items to customers; (5) if these data are inaccurate, the activity group's prices may not cover its full cost of operations or generate enough cash to pay its bills, which has been the case in recent years; (6) until the Air Force can: (a) develop accurate information on the supply management activity group's net operating results and cost of goods sold; (b) use this information to develop an effective price-setting process; and (c) acquire and use management tools for projecting cash outlays--its customers will remain susceptible to wide price fluctuations and a corresponding depletion of funds; (7) further, the Air Force Working Capital Fund will have to continue to advance bill customers so that it has enough cash to pay its bills; and (8) finally, senior managers and those responsible for providing oversight will continue to lack the information they need to make informed decisions on Air Force supply operations. |
gao_NSIAD-99-39 | gao_NSIAD-99-39_0 | Senior Department of Defense (DOD) leadership began considering the implications of such changes on the Department. More specifically, we determined (1) USACOM’s actions to establish itself as the joint force trainer, provider, and integrator of most continental U.S.-based forces; (2) views on the value of the Command’s contributions to joint military capabilities; and (3) recent expansion of the Command’s responsibilities and its possible effect on the Command. USACOM Has Had Successes and Major Redirection in Implementing Its Functional Roles
In pursuing its joint force trainer role, USACOM has generally followed its 1993 implementation plan, making notable progress in developing a joint task force commander training program and establishing a state-of-the-art simulation training center. The joint force provider and integrator roles were redirected with the decision, in late 1995, to deviate from the concept of adaptive joint force packages, a major element of the implementation plan. Command Assumes Much More Limited Role as Force Provider
USACOM has made substantive changes to its approach to providing forces. The military services and USACOM’s service components collaborate on such decisions. 4). Value of USACOM’s Contributions to Joint Military Capabilities
USACOM and others believe that the Command has helped advance the joint military capabilities of U.S. forces. Early Assessments Report Progress on Implementing Functional Roles
In a June 1994 interim report to the Chairman of the Joint Chiefs of Staff, USACOM’s Commander noted that the Command’s first 6 months of transition into its new functional roles had been eventful and that the Command was progressing well in developing new methodologies to meet the geographic commands’ needs. The officials, however, recognized that the planning system does not include assessments or measures that can be used to evaluate the Command’s impact on military capabilities. The Congress anticipated that the Results Act principles would be institutionalized and practiced at all organizational levels of the federal government. It also tasks the Command to train joint task forces not trained by other geographic commands. Little organizational change is anticipated in the near term, with the same level and quality of support by the activities provided to the geographic commands. The Joint Staff is to provide USACOM policy guidance, and the U.S. Transportation Command is to provide transportation expertise. With the exception of training, these roles and responsibilities, both old and new, are largely undefined in DOD directives, instructions, and other policy documents, including joint doctrine and guidance. This absence of a clear delineation of the Command’s roles, authorities, and responsibilities could contribute to a lack of universal understanding and acceptance of USACOM and impede the Command’s efforts to enhance the joint operational capabilities of the armed forces. DOD noted that as part of USACOM’s efforts to establish performance goals and objectives, the Command has provided training on performance measures to its military officers. | Why GAO Did This Study
Pursuant to a congressional request, GAO provided information on Department of Defense (DOD) efforts to improve joint operations, focusing on: (1) the U.S. Atlantic Command's (USACOM) actions to establish itself as the joint force trainer, provider, and integrator of most continental U.S.-based forces; (2) views on the value of the Command's contributions to joint military capabilities; and (3) recent expansion of the Command's responsibilities and its possible effects on the command.
What GAO Found
GAO noted that: (1) USACOM has advanced joint training by developing a state-of-the-art joint task force commander training program and simulation training center; (2) the Command has also progressed in developing other elements of joint training, though not at the same level of maturity or intensity; (3) however, USACOM has had to make substantive changes in its approach to providing and integrating joint forces; (4) its initial approach was to develop ready force packages tailored to meet the geographic commands' spectrum of missions; (5) this was rebuffed by the military services and the geographic commands, which did not want or value USACOM's proactive role and by the Chairman of the Joint Chiefs of Staff (1993-97), who did not see the utility of such force packages; (6) by late 1995, USACOM reverted to implementing a force-providing process that provides the Command with a much more limited role and ability to affect decisions and change; (7) the Command's force integrator role was separated from force providing and also redirected; (8) the establishment of performance goals and measures would help USACOM assess and report on the results of its efforts to improve joint military capabilities; (9) Congress anticipated that the Government Performance and Results Act principles would be institutionalized at all organizational levels in federal agencies; (10) the Command's recently instituted strategic planning system does not include performance measures that can be used to evaluate its impact on the military capabilities of U.S. forces; (11) the Office of the Secretary of Defense, the Joint Staff, and USACOM believed the Command was providing an important focus to the advancement of joint operations; (12) the views of the geographic commands were generally more reserved, with some benefitting more than others from USACOM's efforts; (13) the Command's new authorities are likely to increase its role and capabilities to provide training and joint war fighting support and enhance its ability to influence decisions within the department; and (14) although USACOM's roles are expanding and the number of functions and DOD organizational elements the Command has relationships with is significant, its roles and responsibilities are still largely not spelled out in key DOD policy and guidance, including joint doctrine, guidance, and other publications. |
gao_GAO-17-714 | gao_GAO-17-714_0 | Background
Overseas posts that undergo evacuations in response to threats to post staff, family members, or facilities generally experience phased changes to their operational status, such as an authorized or ordered departure, potentially leading to suspended operations. These drills are shown in figure 2. State guidance also requires post staff to transmit an after-action report listing lessons learned to State headquarters. State Has Gaps in Its Crisis and Evacuation Preparedness for Overseas Posts
State’s implementation of preparedness processes for crises and evacuations at overseas posts has multiple gaps:
Overseas posts have not updated EAPs annually within required time frames. The gaps in State’s implementation of preparedness processes for crises and evacuations at overseas posts increase the risk that post staff are not sufficiently prepared to handle crisis and emergency situations. In fiscal year 2016, about 1 in 12 overseas posts were late in completing required annual updates. Our analysis of a nongeneralizable sample of EAPs for 20 posts that DS had reviewed and approved showed that only 2 of the 20 posts’ EAPs included evidence that posts had updated all 27 key sections. Emergency Action Plans Are Viewed As Lengthy and Cumbersome Documents That Are Not Readily Usable in Emergency Situations
According to the FAH, EAPs should be readily usable plans to handle emergency situations and should contain information to assist post staff in responding to emergencies. Overseas Posts Reported Completing About Half of Required Drills Intended to Prepare Post Staff for Crises and Evacuations
Although the FAH establishes requirements for overseas posts to annually conduct nine types of drills to prepare for crises and evacuations, we found that, on average for fiscal years 2013–2016, overseas posts reported completing 52 percent of required drills. For example, in fiscal years 2013 through 2016, an average of 78 percent of posts reported completing required duck and cover drills; an average of 58 percent of posts reported completing required employee warden system drills; an average of 36 percent of posts reported completing required evacuation/drawdown training drills; and an average of 22 percent of posts reported completing the required consular warden system drills. For those posts rated high or critical in political violence or terrorism, we found that, on average for fiscal years 2013 through 2016, 2.3 percent of posts reported completing all drills at least twice per fiscal year as required (see table 4). Conclusions
U.S. personnel working at overseas posts, along with the family members who accompany them, face a range of threats to their safety and security—such as terrorism, civil unrest, and natural disasters. In its comments, State concurred with all five recommendations and described actions planned or under way to address them. GAO staff who made key contributions to this report are listed in appendix V.
Appendix I: Objectives, Scope, and Methodology
This report examines (1) the processes the Department of State (State) has established to prepare overseas posts for crises and to conduct evacuations and (2) State’s implementation of preparedness processes for crises and evacuations at overseas posts. Therefore, this report omits information identified by State as sensitive. To examine the processes State has established to prepare overseas posts for crises and to conduct evacuations, we reviewed State’s policies and procedures in the FAM and associated FAH requiring posts to prepare EAPs and to conduct crisis-situation and evacuation drills, as well as policies and procedures to conduct evacuations at overseas posts. Fifth, to determine the extent to which overseas posts that had experienced evacuations complied with requirements to submit lessons learned reports to State headquarters following the termination of an authorized or ordered departure, we requested from State officials at headquarters any required lessons learned reports submitted by posts following evacuations for fiscal years 2013–2016. | Why GAO Did This Study
From October 2012 to September 2016, State evacuated overseas post staff and family members from 23 overseas posts in response to various threats, such as terrorism, civil unrest, and natural disasters. Overseas posts undergoing evacuations generally experience authorized departure or ordered departure of specific post staff or family members, potentially leading to suspended operations.
GAO was asked to review State policies and procedures for evacuating overseas posts. This report examines (1) the processes State has established to prepare posts for crises and to conduct evacuations and (2) State's implementation of preparedness processes for crises and evacuations. GAO reviewed State guidance and documents related to crisis and evacuation preparedness, including a sample of EAPs and State databases on EAP updates and post drills. GAO also interviewed U.S. officials in Washington, D.C., and in six countries selected because of posts' experiences with evacuations. This is the public version of a sensitive report that GAO issued in June 2017. Information that State deemed sensitive has been omitted.
What GAO Found
The Department of State (State) has established processes to prepare overseas posts for crises and to conduct evacuations. In particular, posts prepare by developing and updating Emergency Action Plans (EAP) and conducting drills. EAPs are to contain information to assist posts in responding to emergencies, such as checklists of response procedures and decision points to help determine when to evacuate post staff or family members. Posts are required to conduct nine types of drills each fiscal year to prepare for crises and evacuations. State also has established processes for conducting post evacuations. Following an evacuation, post staff are required to transmit an after-action report identifying lessons learned to State headquarters.
State has gaps in its crisis and evacuation preparedness for overseas posts. In fiscal years 2013–2016, almost a quarter of posts, on average, were late completing required annual EAP updates. While the completion rate improved from 46 percent to 92 percent of posts completing updates on time in fiscal years 2013 and 2016, respectively, GAO's review of a nongeneralizable sample of EAPs from 20 posts that had been approved by State's Bureau of Diplomatic Security showed that only 2 of 20 had updated all key EAP sections. GAO also found that EAPs are viewed as lengthy and cumbersome documents that are not readily usable in emergency situations, as required. In addition, GAO found that, on average for fiscal years 2013–2016, posts worldwide reported completing 52 percent of required annual drills; posts rated high or critical in political violence or terrorism reported completing 44 percent of these drills. As shown in the figure below, 78 percent of posts reported completing duck and cover drills, but only 36 percent of posts reported completing evacuation training drills. Overall, less than 4 percent of posts reported completing all required drills during fiscal years 2013-2016. In addition, although posts are required to transmit an after-action report listing lessons learned to State headquarters following evacuations, no such reports were submitted in fiscal years 2013–2016. Taken together, the gaps in State's crisis and evacuation preparedness increase the risk that post staff are not sufficiently prepared to handle crisis and emergency situations.
What GAO Recommends
In GAO's sensitive report, GAO made five recommendations to State focused on strengthening accountability for completion and review of posts' annual EAP updates and required emergency drills, enhancing the usability of EAPs, and ensuring that lessons learned reports are completed. State concurred with all five recommendations and described actions planned or under way to address them. |
gao_GAO-05-23 | gao_GAO-05-23_0 | Congress enacted legislation in November 1995 that exempted FAA from key federal procurement statutes and the FAR, and directed FAA to develop a new acquisition management system. AMS Is Broader and Less Prescriptive Than the FAR
AMS establishes an acquisition life-cycle management system that encompasses both contracting and program management, whereas the FAR is primarily a contracting system that focuses on contract formation and contract administration. In addition, AMS takes the form of guidance. It is not regulatory. By contrast, the FAR is a set of published regulations—a legal foundation that has the force and effect of law for the federal agencies that are required to follow it. AMS Provides Some Discipline but Does Not Ensure a Knowledge-Based Approach to Acquisition
AMS provides some discipline through its various phases, activities, and decision points for acquiring major ATC systems; however, it does not ensure the use of a knowledge-based approach found in the best practices for managing commercial product developments and DOD acquisitions that we have identified in numerous past reports.Commercial best practices call for specific knowledge to be captured and used by corporate-level decision-makers to determine whether a product has reached a level of development (product maturity) sufficient to demonstrate its readiness to move forward in the acquisition process. The capture of such knowledge and its use by executives helps to avoid cost overruns, schedule slips, and performance shortfalls that can occur if decision-makers commit to a system design before acquiring critical technology, design, or manufacturing knowledge. The absence of these key best practices under AMS puts FAA’s major ATC acquisitions at risk of cost overruns, schedule slips, and performance shortfalls. As Implemented, AMS Has Not Resolved Long-standing Acquisition Problems, but FAA Is Beginning to Focus More on Results
According to our review of seven major ATC systems and analysis of FAA’s performance in acquiring major systems, AMS has not resolved the long- standing problems that FAA experienced before implementing AMS, but the agency is beginning to focus more on the expected results of its major acquisitions. Moreover, as FAA has acknowledged, it has never managed its major acquisitions by focusing on how each would improve the efficiency of ATC operations while maintaining or improving safety. Much of the cost growth has been due to FAA requirements creep. Develop explicit written criteria for the key decision points called for under best practices, including the capture of specific design and manufacturing knowledge. Objectives, Scope, and Methodology
To compare FAA’s Acquisition Management System (AMS) with the Federal Acquisition Regulation (FAR), we reviewed AMS and changes in it over time. | Why GAO Did This Study
The Federal Aviation Administration's (FAA) multibillion-dollar effort to modernize the nation's air traffic control (ATC) system has resulted in cost, schedule, and performance shortfalls for over two decades and has been on GAO's list of high-risk federal programs since 1995. According to FAA, performance shortfalls were due, in part, to restrictions imposed by federal acquisition and personnel regulations. In response, Congress granted FAA exemptions in 1995 and directed it to develop a new acquisition management system. In this report, GAO compared FAA's AMS with (1) the FAR and (2) commercial best practices for major acquisitions, and (3) examined FAA's implementation of AMS and its progress in resolving problems with major acquisitions.
What GAO Found
FAA's Acquisition Management System (AMS) is broader and less prescriptive than the Federal Acquisition Regulation (FAR), but both afford managers flexibility. AMS establishes an acquisition life-cycle management system, including both a contracting and program management system, whereas the FAR is primarily a contracting system. In addition, AMS takes the form of guidance--it is not regulatory, while the FAR is a set of published regulations--a legal foundation that has the force and effect of law that most federal agencies are required to follow. AMS provides some discipline for acquiring major ATC systems; however, it does not ensure a knowledge-based approach to acquisition found in the best commercial practices for managing commercial and DOD product developments that we have identified in numerous past reports. Best practices call for (1) use of explicit written criteria to attain specific knowledge at key decision points and (2) use of this knowledge by executives at the corporate level to determine whether a product is ready to move forward. Attainment and use of such knowledge by executives helps to avoid cost, schedule, and performance shortfalls that can occur if they commit to a system design prematurely. While AMS has some good features, including calling for key decision points, it falls short of best practices. GAO's review of seven major ATC systems and analysis of FAA's performance in acquiring major systems found that AMS has not resolved longstanding problems it experienced prior to its implementation of AMS--including developing requirements and managing software--and is just beginning to focus on how these acquisitions will improve the efficiency of ATC operations. While FAA has made progress by providing guidance for avoiding past weaknesses, it has not applied these improvements consistently. According to FAA officials, reorganization under and improved oversight by FAA's new performance-based Air Traffic Organization should help ensure greater consistency and an increased focus on results. Past GAO reports have demonstrated that the success of an acquisition process depends on good management, whether it be under AMS or the FAR. |
gao_GAO-11-557 | gao_GAO-11-557_0 | One example of a third-party network is certain toll collection networks. However, the Strategic Roadmap and other IRDM plans do not document coordination with some significant recent and ongoing servicewide initiatives, such as Workforce of Tomorrow and the Nonfiler Strategy. IRS Did Not Use Substantiated Projections of Form 1099-K Volume for IRDM Resource Planning Decisions
IRDM did not use substantiated volume projections for the new Form 1099-K in some of its budget and risk management decisions because official projections were not available when those decisions were made. Additional IRS Communication and Guidance, and Release of Future Draft Form Instructions, Could Benefit Industry Implementation
IRS Communication with Industry Stakeholders Early in the Rulemaking Process Was Thorough
Prior to preparing the proposed regulations for cost basis and transaction settlement reporting, IRS counsel met in person and via phone with industry stakeholders to gain an understanding of issues facing the industries. Despite Noteworthy Efforts, IRS Did Not Meet Its Target Dates for Issuing Regulations
Due, according to IRS officials, to unanticipated complexities of the cost basis and transaction settlement industries, IRS counsel did not meet its target dates for issuing final regulations for either reporting requirement, as shown in figure 2. Reporting data are due to IRS in 2012 for both laws. Additional IRS Communication on Rulemaking, Guidance, and Outreach May Improve Industry Implementation
After IRS’s issuance of final regulations, industry stakeholders sought clarification of certain issues. IRS did not provide additional written guidance or participate in outreach events until after the effective dates of the regulations. IRDM Plans for IT Systems, New Workflows and Organization, and Research Are Expected to Improve the Compliance Programs for Individual and Business Taxpayers
Planned Enhancements Should Allow for New Information Return Data to be Used in New and Existing Compliance Efforts
IRDM’s plans to use the new cost basis and transaction settlement reporting data rely upon new IT systems that are expected to automatically match information returns to tax returns. IRS Has Plans to Assess Implementation and Outcomes, but Needs to Identify and Document IRDM Performance Measures Early on to Ensure Necessary Data Collection
IRDM Is Documenting Lessons Learned, but Lacks Accountability for Implementing Improvements
At the end of each IRDM IT project milestone IRDM produces a lessons learned document, in accordance with IRS’s Enterprise Lifecycle Guidance, which requires a lessons learned report at the end of each life- cycle phase. Although IRDM has identified dates on which to begin collecting performance measure data, officials did not provide a plan to develop and finalize the measures. IRS agreed in principle with our recommendation to, whenever possible, release draft instructions of new or significantly revised forms. Using the IRS Web site to post expected release dates for outreach, regulations, and guidance would help external stakeholders anticipate IRS actions and plan their implementation of the laws. bjectives of this report, we focused on the To assess IRS’s implementation plans for the new requirements, we compared the Internal Revenue Service’s (IRS) plans, such as the IRDM Strategic Roadmap and the IRDM Program Management Plan, to criteria from prior GAO reports, the Internal Revenue Manual, and other sources. To analyze IRS’s plans to assess the implementation process, we reviewed the existing lessons learned documentation. We also interviewed IRS officials in the Small Business/Self Employed (SB/SE) division, MITS, and Forms and Publications. Appendix III: Assessment of MITS’s IRDM Cost Estimate
We assessed the Modernization and Information Technology Service (MITS) group’s Information Reporting and Document Matching (IRDM) program cost estimate to determine the extent to which it meets best practices established by the GAO Cost Estimating and Assessment Guide. | Why GAO Did This Study
Effective implementation of two 2008 laws by the Internal Revenue Service (IRS) could increase taxpayers' voluntary compliance. Those laws require reporting to IRS and taxpayers of cost basis for sales of certain securities and of transaction settlement information (i.e., merchants' income from payment cards or third party networks). In response to a congressional request, GAO (1) assessed IRS's implementation plans for the laws; (2) determined the extent to which IRS issued timely regulations and guidance and did outreach; (3) examined how IRS will use the new data to improve compliance; and (4) analyzed IRS's plans to assess implementation and measure performance and outcomes. GAO compared IRS's implementation plans to criteria in past GAO work and other sources; interviewed industry groups and agency officials, and reviewed rulemaking documents; examined IRS's plans to use the new data; and compared IRS's measures and evaluation plans to GAO criteria.
What GAO Found
IRS is implementing cost basis and transaction settlement reporting through the new Information Reporting and Document Matching (IRDM) program in the Small Business/Self Employed (SB/SE) and Modernization and Information Technology Services (MITS) divisions. IRDM plans show several elements of effective program management, but do not document coordination with some related IRS projects such as Workforce of Tomorrow. IRS estimated IRDM costs, but MITS's estimate does not reflect some best practices, such as adjusting for inflation. Also, IRDM did not use substantiated tax form volume projections in some budget and risk decisions. To date, IRS spent about $28 million on IRDM and requested another approximately $82 million. IRS outreach with industry stakeholders was thorough early in the rulemaking process, but IRS missed its target dates for issuing regulations by about 1 year due, according to IRS officials, to time needed to learn the complex industries. After IRS released final regulations, industry stakeholders sought clarification of certain issues. IRS did not release additional written guidance until after the regulations' effective dates, which industry stakeholders said may affect their implementation of the new reporting requirements. Although IRS released drafts of the newly required or revised forms, they did not release draft instructions prior to the regulations' effective dates. To use the new data, IRS is developing systems that are expected to improve IRS's existing matching of information returns to individual tax returns and expand matching to business taxpayers. The initial enhancements are to be operational in 2012. IRDM appropriately plans to conduct research and test data quality. IRDM regularly documents lessons learned; however, IRDM has not assigned responsibility or established procedures to use them. IRDM also developed preliminary performance measures to assess the implementation and outcomes, including effects on revenue and compliance. However, IRDM has not documented a plan to finalize the performance measures, such as methodology.
What GAO Recommends
GAO recommends, among other things, that IRS improve cost estimation, form volume projections, stakeholder communication, and performance management. IRS generally agreed with the recommendations, but did not describe plans to release draft form instructions or communicate target guidance release dates, both of which would aid industry implementation. |
gao_GGD-97-156 | gao_GGD-97-156_0 | We also adjusted the retirees’ final salaries for inflation, using the 1995 CPI-W, and made a second estimate of the number of retirees whose 1995 pensions exceeded their final salaries, expressed in constant dollar terms. Some Retirees’ Pensions Exceeded Their Unadjusted Final Salaries
As of 1995, 1.7 million retirees who were covered by the CSRS and/or FERS pension plans were on the federal retirement rolls. However, when we adjusted the final salaries for inflation, no retiree received a pension that exceeded his or her final salary. As a general rule, using constant—rather than nominal—dollars is more meaningful for examining dollar values across time, because constant dollars correct for the effects of inflation or deflation. Three Factors Help Explain Why Pensions Can Come to Exceed Unadjusted Final Salaries
Three factors help to explain why some retirees’ pensions came to exceed their final salaries when their salaries were not adjusted for the effects of inflation—the number and size of COLAs that retirees received, the number of years that they had been retired, and their number of years of federal service. Appendix I provides a summary of COLA history since automatic COLAs were enacted in 1962. Some Retirees’ Pensions Would Have Been Smaller, Others Larger, Had Current Policy Been in Effect Without Interruption
Had current COLA policy—that is, the COLA policy enacted in 1984, which established the formula and schedule used today by OPM—been in effect without interruption since 1962, some sample retirees’ pensions would have been smaller than the pensions that they actually received, and other retirees’ pensions would have been larger. Our simulations suggest that other factors being equal, the majority of those who retired before 1970 would have received smaller pensions, while about 90 percent of those who retired after 1970 would have received larger ones. 1), primarily because of the difference in the number of the COLAs that were received and, to a lesser extent, the shorter period of compounding. The Percentage of Retirees Whose Pensions Exceeded Their Unadjusted Salaries Would Have Been Higher If Current Policy Had Been in Effect
The increases in the pensions of some sample retirees, if current policy had been in effect the entire time, would have been enough to cause an increase of 3.0 percentage points in the number of retirees whose pensions exceeded their unadjusted final salaries. Observations
Our analysis of the effects that COLA policies have had on retiree pensions shows that the policies have played an important role in maintaining the purchasing power of retiree pensions since automatic COLAs began. And, although current COLA policy would have tracked the CPI more closely had it been applied over the period we reviewed compared with some past COLA policies, the numerous changes that have been made in COLA policies over the past 35 years did not cause any retiree’s pension to exceed his or her final salary when the salaries were adjusted for inflation. Our analysis also shows that the effects that COLA policies actually have on retiree pension amounts cannot be summarized easily. As a consequence, COLA policy changes have affected individual retirees differently, depending on when they retired. | Why GAO Did This Study
Pursuant to a congressional request, GAO responded to a series of questions about federal pension costs and retirement policy, focusing on: (1) the number of federal retirees, if any, whose pensions have come to exceed the final salaries that they earned while working; (2) why these retirees' pensions came to exceed their final salaries; (3) the difference, if any, in these retirees' pension amounts if current cost-of-living-adjustment (COLA) policy that is, the COLA policy enacted in 1984, which established the formula and schedule used today by the office of Personnel Management (OPM), had been in effect without interruption since 1962; and (4) any difference in the number of retirees whose pensions would have exceeded their final salaries.
What GAO Found
GAO noted that: (1) an estimated 459,000 (or about 27 percent) of the 1.7 million retirees who were on the federal pension rolls as of October 1, 1995, were receiving pensions that had come to exceed their final salaries when these salaries were not adjusted for inflation; (2) however, when their salaries were adjusted for inflation --i.e., expressed in constant dollars, no retiree was receiving a pension that was larger than his or her final salary; (3) as a general rule, using constant dollars provides a more meaningful way to compare monetary values across time, because the use of constant dollars corrects for the effects of inflation or deflation; (4) although no retiree's pension exceeded his or her final salary in constant dollar terms, GAO's analysis confirmed that three factors played an important role in explaining why the retirees' pensions came to exceed their unadjusted final salaries: the number and size of COLAs that retirees received, the number of years that they had been retired, and the number of years of their federal service; (5) GAO's analysis of the effects that COLA policies have had on retiree pensions suggests that the policies have played an important role in maintaining the purchasing power of retiree pensions since automatic COLAs began; (6) it also suggests that the effects COLA policies actually have had on retiree pension amounts cannot be summarized easily because of numerous changes that have been made in COLA policies over the past 35 years; (7) COLA policy changes have affected individual retirees differently, depending on when their retirements began; (8) if current COLA policy, that is, the policy that was enacted in 1984, had been in effect without interruption since automatic COLAs began in 1962 the pensions of some of the sample retirees would have been smaller than the pension that they actually received, and the pensions of other retirees would have been larger; (9) GAO's comparison of the effects of current and historical COLA policy on pension amounts suggests that other factors being equal, a majority of those who retired before 1970 would have received smaller pensions had current COLA policy been continuously in effect during their retirement, and about 90 percent of those who retired after 1970 would have received larger pensions; and (10) the changes that would have occurred in the sample retirees' pension amounts under current policy were enough to cause about a 3 percentage point (3.0) increase in the number of retirees whose pensions would have come to exceed their unadjusted final salaries. |
gao_RCED-99-63 | gao_RCED-99-63_0 | Objectives, Scope, and Methodology
As requested by the Chairman, Subcommittee on Water and Power, House Committee on Resources, we examined the (1) reliability of the Bureau’s and Corps’ hydropower plants in generating electricity compared with the reliability of nonfederal hydropower plants; (2) reasons why the Bureau’s and the Corps’ plants may be less reliable than nonfederal plants and the potential implications of reduced reliability; and (3) actions taken to obtain funding to better maintain and repair the Bureau’s and the Corps’ plants. However, the Bureau’s and the Corps’ hydropower plants are generally less reliable in generating electricity than nonfederal plants.The Bureau’s and the Corps’ hydropower generating units have been in outage status more of the time for forced and scheduled outages. From 1993 through 1997, nonfederal hydropower generating units were available to generate electricity an average of 91.3 percent of the time. The Bureau’s availability factor improved from 80.9 percent of the time in 1993 to 86.6 percent in 1997. From 1993 through 1997, the Bureau’s units in the Pacific Northwest were available to generate power an average of about 78.7 percent of the time, and the Corps’ units were available an average of 85.4 percent of the time. Funding Processes’ Impacts on the Reliability of Hydropower Plants
The Bureau’s and the Corps’ plants were less reliable than nonfederal plants partly because, under the federal planning and budget cycle, they could not always obtain funding for maintenance and repairs when needed. As a result, the agencies delay repairs and maintenance until funds become available. The PMAs’ electricity generally is priced less than other electricity. However, because markets are becoming more competitive, the PMAs’ customers will have more suppliers from which they can buy electricity. In more competitive markets, the reliability of the federal electricity will have to be maintained or improved to maintain the competitiveness of federal electricity and thus help ensure that the federal government’s $22 billion appropriated and other debt will be repaid. In addition, the Congress, the Office of Management and Budget (OMB), and we have been working to help ensure that the purchase and maintenance of all assets and infrastructure have the highest and most efficient returns to the taxpayer and the government. However, in competitive markets, increased rates decrease the marketability of federal electricity, as nonfederal electricity rates are expected to decline. By enabling repairs to be made on time, they have the potential to help improve the reliability of the PMAs’ electricity and to continue its existing rate-competitiveness. Objectives, Scope, and Methodology
As requested by the Chairman, Subcommittee on Water and Power, House Committee on Resources, we examined (1) the reliability of the Bureau’s and Corps’ hydropower plants in generating electricity compared with the reliability of nonfederal hydropower plants; (2) reasons why the Bureau’s and the Corps’ plants may be less reliable than nonfederal plants and the potential implications of reduced reliability; and (3) actions taken to obtain funding to better maintain and repair the Bureau’s and the Corps’ plants. 5. 10. 11. 13. 14. 15. 16. 8. | Why GAO Did This Study
Pursuant to a congressional request, GAO reviewed the: (1) reliability of the Bureau of Reclamation's and Army Corps of Engineers' hydropower plants in generating electricity compared with the reliability of nonfederal hydropower plants; (2) reasons why the Bureau's and the Corps' plants may be less reliable than nonfederal plants and the potential implications of reduced reliability; and (3) actions taken to obtain funding to better maintain and repair the Bureau's and the Corps' plants.
What GAO Found
GAO noted that: (1) the Bureau's and the Corps' hydropower plants are generally less reliable in generating electricity than nonfederal hydropower plants; (2) the reliability of the Bureau's hydropower plants has improved recently, while the Corps' has remained relatively unchanged; (3) from 1993 through 1997, the Bureau's units were available to generate electricity an average of about 83 percent of the time compared with about 91 percent for nonfederal units; (4) the availability of the Bureau's units to generate electricity improved from about 81 percent of the time in 1993 to about 87 percent in 1997; (5) the Corps' units were available to generate electricity an average of about 89 percent of the time during the period 1993 through 1997; (6) the Bureau's and the Corps' units in the Pacific Northwest were available about 79 percent and 85 percent of the time, respectively; (7) the Bureau's and the Corps' plants were less reliable because they could not always obtain funding for maintenance and repairs when needed; (8) GAO found that because of uncertain funding, the agencies delay repairs and maintenance until funds become available; (9) GAO also found that these delays caused frequent, extended outages and inconsistent plant performance; (10) the power marketing administrations' (PMA) electricity is generally priced less than other electricity; (11) however, as markets become more competitive, PMAs' customers will have more suppliers from whom they can buy electricity; (12) as nonfederal electricity rates decline in competitive markets, a portion of the federal government's appropriated and other debt of about $22 billion may be at risk of nonrecovery if the federal electricity does not continue to be marketable; (13) a factor affecting the marketability of this electricity is its reliability; (14) Congress, the Office of Management and Budget, and GAO have been working to help ensure that the purchase and maintenance of all assets and infrastructure have the highest and most efficient returns to the taxpayer and the government; (15) the Bureau, the Corps, and the PMAs have taken actions to obtain funding to maintain and repair their hydropower plants; (16) these actions involve directly funding maintenance and repairs from the PMAs' electricity revenues or from funds contributed by the power customers; and (17) by enabling repairs to be made in a timely manner, these actions have the potential to help to improve the reliability of the PMAs' electricity and to continue their existing rate-competitiveness. |
gao_GAO-08-471T | gao_GAO-08-471T_0 | Background
Other transaction authority was created to enhance the federal government’s ability to acquire cutting-edge science and technology by attracting nontraditional contractors that have not typically pursued government contracts. The Homeland Security Act of 2002 created DHS and granted the agency the authority to enter into other transactions for research and development and prototype projects for a period of 5 years. The Consolidated Appropriations Act for 2008 extended this authority until September 30, 2008. Most of the department’s use of other transaction authority to date occurred between fiscal years 2004 and 2005. Though it has since used this authority less frequently, it continues to obligate funds for its earliest agreements. About 77 percent of the $443 million spent on DHS’s agreements has been on 7 of the 37 agreements. S&T contracting representatives reported that all of these agreements were for prototype projects. 1). DHS reported a total of 37 other transaction agreements, 30 of which were entered into in fiscal years 2004 and 2005. 2). 3). According to S&T, all of these agreements included at least one nontraditional contractor, most commonly as a subcontractor. Though the acquisition outcomes related to DHS’s use of other transaction authority have not been formally assessed, the department estimates that at least some of these agreements have resulted in time and cost savings. However, the extent to which these savings accrue to the government or to the contractor is unclear. Beyond these efforts, GAO found some areas for improvement and recommended that: DHS provide guidance on when to include audit provisions in agreements; provide more training on creating and managing agreements; capture knowledge gained from current agreements for future use; and take measures to help rotational staff avoid conflicts of interest. Provide guidance: We recommended that DHS develop guidance on when it is appropriate to include audit provisions in other transaction agreements. However, the guidance only addresses prototype agreements over $5 million. Provide additional training: We recommended that DHS develop a training program for staff on the use of other transactions. Operational challenges to successfully making use of other transaction authority include: attracting and ensuring the use of non-traditional contractors; acquiring intellectual property rights; financial control; and maintaining a skilled acquisition workforce. | Why GAO Did This Study
Other transaction authority was created to enhance the federal government's ability to acquire cutting-edge science and technology by attracting nontraditional contractors that have not typically pursued government contracts. The Homeland Security Act of 2002 granted the department the temporary authority to enter into other transactions for research and prototype projects for a period of 5 years. The Consolidated Appropriations Act of 2008 extended this authority until September 30, 2008. This testimony discusses (1) the extent to which DHS has used its other transaction authority, (2) the status of DHS's implementation of GAO's previous recommendations, and (3) the accountability challenges associated with the use of these agreements.
What GAO Found
DHS entered into 37 other transaction agreements between fiscal years 2004 and 2007, most of which were entered into in the first 2 years. Though it has since used this authority less frequently, it continues to obligate funds for its earliest agreements. Furthermore, about 77 percent of the dollars spent on these agreements have been for 7 of DHS's 37 agreements. Contracting representatives also told us that all of the agreements to date were for prototype projects and that each agreement included at least one nontraditional contractor. GAO plans further review of DHS's use of other transaction agreements as required by the Homeland Security Act of 2002. DHS has made efforts to improve its use of other transaction agreements and to prevent conflicts of interest. The department has taken the following steps to address prior GAO recommendations including: (1) creating guidance on when to include audit provisions in other transaction agreements; (2)creating a training program on using these agreements; (3) and improving controls over conflicts of interest. GAO also recommended that DHS capture knowledge gained from the agreements it has entered into. The department has compiled lessons learned from the Department of Defense, but the document is not related to DHS's experience. Furthermore, while DHS created guidance on when to include audit provisions in agreements, its guidance only applies to certain prototype projects and only in certain circumstances. Risks inherent with the use of other transaction agreements create several accountability challenges. These challenges include attracting and ensuring the use of nontraditional contractors, acquiring intellectual property rights, ensuring financial control, and maintaining a skilled acquisition workforce with the expertise to create and maintain these agreements. |
gao_GAO-04-395 | gao_GAO-04-395_0 | The 4010 filing includes proprietary information about the plan sponsor, its total pension assets, and its total benefit obligations were the company to terminate its pension plans immediately. Government regulators and others use Form 5500 information for many purposes, including to determine whether plans are meeting minimum funding requirements and required contributions for each defined benefit plan that a company sponsors, while financial analysts and investors use pension information in corporate financial statements to determine how the company’s plans in aggregate affect its overall financial position, performance, and cash flows. As a result of such differences, information in the two reports is generally not similar, and because the two sources of information use similar terminology—for example, both refer to asset values and investment returns—the results can appear contradictory. However, between these two sources there are differences in the rate’s purpose, selection, and method of application that may, in fact, contribute to differences between the assumed rates of return used in the two sources. For financial statements, the expected rate of return is used to calculate the annual expected investment return on pension assets, which factors into the measurement of pension expense. Pension Accounting Disclosures and Methods Have Been Subjects of Debate
Some primary users of corporate financial statements have expressed concerns about the extent to which these reports show how pension plans affect a company’s profitability, cash flow, and financial position. Under the current methodology for calculating pension expense, the cumulative net effect of pension asset gains or losses may not be reflected in reported pension expense for a few years, if at all. The Financial Accounting Standards Board has recently amended one of its accounting standards to require, among other things, that companies provide more information about the composition and market risk of their pension plan assets and their anticipated contributions to plans in the upcoming year. The Administration Has Proposed Making Additional Information Available Relating to Pension Risk
In July 2003 the Department of the Treasury announced “The Administration Proposal to Improve the Accuracy and Transparency of Pension Information.” The proposal presented four areas of change, and one of them would broaden the public’s access to pension information currently available only to PBGC. In December 2003 FASB issued a revision to its accounting standard on pension disclosures. However, the revised standard does not change the general approach used in the financial statements of aggregating this information across all pension plans. Concluding Observations
Form 5500 reports and corporate financial statements both provide key pension financial data, but they serve different purposes and, as a result, provide significantly different information. While particular concerns have been raised about differences between expected and actual pension asset rates of return reported on corporate financial statements, expected rates of return do not have a significant effect on the actual financial condition of plans. Continued concerns about the financial condition of plans and how this information is disclosed have been highlighted by the administration’s proposal to provide information about funding in the event of plan termination to plan participants and regulators. For example, plan participants and regulators continue to need more timely information. We chose to sample from the universe of publicly owned Fortune 500 companies with defined benefit plans because (1) the pension plans sponsored by these firms represent a large percentage of the total private defined benefit pension plan participants, assets, and liabilities in the United States; (2) these firms tend to have the largest defined benefit plans, and if these plans fail they would create the largest burdens for PBGC and possibly the government; and (3) most of these firms are publicly traded, so their corporate financial statements are publicly available. | Why GAO Did This Study
Information about the financial condition of defined benefit pension plans is provided in two sources: regulatory reports to the government and corporate financial statements. The two sources can often appear to provide contradictory information. For example, when pension asset values declined for most large companies between 2000 and 2002, these companies all continued to report positive returns on pension assets in their financial statement calculations of pension expense. This apparent inconsistency, coupled with disclosures about corporate accounting scandals and news of failing pension plans, has raised questions about the accuracy and transparency of available information about pension plans. GAO was asked to explain and describe (1) key differences between the two publicly available sources of information; (2) the limitations of information about the financial condition of defined benefit plans from these two sources; and (3) recent or proposed changes to pension reporting, including selected approaches to pension reporting used in other countries.
What GAO Found
Information about defined benefit pension plans in regulatory reports and pension information in corporate financial statements serve different purposes and provide different information. The regulatory report focuses, in part, on the funding needs of each pension plan. In contrast, corporate financial statements show the aggregate effect of all of a company's pension plans on its overall financial position and performance. The two sources may also differ in the rates assumed for investment returns on pension assets and in how these rates are used. As a result of these differences, the information available from the two sources can appear to be inconsistent or contradictory. Both sources of information have limitations in the extent to which they meet certain needs of their users. Under current reporting requirements, regulatory reports are not timely and do not provide information about whether benefits would all be paid were the plan to be terminated. Financial statements can supplement regulatory report data because they are timelier and provide insights into the probability of a company meeting its future pension obligations. However, through December 2003, financial statements have lacked two disclosures important to investors--allocation of pension assets and estimates of future contributions to plans. There is also debate about whether current methods for calculating pension expense accurately represent the effect of pension plans on a company's operations. Several changes have been made or proposed to provide further information. In July 2003, the administration called for public disclosure of more information about the sufficiency of a plan's assets. However, no further steps have yet been taken. For financial statements, the Financial Accounting Standards Board issued a revised standard in December 2003 requiring enhanced pension disclosures, such as pension asset allocation and expected contributions to plans. Internationally, accounting standards boards have considered proposals to change the methodology for calculating pension expense. We have previously recommended changes to improve the transparency of plan financial information, but other challenges remain. Plan participants and regulators continue to need more timely information, including measures of plan funding in the event of plan termination. |
gao_GAO-03-210 | gao_GAO-03-210_0 | Some individuals who apply for TANF may have impairments severe enough to make them eligible to receive SSI. 1.) In particular, adult recipients with impairments were half as likely to exit TANF as adult recipients without impairments, after controlling for demographic differences, such as age, race, and marital status. Furthermore, factors other than impairments may also affect whether recipients exit TANF. Recipients Caring for Children with Impairments Were Less Than Half as Likely to Exit TANF as Others
After using a statistical model to control for demographic factors, we found that recipients caring for children with impairments were less than half as likely to exit TANF as their counterparts not caring for children with impairments. After Leaving TANF, People with Impairments Were Less Likely to Be Employed and Were More Likely to Receive Federal Supports Than Were People without Impairments
TANF leavers with impairments were less likely to be employed and more likely to receive federal supports than were leavers without impairments. Leavers with impairments also were more likely to receive Food Stamps and Medicaid. As states move beyond the first 5 years of the TANF program, a key challenge will be to ensure that recipients with impairments and those caring for children with impairments receive the supports they need to meet the work-focused goals and requirements of TANF. Appendix I: Scope and Methodology
To describe the role of physical and mental impairments in the lives of families leaving Temporary Assistance for Needy Families (TANF), we developed estimates of the number of TANF recipients with impairments and investigated the differences between TANF recipients and leavers with and without impairments, using a 2-year cross section of data from the Census Bureau’s Survey of Income and Program Participation (SIPP). Welfare Reform: Information on Former Recipients’ Status. | Why GAO Did This Study
Debates surrounding the reauthorization of welfare reform legislation have involved some discussion regarding outcomes for TANF recipients with physical or mental impairments. To inform this discussion, GAO was asked to report on (1) whether recipients with impairments were as likely to exit TANF as their counterparts without impairments and (2) the sources of income reported by leavers with and without impairments. To obtain this information, GAO analyzed self- reported data for the most recent years available from the Census Bureau's Survey of Income and Program Participation (SIPP)--a national survey of households that includes questions about TANF status and functional impairments.
What GAO Found
Recipients of Temporary Assistance for Needy Families (TANF) who had impairments were found to be half as likely to exit TANF as recipients without impairments, and recipients caring for children with impairments were found to be less than half as likely to exit TANF as recipients not caring for children with impairments, after controlling for demographic differences such as age, race, and marital status. Although impairments affect exits, other factors, including family support and personal motivation, as well as local TANF policies, may also affect whether recipients exit TANF. After leaving TANF, people with impairments were one-third as likely as people without impairments to be employed, according to a statistical model that controlled for demographic differences, and they were more likely to receive federal supports. Forty percent of leavers with impairments reported receiving cash assistance from Supplemental Security Income (SSI), a federal program designed to assist low-income individuals who are aged, blind, or disabled. Leavers with impairments were also more likely to receive non cash support in the form of Food Stamps and Medicaid than their counterparts without impairments. These findings underscore the challenge states face in ensuring that recipients with impairments and those caring for children with impairments receive the supports they need to meet the work-focused goals and requirements of TANF. |
gao_AIMD-97-33 | gao_AIMD-97-33_0 | Shell uses contractors for cleanup activities. The Army’s Process to Control Cost Sharing Has Weaknesses
The Army’s process to review cost sharing claims under its settlement agreement with Shell is insufficient to ensure that costs are documented and appropriate. Weaknesses in the process involve (1) documentation to support claims, (2) agreements to define which costs should be shared, (3) separation of duties for recording and reviewing shared costs, and (4) documentation of decisions on the treatment of capital assets and disposition of real estate. Our work showed that additional documentation is available in most cases and could have been reviewed by the Army. In some cases, the claims were partially documented, and in others, there was no documentation provided. We did not review the appropriateness of individual cost claims. However, the above examples further demonstrate that the Army has not ensured it has sufficient information to review shared costs. 1). Moreover, the Army and Shell staff who conduct the day-to-day operation of the shared cost system also review the shared costs annually. We will also make copies available to others on request. It “provides the process for the planning, selection, design, implementation, operation, and maintenance of response actions taken pursuant to CERCLA as the result of the release or threatened release of hazardous substances, pollutants or contaminants at or from the arsenal, including the public participation process.”
The Army/Shell Rocky Mountain Arsenal Financial Manual
The Financial Manual describes the financial, accounting, and auditing procedures to be used for shared costs incurred in connection with arsenal cleanup. U.S. General Accounting Office P.O. | Why GAO Did This Study
Pursuant to a congressional request, GAO reviewed cleanup costs claimed by Shell Oil Company and shared by Shell and the U.S. Army at Rocky Mountain Arsenal, Colorado, focusing on: (1) selected aspects of the processes that the Army uses to review cost claims under its settlement agreement with Shell; and (2) the adequacy of these processes.
What GAO Found
GAO found that: (1) the process the Army uses to review claims under its cost sharing for cleanup at the arsenal has not been sufficient to ensure that costs claimed by Shell are appropriate; (2) specifically, the review process does not always ensure that sufficient documentation is available to review claimed costs and formal agreements exist to define which costs should be shared; (3) the review process generally does not look at the detailed documentation supporting cost claims; (4) GAO's work showed in most cases further information was available, but in some cases it was not; (5) also, the review process does not have effective checks and balances, such as separation of key duties and responsibilities and independent reviews; (6) for example, staff associated on a daily basis with the shared cost system also conduct the annual assessment of the shared costs; and (7) the combination of limited documentation and inadequate controls places the government at the risk of paying for unwarranted charges. |
gao_AIMD-99-65 | gao_AIMD-99-65_0 | Government Management: Observations on OMB’s Management Leadership Efforts
Mr. Chairman and Members of the Subcommittee: We are pleased to be here today to discuss our observations on the Office of Management and Budget’s (OMB) efforts to carry out its responsibilities to set policy and oversee the management of the executive branch. Finally, we will discuss the factors that appear to contribute to progress in sustaining improvements in federal management. The CFO Act mandated significant financial management reforms and established the Deputy Director for Management (DDM) position within OMB. In addition to serving as the government’s key official for financial management, the DDM is to coordinate and supervise a wide range of general management functions of OMB. OMB is responsible for providing guidance and oversight for various other laws and executive orders as well. Historically, There Have Been Questions About Whether to Integrate or Separate Management and Budget Functions
OMB’s perennial challenge is to carry out its central management leadership responsibilities in such a way that leverages opportunities of the budget process, while at the same time ensuring that management concerns receive appropriate attention in an environment driven by budget and policy decisions. Prior OMB reorganizations, reflecting these different points of view, have alternated between seeking to more directly integrate management into the budget review process and creating separate management offices. Previous congressional and OMB attempts to elevate the status of management by creating separate management units within OMB sought to ensure that an adequate level of effort was focused on management issues. The Effectiveness of OMB’s Management Leadership Has Been Uneven
In recent years, OMB has focused increased attention on management issues, but there is much more that needs to be done. We recommended that OMB ensure that agencies incorporate appropriate goals and strategies in their annual performance plans and describe their relevance to achieving the priority management objectives described in the governmentwide performance plan. Sustaining Improvements in Federal Management
Mr. Chairman, the record of OMB’s stewardship of management initiatives that we have highlighted today suggests that creating and sustaining attention to management improvement is a key to addressing the federal government’s longstanding problems. In the past, management issues often remained subordinated to budget concerns and timeframes, and the leverage the budget could offer to advance management efforts was not directly used to address management issues. Continued improvement in OMB’s plans would provide congressional decisionmakers with better information to use in determining the extent to which OMB is addressing its statutory management and budgetary responsibilities, as well as in assessing OMB’s contributions toward achieving desired results. | Why GAO Did This Study
Pursuant to a congressional request, GAO discussed its observations on the Office of Management and Budget's (OMB) efforts to carry out its responsibilities to set policy and oversee the management of the executive branch, focusing on: (1) OMB's wide-ranging management responsibilities and the question of whether to integrate or separate management and budget functions; (2) the effectiveness of OMB's management leadership; and (3) the factors that appear to contribute to progress in sustaining improvements in federal management.
What GAO Found
GAO noted that: (1) OMB is the lead agency for overseeing a statutory framework of financial, information resources, and performance planning and measurement reforms designed to instill a performance-based approach to federal management, decisionmaking, and accountability; (2) the Chief Financial Officers Act of 1990 mandated significant financial management reforms and established the Deputy Director for Management (DDM) position within OMB; (3) the DDM is to serve as the government's key official for financial management and coordinate and supervise a wide range of general management functions; (4) OMB is responsible for providing guidance and oversight for various other laws and executive orders as well; (5) OMB's perennial challenge is to carry out its central management leadership responsibilities in such a way that leverages opportunities of the budget process, while at the same time ensuring that management concerns receive appropriate attention in an environment driven by budget and policy decisions; (6) prior OMB reorganizations have alternated between seeking to more directly integrate management into the budget review process and creating separate management offices; (7) previous congressional and OMB attempts to elevate the status of management by creating separate management units within OMB sought to ensure that an adequate level of effort was focused on management issues; (8) OMB has focused increased attention on management issues, but there is much more that needs to be done; (9) OMB should ensure that agencies incorporate appropriate goals and strategies in their annual performance plans and describe their relevance to achieving the priority management objectives described in the governmentwide performance plan; (10) the record of OMB's stewardship of management initiatives suggests that creating and sustaining attention to management improvement is a key to addressing the federal government's longstanding problems; (11) in the past, management issues often remained subordinated to budget concerns and timeframes, and the leverage the budget could offer to advance management efforts was not directly used to address management issues; and (12) continued improvement in OMB's strategic plans would provide congressional decisionmakers with better information to use in determining the extent to which OMB is addressing its statutory management and budgetary responsibilities, as well as in assessing OMB's contributions toward achieving desired results. |
gao_GAO-05-801 | gao_GAO-05-801_0 | Section 428 of the act also authorized DHS to immediately assign personnel to Saudi Arabia to review all visa applications prior to final adjudication, as well as the future assignment of officers to other locations overseas to review visa applications. Several Factors Have Limited the Impact of Visa Security Operations in Saudi Arabia
According to embassy officials in Saudi Arabia and DHS officials, the VSOs enhance homeland security through their review of visa applications at posts in Saudi Arabia. However, several factors have hindered the program, including a lack of comprehensive data on the VSOs’ activities and results in Riyadh and Jeddah to demonstrate the program’s overall impact at these posts. Moreover, VSOs’ border security and immigration experience can assist consular officers during the visa process. VSOs Provide Additional Review to Visa Adjudication Process
According to State Department consular officers, the deputy chief of mission, and DHS officials, VSOs in Saudi Arabia enhance the security of the visa adjudication process at these consular posts. 2). VSOs Have Access to Law Enforcement Information Not Readily Available to Consular Officers
VSOs have access to and experience using immigration and law enforcement databases not readily available to consular officers, who are not classified as criminal justice, or law enforcement, personnel. DHS’s Expansion of the Visa Security Program in Fiscal Year 2005
The Homeland Security Act of 2002 authorized the assignment of DHS officers to each diplomatic post where visas are issued to provide expert advice and training to consular officers and review visa applications. Specifically, the cable advised the five chiefs of mission at posts selected for VSO expansion to delay approving the DHS positions until State or the post had received sufficient responses to several outstanding issues, including criteria for selecting the expansion posts; agreement on administrative support services, such as building maintenance, utilities, supplies, and equipment, among others; the extent to which the VSOs will have regional responsibilities at other the roles and responsibilities of the VSOs in relation to State’s consular fraud investigators and regional security officers at post, as well as any other agencies at post; and the criteria that will be used to measure the effectiveness of the visa security operations. Recommendations for Executive Action
To help ensure that the Visa Security Program, and its expansion to other locations worldwide, is managed effectively, we recommend that the Secretary of Homeland Security: develop a strategic plan, in consultation with the Secretary of State, to guide visa security operations in Saudi Arabia and in other embassies and consulates overseas. To assess DHS’s plans to expand the Visa Security Program to consular posts outside Saudi Arabia, we reviewed documentation on the department’s requests to establish new positions at 5 additional posts and spoke with DHS officials regarding the planned expansion. GAO Comments
1. We believe that the development of a strategic plan would assist DHS by providing stakeholders, such as State and chiefs of mission, with information regarding the mission, goals and operations of the Visa Security Program. | Why GAO Did This Study
The Homeland Security Act of 2002 required that the Department of Homeland Security's on-site personnel in Saudi Arabia review all visa applications. The act also authorized the expansion of the Visa Security Program to other embassies and consulates to provide expert advice and training to consular officers, among other things. Given the congressional interest in effective implementation of the Visa Security Program, we assessed (1) the Visa Security Officers' activities in Saudi Arabia, and (2) DHS's plans to expand its Visa Security Program to other consular posts overseas.
What GAO Found
Visa Security Officers (VSO) assigned to Saudi Arabia review all visa applications prior to final adjudication by consular officers, and assist consular officers with interviews and fraud prevention; however, no comprehensive data exists to demonstrate the VSOs' impact. According to State Department consular officers, the deputy chief of mission, and Department of Homeland Security (DHS) officials in Saudi Arabia, the VSOs in Riyadh and Jeddah strengthen visa security because of their law enforcement and immigration experience, as well as their ability to access and use information from law enforcement databases not immediately available, by law, to consular officers. Furthermore, the requirement to review all visa applications in Saudi Arabia limits the VSOs' ability to provide additional training and other services to consular officers, such as assisting with interviews. Moreover, security concerns in Saudi Arabia limit staffing levels at these posts. DHS has not developed a strategic plan outlining the Visa Security Program's mission, activities, program goals, and intended results for operations in Saudi Arabia or the planned expansion posts. Chiefs of mission at the five posts chosen for expansion in fiscal year 2005 delayed approving DHS's requests for the assignment of VSOs until DHS answered specific questions regarding the program's goals and objectives, staffing requirements, and plans to coordinate with existing staff and law enforcement and border security programs at post. DHS's development of a strategic plan may address outstanding questions from chiefs of mission and other embassy officials and help DHS expand the program. |
gao_GAO-13-98 | gao_GAO-13-98_0 | GAO Has Previously Reported on the Dashboard’s Value, Data Quality, and Recent Improvements
We have previously reported that OMB has taken significant steps to enhance the oversight, transparency, and accountability of federal IT investments by creating its IT Dashboard, and by improving the accuracy of investment ratings. CIOs Rated Most IT Investments as Low Risk or Moderately Low Risk; Agencies Had Mixed Results in Reducing Higher Risk Levels
As of March 2012, CIO ratings for most investments listed on the Dashboard for the six agencies we reviewed indicated either low risk or moderately low risk (223 out of 313 investments across all the selected agencies). The figure also reports agencies’ budgets for their major IT investments for fiscal year 2012, as presented on the Dashboard. These investments were rated at the same risk level during every rating period (see fig. In contrast, the other two agencies—OPM and HHS—changed the CIO rating for more than 70 percent of their investments at least once between the investment’s initial rating and the rating reported as of March 2012. Two agencies—DHS and OPM—reported more investments with reduced risk in March 2012, as compared with initial ratings. The other four agencies reported more investments with increased risk. Include input from stakeholders. Among the agencies we reviewed, DOD was unique in that its ratings reflected additional considerations beyond OMB’s instructions. CIO Ratings Present Benefits and Challenges for Agencies’ Investment Management
Selected agencies identified various benefits associated with performing CIO ratings and Dashboard reporting in general. Increased quality of investment performance data. Increased focus on project management practices. Some of these benefits were interrelated. Nevertheless, agencies also identified challenges associated with producing and reporting CIO ratings. First, three agencies reported a challenge associated with the time and effort required to gather, validate, and gain internal approval for CIO ratings and other data reported to the Dashboard. Its CIO ratings, in particular, have improved visibility into changes in the risk levels of agencies’ investments over time. Recommendations for Executive Action
To ensure that OMB’s preparation of the President’s budget submission accurately reflects the risks associated with all major IT investments, we are recommending that the Federal CIO analyze agency trends reflected in Dashboard CIO ratings, and present the results of this analysis with the President’s annual budget submission. To ensure that DOD’s CIO evaluations of investment risk for its major IT Dashboard investments reflect all available performance assessments and are consistent with the department’s own guidance for managing risk, we are recommending that the Secretary of Defense direct the department’s CIO to reassess the department’s considerations for assigning CIO risk levels for Dashboard investments, including assessments of investment performance and risk from outside the programs, and apply the appropriate elements of the department’s risk management guidance to OMB’s evaluation factors in determining CIO ratings. Appendix I: Objectives, Scope, and Methodology
Our objectives were to (1) characterize the Chief Information Officer (CIO) ratings for selected federal agencies’ information technology (IT) investments as reported over time on the federal IT Dashboard; (2) determine how agencies’ approaches for assigning and updating CIO ratings vary; and (3) describe the benefits and challenges associated with agencies’ approaches to the CIO rating. Collectively, these agencies accounted for approximately $51 billion, or 65 percent, of 2011 spending on IT investments. The six agencies are the Department of Defense, Department of Homeland Security, Department of Health and Human Services, Department of the Interior, National Science Foundation, and Office of Personnel Management. To address our second objective, we reviewed available documentation, obtained written responses to questions we posed to all agencies, and interviewed OMB and agency officials to determine their policies and practices related to assigning and updating the CIO ratings and related data for the Dashboard. Appendix II: Risk Levels for Investments at Selected Agencies, as of March 2012
The table below lists the total number of major information technology (IT) investments rated on the federal IT Dashboard as of March 2012 for each agency selected for this review, with the numbers of investments rated at each of the risk levels specified by the Office of Management and Budget (OMB) for the chief information officer (CIO) rating. | Why GAO Did This Study
In June 2009, OMB launched the federal IT Dashboard, a public website that reports performance data for over 700 major IT investments that represent about $40 billion of the estimated $80 billion budgeted for IT in fiscal year 2012. The Dashboard is to provide transparency for these investments to aid public monitoring of government operations. It does so by reporting, among other things, how agency CIOs rate investment risk. GAO was asked to (1) characterize the CIO ratings for selected federal agencies' IT investments as reported over time on the Dashboard, (2) determine how agencies' approaches for assigning and updating CIO ratings vary, and (3) describe the benefits and challenges associated with agencies' approaches to the CIO rating.
To do so, GAO selected six agencies spanning a range of 2011 IT spending levels and analyzed data reported for each of their investments on the Dashboard. GAO also interviewed agency officials and analyzed related documentation and written responses to questions about ratings and evaluation approaches, as well as agency views on the benefits and challenges related to the CIO rating.
What GAO Found
Chief Information Officers (CIO) at six federal agencies rated the majority of their information technology (IT) investments as low risk, and many ratings remained constant over time. Specifically, CIOs at the selected agencies rated a majority of investments listed on the federal IT Dashboard as low risk or moderately low risk from June 2009 through March 2012; at five of these agencies, these risk levels accounted for at least 66 percent of investments. These agencies also rated no more than 12 percent of their investments as high or moderately high risk, and two agencies (Department of Defense (DOD) and the National Science Foundation (NSF)) rated no investments at these risk levels. Over time, about 47 percent of the agencies' Dashboard investments received the same rating in every rating period. For ratings that changed, the Department of Homeland Security (DHS) and Office of Personnel Management (OPM) reported more investments with reduced risk when initial ratings were compared with those in March 2012; the other four agencies reported more investments with increased risk. In the past, the Office of Management and Budget (OMB) reported trends for risky IT investments needing management attention as part of its annual budget submission, but discontinued this reporting in fiscal year 2010.
Agencies generally followed OMB's instructions for assigning CIO ratings, which included considering stakeholder input, updating ratings when new data become available, and applying OMB's six evaluation factors. DOD's ratings were unique in reflecting additional considerations, such as the likelihood of OMB review, and consequently DOD did not rate any of its investments as high risk. However, in selected cases, these ratings did not appropriately reflect significant cost, schedule, and performance issues reported by GAO and others. Moreover, DOD did not apply its own risk management guidance to the ratings, which reduces their value for investment management and oversight.
Various benefits were associated with producing and reporting CIO ratings. Most agencies reported (1) increased quality of their performance data, (2) greater transparency and visibility of investments, and (3) increased focus on project management practices. Agencies also noted challenges, such as (1) the effort required to gather, validate, and gain internal approval for CIO ratings; and (2) obtaining information from OMB to execute required changes to the Dashboard. OMB has taken steps to improve its communications with agencies.
What GAO Recommends
GAO is recommending that OMB analyze agencies' investment risk over time as reflected in the Dashboard's CIO ratings and present its analysis with the President's annual budget submission, and that DOD ensure that its CIO ratings reflect available investment performance assessments and its risk management guidance. Both OMB and DOD concurred with our recommendations. |
gao_GAO-09-553 | gao_GAO-09-553_0 | Scope and Methodology
To describe the nature and purpose of the federal assistance provided to the auto industry, we reviewed Department of the Treasury documents related to AIFP—including white papers on the Supplier Support Program and the Warranty Commitment Program, terms and conditions of the loans provided to Chrysler and GM, and disbursement reports on the amount of funding allocated and disbursed under the AIFP. We also conducted interviews with officials from the Departments of Energy and Transportation to obtain information on their coordination with Treasury in providing and overseeing assistance to automakers; representatives from Chrysler, GM, Chrysler Financial Services Americas LLC (Chrysler Financial) and GMAC LLC (GMAC) to obtain information on how they determined the level of funding needed and their plans for using the funding; and representatives from Ford Motor Company and Ford Motor Credit Company to determine why they have not sought federal assistance. To identify important factors for Chrysler and GM to address to achieve long-term viability and the challenges they face to become viable, we contracted with the National Academy of Sciences (NAS) to identify a diverse group of individuals with expertise about the past and current financial condition and operations of the domestic automakers, the restructuring of distressed companies, labor relations issues, financial management and analysis of distressed or restructuring companies, factors influencing competitiveness in the auto industry, and engine and vehicle technologies that may affect the auto manufacturing industry today as well as in the near future. To further identify challenges to achieving long-term viability, we reviewed Treasury’s assessment of the restructuring plans Chrysler and GM submitted in February. To provide additional information and context on all issues examined in this report, we conducted interviews with other stakeholders, including a representative of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), representatives of the Association of International Automobile Manufacturers, and other knowledgeable individuals including financial analysts specializing in the auto sector, a lawyer knowledgeable about state franchise laws, and an economist specializing in labor issues. The economic reach of the auto industry in the United States is broad, with many groups affected by its downturn and the financial condition of the automakers. This, in turn, could affect the automakers’ ability to obtain parts needed to manufacture vehicles. We have previously identified three fundamental principles that can serve as a framework for considering federal government financial assistance to large firms. According to these principles, the federal government should (1) identify and define the problem, (2) determine the national interests and set clear goals and objectives that address the problem, and (3) protect the government’s interests. Treasury Has Established Programs to Help Stabilize the Auto Industry
In an attempt to help stabilize the U.S. automotive industry and avoid disruptions that would pose systemic risk to the nation’s economy, in December 2008 Treasury established AIFP and agreed to provide Chrysler and GM with loans of $4 billion and $13.4 billion, respectively. As a condition of the December loan agreements, Chrysler and GM were required to submit restructuring plans to Treasury in February that describe actions the automakers would take to achieve and sustain long-term viability. Several new initiatives to help stabilize the auto industry and bring relief to those affected by the industry were announced in March 2009. Supplier Support Program: Under this program, Chrysler and GM will receive funding for the purpose of ensuring payment to suppliers. Treasury has made up to $5 billion available through this program. In Providing Assistance to the Auto Industry, Treasury Identified Goals and Objectives for the Assistance and Took Steps to Protect the Government’s Interest
Treasury identified as a problem of national interest the financial condition of the U.S. automakers and its potential to affect financial market stability and the economy at large. In developing the terms and conditions of the loans to Chrysler and GM, Treasury included provisions to manage risk and protect the government’s interest. Concessions from stakeholders. Treasury also received junior liens on additional assets from both companies. Chrysler did not propose collateral options for any additional federal assistance in its restructuring plan. A potential area of significant financial exposure is the government’s liability for terminated pension plans. In the event that Chrysler or GM cannot continue to maintain their pension plans—such as in the case of liquidation or an asset sale—PBGC may be required to take responsibility for paying the benefits for the plans, which are currently underfunded by a total of about $29 billion. Automakers Have Addressed Some of the Factors Important for Achieving Viability, and Many Challenges Remain
In general, we found that Chrysler’s and GM’s February restructuring plans contain some of the key factors our panel of individuals with auto industry expertise identified as important for achieving viability, such as reducing the number of models and brands and rationalizing dealerships. However, the plans do not fully address all of the considerations that members of the panel identified, which are discussed below. Treasury identified similar concerns and concluded that Chrysler and GM need to establish a new strategy for long-term viability in order to justify substantial additional investment of federal funds. Achieving viability may be difficult because of a number of challenges facing the automakers, including some outside of their control. Treasury identified similar challenges related to both Chrysler’s and GM’s product mixes. Neither company has reached an agreement with the UAW to reduce cash contributions to the VEBAs to fund retirees’ healthcare plans, also part of Chrysler’s and GM’s plans to achieve viability. The poor condition of the U.S. economy will likely continue to affect the financial health of Chrysler and GM. As figure 2 shows, over the past 30 years, automobile sales almost always decreased during periods of economic recession. Agency Comments and Our Evaluation
We provided a draft of this report to the Departments of the Treasury, Transportation, and Energy for review and comment. These agencies provided technical clarifications, which we incorporated as appropriate. We also made a draft of this report available to Chrysler and GM officials for their review and comment. Chrysler and GM officials provided technical corrections and clarifications, which we incorporated as appropriate. | Why GAO Did This Study
The turmoil in financial markets and the economic downturn has brought significant financial stress to the auto manufacturing industry. The economic reach of the auto industry in the United States is broad, affecting autoworkers, auto suppliers, stock and bondholders, dealers, and certain states. To help stabilize the U.S. auto industry and avoid disruptions that could pose systemic risk to the nation's economy, in December 2008 the Department of the Treasury established the Automotive Industry Financing Program (AIFP) under the Troubled Asset Relief Program (TARP). From December 2008 through March 2009, Treasury has allocated about $36 billion to this program, including loans to Chrysler Holding LLC (Chrysler) and General Motors (GM). GAO has previously identified three principles to guide federal assistance to large firms: define the problem, determine the national interests and set goals and objectives, and protect the government's interests. As part of GAO's statutorily mandated responsibilities to provide timely oversight of TARP activities, this report discusses the (1) nature and purpose of assistance to the auto industry, (2) how the assistance addresses the three principles, and (3) important factors for Chrysler and GM to address in achieving long-term viability and the challenges that they face to become viable. To address these objectives, GAO reviewed Chrysler's and GM's restructuring plans and financial statements, as well as Treasury documents related to AIFP. GAO also reviewed the terms and conditions of the federal loans to identify risks to the government and compared these loan provisions to GAO's principles for providing federal financial assistance to large firms. In addition, GAO interviewed representatives of Chrysler, GM, Ford Motor Company (Ford) and the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), and officials from the Departments of the Treasury, Transportation, and Energy. GAO also conducted semistructured interviews with a panel of individuals identified by the National Academy of Sciences for their expertise in the fields of auto industry trends and data, labor relations, vehicle manufacturing, and corporate restructuring. GAO provided a draft of this report to the Departments of the Treasury, Transportation, and Energy for their review and comment. These agencies provided technical clarifications, which GAO incorporated as appropriate. GAO also made a draft of this report available to Chrysler and GM officials for their review and comment. Chrysler and GM officials provided technical corrections and clarifications, which GAO incorporated as appropriate. GAO is not making recommendations in this report.
What GAO Found
From December 2008 through March 2009, the Treasury Department established a series of programs to help bring relief to the U.S. auto industry and prevent the economic disruptions that a sudden collapse of Chrysler and GM could create. In December 2008, Treasury provided bridge loans of $4 billion to Chrysler and $13.4 billion to GM and required both automakers to submit restructuring plans in February 2009. In March, Treasury determined that the automakers' restructuring plans were not sufficient to achieve long-term viability and required that they take more aggressive action as a condition of receiving additional federal assistance. At the same time, Treasury also established programs to ensure payments to suppliers of parts and components needed to manufacture cars and to guarantee warranties of cars Chrysler and GM sell during the restructuring period. In addition to these programs, the President announced a new White House initiative to help communities and workers affected by the downturn in the industry. In the coming weeks, Treasury will determine whether the additional steps Chrysler and GM have taken or plan to take are sufficient to warrant further assistance. If the companies are successful in implementing the additional steps toward restructuring, then Treasury may provide additional assistance. In providing assistance to the auto industry, Treasury identified goals and objectives and took steps to protect the government's interest. Provisions to protect the government's interest include requiring automakers to submit periodic financial reports and to gain concessions from stakeholders such as the UAW, creditors, and bondholders. To date, however, Chrysler and GM have not reached agreements with these stakeholders. In addition, Treasury included provisions to secure collateral from the automakers. However, because many of Chrysler's and GM's assets were already encumbered by other creditors, the amount of assets on which Treasury could secure senior liens was limited. An additional area of risk is the financial health of the automakers' pension plans. In the event that Chrysler or GM cannot continue to maintain its pension plans--such as in the case of liquidation--the Pension Benefit Guaranty Corporation, a government corporation, may be required to take responsibility for paying the benefits for the plans, which are not fully funded. GAO's panel of individuals with auto industry expertise identified a number of factors for achieving viability, including reducing the number of brands, reassessing the scope and size of dealership networks, reducing production capacity and costs, and obtaining labor concessions. However, Chrysler's and GM's restructuring plans submitted in February do not fully address these factors, according to GAO's panelists. In its assessment of the plans, Treasury identified concerns similar to those identified by the panelists, and concluded that Chrysler and GM need to establish a new strategy for long-term viability in order to justify a substantial additional investment of federal funds. Achieving viability is made more difficult because of many additional challenges facing the automakers, some of which are outside their control--such as the weak economy and the limited availability of credit. The condition of the U.S. economy will likely continue to affect the financial health of Chrysler and GM, as historically automobile sales almost always decrease during periods of economic recession. Given these challenges, Treasury, Chrysler, and GM are considering a range of options available for the automakers to achieve viability, including restructuring under the bankruptcy code. |
gao_GAO-12-783 | gao_GAO-12-783_0 | MHA was initially set to end December 31, 2012, but Treasury recently extended the MHA application deadline by 1 year to December 31, 2013. HAMP Tier 2 became available to borrowers June 1, 2012. Treasury Has Not Fully Assessed the Risks of or Developed Performance Measures for the Recent Changes to MHA Programs
Treasury designed the recently announced changes to its MHA programs to address barriers to participation it identified in the existing programs, but the changes may have a limited impact on increasing MHA participation rates. The servicers that we queried had mixed views on the likely effectiveness of these changes on increasing MHA participation. Several servicers we spoke with thought that they might not be able to meet the effective date for the changes, and subsequently Treasury reported that ten servicers were unable to fully implement the changes by the effective date, including two large servicers that were not expected to fully implement them for several more months (mid-October 2012 for one large servicer). Treasury Helped States Increase Hardest Hit Fund Spending but Could Improve Monitoring and Transparency
After a slow start, states have increased their spending on borrower assistance under the Hardest Hit Fund in recent months, but it is not clear that all the states will meet their spending and borrower assistance goals. State officials told us that, with some help from Treasury, they had confronted challenges related to staffing and infrastructure, servicer participation, borrower outreach, and program implementation. Treasury also has not consolidated states’ performance and financial data, including administrative expenses, into a single public report. However, of the $7.6 billion allocated, states had provided combined assistance of $359 million (5 percent) as of March 2012. 3). As of March 2012, states had allocated about $864 million, or 11 percent of their funds, to administrative expenses. Treasury officials said that states had budgeted for initially high administrative expenses to cover start-up costs. Quarterly performance and financial reports. Treasury has established performance measures to assess servicers’ compliance with MHA program requirements and identified certain risks associated with the recent changes, but it has not provided meaningful performance goals or comprehensive risk assessments for HAMP Tier 2. Without specific program measures, Treasury will not be able to effectively assess the outcomes of these programs and hold servicers accountable for performance goals. Recommendations for Executive Action
In order to continue improving the transparency and accountability of MHA and the Hardest Hit Fund programs, we recommend that the Secretary of the Treasury take the following three actions: expeditiously conduct a comprehensive risk assessment of HAMP Tier 2, using the standards for internal control in the federal government as a guide; develop activity-level performance measures and benchmarks related to the HAMP Tier 2 program; and consolidate the state performance reports and financial reports, including administrative expenses, into a single Hardest Hit Fund report to provide policymakers and the public with the overall status of the program as well as the relative status and performance of the states’ efforts. However, Treasury stated that it took exception to our finding that it did not conduct appropriate risk assessments prior to the implementation of HAMP Tier 2. Appendix I: Objectives, Scope, and Methodology
In response to a mandate in the Emergency Economic Stabilization Act of 2008, this report examines (1) steps the Department of the Treasury has taken to design and implement recent changes to the Making Home Affordable (MHA) programs and (2) Treasury’s monitoring and oversight of state housing finance agencies’ (HFA) implementation of the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (Hardest Hit Fund). | Why GAO Did This Study
More than 3 years have passed since Treasury made up to $50 billion available to help struggling homeowners through the MHA program, and foreclosure rates remain near historically high levels. Further, more than 2 years after Treasury set up the Hardest Hit Fund to help homeowners in high-unemployment states, much of the money remains unspent. The Emergency Economic Stabilization Act of 2008, which authorized Treasury to create TARP, requires GAO to report every 60 days on TARP activities. This 60-day report examines (1) the steps Treasury took to design and implement recent changes to MHA, and (2) Treasurys monitoring and oversight of states implementation of Hardest Hit Fund programs. To address these questions, GAO analyzed data and interviewed officials from Treasury, five selected Hardest Hit Fund states, and five large MHA servicers.
What GAO Found
The Department of the Treasury announced changes in January 2012 to its Making Home Affordable (MHA) programs, which are funded by the Troubled Asset Relief Program (TARP), to address barriers to borrower participation. These changes include expanding eligibility criteria and extending application deadlines through 2013. Not enough time has passed to assess the extent to which these changes will increase participation. Several large servicers were not able to fully implement the changes by the June 1, 2012, effective date, and servicers that GAO queried had mixed views about possible effects. Treasury consulted with servicers, investors, and federal banking regulators before implementing the changes but did not perform a comprehensive risk assessment for the changes or develop meaningful performance measures in accordance with standards for internal control. As a result, Treasury may have difficulty mitigating potential risks, such as an increase in redefaults or the misuse of funds; effectively assessing program outcomes; or holding servicers accountable.
After a slow start, states increased their spending on borrower assistance under the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (Hardest Hit Fund). The assistance provided as of March 2012 totaled about 5 percent of the $7.6 billion allocation. All but one state that GAO spoke to anticipated spending their full allocations, and all noted that with Treasurys help they had dealt with challenges related to staffing, infrastructure, servicer participation, borrower outreach, and program implementation. Treasury officials said that they expected initial administrative spending to be high as states established their programs, and 27 percent of states total spending was for administrative expenses as of March 2012. Treasury officials stated that states would be required to report publicly on administrative costs beginning with the third quarter of 2012. Treasury has been monitoring states performance and compliance but has not reported consolidated performance and financial data (including administrative expenses) for the programs. The lack of consolidated reporting of performance and financial data limits transparency and efforts to ensure that resources are used effectively to achieve program goals.
What GAO Recommends
Treasury should (1) expeditiously assess the risks associated with the recent changes to MHA and develop activity-level performance measures for each program, and (2) consolidate the states Hardest Hit Fund performance and financial data, including administrative expenses, into a single public report. Treasury neither agreed nor disagreed with the recommendations but took exception to the finding that it did not conduct a comprehensive risk assessment prior to implementing the MHA program changes. In response, GAO provided examples of key components of a comprehensive risk assessment that Treasury had not addressed. |
gao_GAO-10-7 | gao_GAO-10-7_0 | The Black Lung Benefits Program provides medical and income assistance to coal mine workers who suffer disability or death due to black lung disease. DOL Issued Claims Decisions at Each Stage of the Process, on Average, in 1 Year or Less, but High Rates of Appeal and Remand, Among Other Factors, Delay Resolution of Many Claims
DOL Issued Claims Decisions at Each Stage of the Claims Process, on Average, in 1 Year or Less
According to department data for fiscal year 2008, DOL decided claims at each stage of the claims process, on average, in 1 year or less, meeting its respective performance goals (see table 1). For the claims we examined, which were filed between 2001 and 2008, mine companies agreed to pay benefits for the majority of claims within 3 years from the date of the initial claim, while a minority of claims remained in the process for as many as 8 years before an RO agreed to pay (see fig. For about 73 percent of the 763 examined claims filed between 2001 and 2008, ROs agreed to pay in less than 3 years. According to DOL officials, some miners extend appeals in an attempt to have interim benefits reinstated or to maintain their payment of interim benefits. Some claimants have difficulty proving that their lung disease is pneumoconiosis. In addition, according to NIOSH scientists, some miners develop a form of lung disease associated with long-term exposure to coal mine dust that impairs lung function but frequently cannot be detected by X-ray. In such cases, judges told us that they rely heavily on nonclinical evidence to determine whether claimants are eligible for benefits. According to some administrative law judges, mining company doctors are usually better credentialed and produce lengthier, more sophisticated, and comprehensive medical reports and evaluations than claimants’ doctors. Coal Miners Face a Number of Challenges in Pursuing Federal Black Lung Benefits, Including Finding Legal Representation and Developing Sound Medical Evidence
Although the Program and DOL Recognize the Importance of Legal Representation for Miners, DOL Does Not Track, Evaluate, and Report on Claimants’ Access to Legal Representation
The importance of legal representation for black lung claimants is well established. DOL judges told us that doctors’ medical opinions are a key element of evidence in claims adjudication and indicated that most of the opinions submitted by DOL’s approved doctors did not provide claimants with sound evidentiary support for their cases. Although the cause for these rates is not entirely clear, it is evident that the program’s structure can create financial incentives for both miners and mine operators to continue to file or extend appeals. While miners must be able to develop sound evidentiary support for their black lung cases, the medical evidence prepared by DOL- approved doctors does not consistently provide this support, and blood gas testing practices may contribute to inaccurate disability test readings. 4. 6. Appendix I: Objectives, Scope, and Methodology
To gain insight in to the administration of the Black Lung Benefits Program, we examined (1) how long it takes to process and resolve black lung benefits claims; (2) at what rate and for what reasons black lung claims and appeals are denied by the Department of Labor (DOL); and (3) what barriers, if any, confront miners or their survivors in pursuing their claims. However, DOL does not track how long all claims remain in the claims and appeals process. These states and regions were selected because they have (1) high levels of miner death related to black lung disease, (2) a large volume of federal black lung claims, and (3) estimates of black lung-related resources and services. | Why GAO Did This Study
The Department of Labor (DOL) Black Lung Benefits Program provides medical and income assistance to coal miners who suffer total disability or death due to lung disease caused by coal dust. To provide insight into DOL's administration of the Black Lung Benefits Program, GAO is reporting on (1) how long it takes to process and resolve black lung benefits claims; (2) at what rate and for what reasons black lung claims and appeals are denied by DOL; and (3) what barriers, if any, confront miners or their survivors in pursuing their claims. GAO collected and analyzed black lung claims and appeals data and interviewed officials at relevant federal agencies, national organizations, and selected local organizations at two sites.
What GAO Found
In fiscal year 2008, DOL issued decisions on claims in less than 1 year on average at each stage of adjudication, yet according to officials and experts, the appeals and remands (claims sent back to the prior stage of review for further consideration or development) that follow decisions can keep claims in the system for years. Although DOL does not track how long all claims remain in the claims and appeals process, we examined 763 miner claims filed between 2001 and 2008 that were ultimately awarded benefits by mine companies. We found that mine companies agreed to pay benefits for about 73 percent of these claims within 3 years from the date of the initial claim, roughly 24 percent of claims in 3 to 6 years, and the remaining 4 percent in 6 to 8 years. The program also contains financial incentives for both miners and mining companies to keep claims in the appeals process. For example, some miners may extend the appeals process to maintain their payment of interim benefits. Factors that add additional time to the appeals process also include allowing time for claimants to find legal representation and waiting until there are sufficient cases in rural areas before sending a judge to hold a hearing. In 2008, most claims (87 percent) were initially denied. Few claimants areable to prove they meet all of the program's eligibility requirements, and for certain cases, required conditions are difficult to prove. For example, some miners--those with a history of smoking--develop lung disease associated with long-term exposure to coal mine dust but which frequently cannot be detected by X-ray. Though current science does not allow a medical distinction between lung disease caused by smoking and by coal mine dust, regulations require that claimants establish that their lung disease is significantly related to or substantially aggravated by coal dust. In such cases, judges told us they rely heavily on nonclinical evidence, such as physician credentials, length of depositions, and level of sophistication of evidence presented by claimants and mine operators to determine claimant eligibility. According to some DOL administrative law judges, mining company doctors are usually better credentialed and produce lengthier and more sophisticated medical reports and evaluations. GAO found that coal miners face a number of challenges pursuing federal black lung claims, including finding legal representation and developing sound medical evidence to support their claims. DOL officials identified miners' lack of resources, the low probability of success, and high litigation costs for their cases as factors that contribute to the difficulties miners face in finding legal representatives. Miners also encounter challenges in developing sound medical evidence. DOL administrative law judges said medical evidence prepared by DOL-approved doctors for claimants does not always provide sound or thorough evidentiary support for their claims. Further, various practices of medical testing, a key measure of black lung-related disability, may contribute to inaccurate disability test readings. |
gao_GAO-12-887 | gao_GAO-12-887_0 | This pilot program began in March 2011, and in March 2012, near the end of the pilot, the Navy issued its Surface Force Readiness Manual, which details a new strategy for optimizing surface force readiness throughout the Fleet Response Plan. The strategy calls for integrating and synchronizing maintenance, training, and resources among multiple organizations such as Afloat Training Groups and Regional Maintenance Centers. Data Indicate Differences in Material Readiness Between Ship Types, but Do Not Reveal Readiness Trends Due to Limitations in the Data
For the period from 2008 to 2012, available data show variations in material readiness between different types of ships—such as material readiness differences between amphibious warfare ships and surface combatants—but data limitations prevent us from making any conclusions concerning improvements or declines in the overall readiness of the surface combatant and amphibious warfare fleet during the period. Through a variety of means and systems, the Navy collects, analyzes, and tracks data that show the material condition of its surface ships—in terms of both their current and life cycle readiness. However, the data sources can be viewed as complementary and, when taken together, provide data on both the current and life cycle material readiness of the surface force. Likewise, cruisers have a lower material condition than that of destroyers. DRRS-N data also show that there are readiness differences between the Navy’s different types of ships but the precise differences are classified and therefore are not included in this report. Casualty report data from January 2008 to March 2012 show that there is a significant upward trend in the average daily number of casualty reports per ship for both surface combatants and amphibious warfare ships, which would indicate declining material readiness. Navy Has Acted to Improve Readiness but Not Assessed Risks to Achieving Full Implementation of Its Recent Strategy
The Navy has taken steps intended to improve the readiness of its surface combatant and amphibious warfare ships. Navy Has Not Assessed Risks to Implementing its Strategy as Planned or Developed Alternatives
Certain factors could affect the Navy’s ability to fully implement its strategy, but the Navy has not assessed the risks to implementation or developed alternatives. As we have previously reported,assessment can provide a foundation for effective program management. High operational tempos pose challenges because they could delay the entry of some ships into the strategy as well as the movement of ships through the strategy. Thus, ships with a high operational tempo that do not enter the maintenance phase as planned will have lifecycle maintenance activities deferred, which could lead to increased future costs. For example, Navy Afloat Training Group officials have identified the staffing levels required to fully support the strategy, and reported that they need an additional 680 personnel to fully execute the new strategy. As of August 2012, the Navy plans to reflect its funding needs for 410 of the 680 personnel in its fiscal year 2014 budget request and for the remaining 270 in subsequent requests. The Navy has not undertaken a comprehensive assessment of the impact of high operational tempos, staffing shortages, or any other risks it may face in implementing its new readiness strategy, nor has it developed alternatives to mitigate any of these risks. Full implementation of its new strategy, however, may be delayed if the Navy does not account for the risks it faces and devise plans to mitigate against those risks. Recommendations for Executive Action
To enhance the Navy’s ability to implement its strategy to improve surface force material readiness, we recommend that the Secretary of Defense direct the Secretary of the Navy to take the following two actions:
Develop a comprehensive assessment of the risks the Navy faces in implementing its Surface Force Readiness Manual strategy, and alternatives to mitigate risks. Therefore, we continue to believe that a comprehensive risk assessment is needed. Appendix I: Scope and Methodology
To assess how the Navy evaluates the material readiness of its surface combatant and amphibious warfare ships and the extent to which data indicate trends or patterns in the material readiness of these ships, we interviewed officials from the Commander Naval Surface Force, U.S. Pacific Fleet, Commander Naval Surface Force, U.S. Atlantic Fleet, as well as visiting a number of ships, to include the USS Leyte Gulf (CG 55), USS Arleigh Burke (DDG 51), USS San Antonio (LPD 17), and USS Higgins (DDG-76). We analyzed data from three of the primary data sources the Navy uses to provide information on the material condition of ships: casualty reports; Board of Inspection and Survey (INSURV) material inspection reports; and the Defense Readiness Reporting System – Navy (DRRS-N) reports. We did this separately for surface combatant ships (cruisers, destroyers, and frigates) and amphibious warfare ships. To determine the extent to which the Navy has taken steps intended to improve the readiness of its surface combatant and amphibious warfare ships including efforts to implement its recent strategy, we reviewed relevant Navy instructions on Navy material readiness, including the strategy—the Surface Force Readiness Manual—to identify the policies and procedures required by the Navy to ensure its surface ships are ready to perform their current mission requirements and reach their expected service lives. | Why GAO Did This Study
In 2010, the Navy concluded that decisions it made to increase efficiencies of its surface force had adversely affected ship readiness and service life. To improve ship readiness the Navy developed a new strategy, which includes several initiatives. House Report 112-78, accompanying a proposed bill for the Fiscal Year 2012 National Defense Authorization Act (H.R.1540), directed GAO to review the recent Navy initiatives. GAO assessed 1) how the Navy evaluates the material readiness of its surface combatant and amphibious warfare ships and the extent to which data indicate trends or patterns in the material readiness of these ships, and 2) the extent to which the Navy has taken steps to improve the readiness of its surface combatant and amphibious warfare ships, including implementing its new readiness strategy. GAO analyzed Navy policies, material and readiness data from January 2008two years prior to the release of the Navys 2010 report on the degradation of surface force readinessthrough March 2012, two years after the release of the report, and interviewed headquarters and operational officials and ship crews.
What GAO Found
Recent data show variations in the material readiness of different types of ships, but do not reveal any clear trends of improvement or decline for the period from 2008 to 2012. The Navy uses a variety of means to collect, analyze, and track the material readiness of its surface combatant and amphibious warfare ships. Three data sources the Navy uses to provide information on the material readiness of ships are: casualty reports, which reflect equipment malfunctions; Defense Readiness Reporting System-Navy (DRRS-N) reports; and Board of Inspection and Survey (INSURV) material inspection reports. These data sources can be viewed as complementary, together providing data on both the current and life cycle material readiness of the surface force. INSURV and casualty report data show that the material readiness of amphibious warfare ships is lower than that of frigates and destroyers. However, there is no clear upward or downward trend in material readiness across the entire Navy surface combatant and amphibious warfare ships. From 2010 to March 2012, INSURV data indicated a slight improvement in the material readiness of the surface combatant and amphibious warfare fleet, but over that period casualty reports from the ships increased, which would indicate a decline in material readiness. DRRS-N data also show differences in material readiness between ship types, but the precise differences are classified and therefore are not included in this report.
The Navy has taken steps to improve the readiness of its surface combatant and amphibious warfare ships, including a new strategy to better integrate maintenance actions, training, and manning, but it faces risks to fully implementing its strategy and has not assessed these risks or developed alternatives to mitigate them. In March 2012, near the end of a year-long pilot, the Navy issued its Surface Force Readiness Manual, which calls for integrating and synchronizing maintenance, training and manning among multiple organizations. The Navy expects this strategy to provide a standard, predictable path for ships to achieve and sustain surface force readiness, but certain factors, such as high operational tempos and supporting organizations staffing levels, could delay the entry of some ships into the strategy and the execution of the strategy. For example, one supporting organization reported needing an additional 680 personnel to fully execute the strategy. As of August 2012, the Navy plans to reflect its funding needs for 410 personnel in its fiscal year 2014 budget request and the remaining 270 in subsequent requests. Also, due to high operational tempos the phased implementation of some ships into the strategy may be delayed. Furthermore, ships that do not execute the strategys maintenance periods as planned will have lifecycle maintenance actions deferred. GAO has previously reported that risk assessment can inform effective program management by helping managers make decisions about the allocation of finite resources, and alternative courses of action. However, the Navy has not undertaken a comprehensive assessment of risks to the implementation of its strategy, nor has it developed alternatives to mitigate its risks. GAO believes operational tempo, supporting organizations staffing levels, and other risks may hinder the Navys full implementation of its surface force readiness strategy. If not addressed, this could lead to deferrals of lifecycle maintenance, which have in the past contributed to increased maintenance costs, reduced readiness, and shorter service lives for some ships.
What GAO Recommends
GAO recommends that the Navy conduct a comprehensive assessment of the risks the new strategy faces and develop alternatives to mitigate these risks. DOD partially concurred, but felt that current assessments sufficiently identify risks. GAO continues to believe that a comprehensive assessment that takes into account the full range of risk to the overall strategy is needed. |
gao_GAO-11-757 | gao_GAO-11-757_0 | Many states do not regulate a significant number of providers. Overview of Federal and State Laws Related to the Employment of Sex Offenders at Child Care Facilities
Federal laws regulate the employment of sex offenders at federal child care facilities, and widely divergent laws govern state child care facilities, especially with regard to licensing requirements and penalties. Only 3 states appear to require criminal-history checks for all licensed and unlicensed child care facilities, while 11 states require that all facilities that receive state or federal funds perform these checks. Method for Conducting Criminal-History Checks. Penalties for violations. For example, 34 states and the District of Columbia attach criminal penalties to licensing requirement violations, failure of an owner or employee to disclose criminal-history information, or failure to perform criminal-history checks. Cases of Child Care Facilities That Employed or Provided Residence to Sex Offenders
We did not assess the prevalence of sex offenders working or residing at child care facilities; our 10 cases do provide examples of sex offenders who gained access to such facilities as maintenance workers, spouses or friends of providers, a cafeteria worker, and a carpenter. Seven of these cases involve offenders who previously targeted children, and in at least 3 of the cases, the offenders used their access to children at the child care facility to offend again. As discussed below, we identified instances of relatives and acquaintances who knowingly hired offenders to work at child care facilities and facilities that unknowingly hired offenders because they did not perform preemployment criminal-history checks. Our investigation also found instances where child care facilities employing sex offenders operated without licenses or received federal funds. After interviewing the child care provider, we confirmed that the offender was working at the facility in November 2010. We then referred the matter to the Office of the State Superintendent of Education, the office responsible for licensing child care facilities in the District of Columbia. North Carolina prohibits sex offenders from being present at child care facilities. If enforced, penalties for violating licensing requirements also vary widely, ranging from a $5 administrative fine to imprisonment for a term of years. Details regarding our four cases follow. The Nebraska Department of Health and Human Services is authorized to conduct national and state criminal- history checks of the owners and employees of licensed child care facilities (4 or more children). Periodic checks are required every 2 years. | Why GAO Did This Study
Very little is known about sexual abuse among children that are regularly cared for by more than 1.3 million child care providers every week in the United States. In this context, GAO was asked to (1) provide an overview of federal and state laws related to the employment of sex offenders at child care facilities and (2) examine cases where individuals who were convicted of serious sexual offenses were subsequently employed or present at child care facilities. To provide an overview of selected laws, GAO searched for prohibitions against offenders being present at child care facilities, requirements for conducting criminal-history checks, and penalties for violating these requirements. The cases GAO examined focus only on individuals who were convicted of serious sexual offenses and cannot be generalized to all child care facilities. To identify the cases, GAO reviewed open-source information from 2000 to 2010. GAO also compared the years 2007 to 2009 in employment databases from 20 states and the District of Columbia to data in the National Sex Offender Registry. GAO ultimately selected 10 cases from eight states and the District of Columbia for review. For each case, GAO reviewed court documents and interviewed law enforcement personnel. Our methodology was not designed to assess the prevalence of sex offenders working at child care facilities. This product contains no recommendations. Where applicable, GAO referred its cases for further investigation.
What GAO Found
Federal laws regulate the employment of sex offenders at federal child care facilities. For example, federally operated facilities are required to conduct criminal-history checks on employees, as are facilities receiving grants from the Department of Health and Human Services' Head Start program. At the state level, laws vary widely. For example, all 50 states require criminal-history checks for owners and employees of licensed child care facilities, but many state laws exempt facilities from licensing if they do not exceed certain thresholds, such as a minimum number of children. Penalties for violating licensing requirements can range from a $5 administrative fine to imprisonment for a term of years. The cases GAO examined show examples of individuals convicted of serious sexual offenses who gained access to child care facilities as maintenance workers, spouses or friends of providers, a cafeteria worker, and a cook. At least seven of these cases involve offenders who previously targeted children, and in three of the cases, the offenders used their access to children at the facilities to offend again. Among the cases, GAO found instances of providers who (1) knowingly hired offenders and (2) did not perform preemployment criminal-history checks. GAO also found examples of facilities operating without licenses, and facilities that employed offenders while receiving federal funds. The following four cases illustrate the nature of the situations GAO identified. |
gao_GAO-07-127 | gao_GAO-07-127_0 | Based on this limited work, we found no material inconsistencies with the schedules. In order to fulfill these responsibilities, we examined, on a test basis, evidence supporting the amounts and disclosures in the Schedules of Federal Debt; assessed the accounting principles used and any significant estimates evaluated the overall presentation of the Schedules of Federal Debt; obtained an understanding of internal control relevant to the Schedule of Federal Debt as of September 30, 2006, related to financial reporting and compliance with laws and regulations (including execution of transactions in accordance with budget authority); tested relevant internal controls over financial reporting and compliance, and evaluated the design and operating effectiveness of internal control relevant to the Schedule of Federal Debt as of September 30, 2006; considered the process for evaluating and reporting on internal control and financial management systems under the Federal Managers’ Financial Integrity Act; and tested compliance in fiscal year 2006 with the (1) statutory debt limit (31 U.S.C. We limited our tests of compliance to selected provisions of laws that have a direct and material effect on the Schedule of Federal Debt for the fiscal year ended September 30, 2006. The comments are reprinted in appendix I.
Overview, Schedules, and Notes
Federal debt managed by the Bureau of the Public Debt (BPD) comprises debt held by the public and debt held by certain federal government accounts, the latter of which is referred to as intragovernmental debt holdings. As of September 30, 2006 and 2005, outstanding gross federal debt managed by the bureau totaled $8,493 and $7,918 billion, respectively. The increase in gross federal debt of $575 billion during fiscal year 2006 was due to an increase in gross intragovernmental debt holdings of $333 billion and an increase in gross debt held by the public of $242 billion. As Figure 1 illustrates, both intragovernmental debt holdings and debt held by the public have steadily increased since fiscal year 2002. (in billions)
Debt held by the public reflects how much of the nation’s wealth has been absorbed by the federal government to finance prior federal spending in excess of total federal revenues. Intragovernmental debt holdings represent balances of Treasury securities held by over 230 individual federal government accounts with either the authority or the requirement to invest excess receipts in special U.S. Treasury securities that are guaranteed for principal and interest by the full faith and credit of the U.S. Government. From February 16 to March 20, 2006, Treasury faced a period that required it to depart from its normal debt management procedures and to invoke legal authorities to avoid breaching the statutory debt limit. On March 20, 2006, Public Law 109-182 was enacted, which raised the statutory debt ceiling by $781 billion to $8,965 billion. Through fiscal year 1997, annual federal deficits continued to be large and debt continued to grow at a rapid pace. As a result, total federal debt increased more than five fold between 1981 and 1997. In addition, BPD has been given the responsibility to issue Treasury securities to trust funds for trust fund receipts not needed for current benefits and expenses. The average interest rates for both fiscal years 2006 and 2005 were 5.2 percent. Interest Expense Interest expense on Federal Debt Managed by BPD for fiscal years 2006 and 2005 consisted of the Federal Debt Held by the Public Net Amortization of Premiums and Discounts Total Interest Expense on Federal Debt Held by the Public Net Amortization of Premiums and Discounts (3,269) (1,814)
Total Interest Expense on Intragovernmental Debt Total Interest Expense on Federal Debt Managed by BPD The principal for TIPS is adjusted daily over the life of the security based on the Consumer Price Index for all Urban Consumers. | Why GAO Did This Study
GAO is required to audit the consolidated financial statements of the U.S. government. Due to the significance of the federal debt held by the public to the governmentwide financial statements, GAO has also been auditing the Bureau of the Public Debt's (BPD) Schedules of Federal Debt annually. The audit of these schedules is done to determine whether, in all material respects, (1) the schedules are reliable and (2) BPD management maintained effective internal control relevant to the Schedule of Federal Debt. Further, we test compliance with selected provisions of significant laws related to the Schedule of Federal Debt. Federal debt managed by BPD consists of Treasury securities held by the public and by certain federal government accounts, referred to as intragovernmental debt holdings. The level of debt held by the public reflects how much of the nation's wealth has been absorbed by the federal government to finance prior federal spending in excess of federal revenues. Intragovernmental debt holdings represent balances of Treasury securities held by federal government accounts, primarily federal trust funds such as Social Security, that typically have an obligation to invest their excess annual receipts over disbursements in federal securities.
What GAO Found
In GAO's opinion, BPD's Schedules of Federal Debt for fiscal years 2006 and 2005 were fairly presented in all material respects and BPD maintained effective internal control relevant to the Schedule of Federal Debt as of September 30, 2006. GAO also found no instances of noncompliance in fiscal year 2006 with selected provisions of the statutory debt limit and debt issuance suspension period laws we tested. As of September 30, 2006 and 2005, federal debt managed by BPD totaled about $8,493 billion and $7,918 billion, respectively. At the end of fiscal year 2006, debt held by the public as a percentage of the U.S. economy is estimated at 36.9 percent, compared to 34.1 percent at the end of fiscal year 2002. Further, certain trust funds (e.g., Social Security) continue to run surpluses, resulting in increased intragovernmental debt holdings. These debt holdings are backed by the full faith and credit of the U.S. government and represent a priority call on budgetary resources. As a result, total gross federal debt has increased 37 percent between the end of fiscal years 2002 and 2006. During fiscal year 2006, a debt issuance suspension period was invoked to avoid breaching the statutory debt limit. On March 20, 2006, legislation was enacted to raise the debt limit by $781 billion to $8,965 billion. This was the fourth occurrence since 2002 that the statutory debt limit had to be raised to avoid breaching the statutory debt limit. During that time, the debt limit has increased more than $3 trillion, from $5,950 billion in 2002 to the current limit of $8,965 billion. Total federal debt increased over each of the last 4 fiscal years. Debt held by the public increased during this 4-year period primarily as a result of annual unified budget deficits. Intragovernmental debt holdings steadily increased during this 4-year period primarily due to excess receipts over disbursements in federal trust funds (e.g., Social Security). |
gao_HEHS-96-29 | gao_HEHS-96-29_0 | The current composition of the program’s portfolio with the concentration of insured loans in New York, changes in state policies, trends in the health care market, and the probability of future changes in federal health care policies pose risks that may threaten the future stability of the program. 2). The portfolio has an aggregate unpaid principal balance of about $5 billion. Also, 9 of the 10 largest hospital mortgages are in New York. Several officials stated that New York hospitals rely on FHA mortgage insurance, in part, because the state’s reimbursement system hinders hospitals’ ability to access capital in the private market. The net effect of the methodological flaws on the reserve estimate is unclear because FHA’s default assumptions and their exclusion of market trends could overstate or understate the loan loss reserve estimate. Although FHA officials believe that the hospital program is consistent with HUD’s mission, the extent to which the program accomplishes the department’s goals and thereby supports its mission is not routinely measured. FHA Program Management Responsibilities Shared With HHS Staff
FHA has limited health care expertise to independently manage the program. FHA did not consider the full loss exposure in estimating reserves for hospitals that it identified as having high default probabilities. Therefore, these loss rates do not provide a reliable basis for estimating FHA’s reserves. Financial Performance of FHA’s Hospital Mortgage Insurance Program, Fiscal Years 1969-94
Net cash flow from operations for the year ($1) (12) (50) (86) (133) (26,867) (159) (21,985) (169) (243) (337) (363) (378) (12,105) (418) (516) (548) (663) (673) (869) (876) (5,351) (898) (901) (34,606) (844) (11,324) (21,240) (872) (91,179) (883) (66,687) (828) (4,202) (773) (4,180) (714) $370,110 ($199,730) ($13,207)
FHA-Insured Hospital Projects’ Unpaid Principal Balances, by State, August 1995
(continued) (continued) (continued)
Total (100 projects)
HUD’s and HHS’ Responsibilities in FHA’s Hospital Mortgage Insurance Program Loan Cycle
Provide applicant guidance and assistance (including preapplication conference)
Conduct initial site visit to hospital Review and approve construction plans, specifications, and contracts Recommend to HUD approval or disapproval of hospital’s application Make final underwriting determinations, conduct any needed legal reviews, issue firm commitment, close and initially endorse loan Conduct preconstruction conference, monitor construction work, and process requests for advances of mortgage proceeds Review cost certification, inform lender of maximum insurable mortgage amount, and process final advance Arrange final closing and finally endorse mortgage Monitor hospital’s financial performance by reviewing financial statements and conducting periodic site visits Receive, review, and recommend to HUD approval or disapproval of special requests and loan modifications (for example, partial release of security, transfer of physical assets, bond refundings, or major capital projects)
Approve special requests and loan modifications Conduct site visits to troubled hospitals to determine actions needed to prevent or cure defaults Review quality and condition of insured hospital loan portfolio and determine amount of loan loss reserve Receive/process assignment of loan and pay insurance claim Review assigned hospital’s operational performance and financial condition and conduct site visits as needed Receive, review, and recommend to HUD approval or disapproval of proposed workout agreements or mortgage modifications Bill for and collect mortgage payments Analyze hospital’s situation, evaluate alternative uses, secure appraisal, make decision to foreclose, and arrange and hold foreclosure sale (continued)
Objectives, Scope, and Methodology
The specific objectives of our review were to (1) identify factors, including those related to health care market trends, that could affect the stability of the program’s portfolio and provide information on the program’s financial performance; (2) evaluate the methodology FHA used to estimate the program’s fiscal year 1994 loan loss reserve; (3) evaluate the relationship between the purpose of the hospital mortgage insurance program and HUD’s mission; and (4) determine whether FHA has the expertise to manage the program. | Why GAO Did This Study
Pursuant to a legislative requirement, GAO reviewed the Federal Housing Administration's (FHA) Hospital Mortgage Insurance Program, focusing on: (1) factors that could affect the stability of the program's portfolio and financial performance; (2) FHA 1994 loan loss reserve estimate; (3) how the program relates to the Department of Housing and Urban Development's (HUD) mission; and (4) whether FHA has the expertise to manage the program.
What GAO Found
GAO found that: (1) although the Hospital Mortgage Insurance Program has had a net positive cash flow since its inception, the program faces financial risks that could affect its future stability; (2) New York hospitals account for 87 percent of the program's $5 billion in unpaid principal and have 9 of the 10 largest unpaid principal balances; (3) New York hospitals unduly rely on the FHA mortgage insurance program because the state's restrictive reimbursement system hinders their ability to attract private-sector capital; (4) state actions and future health care policy changes and trends could further threaten hospital solvency; (5) FHA loan loss reserve estimates are unreliable because FHA used questionable assumptions about default probabilities and loss rates and did not consider health care market trends; (6) the extent to which the mortgage program contributes to the HUD mission is unclear because HUD does not routinely measure program outcomes; (7) FHA staff do not have sufficient health care expertise to manage key program functions and must rely on Health and Human Services staff experience to monitor hospitals' financial performance; and (8) hospital officials and program users are concerned about the length of the program's application and loan modification processes. |
gao_GAO-06-215 | gao_GAO-06-215_0 | To address these concerns, the Navy initiated the NTCSS program in 1995 to enhance the combat readiness of ships, submarines, and aircraft. The Navy has not managed NTCSS in accordance with many key aspects of these policies and guidance. For example, the Navy has not economically justified its investment in NTCSS on the basis of cost and benefits. It has not invested in NTCSS within the context of a well-defined enterprise architecture. Further, the Navy has not effectively performed key measurement, reporting, and oversight activities, and has not adequately conducted requirements management and testing activities. Reasons the Navy cited for not following policies and guidance included questioning their applicability to the NTCSS program, having insufficient time in which to apply them, and believing that plans to adopt them were not meant to be applied retroactively. As a result, the Navy does not currently have a sufficient basis for determining whether NTCSS is the right system solution for its tactical command support needs, and it has not pursued the proposed solution in a way that increases the likelihood of delivering defined capabilities on time and within budget. The Navy has also not had an enterprise architecture to guide and constrain its IT system investments. In particular, it is a means to measure performance and serves as an early warning system for deviations from plans. The OOMA application has failed operational testing twice over the last 4 years reportedly because of deficiencies in developmental testing. It is important that the NTCSS program improve its developmental testing. To accomplish this, the Secretary of the Navy should direct the program office to take the following three actions: collaborate with the Office of the Assistant Secretary of Defense for Networks and Information Integration/Chief Information Officer, the Office of Program Analysis and Evaluation, and the Naval Cost Analysis Division to prepare a reliable economic analysis that encompasses all viable alternatives, including the Navy’s recent enterprise resource planning program; ensure that development of this economic analysis (1) complies with cost estimating best practices, including recognition of costs to resolve open trouble reports and change proposals, and relevant OMB cost benefit guidance and (2) incorporates available data on whether deployed NTCSS capabilities are actually producing benefits; and collaborate with the Undersecretary of Defense for Acquisition, Technology, and Logistics and the Under Secretary of Defense (Comptroller) to ensure that NTCSS is adequately aligned with evolving DOD and Navy enterprise architectures. If—based on reliable data—a decision is made to continue the NTCSS program, we recommend that the Secretary of Defense direct the Secretary of the Navy to ensure that the following two actions are taken: the NTCSS program implements effective program management activities, including earned value management, requirements development and management, and test management; and key stakeholders, such as the central design agency and the developmental testing organization, have the people, processes, and tools to effectively execute their respective roles and responsibilities. Nevertheless, the department agreed to address this recommendation. GAO staff who made major contributions to this report are listed in appendix V.
Objective, Scope, and Methodology
Our objective was to determine whether the Naval Tactical Command Support System (NTCSS) is being managed according to important aspects of the Department of Defense’s (DOD) acquisition policies and guidance, as well as other relevant acquisition management best practices. GAO Comments
1. However, the point in our report is that NTCSS has not been defined and developed in the context of a DOD or Navy enterprise architecture because a well-defined version of either has not existed to guide and constrain the program. | Why GAO Did This Study
Because it is important that the Department of Defense (DOD) adheres to disciplined information technology (IT) acquisition processes to successfully modernize its business systems, GAO was asked to determine whether the Naval Tactical Command Support System (NTCSS) is being managed according to important aspects of DOD's acquisition policies and guidance, as well as other relevant acquisition management best practices. NTCSS was started in 1995 to help Navy personnel effectively manage ship, submarine, and aircraft support activities. To date, about $1 billion has been spent to partially deploy NTCSS to about one-half its intended ashore and afloat sites.
What GAO Found
The Department of the Navy has not managed its NTCSS program in accordance with key aspects of the department's policies and related guidance, including federal and recognized best practice guidance. Collectively, these policies and guidance are intended to reasonably ensure that investment in a given IT system represents the right solution to fill a mission need and, if it is, that acquisition and deployment of the system are handled in a manner that maximizes the chances of delivering defined system capabilities on time and within budget. In the case of NTCSS, neither of these outcomes is being realized. The Navy has not economically justified its ongoing and planned investment in NTCSS. Specifically, it (1) has not reliably estimated future costs and benefits and (2) has not ensured that independent reviews of its economic justification were performed to determine its reliability. The Navy has not invested in NTCSS within the context of a well-defined DOD or Navy enterprise architecture, which is necessary to guide and constrain NTCSS in a way that promotes interoperability and reduces redundancy with related and dependent systems. The Navy has not effectively performed key measurement, reporting, budgeting, and oversight activities. In particular, earned value management, which is a means for determining and disclosing actual performance against budget and schedule estimates, has not been implemented effectively, and oversight entities have not had the visibility into the program needed to affect its direction. The Navy has not adequately conducted requirements management and testing activities. For example, requirements were neither prioritized nor traced to related documentation to ensure that the system delivers capabilities that meet user needs. This contributed to failures in developmental testing that have prevented the latest component of NTCSS from passing operational testing twice over the last 4 years. Reasons the Navy cited for not following policies and guidance ranged from their not being applicable to the NTCSS program, to lack of time available to apply them, to plans for strengthening system practices not being applied retroactively. Nevertheless, the Navy has begun taking steps and is considering other steps intended to address some of the above problems. Until program management improves, NTCSS will remain a risky program. |
gao_T-HEHS-98-125 | gao_T-HEHS-98-125_0 | VBA Has Made Progress but Faces Significant Challenges in Implementing the Results Act
As with last year’s business plan, VBA’s fiscal year 1999 business plan continues to focus primarily on process-oriented goals and performance measures. To help achieve its program goals, VBA has efforts under way to coordinate with other agencies that support veterans’ benefit programs; these efforts will need to be sustained to ensure quality service to veterans. VBA also faces significant challenges in setting clear strategies for achieving the goals it has established and in measuring program performance. For example, VBA considers its BPR efforts to be essential to the success of key performance goals, such as reducing the number of days it takes VBA to process a veteran’s disability compensation claim. VBA is also in the process of identifying and developing key data it needs to measure its progress in achieving specific goals. In focusing on program results, VBA will need to tackle difficult questions in consultation with the Congress. Coordinating Related Performance Goals
As VBA develops more results-oriented goals and measures, it also needs to ensure that it is coordinating efforts with other parts of VA as well as federal and state agencies that support veterans’ benefits programs. VBA is in the early stages of developing clear and specific strategies. A major challenge VBA faces in developing clear and specific strategies for achieving performance goals will be effectively using BPR to identify what actions are needed to achieve performance goals and explain how these actions will lead to the intended results. For example, one goal is to ensure that VBA is providing the best value for the taxpayers’ dollar; however, VBA currently is unable to calculate the full cost of providing benefits and services to veterans. In addition, VBA’s recently appointed Under Secretary for Benefits has raised concerns about the accuracy of data contained in VBA’s existing management reporting systems. Moreover, completed and ongoing IG audits have identified data system internal control weaknesses and data integrity problems, which if not corrected will undermine VBA’s ability to reliably measure its performance. The Results Act: Observations on VA’s June 1997 Draft Strategic Plan (GAO/HEHS-97-174R, July 11, 1997). The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997). | Why GAO Did This Study
GAO discussed the Veterans Benefits Administration's (VBA) implementation of the Government Performance and Results Act of 1993.
What GAO Found
GAO noted that: (1) VBA continues to make progress in setting goals and measuring its programs' performance but faces significant challenges in its efforts to successfully implement the Results Act; (2) VBA has efforts under way to address these challenges, which if continued will help ensure success; (3) for example, VBA is in the process of developing results-oriented goals and measures for each of its programs in response to concerns that GAO and others have raised; (4) developing more results-oriented goals and measures will require VBA to address difficult and sensitive questions regarding specific benefit programs, such as whether disabled veterans are being compensated appropriately under the existing disability program structure; (5) to address these questions, VBA is continuing its consultations with Congress, begun last year in conjunction with the Department of Veterans Affairs (VA) strategic planning efforts; (6) VBA also has efforts under way to coordinate with agencies that support veterans' benefits programs, such as the Department of Defense, in achieving specific goals; (7) to successfully implement the Results Act, VBA must also develop effective strategies for achieving its performance goals and ensure that it has accurate, reliable data to measure its progress in achieving these goals; (8) VBA is in the early stages of developing clear and specific strategies but has not yet clearly demonstrated how these strategies will help it achieve the intended results; (9) morever, VBA does not yet have the data needed to effectively measure its performance in several key areas; (10) for example, one goal is to ensure that VBA is providing the best value for the taxpayer dollar; however, VBA currently is unable to calculate the full cost of providing benefits and services to veterans; (11) in addition, VBA officials and VA's Inspector General (IG) have raised concerns about the accuracy of data VBA is currently collecting; (12) for example, completed ongoing IG audits have identified data integrity problems with VBA's claims processing timeliness data; and (13) VBA is currently determining how best to address these concerns. |
gao_GAO-07-49 | gao_GAO-07-49_0 | Because NMEs contain active chemical substances never before approved for marketing in the United States, industry analysts and FDA generally consider them innovative. FDA Response to Concerns Over the Number of Drugs Developed
Over the past several years, numerous industry analysts and FDA noted a decline in the submission of applications for NDAs overall, and for innovative drugs, such as NMEs. Although the pharmaceutical industry reported a 147 percent real increase in annual research and development expenditures from 1993 through 2004, and an increasing number of INDs are being submitted to FDA, the number of new drugs developed has not grown in a similar manner. Compared to industry-reported research and development expenditures, the number of NDAs and NDAs for NMEs submitted to FDA over the period increased at a lower rate—by 38 percent and 7 percent respectively—which indicates that the productivity of the research and development investments has been declining. Our review of annual research and development expense data reported by PhRMA and IND submission data reported by FDA indicate that there have been substantial and consistent increases in these expenses over the past decade, and that the number of INDs submitted to FDA has been increasing. Figure 11, which is based on these data, shows that FDA approved an increasing number of NDAs and NDAs for NMEs from 1993 through 1996. Experts Identified Factors Contributing to Declining Productivity in Drug Development and Offered Suggestions for Improvement
According to experts, a variety of factors have contributed to the declining productivity of pharmaceutical research and development efforts by making it more difficult for the industry to successfully complete clinical testing and submit NDAs for approval. These factors include limitations on the scientific understanding of how to translate chemical and biological discoveries into safe and effective drugs, business decisions by the pharmaceutical industry, uncertainty regarding regulatory standards for determining whether a drug should be approved, and intellectual property issues, such as the length of patent terms. According to experts, these factors have impacted the length, costs, and failure rates of drug development, as well as the innovative potential of NDAs being submitted to FDA. Factors in the Operating Environment Affect Drug Development Outcomes
Based on the results of discussion among panel members, our interviews with drug development experts, and our review of prior studies, we identified several other factors that affect the numbers, types, and costs of drugs being developed. One of these areas included developing new biomarkers which, according to FDA, could increase the safety of new drugs, reduce the costs of clinical trials, and expedite drug development. Recent trends reveal the number of drugs developed has not been commensurate with research and development investments by the pharmaceutical industry. Agency Comments
HHS provided comments on a draft of this report. To determine the trends in the number of submissions and approvals of NDAs, we requested that the Food and Drug Administration (FDA) provide information on all 1,264 new drug applications (NDA) submitted to FDA from January 1, 1993, through December 31, 2004. | Why GAO Did This Study
Drug development is complex and costly, requiring the testing of numerous chemical compounds for their potential to treat disease. Before a new drug can be marketed in the United States, a new drug application (NDA), which includes scientific and clinical data, must be approved by the Food and Drug Administration (FDA). Recent scientific advances have raised expectations that an increasing number of new and innovative drugs would soon be developed to more effectively prevent, treat, and cure serious illnesses. However, industry analysts and the FDA have reported that new drug development, and in particular, development of new molecular entities (NMEs)--potentially innovative drugs containing ingredients that have never been marketed in the United States--has become stagnant. GAO was asked to provide information on (1) trends in the pharmaceutical industry's reported research and development expenses as well as trends in the number of NDAs submitted to, and approved by, FDA; and (2) experts' views on factors accounting for these trends and their suggestions for expediting and enhancing drug development. GAO analyzed data from FDA on all 1,264 NDAs submitted to the agency from 1993 through 2004. GAO also convened a panel of experts and interviewed other drug development experts and analysts to identify factors affecting, and suggestions for enhancing, drug development.
What GAO Found
Although the pharmaceutical industry reported substantial increases in annual research and development costs, the number of NDAs submitted to, and approved by, FDA has not been commensurate with these investments. From 1993 through 2004, industry reported annual inflation-adjusted research and development expenses steadily increased from nearly $16 billion to nearly $40 billion--a 147 percent increase. In contrast, the number of NDAs submitted annually to FDA increased at a slower rate--38 percent over this period. Similarly, the number of NDAs submitted to FDA for NMEs increased by only 7 percent over this period. FDA approved most NDA applications--76 percent overall, but the numbers of NDAs and NDAs for NMEs it approved annually have generally been declining since 1996. According to experts, several factors have hampered drug development. These include limitations on the scientific understanding of how to translate research discoveries into safe and effective drugs, business decisions by the pharmaceutical industry, uncertainty regarding regulatory standards for determining whether a drug should be approved, and certain intellectual property protections. These factors have been cited as affecting the number of drugs developed, the cost and length of the drug development process, as well as the types of drugs being produced. To address these issues, experts offered suggestions including increasing the number of scientists who can translate drug discoveries into effective new medicines and allowing conditional approval of certain drugs based on shorter clinical trials using fewer numbers of patients. In its comments on a draft of this report, the Department of Health and Human Services provided clarifications, which GAO incorporated as appropriate. |
gao_GAO-05-822T | gao_GAO-05-822T_0 | The Basic Pilot Program provides participating employers with an electronic method to verify their employees’ work eligibility. Various Weaknesses Have Undermined the Employment Verification Process, but Opportunities Exist to Enhance It
Current Employment Verification Process Is Based on Employers’ Review of Documents
In 1986, IRCA established the employment verification process based on employers’ review of documents presented by employees to prove identity and work eligibility. Employers must then certify that they have reviewed the documents presented by their employees to establish identity and work eligibility and that the documents appear genuine and relate to the individual presenting them. Form I-9 Process Is Vulnerable to Document and Identity Fraud
Since passage of IRCA in 1986, document and identity fraud have made it difficult for employers who want to comply with the employment verification process to ensure they hire only authorized workers. The Number and Variety of Acceptable Documents Hinders Employer Verification Efforts
The number and variety of documents that are acceptable for proving work eligibility have complicated employer verification efforts under IRCA. According to DHS officials, the department is currently assessing possible revisions to the Form I-9 process, including reducing the number of acceptable work eligibility documents, but has not established a target time frame for completing this assessment and issuing regulations on Form I-9 changes. The Basic Pilot Program may enhance the employment verification process and a mandatory program could assist ICE in targeting its worksite enforcement efforts. However, weaknesses exist in the current program. DHS has taken steps to increase the timeliness and accuracy of information entered into databases used as part of the Basic Pilot Program and reports, for example, that data on new immigrants are now typically available for verification within 10 to 12 days of an immigrant’s arrival in the United States while, previously, the information was not available for up to 6 to 9 months after arrival. The number of worksite arrests declined by about 84 percent from 2,849 in fiscal year 1999 to 445 in fiscal year 2003. Difficulties Proving Employer Violations, Collecting Fines, and Detaining Aliens Have Weakened the Worksite Enforcement Program
The difficulties that INS and ICE have experienced in proving that employers knowingly hired unauthorized workers and in setting and collecting fine amounts that meaningfully deter employers from knowingly hiring unauthorized workers have limited the effectiveness of worksite enforcement efforts. Worksite Enforcement Focus Shifted to Critical Infrastructure Protection after September 11, 2001
In keeping with the primary mission of DHS to combat terrorism, after September 11, 2001, INS and then ICE has focused its resources for worksite enforcement on identifying and removing unauthorized workers from critical infrastructure sites, such as airports and nuclear power plants, to help reduce vulnerabilities at those sites. The Basic Pilot Program shows promise for enhancing the employment verification process and reducing document fraud if implemented on a much larger scale. Homeland Security: Challenges to Implementing the Immigration Interior Enforcement Strategy. Immigration and Naturalization Service: Overview of Management and Program Challenges. | Why GAO Did This Study
The opportunity for employment is one of the most important magnets attracting illegal aliens to the United States. The Immigration Reform and Control Act (IRCA) of 1986 established an employment eligibility verification process and a sanctions program for fining employers for noncompliance. Few modifications have been made to the verification process and sanctions program since 1986, and immigration experts state that a more reliable verification process and a strengthened worksite enforcement capacity are needed to help deter illegal immigration. In this testimony, GAO provides preliminary observations from its ongoing assessment of (1) the current employment verification process and (2) U.S. Immigration and Customs Enforcement's (ICE) priorities and resources for the worksite enforcement program and the challenges it faces in implementing that program.
What GAO Found
The current employment verification (Form I-9) process is based on employers' review of documents presented by new employees to prove their identity and work eligibility. On the Form I-9, employers certify that they have reviewed documents presented by their employees and that the documents appear genuine and relate to the individual presenting the documents. However, document fraud (use of counterfeit documents) and identity fraud (fraudulent use of valid documents or information belonging to others) have undermined the employment verification process by making it difficult for employers who want to comply with the process to ensure they hire only authorized workers and easier for unscrupulous employers to knowingly hire unauthorized workers. In addition, the number and variety of documents acceptable for proving work eligibility has hindered employer verifications efforts. In 1998, the former Immigration and Naturalization Service (INS), now part of the Department of Homeland Security (DHS), proposed revising the Form I-9 process, particularly to reduce the number of acceptable work eligibility documents, but DHS has not yet finalized the proposal. The Basic Pilot Program, a voluntary program through which participating employers electronically verify employees' work eligibility, shows promise to enhance the current employment verification process, help reduce document fraud, and assist ICE in better targeting its worksite enforcement efforts. Yet, several current weaknesses in the pilot program's implementation, such as its inability to detect identity fraud and DHS delays in entering data into its databases, could adversely affect increased use of the pilot program, if not addressed. The worksite enforcement program has been a low priority under both INS and ICE. For example, in fiscal year 1999 INS devoted about 9 percent of its total investigative agents' time to worksite enforcement, while in fiscal year 2003 it allocated about 4 percent. ICE officials told us that the agency has experienced difficulties in proving employer violations and setting and collecting fine amounts that meaningfully deter employers from knowingly hiring unauthorized workers. In addition, INS and then ICE shifted its worksite enforcement focus to critical infrastructure protection after September 11, 2001. |
gao_GAO-06-296 | gao_GAO-06-296_0 | To achieve its goals, US-VISIT uses biometric information (digital fingerscans and photographs) to verify identity. When a visitor arrives at a POE, the biometric information is used to verify that the visitor is the person who was issued the visa. In addition, at certain sites, visitors are required to confirm their departure by undergoing US-VISIT exit procedures—that is, having their visas or passports scanned and undergoing fingerscanning. As a result of our assessments, we made 24 recommendations aimed at improving both plans and program management, all of which DHS has agreed to implement. The Status of DHS’s Implementation of Our Recommendations Is Mixed
The current status of DHS’s implementation of our 18 recommendations on program risks is mixed, but progress in critical areas has been slow. According to the Program Director, the pace of progress is attributable to competing demands on time and resources. Of these 18, DHS has completely implemented 2, has partially implemented 11, and is in the process of implementing another 5. The longer that the program takes to implement the recommendations, the greater the risk that the program will not meet its goals on time and within budget. Determination and Disclosure of Whether Increments Produce Mission Value Commensurate with Costs and Risks Are Partially Complete
In September 2003, we reported that the program had not assessed the costs and benefits of Increment 1, which is extremely important because the decision to invest in any capability should be based on reliable analyses of return on investment. The latest cost-benefit analysis for Increment 1B (dated June 23, 2005) identifies potential costs and benefits for three exit solutions at air and sea POEs and provides a general rationale for the viability of the three alternatives described. An analysis of uncertainty is important because it provides decision makers with a perspective on the potential variability of the cost and benefit estimates should the facts, circumstances, and assumptions change. Accordingly, we recommended that DHS do the following: Define program office positions, roles, and responsibilities. Because these criteria were not being met, we recommended that DHS do the following: Develop and approve test plans before testing begins that (1) specify the test environment; (2) describe each test to be performed, including test controls, inputs, and expected outputs; (3) define the test procedures to be followed in conducting the tests; and (4) provide traceability between test cases and the requirements to be verified by the testing. However, the test plan did not adequately trace between test cases and the requirements to be verified by testing. Assessment of the Impact of Increment 2B on Workforce Levels and Facilities Is Partially Complete
We reported in May 2004 that the program had not assessed its workforce and facility needs for Increment 2B. Nevertheless, other alternatives, such as surveying officials at these sites to better understand the increment’s impact on workforce levels and facilities, have yet to be explored. Until they are, the program may not be able to accurately project resource needs or make required modifications to achieve its goals of minimizing US-VISIT’s impact on POE processing times. However, as we previously stated, the scope of the evaluations was not sufficient to satisfy our recommendation. Accordingly, the longer that US-VISIT takes to implement our recommendations, the greater the risk that the program will not meet its stated goals and commitments. We would also observe that we made this recommendation in May 2004, and at that time the department stated that it agreed with the recommendation but did not indicate that it had taken any steps to address it, such as commenting that a report was issued on August 18, 2003. Visitor and Immigrant Status Indicator Technology (US-VISIT) program. Comments from the Department of Homeland Security
Description of US-VISIT Processes
US-VISIT involves complex processes governing the stages of a traveler’s visit to the United States (pre-entry, entry, status, and exit) and analysis of hundreds of millions of foreign national travelers at over 300 air, sea, and land ports of entry (POE). | Why GAO Did This Study
The Department of Homeland Security (DHS) has established a program--the U.S. Visitor and Immigrant Status Indicator Technology (US-VISIT)--to collect, maintain, and share information, including biometric identifiers, on selected foreign nationals entering and exiting the United States. US-VISIT uses these identifiers (digital fingerscans and photographs) to screen persons against watch lists and to verify that a visitor is the person who was issued a visa or other travel document. Visitors are also to confirm their departure by having their visas or passports scanned and undergoing fingerscanning at selected air and sea ports of entry (POE). GAO has made many recommendations to improve the program, all of which DHS has agreed to implement. GAO was asked to report on DHS's progress in responding to 18 of these recommendations.
What GAO Found
The current status of DHS's implementation of the 18 recommendations is mixed, but progress in critical areas has been slow. DHS has implemented 2 of the recommendations: it defined program staff positions, roles, and responsibilities, and it hired an independent verification and validation contractor. It has also taken steps to implement the other recommendations, partially completing 11 and beginning to implement another 5. In September 2003, GAO reported that the program had not assessed the costs and benefits of Increment 1 (which provides entry capabilities to air and sea POEs) and recommended that the program determine whether proposed increments will produce mission value commensurate with cost. In the latest cost-benefit analysis, dated June 23, 2005, the program identified potential costs and benefits for three alternatives for an air and sea exit solution. However, the analysis does not meet key Office of Management and Budget criteria; for example, it does not include a complete uncertainty analysis, which helps to provide decision makers with perspective on the potential variability of the cost and benefit estimates should circumstances change. GAO reported in May 2004 and February 2005 that system testing was not based on well-defined test plans and recommended that before testing begins, the program develop and approve test plans meeting certain criteria. However, although the latest test plan did cover many required areas (such as the tests to be performed), it did not adequately trace between test cases and the requirements to be verified by testing. Without complete and traceable test plans, the risk is increased that the deployed system will not perform as intended. In May 2004, GAO reported that the program had not assessed its workforce and facility needs for Increment 2B (which extends entry capabilities to the 50 busiest land POEs) and recommended that it do so. Since then, the program evaluated the processing times to issue and process entry/exit forms at 3 of the 50 busiest POEs and concluded that the results showed that no additional staff and only minor facilities modifications were required. However, the scope of the evaluation was limited. Since then, DHS has deployed and implemented Increment 2B capabilities to these 50 POEs, making the collection of predeployment baseline data for these sites impractical. Nonetheless, other alternatives, such as surveying site officials about the increment's impacts, have yet to be explored. Until they are, the program may not be able to accurately project resource needs or make any needed modifications to achieve its goals of minimizing US-VISIT's impact on POE operations, which was the impetus for GAO's recommendation. DHS attributed the pace of progress to competing demands on time and resources. The longer that US-VISIT takes to implement the recommendations, the greater the risk that the program will not meet its stated goals on time and within budget. |
gao_GAO-06-653T | gao_GAO-06-653T_0 | ATO Has Made Significant Progress Toward More Efficiently Managing ATC Modernization, but Challenges Remain
ATO has implemented organizational and business process changes to improve management of the ATC modernization program. ATO has taken several steps to increase its scrutiny of its acquisition decisions and has met its acquisition performance goal for the second consecutive year. ATO has identified cost savings opportunities through consolidation of administrative activities and outsourcing. However, ATO faces several challenges, including sustaining and institutionalizing ATO’s progress toward operating effectively as a performance-based organization, hiring and training thousands of air traffic controllers, ensuring stakeholder involvement in major system acquisitions, and keeping acquisitions on schedule and within budget. In response to this and other recommendations we have made, FAA is making revisions to its Acquisition Management System. The goal for fiscal years 2004 and 2005 was to have 80 percent of its system acquisitions on schedule and within 10 percent of budget. ATO Faces Human Capital Challenges in Institutionalizing Its Performance-based Organization and Hiring and Training Thousands of Air Traffic Controllers
ATO faces a challenge in sustaining and institutionalizing its efforts to operate as a PBO. I will now discuss the status of JPDO’s planning efforts. JPDO is working to develop a cost estimate for NGATS through a series of workshops with various stakeholders. However, JPDO faces several challenges, including maintaining stakeholder support over the long term, defining roles and responsibilities as well as deciding how to coordinate the implementation of NGATS, and addressing several critical policy issues. JPDO Is Working to Facilitate Collaboration among Federal Agencies, but Faces Challenges in Continuing to Leverage Resources
Our work to date shows that JPDO is implementing a number of practices that our work has shown facilitates the federal interagency collaboration that is central to its mission and legislative mandate. However, while JPDO’s legislation, integrated plan, and governance structure provide the framework for collaboration among multiple federal agencies, JPDO is fundamentally a planning and coordinating body that lacks authority over the key human and technological resources needed to continue developing plans and system requirements for NGATS. To develop an enterprise architecture—a blueprint for NGATS and one of the most critical planning documents in the NGATS effort—JPDO has taken several important first steps and is following several effective practices that we have identified for enterprise architecture development. The enterprise architecture will describe FAA’s operation of the current national airspace system, JPDO’s plans for the NGATS, and the sequence of steps needed to transition between them. Success also depends on the ability of ATO and JPDO to define their roles and form a collaborative environment for planning and implementing the next generation system. | Why GAO Did This Study
The Federal Aviation Administration's (FAA) effort to modernize the nation's air traffic control (ATC) system has been listed by GAO as a high risk program for more than a decade now, due to systemic management and acquisition problems. Two relatively new organizations housed within FAA--the Air Traffic Organization (ATO) and the Joint Planning and Development Office (JPDO)--have been given the bulk of the responsibility for planning and implementing these modernization efforts. Congress created ATO to be a performance-based organization that would improve the culture, structure, and processes and improve accountability in the ATC modernization program. Congress created JPDO, made up of seven partner agencies, to coordinate the federal and nonfederal stakeholders necessary to plan a transition from the current air transportation system to the "next generation air transportation system" (NGATS). This testimony is based on GAO's recently completed and ongoing studies of the ATC modernization program. GAO provides information on (1) the status of ATO's efforts to implement processes and other initiatives aimed at efficiently managing and modernizing the current ATC system and (2) the status of JPDO's planning efforts and the key challenges that JPDO faces in planning for NGATS.
What GAO Found
ATO has made significant progress toward the efficient management of the nation's ATC system, but faces several challenges. ATO has implemented organizational and business process changes, and has taken steps to increase scrutiny of its acquisition decisions. ATO has met its acquisition performance goal for the second consecutive year--that is, 80 percent of its system acquisitions are on schedule and within 10 percent of budget. ATO has identified cost savings opportunities through consolidation of administrative activities and outsourcing. However, ATO faces several challenges, including sustaining and institutionalizing its progress toward operating effectively as a performance-based organization, hiring and training thousands of air traffic controllers, ensuring stakeholder involvement in major system acquisitions, and keeping acquisitions on schedule and within budget. JPDO is making progress in its planning for NGATS, but faces several challenges. JPDO is implementing a number of practices that our work has shown facilitates the federal interagency collaboration that is central to its mission and legislative mandate. However, JPDO is fundamentally a planning and coordinating body that lacks authority over the key human and technological resources needed to continue developing plans and system requirements for NGATS. Thus, a challenge may arise in leveraging the resources of the partner agencies. As part of its planning, JPDO is working to develop a cost estimate for NGATS through a series of workshops with various stakeholders. JPDO has taken several important first steps and is following effective practices in developing an NGATS enterprise architecture--a blueprint for NGATS and one of the most critical planning documents in the NGATS effort. JPDO faces several challenges, including maintaining stakeholder support over the long term, defining roles and responsibilities and deciding how to coordinate the implementation of NGATS, and addressing several critical policy issues, such as the extent to which NGATS will accommodate visual flights versus instrument-only flights. |
gao_GAO-01-535 | gao_GAO-01-535_0 | However, IRS’ last measure of voluntary reporting compliance was done on tax year 1988 returns, where an estimated 8 percent of taxes owed were underreported on individual tax returns. IRS Has Not Finalized Its Plans on How It Will Measure Voluntary Reporting Compliance
In May 2000, IRS established a NRP Program Office to develop an approach for measuring voluntary compliance. IRS Has Established Objectives and Guiding Principles for Developing a Measure of Voluntary Reporting Compliance
NRP is IRS’ effort to measure its progress in meeting its strategic goal of providing top-quality service to all taxpayers through fair and uniform application of the law. Components of IRS’ Draft Business Plan for Measuring Voluntary Reporting Compliance
As of March 2001, the NRP Office had developed a preliminary draft business plan, providing information on how IRS intends to develop a measure of voluntary reporting compliance around the framework of the guiding principles. How Other Programs Measure Compliance
The six federal programs we studied, like IRS’ TCMP studies, randomly sample their clients to measure compliance with the rules and regulations covering their programs and services. Each of the six programs we studied conducted compliance reviews differently, gathering different amounts and types of information with varying amounts of time required for the review. For example, the agencies and IRS try to ensure compliance through efforts that apply to all their clients. In addition, we looked at how compliance is measured in six other federal programs. Appendix III: Summary of GAO Assignments Related to Measuring Voluntary Compliance
GAO report Tax Administration: IRS’ Plans to Measure Tax Compliance Can Be Improved (GAO/GGD-93-52, Apr. This report also identifies sampling strategies that will reduce the sample size and still provide some data. SSA reviews the case file and also contacts the claimant either in person or by telephone. INS is currently evaluating this pilot program. Appendix V: Comments From the Internal Revenue Service | Why GAO Did This Study
The U.S. tax system is based on voluntary reporting. The Internal Revenue Service (IRS) reviews all tax returns after they are filed to ensure compliance with tax laws governing this voluntary system. Despite these efforts, each year billions of dollars in taxes owed are not voluntarily reported and paid, which could result in reduced revenue to fund federal programs, higher tax rates, or both. There are three types of voluntary compliance measures: filing compliance, which measures the percent of taxpayers who file returns in a timely manner; payment compliance, which measures the percent of tax payments that are paid in a timely manner; and reporting compliance, which measures the percent of actual tax liability that is reported accurately on returns. This report reviews the status of IRS' plans to measure voluntary reporting compliance as well as six other federal programs that currently measure voluntary compliance.
What GAO Found
GAO found that IRS has tried to develop an approach for measuring voluntary compliance. It has established objectives and guiding principles for developing this measure as well as developed database software to collect and analyze data. As of March 2001, IRS' preliminary draft plan included four alternatives for measuring voluntary reporting compliance. GAO found that each of the six programs measure compliance by gathering different types and amounts of information from a random sample of clients. Sample sizes range from about 1,400 to more than 500,000 annually. In all but one program, clients are randomly selected and interviewed in person. |
gao_GAO-04-858 | gao_GAO-04-858_0 | At the core are communications satellites, next-generation radios, and an installations-based network with significantly expanded bandwidth. Acquisitions
DOD has taken a two-pronged approach to build the GIG: (1) invest in a set of core enterprise programs and initiatives to build a core network and information capability and (2) bring other existing and planned weapon systems, command, control, and communications systems, information technology systems, and logistics, personnel, and other business-related systems into the GIG network. According to DOD, the key acquisitions underway to build the GIG network capability include 1) Transformational Satellite (TSAT), a new constellation of communications satellites to transmit and route larger volumes of data; 2) Joint Tactical Radio System (JTRS), a new family of interoperable radio systems; 3) Global Information Grid-Bandwidth Expansion (GIG-BE), which includes state of the art optical network technologies and upgraded routers and switches to increase bandwidth for greater voice, data, and video transmissions as well as improvements in network services at about 90 DOD installations; 4) Network Centric Enterprise Services (NCES), a common set of services and applications to manage the network and help users locate and share information; 5) Cryptography Transformation Initiative, tools to protect sensitive information transmitted across the network and protect the network from attack; and 6) Horizontal Fusion, which is a portfolio of initiatives focused on developing and demonstrating data applications and tools for information sharing and netcentric operations. DOD plans to integrate most weapon systems into the GIG. DOD intends to integrate virtually all command, control, and communications, systems into the GIG. Influencing Acquisition and Budgeting Decisions
DOD officials who developed the GIG concept also expect to influence decisions by participating in DOD’s key decision-making processes. DOD Challenges in Implementing the GIG
The most critical challenge ahead for DOD is making the GIG a reality. While DOD has taken steps to define its vision and objectives for the GIG on paper and in policy, it is not fully known how DOD will meet these objectives, particularly with respect to setting investment priorities, providing management attention and oversight, transforming operations, and advancing technologies. At the same time, DOD is beginning to make a heavy investment in the GIG as well as systems that will be heavily dependent on the GIG, such as the Army’s Future Combat Systems, and DOD is asking its components and the military services to accept its vision and plan toward it. Until DOD implements an investment and oversight strategy for the GIG as a whole, it is at risk of making investments that do not fit its vision for the future. According to DOD officials, the enhancements DOD is making to its planning and budgeting processes are meant to begin addressing these questions. No one security solution likely will address GIG requirements. Conclusions
DOD is depending on the GIG to enable a fundamental transformation in the way military operations are conducted. Moreover, even though DOD has begun to make heavy investments to implement the new network and to ask the military services to accept its vision for the GIG, important questions as to how DOD will make the GIG a reality and how it will oversee progress as a whole and ensure the GIG is providing an adequate return on DOD’s investment are only just beginning to be addressed, leaving DOD at risk of making investments that may not fit in with its vision for the future. | Why GAO Did This Study
The Department of Defense (DOD) is in the midst of transforming military capabilities. The transformation relies in part on the Global Information Grid (GIG), which is focused on building a new Internet-like network capability that DOD envisions will enable weapons and other systems and people to share information quickly, allowing warfighters to identify threats more effectively and to respond with greater precision and lethality. DOD plans to spend at least $21 billion through 2010 to build a core GIG capability. GAO was asked (1) to describe the GIG, including the concept, key acquisitions, and implementation and (2) to identify significant challenges facing DOD in implementing the GIG.
What GAO Found
The GIG is a huge and complex undertaking that is intended to integrate virtually all of DOD's information systems, services, and applications into one seamless, reliable, and secure network. DOD's overall concept is to enable data access for a variety of systems and users in the network no matter which military service owns a weapon system or where a user might be located around the world. DOD is looking to the GIG to form the basis of a network-centric or "netcentric" way of fighting wars and to create a decisive advantage over adversaries. DOD has taken the following two-pronged approach to building the GIG: (1) invest in key acquisitions to build a core networking capability, including new communication satellites, next-generation interoperable radios, a new ground-based communication network with significantly expanded bandwidth, and services and applications to manage and protect the network and help users locate, post, and share information; and (2) integrate other existing and planned weapon systems, information technology systems, and logistics, personnel, and other business-related systems into the GIG. To integrate other systems, DOD officials who created the concept for the GIG have developed an initial blueprint or architecture for the GIG and policies to formalize the GIG, and they are attempting to influence key acquisition and budgeting decisions to align investments and systems with the GIG. The most critical challenge ahead for DOD is making the GIG a reality. While DOD has taken steps to define its vision and objectives for the GIG on paper and in policy and is beginning to make a heavy investment in the GIG as well as systems that will be heavily dependent on the GIG, it is not fully known how DOD will meet these objectives. For example, it is not known which investments should take priority over others and how these decisions will be enforced. Moreover, it is not known how DOD will assess the overall progress of the GIG and determine whether the network as a whole is providing a worthwhile return on investment, particularly in terms of enhancing and even transforming military operations. According to DOD officials, the enhancements DOD is making to its planning and budgeting processes are meant to begin addressing these questions. Until DOD implements an investment and oversight strategy for the GIG as a whole, it is at risk of making investments that do not fit DOD's vision for the future. |
gao_HEHS-00-187 | gao_HEHS-00-187_0 | 1). 2). Linkages Between Social Security and Private Pensions Are Explicit and Implicit
Social Security and private pensions are key sources of retirement income that are linked through the employer costs associated with the compensation provided to workers. Employers consider Social Security provisions in designing pensions that complement their human resource and other business strategies. 3). An important implicit linkage with Social Security is pension plans’ specification of a normal retirement age. Traditional Social Security Reforms Could Affect Pension Plans by Changing the Incentives Facing Employers and Workers
Traditional reform options, such as reducing benefits or increasing payroll taxes, will likely affect the provision of employer-sponsored pensions. Employers will likely respond to reforms that change their compensation costs or reasons for sponsoring plans. Employers may respond to these changes in a variety of ways. 3). Some evidence indicates that employers might respond by seeking to retain the effectiveness of their retirement incentives.Although some employers will want to continue to use pensions as a tool to reduce or adjust the composition of their workforces, recent evidence indicates that some employers may now want to retain older workers.For example, some firms have been developing pension structures in which workers accumulate benefits more evenly over their careers, in contrast to the “back-loading” typical of traditional defined benefit plans.The introduction of “hybrid” arrangements such as “cash balance plans”could have the effect of reducing early retirement subsidies found in traditional defined benefit plans and could make it more attractive for firms to retain older workers in the future.Thus, to the extent that employers are implementing pension plan provisions that encourage workers to retire later, the potential effects of raising the Social Security retirement age on private pensions may be mitigated. Employer responses such as reducing plan benefits or terminating a plan could depend in part on the size of the firm. Implications for the private pension system will depend on how the individual account is structured (e.g., how it is financed and administered), its scope (e.g., whether it has voluntary or universal participation), and its interaction with other reform provisions (e.g., whether other benefits are reduced). Like more traditional reforms, the effects of an individual account reform feature on the pension system will occur through explicit and implicit linkages between Social Security and pensions and employer and worker responses to specific reforms. In this instance, the net effects on the private pension system would depend on the other provisions included in the reform and the structure of the individual account feature. Some arise from the explicit and implicit linkages between Social Security and pensions and will depend on the responses of employers and workers. Implementing Individual Accounts Presents Challenges and Opportunities
Individual accounts raise a broader set of issues for private pensions compared with traditional reforms. Our retirement income institutions operate in a dynamic environment where workers, employers, and policymakers interact to pursue the goal of retirement income security. The limited knowledge we have of these influences and the complexity of instituting policy change suggests that any reform should be taken with caution and careful deliberation. At the same time, establishing agreement on the fundamental principles underlying the reform should be emphasized. These principles should include ensuring retirement income to those who most need it and encouraging the development of new opportunities to secure and expand the retirement income of future generations. | Why GAO Did This Study
Pursuant to a congressional request, GAO provided information on the interactions between Social Security and private pensions, focusing on the: (1) primary linkages between Social Security and private pensions and the way they interact to provide retirement income for workers and families; (2) effects of traditional Social Security reforms on the structure of employer-sponsored pension plans through changes in the costs and incentives faced by employers and workers; and (3) effects of nontraditional reforms, such as individual accounts, on the structure of the private pension system.
What GAO Found
GAO noted that: (1) Social Security and private pensions are key sources of retirement income that are linked through the employer costs associated with the compensation provided to workers; (2) because pension plans serve as a supplement to Socal Security, many plans are integrated--that is, they explicitly incorporate Social Security benefits or contributions into their plan design; (3) employers also implicitly consider Social Security provisions in designing pensions that complement their human resource and other business strategies; (4) traditional reforms in the Social Security program, such as changing benefits or taxes or raising the normal retirement age, may alter the incentives of workers and employers, which could prompt adjustments in private pension plans; (5) the effect of any specific reform will depend on the nature of the change its magnitude, its time horizon for implementation and its interaction with other provisions that comprise a comprehensive reform proposal; (6) employers' and workers' responses to reform will be shaped by a variety of factors, including the firm's size, the type of pension plan offered, and the economic status of the worker; (7) employers will respond to reforms that affect compensation costs or the incentives for sponsoring a plan; (8) the introduction of individual accounts raises a broad set of issues for private pensions, depending on how such a reform is structured, its scope--whether it is voluntary or universal--and its interaction with other reforms as part of a broader reform proposal; (9) like more traditional reforms, the the effects of an individual account feature on the pension system will depend on the explicit and implicit linkages between Social Security and pensions and employers' and workers' responses to specific reforms; (10) the nation's retirement income institutions operate in a dynamic environment where workers, employers, and policymakers interact to pursue the goal of retirement income security; (11) the complexity of making policy change suggests that any reform should be taken with careful deliberation; (12) the complexity of making policy change suggests that any reform should be taken with careful deliberation; and (13) at the same time, ensuring retirement income for those who most need it and encouraging the development of new opportunities to secure and expand the retirement income of future generations should be emphasized. |
gao_GAO-15-495 | gao_GAO-15-495_0 | We have recognized the following five key principles for strategic workforce planning to address these needs: involve top management, employees, and other stakeholders in developing, communicating, and implementing the strategic workforce plan; determine the critical skills and competencies that will be needed to achieve current and future programmatic results; develop strategies to address gaps in number, deployment, and alignment of human capital approaches for enabling and sustaining the contributions of all critical skills and competencies; build the capability needed to address administrative, educational, and other requirements important to support workforce planning strategies; and monitor and evaluate progress toward human capital goals and how human capital results have helped achieve program goals. Direct-hire authority enables an agency to hire any qualified applicant without regard to certain federal hiring requirements, such as competitive rating and ranking and veterans’ preference. USDA and Some Component Agencies Conduct Workforce Planning for Veterinarians, but HHS Has Not Done So Department-Wide
USDA has taken actions to ensure that component agencies include veterinarians in workforce planning efforts for meeting routine needs, but HHS has not done so. Direction and guidance from HHS could help integrate its component agencies’ workforce planning efforts for veterinarians. USDA Has Provided Direction and Guidance to Component Agencies for Conducting Workforce Planning for Veterinarians
USDA has provided direction to ensure that its component agencies include veterinarians in workforce planning efforts for meeting routine needs. The efforts of USDA and its component agencies met the intent of our recommendation for a department-wide assessment of its veterinarian workforce. FSIS. In 2009, we recommended that HHS conduct a department-wide assessment of their veterinarian workforces based on assessments completed by their component agencies. HHS leadership and direction could help integrate these component agencies’ workforce planning efforts for veterinarians at the department-wide level. FDA included veterinarians in its workforce plans, although HHS did not provide guidance or direction to FDA or other component agencies to do so. USDA Has Not Identified Reliable Estimates of Veterinarians Needed to Augment Its Workforce for Emergency Response to Animal Disease Outbreaks
USDA’s APHIS has not developed reliable estimates of the number of veterinarians needed for emergency response to animal disease outbreaks of various types. Moreover, APHIS’ plans for an emergency response do not include details on how it will augment its workforce to respond to a large- scale emergency. As a result, even though it may ask or assign agency employees to participate in a large-scale emergency response, the agency may not have sufficient veterinarians to respond to an animal disease outbreak. OPM and Federal Agencies Have Taken Limited Steps to Achieve Government- Wide Goals for Veterinarians
OPM and other federal agencies have taken steps toward achieving the three goals outlined in OPM’s strategic government-wide workforce plan for the federal veterinary workforce, primarily through their participation in TMAC. However, in each of the three goals, TMAC did not follow through on next steps and made limited progress in achieving its goals in part because the group did not consistently monitor and evaluate its progress toward achieving the goals. Without a review of the use of the authority, OPM cannot determine the overall impact on recruitment or whether the authority should continue or be modified if shortages are limited to some agencies, as TMAC reported. As we discussed above, the study’s estimates of the number of veterinarians needed are not reliable for purposes of effective emergency response planning because of several limitations, such as being based on a model that had not been verified or validated. According to OPM officials, the group did not consistently monitor progress toward goals in part because the group’s membership did not have sufficient leadership support from participating agencies. As a result, OPM and federal agencies cannot easily identify all federal veterinarians. Leadership involvement is among the key principles we have identified for effective strategic workforce planning, and we have also found that leadership involvement facilitates collaboration within interagency Without leadership support from USDA and HHS, TMAC will groups.likely continue to have difficulty ensuring progress toward group goals, such as developing a way to identify all federal veterinarians. Accordingly, we continue to believe that our previous recommendation remains valid. Without leadership support from TMAC members—including USDA and HHS, the major federal employers of civilian veterinarians—OPM may have difficulty ensuring progress toward TMAC goals and taking appropriate actions if progress is limited. To improve government-wide veterinarian workforce planning efforts, we recommend that the Director of the Office of Personnel Management initiate efforts to monitor and evaluate TMAC’s progress toward government-wide goals for the federal veterinary workforce and work with TMAC members to obtain leadership support, particularly from USDA and HHS, for making progress toward the goals; and evaluate whether the need for government-wide direct-hire authority for veterinarians continues to exist and modify or terminate the authority as appropriate. In particular, USDA agreed that APHIS could do more to improve its estimates of veterinarian workforce needs for an emergency response to an animal disease outbreak, but believes that it has made efforts to assess its needs. | Why GAO Did This Study
USDA and HHS veterinarians perform crucial work for public and animal health and for emergency response to an economically devastating or highly contagious animal disease—where USDA has a lead role. In 2009, USDA and HHS committed to department-wide efforts to address veterinarian workforce challenges, such as recruitment. In 2010, OPM issued a strategic plan for federal veterinarians to help improve recruiting initiatives and emergency response plans.
GAO was asked to review workforce planning for federal veterinarians. This report examines (1) department-wide efforts USDA and HHS have made for their routine veterinarian workforces, (2) the extent to which USDA has identified the veterinarians needed for emergency response to an animal disease outbreak, and (3) the steps OPM and other federal agencies have taken to achieve the goals of the government-wide strategic plan for the veterinarian workforce. GAO reviewed USDA, HHS, and government-wide workforce plans and interviewed relevant officials.
What GAO Found
The U.S. Department of Agriculture (USDA) has taken actions to ensure that component agencies include veterinarians in workforce planning efforts for meeting routine needs, but the Department of Health and Human Services (HHS) has not done so. GAO has identified top leadership involvement as a key principle for workforce planning. For example, USDA provided guidance to its component agencies to assess and develop strategies for its workforce. In accordance with this guidance, USDA's Food Safety and Inspection Service (FSIS)—the agency that inspects slaughter plants—developed a workforce plan that included recruitment incentives and other strategies for veterinarians. HHS's Food and Drug Administration (FDA) also included veterinarians in its workforce plans, but HHS did not provide guidance or direction to FDA or other component agencies to do so. GAO recommended in 2009 that USDA and HHS conduct department-wide assessments of their veterinarian workforces. The efforts of USDA and its component agencies met the intent of the recommendation. GAO believes that the recommendation to HHS is still valid. Direction and guidance from HHS could help integrate its component agencies' workforce planning efforts for veterinarians into a department-wide assessment.
USDA participated in a government-wide study to estimate the veterinarians needed to respond to animal disease outbreaks, but because of limitations in the study, the estimates are not reliable for purposes of effective emergency response planning. For example, the estimates were based on a USDA model that had not been verified or validated. Moreover, USDA has not developed a detailed plan to augment or train its workforce to respond to an economically devastating or highly contagious outbreak. Without reliable estimates of the veterinarians needed or how it will augment and train its workforce, USDA cannot ensure it will have enough veterinarians to adequately respond.
The Office of Personnel Management (OPM) and other federal agencies have taken steps toward achieving the goals outlined in OPM's government-wide strategic plan for the veterinarian workforce, primarily through an interagency group OPM created. However, in each of the three goals, the interagency group did not follow through on next steps and made limited progress. For example, to improve recruiting, OPM granted government-wide direct-hire authority in 2009 to enable agencies to hire qualified veterinarians without regard to certain federal hiring requirements. However, OPM did not follow through on plans to review agencies' use of the authority. As a result, OPM cannot determine the overall impact on recruitment or whether the authority should continue or be modified. Monitoring and evaluating progress toward human capital goals is among the key principles GAO has identified for effective strategic workforce planning. According to OPM officials, the group did not consistently monitor progress toward goals in part because it did not have sufficient leadership support from participating agencies. OPM and group members, including USDA and HHS, recognize a need for a higher level of leadership but have not identified officials to serve in this capacity. Obtaining leadership support—including from USDA and HHS, the major federal employers of civilian veterinarians—and monitoring and evaluating progress could help emphasize the importance of completing work under these goals and better position OPM to ensure progress or take appropriate actions if progress is limited.
What GAO Recommends
GAO recommends that USDA assess and address veterinarian workforce needs for emergency response to an animal disease outbreak, and that OPM review agencies' use of direct-hire authority for veterinarians and monitor and evaluate progress and obtain leadership support for achieving government-wide veterinary workforce goals. USDA partially agreed, noting that it has taken steps to assess its emergency needs. GAO believes the recommendation remains valid. OPM agreed with both recommendations. |
gao_GAO-05-6 | gao_GAO-05-6_0 | The demonstrator models logged several thousand-flight hours and effectively supported combat operations in Afghanistan and Iraq. In December 2002, DOD restructured the program again. Restructured Global Hawk Program Attempts to Do More in Less Time
Global Hawk’s restructuring has impacted the acquisition program in a number of significant ways: the time span for funding has been compressed into roughly half the time and the overall funding amount has increased; concurrent development and production is causing the Air Force to invest in almost half the total fleet of the new and improved Global Hawk vehicle before a production model has proven that it will work as intended; and development costs have tripled because of the need to develop a new and improved vehicle. Procurement is now concentrated into 11 years instead of the 20 years of relatively level procurement set out in the original plan. Cumulatively, the restructured plan requires $6.3 billion to be completed in fiscal year 2012, whereas the original plan would only have needed $3.4 billion by that year. Additionally, schedule delays have already occurred in the restructured plan that will continue to add pressure in the program. The program acquisition unit cost increased 44 percent since program start, from $85.6 million to $123.2 million. Restructured Program Has Created Other New Challenges
Space, weight, and power constraints of the RQ-4B limit what capabilities can be included now or added in the future. Delays in Key Events Since Restructuring Can Impact Delivery of New Capability
The new schedule for some key events and activities has slipped because of programmatic, budget, or external issues. Global Hawk Program’s Current Management Approach Sets Stage for Additional Risks
In attempting to get advanced capabilities to the warfighter sooner, the Air Force’s restructured acquisition strategy for the Global Hawk program does not fully follow best practices and DOD acquisition guidance for an evolutionary, knowledge-based acquisition process. However, by this time most of the air vehicles will have already been bought. Nevertheless, using a knowledge-based approach that captures critical knowledge at key junctures in a program has been shown time and again in both commercial and defense acquisition programs to consistently produce successful outcomes—cost, schedule, quality, and performance. Recommendations for Executive Action
To decrease risks of poor outcomes and to increase the chances of delivering required warfighter capabilities with the funds available, we are making recommendations to the Secretary of Defense to take the following two actions direct the Air Force to revisit the decision to begin concurrent development and production of the Global Hawk B design and direct the Air Force to create and present a new business case that defines the warfighter’s needs that can be accommodated given current available resources of technology, engineering capability, time, and money, and delay further procurement of the Global Hawk B, other than units needed for testing, until a new business case is completed that reduces risk and justifies further investments based on a knowledge-based acquisition strategy. These subsystems are key to providing the advanced intelligence, surveillance, and reconnaissance capabilities for which the RQ-4B is being developed. | Why GAO Did This Study
Global Hawk offers significant military capabilities to capture and quickly transmit high-quality images of targets and terrain, day or night, and in adverse weather--without risk to an onboard pilot. Global Hawk first flew in the late 1990s as a demonstrator and supported recent combat operations in Afghanistan and Iraq. In 2001, the Air Force began an acquisition program to develop and produce improved Global Hawks. In 2002, the Department of Defense (DOD) restructured and accelerated the program to include a new, larger and more capable air vehicle. GAO was asked to review the program and discuss (1) the restructuring's effect on the Air Force's ability to deliver new capabilities to the warfighter and (2) whether its current business case and management approach is knowledge-based and can help forestall future risks.
What GAO Found
The restructuring of the Global Hawk program impacts the acquisition program in multiple ways. More and accelerated funding: Funding, which previously spanned 20 years, now is compressed in about half the time. The restructured plan requires $6.3 billion through fiscal year 2012; the original plan would have needed $3.4 billion by that time. The budget request is now three times higher for some years. Immature technologies: Several critical technologies needed to provide the advanced capabilities are immature and will not be tested on the new air vehicle until late in the program, after which most of the air vehicles will already have been bought. New requirements, new costs: DOD's desire to add additional Global Hawk capabilities tripled development costs. The program acquisition unit cost increased 44 percent since program start, yet fewer vehicles are to be produced than originally planned. Challenges, trade-offs, and delays: The addition of new capabilities has led to space, weight, and power constraints for the advanced Global Hawk model. These limitations may result in deferring some capabilities. Some key events and activities--many related to testing issues--have been delayed. Global Hawk's highly concurrent development and production strategy is risky and runs counter in important ways to a knowledge-based approach and to DOD's acquisition guidance. The restructuring caused gaps in product knowledge, increasing the likelihood of unsuccessful cost, schedule, quality, and performance outcomes. Because the restructured program is dramatically different from the initial plan for the basic model, the business case now seems out of sync with the realities of the acquisition program. |
gao_GAO-07-907 | gao_GAO-07-907_0 | Under the demonstration project, VETS is authorized to investigate claims filed against federal executive agencies by servicemembers with social security numbers ending in even numbers; its role in handling other nonfederal USERRA claims remains unchanged. Request for Referral of Claims from VETS to OSC
Under USERRA and the demonstration project, when VETS is unsuccessful in resolving servicemembers’ claims, DOL is to notify servicemembers who filed claims against federal executive branch agencies that they may request to have their claims referred to OSC or file directly with MSPB. At DOL, data limitations affected DOL’s annual report to Congress. We also found that DOL did not consistently notify claimants concerning the right to have their claims referred to OSC for further investigation or to bring their claims directly to MSPB if DOL did not resolve their claims. Data from VETS’s database showed that from the start of the demonstration project through September 30, 2006, DOL received 202 claims. Additionally, during our review of a random sample of 54 VETS case files to assess the reliability of VETS’s data, we found the closed dates in VETS’s database did not match the date contained in the closure letter to the claimant in 22 of 52 claims reviewed. Because DOL reports annually to Congress on the number and percentage of claims it closed within 90, 120, and 365 days, such inaccuracies in the number of claims reported and the closed dates also affect the quality of information reported to Congress on the time it takes VETS to process claims. Citing our preliminary findings, VETS officials required each region to revise its guidance concerning the notification of rights. We assessed the reliability of selected data elements in OSC’s case tracking system in an earlier report. First, two agencies now receive and process claims with two different models for investigating USERRA claims from federal executive branch employees—a nationwide approach by VETS that gives much authority to individual investigators in resolving and closing claims and a centralized approach by OSC that has a single individual entering claims into the case tracking system, providing guidance, and reviewing all claims. Second, both DOL and OSC officials have said that since the demonstration project began, cooperation and communication concerning USERRA claims has increased, in turn raising awareness of the issues related to servicemembers who are federal executive branch employees. Finally, technological enhancements have occurred during the demonstration project. For example, an enhancement to VETS’s database enables the electronic transfer of information between agencies. Appendix I: Objectives, Scope, and Methodology
Our objectives were to (1) describe the Department of Labor’s (DOL) and Office of Special Counsel’s (OSC) policies and procedures for processing federal employees’ Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) claims under the demonstration project; (2) identify the number of federal employees’ USERRA claims that DOL and OSC received and the outcomes of these claims, including average processing times; and (3) identify changes to federal employees’ USERRA claims’ processing since the demonstration project began. Objective 2: Identify the Number of Federal Employees’ USERRA Claims that DOL and OSC Received and the Outcomes of These Claims, Including Average Processing Times
To identify the number of federal employees’ USERRA claims that DOL and OSC received and the outcomes of these claims, including average processing times, we obtained information on all the USERRA claims filed against federal executive branch agencies that DOL and OSC received from February 8, 2005—the beginning of the demonstration project— through September 30, 2006. To determine the number of unique claims opened by VETS, we removed claims opened prior to the demonstration project; removed claims transferred to OSC after being opened in VETS’s database (i.e., those with odd social security numbers and allegations of related prohibited personnel practices); removed duplicate filings (i.e., those opened within 3 days of another claim brought by the same claimant and subsequently closed, while the original claim remained open); removed one veterans’ preference claim identified by VETS as being inadvertently opened as a USERRA claim; and combined and counted as one claim original and reopened claims where both were opened during the demonstration project. From February 8, 2005, through September 30, 2006, for 16 claims in the VETS’s database, claimants asked VETS for referral to OSC. | Why GAO Did This Study
The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) protects the employment and reemployment rights of federal and nonfederal employees who leave their employment to perform military service. The Department of Labor (DOL) investigates and attempts to resolve claims filed by servicemembers, and if not successful, DOL is to inform the federal claimants that they may request to have their claims referred to the Office of Special Counsel (OSC). Under a demonstration project, from February 8, 2005, through September 30, 2007, OSC is authorized to receive and investigate certain USERRA claims, with DOL continuing its investigative role for others. As required by Pub. L. No. 108-454, this report describes the (1) processes, (2) outcomes, and (3) major changes during the demonstration project. GAO selected a random sample of cases from DOL's and OSC's databases and traced data for selected elements from the electronic files to source case files.
What GAO Found
Since the start of the demonstration project on February 8, 2005, both DOL and OSC have had policies and procedures for receiving, investigating, and resolving USERRA claims against federal executive branch employers, with DOL investigating the ones from claimants with even-number social security numbers, and OSC those from claimants with odd social security numbers as well as those with related allegations of prohibited personnel practices. Under the demonstration project, DOL's process for investigating USERRA claims remains unchanged: DOL uses a nationwide network of over a hundred investigators from offices in every state. Under the demonstration project, OSC has instituted a centralized approach for investigating USERRA claims, with a single office of about half a dozen investigators and attorneys in its Washington, D.C., headquarters. Data for reporting outcomes were not reliable at either agency. At DOL, inaccurate data were included in the agency's annual report to Congress, which could adversely affect Congress's ability to assess how well federal USERRA claims are processed and whether changes are needed in the future. GAO also found that DOL did not consistently notify claimants concerning the right to have their claims referred to OSC for further investigation or to bring their claims directly to the Merit Systems Protection Board. Citing GAO's preliminary findings, in December 2006, DOL officials required each region to revise its guidance regarding notifying claimants in the closure letter of their rights. GAO found that for the period of its review--February 8, 2005, through September 30, 2006--DOL received a total of 166 unique claims, although 202 claims were recorded as opened in DOL's database. Duplicate, reopened, and transferred claims accounted for most of this difference. During a review of a random sample of DOL's case files to assess the reliability of DOL's data, GAO found the closed dates in DOL's database, which it uses to report to Congress on the number and percentage of claims it closes within 90, 120, and 365 days, were not reliable. From the start of the demonstration project, through September 30, 2006, OSC received 269 claims and took an average of 115 days to process these claims. The closed dates in OSC's case tracking system were sufficiently reliable. Three primary changes have occurred in federal employees' USERRA claims' processing since the demonstration project. First, two agencies now investigate claims from federal employees using two different models for investigations. Second, both DOL and OSC officials said cooperation and communication between the two agencies on claims has increased under the demonstration project, in turn raising awareness of issues related to servicemembers who are federal employees. Finally, technological enhancements have occurred, including an enhancement to DOL's database enabling the electronic transfer of information between agencies, which began in October 2006. |
gao_HEHS-96-16 | gao_HEHS-96-16_0 | Proprietary HHAs are private, for-profit agencies. 1). Medicare Beneficiaries Receiving More Home Health Services
Since the Medicare Home Health Agency Manual and Medicare Intermediary Manual changes of 1989, the percentage of Medicare beneficiaries receiving home health services and the number of home health visits received per year per home health user have increased significantly. In 1989, 1.7 million beneficiaries (5.6 percent of the Medicare population) received home health care. From 1989 through 1993, the average number of visits received per year more than doubled, from 26 to 57 visits. 2). Most of the increase in visits has resulted from an increased use of skilled nursing (average visits increased from 15 per year in 1989 to 26 visits per year in 1993) and home health aide visits (average visits increased from 25 visits per year for beneficiaries who received any aide visits in 1989 to 56 visits per year in 1993). 3). The number of Medicare-certified HHAs increased from 5,692 in 1989 to 7,864 at the end of 1994. This increased percentage of proprietary agencies was responsible for 83 percent of the growth in the number of HHAs between 1989 and 1994. 4). Little Medical Review Is Done
The regional home health intermediaries are responsible for procedures to assure that they only make payments for home health services that are covered by Medicare and avoid paying for services that are (1) provided to beneficiaries who do not meet Medicare home health criteria, (2) not reasonable or medically necessary, or (3) in excess of the services called for by the approved plan of treatment. HCFA Striving to Address Problems
In response to the changing climate surrounding home health care, the Administrator of HCFA convened an internal task force in the spring of 1994 (the Medicare Home Health Initiative) to examine the home health benefit from both a policy and an operations perspective. And we reviewed studies related to home health benefit utilization and control issues. 4, 1983). | Why GAO Did This Study
Pursuant to a congressional request, GAO examined the growth in the use of Medicare home health benefits, focusing on the: (1) changes in the home health industry; (2) composition of Medicare home health users; (3) differences in utilization of home health benefits across geographic areas; (4) incentives to overuse Medicare home health benefits; and (5) effectiveness of payment controls in preventing payment for services not covered by Medicare.
What GAO Found
GAO noted that: (1) the growth in Medicare's home health benefits resulted from less restrictive Health Care Financing Administration (HCFA) guidelines issued in 1989; (2) 2.8 million Medicare beneficiaries received home health services in 1993, up from 1.7 million in 1989; (3) during the same period, the average number of home health care visits doubled from 26 visits per year in 1989 to 57 visits per year in 1993; (4) more than 25 percent of home health beneficiaries received at least 60 visits per year; (5) between 1989 and 1994, the number of Medicare-certified home health agencies grew from 5,692 to 7,864; (6) proprietary home health agencies provided beneficiaries with 78 visits per year, while voluntary and government agencies provided beneficiaries with 46 visits per year; (7) home health beneficiaries with the same diagnosis received more visits from proprietary agencies than from non-profit agencies; and (8) Medicare's home health services can be improved by subjecting claims to medical review and audit, requiring visits from intermediaries and physicians to beneficiaries, and determining whether beneficiaries are qualified for such service, and actually need or receive the service billed to Medicare. |
gao_GAO-01-601 | gao_GAO-01-601_0 | According to VBA’s current schedule, the development of the full TPSS program will not be completed until at least calendar year 2004, or about 2 years later than VBA had planned. In general, the regional offices reported that the most significant hindrance to using the modules was lack of time for training due to workload pressures. Many TPSS Modules Will Not Be Available When Needed to Train New Claims Processing Employees
In its rationale for the TPSS program, VBA stated that the program would allow VBA to effectively train employees hired and promoted as replacements for the expected wave of retiring claims processors. TPSS May Not Substantially Shorten the Training Period for Employees to Become Fully Proficient
In its rationale for the TPSS program, VBA may have overstated the extent to which the TPSS modules can be expected to reduce the employees’ training period. Conclusions
While we support VBA’s objective to centrally develop a standardized training program, significant delays in the development of TPSS are hindering the program’s ability to achieve its objective of providing standardized training to claims processing employees. Furthermore, we recognize that it may not be feasible to measure the exact extent to which TPSS improves claims-processing accuracy or consistency. Appendix I: Scope and Methodology
To determine regional offices’ experiences with and views on the Training and Performance Support System (TPSS) program, as well as other types of training, we sent a questionnaire in October 2000 to each of the Veterans Benefits Administration’s (VBA) 57 regional offices. | Why GAO Did This Study
The Veterans Benefits Administration (VBA) developed a computer-assisted training program, known as the Training and Performance Support System (TPSS), to help its employees become more accurate in processing disability compensation and pension claims. The program seeks to provide uniform and consistent training to employees in 57 regional offices. Although VBA's long-term goal is to attain a 96 percent accuracy rate for claims processing, VBA reported an accuracy rate of only 59 percent for fiscal year 2000. This report reviews (1) the status of the TPSS program's development and implementation and (2) the extent to which TPSS will meet its objectives.
What GAO Found
GAO found that despite VBA's objective to centrally develop a standardized training program, significant delays in the development of TPSS are hindering the program's ability to provide standardized training to claims processing employees. According to VBA's current schedule, the full development of the program will not be completed until at least 2004, or about two years later than VBA had planned. Although VBA provided nine training modules to regional offices to begin the program, the extent to which the offices implemented them varied considerably. Many offices reported that workload pressures prevented them from fully using the modules. GAO found that TPSS might not fully achieve its objectives. For instance, TPSS training modules may not be available in time to train new employees hired to replace employees who are expected to retire in the future. Furthermore, TPSS may not reduce training time, as envisioned by VBA. |
gao_GAO-08-824 | gao_GAO-08-824_0 | Under Part D, both the beneficiary and the plan pay a portion of the cost of covered prescription drugs. 1.) Applying for the LIS
Beneficiaries generally apply to SSA for the LIS. Applicants are approved for the LIS only if both their assets and incomes are less than the thresholds established by law. Assets and Income Were Important Factors in LIS Denials
Both assets and income were important factors in LIS denials, but more applicants were denied the subsidy because their income was too high than were denied it because their assets were too high. However, because some applicants were denied the LIS based solely on the initial assets screening question, and were not required to answer questions about their income, it is not possible to know how many of these applicants would have also been denied the LIS because of their income. In both 2006 and 2007, of those beneficiaries who were denied the LIS and who answered detailed questions about their assets, more than one in four exceeded the assets threshold by less than $5,000. In 2006, 50.4 percent of all denials were due at least in part to assets; by contrast, 66.2 percent were based at least in part on income. In 2006, 22.2 percent of LIS denials resulted from the answer to the initial screening question, which asked about assets. Overall, more than half of the 4.5 million applicants for the subsidy in 2006 were denied it in calendar year 2006 and about 56 percent were denied it in fiscal year 2007. Denials Often Exceeded Asset Threshold by Relatively Small Amount
In both 2006 and 2007, a number of applicants who were denied the LIS in part because of their assets, and who reported the actual amount of their assets, exceeded the threshold by a relatively small amount. Some State and Drug Manufacturer Programs Help Beneficiaries, but Provide Uneven Access to Prescription Drugs
Some state and drug manufacturer programs provide assistance to Medicare beneficiaries with limited income in obtaining drugs, but they do not provide uniform national access to prescription drugs. The eligibility requirements for these programs vary, as does the type and extent of assistance provided. Pharmaceutical manufacturers sponsor Patient Assistance Programs (PAP) that provide assistance to low-income individuals, but not all are open to Medicare beneficiaries, and the drugs they provide are limited to those produced by the sponsor. SPAPs Offer Assistance to Medicare Beneficiaries with Limited Incomes, but Access Is Uneven
SPAPs offer financial assistance to low-income Medicare beneficiaries— those who receive the LIS and those who do not—in obtaining prescription drugs, but these programs are available in only a minority of states. Under the MMA, SPAPs—which generally predate Part D—can offer wrap-around benefits that fill in gaps in Part D and cover some or all of the beneficiary’s out-of-pocket expenditures. Broadly defined SPAPs differ in the amount of assistance they provide for Part D premiums, deductibles, and copayments. CMS concurred with our report and its concluding observations. SSA expressed appreciation that we used its analysis of applicants denied the LIS in 2006 and 2007 as the foundation of our analysis of the impact of the assets test on LIS applicants. We are sending copies of this report to the Acting Administrator of CMS and the Commissioner of Social Security. | Why GAO Did This Study
To help defray the cost of prescription drugs for beneficiaries with limited means, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) included the low-income subsidy (LIS) in the Part D prescription drug insurance program. To qualify for the LIS, beneficiaries must be enrolled in a Part D plan and their assets and income must be less than the thresholds established by the law. Part D is administered by the Centers for Medicare & Medicaid Services (CMS), and the Social Security Administration (SSA) administers the eligibility determination for the LIS. The MMA directed GAO to compare the utilization of and access to Part D prescription drugs among beneficiaries who received the LIS with those who were denied it because of the amount of their assets. This report focuses on beneficiaries' access to prescription drugs by examining (1) the importance of assets and income in LIS denials in 2006 and 2007, and (2) state and manufacturer programs providing access to prescription drugs for Medicare beneficiaries. To do this, GAO analyzed data from SSA, reviewed information on state and drug manufacturer pharmaceutical programs, and interviewed officials from SSA, CMS, state programs, advocacy organizations, and pharmaceutical manufacturer programs.
What GAO Found
In 2006 and 2007, assets and income were both important factors in LIS denials, but income was of greater importance. In 2006, 4.5 million beneficiaries applied for the LIS and more than half were denied the subsidy. About half of LIS denials in 2006 were based solely or in part on applicants' assets exceeding program thresholds, and in 2007, about 30 percent of LIS denials were for this reason. By contrast, 66.2 percent of denials were due at least in part to income in 2006 and 81.2 percent in 2007. Because some applicants in both years were denied the LIS by an initial screen that only asked about assets and were not required to give information on income, it is impossible to know the number of these applicants who would also have been denied the LIS because of their income. Among those who provided detailed information about their assets, applicants denied the LIS often exceeded the asset threshold by a relatively small amount, and in both years more than one-quarter of these applicants exceeded the threshold by less than $5,000. Some states and drug manufacturers offer programs that assist low-income Medicare beneficiaries in obtaining prescription drugs, but the availability of these programs and the assistance they offer are uneven. Twenty-three states offer State Pharmaceutical Assistance Programs (SPAP), which can supplement Part D benefits. These SPAPs differ in the type and extent of assistance they offer, but they generally cover some of the beneficiaries' out-of-pocket prescription drug costs. Prescription drug manufacturers' Patient Assistance Programs (PAP) also assist low-income individuals in obtaining prescription drugs. However, not all PAPs are open to Part D beneficiaries, and the drugs provided are limited to those of the sponsoring manufacturers. CMS concurred with our report. SSA expressed appreciation that we used its analysis of applicants denied the LIS in 2006 and 2007 as the foundation for our analysis of the impact of the assets test on LIS applicants. |
gao_GAO-15-198 | gao_GAO-15-198_0 | The DOD OIG also reported that the Marine Corps had identified remediation activities that needed to be accomplished before an audit of its SBR was undertaken. Subsequent fiscal year Schedules of Budgetary Activity would include activity in subsequent years’ appropriations, building toward an SBR. Budgetary Resources. The Audit of the Marine Corps’ Fiscal Year 2012 Schedule of Budgetary Activity Did Not Obtain Sufficient, Appropriate Evidence to Support the Audit Opinion
Our review of the audit documentation supporting the audit of the Marine Corps’ Fiscal Year 2012 General Fund Schedule identified key areas where sufficient audit procedures were not performed, under professional auditing standards, and consequently sufficient, appropriate evidence was not obtained to support the reported audit opinion. Specifically, the audit documentation does not provide evidence that the auditors had (1) performed sufficient procedures to determine the completeness of budgetary transactions reported on the Marine Corps’ Fiscal Year 2012 General Fund Schedule, (2) performed sufficient procedures to determine the reliability of certain evidence used to support transactions included on the Marine Corps’ Schedule, (3) performed sufficient procedures to determine whether budget activity was recorded in the proper period and shipment obligations were properly recorded, and (4) properly considered and evaluated the audit evidence in concluding and reporting on the audit results. As discussed later in this report, the Marine Corps had not yet addressed all information technology system recommendations from its fiscal years 2010 and 2011 SBR audits related to control weaknesses over data transfers between feeder systems and SABRS. DOD’s reported target date for completing corrective actions was 2014. The Marine Corps Has Made Limited Progress in Addressing Internal Control Weaknesses Identified by the OIG
Our review of the OIG’s documentation on the status of actions to address its recommendations to Marine Corps management resulting from its fiscal years 2010 through 2012 audits of the Marine Corps budgetary activity showed that as of the end of its audit of the Marine Corps’ Fiscal Year 2012 General Fund Schedule, 130 of the 177 recommendations issued had not been fully addressed. Because other DOD components also rely on many of those same DOD agencies’ business processes and feeder systems, these issues will likely present DOD-wide challenges related to (1) ensuring the completeness of populations used for transaction testing and the proper cutoff of transactions for the accounting period, (2) determining the reliability of feeder system data transferred to the general ledger system, and (3) determining the reliability of reported obligations and outlays. The OIG withdrew its opinion on the Marine Corps’ Fiscal Year 2012 General Fund Schedule because of issues identified in the audit of the Marine Corps’ Fiscal Year 2014 General Fund Schedule that raised questions concerning the completeness of transactions in the Fiscal Year 2012 Schedule on which its opinion was based. At that time, the OIG indicated that once additional information has been gathered and analyzed, the fiscal year 2012 audit opinion will be revisited in light of its analysis and reissued. Recommendations for Executive Action
To improve the quality of DOD’s financial statement audits and ensure that corrective actions to address audit recommendations are fully and effectively implemented prior to their closure, we are making the following three recommendations to the Department of Defense Inspector General: In addition to analyzing additional information related to the withdrawal of the auditor’s opinion on the Marine Corps’ Fiscal Year 2012 General Fund Schedule, reconsider the conclusions made in the OIG’s initial audit report based on the findings in our report before determining whether the auditor’s opinion should be reissued or revised, or whether additional work should be performed. DOD OIG Comments and Our Evaluation
In commenting on our report, the DOD OIG agreed with our three recommendations directed to it but generally disagreed with our findings that the OIG did not perform sufficient procedures, under professional standards, and consequently did not obtain sufficient, appropriate audit evidence to support its audit opinion on the Marine Corps’ Fiscal Year 2012 General Fund Schedule. The OIG stated that certain audit testing in subsequent audits was expanded to address GAO concerns. However, the OIG did not do so. However, the Marine Corps did not agree with certain findings with respect to (1) support for certain audit sample items, and (2) progress in addressing audit recommendations. We acknowledge DOD’s continuing efforts to become audit ready. To the extent that the other DOD military services and DOD agencies rely on these support agencies, they are likely to experience similar challenges as the Marine Corps with regard to having reliable information for decision making on their missions and operations and achieving auditability of their budgetary information. To identify any DOD-wide implications of the Marine Corps’ Fiscal Year 2012 General Fund Schedule audit results, we considered our findings with regard to the conduct of the Marine Corps audit and the status of Marine Corps actions to address auditor recommendations as well as November 2014 Financial Improvement and Audit Readiness (FIAR) Plan Status Report information on the status of DOD military service and DOD mission support agency audit readiness efforts. 2. The OIG stated that it considered such occurrences as a compliance issue. | Why GAO Did This Study
After being identified in August 2009 as the pilot military service for an audit of its SBR, the Marine Corps received disclaimers of opinion on its fiscal year 2010 and 2011 SBRs. Because of difficulties in locating supporting documents for prior fiscal years, in June 2012, DOD leadership decided that the Marine Corps would prepare and subject to audit a Schedule of Budgetary Activity that would include only current year activity on fiscal year 2012 appropriations. In December 2013, the DOD OIG issued an unqualified opinion on the Schedule.
GAO was asked to assess the 2012 audit results. GAO (1) determined the extent to which the OIG's audit met professional standards, (2) analyzed the status of Marine Corps actions on recommendations, and (3) identified any DOD-wide implications from the audit. GAO reviewed auditor documentation, re-performed certain tests, evaluated Marine Corps corrective action plans and statuses, and determined whether other military services and DOD would likely encounter similar issues. GAO met with DOD OIG auditors and Marine Corps and DOD Comptroller officials.
What GAO Found
GAO found that in certain key audit areas, the Department of Defense (DOD) Office of Inspector General (OIG) did not perform sufficient procedures, under professional standards, and consequently did not obtain sufficient, appropriate audit evidence to support the audit opinion on the Marine Corps' Fiscal Year 2012 Schedule of Budgetary Activity (Schedule). GAO found that the OIG did not perform sufficient procedures to determine (1) the completeness of transactions reported on the Schedule, (2) the reliability of certain evidence used to support transactions included on the Schedule, (3) whether budgetary activity was recorded in the proper period and shipment obligations were properly recorded. In addition, the OIG did not properly consider and evaluate the audit evidence in concluding and reporting on the results of the audit.
For example, about half of the Marine Corps' reported fiscal year 2012 budgetary activity originated in non-payroll feeder systems. However, the OIG did not perform sufficient procedures to determine the completeness of the data transferred to the general ledger from the non-payroll feeder systems, although the OIG had reported control weaknesses over feeder system transfers in the 2 prior year audits that the Marine Corps had not yet fully addressed. Also, the OIG did not perform sufficient procedures to determine the reliability of data in certain feeder systems that were used as support when the Marine Corps could not locate or provide original support for some of the OIG's sampled transactions. The OIG stated that certain audit testing in subsequent audits was expanded to address GAO's concerns.
On March 23, 2015, the OIG withdrew its fiscal year 2012 audit report, stating that facts identified in the audit of the Marine Corps' fiscal year 2014 Schedule raised questions about the completeness of information on which the 2012 opinion was based. The OIG has indicated that once additional information has been gathered and analyzed, it will revisit its fiscal year 2012 audit opinion in light of its analysis and determine whether the report should be reissued.
GAO also found that the Marine Corps had made limited progress in addressing auditor recommendations since the audit of its fiscal year 2010 Statement of Budgetary Resources (SBR). For example, as of December 2013, the Marine Corps had not completed action on 130 of the 177 OIG recommendations. In commenting on GAO's report, the Marine Corps noted that it has subsequently remediated numerous recommendations. GAO has not assessed these subsequent corrective actions.
GAO identified DOD-wide implications from the Marine Corps audit related to challenges in assuring the (1) completeness of budgetary transactions, (2) reliability of data generated by DOD agencies' business processes and systems, and (3) proper fiscal year recording of obligations and outlays. Actions to address these challenges will help ensure the reliability of DOD component agencies' financial information; however, until such actions are complete, DOD and its component agencies likely will continue to face significant challenges in having reliable budgetary information for decision making on DOD missions and operations and achieving auditability of their budgetary information.
What GAO Recommends
GAO makes three recommendations related to the quality of DOD OIG audits. The OIG agreed with GAO's recommendations, but disagreed with many of its findings; the Marine Corps disagreed with certain findings; and the Office of the DOD Comptroller generally agreed with GAO's findings on the DOD-wide audit readiness implications from GAO's work. GAO acknowledges DOD's continuing efforts to become audit ready. GAO maintains that its findings are accurate. |
gao_AIMD-95-84 | gao_AIMD-95-84_0 | The Congress, administration, savings association trade groups, regulators, and other interested parties have expressed concern that a significant disparity in premium rates between BIF and SAIF could develop when BIF is fully recapitalized if the Federal Deposit Insurance Corporation (FDIC) lowers BIF’s premium rates. Pursuant to the June 10, 1994, request of the now Chairman of the Senate Committee on Banking, Housing, and Urban Affairs and the now Ranking Minority Member of the House Committee on Small Business, we undertook a review of the issues related to the likelihood that an insurance premium rate differential would develop between bank and thrift institutions and the potential impact of such a differential on the banking and thrift industries and their respective insurance funds. Once SAIF is fully capitalized, the moratorium on conversions will be lifted. Objectives, Scope, and Methodology
As directed by the requesters’ June 10, 1994, letter, our objectives were to (1) determine the likelihood, potential size, and timing of a differential in premium rates between BIF- and SAIF-insured institutions, (2) analyze possible effects of the premium rate differential on the thrift and banking industries, (3) assess potential threats to SAIF’s viability, and (4) present various policy options to avoid or mitigate problems which a premium rate differential may create. With the pending significant differential between BIF and SAIF premium rates, the SAIF deposit base available to service FICO bond interest may decline by more than the 2-percent annual rate projected by FDIC. SAIF’s total deposit base has declined by 25 percent since its inception, or an average decline of 5 percent each year, from $948 billion in 1989 to $711 billion in 1994. Reliable statistical estimates are not available to predict banks’ and thrifts’ responses to a premium rate differential. Thrifts would likely incur additional costs in their attempt to match bank actions and remain competitive with banks for deposits. However, in the aggregate, the cushion provided by such substitution is limited because eventually SAIF’s premium rates would need to be increased in response to declines in the portion of SAIF’s assessment base available to pay FICO in order to continue paying the FICO bond interest. Former SAIF Members Continue to Service Combined Fund’s FICO Obligation
The Congress could also pass legislation to merge BIF and SAIF into a combined deposit insurance fund with all members contributing to capitalize the fund but require the former SAIF members to retain responsibility for servicing the annual FICO interest obligation. Under this scenario, BIF premiums would not be reduced until 1997. | Why GAO Did This Study
Pursuant to a congressional request, GAO reviewed the Federal Deposit Insurance Corporation's (FDIC) proposed reduction of bank insurance premiums once the Bank Insurance Fund (BIF) is recapitalized, focusing on: (1) the likelihood, potential size, and timing of a premium rate differential between banks and thrifts; (2) the possible effects of the premium rate differential on the two industries; (3) the potential adverse effects on the Savings Association Insurance Fund (SAIF); and (4) various policy options to avoid a premium rate differential between BIF and SAIF members.
What GAO Found
GAO found that: (1) BIF is expected to be fully capitalized during 1995 and FDIC has proposed reducing bank premiums as early as September 1995; (2) SAIF will not be fully capitalized for another 7 years because SAIF premiums are also used to pay the Financing Corporation's (FICO) bond interest; (3) a rate differential of about 19 basis points could exist for up to 24 years; (4) SAIF capitalization may be delayed or thrift insurance premiums may have to be increased if thrift failures increase and the deposit base for FICO payments continues to decline; (5) the SAIF deposit base has declined by 25 percent since 1989 and the portion of the deposit base available for FICO payments has declined by 48 percent; (6) there is no reliable data to predict banks' and thrifts' responses to a premium rate differential; (7) banks could pass some of the savings from reduced premiums to customers by increasing deposit interest rates and improving customer services, while thrifts would incur increased costs of up to 10 percent to remain competitive with banks; and (8) policy options to mitigate rate differential problems include taking no action, merging BIF and SAIF, requiring BIF and SAIF members to share FICO bond interest costs proportionally, using BIF premiums or all SAIF resources to pay FICO bond interest, and using appropriated funds to capitalize SAIF or fund FICO bond interest. |
gao_GAO-05-383 | gao_GAO-05-383_0 | Background
Wireless networks extend the range of traditional wired networks by using radio waves to transmit data to wireless-enabled devices such as laptops and personal digital assistants. Typically, this identifier is the name of the network. 2). Wireless Networks Provide Benefits and Present Challenges to Agencies
Wireless networks offer federal agencies two primary benefits: increased flexibility and easier installation. Ease of installation is commonly cited as a key attribute of wireless networks. In implementing wireless networks, federal agencies face three overarching challenges to maintaining the confidentiality, integrity, and availability of their information: protecting against attacks that exploit wireless transmissions, establishing physical control of wireless-enabled devices, and preventing unauthorized wireless deployments. If agencies do not establish effective controls for securing federal wireless networks, federal information and operations can be placed at risk. By not managing signal leakage, agencies increase their susceptibility to attack. Conclusions
Wireless networks can offer a wide range of benefits to federal agencies, including increased productivity, decreased costs, and additional flexibility for the federal workforce. However, wireless networks also present significant security challenges to agency management. If these challenges are not addressed, federal agency information and operations will be at increased risk. In particular, agencywide security programs should include robust policies for authorizing the use of the wireless networks, identifying requirements, and establishing security controls for wireless- enabled devices in accordance with NIST guidance; security configuration requirements for wireless devices that include available security tools, such as encryption, authentication, virtual private networks, and firewalls; placement and strength of wireless access points to minimize signal physical protection of wireless-enabled devices; comprehensive monitoring programs, including the use of tools such as site surveys and intrusion detection systems to ensure compliance with configuration requirements; ensure only authorized access and use of wireless networks; and identify unauthorized wireless-enabled devices and activities in the agency’s facilities; and wireless security training for employees and contractors. Objectives, Scope, and Methodology
The objectives of our review were to describe the benefits and challenges associated with securing wireless identify the controls (policies, practices, and tools) available to assist federal agencies in securing wireless networks, analyze the wireless policies and practices reported by each of the 24 agencies covered by the Chief Financial Officers (CFO) Act of 1990, and test the security of wireless networks at the headquarters of six major federal agencies in Washington, D.C.
For the first three objectives, the scope of our review included (1) the 24 agencies under the CFO Act and focused on wireless networks conforming to the 802.11x standard. | Why GAO Did This Study
The use of wireless networks is becoming increasingly popular. Wireless networks extend the range of traditional wired networks by using radio waves to transmit data to wireless-enabled devices such as laptops. They can offer federal agencies many potential benefits but they are difficult to secure. GAO was asked to study the security of wireless networks operating within federal facilities. This report (1) describes the benefits and challenges associated with securing wireless networks, (2) identifies the controls available to assist federal agencies in securing wireless networks, (3) analyzes the wireless security controls reported by each of the 24 agencies under the Chief Financial Officers (CFO) Act of 1990, and (4) assesses the security of wireless networks at the headquarters of six federal agencies in Washington, D.C.
What GAO Found
Wireless networks offer a wide range of benefits to federal agencies, including increased flexibility and ease of network installation. They also present significant security challenges, including protecting against attacks to wireless networks, establishing physical control over wireless-enabled devices, and preventing unauthorized deployments of wireless networks. To secure wireless devices and networks and protect federal information and information systems, it is crucial for agencies to implement controls--such as developing wireless security policies, configuring their security tools to meet policy requirements, monitoring their wireless networks, and training their staffs in wireless security. However, federal agencies have not fully implemented key controls such as policies, practices, and tools that would enable them to operate wireless networks securely. Further, our tests of the security of wireless networks at six federal agencies revealed unauthorized wireless activity and "signal leakage"--wireless signals broadcasting beyond the perimeter of the building and thereby increasing the networks' susceptibility to attack. Without implementing key controls, agencies cannot adequately secure federal wireless networks and, as a result, their information may be at increased risk of unauthorized disclosure, modification, or destruction. |
gao_NSIAD-93-231 | gao_NSIAD-93-231_0 | Background
The Army’s forces train at four combat training centers. Under Army Regulation 11-33, the Training and Doctrine Command (TRADOC) has overall responsibility for the Army’s lessons learned program. Ultimately, the schools are responsible for using the lessons learned analyses to modify training and doctrine and to validate and assess the adequacy of solutions to training problems. TRADOC Lacks Follow-Up Procedures for Tracking Use and Impact of Lessons Learned
Regulation 11-33 requires TRADOC to track the actions taken to resolve training deficiencies. More specifically, it said that the guidance would direct TRADOC to establish (1) a system to assign priorities to the problems identified at the combat training centers and (2) procedures for tracking lessons learned and assigning accountability for problem resolution. We interviewed Army officials responsible for the management of the lessons learned program at the Center for Army Lessons Learned, the Combined Arms Command, and TRADOC. | Why GAO Did This Study
Pursuant to a congressional request, GAO examined the effectiveness of the Army's program for: (1) assessing the performance of units during their rotations at combat training centers; (2) identifying the lessons learned from battlefield experience; and (3) disseminating information so that training and doctrine can be modified to avoid repeating the same mistakes during training exercises.
What GAO Found
GAO found that: (1) the Training and Doctrine Command (TRADOC) has overall responsibility for the Army's lessons learned program and has assigned responsibility for the program to its Combined Arms Command; (2) despite the lessons learned program, Army units repeat many of the same mistakes during maneuver exercises at combat training centers; (3) the TRADOC program lacks procedures for assigning priorities to the lessons learned; (4) TRADOC lacks follow-up procedures for tracking use and impact of lessons learned; and (5) the schools are not held accountable for ensuring that identified problems are resolved. |
gao_GAO-11-55 | gao_GAO-11-55_0 | In addition, VBIA 2008 requires DOJ, DOL, and OSC to submit quarterly reports to Congress on their compliance with the deadlines. DOL, DOJ, and OSC Were Generally Timely in Meeting VBIA Deadlines, but Issues Remain Regarding Notification of Rights by DOL
DOL Has Generally Met VBIA and Extended Deadlines, but Some Servicemembers who Filed Hard Copy Complaints Were Not Notified of Rights
Our analysis showed that in the 1,663 investigations included in our review, DOL generally met the original deadline or a new deadline agreed to by the servicemember. However, because VBIA 2008 does not require DOL to report on the extent to which it meets the new requirement to notify servicemembers of their rights in writing within 5 days of receiving the complaint, and DOL does not maintain and monitor such data, Congress and DOL cannot be assured that servicemembers who file complaints are adequately being informed of their USERRA process rights in accordance with VBIA 2008. In about 7 percent of the cases, DOL did not have evidence of notification of rights. According to DOJ, complaints against state employers are not covered under the 60-day deadline. DOJ Does Not Apply Statutory Deadline Requirements to Cases against State Employers
Our analysis showed that 6 of 12 cases against state employers took more than 60 days to process. Comparatively, 23 of 189 cases against private or local government employers exceeded the 60-day deadline. Therefore, servicemembers who are employed by state governments may not be receiving the same treatment as other servicemembers in terms of the timeliness of USERRA complaint processing. Specifically, DOJ officials stated that the statutory deadline only applies where the Attorney General makes a decision whether to “appear on behalf of, and act as attorney for” the servicemember. DOJ Did Not Report on Time Facilitating Settlement
Our analysis showed that in 6 of 13 private employer cases where the servicemember was involved in settlement negotiations and DOJ declined representation, DOJ notified the servicemember of its decision to decline representation but continued to aid the parties with facilitating a settlement. However, the three agencies did not use the same criteria for including the number of cases that exceeded or met the statutory deadline in their quarterly reports. DOL Data Presented in Quarterly Reports Were Generally Reliable, but DOL Does Not Always Correct Its Database after Preparing its Reports
Although the data contained in DOL’s quarterly USERRA reports during the time of our review were generally consistent with our analysis of data from its USERRA database, DOL’s process for identifying and correcting errors in its quarterly reports accounts for some of the differences we found. Because DOL does not consistently make corrections to the data in its USERRA database, DOL cannot ensure it has accurate and readily available data to monitor, track, and report on its performance in meeting VBIA 2008 requirements. DOJ Reports Were Generally Accurate, but DOJ Does Not Have a Reliable Process for Producing Quarterly Reports
Although the data contained in DOJ’s quarterly reports that we analyzed were generally consistent with our analysis of the data from its WordPerfect log, DOJ does not have a standard, repeatable process to input USERRA data and produce its quarterly reports. We recommend that the Secretary of Labor direct the Assistant Secretary for the Veterans’ Employment and Training Service to ensure that a system is in place to monitor compliance with notification of rights requirements similar to those used to assess compliance with other statutory deadlines, including maintaining data on such compliance; develop guidance and oversight mechanisms to ensure that changes are entered into the USERRA database as the quarterly reporting data are updated; and establish procedures to ensure that quarterly USERRA reports are submitted to Congress within 30 days of the end of each quarter, as required by VBIA 2008. Matters for Congressional Consideration
To help ensure that that servicemembers who file complaints are adequately being informed of their USERRA complaint process rights in accordance with VBIA 2008, Congress should consider amending USERRA to require DOL to report on the extent to which it is notifying complainants of their USERRA complaint process rights within 5 days of filing a complaint. Staff who made major contributions to this report are listed in appendix V.
Appendix I: Objectives, Scope, and Methodology
Our objectives were to assess the extent to which the Department of Labor (DOL), Office of Special Counsel (OSC), and Department of Justice (DOJ) (1) met Veterans’ Benefits Improvement Act of 2008’s (VBIA 2008) complaint processing timeliness requirements between October 10, 2008, and December 31, 2009, and (2) submitted timely and reliable quarterly reports to Congress as required by VBIA 2008. | Why GAO Did This Study
The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) protects the employment and reemployment rights of individuals who leave their employment to perform uniformed service. Concerned with the timeliness of USERRA complaint processing and data reliability of agency reports, Congress imposed timeliness requirements for the Department of Labor (DOL), Department of Justice (DOJ), and Office of Special Counsel (OSC) under the Veterans' Benefits Improvement Act of 2008 (VBIA 2008) and required agencies to submit quarterly reports to Congress on the extent of their compliance with the requirements. As required by VBIA, this report assesses whether the agencies (1) met VBIA timeliness requirements for USERRA complaint processing, and (2) submitted reliable and timely quarterly reports. GAO analyzed data in each agency's USERRA database, and the extent to which those data were consistent with the quarterly reports.
What GAO Found
DOL, DOJ, and OSC generally were timely in meeting VBIA 2008 deadlines to process complaints, but issues remain regarding notification of rights. Under VBIA 2008, DOL must complete its investigation within 90 days of receiving a complaint. If the complaint is not resolved and the servicemember requests to have the complaint referred, DOL must send the case to DOJ (if against a nonfederal employer) or OSC (if against a federal employer) within 60 days of receiving the request for referral. Within 60 days of receiving the case from DOL, DOJ, and OSC must make a decision on whether to represent the servicemember. Any of the three agencies may seek consent to extend the applicable deadline. GAO's analysis showed that DOL, DOJ, and OSC generally met the original or extended deadlines to process complaints. Although DOL does not maintain data in its USERRA database on notifying servicemembers of their USERRA complaint processing rights within 5 days of receiving the complaint, GAO estimated that in about 7 percent of the cases, DOL did not document notification of rights. Because VBIA 2008 does not require DOL to report on this requirement and DOL does not maintain and monitor such data, Congress and DOL cannot be assured that all servicemembers are adequately being informed of their USERRA process rights in accordance with VBIA 2008. According to DOJ, the 60-day statutory deadline does not apply to state employer cases. GAO's analysis showed that 6 of 12 cases against state employers took more than 60 days to process. Comparatively, 23 of 189 cases against private or local government employers exceeded the 60-day deadline. Therefore, servicemembers who are employed by state governments may not be receiving the same treatment in terms of timeliness that other servicemembers are receiving under USERRA. In addition, GAO's analysis showed that in 6 of 13 cases where the servicemember was involved in settlement negotiations and DOJ declined representation, DOJ notified the servicemember of its decision but continued to aid the parties with facilitating a settlement. VBIA 2008 does not require agencies to report on their time spent after making a decision on representation. For DOL, DOJ, and OSC, the data contained in the quarterly reports during the time of our review were generally consistent with our analysis. However, the three agencies did not use the same criteria for including the number of cases that exceeded or met the statutory deadline in their quarterly reports. DOL and DOJ were consistently late in submitting quarterly reports to Congress, by as much as 46 days for DOL and by as much as 40 days for DOJ. DOL does not always correct errors in its USERRA database after preparing its quarterly reports and therefore cannot ensure it has accurate, readily available data to monitor its performance in meeting USERRA requirements. DOJ does not have a standard, repeatable process to input USERRA data and produce its quarterly reports.
What GAO Recommends
GAO recommends that the three agencies use consistent reporting criteria and that the Attorney General and Secretary of Labor improve maintenance of data. Congress should consider amending USERRA to apply VBIA 2008 deadlines to state cases and add reporting requirements. The agencies generally agreed with GAO's recommendations but expressed concern over some of the matters for congressional consideration. |
gao_GAO-07-1240T | gao_GAO-07-1240T_0 | DHS began operations in March 2003. A variety of factors have affected DHS’s efforts to implement its mission and management functions. Our Report Assesses DHS’s Progress in Implementing Its Mission and Management Functions
Our report assesses DHS’s progress across 14 mission and management areas. DHS Has Made Progress in Implementing Mission and Management Functions but Has Faced Difficulties in Its Implementation Efforts
Our report shows that since March 2003, DHS has attained some level of progress in implementing the performance expectations in all of its major mission and management areas, but the rate of progress among these areas has varied. Overall, DHS has made more progress in its mission areas than in its management areas, reflecting an understandable focus on implementing efforts to secure the homeland. Within its mission areas, DHS has made more progress in developing strategies, plans, and programs than in implementing them. As shown in table 7, we identified 23 performance expectations for DHS in the area of maritime security and found that DHS has generally achieved 17 of them and has generally not achieved 4 others. The creation of DHS is an enormous management challenge, and DHS faces a formidable task in its transformation efforts as it works to integrate over 170,000 federal employees from 22 component agencies. Despite these efforts, we reported earlier this year that DHS implementation and transformation remains high-risk because DHS has not yet developed a comprehensive management integration strategy and its management systems and functions⎯especially related to acquisition, financial, human capital, and information management⎯are not yet fully integrated and wholly operational. Several DHS component agencies have taken steps toward integrating risk- based decision making into their decision-making processes. DHS has taken some steps to implement its information-sharing responsibilities. For example, DHS implemented a network to share homeland security information. Concluding Observations
Given the leading role that DHS plays in securing the homeland, it is critical that the department’s mission programs and management systems and functions operate as efficiently and effectively as possible. In the more than 4 years since its establishment, the department has taken important actions to secure the border and the transportation sector and to defend against, prepare for, and respond to threats and disasters. DHS has had to undertake these critical missions while also working to transform itself into a fully functioning cabinet department—a difficult undertaking for any organization and one that can take, at a minimum, 5 to 7 years to complete even under less daunting circumstances. As it moves forward, DHS will continue to face the challenges that have affected its operations thus far, including transforming into a high- performing, results-oriented agency; developing results-oriented goals and measures to effectively assess performance; developing and implementing a risk-based approach to guide resource decisions; and establishing effective frameworks and mechanisms for sharing information and coordinating with homeland security partners. While this testimony contains no new recommendations, in past products GAO has made approximately 700 recommendations to DHS. | Why GAO Did This Study
The Department of Homeland Security's (DHS) recent 4-year anniversary provides an opportunity to reflect on the progress DHS has made. The creation of DHS was one of the largest federal reorganizations in the last several decades, and GAO has reported that it was an enormous management challenge and that the size, complexity, and importance of the effort made the challenge especially daunting and critical to the nation's security. Our prior work on mergers and acquisitions has found that successful transformations of large organizations, even those faced with less strenuous reorganizations than DHS, can take at least 5 to 7 years to achieve. This testimony is based on our August 2007 report evaluating DHS's progress since March 2003. Specifically, it addresses DHS's progress across 14 mission and management areas and key themes that have affected DHS's implementation efforts.
What GAO Found
Since its establishment in March 2003, DHS has made varying levels of progress in implementing its mission and management areas, as shown in the following table. In general, DHS has made more progress in its mission areas than in its management areas. Within its mission areas, DHS has made progress in developing plans and programs, but has faced challenges in its implementation efforts. Key underlying themes have affected DHS's implementation efforts. These include strategies to achieve agency transformation, strategic planning and results management, risk management, information sharing, and partnerships and coordination. For example, we have designated DHS's implementation and transformation as high-risk. While DHS has made progress in transforming its component agencies into a fully functioning department, it has not yet addressed elements of the transformation process, such as developing a comprehensive transformation strategy. DHS also has not yet fully adopted and applied a risk management approach in implementing its mission and management functions. Some DHS component agencies have taken steps to do so, but this approach is not yet used departmentwide. In addition, DHS has taken steps to share information and coordinate with homeland security partners but has faced difficulties in these partnership efforts. Given DHS's leading role in securing the homeland, it is critical that the department's mission and management programs operate as efficiently and effectively as possible. DHS has taken important actions to secure the border and transportation sectors and to prepare for and respond to disasters. DHS has had to undertake these missions while also working to transform itself into a fully functioning cabinet department--a difficult task for any organization. As DHS moves forward, it will be important for the department to continue to develop more measurable goals to guide implementation efforts and to enable better accountability. It will also be important for DHS to continually reassess its mission and management goals, measures, and milestones to evaluate progress made, identify past and emerging obstacles, and examine alternatives to effectively address those obstacles. |
gao_GAO-07-705 | gao_GAO-07-705_0 | Cybercrime also includes the use of computers as tools to conduct criminal activity such as fraud, identity theft, and copyright infringement. Cybercrime Has Significant Economic Impacts and Threatens U.S. National Security Interests, but Its Precise Magnitude Is Unknown
Cybercrime is a threat to U.S. national economic and security interests. Based on various studies and expert opinion, the direct economic impact from cybercrime is estimated to be in the billions of dollars. The overall loss projection due to computer crime was estimated to be $67.2 billion annually for U.S. organizations, according to a 2005 FBI survey. In addition, there is concern about threats that nation-states and terrorists pose to our national security through attacks on our computer-reliant critical infrastructures and theft of our sensitive information. Also, according to FBI testimony, terrorist organizations have used cybercrime to raise money to fund their activities. However, despite the reported loss of money and information and known threats from our nation’s adversaries, there remains a lack of understanding about the true magnitude of cybercrime and its impact because it is not always detected or reported. In addition, the report stated that Chinese intelligence services are capable of compromising the security of computer systems. Numerous Public and Private Organizations Have Responsibilities to Protect Against, Detect, Investigate, and Prosecute Cybercrime
Federal agencies, state and local law enforcement, private industry, and academia have responsibilities, based on their primary missions or business interests, to protect against, detect, investigate, and prosecute cybercrime. Many Public Entities Have Responsibilities for Addressing Cybercrime
DOJ, DHS, and DOD and the FTC have key roles in addressing cybercrime within the federal government, along with the federal inspectors general. Numerous Public and Private Partnerships Work to Address Cybercrime
Numerous partnerships have been established between public sector entities, between public and private sector entities, and internationally to collaborate and implement effective cybercrime strategies. While numerous public and private entities—federal agencies, state and local law enforcement, industry, and academia—have responsibilities to address these threats, they face challenges in protecting against, detecting, investigating, and prosecuting cybercrimes. Appendix I: Objectives, Scope, and Methodology
Our objectives were to (1) determine the impact of cybercrime on our nation’s economy and security; (2) describe key federal entities, as well as nonfederal and private-sector entities, responsible for addressing cybercrime; and (3) determine challenges being faced in addressing cybercrime. To determine the impact of cybercrime on the U.S. economy and security, we analyzed various government and private-sector reports, surveys, and statistics related to cybercrime and conducted interviews with experts from law enforcement, academia, and information technology and security companies to verify, clarify, and gain a greater understanding of cybercrime’s impact. | Why GAO Did This Study
Computer interconnectivity has produced enormous benefits but has also enabled criminal activity that exploits this interconnectivity for financial gain and other malicious purposes, such as Internet fraud, child exploitation, identity theft, and terrorism. Efforts to address cybercrime include activities associated with protecting networks and information, detecting criminal activity, investigating crime, and prosecuting criminals. GAO's objectives were to (1) determine the impact of cybercrime on our nation's economy and security; (2) describe key federal entities, as well as nonfederal and private sector entities, responsible for addressing cybercrime; and (3) determine challenges being faced in addressing cybercrime. To accomplish these objectives, GAO analyzed multiple reports, studies, and surveys and held interviews with public and private officials.
What GAO Found
Cybercrime has significant economic impacts and threatens U.S. national security interests. Various studies and experts estimate the direct economic impact from cybercrime to be in the billions of dollars annually. The annual loss due to computer crime was estimated to be $67.2 billion for U.S. organizations, according to a 2005 Federal Bureau of Investigation (FBI) survey. In addition, there is continued concern about the threat that our adversaries, including nation-states and terrorists, pose to our national security. For example, intelligence officials have stated that nation-states and terrorists could conduct a coordinated cyber attack to seriously disrupt electric power distribution, air traffic control, and financial sectors. Also, according to FBI testimony, terrorist organizations have used cybercrime to raise money to fund their activities. Despite the estimated loss of money and information and known threats from adversaries, the precise impact of cybercrime is unknown because it is not always detected and reported. Numerous public and private entities have responsibilities to protect against, detect, investigate, and prosecute cybercrime. The Departments of Justice, Homeland Security, and Defense, and the Federal Trade Commission have prominent roles in addressing cybercrime within the federal government, and state and local law enforcement entities play similar roles at their levels. Private entities such as Internet service providers and software developers focus on the development and implementation of technology systems to detect and protect against cybercrime, as well as gather evidence for investigations. In addition, numerous cybercrime partnerships have been established between public sector entities, between public and private sector entities, and internationally, including information-sharing efforts. Entities face a number of key challenges in addressing cybercrime, including reporting cybercrime and ensuring that there are adequate analytical capabilities to support law enforcement. While public and private entities, partnerships, and tasks forces have initiated efforts to address these challenges, federal agencies can take additional action to help ensure adequate law enforcement capabilities. |
gao_GAO-02-677T | gao_GAO-02-677T_0 | 3844 proposes a number of changes and clarifications that we believe could strengthen information security requirements, some of which address issues noted in the first-year implementation of GISRA. 3844 includes a number of provisions that would require the development, promulgation, and compliance with minimum mandatory management controls for securing information and information systems to manage risks as determined by agencies. In particular, it requires agencies to submit an annual report to both OMB and the comptroller general. 3844’s more significant changes to NIST’s role and responsibilities would require NIST to: develop mandatory minimum information security requirements and guidance for detecting and handling of information security incidents and for identifying an information system as a national security system; establish a NIST Office for Information Security Programs to be headed by a senior executive level director; and report annually to OMB to create a more active role for NIST in governmentwide information security oversight and to help ensure that OMB receives regular updates on the state of federal information security. As I emphasized in my March 2002 testimony, as the administration refines the strategy that it has begun to lay out in recent months, it is imperative that it take steps to ensure that information security receives appropriate attention and resources and that known deficiencies are addressed. These steps would include the following: It is important that the federal strategy delineate the roles and responsibilities of the numerous entities involved in federal information security and related aspects of critical infrastructure protection. Agencies must have the technical expertise they need to select, implement, and maintain controls that protect their information systems. | What GAO Found
The Federal Information Security Management Act of 2002 reauthorizes and expands the information security, evaluation, and reporting requirements enacted in the National Defense Authorization Act for Fiscal Year 2001. Concerned that pervasive information security weaknesses place federal operations at significant risk of disruption, tampering, fraud, and inappropriate disclosures of sensitive information, Congress enacted the Government Security Reform Act (GISRA) for more effective oversight. The Federal Information Security Management Act also changes and clarifies information security issues noted in the first-year implementation of GISRA. In particular, the bill requires the development, promulgation of, and compliance with minimum mandatory management controls for securing information and information systems; requires annual agency reporting to both the Office of Management and Budget and the Comptroller General; and defines the evaluation responsibilities for national security systems. To ensure that information security receives appropriate attention and resources and that known deficiencies are addressed, it will be necessary to delineate the roles and responsibilities of the numerous entities involved; obtain adequate technical expertise to select, implement, and maintain controls; and allocate enough agency resources for information security. |
gao_GAO-07-770 | gao_GAO-07-770_0 | 1). 2). Freight railroads generally consider this information proprietary, citing concerns over security and liability, and they selectively share bridge and tunnel information with the government. Railroads Collect and Maintain Information on the Condition of Their Bridges and Tunnels to Varying Degrees
Class I railroads, which own over 75 percent of U.S. railroad bridges and over 800 tunnels, maintain detailed information on the condition of their bridges and tunnels and generally have the resources to invest in a robust maintenance and inspection regime; however, less is known about the information Class II and III railroads collect on bridge and tunnel conditions, according to FRA’s Chief Structural Engineer. Railroad Bridges and Tunnels Are Aging but Are Not Generally the Main Cause of Freight Railroad Congestion, Although Some Are Chokepoints
While railroad bridges and tunnels are aging, their condition is not the main cause of freight railroad congestion; however, some critical bridges and tunnels are chokepoints on the freight railroad network. Federal Railroad Bridge and Tunnel Safety Efforts Are Limited Because FRA Has Determined That Railroads Are Sufficiently Ensuring Structural Stability
Historically, the federal role in railroad bridge and tunnel safety has been narrow. In observing bridge conditions, FRA bridge specialists use FRA advisory guidelines for railroad bridge management programs. In contrast, some states structure their investments in freight railroad infrastructure to produce public benefits at the state and local levels, and some public-private partnerships have facilitated investments designed to produce public and private benefits. Examining Critical Questions and Implementing a Framework That Identifies Goals, Stakeholder Roles, Revenue Sources, and Funding Mechanisms Could Guide a Federal Role in Freight- Related Infrastructure Investments
As noted earlier in this report, the federal government lacks a strategic freight transportation plan to guide its involvement in freight-related capital infrastructure investments. Different funding mechanisms and revenue sources could also be used to implement any future federal role in freight infrastructure investments. Recommendations for Executive Action
To enhance the effectiveness of its bridge and tunnel safety oversight function, we recommend that the Secretary of Transportation direct the Administrator of the Federal Railroad Administration to devise a systematic, consistent, risk-based methodology for selecting railroads for its bridge safety surveys to ensure that it includes railroads that are at higher risk of not following the FRA’s bridge safety guidelines and of having bridge and tunnel safety issues. To help better focus limited federal resources, we recommend that the Secretary of Transportation ensure that its draft Framework for a National Freight Policy : includes clear national goals for federal involvement in freight- related infrastructure investments across all modes, including freight railroad investments; establishes and clearly defines roles for all public and private stakeholders; and identifies funding mechanisms for federal freight-related infrastructure investments, including freight railroad investments, which provide the highest return in national public benefits for limited federal expenditures. To identify the federal role in overseeing railroad bridge and tunnel safety, we reviewed public laws and interviewed officials from the public agencies and railroads listed in table 4. We reviewed Department of Transportation’s (DOT) draft Framework for a National Freight Policy. | Why GAO Did This Study
Freight railroads account for over 40 percent (by weight) of the nation's freight on a privately owned network that was largely built almost 100 years ago and includes over 76,000 railroad bridges and over 800 tunnels. As requested, GAO provides information on this infrastructure, addressing (1) the information that is available on the condition of railroad bridges and tunnels and on their contribution to railroad congestion, (2) the federal role in overseeing railroad bridge and tunnel safety, (3) the current uses of public funds for railroad infrastructure investments, and (4) criteria and a framework for guiding any future federal role in freight infrastructure investments. GAO reviewed federal bridge safety guidelines and reports, conducted site visits, and interviewed federal, state, railroad, and other officials.
What GAO Found
Little information is publicly available on the condition of railroad bridges and tunnels and on their contribution to congestion because the railroads consider this information proprietary and share it with the federal government selectively. Major (Class I) railroads maintain detailed repair and inspection information, while other (Class II and III) railroads vary, from keeping detailed records, to lacking basic condition information. Despite their age, bridges and tunnels are not the main cause of congestion, although some do constrain capacity. Because bridge and tunnel work is costly, railroads typically make other investments to improve mobility first. The federal role in overseeing the safety of railroad bridges and tunnels is limited because the Federal Railroad Administration (FRA) has determined that most railroads are sufficiently ensuring safe conditions. FRA has issued bridge management guidelines, makes structural observations, and may take enforcement actions to address structural problems. However, FRA bridge specialists use their own, not a systematic, consistent, risk-based, methodology to select smaller railroads for safety surveys and therefore may not target the greatest safety threats. Federal funds are used to meet many different goals, but are not invested under any comprehensive national freight strategy, nor are the public benefits they generate aligned with any such strategy. Some state investments are structured to produce state and local economic and safety benefits, and public-private partnerships have facilitated investments designed to produce public and private benefits. GAO has identified critical questions that can serve as criteria for reexamining the federal role in freight investments--including railroad bridge and tunnel investments--and a framework for implementing that role that includes identifying national goals, clarifying stakeholder roles, and ensuring that revenue sources and funding mechanisms achieve maximum national public benefits. The Department of Transportation's draft Framework for a National Freight Policy takes a step forward, but more is needed to guide the implementation of a federal role in freight transportation investments. |
gao_T-NSIAD-96-213 | gao_T-NSIAD-96-213_0 | Export Assistance Centers. Of the 28 customers who acknowledged receiving services from a second USEAC agency, 11 (40 percent) indicated that they had found the second agency by themselves, rather than through their USEAC contact. For example, we learned that individuals at certain USEACs were reluctant to recommend the services of another agency, even to clients who expressed a need, because they were unfamiliar with that agency’s performance in delivering the service. USEAC-Wide Client Tracking System
To further improve the quality of services to customers, USEAC directors and staff acknowledged their need for a USEAC-wide, computer-based client tracking system. Eximbank staff used an off-the-shelf computer program for maintaining information on customers. Commerce, Eximbank, and SBA officials recently told us that they have agreed to allocate expenses based on a formula that reflects the limited capabilities of ITA’s financial accounting system. The agencies recently told us that they are currently piloting a separate financial management system for the USEACs. Recommendations
Based on our review, we recommend that the Secretary of Commerce, working with the Chairman of the Eximbank and the Administrator of SBA give all USEAC directors the authority to contribute to the performance appraisals of all USEAC staff with regard to intra-USEAC cooperation and teamwork (including development of an appropriate performance factor for staff appraisals and performance measures), establish a USEAC-specific customer tracking system that contains information on clients and services provided to them, and set up an accounting system that accurately tracks the full costs of creating and operating the USEAC network and, as part of that process, incorporate ways to give USEAC directors greater authority over USEAC expenditures. Scope and Results of U.S. The overwhelming majority of USEAC staff believed that the establishment of the USEAC had increased cooperation among the USEAC agencies (82 percent “to a great/very great extent”) and substantially increased customer access to federal export promotion services (80 percent). | Why GAO Did This Study
GAO discussed opportunities to improve U.S. Export Assistance Centers' (USEAC) operations.
What GAO Found
GAO noted that: (1) staff and customers at the four USEAC surveyed believed that collocating agency staff and nonfederal partner organizations improved export delivery services by increasing customer access to federal export promotion services; (2) although customers were highly satisfied with individual agencies' services, they believed that cooperation among agency staffs could be improved; (3) 40 percent of the customers who used a second USEAC agency found the agency on their own without help from their USEAC contact, even though some of these customers expressed a need for another agency's services; (4) some USEAC staff were reluctant to recommend other agencies' services because they were not familiar with those agencies' performance in service delivery; (5) to improve teamwork, USEAC directors believed that they needed to have input to staff performance appraisals with regard to intra-USEAC teamwork, a USEAC-wide client tracking system, adequate authority over USEAC expenditures, and a USEAC-wide accounting system; (6) three federal agencies were considering ways to give USEAC directors input to staff appraisals and plan to install an off-the-shelf client tracking system; and (7) the three agencies have agreed to allocate USEAC expenses based on a formula that reflects the limited capabilities of the International Trade Administration's accounting system, but they are working on a separate financial management system for USEAC. |
gao_NSIAD-96-12 | gao_NSIAD-96-12_0 | The CFIUS review process serves both to protect national security and to minimize any potential adverse effect of the Exon-Florio legislation on foreign investment in the United States. Investments Not Reported to CFIUS
The Exon-Florio legislation and implementing regulations do not define which investments are important to review for national security reasons. Decisions on Foreign Government Control
The 1992 legislation required mandatory investigations of CFIUS cases in which the foreign company proposing an investment is controlled by a foreign government and the transaction could result in foreign control that “could affect the national security.” As a result, CFIUS also reviews cases for foreign government control. Of the 174 cases reviewed between October 1992 and December 1994, CFIUS found foreign government control in 18 cases. CFIUS found the national security concerns in these cases were not sufficient to warrant investigations. CFIUS found that there was foreign control because the acquiring company was German-owned and planned to purchase substantially all the assets of the U.S. company. A British company notified CFIUS of its intention to acquire 20 percent of a U.S. company. However, officials from other CFIUS agencies stated that they look to DOD to make key judgments regarding the national security risks of a transaction. DOD Determinations of Defense-Critical Technologies for Risk of Diversion Assessments
As required by the 1992 legislation, DOD agencies, including defense intelligence entities, assess the risk of diversion when the Secretary of Defense determines that a proposed merger, acquisition, or takeover may involve a firm engaged in the development of a defense-critical technology or is otherwise important to the defense industrial and technology base. The Office of the Assistant Secretary of Defense for Economic Security found that 9 of the 174 CFIUS cases reviewed between October 1992 and December 1994 required a risk of diversion assessment. The Department of the Treasury discussed the voluntary nature of CFIUS notification and said it will remind agencies to bring to CFIUS’s attention transactions in high-technology industries that have not been notified to CFIUS. Specifically, we focused on (1) the extent foreign investments are reported to the Committee on Foreign Investment in the United States (CFIUS) and the characteristics of these investments and (2) the factors CFIUS considers in making decisions on whether the foreign investment would result in foreign companies’ control of U.S. companies, whether the acquiring foreign company is controlled by a foreign government, and whether there are associated national security risks. The ESI database tracks foreign investments in and acquisitions of U.S. companies involved in high, key, or critical technologies. | Why GAO Did This Study
Pursuant to a congressional request, GAO examined the Committee on Foreign Investment in the United States' (CFIUS) implementation of the Exon-Florio legislation and related amendments, focusing on: (1) the characteristics of foreign investments in the United States and the extent to which they are reported to CFIUS; (2) the factors CFIUS considers in determining whether a foreign investment results in foreign control of a U.S. company; and (3) whether foreign control of U.S. companies threatens U.S. national security.
What GAO Found
GAO found that: (1) about two-thirds of the cases notified to CFIUS between October 1988 and May 1994 involved defense-related and high-technology industries that raised possible national security concerns; (2) many companies voluntarily notified CFIUS of proposed investments in and acquisitions of U.S. companies, but, according to two private-sector databases, many others did not; (3) the CFIUS process was not intended to provide a comprehensive screening mechanism for all foreign investment although CFIUS officials expressed the view that, because CFIUS clearance essentially eliminates the risk of a forced divestiture, most transactions affecting national security are reported; (4) in deciding whether a foreign investment will result in a foreign company gaining control of a U.S. company, CFIUS considers many factors related to the investor's ability to affect key company decisions; (5) when deciding on foreign government control, CFIUS examines the extent to which a foreign government owns and controls the acquiring company; (6) of the 174 transactions filed between the 1992 legislation and December 1994, CFIUS decided there was foreign government control in 18 cases; (7) none of these cases were investigated since CFIUS decided the national security concerns were not sufficient to warrant further investigation; (8) the Exon-Florio legislation does not provide a precise definition of national security, and neither the statute nor the implementing regulations contain guidelines for weighing the various factors considered in examining the national security risks of a transaction; (9) as a result, CFIUS agencies have significant flexibility in making such judgments; (10) CFIUS members noted that they rely primarily on the Department of Defense's (DOD) assessment of national security risks; (11) the 1992 legislation requires DOD to direct appropriate defense intelligence and other agencies to assess the risks of diversion when DOD decides that a CFIUS case involves a company engaged in the development of defense-critical technology or is otherwise important to the defense industrial or technology base; and (12) of the 174 cases reviewed between October 1992 and December 1994, the Office of the Assistant Secretary of Defense for Economic Security found that 9 cases required a risk of diversion assessment. |
gao_GAO-03-1114T | gao_GAO-03-1114T_0 | Background
Over the past decade, there has been a series of devastating and deadly wildland fires on federal lands. These fires burn millions of acres of forests, grasslands, and deserts each year, and federal land management agencies spend hundreds of millions of dollars to fight them. Numerous Geospatial Technologies Can Be Used to Address Different Aspects of Wildland Fire Management
Geospatial information technologies—sensors, systems, and software that collect, manage, manipulate, analyze, model, and display information about positions on the earth’s surface—can aid in managing wildland fires by providing accurate, detailed, and timely information to federal, state, and local decision makers, fire- fighting personnel, and the public. This information can be used to help reduce the risk that a fire will become uncontrollable, to respond to critical events while a fire is burning, and to aid in recovering from fire disasters. Staffing issues. Use of new products. Clearly, effective interagency management of information resources and technology could help address the challenges faced by the wildland fire community in using geospatial information technologies. In our report, due to be issued in September 2003, we further discuss the use of geospatial technologies in support of wildland fire management, challenges to effectively using these technologies, and opportunities to address key challenges and to improve the effective use of geospatial technologies. We will also make recommendations to improve the use of geospatial technologies in support of wildland fire management. Appendix I: Objectives, Scope, and Methodology
Our objectives were to provide an overview of key geospatial information technologies for addressing different aspects of wildland fire management and to summarize key challenges to the effective use of geospatial technologies in wildland fire management. To accomplish these objectives, we focused our review on five key federal agencies that are responsible for wildland fire management on public lands: the Department of Agriculture’s Forest Service and the Department of the Interior’s National Park Service, Bureau of Land Management, Fish and Wildlife Service, and Bureau of Indian Affairs. | Why GAO Did This Study
Over the past decade, a series of devastating and deadly wildland fires has burned millions of acres of federal forests, grasslands, and deserts each year, requiring federal and management agencies to spend hundreds of millions of dollars to fight them. GAO was asked to provide an interim update on key segments of an ongoing review of the use of geospatial information technologies in wildland fire management. Specifically, GAO was asked to provide an overview of key geospatial information technologies and their uses in different aspects of wildland fire management and to summarize key challenges to the effective use of these technologies. The final report is expected to be issued in September 2003. GAO's review focused on the five federal agencies that are primarily responsible for wildland fire management: the Department of Agriculture's Forest Service and the Department of the Interior's National Park Service, Bureau of Land Management, Fish and Wildlife Service, and Bureau of Indian Affairs.
What GAO Found
Geospatial information technologies--sensors, systems, and software that collect, manage, manipulate, analyze, model, and display information about locations on the earth's surface--can aid in managing wildland fires by providing accurate, detailed, and timely information to federal, state, and local decision makers, fire-fighting personnel, and the public. This information can be used to help reduce the risk that a fire will become uncontrollable, to respond to critical events while a fire is burning, and to aid in recovering from fire disasters. However, there are multiple challenges to effectively using these technologies to manage wildland fires, including challenges with data, systems, infrastructure, staffing, and the effective use of new products. Clearly, effective management of information technology and resources could help address these challenges. In our final report, due to be issued next month, we will further discuss geospatial information technologies, challenges to effectively using these technologies, and opportunities to improve the effective use of geospatial information technologies. We will also make recommendations to address these challenges and to improve the use of geospatial technologies in wildland fire management. |
gao_GAO-03-824 | gao_GAO-03-824_0 | To initiate, or file, a dispute, a WTO member requests consultations with the defending member. In the United States, the Department of Commerce and the International Trade Commission (ITC) investigate whether the United States should impose antidumping or countervailing duties to offset unfair foreign trade practices. Trade Remedy Cases Increased Over Time, but Few Measures Were Challenged
From 1995 through 2002, WTO members brought 198 formal dispute settlement cases against other members. U.S. agency officials said that it was not surprising that the United States had been a defendant more often than a complainant in WTO disputes since (1) the United States has the world’s biggest economy and most desirable market and (2) U.S. laws and procedures are more detailed and transparent than those of other members that are large users of trade remedies. Measures Were Challenged Most
Although members notified the WTO that they imposed 1,405 trade remedy measures from 1995 through 2002, only a small percentage of these measures were challenged in the dispute settlement system. The WTO also rejected roughly the same proportion of U.S. and non-U.S. domestic determinations. Measures
The 25 WTO trade remedy rulings completed from 1995 through 2002 did not result in many changes to WTO members’ laws, regulations, or practices. U.S. Officials Are Concerned about the Potential Impact of WTO Rulings on U.S. Ability to Impose Trade Remedy Measures
While U.S. officials told us that WTO trade remedy rulings had not yet significantly impaired the U.S.’s fundamental right and ability to use its trade remedies, they are concerned about the rulings’ potential to do so in the future. Expert Views and U.S. Agency Positions on Standard of Review and Other Trade Remedy Issues
How the WTO has interpreted and applied the standard of review in trade remedy cases and how it has resolved important trade remedy issues are highly controversial issues in the United States. In addition, a majority of the experts who responded concluded that WTO decisions generally have not added to obligations or diminished rights of WTO members and that it was appropriate for the WTO to interpret vague and ambiguous provisions in WTO agreements, sometimes referred to as “gap filling.” However, a significant minority of experts strongly disagreed with this view about WTO members’ obligations and rights and considered gap filling to be inconsistent with several provisions of the Dispute Settlement Understanding. ITC officials indicated that they do not agree that the WTO has properly applied standard of review in trade remedy cases. Agency Comments and Our Evaluation
We requested comments on a draft of this report from the Secretary of Commerce, the Chairman of the U.S. International Trade Commission, and the U.S. Trade Representative (USTR). As a result of this increased emphasis, we modified the sections of this report that present U.S. agency views on the potential future ramifications of WTO decisions on the U.S.’s ability to impose trade remedies. Specifically, in this report we (1) identified the major trends in WTO dispute settlement activity concerning trade remedies; (2) analyzed the outcome of WTO rulings in completed trade remedy cases; (3) assessed the major impacts of these rulings on WTO members’ laws, regulations, and practices and on their ability to impose trade remedies; (4) identified the standards of review for trade remedy cases and Appellate Body guidance on how they should be applied; and (5) summarized legal experts’ views and U.S. agencies’ positions on standard of review and other trade remedy issues. The safeguard measure took the form of minimum specific duties on these imports. | Why GAO Did This Study
World Trade Organization (WTO) members rely on trade remedies in the form of duties or other import restrictions to protect their industries from injury due to unfair foreign trade practices or unexpected import surges. There is congressional concern that the WTO, created in 1995 to administer trade rules, is interfering with this ability. There is also congressional concern that the WTO is not treating the United States fairly in resolving trade remedy disputes. A congressional requester asked GAO to identify trends in WTO trade remedy disputes since 1995, including the outcomes of these disputes and how they affected members' ability to impose trade remedies. The requester also asked GAO to discuss the standards of review that the WTO applies when ruling on trade remedy disputes and to present U.S. agencies' and legal experts' views on the WTO's application of these standards and related trade remedy issues. In their comments on a draft of this report, the Department of Commerce and the U.S. International Trade Commission stated that the report needed to put more emphasis on U.S. agencies' concerns about the potential adverse impact of WTO rulings on the U.S.'s use of trade remedies. The U.S. Trade Representative provided only technical comments on the report. GAO modified the report as appropriate.
What GAO Found
About a third of the cases filed in the WTO dispute settlement system from 1995 through 2002 challenged members' trade remedies, with the ratio of such cases increasing over time. Although a relatively small proportion of WTO members' trade remedy measures were challenged in the WTO, the United States faced substantially more challenges than other WTO members. The WTO generally rejected members' decisions to impose trade remedies in the 25 trade remedy disputes resolved from 1995 through 2002. However, GAO found that the WTO ruled for and against the U.S. and other members in roughly the same ratios. Overall, WTO rulings resulted in few changes to members' laws, regulations, and practices but had a relatively greater impact on those of the United States. While U.S. agencies stated that WTO rulings have not yet significantly impaired their ability to impose trade remedies, they had concerns about the potential future adverse impact of WTO rulings. Of the legal experts GAO consulted, a majority concluded that the WTO has properly applied standards of review and correctly ruled on major trade remedy issues. However, a significant minority strongly disagreed with these conclusions. U.S. agencies also said that the WTO has not always properly applied the standards and has, in some cases, imposed obligations on members that are not found in WTO agreements. Nonetheless, the experts almost unanimously agreed that the WTO was not treating the United States any differently than other members. |
gao_NSIAD-99-44 | gao_NSIAD-99-44_0 | A majority (77 percent) of the competitions were held by the Air Force. We found that the time to complete the competitions in our review has decreased to an average time of 18 months for single function competitions and 30 months for multiple function competitions. Table 3 indicates the average length of time required to complete the recent A-76 competitions. Sixteen of the 53 completed competitions competed between October 1995 and March 1998 used best value criteria. However, the data is too limited at this point to reach any conclusions about trends. Our current work also reinforces previous concerns expressed about the adequacy and reliability of the CAMIS databases used by the services to record savings from A-76 competitions, and their usefulness for tracking changes over time. Initial Savings Estimates From Recent Competitions Are Expected to Be Substantial
Data available from the services and defense agencies for their recently completed competitions suggests that the 53 completed competitions were projected to result in savings of $528 million over the life of the multiyear awards and would average 42 percent; similar savings were projected regardless of whether the competitions were won by the private sector or in-house. Few Implementation Problems Identified
We identified only a few performance problems on contracts awarded as the result of competitions won by the private sector. In one instance involving a storage and warehousing contract at Fort Riley, Kansas, the contract was terminated after the first full performance period (19 months) because of poor contractor performance, according to contract officials. Full implementation of the aircraft maintenance most efficient organization at Altus Air Force Base had to be extended 17 months—from December 1996 to April 1998—due to a delay in being able to recruit enough personnel for the work. The number of personnel assigned to the monitoring of contracts won by the private sector will vary depending upon the size and complexity of the functions being competed. Conclusions
Defense components appear to be conducting competitive sourcing competitions in accordance with OMB Circular A-76 guidelines. Improvements are still needed in DOD’s database to ensure that results from A-76 competitions and savings estimates are tracked over time, with adjustments made as needed for competitions won by the private as well as the public sector. Scope and Methodology
To determine the results of the A-76 competitions and related appeals, we spoke with officials from the Office of the Secretary of Defense, Departments of the Army, the Navy, and the Air Force; the Marine Corps; the Defense Finance and Accounting Service; and the Defense Commissary Agency to obtain listings of competitions completed from October 1995 through March 1998 and the performance and oversight of the winners. The A-76 Process
In general, the A-76 process consists of six key activities—(1) developing a performance work statement and quality assurance surveillance plan; (2) conducting a management study to determine the government’s most efficient organization (MEO); (3) developing an in-house government cost estimate for the MEO; (4) issuing a Request for Proposals or Invitation for Bids; (5) evaluating the proposals or bids and comparing the in-house estimate with a private sector offer or interservice support agreement and selecting the winner of the cost comparison; and (6) addressing any appeals submitted under the administrative appeals process, which is designed to ensure that all costs are fair, accurate, and calculated in the manner prescribed by the A-76 handbook. (continued)
Positions competed (Civ./mil.) | Why GAO Did This Study
Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) recent competitive sourcing initiatives, focusing on: (1) determining the number of sourcing competitions completed between October 1995 and March 1998 and whether the competitions had been done in accordance with applicable procedures; (2) comparing characteristics such as outcomes of recent competitions with previous competitions in terms of winners of the competitions, time required to complete the competitions, savings produced, and other relevant metrics; and (3) identifying the extent of any problems in implementing the results of the competitions, and plans for government monitoring of contracts awarded as a result of outsourcing.
What GAO Found
GAO noted that: (1) the Air Force held the vast majority of competitions completed between October 1995 and March 1998--41 of 53; (2) likewise, 85 percent of the positions competed were in the Air Force; (3) while the number of recently completed competitions is small, the agency procedures and GAO's analysis of a sample of completed cases indicate that DOD components are conducting these competitions in accordance with Office of Management and Budget Circular A-76 guidelines; (4) additionally, GAO identified only ten appeals under the A-76 administrative appeal process, with only one being upheld; (5) the private sector won about 60 percent of recent competitions compared to about 50 percent prior to 1995; (6) also, the time to complete single and multiple function competitions was 18 and 30 months, respectively, compared to an average of about 51 months for all prior competitions; (7) further, the competitions show significant potential for savings, largely driven by personnel reductions; (8) however, the data is too limited at this point to reach any conclusions about trends, and questions exist about the precision and consistency of savings estimates; (9) moreover limitations continue to exist in DOD databases used to record savings from A-76 competitions and their usefulness for tracking changes over time; (10) actions are still required to ensure that improvements are made in these databases and savings estimates from completed competitions are tracked over time; (11) the relatively few implementation problems were independent of whether the private or public sector had won the competition; (12) for example, a storage and warehousing contract was terminated for poor performance after a 19-month performance period; (13) in another case, full implementation of a public maintenance operation was delayed 17 months due to a delay in being able to recruit enough personnel to perform the work; and (14) lastly, resources expected to be devoted to monitoring contracts awarded to the private sector varied depending on the size and complexity of the functions being reviewed. |
gao_GAO-08-1159T | gao_GAO-08-1159T_0 | DOD’s Major Acquisition Programs Continue to Experience Significant Cost Growth and Schedule Delays
DOD is not receiving expected returns on its large investment in weapon systems. The total acquisition cost of DOD’s 2007 portfolio of major programs under development or in production has grown by nearly $300 billion over initial estimates. On average, the current portfolio of programs has experienced a 21-month delay in delivering initial operational capability to the warfighter, and 14 percent are more than 4 years late. Fragmented Processes, Unexecutable Business Cases, and Lack of Knowledge Underlie Poor Acquisition Outcomes
Over the past several years our work has highlighted a number of underlying systemic causes for cost growth and schedule delays both at the strategic and at the program level. At the strategic level, DOD’s processes for identifying warfighter needs, allocating resources, and developing and procuring weapon systems—which together define DOD’s overall weapon system investment strategy—are fragmented and broken. At the same time, program managers frequently change during a program’s development. The Way Forward: Potential Solutions
Our work shows that acquisition problems will likely persist until DOD provides a better foundation for buying the right things, the right way. This involves (1) maintaining the right mix of programs to invest in by making better decisions as to which programs should be pursued given existing and expected funding and, more importantly, deciding which programs should not be pursued; (2) ensuring that programs that are started can be executed by matching requirements with resources and locking in those requirements; and (3) making it clear that programs will then be executed based on knowledge and holding program managers responsible for that execution. They will require DOD to reexamine not only its acquisition process, but its requirement setting and funding processes as well. Finally, none of this will be achieved without a true partnership among the department, the military services, the Congress, and the defense industry. To enable accountability to be exercised at the program level once a program begins, DOD will need to (1) match program manager tenure with development or the delivery of a product; (2) tailor career paths and performance management systems to incentivize longer tenures; (3) strengthen training and career paths as needed to ensure program managers have the right qualifications to manage the programs they are assigned to; (4) empower program managers to execute their programs, including an examination of whether and how much additional authority can be provided over funding, staffing, and approving requirements proposed after the start of a program; and (5) develop and provide automated tools to enhance management and oversight as well as to reduce the time required to prepare status information. Recent Congressional Initiatives and DOD Actions Aim to Promote a More Disciplined, Knowledge-Based Acquisition Approach
Recognizing the need for more discipline and accountability in the acquisition process, Congress recently enacted legislation that, if followed, could result in a better chance to spend resources wisely. Likewise, DOD has recently begun to develop several initiatives, based in part on congressional direction and GAO recommendations that, if implemented properly, could also provide a foundation for establishing a well balanced investment strategy and sound, knowledge-based business cases for individual acquisition programs. Past efforts have had similar goals, yet we continue to find all too often that DOD’s investment decisions are too service- and program- centric and that the military services overpromise capabilities and underestimate costs to capture the funding needed to start and sustain development programs. It should not be necessary to take extraordinary steps to ensure needed capabilities are delivered to the warfighter on time and within costs. Defense Acquisitions: Results of Annual Assessment of DOD Weapon Programs. Defense Acquisitions: Assessments of Selected Weapon Programs. Best Practices: An Integrated Portfolio Management Approach to Weapon System Investments Could Improve DOD’s Acquisition Outcomes. Best Practices: Better Support of Weapon System Program Managers Needed to Improve Outcomes. Defense Acquisitions: Major Weapon Systems Continue to Experience Cost and Schedule Problems under DOD’s Revised Policy. | Why GAO Did This Study
Since 1990, GAO has designated the Department of Defense's (DOD) management of major weapon system acquisitions a high risk area. DOD has taken some action to improve acquisition outcomes, but its weapon programs continue to take longer, cost more, and deliver fewer capabilities than originally planned. These persistent problems--coupled with current operational demands--have impelled DOD to work outside of its traditional acquisition process to acquire equipment that meet urgent warfighter needs. Poor outcomes in DOD's weapon system programs reverberate across the entire federal government. Over the next 5 years, DOD expects to invest more than $357 billion on the development and procurement of major defense acquisition programs. Every dollar wasted on acquiring weapon systems is less money available for other priorities. This testimony describes DOD's current weapon system investment portfolio, the problems that contribute to cost and schedule increases, potential solutions based on past GAO recommendations, and recent legislative initiatives and DOD actions aimed at improving outcomes. It also provides some observations about what is needed for DOD to achieve lasting reform. The testimony is drawn from GAO's body of work on DOD's acquisition, requirements, and funding processes, as well as its most recent annual assessment of selected DOD weapon programs.
What GAO Found
DOD is not receiving expected returns on its large investment in weapon systems. Since fiscal year 2000, DOD significantly increased the number of major defense acquisition programs and its overall investment in them. During this same time period, the performance of the DOD portfolio has gotten worse. The total acquisition cost of DOD's 2007 portfolio of major programs under development or in production has grown by nearly $300 billion over initial estimates. Current programs are also experiencing, on average, a 21-month delay in delivering initial capabilities to the warfighter--often forcing DOD to spend additional funds on maintaining legacy systems. Systemic problems both at the strategic and at the program level underlie cost growth and schedule delays. At the strategic level, DOD's processes for identifying warfighter needs, allocating resources, and developing and procuring weapon systems--which together define DOD's overall weapon system investment strategy--are fragmented and broken. At the program level, weapon system programs are initiated without sufficient knowledge about system requirements, technology, and design maturity. Lacking such knowledge, managers rely on assumptions that are consistently too optimistic, exposing programs to significant and unnecessary risks and ultimately cost growth and schedule delays. Our work shows that acquisition problems will likely persist until DOD provides a better foundation for buying the right things, the right way. This involves making tough decisions as to which programs should be pursued, and more importantly, not pursued; making sure programs can be executed; locking in requirements before programs are ever started; and making it clear who is responsible for what and holding people accountable when responsibilities are not fulfilled. Recent congressionally mandated changes to the DOD acquisition system, as well as initiatives being pursued by the department, include positive steps that, if implemented properly, could provide a foundation for establishing a well balanced investment strategy, sound business cases for major weapon system acquisition programs, and a better chance to spend resources wisely. At the same time, DOD must begin making better choices that reflect joint capability needs and match requirements with resources. DOD investment decisions cannot continue to be dictated by the military services who propose programs that overpromise capabilities and underestimate costs to capture the funding needed to start and sustain development programs. To better ensure warfighter capabilities are delivered when needed and as promised, incentives must encourage a disciplined, knowledge-based approach, and a true partnership with shared goals must be developed among the department, the military services, the Congress, and the defense industry. |
gao_GAO-07-631 | gao_GAO-07-631_0 | Background
O&M appropriations support the training, supply, and equipment maintenance of military units as well as the administrative and facilities infrastructure of military bases. Along with military personnel costs, which are funded with separate military personnel appropriations, O&M funding is considered one of the major components of DOD’s funding for readiness. O&M and Services Contract Costs Have Increased Significantly
Driven primarily by increased operations associated with GWOT and other contingencies, DOD’s O&M costs increased substantially between fiscal years 1995 and 2005, with the most growth occurring since fiscal year 2001. DOD’s reliance on contractors for support services also increased substantially during this period in order to meet increased military requirements without an increase in active duty and civilian personnel and because federal government policy is to rely on the private sector for needed commercial services that are not inherently governmental in nature, which includes many of the requirements generated from the GWOT in areas such as logistics and base operations support. DOD total costs were almost constant between fiscal year 1995 and fiscal year 2000. DOD total costs increased about 51 percent between fiscal year 2000 and fiscal year 2005. Between fiscal years 2000 and 2005, DOD’s service contract costs in O&M-related areas increased over $40 billion, or 73 percent. DOD officials noted several factors that have contributed to DOD’s increased use of contractor support. For example, between fiscal years 1995 and 2005, DOD’s competitive sourcing, or A-76 public/private competition, program resulted in 570 decisions to contract out work that had been performed by over 39,000 uniformed and DOD civilian personnel. Data Are Insufficient to Determine Whether Increased Services Contracting Has Exacerbated O&M Cost Growth
Sufficient data are not available to determine whether increased services contracting has caused DOD’s costs to be higher than they would have been had the contracted activities been performed by uniformed or DOD civilian personnel. Although overall quantitative information was not available, our analysis of the military services’ reported information from its competitive sourcing program, commonly referred to as the A-76 public/private competition process, and case studies of O&M-related work contracted out at three installations showed that outsourcing decisions generally resulted in reducing the government’s costs for the work. However, compared to all O&M-related contracts, the number of A-76 public/private competition contracts is small, the results from this program may not be representative of the results from all services contracts for new or expanded O&M work, and certain limitations exist with the use of the A-76 data. DOD officials noted that existing policy generally does not require a public/private competition for private sector performance of a new or expanded commercial requirement and, as a result, in-house cost estimates have not been prepared for most of the work awarded to contractors as a result of increased O&M requirements from GWOT and other contingencies. Concerns from Increased Use of Contractor Support
Recently cited concerns associated with increased use of contractor support have included (1) the need for DOD to consider performing more work using government employees, (2) controlling support services contract costs, (3) reduced operational flexibility resulting from some outsourcing contracts, (4) the difficulty in ensuring accurate contract statements of work and sufficient contract oversight, and (5) questions on the adequacy of DOD’s services acquisition process. Concluding Observations
DOD’s O&M costs and reliance on contractors to perform O&M-related work have increased substantially since fiscal year 2001. Agency Comments
DOD made no comments on a draft of this report except for technical comments, which we incorporated where appropriate. Appendix I: Scope and Methodology
To identify the trends in operations and maintenance (O&M) costs and services contracts and the reasons for the trends, we reviewed and analyzed the Department of Defense’s (DOD) O&M appropriations, budget documentation, and services contract costs and identified the related trends for fiscal years 1995 through 2005. To provide perspectives on the benefits and concerns associated with increased contracting for support services, we discussed this issue with DOD officials. | Why GAO Did This Study
The Department of Defense (DOD) spent about 40 percent of the total defense budget to operate and maintain the nation's military forces in fiscal year 2005. Operation and maintenance (O&M) funding is considered one of the major components of funding for readiness. O&M appropriations fund the training, supply, and equipment maintenance of military units as well as the infrastructure of military bases. Over the past several years, DOD has increasingly used contractors, rather than uniformed or DOD civilian personnel, to provide O&M services in areas such as logistics, base operations support, information technology services, and administrative support. The House Appropriations Committee directed GAO to examine growing O&M costs and support services contracting. This GAO report (1) identifies the trends in O&M costs and services contracts and the reasons for the trends, (2) discusses whether increased services contracting has exacerbated the growth of O&M costs, and (3) provides perspectives on the benefits and concerns associated with increased contracting for support services. GAO analyzed DOD's O&M appropriations, budgets, and services contract costs over a 10-year period and developed case studies of outsourced O&M-related work at three installations. GAO is not making any recommendations. DOD made only technical comments on a draft of this report.
What GAO Found
DOD's O&M and services contract costs increased substantially between fiscal years 1995 and 2005, with most growth occurring since fiscal year 2001. DOD's O&M costs were almost constant between fiscal years 1995 and 2000. However, between fiscal years 2000 and 2005, DOD's O&M costs increased from $133.4 billion to $209.5 billion--an increase of $76.1 billion, or 57 percent, in constant fiscal year 2007 dollars. This growth was primarily caused by increased military operations associated with the global war on terrorism and other contingencies. In addition to increased O&M costs, DOD has increasingly relied on contractors to perform O&M-related work. Between fiscal years 2000 and 2005, DOD's services contract costs in O&M-related areas increased by 73 percent. According to DOD and service officials, several factors have contributed to the increased use of contractors for support services: (1) increased O&M requirements from the global war on terrorism 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. Sufficient data are not available to determine whether increased services contracting has caused DOD's costs to be higher than they would have been had the contracted activities been performed by uniformed or DOD civilian personnel. Because existing policy generally does not require a public/private competition for contractor performance of a new or expanded commercial requirement, in-house cost estimates have not been prepared for most of the work awarded to contractors as a result of increased O&M requirements from expanded military operations. Without this information, an overall determination cannot be made of the effect of increased services contracting on O&M cost growth. DOD does maintain data from its competitive sourcing, or A-76, program. GAO's analysis of the military services' reported information on 538 A-76 decisions during fiscal years 1995 through 2005 to contract out work formerly performed by uniformed and DOD civilian personnel showed that the decisions generally resulted in reducing the government's costs for the work. However, the number of A-76 public/private competition contracts is relatively small and the results from this program may not be representative of the results from all services contracts for new or expanded O&M work. Although DOD officials have cited certain benefits from increased use of contractors for support services, such as allowing more uniformed personnel to be available for combat missions, concerns have also been cited. For example, Congress recently required DOD to prescribe guidelines giving consideration to performing more work using government employees and GAO has noted concerns over DOD's approach to services acquisition. |
gao_GAO-16-496 | gao_GAO-16-496_0 | These licenses, as described in figure 1 below, allow cable or satellite operators to retransmit broadcast programming without obtaining permission from the copyright owners of that material. Retransmission consent applies only to commercial local broadcast television stations and allows them to grant permission to cable and satellite operators to retransmit their signals, usually in return for a negotiated payment. Additionally, content producers may receive royalty fees paid by cable and satellite operators to the U.S. The video content includes programs available on-demand and, in some cases, as a live stream of a local broadcast television station or cable network with the same schedule of shows and aired at the same time as is offered over-the-air or through a cable or satellite operator. This suggests that the same parties (e.g., broadcast networks, local broadcast television stations, and cable and satellite operators) that currently rely on the statutory licenses to facilitate the retransmission of broadcast content by cable and satellite operators already use market-based negotiations to license other public performance rights for broadcast content. Although feasible for most, some video marketplace participants may face negative effects and may have difficulty licensing secondary transmission rights to ensure distribution of their video content in the event of a phaseout. Copyright Office has reported, small cable operators are particularly vulnerable to increases in the costs of doing business. A Phaseout of the Statutory Licenses Could Impact Some Carriage Requirements
A phaseout of the statutory licenses could have implications for the must- carry and carry-one, carry-all requirements, as currently implemented. Must-carry: As we have previously reported, if Congress phases out the Section 111 statutory license, cable operators may have difficulty complying with the must-carry requirement. Cable operators would be required to transmit without modification local broadcast station signals containing copyrighted content for which they might not be able to license the needed public performance rights, or only be able to do so at a potentially significant burden and cost. Carry-one, carry-all: If Congress phases out the Section 122 statutory license, according to FCC and the U.S. Copyright Office, the carry- one, carry-all provision would no longer apply to satellite operators. Of the 42 selected stakeholders we interviewed, all of whom provided a response to our questions asking their position on a phaseout, 15 supported either a full or partial phaseout of the statutory licenses, and in some cases cited contingent factors:
Six of the 42 stakeholders supported a full phaseout of all three statutory licenses. In contrast, 14 of the 42 selected stakeholders said they did not support a phaseout. Some selected stakeholders also raised concerns about how, if the licenses were phased out, retransmission consent negotiations for the commercial local broadcast television station signal would co-exist with market-based negotiations to license the rights for the broadcast station’s content. Stakeholders Were Uncertain about the Potential Effects of a Phaseout of the Statutory Licenses on Consumers
Given the uncertainty about the implications of a phaseout on the carriage requirements and the video marketplace discussed above, most stakeholders did not have a position regarding the effect of a phaseout on consumer access to programming and prices paid for cable and satellite television. The U.S. Appendix I: Objectives, Scope, and Methodology
The Satellite Television Extension and Localism Act Reauthorization Act of 2014 included a provision for us to study and evaluate the possible effects of phasing out statutory licensing of the secondary transmission of television broadcast programming. This report examines (1) what is known about the potential feasibility of a phaseout of the statutory licenses and (2) what are selected stakeholder views on the implications of a phaseout of the statutory licenses. We conducted a content analysis based on these interviews to determine how the video marketplace has changed in the last 5 years, the potential feasibility of a phaseout of the statutory licenses based on the types of rights licensed in the video marketplace and negotiations stakeholders participate in, and the potential implications of a phaseout of carriage requirements, for the video marketplace, and for consumers’ access to programming and the prices consumers pay for cable and satellite services. Table 2 contains those industry participants we interviewed along with their role(s) in the marketplace. In addition, to understand the potential feasibility of a phaseout of the statutory licenses, we analyzed FCC’s Cable Service Price survey data from 2010 through 2014, and computer-processed data from Bloomberg Analytics on nationwide use of cable and satellite video services and trends in cable and satellite subscription rates from 2010 through 2014, the most recent available data. | Why GAO Did This Study
Most U.S. households rely on cable or satellite operators to watch television broadcast programming. These operators are able to provide their subscribers with broadcast programming—including local news—by retransmitting local broadcast television stations' over-the-air signals. Three statutory licenses permit operators to offer copyrighted broadcast programming in return for paying a government-set royalty fee. For 2014, these fees totaled about $320 million. Congress created statutory licenses as a cost-effective way for operators to air broadcast programming without obtaining permission to do so from those that own the copyrights for this programming. However, changes in the video marketplace have led some industry stakeholders to question the need for the licenses.
The Satellite Television Extension and Localism Reauthorization Act of 2014 included a provision for GAO to review possible effects of phasing out the statutory licenses. This report addresses (1) what is known about the feasibility of phasing out the statutory licenses and (2) views of selected stakeholders on the implications of such a phaseout. GAO analyzed FCC's cable price data from 2010 to 2014 and the U.S. Copyright Office's royalty data from 2014, the most recently available; reviewed relevant laws and reports; and interviewed 42 industry stakeholders, selected for their role in the video marketplace and expertise on the issue.
What GAO Found
A phaseout of the statutory licenses for broadcast programming may be feasible for most participants in the video marketplace, although there may be statutory implications for the “carriage requirements” governing which local broadcast television stations are carried by cable and satellite operators. These licenses allow cable and satellite operators to carry copyrighted content, such as television shows and movies, embedded in local broadcast stations' signals to their subscribers' television sets without negotiating with individual copyright owners. At the same time, these cable and satellite operators also engage in market-based negotiations to make some or all of this content available in other contexts, such as online. Of the 42 selected stakeholders GAO interviewed, 21 either use the statutory licenses or have their content provided through the statutory licenses. 20 of these 21 stakeholders—including content producers, broadcast networks, and cable and satellite operators—also engage in market-based negotiations to license broadcast content for video-on-demand or online viewing. Therefore, for stakeholders representing these business interests, a market-based approach to licensing secondary transmission rights may be feasible. However, some participants in the video marketplace—most notably, public television and small cable operators—may face logistical challenges and financial constraints in the event of a phaseout of the statutory licenses.
Phasing out the statutory licenses could have implications for the “must-carry” and “carry-one, carry-all requirements,” which require cable and satellite operators, respectively, to carry the signals of local broadcast television stations upon request. As GAO has previously reported, the must-carry requirement could become impractical if Congress phased out the statutory license that applies to cable operators, as these operators could find themselves in the paradoxical position of being required to transmit the copyrighted content on a local broadcast television station's signal for which they may not have the legal right to air. In addition, according to Federal Communications Commission (FCC) and the U.S. Copyright Office, the carry-one, carry-all requirement would no longer apply to satellite operators if the applicable statutory license were phased out because the requirement is premised on the use of the license.
The 42 selected stakeholders GAO interviewed varied in their support for a phaseout of the statutory licenses and many stakeholders were uncertain about the potential effects on the marketplace and consumers. For example:
15 supported a full or partial phaseout; 13 did not have a position; and 14 did not support a phaseout, because most believe the current system works,
About half were uncertain how a phaseout would affect the video marketplace. This uncertainty stems from uncertainty over how the carriage requirements may change and the video marketplace would respond; 10 thought a phaseout would affect competition in the market, but differed on whether this would increase or decrease programming costs.
6 thought consumers' access to programming would be negatively affected, 7 thought diversity of programs offered would decrease, and 13 thought consumer prices would rise. |
gao_GAO-12-701 | gao_GAO-12-701_0 | When delays occur, Treasury has to depart from normal cash and debt management operations to avoid exceeding the debt limit. In 1986 and 1987, after Treasury’s experiences during prior debt limit crises, Congress authorized the Secretary of the Treasury to use the CSRDF and the Government Securities Investment Fund of the Federal Employees’ Retirement System (G-Fund) to help Treasury manage federal debt when delays in raising the debt limit occur. Extraordinary Actions to Manage Debt Were Consistent with Legislation and Regulations
The extraordinary actions Treasury took during 2011 and January 2012 to manage federal debt when delays in raising the debt limit occurred were consistent with relevant authorizing legislation and regulations. These actions related to State and Local Government Series (SLGS) securities, and the CSRDF, Postal Service Retiree Health Benefits Fund (Postal Benefits Fund), G-Fund, and Exchange Stabilization Fund (ESF). On August 2, 2011, Treasury resumed the sale of SLGS securities. As such, Treasury did not redeem investments of the Postal Benefits Fund earlier than normal during 2011 and January 2012. Treasury Restored Uninvested Principal and Interest Losses as Authorized
In accordance with relevant legislation and consistent with the timing of the debt limit increases authorized by the BCA, Treasury restored the uninvested principal amounts to the CSRDF, Postal Benefits Fund, and G-Fund, and invested the uninvested principal to the ESF totaling approximately $299.5 billion. On August 2, 2011, and January 30, 2012, Treasury invested all uninvested principal for the ESF. During May through August 2011 and January 2012, interest losses to the ESF were $55,630 and $284,691, respectively, because its funds were not fully invested. Delays in Raising the Debt Limit Increased Treasury’s Borrowing Costs and Affected Its Operations
Congress usually votes on increasing the debt limit after fiscal policy decisions affecting federal borrowing have begun to take effect. Managing Debt When Delays in Raising the Debt Limit Occurred in 2011 and January 2012 Affected Treasury’s Normal Operations
Debt and cash management required more time and Treasury resources as delays in raising the debt limit occurred in 2011 and January 2012. However, delays in raising the debt limit can create uncertainty in the Treasury market and lead to higher borrowing costs. However, this does not account for the multiyear effects on increased costs for Treasury securities that will remain outstanding after fiscal year 2011. According to Treasury officials, these events diverted Treasury’s staff away from other important cash and debt management responsibilities as well as staff development and program oversight activities. This approach to raising the debt limit does not facilitate debate over specific tax or spending proposals and their effect on debt. In February 2011, we reported, and continue to believe, that Congress should consider ways to better link decisions about the debt limit with decisions about spending and revenue to avoid potential disruptions to the Treasury market and to help inform the fiscal policy debate in a timely way. Treasury also provided technical comments, which we incorporated as appropriate. Appendix I: Objectives, Scope, and Methodology
With regard to actions taken by the Department of the Treasury (Treasury) during 2011 and January 2012 to manage federal debt when delays in raising the debt limit occurred, our objectives were to (1) provide a chronology of the significant events, (2) analyze whether actions taken by Treasury were consistent with legal authorities provided to manage federal debt during such delays, (3) assess the extent to which Treasury restored uninvested principal and interest losses to federal government accounts in accordance with relevant legislation, and (4) analyze the effect that delays in raising the debt limit had on Treasury’s borrowing costs and operations. To address the first objective, we reviewed congressional actions increasing the debt limit and Treasury correspondence, announcements, and documentation of the extraordinary actions taken. Effect of Delayed Increase in the Debt Limit on Treasury’s Borrowing Costs
On the basis of our analysis, we estimated that delays in raising the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011. | Why GAO Did This Study
GAO previously examined challenges associated with managing cash and debt when delays in raising the debt limit occurred, focusing on the period from 1995 through 2010. In February 2011, GAO reported that delays in raising the debt limit create debt and cash challenges for Treasury, and these challenges have been exacerbated in recent years by a large growth in debt.
Delays in raising the debt limit occurred during 2011 and January 2012. GAO has prepared this report because of the nature of, and sensitivity toward, actions taken to manage federal debt during such delays. With regard to actions taken by Treasury during 2011 and January 2012 to manage federal debt when delays in raising the debt limit occurred, this report provides (1) a chronology of the significant events, (2) an analysis of whether actions taken by Treasury were consistent with legal authorities provided to manage federal debt during such delays, (3) an assessment of the extent to which Treasury restored uninvested principal and interest losses to federal government accounts in accordance with relevant legislation, and (4) an analysis of the effect that delays in raising the debt limit had on Treasurys borrowing costs and operations. To address these objectives, GAO reviewed Treasury correspondence and other documentation, analyzed Treasury and private security yield data, and interviewed Treasury officials. In commenting on GAOs draft report, Treasury broadly agreed with GAOs conclusions and provided technical comments, which GAO incorporated as appropriate.
What GAO Found
On August 2, 2011, Congress and the President enacted the Budget Control Act of 2011, which established a process that increased the debt limit to its current level of $16.4 trillion through incremental increases effective on August 2, 2011; after close of business on September 21, 2011; and after close of business on January 27, 2012. Delays in raising the debt limit occurred prior to the August 2011 and January 2012 increases, with the Department of the Treasury (Treasury) deviating from its normal debt management operations and taking a number of actions, referred to by Treasury as extraordinary actions, to avoid exceeding the debt limit.
The extraordinary actions Treasury took during 2011 and January 2012 to manage federal debt when delays in raising the debt limit occurred were consistent with relevant legislation and regulations. For 2011, these actions included suspending investments of the Civil Service Retirement and Disability Fund (CSRDF), the Postal Service Retiree Health Benefits Fund (Postal Benefits Fund), the Government Securities Investment Fund of the Federal Employees Retirement System (G-Fund), and the Exchange Stabilization Fund (ESF), and redeeming certain investments held by the CSRDF earlier than normal. For January 2012, Treasury suspended investments to the G-Fund and ESF.
In accordance with relevant legislation, Treasury restored the uninvested principal and interest losses for 2011 and January 2012 to the CSRDF, Postal Benefits Fund, and G-Fund. Treasury also invested the uninvested principal for 2011 and January 2012 to the ESF. However, Treasury did not restore interest losses to the ESF because it lacks legislative authority to do so.
Delays in raising the debt limit can create uncertainty in the Treasury market and lead to higher Treasury borrowing costs. GAO estimated that delays in raising the debt limit in 2011 led to an increase in Treasurys borrowing costs of about $1.3 billion in fiscal year 2011. However, this does not account for the multiyear effects on increased costs for Treasury securities that will remain outstanding after fiscal year 2011. Further, according to Treasury officials, the increased focus on debt limit-related operations as such delays occurred required more time and Treasury resources and diverted Treasurys staff away from other important cash and debt management responsibilities.
The debt limit does not restrict Congresss ability to enact spending and revenue legislation that affects the level of debt or otherwise constrains fiscal policy; it restricts Treasurys authority to borrow to finance the decisions already enacted by Congress and the President. Congress also usually votes on increasing the debt limit after fiscal policy decisions affecting federal borrowing have begun to take effect. This approach to raising the debt limit does not facilitate debate over specific tax or spending proposals and their effect on debt. In February 2011, GAO reported, and continues to believe, that Congress should consider ways to better link decisions about the debt limit with decisions about spending and revenue to avoid potential disruptions to the Treasury market and to help inform the fiscal policy debate in a timely way. |
gao_GGD-96-44 | gao_GGD-96-44_0 | To satisfy these requirements, RTC established its minority preference resolutions program in February 1994. Finally, under the provisions of the mortgage loan sale agreement, RTC was expected to credit, to the minority acquirers who exercised their option to purchase the mortgage loans, the interest accrued on the loans selected. We subsequently met with them to understand their experiences in purchasing loans from RTC under the minority preference resolutions program. RTC Established a Reasonable Process for Pricing Mortgage Loans
The pricing of mortgage loans is a difficult and complex process requiring the use of a sophisticated and technical methodology. This process provided for an independent valuation of 1- to 4-family residential mortgage loans that were offered for sale to minority acquirers of failed thrifts located in PMNs. RTC decided not to use the alternative methodology proposed by the minority acquirers because it believed that the methodology being used established a fair market value for the loans and that none of the mortgage loans were overpriced. As of October 11, 1995, 11 minority acquirers had purchased 4,063 mortgage loans for $289.6 million. | Why GAO Did This Study
Pursuant to a legislative requirement, GAO reviewed the Resolution Trust Corporation's (RTC) efforts during fiscal year (FY) 1995 to sell performing assets to acquirers of failed thrifts under the Minority Preference Resolutions Program.
What GAO Found
GAO found that: (1) RTC established a reasonable process for the independent valuation of residential mortgage loans that were offered for sale to minority acquirers; (2) RTC contracted out the initial phase of the loan pricing process to be fair to minority acquirers while maximizing the total return on asset disposition; (3) 11 of the 14 minorities who bought thrifts from RTC under the Minority Preference Resolutions Program purchased 4,063 residential mortgage loans during FY 1995 for $289.6 million; (4) the two valuation contractors priced mortgage loans using a methodology that considered adjustments in interest rates, credit risk, and was consistent with Freddie Mac's and Fannie Mae's pricing methodology; and (5) RTC did not adopt the loan pricing methodology proposed by minority acquirers who believed the mortgage loans were over priced, since it believed the existing methodology established a fair market value for the loans. |
gao_GAO-08-1018 | gao_GAO-08-1018_0 | The primary goal of FFMIA is for agencies to improve financial management systems so that financial information from these systems can be used to help manage agency programs more effectively and enhance the ability to prepare auditable financial statements. However, in light of the significant deficiencies and problems that auditors are still reporting, we remain concerned that criteria for substantial compliance with FFMIA requirements are not well defined or consistently implemented across the 24 CFO Act agencies. In its commentary and summary of Justice’s annual financial statement for fiscal year 2007, the Justice IG made the following comment about Justice’s financial system environment: “Inadequate, outdated, and in some cases non-integrated financial management systems do not provide certain automated financial transaction processing activities that are necessary to support management’s need for timely and accurate financial information throughout the year.”
In the IG’s 2007 list of top management and performance challenges facing Justice, the IG also reported that “the Department’s efforts over the past few years to implement the Unified Financial Management System (UFMS) to replace the seven major accounting systems currently used throughout the Department have been subject to fits and starts. We have previously reported that auditors have expressed a need for clarification on the definition of “substantial compliance” with FFMIA. A-127, we reemphasized our concerns with, among other things, the need for an appropriate definition of substantial compliance that focuses on financial management systems’ capabilities beyond financial statement preparation. Nevertheless, agency efforts far too often result in systems that do not meet their cost, schedule, and performance goals. For example, modernization efforts at DOD, HHS, and DHS have been hampered by agencies not following disciplined processes. Over a decade has passed since the enactment of FFMIA, and the majority of agencies continue to lack financial management systems—including processes, procedures, and controls—that substantially comply with the requirements of the act, even though the majority of agencies are achieving “clean” audit opinions. Accordingly, we reiterate our prior recommendation for OMB to clarify its guidance on the meaning of “substantial compliance” with FFMIA. In addition, we analyzed the results and information obtained from the recent Comptroller General’s forum on improving the federal government’s financial management systems. Moreover, FFMIA requires implementation of the U.S. Government Standard General Ledger (SGL). Even with these improvements, the Senate Committee on Governmental Affairs, which considered the legislation resulting in FFMIA, stated that federal agencies’ financial management systems were inadequate and could be improved by creating a means to use the audit process established by the CFO Act to assure that federal agencies would implement and maintain financial management systems that use the applicable federal financial management systems requirements and federal accounting standards. Financial Management: Achieving FFMIA Compliance Continues to Challenge Agencies. Financial Management: Sustained Efforts Needed to Achieve FFMIA Accountability. Financial Management: Effective Implementation of FFMIA Is Key to Providing Reliable, Useful, and Timely Data. Financial Management: Implementation of the Federal Financial Management Improvement Act of 1996. | Why GAO Did This Study
The ability to produce the financial information needed to efficiently and effectively manage the day-today operations of the federal government and provide accountability to taxpayers continues to be a challenge for many federal agencies. To help address this challenge, the Federal Financial Management Improvement Act of 1996 (FFMIA) requires the 24 Chief Financial Officers (CFO) Act agencies to implement and maintain financial management systems that comply substantially with (1) federal financial management systems requirements, (2) federal accounting standards, and (3) the U.S. Government Standard General Ledger (SGL). FFMIA also requires GAO to report annually on the implementation of the act. This report, primarily based on GAO and inspectors general reports and agencies' performance and accountability reports, discusses (1) the reported status of agencies' systems compliance with FFMIA and overall federal financial management improvement efforts and (2) the remaining challenges to achieving the goals of FFMIA.
What GAO Found
For fiscal year 2007, auditors reported 13 of 24 CFO Act agencies' financial management systems were not in substantial compliance with FFMIA requirements. For these 13 agencies, auditors reported a number of problems, as shown below, that illustrate how agency financial management systems-- including processes, procedures, and controls--are not providing reliable, useful, and timely information to help manage agency programs more effectively. As discussed in prior FFMIA reports, GAO remains concerned that the criteria for assessing substantial compliance with FFMIA are not well defined or consistently implemented across agencies. In addition, the majority of participants at a Comptroller General's forum on improving federal financial management systems said there is little agreement on the definition of "substantial compliance." To address GAO's prior recommendation, OMB is in the process of revising its guidance, and GAO has reemphasized its concerns with the need for an appropriate definition of substantial compliance that focuses on financial management systems' capabilities beyond financial statement preparation. Agencies' efforts to implement new systems far too often result in systems that do not meet cost, schedule, and performance goals. Recent modernization efforts by some agencies have been hampered by not following disciplined processes. To help avoid implementation problems, OMB continues to make progress on its financial management line of business initiative, which promotes business-driven, common solutions for agencies to enhance federal financial management, but additional efforts are needed. |
gao_GAO-10-145 | gao_GAO-10-145_0 | Conclusions
The current schedule for the full implementation of the Full Service program has been delayed by almost 10 months, and key functionality that was originally intended to be delivered in the program has been deferred indefinitely. As a result, program officials lack an accurate total cost estimate. A key cause of the program’s acquisition management weaknesses in the areas of project planning, risk management, and product integration is that USPS organizational policies do not set forth sufficient requirements for establishing effective practices in these areas. Weaknesses exist in the program monitoring and control area because the program management contract creates a conflict of interest by requiring that the contractor assess the quality of its own deliverables and oversee the program’s schedule, issues, and risks. This initiative is intended to build a system that improves the visibility into end-to-end mail processing operations through the use of new barcodes, gather more comprehensive and detailed service performance information and measure it against established performance standards, and create efficiencies by streamlining and automating certain aspects of the process USPS uses to verify mail from commercial mailers. As agreed, our objectives were to determine the current status and plans for the Intelligent Mail® Full Service program and if the Postal Service has capabilities in place to successfully acquire and manage the Intelligent Mail® Full Service program. The second release is expected to be implemented by the end of November 2009. However, the life cycle cost estimate that program officials prepared does not capture all the costs associated with the acquisition and implementation of the program, such as costs to integrate approximately 30 systems with the Full Service program. 8 While the Full Service program has implemented initial acquisition management activities, it does not have the full set of capabilities it needs to fully manage the acquisition. In 2003, USPS initiated the Intelligent Mail® program, which is intended to use information-rich standardized barcodes to track mail and thus provide USPS and mailers with better and timelier information about the mail. Table 2 provides a summary of the key functionality of the program. Moreover, the first deployed release is currently experiencing operational problems, thus requiring program officials to develop patches to resolve the issues. Until USPS implements the full set of controls essential to effectively managing the program, it increases the risk that the Full Service program will continue to encounter problems in meeting its performance, schedule, and cost objectives. | Why GAO Did This Study
In 2003, the United States Postal Service (USPS) initiated the Intelligent Mail program, which is intended to use information-rich standardized barcodes to track mail and thus provide USPS and mailers with better and timely information. A major component of this program is the Full Service program, which, among other things, is intended to build a system that improves the visibility into end-to-end mail processing operations through the use of new barcodes, and create efficiencies by streamlining and automating certain aspects of the process. GAO was asked to determine (1) the current status and plans for the Intelligent Mail Full Service program and (2) if the Postal Service has capabilities in place to successfully acquire and manage the Intelligent Mail Full Service program. GAO obtained and analyzed USPS documentation, reviewed previous GAO reports, interviewed officials, and compared acquisition best practices with USPS's practices.
What GAO Found
Program officials have completed key activities for implementing the Intelligent Mail Full Service program, such as deploying the first phase of the program; however, the current schedule for the program has been delayed by almost 10 months. As a result, the second phase of the program is not expected to be implemented until the end of November 2009. In addition, key functions of the program that were originally intended to be delivered have been deferred. Moreover, the life-cycle cost that program officials prepared does not capture all the costs associated with the acquisition and implementation of the program. As a result, program officials lack an accurate total cost estimate. Finally, the first deployed phase is currently experiencing operational problems. While the Full Service program has taken steps to implement acquisition management activities, it does not have the full set of capabilities it needs to fully manage the acquisition. A key cause of the program's acquisition management weaknesses in the areas of project planning, risk management, and product integration is that USPS organizational policies do not set forth sufficient requirements for establishing effective practices in these areas. Weaknesses exist in the program monitoring and control area because the program management contract creates a conflict of interest by requiring that the contractor assess the quality of its own deliverables and oversee the program's schedule, issues, and risks. Without these management capabilities in place, USPS increases the risk that this program will continue to encounter problems in meeting its performance, schedule, and cost objectives. |
gao_GAO-12-646 | gao_GAO-12-646_0 | 2. The increased balance has primarily resulted from the growing difference between the resources deposited into the FBF and use of these funds as determined through the budgeting and appropriations process. According to OMB staff and GSA officials, Congress provided less obligational authority than requested to balance competing priorities among government programs and meet spending caps. For example, OMB staff stated that if GSA were able to spend all of the funds collected by the FBF each year, these funds would generally be sufficient to fund GSA’s identified repairs and alterations projects and a modest new construction program. GSA officials also stated that the authorization to obligate and spend the balance of funds in the FBF, which it anticipates will double to $4.5 billion by the end of fiscal year 2013, would enhance the agency’s ability to manage its real property portfolio by ensuring that operations and maintenance are sufficiently funded and that capital investments, such as repairs and alterations and new construction projects, can continue to be made. Factors Affecting FBF
While budgeting and appropriations decisions have contributed to a significant increase in the FBF balance the last 2 years, various factors have limited the fund’s income from GSA’s real property operations. As measured by funds from operations—meaning revenue less costs excluding depreciation—GSA generated approximately $1.6 billion from its owned assets in 2006 and a nearly identical amount in 2011, though the annual amount varied during this time period. Specifically, the revenue from GSA’s owned portfolio adjusted for inflation has decreased by 2 percent. Costs. While the FBF as a whole has generated positive funds from operations, portions of GSA’s inventory operate at a loss. 2.) Even with these losses in its leased portfolio, GSA continues to rely extensively on leasing to meet its tenants’ increasing demand for office space. GSA is taking steps to manage its financial resources more effectively by reducing the size of its overall real estate portfolio, both in terms of the number of assets and the amount of square feet it manages. GSA Has Identified Billions in Repair Liability, but Decreased Funding May Increase Future Resource Demand from the FBF
Condition of GSA’s Assets
GSA measures its investment needs for maintaining and improving the condition of its owned facilities through its maintenance and repair liability, which identifies the estimated aggregated cost of future maintenance and repairs across its portfolio. The National Research Council estimates that each $1 in deferred maintenance results in a long-term capital liability of $4 to $5, and that “an accumulation of deferred investments over the long term may be significantly greater than the short-term savings that public-sector decision makers were initially seeking.”
GSA Could Better Conform Some of Its Capital Planning to Leading Practices
Making informed capital investment decisions requires full information about an agency’s current and long-term needs, alternative courses of action, and how potential projects compare amongst each other. In addition, the agency’s lack of a comprehensive long-term capital plan could limit its ability to provide perspective on how funding for requested projects aligns with its long-term investment strategy. Having such a plan would enable GSA and Congress to better evaluate the full range of real property priorities for using funds in the FBF both over the next 5 years and annually and, should fiscal constraints so dictate, identify which might take precedence over others. Recommendations for Executive Action
To enhance transparency, allow for more informed decision making related to GSA’s real property priorities, and make a stronger case for using funds in the FBF to meet capital investment needs, we recommend that the Administrator of GSA take the following two actions:
Document in its annual budget request to OMB how GSA uses its prioritization criteria to generate its annual and 5-year lists of prioritized projects to ensure that Congress understands the rationale behind prioritized project lists and that GSA is maximizing return on FBF investments. GSA agreed with our findings and recommendations. Appendix I: Objectives, Scope, and Methodology
This report focuses on (1) the factors that have affected the resources available in the Federal Buildings Fund (FBF); (2) the General Services Administration’s (GSA) potential maintenance and repair liability for its owned assets and the implications for the fund; and (3) the information GSA considers when evaluating capital investment proposals and how its practices compare to leading practices for making capital investment decisions. In addition, we reviewed GSA’s congressional budget requests to obtain information on the amounts of obligational authority requested by GSA compared to the amounts provided by Congress and the amount available in the fund from fiscal year 2006 through fiscal year 2012. Comparison to Leading Capital Practices
To assess how GSA’s use of Information to make capital investment decisions conforms with leading practices, we identified leading practices for using information to make capital investment decisions from GAO’s We also drew Executive Guide and OMB’s Capital Programming Guide.from the National Research Council’s research in this area. To assess GSA’s project prioritization and long-term capital planning, we interviewed GSA program and budget officials and documentation that GSA provided in these areas such as its 5-year prioritized project list from fiscal year 2011 to fiscal year 2015. | Why GAO Did This Study
GSA serves as the primary steward of the federal governments civilian real property portfolio of nearly 10,000 assets. Since 1972, GSA has funded its real property acquisition, operation, maintenance, and disposal through the rent it collects from tenant agencies that is deposited into the FBF. GAO has previously reported, however, that the FBF has faced difficulty providing sufficient resources to support GSAs mission.
GAO was asked to examine (1) the factors affecting the resources in the FBF, (2) GSAs potential repair liability and the implications for the FBF, and (3) the information GSA considers when evaluating capital investments and how these practices compare to leading practices for prioritizing capital investments. GAO reviewed legislation and GSA documents and compared leading practices on making capital investment decisions from OMB and GAO capital planning guidance to GSA practices. GAO also analyzed budget and financial data from fiscal years 2006 through 2012, facility condition data from fiscal year 2011, and interviewed GSA officials and OMB staff.
What GAO Found
The Federal Buildings Funds (FBF) balance has increased from $56 million in fiscal year 2007 to $2.2 billion in fiscal year 2012 primarily due to the growing difference between the resources provided to the FBF and the General Services Administrations (GSA) use of these funds as determined through the budgeting and appropriations process. In the last 2 years, Congress has provided fewer resources than requested by the executive branch and generated by the FBF. Office of Management and Budget (OMB) staff and GSA officials stated that if GSA were able to spend all of the funds collected by the FBF each year, these funds would generally be sufficient to fund GSAs needs. However, GSA, through the annual Presidents Budget Request, has sought less obligational authority than the balance available in the fund. While the FBFs balance has increased, various factors have limited the funds income. Funds from operationsrevenue less costs excluding depreciationthat contribute to FBF income have declined from 2006 to 2011 when adjusted for inflation. Revenues have declined while costs have outstripped inflation over this time period. In addition, portions of GSAs inventory operate at a loss. For example, about 30 percent of GSAs owned assets lost money in 2011, while GSAs total leased portfolio lost about $75 million. Despite the losses in its leased portfolio, GSA continues to rely extensively on leasing. GSA is taking steps to reduce the size of its overall real estate portfolio.
GSA has identified $4.6 billion in maintenance and repairs expected from 2012 to 2021 and anticipates that nearly a quarter of this amount is needed immediately. However, funding for maintenance and repairs has declined since 2006. GSA officials noted that reduced funding for capital reinvestments could result in deferred maintenance and repairs, and increase the cost and extent of such work in the future. These concerns are consistent with the National Research Councils findings that each $1 in deferred maintenance and repair work results in a long-term capital liability of $4 to $5.
GSAs use of information to make capital investment decisions conforms to some leading practices from GAO and OMB guidance, but GSA lacks a transparent process for prioritizing projects and a comprehensive long-term capital plan that fully aligns with leading practices. GSA keeps a baseline of information on its assets and needsas leading practices suggestthrough various tools and databases. GSAs process and guidance for evaluating capital investment alternatives substantially meet leading practices as its project planning process explores alternatives to meeting investment needs. GSAs process for prioritizing capital investments partially meets leading practices, but its project prioritization transparency could be improved by laying out in its annual budget submission how it uses its criteria to determine which projects get selected for funding over others. In addition, an improved comprehensive long-term capital plan could further GSAs ability to make informed choices about long-term investment decisions. Both OMB and GAO guidance emphasize the importance of developing a long-term capital plan to guide the implementation of organizational goals. Having such a plan would enable GSA and Congress to better evaluate a range of priorities over the next 5 years. In short, more transparency through a comprehensive long-term capital plan would allow for more informed decision making by GSA and Congress among competing priorities.
What GAO Recommends
GAO recommends that GSA (1) document in its budget submission how it prioritizes capital investments and (2) develop and annually submit a 5-year long-term capital plan to OMB and Congress. GSA agreed with our recommendations. Technical comments from GSA and OMB were incorporated as appropriate. |
gao_GAO-05-321T | gao_GAO-05-321T_0 | The Key Concepts Underlying Internal Control
Internal control represents an organization’s plans, methods, and procedures used to meet its missions, goals, and objectives and serves as the first line of defense in safeguarding assets and preventing and detecting errors, fraud, waste, abuse, and mismanagement. Internal control is to provide reasonable assurance that an organization’s objectives are achieved through (1) effective and efficient operations, (2) reliable financial reporting, and (3) compliance with laws and regulations. The Congress Has Long Recognized the Importance of Internal Control
The Congress has long recognized the importance of internal control, beginning with the Budget and Accounting Procedures Act of 1950, over 50 years ago. The 1950 act placed primary responsibility for establishing and maintaining internal control squarely on the shoulders of agency management. In 1982, when faced with a number of highly publicized internal control breakdowns, the Congress passed FMFIA with a goal of strengthening internal control and accounting systems. Under FMFIA, agency heads are required to establish a continuous process for assessment and improvement of their agency’s internal control and to publicly report on the status of their efforts by signing annual statements of assurance as to whether internal control is designed adequately and operating effectively. The act also required that the Comptroller General establish internal control standards and that OMB issue guidelines for agencies to follow in assessing their internal control against the Comptroller General’s standards. Early Experiences and Lessons Learned from Agency FMFIA Implementation
From the outset, agencies faced major challenges in implementing FMFIA. Starting in 1983, GAO monitored and reported on FMFIA implementation efforts across the government in a series of four reports from 1984 through 1989 as well as in numerous reports targeting specific agencies and programs. Our fourth governmentwide report, issued in 1989 for which the title, Ineffective Internal Controls Result in Ineffective Federal Programs and Billion in Losses, is still appropriate in today’s environment, concluded that while internal control was improving, the efforts were clearly not producing the results intended. It seemed that the assessment and reporting processes had, at least to some, become the endgame. Too much process and paper continued to be a problem, and in 1995 OMB made a major revision to Circular A-123 that relaxed the assessment and reporting requirements. In addition, it gave agencies the discretion to determine which tools to use in arriving at the annual assurance statement to the President and the Congress, with the stated aim of achieving a streamlined management control program that incorporated the then administration’s reinvention principles. The changes are intended to strengthen the requirements for conducting management’s assessment of internal control over financial reporting. The December 2004 revision to the Circular also emphasizes the need for agencies to integrate and coordinate internal control assessments with other internal control-related activities. In particular, we support the principles-based approach in the revised Circular for establishing and reporting on internal control that should increase accountability. Third, managers throughout an agency and at all levels will need to provide strong support for internal control. FMFIA does not call for an auditor opinion on management’s assessment of internal control over financial reporting nor does it call for an auditor opinion on the effectiveness of internal control. What is the maturity level of internal control over financial reporting? Of the 25 areas on GAO’s high-risk list, 14 relate to DOD, including DOD financial management. | Why GAO Did This Study
Internal control is at the heart of accountability for our nation's resources and how effectively government uses them. This testimony outlines the importance of internal control, summarizes the Congress's long-standing interest in internal control and the related statutory framework, discusses GAO's experiences and lessons learned from agency assessments since the early 1980s, and provides GAO's views on the Office of Management and Budget's (OMB) recent revisions to its Circular A- 123. GAO highlights six issues important to successful implementation of the revised Circular, specifically, the need for supplemental guidance and implementation tools; vigilance over the broader range of controls covering program objectives; strong support from managers throughout the agency, and at all levels; risk-based assessments and an appropriate balance between the costs and benefits of controls; management testing of controls in operation to assess if they are designed adequately and operating effectively; and management accountability for control breakdowns. Finally, GAO discusses its views on the importance of auditor opinions on internal control over financial reporting.
What GAO Found
Internal control represents an organization's plans, methods, and procedures used to meet its missions, goals, and objectives and serves as the first line of defense in safeguarding assets and preventing and detecting errors, fraud, waste, abuse, and mismanagement. Internal control provides reasonable assurance that an organizations' objectives are achieved through (1) effective and efficient operations, (2) reliable financial reporting, and (3) compliance with laws and regulations. The Congress has long recognized the importance of internal control, beginning with the Budget and Accounting Procedures Act of 1950, which placed primary responsibility for establishing and maintaining internal control squarely on the shoulders of management. In 1982, when faced with a number of highly publicized internal control breakdowns, the Congress passed the Federal Managers' Financial Integrity Act (FMFIA). FMFIA required agency heads to establish a continuous process for assessment and improvement of their agency's internal control and to annually report on the status of their efforts. In addition the act required the Comptroller General to issue internal control standards and OMB to issue guidelines for agencies to follow in assessing their internal controls. GAO monitored and reported on FMFIA implementation efforts across the government in a series of four reports from 1984 through 1989 as well as in numerous reports targeting specific agencies and programs. With each report, GAO noted the efforts under way, but also that more needed to be done. In 1989, GAO concluded that while internal control was improving, the efforts were clearly not producing the results intended. The assessment and reporting process itself appeared to have become the endgame, and many serious internal control and accounting systems weaknesses remain unresolved as evidenced by GAO's high risk report which highlights serious long-standing internal control problems. In 1995, OMB made a major revision to its guidance that provided a framework for integrating internal control assessments with other work performed and relaxed the assessment and reporting requirements, giving the agencies discretion to determine the tools to use in arriving at their annual FMFIA assurance statements. OMB's recent 2004 revisions to the internal control guidance are intended to strengthen the requirements for conducting management's assessment of control over financial reporting. GAO supports OMB's recent changes to Circular A-123 and in particular the principles-based approach for establishing and reporting on internal control. GAO also noted six specific issues that are important to successful implementation of OMB's revised guidance and discusses its views on the importance of auditor opinions on internal control over financial reporting. |
gao_GAO-07-525T | gao_GAO-07-525T_0 | Transferring Additional Security Responsibilities to the Iraqi Government Has Not Improved the Security Situation
Despite U.S. and Iraqi efforts to shift a greater share of the country’s defense to the Iraqi security forces, the security situation continues to deteriorate, impeding management of the more than $29 billion obligated for reconstruction and stabilization efforts. The State Department has reported that the number of army and police forces that have been trained and equipped increased from about 174,000 in July 2005 to about 323,000 in December 2006. In October 2006, the State Department reported that the recent increase in violence has hindered efforts to engage with Iraqi partners and illustrates the difficulty in making political and economic progress in the absence of adequate security conditions. According to portions of the January 2007 National Intelligence Estimate on Iraq that were declassified, sectarian divisions have eroded the dependability of many Iraqi units, and a number of Iraqi units have refused to serve outside the areas where they were recruited. Moreover, in November 2006, the State Department reported that corruption and infiltration by militias and others loyal to parties other than the Iraqi government have resulted in the Iraqi security forces being part of the problem in many areas instead of the solution. DOD Faces Weaknesses in the Program to Develop Iraqi Security Forces
Our work has identified weaknesses in the $15.4 billion program to develop Iraqi security forces. Although unit-level transition readiness assessments provide detailed information on Iraqi security force capabilities, the aggregate reports that DOD and State provide to Congress do not provide the information needed to determine the complete capabilities of the forces. Consequently, Congress will need additional information to assess the department’s supplemental request for $3.8 billion to train and equip Iraqi security forces. The State Department reports that the number of trained and equipped Iraqi security forces has increased from about 174,000 in July 2005 to about 323,000 in December 2006. However, these numbers do not provide a complete picture of the Iraqi security forces’ capabilities in part because they may overstate the number of forces on duty. DOD Faces Challenges in Managing Contracts and Contractors in Iraq that Could Lead to Fraud, Waste, and Abuse
While DOD relies heavily on contractors for reconstruction projects and support to its forces in Iraq, it faces several management and oversight challenges. Second, DOD lacks clear and comprehensive guidance and leadership for managing and overseeing contractors. Third, key contracting issues— including unclear requirements and not reaching agreement on key terms and conditions in a timely manner—have prevented DOD from achieving successful acquisition outcomes. Finally, military commanders and contract oversight personnel do not receive sufficient training to effectively manage contracts and contractors in Iraq. Most recently, in our December 2006 review of DOD’s use of contractors in Iraq, we found that DOD’s limited visibility unnecessarily increased contracting costs to the government and introduced unnecessary risk. DOD Needs Clear and Comprehensive Guidance and Leadership to Manage and Oversee Contractors
Since the mid-1990s, our reports have highlighted the need for clear and comprehensive guidance for managing and overseeing the use of contractors who support deployed forces. However, as our December 2006 report made clear, DOD’s guidance does not address a number of problems we have repeatedly raised—such as the need to provide adequate contract oversight personnel, to collect and share lessons learned on the use of contractors supporting deployed forces, or to provide DOD commanders and contract oversight personnel with training on the use of contractors overseas before deployment. According to U.S. officials, the inability of the Iraqi government to spend its 2006 capital budget also increases the uncertainty that it can sustain the rebuilding effort. Iraq Has Difficulty Sustaining the Billions of Dollars Invested in Infrastructure and Security
The United States has obligated about $14 billion to restore essential services such as oil, electricity, and water, and more than $15 billion to train, equip, and sustain Iraqi security forces. The Iraqi Government Faces Critical Challenges Staffing Effective Civil Service, Fighting Corruption, and Managing Resources
Iraqi government institutions are undeveloped and confront significant challenges in staffing a competent, non-partisan civil service; effectively fighting corruption; using modern technology; and managing resources effectively. This includes more accurate, reliable, and comprehensive information on the cost of the war, the capabilities of Iraqi security forces, and the results of U.S. efforts to build the managerial capacity of the Iraqi ministries. | Why GAO Did This Study
This testimony discusses some of the systemic conditions in Iraq that contribute to the fraud, waste, or abuse of U.S.-provided funds. Since 2003, DOD has reported total costs of about $257.5 billion for military operations in Iraq; these have increased from about $38.8 billion in fiscal year 2003 to about $83.4 billion in fiscal year 2006. The largest increase has been in operation and maintenance expenses, including items such as support for housing, food, and services; the repair of equipment; and transportation of people, supplies and equipment. Many of the operation and maintenance expenses are for services. Other U.S. government agencies had reported obligations of $29 billion for Iraqi reconstruction and stabilization, as of October 2006. These funds have been used for, among other things, infrastructure repair of the electricity, oil, water, and health sectors; training and equipping of the Iraqi security forces; and administrative expenses. Specifically, the testimony focuses on (1) security, (2) management and reporting of the program to train and equip Iraqi security forces, (3) contracting and contract management activities, and (4) Iraqi capacity and commitment to manage and fund reconstruction and security efforts.
What GAO Found
Despite U.S. and Iraqi efforts to shift a greater share of the country's defense on Iraqi forces, the security situation continues to deteriorate. Poor security conditions have hindered the management of the more than $29 billion that has been obligated for reconstruction and stabilization efforts since 2003. Although the State Department has reported that the number of Iraqi army and police forces that has been trained and equipped has increased from about 174,000 in July 2005 to about 323,000 in December 2006, overall security conditions in Iraq have deteriorated and grown more complex. These conditions have hindered efforts to engage with Iraqi partners and demonstrate the difficulty in making political and economic progress in the absence of adequate security conditions. GAO's ongoing work has identified weaknesses in the $15.4 billion program to support the development and sustainment of Iraqi security forces. Sectarian divisions have eroded the dependability of many Iraqi units, and a number of Iraqi units have refused to serve outside the areas where they were recruited. Corruption and infiltration by militias and others loyal to parties other than the Iraqi government have resulted in the Iraqi security forces being part of the problem in many areas instead of the solution. While unit-level transition readiness assessments (TRA) provide important information on Iraqi security force capabilities, the aggregate reports DOD provides to Congress based on these assessments do not provide adequate information to judge the capabilities of Iraqi forces. The DOD reports do not detail the adequacy of Iraqi security forces' manpower, equipment, logistical support, or training and may overstate the number of forces on duty. Congress will need additional information found in the TRAs to assess DOD's supplemental request for funds to train and equip Iraqi security forces. DOD's heavy reliance on contractors in Iraq, its long-standing contract and contract management problems, and poor security conditions provide opportunities for fraud, waste, and abuse. First, military commanders and senior DOD leaders do not have visibility over the total number of contractors who are supporting deployed forces in Iraq. As we have noted in the past, this limited visibility can unnecessarily increase costs to the government. Second, DOD lacks clear and comprehensive guidance and leadership for managing and overseeing contractors. In October 2005, DOD issued, for the first time, department-wide guidance on the use of contractors that support deployed forces. Although this guidance is a good first step, it does not address a number of problems we have repeatedly raised. Third, key contracting issues have prevented DOD from achieving successful acquisition outcomes. There has been an absence of well-defined requirements, and DOD has often entered into contract arrangements on reconstruction efforts and into contracts to support deployed forces that have posed additional risk to the government. Further, a lack of training hinders the ability of military commanders to adequately plan for the use of contractor support and inhibits the ability of contract oversight personnel to manage and oversee contracts and contractors in Iraq. Iraqi capacity and commitment to manage and fund reconstruction and security efforts remains limited. Key ministries face challenges in staffing a competent and non-partisan civil service, fighting corruption, and using modern technology. The inability of the Iraqi government to spend its 2006 capital budget also increases the uncertainty that it can sustain the rebuilding effort. |
gao_GAO-10-387T | gao_GAO-10-387T_0 | NASA Challenges
Retiring of the Space Shuttle
This year the space shuttle is scheduled to fly its final six missions to deliver hardware, supplies, and an international scientific laboratory to the International Space Station. NASA officials remain confident that the current flight manifest can be accomplished within the given time, and add that should delays occur, the International Space Station can still function. According to NASA, there are trade-offs the agency can make in what it can take up to support and sustain the station. However, failure to complete assembly as currently planned would further reduce the station’s ability to fulfill its research objectives and deprive the station of critical spare parts that only the shuttle can deliver. The recent review completed by the U.S. Human Space Flight Plans Committee included the option of flying the space shuttle through 2011 in order to complete the International Space Station. These include: disposing of the facilities that no longer are needed while complying with federal, state, and local environmental laws and regulations; ensuring the retention of critical skills within NASA’s workforce and its suppliers; and disposing of over 1 million equipment items. In addition, the total cost of shuttle retirement and transition—to include the disposition of the orbiters themselves—is not readily transparent in NASA’s budget. Utilizing and Sustaining the International Space Station
Although it is nearing completion, the International Space Station faces several significant challenges that may impede efforts to maximize utilization of research facilities available onboard. These include: the retirement of the Space Shuttle in 2010 and the loss of its unmatched capacity to move cargo and astronauts to and from the station; the uncertain future for the station beyond 2015; and the limited time available for research due to competing demands for the crew’s time. NASA concurred with our recommendation and is researching the possibility of developing a management body to manage space station research, which would make the International Space Station National Laboratory similar to other national laboratories. Continuing Difficulty Developing Large-scale Systems
NASA projects have produced ground-breaking research and advanced our understanding of the universe. However, one common theme binds most of the projects—they cost more and take longer to develop than planned. As we reported in our recently completed assessment of NASA’s 19 most costly projects—which have a combined life-cycle cost that exceeds $66 billion—the agency’s projects continue to experience cost growth and schedule delays. Ten of the 19 projects, which had there baselines set within the last 3 years, experienced cost growth averaging $121.1 million or 18.7 percent and the average schedule growth was 15 months. NASA is actively addressing these challenges. Continuing Weakness in Financial Management and Information Technology Systems
NASA has continually struggled to put its financial house in order. GAO and others have reported for years on these efforts. In fact, GAO has made a number of recommendations to address NASA’s financial management challenges. Moreover, the NASA Inspector General has identified financial management as one of NASA’s most serious challeng In a November 2008 report, the Inspector General found continuing weaknesses in NASA’s financial management process and systems, including internal controls over property accounting. We have also reported that NASA remains vulnerable to disruptions in its information technology network. NASA has made important progress in implementing security controls and aspects of its information security program. However, NASA has not always implemented sufficient controls to protect the confidentiality, integrity, and availability of the information and systems supporting its mission directorates. | Why GAO Did This Study
The National Aeronautics and Space Administration (NASA) is in the midst of many changes and one of the most challenging periods in its history. The space shuttle is slated to retire this year, the International Space Station nears completion but remains underutilized, and a new means of human space flight is under development. Most recently, the administration has proposed a new direction for NASA. Amid all this potential change, GAO was asked to review the key issues facing NASA. This testimony focuses on four areas: 1) retiring the space shuttle; 2) utilizing and sustaining the International Space Station; 3) continuing difficulty developing large-scale systems, including the next generation of human spaceflight systems; and 4) continuing weaknesses in financial management and information technology systems. In preparing this statement, GAO relied on completed work. To address some of these challenges, GAO has recommended that NASA: provide greater information on shuttle retirement costs to Congress, take actions aimed at more effective use of the station research facilities, develop business cases for acquisition programs, and improve financial and IT management. NASA concurred with GAO's International Space Station recommendations, and has improved some budgeting and management practices in response.
What GAO Found
The major challenges NASA faces include: (1) Retiring the Space Shuttle. The impending end of shuttle missions poses challenges to the completion and operation of the International Space Station, and will require NASA to carry out an array of activities to deal with shuttle staff, equipment, and property. This year the shuttle is scheduled to fly its final six missions to deliver hardware, supplies, and an international laboratory to the International Space Station. NASA officials remain confident that the current manifest can be accomplished within the given time, and add that should delays occur, the space station can still function. According to NASA, there are trade-offs the agency can make in what it can take up to support and sustain the station. However, failure to complete assembly would further reduce the station's ability to fulfill its research objectives and short the station of critical spare parts that only the shuttle can currently deliver. Retirement of the shuttle will require disposing of facilities; ensuring the retention of critical skills within NASA's workforce and its suppliers; and disposing of more than 1 million equipment items. (2) Utilizing the International Space Station. The space station, which is nearly complete, faces several significant challenges that may impede efforts to maximize utilization of its research facilities. These include the retirement of the shuttle and the loss of its unmatched capacity to move cargo and astronauts to and from the station; the uncertain future for the station beyond 2015; and the limited time available for research due to competing demands for the crew's time. (3) Developing Systems. A common theme in NASA projects--including the next generation of space flight efforts--is that they cost more and take longer to develop than planned. GAO again found this outcome in a recently completed assessment of NASA's 19 most costly projects--with a combined life-cycle cost of $66 billion. Within the last 3 years, 10 of the 19 projects experienced cost growth averaging $121.1 million or 18.7 percent, and the average schedule growth was 15 months. A number of these projects had experienced considerable cost growth before the most recent baselines were set. (4) Managing Finances and IT. NASA continues to struggle to put its financial house in order. GAO and others have reported for years on these efforts. The NASA Inspector General identified financial management as one of NASA's most serious challenges. In addition, NASA remains vulnerable to disruptions in its information technology network. NASA has made important progress in implementing security controls and aspects of its information security program. However, it has not always implemented sufficient controls to protect information and systems supporting its mission directorates. |
gao_RCED-99-98 | gao_RCED-99-98_0 | In fiscal year 1998, the Congress appropriated about $4.9 billion for the Community Development Block Grant Program. In particular, we examined whether (1) HUD’s on-site monitoring of grantees under the Grants Management System is adequate and (2) the Integrated Disbursement and Information System provides the data HUD needs to accurately assess grantees’ performance. Monitoring Under the Grants Management System Does Not Ensure That Grantees Are Managing Their Funds Appropriately to Achieve Program Objectives
While the Grants Management System provides a logical, structured approach to managing the four block grant programs, CPD’s monitoring under the system, of which IDIS is a critical part, does not ensure that program objectives are being met and that funds are being managed appropriately. Furthermore, CPD headquarters has reduced its oversight of the field offices because of a desire for a more collaborative relationship and because of resource constraints. Such breakdowns in monitoring make the Department vulnerable to fraud, waste, and abuse in its formula grants programs. CPD’s Implementation of the Grants Management System Does Not Ensure That On-Site Monitoring Occurs and That the Poorest Performing Grantees Are Reviewed
While HUD’s Grants Management Policy Notebook emphasizes the importance of on-site monitoring in implementing the Grants Management System, stating that on-site monitoring is an essential tool for determining whether important program requirements are being met, the five field offices we visited have generally conducted limited on-site monitoring of grantees and of those grantees CPD identifies as most in need of oversight or assistance. As we discuss in chapter 3, we found during our visits to field offices that grantees were not always entering complete and accurate information into IDIS and that the system cannot provide timely and accurate information on grantees’ performance. HUD’s Inspector General has also specifically faulted CPD’s monitoring of grantees. According to the directors of the field offices, the level of on-site monitoring is also lower because of a combination of a lack of staff resources and travel funds and increased responsibilities. Financial and Management Information System Is Not Providing the Information Needed to Manage and Monitor Grant Programs
CPD’s chief monitoring tool for the Grants Management System—the Integrated Disbursement and Information System (IDIS)—does not produce the complete, accurate, and timely information that the Department should obtain from a computerized database to effectively manage and monitor almost $6 billion in block grants. Furthermore, CPD cannot ensure that IDIS is safe from fraud and abuse because it has not put into place the security controls needed to safeguard the formula block grant funds. Specifically, (1) the process for establishing and maintaining grant activity information is time-consuming and cumbersome and provides ample opportunity for major data entry problems, (2) correcting major data entry problems in IDIS is difficult, (3) IDIS does not readily enable grantees to accurately report income generated by grant-funded revolving funds (program income), and (4) grantees find it difficult to produce comprehensive and timely reports using IDIS. | Why GAO Did This Study
Pursuant to a congressional request, GAO provided information on whether controls are in place to ensure that block grant programs' objectives are being achieved and that funds are being managed appropriately, focusing on whether: (1) the Department of Housing and Urban Development's (HUD) on-site monitoring of grantees under the Grants Management System is adequate; and (2) the Integrated Disbursement and Information System provides the data HUD needs to accurately assess grantees' performance.
What GAO Found
GAO noted that: (1) while the Grants Management System provides a logical, structured approach to managing the four block grant programs, HUD's monitoring under the system--including on-site monitoring of grantees and the Integrated Disbursement and Information System--does not ensure that the programs' objectives are being met and that grantees are managing their funds appropriately; (2) HUD considers its on-site monitoring of grantees essential, but GAO found this monitoring is inadequate; (3) the five field offices GAO visited (accounting for about 20 percent of all block grant funds in fiscal year (FY) 1998, or $1.18 billion) conduct on-site monitoring infrequently because of a shift to a more collaborative relationship with the grantees and because of a lack of resources, according to the directors of the field offices; (4) furthermore, on-site monitoring seldom targets the grantees that receive the poorest evaluations from the field officers compared with other grantees, and this monitoring is not uniform or comprehensive because the field officers lack specific guidance; (5) the reviews of some grantees conducted by GAO and others, especially HUD's Inspector General, have identified significant problems in grantees' finances and performance; (6) while such reviews are not generalizable to all block grant programs, these reviews, along with the breakdowns in monitoring, call into question the integrity of programs funded at nearly $6 billion in FY 1998, including their safeguards against fraud, waste, and abuse; (7) for its part, HUD's Integrated Disbursement and Information System does not provide the information HUD needs to accurately assess grantees' performance and thus does not compensate for these breakdowns in monitoring; (8) fraught with major design flaws, the information system makes the process for establishing and maintaining accounts difficult and provides ample opportunity for major problems with entering data, does not allow such problems to be corrected easily, cannot track the program income from the revolving funds that grantees establish, does not provide timely and accurate information, and has difficulty producing reports; and (9) GAO also determined that the security controls for the information system are weak and therefore do not provide assurance that the system is safe from fraud and abuse. |
gao_GAO-15-604T | gao_GAO-15-604T_0 | At the time of their injuries, 43 percent of and are neither subject to age restrictions nor taxed. FECA and Retirement under FERS
FECA beneficiaries receive different benefits past retirement age than workers who retire under a federal retirement system. In addition, Social Security benefits attributable to federal service are offset by FECA. Proposed FECA Revisions Would Reduce Median Wage Replacement Rates and Increase the Difference between Total- Disability Beneficiaries With and Without a Dependent
Our simulations of the effects of compensating non-USPS and USPS total-disability beneficiaries at the single rate of either 66-2/3 or 70 percent of wages at injury, regardless of the presence of dependents, reduced the median wage replacement rates. Median wage replacement rates overall, and within the subgroups we examined, were generally lower under the 66-2/3 percent compensation proposal. Proposed Single Rates Would Reduce Wage Replacement Rates
As we reported in 2012, compared to the current FECA program, both proposals reduced 2010 median wage replacement rates for total- disability non-USPS and USPS beneficiaries, as shown in figure 1. In contrast, 2 out of 5 non-USPS beneficiaries would have had less than 10 percent income growth, absent an injury. Years of Service Play a Key Role in the Comparison between FECA and FERS Benefits
Current Median FECA Benefit Packages Exceed 2010 FERS Benefit Packages
According to the retirement simulations from our 2012 reports comparing current FECA benefits to FERS benefits, we found that the overall median FECA benefit package (FECA benefits and TSP annuity) for both USPS and non-USPS FECA beneficiaries was greater than the current median FERS retirement benefit package (FERS annuity, TSP annuity, and Social Security). Specifically, the median FECA benefit package for non- USPS beneficiaries was 32 percent greater than the current median FERS—and 37 percent greater for USPS FECA beneficiaries. Proposals Would Roughly Equalize FECA and FERS Benefit Packages for 2010 Annuitants
Based on the simulations we conducted for our 2012 reports, we found that reducing FECA benefits once beneficiaries reach retirement age to 50 percent of wages at the time of injury would result in an overall median for the reduced FECA benefit package (reduced FECA plus the TSP) that is about 6 percent less than the median FERS benefit package for non- USPS annuitants. Under our simulation for USPS annuitants, the reduced FECA benefit package would be approximately equal to the median 2010 FERS benefit package. As a result, we conducted a simulation of a “mature” FERS that was coupled with the assumption that individuals have 30-year federal careers. Effects of Proposed FECA Revisions on Partial-disability Beneficiaries Depend on Post-Injury Earning Capacity and Employment Over Time
As we reported in 2012, partial-disability beneficiaries are fundamentally different from total-disability beneficiaries, as they receive reduced benefits based on their potential to be re-employed and have work earnings. However, the beneficiary’s total income comparisons under the current FECA program and the proposals were over 30 percentage points lower than those of the beneficiary in case study 3 who had the lowest total income comparisons of those beneficiaries with actual earnings LWECs. Effects of Proposals to Reduce FECA at Retirement Age Depend on Whether Partial- disability Beneficiaries Remain on FECA or Elect OPM Retirement Benefits
We have also found that the proposals to reduce FECA benefits at retirement age would primarily affect those partial-disability beneficiaries who continue to receive FECA benefits past retirement age. Since those beneficiaries who elect FERS retirement would not be affected by the proposed revisions to FECA compensation at retirement age, the overall effects of the proposals on partial-disability beneficiaries should be considered in the larger context of retirement options. In table 2, beneficiaries with: low earning capacities post-injury (case studies 1, 3, and 5) had FECA benefits that were more favorable than FERS benefits; high earning capacities post-injury (case studies 2 and 4) had FECA benefits that were less favorable than FERS benefits; and mid-range earning capacities post-injury (case studies 6 and 7) had FECA benefits whose favorability depended on their total years of federal service. We have also found that partial-disability beneficiaries who choose to remain on FECA past retirement age currently face lower FECA benefits in retirement as compared with total-disability beneficiaries, and would experience a reduction in benefits under the proposals. More specifically, we assessed the proposed changes by simulating the level of take-home pay or retirement benefits FECA beneficiaries would have received if they had not been injured, which provides a realistic basis for assessing how beneficiaries may be affected. While our analyses focused on how the median FECA beneficiary might be affected by proposed changes, it also highlighted how potential effects may vary for different subpopulations of beneficiaries, which can assist policymakers as they consider such changes to the FECA program. | Why GAO Did This Study
The FECA program, administered by the Department of Labor, provides wage-loss compensation to federal workers who sustained injuries or illnesses while performing federal duties. Benefits are adjusted for inflation and are not taxed nor subject to age restrictions. Initial FECA benefits are set at 75 percent of gross wages at the time of injury for beneficiaries with eligible dependents and 66-2/3 for those without. Some policymakers have raised questions about the level of FECA benefits, especially compared to federal retirement benefits. Prior proposals to revise FECA for future total- and partial-disability beneficiaries have included: setting initial FECA benefits at a single rate, regardless of whether the beneficiary has eligible dependents; and converting FECA benefits to 50 percent of applicable wages at time of injury—adjusted for inflation—once beneficiaries reach full Social Security retirement age.
This testimony presents results from GAO reports issued in fiscal year 2013. It summarizes (1) potential effects of the proposals to compensate total-disability FECA beneficiaries at a single rate; (2) potential effects of the proposal to reduce FECA benefits to 50 percent of applicable wages at full Social Security retirement age for total-disability beneficiaries; and (3) how partial-disability beneficiaries might fare under the proposed changes. For this work, GAO conducted simulations for USPS and non-USPS beneficiaries comparing FECA benefits to income (take-home pay or retirement benefits) a beneficiary would have had absent an injury and conducted case studies of partial-disability beneficiaries.
What GAO Found
In 2012, GAO ran simulations to analyze proposals—similar to a proposal discussed in the Department of Labor's 2016 budget justification—to set initial Federal Employees' Compensation Act (FECA) benefits at a single compensation rate. GAO found that the proposals reduced the median wage replacement rates—the percentage of take-home pay replaced by FECA—for total-disability beneficiaries. Specifically, according to GAO's simulation, in 2010 under the existing FECA program, the median wage replacement rates were 88 percent for U.S. Postal Service (USPS) beneficiaries and 80 percent for non-USPS beneficiaries. The proposal to use a single rate of 70 percent to compensate both those with and without dependents would reduce the beneficiaries' median wage replacement rates by 3 to 4 percentage points. The proposal to use a single rate of 66-2/3 percent would reduce the beneficiaries' median wage replacement rates by 7 to 8 percentage points.
The simulations for GAO's 2012 reports also found that proposals to reduce FECA benefits upon reaching Social Security retirement age would reduce beneficiaries' retirement income, bringing the median FECA benefits on par with or below the median retirement incomes individuals would have received absent their injuries. In simulations comparing FECA benefits to retirement benefits—both in 2010—GAO found that under the existing FECA program, the median FECA benefit package for total-disability retirement-age beneficiaries was 37 and 32 percent greater than the median 2010 retirement benefit package for USPS and non-USPS beneficiaries, respectively. This analysis focused on individuals covered under the Federal Employees Retirement System (FERS), which generally covers employees first hired in 1984 or later. GAO found that the proposal to reduce FECA benefits at the full Social Security retirement age would result in a median FECA package roughly equal to the median 2010 FERS retirement package. However, the median years of service for the FERS annuitants GAO analyzed were 16 to 18 years—which did not constitute a mature FERS system—so these simulations understated the future FERS benefit level. GAO then simulated a mature FERS system—intended to reflect benefits of workers with 30-year careers—and found that the median FECA benefit package under the proposed change would be 22 to 35 percent less than the median FERS retirement package.
The potential effects of the proposed changes to FECA on partial-disability beneficiaries would vary based on individual circumstances. Partial-disability beneficiaries differ fundamentally from total-disability beneficiaries, as they receive reduced FECA benefits based on a determination of their post-injury earning capacity. GAO's seven case studies of partial-disability beneficiaries showed variation based on characteristics such as earning capacity and actual earnings. For example, beneficiaries with high earning capacities based on actual earnings might elect to retire under FERS if their potential retirement benefits were higher than their current or reduced FECA benefit levels. They would, thus, not be affected by the proposed changes. In contrast, those beneficiaries with low earning capacities who might remain on FECA past retirement age would have their benefits reduced under the proposed change. |
gao_GAO-02-270T | gao_GAO-02-270T_0 | In 1986, after 17 years of negotiations, the United States and the FSM and the RMI entered into the Compact of Free Association. The three main U.S. goals for the Compact—(1) to secure self- government for the FSM and the RMI, (2) to assure certain national security rights for all the parties, and (3) to assist the FSM and the RMI in their efforts to advance economic development and self-sufficiency— represent a continuation of U.S. rights and obligations first embodied in the U.N. trusteeship agreement that made the United States the Administering Authority of the Trust Territory of the Pacific Islands. The provisions governing the amount and distribution of this economic assistance are due to expire, unless renegotiated and subsequently reauthorized by the Congress, in late 2003. Unlike economic assistance provisions, the Compact’s migration provisions are not scheduled to expire in 2003. Compact Funds Had Limited Impact and Accountability
While the FSM and the RMI spent nearly $1.6 billion in Compact direct funding during 1987 through 1998, these funds have contributed little to improving economic development. However, the causeway remains unfinished. Moreover, Interior resources devoted to Compact oversight were minimal. Interior officials have claimed that interagency disagreements between the Departments of State and the Interior concerning the level of and responsibility for oversight, and a Compact provision guaranteeing payment of Compact funds (“full faith and credit”), have limited the U.S. government’s ability to oversee the use of Compact funds and ensure that they are used effectively. Migrants were working mainly in low-skill, low-wage jobs and costing the islands’ governments an estimated $371 million to $399 million mainly in health care and education costs. Donors Recognized Challenges in Promoting Economic Self-Sufficiency and Alleviating Poverty
Major donors to Pacific Island nations have provided about $11 billion to this region from 1987 through 1999. Compact migration has clearly had a significant impact on Guam, Hawaii, and the CNMI and has required government services in key areas. The negotiation of new economic assistance presents an opportunity for the United States to benefit from its 15-year experience under the Compact and the experiences of other aid donors to Pacific region, in order to potentially increase the effectiveness of the assistance it provides. | What GAO Found
The Compact of Free Association between the United States and the Federated States of Micronesia and the Republic of the Marshall Islands provides direct U.S. economic assistance and extends U.S. domestic programs and federal services to these two Pacific Island nations. The Compact also allows for migration from Micronesia and the Marshall Islands to the United States and establishes U.S. defense rights and obligations in the region. The Compact's economic assistance provisions were scheduled to expire in late 2001. However, the provisions will remain in effect for two more months while the United States and the two Pacific Island nations renegotiate them. Congress must renegotiate and reauthorize the expiring provisions by late 2003 for economic assistance to continue uninterrupted. The $1.6 billion provided under the Compact through 1998 has had little impact on economic development in Micronesia and the Marshall Islands and was subject to limited accountability. U.S. oversight was limited by interagency disagreements between the Departments of Interior and State, a lack of resources devoted to Compact oversight, and Interior's belief that Compact provisions restricted its ability to require accountability and withhold funds. Because of the lack of opportunities in the region, thousands of citizens in Micronesia and the Marshall Islands have migrated to the United States. Migrants to Guam, Hawaii, and the commonwealth of the Northern Mariana Islands generally work in unskilled, low-paying jobs. Between 1996 and 2000, the local governments have spent at least $371 million on assistance--primarily health care and education. Since 1987, several multilateral organizations and donor nations, including the United States, have given nearly $12 billion to the two Pacific island nations to promote economic self-sufficiency and alleviate poverty. The major donors believe that many Pacific Island nations will not be able to improve development without continued assistance. |
gao_GAO-05-255 | gao_GAO-05-255_0 | Each mission package consists of systems made up of manned and unmanned vehicles and the subsystems these vehicles use in their missions. Additional crew will be needed to operate these systems. The Navy eventually conducted a requirements development process and analyzed a number of alternative solutions to a new ship but concluded that the LCS remained the best option. However, the requirements the Navy arrived at for LCS’s surface warfare capabilities were focused on small boats, and this did not include an analysis of the impact of larger surface threats in the littorals. When operating independently, such as during routine deployments to littoral waters, LCS may not be able to call upon assistance from larger U.S. forces. A Detailed Concept of Operations Has Been Developed for LCS but Faces a Number of Challenges in Implementation
Although there are no formal criteria for developing a concept of operations, the Navy has developed both a broad concept and more detailed plans as to how the LCS and its mission systems will be used to meet requirements. The concept of operations also includes several challenges that, if not met, may increase the risk in actual LCS operations. However, the Navy has not yet fully considered the LCS concept of operations in the force structure and procurement plans for the MH-60 helicopter, which is critical to all LCS missions. Since the helicopter is critical for LCS’s concept of operations, the ship’s operations will be significantly limited if the helicopters are not bought and made available. The Navy plans for a period of about 12 months between the time of delivery of the first Flight 0 ship and the start of construction for the first Flight 1 ship, provided the first Flight 0 ship is available on time. Immaturity in Mission Package Technologies Could Decrease the Experimental and Operational Utility of Flight 0 Ships
A number of the technologies chosen for the LCS mission packages are not mature, increasing the risk that the first ships will be of limited utility and not allow sufficient time for experimentation to influence design for follow-on ships. These factors could also impair the Navy’s ability to experiment with the Flight 0 ships and adequately gather and incorporate lessons learned into the designs for the Flight 1 ships. The basis of the procurement costs for the LCS seaframe appears to be more defined because the Navy has conducted a series of cost analyses to investigate the challenges in detailed design and construction. The Navy seeks to stabilize seaframe costs by establishing a $220 million cost target and working to meet this target by trading between capability and cost while assuring that seaframe performance meets threshold requirements. Other mission package costs are not covered by LCS program cost analyses. The developmental nature of the mission package technologies may affect more than the procurement, or recurring, costs of LCS. Recommendations for Executive Action
To help the Navy assess and mitigate operational, force structure, and technology risks associated with LCS, we are making the following three recommendations:
To determine whether surface threats larger than small boats do pose risks to the LCS when operating independently and to mitigate any risks the Navy subsequently identifies, we recommend that the Secretary of Defense direct the Secretary of the Navy to conduct an analysis of the effect of a surface threat larger than small boats on LCS operations and the impact on other naval forces in support of those operations. To allow the Navy to take full advantage of the technical and operational maturation of the Flight 0 ships before committing to the much larger purchases of follow-on ships, we recommend that the Secretary of Defense direct the Navy to revise its acquisition strategy to ensure that it has sufficiently experimented with both Flight 0 ship designs, captured lessons learned from Flight 0 operations with more than one of the mission packages, and mitigated operational and technology risks before selection of the design for an award of a detailed design and construction contract for Flight 1 is authorized. To assess the progress of technology development in LCS mission packages, we reviewed the basis of the Navy’s estimation of technology readiness and plans to bring these technologies to full maturity. | Why GAO Did This Study
To conduct operations in littorals--shallow coastal waters--the Navy plans to build a new class of surface warship: the Littoral Combat Ship (LCS). LCS is being designed to accomplish its missions through systems operating at a distance from the ship, such as helicopters and unmanned vehicles, and that will be contained in interchangeable mission packages. The Navy is using an accelerated approach to buy the LCS, building the ships in "flights." Flight 0, consisting of four ships, will provide limited capability and test the LCS concept. The schedule allows 12 months between the delivery of the first Flight 0 ship and the start of detailed design and construction for Flight 1 ships. Estimated procurement cost of the Flight 0 ships is $1.5 billion. The Congress directed GAO to review the LCS program. This report assesses the analytical basis of LCS requirements; the Navy's progress in defining the concept of operations; the technical maturity of the mission packages; and the basis of recurring costs for LCS.
What GAO Found
The formal analysis of requirements for U.S. littoral combat operations--conducted after the Navy established the LCS program--examined a number of options, such as the extent to which existing fleet assets or joint capabilities could be used. While the Navy concluded that the LCS remained the best option, it focused on LCS requirements for combating small boats. The Navy did not conduct an analysis of the impact of larger surface threats LCS may face. Such threats may increase the risk to LCS operations when no other nearby U.S. forces are available to help. The Navy has developed both a broad concept and more detailed plans on how the LCS will be employed. It has also identified a number of challenges that could put the LCS concept at risk, such as manning, logistics, and communications. For example, reduced manning--a key goal of the LCS program--may not be achievable because maintaining and operating the ship's mission packages, such as the MH-60 helicopter, may require more sailors than the current design allows. Further, the Navy has not yet incorporated the numbers of helicopters that will be needed to fulfill LCS's concept of operation into its force structure and procurement plans. If the Navy's efforts to meet these challenges are not successful, the Navy may not have sufficient time to experiment with the Flight 0 ships and integrate lessons learned into planning and designing for follow-on ships. While the Navy designed the first LCS to rely on proven technologies and systems, a number of technologies to be used in LCS's mission packages have yet to be sufficiently matured--that is, they have not been demonstrated in an operational environment--increasing the risk of cost and schedule increases if the technologies do not work as intended. Technologies must also be demonstrated for systems on the LCS seaframe. Other factors may affect the availability of mature technologies and subsystems, such as making the modifications necessary for adaptation to the LCS and transitioning projects from the laboratory to production. Collectively, these technology issues pose an additional challenge to the Navy's ability to sufficiently experiment with Flight 0 ships in time to inform the design efforts for follow-on ships. Procurement costs for the Flight 0 ships remain uncertain. The basis for the seaframe cost target--$220 million--appears to be more defined than for the mission packages, as the Navy has performed various cost analyses that consider the challenges in detailed design and construction. The Navy seeks to meet the cost target by trading between capability and cost. Cost data for the Flight 0 mission packages are not as firm in part because of the uncertainties associated with immature technologies. |
Subsets and Splits