prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: U S  agencies perform a wide variety of activities that contribute to export promotion, and responsibility for these activities is widely dispersed  Some of the services these agencies provide are intended, at least in part, to assist U S  companies in entering foreign markets or expanding their presence abroad  For example, the U S  government distributes trade-related information to exporters, conducts foreign country market research, and provides counseling to U S  companies throughout the export process  U S  agencies may also use diplomatic tools to advocate on behalf of U S  companies to help ensure they can compete on a level playing field in export markets  Three of these agencies—State, Commerce, and USDA—receive appropriations that are restricted from being used to promote the sale or export of U S  tobacco or tobacco products  These agencies promote the growth of other U S  exports through various activities, as discussed in table 1  Congress has restricted the use of funds that are generally appropriated for State, Commerce, and USDA from being used to promote the sale or export of U S  tobacco and tobacco products since the 1990s  In 1990, we reported that U S  policy and programs for assisting the export of tobacco and tobacco products worked at cross purposes to U S  health policy and initiatives, both domestically and internationally  Congress later restricted the use of funds that are generally appropriated to State, Commerce, and USDA from being used to promote the sale or export of U S  tobacco and tobacco products  During fiscal years 1994 through 2003, Congress prohibited funds generally appropriated for USDA through annual appropriations acts from being used to promote the sale or export of tobacco or tobacco products  In fiscal year 2004, Congress permanently prohibited funds appropriated for USDA from being used to promote the sale or export of tobacco or tobacco products  According to USDA officials, USDA stopped its efforts to gather and disseminate tobacco-related production and consumption information overseas in the early 2000s  Congress restricted the use of certain appropriated funds, including appropriations for Commerce and State, from being used to promote the sale or export of U S  tobacco and tobacco products from fiscal years 1998 through 2017  Congress passed the Departments of Commerce, Justice, State, the Judiciary and Related Agencies Appropriations Act, 1998, which prohibited the funds provided by the act from being used to promote the sale or export of tobacco or tobacco products  This act also prohibited the funds provided by the act from being used to seek the reduction or removal of foreign country restrictions on the marketing of tobacco or tobacco products  The act provided an exception for the funds to be used to address foreign-country restrictions on tobacco marketing that are not applied equally to all tobacco or tobacco products of the same type  These restrictions have been enacted through annual appropriations acts through fiscal year 2018  In fiscal year 2018, Congress altered the restriction language on tobacco promotion in the act making appropriations for State, which, according to State, makes promotion activities permissive with respect to the use of State appropriations  Congress used the term “should” in the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2018 (2018 State Appropriations Act) instead of the term “shall” as in prior acts making appropriations for State  Specifically, the 2018 State Appropriations Act states that “None of the funds made available by this Act should be available to promote the sale or export of tobacco or tobacco products       ” In contrast, prior acts making appropriations for State stated “None of the funds made available by this Act shall be available to promote the sale or export of tobacco or tobacco products       ” According to State officials, they interpreted the term “shall” in prior appropriations acts as a mandatory action, whereas the use of the term “should” gives the agency more discretion in how it addresses the restrictions  However, State has not changed how it addresses the restrictions and does not plan to promote the sale or export of U S  tobacco, according to State officials  The legislation restricting fiscal year 2018 appropriations provided to Commerce and USDA from being used to promote tobacco retains the mandatory “shall” language  According to Commerce and USDA officials, the change to State’s restriction language does not affect the agencies’ activities because Commerce and USDA are still subject to the mandatory restrictions outlined in their agencies’ appropriations language  State collaborates with Commerce, USDA, and other agencies to develop and periodically issue an interagency guidance cable to implement funding restrictions on promoting tobacco  According to officials, this cable serves as the primary source of guidance for implementing the restrictions on promoting tobacco for their officials at all posts overseas  State collaborates with Commerce, USDA, and other agencies to develop and periodically issue an interagency guidance cable to all posts overseas to facilitate their implementation of funding restrictions on promoting tobacco  State officials draft the updated cable and Commerce, USDA, and other agency officials have the opportunity to review and comment on it before State issues it through its cable system  This cable serves as the primary source of guidance for implementing the restrictions, according to officials at these agencies (see table 2)  State has updated and issued the interagency guidance cable four times since 2013 to address changes in tobacco technology and other emerging issues, according to State officials  We identified two significant changes to the cable over the past 5 years  Addition of information concerning attendance at corporate social responsibility events: In May 2013, State added a provision that post officials should consult with headquarters before attending corporate social responsibility events involving U S  tobacco companies  State officials in headquarters acknowledged that post officials may not link some activities, such as participating in corporate social responsibility events, to the promotion of or selling of products  They noted that this is why it is important to make post officials aware of the actions they should or should not take through the interagency guidance cable  Changes to the scope of tobacco products: In recent updates to the cable, State expanded the description of “tobacco and tobacco products” to address the emergence of new delivery systems for tobacco  Specifically, in 2014 State added the language “tobacco delivering products, such as electronic cigarettes” to provide an example of a tobacco product  In 2016, State changed the description to “electronic nicotine delivery systems such as e-cigarettes ” Then in 2018, State added “non-combustible products such as smokeless tobacco” to the description of tobacco products  In response to the revised funding restriction language in the 2018 State Appropriations Act, State modified the 2018 cable stating that the changes make promotion activities permissive with respect to the use of State appropriations  However, State decided not to change the portion of the cable describing specific actions officials should or should not take in the version it issued in April 2018, because according to State officials, they do not plan to promote tobacco  In addition, Commerce and USDA officials said that the change to State’s restriction language has not changed how they interpret the guidance  Commerce relies on both the interagency guidance cable as well as its client eligibility policy to implement restrictions on promoting tobacco  Commerce’s client eligibility policy applies to all export promotion services that Commerce provides and educates officials on how to effectively manage U S  company requests for commercial assistance  The policy’s section on exceptions and other bases for declining services to companies states that Commerce is prohibited by law from promoting the export of tobacco or tobacco-related products  Commerce issued its updated client eligibility policy in October 2018  USDA relies on the interagency guidance cable to provide direction to its officials overseas, and does not have agency-specific guidance for implementing its permanent funding restrictions on promoting tobacco  USDA officials said that the cable sufficiently addresses the funding restrictions on the agency’s promotion activities and helps to ensure that all officials serving at posts overseas conduct activities in a consistent manner  Most State, Commerce, and USDA officials overseas we interviewed were aware of the restrictions on promoting tobacco  Most officials we interviewed had received some guidance concerning the restrictions, but several officials did not recall receiving the interagency guidance cable  Moreover, two of the agencies’ current training courses do not address the restrictions  Officials in 21 of the 24 offices overseas we interviewed were aware of the restrictions  The three offices that were not aware of the restrictions were from State  Although these officials were not aware of the restrictions, they said they had never provided services to U S  tobacco companies  Commerce and USDA headquarters officials said that it is widely known within their agencies that staff should not promote tobacco  Commerce and USDA officials said the guidance concerning these restrictions has been consistent for many years and that staff in the field and in headquarters are very aware of the restrictions  Most officials overseas had received some guidance concerning the restrictions on promoting tobacco  Officials in 21 of the 24 offices overseas we interviewed had received written or verbal guidance concerning the restrictions on promoting tobacco at some point in their career  For example, officials in 15 offices mentioned receiving the State-issued interagency guidance cable when we asked them what type of tobacco-related guidance they had received  In addition, officials in four of the eight Commerce offices recalled receiving agency-specific guidance  Some officials said that their supervisors had informed them they are not allowed to promote tobacco exports  Some officials did not recall receiving the interagency guidance cable, which agency officials said serves as the primary source of guidance for implementing the restrictions, and some were not aware that State periodically issues the cable  For example, one USDA official stated that he could not recall the last time he received guidance and noted that cables can easily be overlooked  He recommended that USDA improve its efforts to distribute the cable and have supervisors maintain an annual checklist to ensure staff have read and understand it or incorporate it into annual training  A State official told us that he was in Washington, D C  when State issued the prior cable and he did not learn about it until he had been stationed at his next overseas post for several months  A Commerce official noted that some officials new to post may not receive the interagency guidance cable for several months  All officials working overseas can access the interagency guidance cable through the State cable database or access other resources if a tobacco- related issue arises  For example, the Commerce client eligibility policy and the interagency guidance cable are available on an internal Commerce website  USDA officials in headquarters stated that they do not remind officials overseas about the restrictions or available guidance, but that, in response to our audit work, they plan to send an annual reminder  Finally, many post officials we interviewed said that they are aware of the activities their colleagues are undertaking and would have the opportunity to educate their colleagues before they provided any services to a tobacco company  Officials in 15 of the 24 offices overseas we interviewed said they did not receive any training concerning restrictions on promoting tobacco  In the past, State, Commerce, and USDA did not include information about the funding restrictions or related guidance in training materials  State and USDA officials in headquarters confirmed that training materials for officials conducting export promotion activities overseas do not address funding restrictions on promoting tobacco  According to an official at State’s Foreign Service Institute, tobacco products may be discussed in a trade-related course when describing those products officials should not advocate for, or in the 6-month economic studies course when examining the nexus between trade issues and public policy  However, State could not provide documentation of where this is specifically addressed in its curriculum  A USDA official stated that none of the Foreign Agricultural Service training courses explicitly discuss restrictions on promoting tobacco  According to Commerce officials, the training for new trade specialists did not include information about the restrictions on promoting tobacco when Commerce last provided the training in 2014  However, in response to our audit work, Commerce added this information into its training materials for new trade specialists in September 2018  Officials who do not receive training on the restrictions early in their careers may not be aware that they are prohibited from promoting tobacco  For example, one Commerce official told us he did not know about the restrictions while serving at his first post when he attended a meeting that involved representatives from the tobacco industry  He noted that he now questions whether he would have attended the meeting if he had known about the restrictions  Federal internal control standards state that appropriate training, aimed at developing employee knowledge, skills, and abilities, is essential to an organization’s operational success  If agencies do not explicitly include information about the restrictions and related guidance in training materials for officials conducting export promotion activities overseas, officials may work at a post for several months, or longer, before learning about the restrictions  The State, Commerce, and USDA officials we interviewed said they have implemented the funding restrictions on tobacco as outlined in the interagency guidance cable issued by State  For example, post officials said they have not promoted the sale or export of tobacco or tobacco products or attended events solely sponsored by tobacco companies, though many officials said they attended events at which officials from tobacco companies were present  Post officials identified three areas of the guidance that may benefit from additional clarification, according to interviews with agency officials and our review of agency emails  Our interviews with State, Commerce, and USDA officials in 24 offices in nine countries and our review of agency documents, showed that posts have implemented the interagency guidance outlining actions they should not take (see table 3 ) Post officials identified three areas of the guidance that may benefit from additional clarification, according to our interviews with agency officials and our review of agency emails: attendance at events, the types of permitted services, and the description of tobacco products  Officials from all three agencies raised questions about whether and when it is permissible to attend events at which tobacco company representatives are present  The guidance does not specifically address attendance at events also attended by representatives of tobacco companies  State headquarters officials said the vast majority of questions received from posts concern whether personnel at a post may participate in an event when representatives from a company engaged in the tobacco industry are also expected to participate in that event  We also reviewed emails in which Commerce officials asked for additional guidance about attending events or meetings with tobacco companies  For example, one post official asked whether the embassy could invite a tobacco company to participate in an embassy-organized trade mission that would include meetings with the local governor and mayor  In this case, Commerce headquarters officials advised that the tobacco company’s participation could be construed as U S  government support for the company’s commercial activities and recommended against including the tobacco company  A USDA official in headquarters also noted that attending events could, in some cases, be construed as supporting tobacco companies, and noted that this is an area where staff could use more guidance  Representatives from several tobacco control organizations expressed concern that interactions between U S  government officials and representatives from tobacco companies at events organized by business associations created a perception that the U S  government supported tobacco company sales in the country  For example, in 2017 a business association hosted a trade mission to one Southeast Asian country that included representatives from 30 U S  companies, including a U S  tobacco company  In response, two tobacco control organizations wrote to the U S  ambassador in that country voicing their concern that U S  government officials’ attendance at meetings that included the tobacco company representatives violated the spirit of the interagency guidance cable and gave the appearance that the U S  government supports the tobacco company  Subsequently, the Deputy Chief of Mission distributed guidance specific to that post stating that officials were not allowed to attend a trade mission’s events or meetings if representatives from a tobacco company were scheduled to give a presentation  Several post officials said that attending events organized by business associations is a key function of their job  They attend these events to, among other things, exchange information about the local business climate and learn about the concerns of American companies  Commerce and USDA officials identified ambiguities in the guidance concerning the types of services they are allowed to provide to tobacco companies or the tobacco industry  In 14 of the 21 Commerce emails we reviewed, officials at posts asked for additional guidance about the types of services they are permitted to provide to tobacco companies or the types of companies or products they can support  For example, some post officials asked whether they could engage with the host country government to obtain information about pending tobacco-related legislation at the request of a tobacco company  In one case, Commerce headquarters advised post officials that the restrictions did not prohibit them from raising concerns on a legislative proposal that would discriminate against foreign tobacco companies  They further noted that because of the sensitive nature of tobacco-related issues, any policy decision to engage should be weighed carefully  Commerce’s client eligibility policy does not provide a description of the types of actions Commerce officials should and should not take with regards to tobacco companies and products  The interagency guidance cable also does not provide information about some types of services, such as whether officials should engage with host country government officials to learn about pending tobacco-related legislation  According to a USDA official, some officials overseas interpret “promotional” activities differently and did not agree on whether both marketing and trade-related activities, such as enforcing trade agreements, are promotional activities  Commerce officials at post asked for additional guidance about whether they could provide export promotion services to companies exporting certain tobacco-related products in 3 of the 21 emails we reviewed  For example, some Commerce officials asked whether they could provide services to companies selling component parts for electronic nicotine delivery systems, such as e-liquids  Commerce’s prior client eligibility policy, issued in May 2017, did not include a list of tobacco products covered by the policy; whereas, the interagency guidance cable issued in 2014 states that tobacco products include tobacco delivery systems, such as electronic cigarettes, and the updated version issued in 2018 added non-combustible products, such as smokeless tobacco, to this description  However, neither the interagency guidance cable nor Commerce’s updated client eligibility policy specifically states whether the description includes component parts for electronic cigarettes and other tobacco products  GAO previously reported that electronic cigarettes include a wide range of products that share the same basic design and generally consist of three main parts: a power source, a heating element, and a cartridge or tank containing liquid solution, which is often sold separately  According to State officials in headquarters, the guidance on promoting tobacco was written for a broad audience and to make post officials mindful of the restrictions  They said they trust that officials overseas will use their professional judgment and in-country expertise to determine if post’s support for an event or a company will be construed as promotion of a tobacco product  Moreover, State and Commerce officials said that they expect officials overseas to ask headquarters questions to clarify the interagency guidance cable  While federal standards for internal control state that management should clearly document internal controls in policies and guidance to prevent officials from failing to achieve an objective or address a risk, we found that the interagency guidance does not provide examples of the factors post officials should consider when attending business association events  The guidance also lacks sufficient examples of the types of services officials are allowed to provide to tobacco companies and a clear description of tobacco products  More specific guidance would help ensure that State, Commerce, and USDA officials consistently implement their agency-specific funding restrictions on promoting tobacco exports  The United States exported over $2 billion in tobacco and tobacco-related products in 2017  Congress has enacted restrictions on the use of certain appropriated funds to promote the sale or export of U S  tobacco or tobacco products since the 1990s, and State, Commerce, and USDA have developed and updated guidance to implement these restrictions  However, not all officials were aware of the restrictions and more than half had not received training about the restrictions  Including information about the restrictions in training materials would help make officials aware of the restrictions early in their careers and prompt them to seek guidance if a tobacco-related issue arises  If officials conducting export promotion activities are unaware of the funding restrictions on promoting tobacco sales and exports, they may also be unaware of the activities they should and should not undertake  Moreover, some officials said that the guidance is unclear in some areas  Although officials said they need to attend business association events to support all U S  companies conducting business in a country, they were unsure whether they can attend events where representatives from U S  tobacco companies may be present  In addition, some officials also indicated that the current guidance lacks clarity on the types of services officials are allowed to provide to tobacco interests and what constitutes a tobacco product  Although we did not identify any instances in which a State, Commerce, or USDA official directly promoted U S  tobacco products, clearer guidance would help to ensure that officials will consistently implement their agency-specific funding restrictions  We are making three recommendations, including two to State and one to USDA  Specifically: The Secretary of State should work with the Foreign Service Institute to include information about the funding restrictions and relevant guidance on promoting the sale or export of tobacco or tobacco products in its training materials for employees conducting export promotion activities overseas  (Recommendation 1) The Secretary of Agriculture should include information about the funding restrictions and relevant guidance on promoting the sale or export of tobacco or tobacco products in training materials for employees conducting export promotion activities overseas  (Recommendation 2) The Secretary of State, in consultation with the Secretary of Commerce and the Secretary of Agriculture, should assess the interagency guidance cable on promoting tobacco in light of questions raised by officials at posts overseas and update it to address ambiguities, as needed  (Recommendation 3) We provided a draft of this report to State, Commerce, USDA, and USTR for review and comment  In their comments, reproduced in appendix III, State concurred with our recommendations and described planned actions to address them  USDA concurred with the recommendation and told us that they had no comments on the draft report  Commerce and USTR told us that they had no comments on the draft report  As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date  At that time, we will send copies to the appropriate congressional committees, the Secretary of the Department of State, the Secretary of the Department of Commerce, the Secretary of the U S  Department of Agriculture, the U S  Trade Representative, and other interested parties  In addition, the report will be available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-3149 or gootnickd@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix IV  This report examines (1) the guidance select U S  agencies have issued to implement funding restrictions on promoting tobacco exports overseas, (2) to what extent overseas officials from select U S  agencies were aware of the restrictions and guidance, and (3) to what extent select U S  agencies have implemented this guidance overseas  To address our first objective, we reviewed U S  appropriations laws that prohibited the funds appropriated therein from being used to promote the sale or export of tobacco or tobacco products  We also reviewed guidance issued by the Departments of State (State) and Commerce (Commerce) concerning the promotion of tobacco exports overseas  We also interviewed officials in headquarters from State, Commerce, the U S  Department of Agriculture (USDA), and the Office of the U S  Trade Representative (USTR) about the funding restrictions on promoting tobacco exports overseas and the development and revision of guidance on tobacco promotion  To address our second objective, we interviewed officials in headquarters from State, Commerce, and USDA about any training officials posted overseas receive concerning the funding restrictions on promoting tobacco exports  In addition, we held structured interviews with 35 State, Commerce, and USDA officials overseas conducting export promotion activities and reached out to an additional 10 officials to ask about activities associated with the solicitation of gifts and attendance at corporate social responsibility events  These officials were located across 11 posts and in 9 countries  We interviewed officials in Cambodia, Croatia, Dominican Republic, Honduras, Indonesia, Philippines, South Africa, Thailand, and Vietnam  Because multiple officials from one agency attended a meeting in some cases, we are reporting their combined responses as one “office” response  Thus, we are reporting the results from the 24 offices we interviewed—9 State, 8 Commerce, and 7 USDA offices  We selected this non-generalizable sample of countries based on criteria that included the countries’ large or increasing amounts of U S  tobacco imports, relatively high tobacco smoking prevalence rates, and geographic dispersion  The information obtained from these interviews is neither generalizable nor reflects the experiences of all State, Commerce, and USDA officials serving at posts overseas, but it does provide insights into officials’ experiences at post and illustrative examples across our sample on the topics discussed  To address our third objective, we interviewed officials in headquarters from State, Commerce, and USDA about post officials’ implementation of guidance regarding the promotion of tobacco exports, the types of questions they receive from post officials about the funding restrictions and guidance, and the additional advice they provide to post officials overseas  We asked post officials about the clarity of guidance, whether they attended events sponsored or attended by representatives of U S  tobacco companies, and whether they discussed tobacco-related issues with host country government officials during our structured interviews with the 24 State, Commerce, and USDA offices overseas  We also analyzed a Commerce database, agency emails, and State cables and conducted a literature search  Commerce documents all the fee-based services it provides to companies in a database  We obtained a list of approximately 30,000 fee-based services Commerce provided in fiscal years 2013 through 2017, which included the name of the companies to which Commerce provided these services  We then downloaded a list of 763 U S  tobacco companies from Nexus using criteria such as industry classification codes related to tobacco and tobacco products and the location of company headquarters  We limited the list of U S  tobacco companies to those with revenues greater than $5 million  We then compared the two lists to determine if Commerce provided any fee-based services to U S  tobacco companies  To assess the reliability of the Commerce fee-based services data, we reviewed relevant documentation and interviewed knowledgeable officials about system controls  We determined that Commerce’s fee-based services data were sufficiently reliable for the purposes of our reporting objectives  In addition, we requested State, Commerce, and USDA email communications concerning tobacco-related issues sent between January 2015 and February 2018 from post officials to headquarters  State was only able to provide one such email  USDA provided several emails, but the emails were not from USDA post officials to USDA officials in headquarters  Commerce provided us 21 emails that matched our request and an additional 20 emails from officials working throughout the United States  We analyzed the Commerce email communications to identify commonly asked questions or concerns about the existing guidance and actions the agencies should take to support U S  tobacco companies or the tobacco industry  We also requested State cables from the eight countries in our sample sent between January 2013 and December 2017 that referenced at least 1 of the 10 U S  tobacco companies with the highest revenues  We received and reviewed cables from six of these countries  We also conducted a literature search to identify instances in which U S  government officials may have conducted activities addressed by the interagency tobacco guidance cable  To identify relevant articles, such as trade or industry articles, we searched various databases, including ProQuest and Nexus  From these sources, we identified one article relevant to our research objective  We performed these searches in December 2017 and searched for articles published from January 2013 to December 2017  We also interviewed representatives of the tobacco control community and business associations to obtain their perspectives concerning U S  government support for tobacco exports and U S  government interactions with U S  tobacco companies  Specifically, we interviewed the World Health Organization (WHO), four global or regional tobacco control nongovernmental organizations, and several local nongovernmental organizations in two countries in our scope  In addition, we interviewed officials from the local American Chamber of Commerce and the U S - Association of Southeast Asian Nations Business Council in two countries  The information obtained from these interviews is neither generalizable nor reflects the experiences of all tobacco control organizations or business associations, but it does provide insights into these officials’ experiences  We conducted this performance audit from November 2017 to December 2018 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  The United States exported over $2 1 billion in tobacco and tobacco products in 2017  Figure 1 shows how tobacco exports fluctuated from 2007 to 2017  Specifically, total tobacco exports have ranged from a high of approximately $2 4 billion in 2007 to a low of about $1 7 billion in 2012  U S  tobacco exports to Asia have decreased by 68 percent over the past 11 years, whereas exports to North America have increased 10-fold (see fig  2)  Most of the decrease in exports to Asia is attributable to reduced exports to Japan, which fell 95 percent from 2007 to 2017  Most of the increases in exports to North America are attributable to Canada, which accounted for approximately 40 percent of total U S  tobacco exports in 2017  David B  Gootnick, (202) 512-3149 or gootnickd@gao gov  In addition to the contact named above, Cheryl Goodman (Assistant Director), Celia Thomas (Assistant Director), Amanda Bartine, Leah DeWolf, Jewel Conrad, Aldo Salerno, and Neil Doherty made key contributions to this report  Grace Lui, Justin Fisher, and Ming Chen provided technical assistance 


Report 2: In order to receive federal matching funds, states report expenditures quarterly to CMS on the CMS-64  States are required to report their expenditures to CMS within 30 days of the end of each quarter, but may adjust their past reporting for up to 2 years after the expenditure was made, referred to as the 2-year filing limit  Adjustments can reflect resolved disputes or reclassifications of expenditures  Expenditures reported after the 2-year filing limit are generally not eligible for a federal match, with certain exceptions  The CMS-64 is a series of forms that capture expenditure data for different aspects of states’ Medicaid programs, such as different types of services, populations, and different federal matching rates  (See table 1 for examples of the expenditure types captured by the CMS-64 ) States report their expenditures quarterly on the CMS-64 at an aggregate level— such as a state’s total expenditures for such categories of services as inpatient hospital services—and these reported expenditures are not linked to individual enrollees or services  States’ reporting may vary depending on the features of their Medicaid program  Some examples of this variation include the following: States that expanded eligibility under PPACA would need to report expenditures not only by the type of services (e g , inpatient hospital services), but also by populations receiving different federal matching rates, such as expansion enrollees  States with waivers—that is, where the state received approval from HHS to waive certain Medicaid requirements in order to test and evaluate new approaches for delivering and financing care under a demonstration—would need to report those expenditures associated with these waivers on additional forms  CMS is responsible for assuring that expenditures reported by states are supported and allowable, meaning that the state actually made and recorded the expenditure and that the expenditure is consistent with Medicaid requirements  CMS regional offices perform the ongoing oversight, with enhanced oversight procedures in the 20 states with the highest federal Medicaid expenditures  (See fig 1) CMS is required to review the expenditures reported by states each quarter  (See fig  2 ) Regional office reviewers have 50 days to review the expenditures and compute the federal share of states’ Medicaid expenditures  As part of the quarterly review, regional office reviewers also check that expenditures receive the correct matching rate  In general, the amount of federal funds that states receive for Medicaid services is determined annually by a statutory formula—the Federal Medical Assistance Percentage (FMAP), which results in a specific federal matching rate for each state  However, there are a number of exceptions where higher federal matching rates can apply for certain types of beneficiaries, services, or administrative costs  See table 2 for examples of higher matching rates that apply for expenditures for certain types of enrollees, services, or administrative costs  When CMS identifies questionable expenditures or errors through its reviews, there are several ways that they can be resolved, as summarized below  Deferral of federal funds  CMS can defer federal matching funds if, during the quarterly review, the regional office reviewer needs additional information to determine whether a particular expenditure is allowable  The reviewer may recommend that CMS defer the expenditure until the state provides additional support or corrects the reporting  State reducing reported expenditures  If the state agrees that the questionable expenditure is an error, the state can submit an adjusted report during the quarterly review or make an adjustment in a subsequent quarter  These adjustments prevent federal payments for those expenditures  Disallowance of expenditure  If CMS determines an expenditure is not allowable, CMS can issue a disallowance, and the state returns federal funds through reductions in future federal allocations  States may appeal disallowances  CMS uses a variety of processes to assure that state-reported expenditures are supported during quarterly reviews and performs focused financial management reviews on expenditures considered at risk of not complying with Medicaid requirements  Although we found that CMS was identifying errors and compliance issues using both review methods, we also found weaknesses in how CMS targets its oversight resources to address risks  CMS uses quarterly reviews to assess whether expenditures are supported by the state’s accounting systems; are in accordance with CMS approved methodologies, plans, and spending caps; and whether there are significant unexplained variances—changes in expenditures— from one quarter to the next (referred to as a variance analysis)  CMS review procedures include validation measures that check to ensure that expenditures were reported within the 2-year limit, which is a check done on all types of expenditures  Another validation measure compares expenditures to various approval documents  For example, when a state has a waiver in place, expenditures are reviewed against waiver agreements that authorize payment for specified services or populations  Other examples include comparing supplemental payment expenditures to caps set for those expenditures  (See table 3 ) Our examination of the quarterly reviews indicated that the reviews involved significant coordination with other CMS staff and the state  In addition to reviewing state documentation, officials from two regional offices told us that they consult other regional office staff who oversee the approval of new expenditures to ensure that expenditures reflect approved program features  For example, officials in region 9 told us that in reviewing managed care expenditures, they consult with their colleagues who review the state’s payment methodologies for capitated payments  In reviewing information technology development expenditures—which are subject to a higher federal matching rate— reviewers for all six selected states examined advanced planning documents, which requires coordination with staff who approve those documents to ensure that the state was receiving the correct matching rates and staying within the approved amounts  With regard to coordination with states, we found that regional reviewers for all six reviews contacted states to follow-up on issues identified during the review  Officials also described being in regular contact with states to stay abreast of program, system, and staffing changes to inform their reviews  For example, according to regional officials, Arkansas experienced some significant and unexpected staffing challenges in 2016 that resulted in delays in the state reporting expenditures and returning federal overpayments, and the reviewer worked closely with state staff to track the state’s progress  We found evidence that reviewers identified errors during their quarterly reviews  In the six quarterly reviews we examined, regional offices identified errors in three of the six states  For example, region 3 reviewers found errors in Maryland’s expenditure reporting—including claims for the wrong matching rate for two enrollees who were not eligible for PPACA’s Medicaid expansion and reporting provider incentive payments on the wrong line—and worked with the state to correct those errors  Additionally, region 9 reviewers found errors in California’s reporting of expenditures  For example, they found that the state reported waiver expenditures for the incorrect time period, which has implications for CMS’s ability to monitor and enforce spending limits for the waiver  Reviewers worked with the state to correct those errors  To supplement the quarterly reviews, CMS generally directs regional offices to conduct a focused financial management review (FMR) each year on an area of high risk within the region, typically within one state  According to regional officials, CMS uses these reviews to investigate expenditures in greater depth and detail than is reasonable within the timeframes of a quarterly review  For example, reviewers can examine individual claims for services from providers or the methodologies developed for certain payment types  Regional reviewers also use these reviews to investigate errors that could not have been detected by the quarterly review  For example, regional office 6 officials told us that they uncovered inappropriate financing arrangements when they used an FMR to examine how Texas financed the state share of its supplemental payments to hospitals in one of its counties  To do so, the regional office reviewed payments from the state to the provider, project plans, and interviewed providers—steps that are not part of the quarterly review process  Rather, in the quarterly review, the reviewer only checks that state-reported payments are supported by state accounting records and are within applicable caps; thus, inappropriate financing of the state share would not have been detected through the quarterly review  In fiscal years 2014 through 2017, CMS used FMRs to review various expenditures considered to be at risk for not complying with Medicaid requirements  Specifically, as outlined in annual work plans, regional offices planned to conduct 31 FMRs and estimated that the total amount of federal funds at risk in expenditure areas covered by their planned reviews was $12 billion  (See app  I ) Planned FMRs targeted a wide range of topics, with the reviews most frequently targeting expenditures for the Medicaid expansion population  (See table 4 ) We found that CMS frequently identified compliance issues through FMRs  As of March 2018, CMS reported that reviewers had identified compliance issues with financial impact in 11 of the 31 planned FMRs, though most of those findings were still under review  More findings from the planned FMRs are likely as some of the reviews were still ongoing  We reviewed the draft results for 5 FMRs  Among these, CMS found that four states were reporting expenditures that were not allowable  For example, as noted earlier, a 2014 FMR on supplemental payments in Texas revealed inappropriate funding arrangements, and CMS issued a disallowance for approximately $27 million  In some cases, FMRs did not have apparent financial findings, but identified significant internal control weaknesses in the state and recommended specific corrective actions— such as better aligning eligibility and expenditures systems to better detect and correct irregularities—that would provide greater assurances that federal funds are appropriately spent  Both the quarterly reviews and the FMRs occur in conjunction with other ongoing CMS financial oversight activities  For example in addition to reviewing expenditures, regional office reviewers assess how states estimate their costs, set payment rates for managed care and home and community based services, and allocate costs among different Medicaid administrative activities under their cost allocation plans  CMS officials told us that issues relating to state compliance with Medicaid requirements for expenditures could be identified during these other oversight activities and could inform follow-up during the quarterly reviews or be the subject of a FMR  Officials also told us that since FMRs were instituted, the agency has built in more front-end procedures for preventing problems with the accuracy and allowability of reported expenditures  As examples, they cited their work on managed care rate reviews, among other things  We identified two weaknesses in how CMS is allocating resources for overseeing state-reported expenditures that limited the agency’s ability to target risk in its efforts to assure that these expenditures are supported and consistent with Medicaid requirements  First, we found that CMS has allocated similar staff resources to states with differing levels of risk  For example, the staff resources dedicated to reviewing California’s expenditures—ranking first nationally in expenditures and constituting 15 percent of all federal Medicaid expenditures—are comparable to significantly smaller states in other regions, despite California’s history of reporting challenges and its inability to provide electronic records, which requires on-site review  (See fig  3 ) CMS has allocated 2 2 staff to review California’s expenditures in contrast to one person to review Arkansas’ expenditures, which constitute 1 percent of federal Medicaid expenditures, and Arkansas does not have a similar history of complex reporting challenges  We also found that California’s reviewers have set a higher threshold for investigating variances in reported expenditures than in the five other selected states  Specifically, reviewers investigated variances in California of plus or minus 10 percent if the variances represented more than 2 percent of medical expenditures, or $450 million in the quarter we reviewed  The state experienced an approximately 24 percent increase in its prescription drug expenditures—roughly $200 million—during that quarter, but the variance was deemed not significant  In contrast, for two of our five other selected states, we found that reviewers generally investigated variances of plus or minus 10 percent regardless of the dollar amount of the variance and in the remaining three states they had significantly lower dollar thresholds than used for California  Second, CMS reported cancelling the FMR requirement for regional offices in 17 out of 51 instances in the last 5 years when faced with resource constraints  In some cases, CMS excused individual regional offices from conducting planned FMRs due to staff shortage as the agency did for regions 3 and 7 in 2014; region 8 in 2016; and regions 3, 7, 8, and 9 in 2018  In 2015, according to CMS officials, all 10 regions were excused from conducting an FMR, because the regional offices needed their staff to focus on implementing new procedures for validating expenditures for the Medicaid expansion population  In addition to cancelling FMRs, CMS was delayed in finalizing FMRs  Among the eight FMRs that were conducted in fiscal year 2014, three have been issued as final reports, CMS decided no report was needed on a fourth, and the four remaining FMRs from 2014 were still under review as of March 2018, delaying important feedback to states on their vulnerabilities  According to CMS officials, resource constraints have contributed to both of these weaknesses  Our analysis of staffing data indicated that, from fiscal years 2014 to 2018, the number of full time equivalent staff dedicated to financial oversight activities declined by approximately 19 percent across all 10 regions  These staff are responsible not only for completing the quarterly reviews and FMRs, but also other financial oversight activities, including resolving audit findings and other on-going oversight activities noted previously  During this period, federal Medicaid expenditures are estimated to have increased by approximately 31 percent, and the reporting of expenditures has grown more complex  In addition to the decline in dedicated staff, officials told us they faced challenges in filling vacancies either because of hiring restrictions or challenges in recruiting qualified candidates  Officials described instances where regional offices shared resources with other offices to address critical gaps in resources  For example region 9 was able to obtain part-time assistance from a region 6 reviewer to help review California’s expenditures  However, CMS officials told us that they had not permanently reallocated resources between regional offices, because all regional offices are under-resourced given their various oversight responsibilities as of May 2018  With regard to cancelling FMRs, CMS officials noted that other oversight responsibilities, including the quarterly reviews, are required under statute or regulation and thus have a higher priority than FMRs  Compounding its resource allocation challenges, CMS has not conducted a comprehensive, national assessment of risk to determine whether resources for financial oversight activities are (1) adequate and (2) allocated—both across regional offices and oversight tools—to focus on the greatest areas of risk  Agency officials told us that they have not conducted a formal risk assessment, because they are assessing risk on an on-going basis, allocating resources within each region accordingly and sharing resources across regions to the extent possible  However, this approach does not make clear whether the level of resources dedicated to financial oversight nationally is adequate given the risk  Federal internal control standards for risk assessment require agencies to identify and analyze risks related to achieving the defined objectives (i e , assuring that state-reported expenditures are in accordance with Medicaid rules), and respond to risks based on the significance of the risk  Without completing a comprehensive, national assessment of risk and determining whether staff resources dedicated to financial oversight are adequate and allocated commensurate with risk, CMS is missing an opportunity to improve its ability to identify errors in reported expenditures that could result in hundreds of millions of dollars in potential savings to the Medicaid program  CMS reviewers in the selected regional offices we reviewed did not consistently perform variance analyses—which compare changes in expenditures from the quarter under review to the previous quarter—of higher matched expenditures during quarterly reviews  Further, the sampling procedures used to examine Medicaid expansion expenditures did not account for varying risks across states  CMS has multiple procedures in place to review expenditures that receive a higher federal matching rate  As with other expenditures, reviewers are required to complete a variance analysis, comparing reported expenditures in the quarter under review to those reported in the prior quarter and investigating variances above a certain threshold  However, we found that our three selected regional offices were not consistently conducting these analyses across several different types of expenditures with higher matching rates  While CMS’s internal guidance required that regional offices conduct variance analyses on expenditures with higher matching rates, we found that for the quarter we investigated (generally the 1st quarter of fiscal year 2017), our selected regional offices did not consistently do so for three types of expenditures that we reviewed: IHS, family planning, and certain women with breast or cervical cancer  Two of the three regional offices (regions 3 and 9) did not conduct or did not document these required variance analyses, and the remaining regional office (region 6) conducted the analyses but deviated from standard procedures outlined in CMS guidance, as summarized below  CMS region 3  Reviewers did not conduct variance analyses for either Maryland or Pennsylvania  Regional office staff with whom we spoke said that as part of the quarterly review they conduct the standard variance analysis on category of service lines of the CMS-64  Expenditures for IHS, family planning and services for certain women with breast or cervical cancer are not separately identified at that level  Although CMS reviewers said they thought the standard analysis was sufficient, net changes within a broad service category may obscure major changes within these higher matched expenditures  For example, examining changes in total inpatient hospital expenditures would not necessarily reveal a significant variance limited to inpatient expenditures in IHS facilities that receive a higher federal match  CMS region 9  Reviewers told us that they examined higher matched expenditures for California; however, no variance analyses of IHS, family planning, or breast or cervical cancer services were included in the work papers provided to us  In addition, they told us that they do not conduct a variance analysis on IHS, family planning, and services for certain women with breast or cervical cancer for Nevada, noting that expenditures in these areas tend to be quite small  CMS region 6  Reviewers conducted a variance analysis of these higher matched expenditures for Arkansas and Texas and provided us documentation; however, the documentation showed some deviation from the required steps specified in CMS’s guidance  For example, for Texas, spending on two of the three categories was beyond the threshold for significance, but the reviewer did not document any follow-up with the state  Although expenditures for IHS, family planning, and certain women with breast or cervical cancer constituted a small share of total federal spending on Medicaid services—roughly 1 percent—combined spending on these categories was approximately $1 billion in the first quarter of fiscal year 2017  Our analysis indicated that variances in spending for these three services ranged widely across our six states, and in four of the states, some of their expenditures were above the thresholds for significance  (See fig  4 ) For example, in regional office 3, Maryland experienced a significant variance in its family planning expenditures—an increase of approximately $8 million dollars or 7,700 percent from the previous quarter—but there was no indication in the documentation provided that the regional office identified or investigated that variance  Similar to the variance analyses for other higher matched expenditure types, we found that the selected regional offices did not consistently conduct variance analyses on expenditures reported for the Medicaid expansion population  First, although five of our six states opted to expand Medicaid under PPACA, two of the five states (Maryland and Pennsylvania) were not subjected to a variance analysis for their expansion populations, a segment that accounted for nearly $7 billion in Medicaid expenditures in fiscal year 2016  Among the remaining three states, CMS regional office staff conducted a variance analysis, but in two of them, the reviewers did not document whether they investigated significant variances, leaving it unclear whether this required step was taken  Specifically, for two of the three remaining states—Arkansas and Nevada—reviewers did not document which variances were deemed significant or that any such variances were discussed with state officials  The guidance specified in CMS’s quarterly review guide is not always clear or consistent  For example: For IHS, family planning, and certain women with breast or cervical cancer, the guidance is explicit that the analysis is required, but the automated variance report used by reviewers for the step does not include these expenditures  For Medicaid expansion expenditures, the review guide is not explicit about whether a variance analysis is required, but CMS has an automated variance report available for these expenditures, which suggests that such an analysis was expected  The guidance suggests that a variance analysis should be conducted for expansion enrollees; however, it does not specify whether the analysis should be conducted in conjunction with—or take the place of—more in-depth examinations  According to federal internal controls standards for information and communication, agencies should communicate the information necessary for staff to achieve the agency’s objectives  CMS’s guidance on conducting variance analyses for types of expenditures with higher federal matching rates has not been sufficiently clear to assure that such analyses are being consistently conducted  By not consistently conducting such checks, errors may be going undetected and CMS may be providing federal funds at a higher matching rate than is allowable  CMS has additional procedures in place to review service expenditures reported for the Medicaid expansion population, a category of expenditures that received a 95 percent federal match in 2017  Specifically, in addition to a variance analysis, CMS guidance specifies that each regional office reviewer is to review claims for a sample  The guide directs the reviewer to obtain a full list of all expansion enrollees from the state and to select 30 to 40 for further review  Next, the reviewer is to obtain supporting documentation from the state listing the eligibility factors for the sampled enrollees, such as age, pregnancy status, Medicare enrollment, and income  The reviewer is to select a single claim for each enrollee and verify that the corresponding expenditures were reported under the correct federal matching rate category—i e , that the sample claim for each individual was accounted for in the relevant section of the CMS-64  The review guide specifies that the sample review be conducted each quarter unless the state has had four consecutive quarters with three or fewer errors, in which case, the sampling must be performed only annually  We found that regional offices were identifying errors in their sampling reviews  For example, region 3 reviewers found that Pennsylvania had incorrectly categorized an individual in the sample as a Medicaid expansion enrollee, with the selected expenditures initially reported as eligible for the higher matching rate  According to CMS central office officials, the sampling methodology has helped identify systemic issues with state expenditure systems in some states and resulted in corrections, adjustments, and in one case, a disallowance  Under current procedures, among our five selected states that expanded Medicaid under PPACA, all five were determined to have had four consecutive clean quarters according to agency officials; that is, the state had three or fewer errors in each quarter  Nationally, all but one of the 33 states that have implemented Medicaid expansion under PPACA had four consecutive clean quarters as of March 2018, according to CMS officials  We found, however, that CMS’s procedures for sampling reviews had a key weakness in that they did not account for varying risks across states, as illustrated in the following examples  We found that sample size does not account for significant differences in program size  For example, both California and Arkansas have expanded Medicaid under PPACA, and regional office staff told us they reviewed claims for 30 expansion enrollees in each of the two states, despite the fact that California has over 10 times as many expansion enrollees as Arkansas  Region 9 officials told us that for California they had initially sampled 100 enrollees during the first quarter they were required to conduct this analysis, but the review was time consuming given staff resources, and they were advised by CMS’s central office to limit their sample to 30 individuals  CMS officials told us that the sampling procedures are resource intensive and that the sample size they decided upon was what they thought they had the resources to complete  Additionally, the sample size does not account for previously identified risks in a state’s program  Specifically, as we noted in a 2015 report, CMS’s sampling review of expansion expenditures was not linked to or informed by reviews of eligibility determinations conducted by CMS, some of which identified high levels of eligibility determination errors  According to CMS officials, the expenditure review is primarily intended to ensure that states are correctly assigning expenditures for the expanded eligibility groups as initially determined, not whether the eligibility determination is correct  Federal standards for internal control related to risk assessment require that agencies identify, analyze, and respond to risks  However, because CMS’s sampling methodology does not account for risk factors like program size and high levels of eligibility determination errors, the agency’s review of expansion population expenditures may be missing opportunities to detect systemic issues with improperly matched expenditures  Quarterly variance analyses and sampling of Medicaid expansion enrollees can be supplemented by financial management reviews  For fiscal year 2016, CMS recommended regional offices conduct FMRs on expenditure claims for expansion enrollees  As of March 2018, however, regional offices had completed an FMR on Medicaid expansion expenditures in only one state, with no findings, and were in the process of completing FMRs for five other states  According to CMS officials, no additional reviews in this area were planned for fiscal year 2018  Financial Impact of Expenditure Reviews Compared with Program Integrity Recoveries The impact of CMS’s expenditure review activities is greater than the impact from other program integrity efforts  For example, in fiscal year 2015, CMS resolved errors through expenditure reviews that saved over $1 4 billion in federal funds  In the same year, CMS reported that efforts by states and the federal government to identify improper payments to providers—for example, services that were billed by a provider but were not received by a beneficiary—resulted in recoveries that totaled $852 9 million, in both state and federal funds  In fiscal years 2014 through 2017, CMS’s regional offices resolved expenditure errors that reduced federal spending by over $5 1 billion, with at least $1 billion in errors resolved in each of three of those four years  Errors were resolved through states agreeing to reduce their reported expenditures, which prevented federal payments to the state for those expenditures; and through CMS issuing disallowances, under which states are required to return federal funds  Although CMS resolved over $1 billion in expenditure errors in each year of fiscal years 2014 through 2016, CMS resolved less than $600 million in fiscal year 2017  CMS officials explained that this change likely reflects delays in clearance of disallowances due to the transition between presidential administrations  (See fig  3 ) In addition to these resolved errors, as of the end of 2017, CMS had $4 47 billion in outstanding deferrals of federal funds, where CMS was delaying federal funds until additional information was provided  Expenditures flagged for deferrals may or may not represent errors  All 10 CMS regional offices resolved errors from fiscal years 2014 through 2017, though the magnitude varied across regions  (See table 5 ) Among the 10 regional offices, 9 reported that they had resolved errors through states agreeing to reduce reported expenditures  Additionally, 9 regional offices issued a total of 49 disallowances across 16 states, with the majority of the disallowances occurring in regional offices 2 and 3  Finally, all 10 regional offices had taken deferrals for questionable expenditures, with 22 states having outstanding “active” deferrals that had not been resolved as of the fourth quarter of fiscal year 2017, which ranged in amount from $178 to $444 million  CMS officials told us that the range of resolved errors and deferred funds across regional offices may reflect differences in the proportion of high-expenditure states  For example, regional office 4 oversees four states ranking in the top 20 in terms of Medicaid expenditures, while regional office 8 does not oversee any top- 20 states  The variation may also reflect large actions taken in specific states  For example, the majority of the disallowed funds in regional office 2 from fiscal years 2014 to 2017 were due to a single disallowance of $1 26 billion in one state  The financial significance of individual errors resolved by CMS’s regional offices varied significantly  We found that regional offices resolved errors that ranged from reporting errors that had no federal financial impact— such as expenditures that were allowable, but were reported on the incorrect line—to hundreds of millions of dollars in expenditures that were found to be unallowable under Medicaid requirements  Over the fiscal years we reviewed, more than half of the disallowances CMS issued were less than $15 million; however, in four states CMS issued disallowances of over $100 million, including a disallowance of over $1 billion in New York  (See fig  5 ) In some cases, actions taken by CMS to resolve errors were the culmination of years of work  For example, over several years the California Medicaid program reported a large volume of expenditures for which it did not yet have sufficient supporting documentation  The regional office officials told us that the state reported these expenditures in order to comply with the 2-year filing limit, and had reported these as “placeholder claims,” with the intention of providing additional support at a later time  Over the course of at least 6 years, CMS deferred hundreds of millions of dollars in federal funds related to these placeholder claims  Of the active deferrals as of the end of fiscal year 2017, most of the total amount of deferred funds was taken for expenditures in California, which represented $3 4 billion of the $4 5 billion in total active deferrals  According to CMS officials, in 2015, CMS prohibited California from reporting additional placeholder claims  Region 9 officials told us that they continue to work with the state to clear the deferrals related to this issue  They were able to resolve 9 related deferrals in fiscal year 2017; however, another over 60 deferrals were still unresolved  The growth of federal Medicaid expenditures, estimated at about $370 billion in fiscal year 2017, makes it critically important to assure expenditures are consistent with Medicaid requirements  CMS has a variety of processes in place to review state-reported expenditures, and those reviews have resulted in CMS resolving errors that have saved the federal government a considerable amount of money; over $5 billion in the last 4 years  However, the increasing complexity of expenditure reporting is occurring as resources to review these expenditures are decreasing, hindering CMS’s ability to target risk and potentially allowing for hundreds of millions of federal dollars in errors to go undetected  In the absence of a comprehensive risk assessment, which CMS has not conducted, CMS may be missing opportunities to better target resources to higher risk expenditures and increase the savings from these oversight activities  The variety of different matching rates has contributed to the increased complexity of CMS’s expenditure reviews  Although CMS has review procedures in place to assure that the correct matching rate is applied for services and populations receiving a higher federal matching rate, unclear guidance has contributed to inconsistency in the extent to which these reviews are conducted  In addition, we found weaknesses in the sampling methodology CMS requires its regional offices to use to help ensure that expenditures for Medicaid expansion enrollees—expenditures that receive a higher matching rate and that represented almost 20 percent of total federal Medicaid spending in 2016—are consistent with Medicaid requirements  In particular, the methodology does not account for risk factors like program size or vulnerabilities in state eligibility-determination processes and systems  As a result of the inconsistency in reviews and a sampling methodology that does not consider program risk, errors may be going undetected, resulting in CMS providing federal funds at higher federal matching rates than is allowable  In addition, CMS could be missing opportunities to identify any systemic issues that may contribute to such errors  We are making the following three recommendations to CMS: 1  The Administrator of CMS should complete a comprehensive, national risk assessment and take steps, as needed, to assure that resources to oversee expenditures reported by states are adequate and allocated based on areas of highest risk  (Recommendation 1) 2  The Administrator of CMS should clarify in internal guidance when a variance analysis on expenditures with higher match rates is required  (Recommendation 2) 3  The Administrator of CMS should revise the sampling methodology for reviewing expenditures for the Medicaid expansion population to better target reviews to areas of high risk  (Recommendation 3) We provided a draft of this report to HHS for review and comment  HHS concurred with all three recommendations, noting that it takes seriously its responsibilities to protect taxpayer funds by conducting thorough oversight of states’ claims for federal Medicaid expenditures  Regarding our first recommendation—that CMS complete a comprehensive, national risk assessment and take steps to assure that resources are adequate and allocated based on risk—HHS noted that CMS will complete such an assessment, and, based on this review, will determine the appropriate allocation of resources based on expenditures, program risk, and historical financial issues  CMS will also identify opportunities to increase resources  Regarding our second recommendation—clarifying internal guidance on when a variance analysis on higher matched expenditures is required—HHS noted that CMS will issue such internal guidance  Regarding our third recommendation—that CMS revise the sampling methodology for reviewing expenditures for the Medicaid expansion population to better target reviews to areas of high risk—HHS noted CMS is considering ways to revise its methodology  HHS’s comments are reproduced in appendix II  As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date  At that time, we will send copies of this report to the Secretary of Health and Human Services, appropriate congressional committees, and other interested parties  The correspondence is also available at no charge on the GAO website at http://www gao gov  If you or your staff members have any questions about this report, please contact me at (202) 512-7114 or yocomc@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix III  Public psychiatric residential treatment facilities Medicare Part B premium buy-ins Outpatient hospital reimbursement for mental health services Review of comprehensive psychiatric emergency program rates Provider taxes implemented to avoid program reductions Health homes data and expenditures reporting Provider incentive payments for health information technology 1115 demonstration provider incentive payments Public psychiatric residential treatment facilities Managed care organizations’ provider payments Provider incentive payments for health information technology Federally qualified health center reimbursement payments Eligibility and enrollment maintenance and operations Managed care organizations’ reporting of drug rebates 3 CMS cancelled these 2014 FMRs due to a staffing shortage  Region 8 was excused from the requirement to conduct an FMR in 2016 due to staffing constraints  In addition to the contact named above, Susan Barnidge (Assistant Director), Jasleen Modi (Analyst-in-Charge), Caroline Hale, Perry Parsons, and Sierra Gaffney made key contributions to this report  Also contributing were Giselle Hicks, Drew Long, and Jennifer Whitworth 

ground_truth: The World Health Organization estimates that tobacco use kills over 7 million people each year, more than tuberculosis, HIV/AIDS, and malaria combined. Since the 1990s, Congress has enacted restrictions regarding the use of certain appropriated funds to promote U.S. tobacco exports. GAO was asked to review the implementation of these restrictions. This report examines (1) guidance select U.S. agencies have issued to implement these restrictions, (2) whether overseas officials from select U.S. agencies were aware of the restrictions and guidance, and (3) select U.S. agencies' implementation of the guidance overseas. GAO reviewed U.S. laws, agency guidance, and internal communications; analyzed Commerce data; and interviewed agency officials in Washington, D.C. and in 24 offices across 11 overseas posts in 9 countries. GAO selected these countries based on criteria that included U.S. tobacco export totals, smoking rates, and geographic dispersion. Congress has restricted the use of certain appropriated funding to promote tobacco exports and the Departments of State (State), Commerce (Commerce), and Agriculture (USDA) have issued interagency guidance through the cable system that they rely on to implement these restrictions. State collaborates with these and other agencies to periodically update this cable. The cable informs officials about the types of actions they should take—such as providing routine business facilitation services to all U.S. companies—and the types of actions they should not take—such as attending events sponsored by tobacco companies. Most, but not all, officials overseas that GAO interviewed were aware of the restrictions and received some guidance concerning the restrictions. However, GAO found that some officials did not recall receiving the interagency guidance cable. In addition, State and USDA's current training materials do not address the restrictions. Federal internal control standards state that appropriate training is essential to an organization's operational success. Thus, providing officials overseas with training about the funding restrictions and related guidance would help to ensure that officials are aware of the restrictions. U.S. officials overseas have implemented restrictions on promoting tobacco, but some officials said that the interagency guidance lacks clarity. Officials said that they have not promoted tobacco by, for example, attending events sponsored solely by tobacco companies. However, officials identified three areas of the guidance that are unclear: (1) attendance at events not sponsored by U.S. tobacco companies but attended by representatives of these companies; (2) the types of services officials can provide tobacco companies; and (3) the description of tobacco products, such as whether component parts for electronic cigarettes are included. Federal standards for internal control state that management should clearly document internal controls in policies and guidance to prevent officials from failing to achieve an objective or address a risk. By providing more specific guidance, the agencies would help ensure that officials consistently implement the funding restrictions on promoting tobacco. GAO recommends that (1) State and USDA include information about the funding restrictions and guidance in training materials for relevant employees and (2) State, in consultation with Commerce and USDA, assess and update the interagency guidance cable, as needed, on promoting tobacco in light of questions raised by officials at posts overseas. State and USDA concurred with the recommendations.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: Since its founding in 2006, the National Popular Vote (NPV) initiative has promoted an agreement among the states, an interstate compact that would effectively establish direct popular election of the President and Vice President without a constitutional amendment, while retaining the structure of the electoral college system  The United States is unique among "presidential" republics by providing an indirect election to choose its chief executive  The President and Vice President of the United States are selected not by registered voters, but by the electoral college, electors appointed in the states "in such Manner as the Legislature thereof may direct     " Alexander Hamilton, who was "present at the creation" of the Constitution in 1787, commented favorably on the electoral college system in The Federalist : The mode of appointment of the Chief Magistrate of the United States is almost the only part of the system, of any consequence, which has escaped without severe censure, or which has received the slightest mark of approbation from its opponents     I venture somewhat further, and hesitate not to affirm that if the manner of it be not perfect, it is at least excellent  It unites in an eminent degree all the advantages the union of which was to be wished for  Notwithstanding Hamilton's endorsement, the first proposal to change the electoral college system by constitutional amendment was introduced as early as 1800, and since that time more than 700 proposals to reform or eliminate the college have been introduced in Congress  Reform advocates have long focused on the fact that it does not provide for direct democratic election, that less-populous states are afforded an arithmetical advantage due to the assignment of two electors to each state, regardless of population, and that the winner-take-all system makes it possible for candidates to win an electoral college majority and the presidency, while gaining fewer votes than their principal opponents in the popular election  Between 1949 and 1979, Congress considered amendments to reform the electoral college, or replace it with direct popular election, in committee and on the floor of both chambers  Proposed amendments must, however, meet the requirements of the Constitution's Article V, which calls for two-thirds approval by both houses of Congress, and ratification by three-fourths of the states; to date, no electoral college reform proposal has met these requirements  Proponents of the National Popular Vote initiative contend that their plan will achieve direct popular election while circumventing the requirements of Article V, and will guarantee that the popular vote winners will always be elected President and Vice President  The fundamentals of the electoral college system were established by Article II, Section 1 of the U S  Constitution, and subsequently revised by the Twelfth Amendment  The Constitution's minimal provisions have been complemented over the past two centuries by a range of federal and state laws, political party procedures, and enduring political traditions, leading to the system as it exists today  The salient features of the contemporary system are detailed below  The electors are collectively known as the electoral college; although this phrase does not appear in the Constitution, it gained currency in the early days of the republic, and was recognized in federal law in 1845  The electoral college has no continuing existence; its sole purpose is to elect the President and Vice President  Each state is allocated a number of electors equal to the combined total of its U S  Senate and House of Representatives delegations  The District of Columbia is also allocated three electors  At present, the total is 538, reflecting the combined size of the Senate (100 Members), the House (435 Members), and the District of Columbia electors  Any person may serve as an elector, except Senators and Representatives, or any other person holding an office of "trust or profit" under the United States  Article II, Section 1 of the Constitution empowers the states to "appoint [electors], in such Manner as the Legislature thereof may direct     " This grant of authority provides the constitutional basis claimed for the NPV initiative  In practice, all states currently provide for popular election of their electoral college delegations  Candidates for the office of elector are nominated by political parties and other groups on the presidential ballot in each state  In most cases, the candidates for the office of elector are nominated by the state party committee or the party's statewide convention  The winning presidential nominees must gain a national majority of 270 or more electoral votes, out of the 538 total, in order to be elected  If no ticket of candidates attains a majority, then the House of Representatives elects the President, and the Senate the Vice President, in a procedure known as contingent election  Candidates for the office of elector are selected by their respective political parties  They are expected to vote for the presidential and vice presidential candidates to whom they are pledged  Some states seek to require them to so vote by law or other means, but most constitutional scholars hold that the electors remain free agents under the Constitution, and that they may vote for any person they choose  On rare occasions, an elector will vote for a different candidate, or abstain from casting a vote for any candidate; he or she is known as a "faithless elector " The goal of presidential campaigns under the existing system is to win by carrying states that collectively cast a majority of electoral votes  Political parties and presidential campaigns tend to focus on states that are closely contested (widely referred to as "battleground" states), or that have large delegations of electoral votes, or both  Winning a majority of the more populous and/or battleground states is considered crucial to obtaining the necessary electoral vote majority  In 48 states and the District of Columbia, the presidential/vice presidential ticket winning the most popular votes (a plurality or more) in that state is awarded all its electoral votes  That is to say, the winning party's entire ticket of electors is elected  This is referred to as the "winner-take-all" or "general ticket" system  Presidential Election Day is set by law for Tuesday after the first Monday in November every fourth year succeeding the election of President and Vice President  On Presidential Election Day, voters cast one vote for the candidates they support  They are, however, actually voting for the state political party "ticket" of electors supporting those presidential and vice presidential candidates  Presidential electors assemble on the first Monday after the second Wednesday in December following the general election  They meet in their respective states, not collectively, and cast separate votes by ballot for the President and Vice President  After the electors vote, the results are sent by the states to Congress and various other federal authorities  On January 6 of the year following a presidential election, Congress meets in a joint session to count the electoral votes and make a formal declaration of which candidates have been elected President and Vice President  A range of factors contributed to the emergence of the National Popular Vote initiative in the first decade of the 21 st century  A major source was frustration by reform advocates after three decades of failed attempts to secure congressional approval for a direct popular election amendment  A more immediate spur was the contentious and disputed presidential election of 2000, which is regarded as having been a major factor contributing to the development of the NPV proposal  One of the factors cited for the emergence of the NPV initiative has been the exacting requirements set by the Constitution for amendments, in this case, a direct popular election constitutional amendment  As noted previously, approval by two-thirds of Members present and voting is required in both houses when Congress proposes an amendment, followed by ratification by three-fourths of the states, 38 at present, usually within a seven-year period specified by Congress  Between 1948 and 1979, Congress debated electoral college reform at length; throughout this time, hundreds of reform proposals were introduced in both chambers  They generally centered on one of two courses: "end it" by eliminating the entire electoral college system and establishing direct popular election, or "mend it" by reforming its more controversial provisions  Between 1948 and 1979, proposed amendments were the subject of hearings in the Senate and House Judiciary Committees on 17 different occasions, while electoral college reform was debated in the Senate on five occasions and twice in the House during this period  Proposals were approved by the necessary two-thirds majority twice in the Senate and once in the House, but never in the same Congress  Following the 1979 defeat of a direct popular election amendment on the Senate floor, and the retirement or defeat of prominent congressional advocates, the question of electoral college reform largely disappeared from public attention and Congress's legislative agenda  Although Senators and Representatives continued to introduce reform proposals, few received action beyond routine committee referral, and in time, the number of measures introduced dropped to zero  Even after the presidential elections of 2000 and 2016, in which the winner of the electoral vote won fewer popular votes than his opponent (a so-called "misfire") , there was little evidence that Congress was prepared to consider an electoral college reform amendment  Proposals to replace the electoral college system with direct popular election continued to be introduced, but in dwindling numbers as the years passed  No proposal for direct popular election was introduced in the 113 th Congress  By comparison, 41 direct popular election or electoral college reform amendments were proposed in the 95 th Congress (1977-1978)  Following the 2016 election, however, four constitutional amendments introduced late in the 114 th Congress proposed eliminating the electoral college and replacing it with direct election  To date in the 116 th Congress, three amendments to establish direct popular election by constitutional amendment have been introduced, but no action beyond committee referral has been taken on them  Until recently, survey research findings showed public support for presidential election reform through direct popular election by sizable margins  As early as 1967, the Gallup Poll reported that 58% of respondents supported direct election, compared with 22% who favored retaining the electoral college  More recently, Gallup's 2013 survey recorded that 63% of respondents favored an amendment providing for direct election, while 29% favored retention of the electoral college  Following the 2016 election, however, overall support for direct election was measured at 49% in favor to 47% opposed  It is arguable that the change in public attitudes was influenced by the 2016 election results, in which the Republican nominees won the election with a majority of electoral votes, but fewer popular votes than their Democratic opponents  For instance, Gallup reported a shift to greater support for the electoral college system by respondents who identified themselves as "Republican" or "Lean Republican " Conversely, already high levels of support for direct popular election among respondents who identified themselves as "Democratic" or "Lean Democratic" rose still further in the post-2016 election Gallup Poll  To date, CRS has identified one survey that was specifically designed to measure public commitment to the NPV initiative  A March 27, 2019, Politico/Morning Consult poll posed relevant questions on the presidential election process and the NPV compact  The first question, which presented a general outline of the existing electoral college system and the generic alternative of direct popular election, reported that respondents preferred direct election by 50% to 34% for retaining the electoral college, and 16% reporting "Don't know/No opinion " The next question explained the proposed NPV compact and asked respondents' preference for NPV or the electoral college method  Although the level of support for NPV was lower than that measured for generic direct popular election, a plurality of respondents to this question favored the "National Popular Vote Interstate Compact" by a plurality of 43% in favor, to 33% opposed and 23% who reported "Don't know/No opinion " The disputed presidential election of 2000 was arguably a catalyst for new thinking on electoral college reform   Following a closely contested campaign, Republican candidates George W  Bush and Richard Cheney were elected over Democratic nominees Al Gore Jr  and Joseph Lieberman following a bitter dispute over election results in Florida tha t was ultimately decided by the Supreme Court   The high court's decision left Bush and Cheney with a narrow plurality in Florida of 537 popular votes and a similarly narrow electoral college majority of 30 states with 271 electoral votes, while their Democratic opponents took 20 states and the District of Columbia with 266 electoral votes (one District of Columbia elector cast a blank ballot in protest against the outcome)   It was the first election since 1888 in which the candidates elected uncontestably won fewer popular votes than their principal opponents : the Gore / Lieberman Democratic ticket gained 50,992,335 popular votes to 50,455,156 for Bush / Cheney  The se election results generated considerable discontent with the system  Some critics argued for a constitutional amendment, but the 107 th Congress faced a heavy legislative workload throughout this period, which initially included enactment of President George W  Bush's legislative program and was later expanded to urgent responses to the terrorist attacks of September 1 1, 2001   Rather than focus on the lengthy process associated with consideration of a constitutional amendment, Congress focused on legislati ve remedies  The Help America Vote Act of 2002, passed in response to the numerous irregularities in voting systems and procedures revealed by the 2000 election, mandated election administration reforms and v oting system technology enhancements (funded in part by federal grants to the states) intended to ensure accurate and timely voting and vote tabulation in future elections  In 2016, the presidential election was again won by nominees who gained a majority of electoral votes but fewer popular votes than their major party opponents  Although proposals to amend the Constitution to provide direct popular election were introduced in response to this occurrence late in the 114 th Congress , and again in the 115 th Congress, the 2016 results did not result in the degree of c ontroversy a nd activism that followed the electoral college "misfire " of 2000  T he following factor may have contributed to this situation : i n 2000, a shift in Florida's electoral votes from Bush/Cheney to Gore/Lieberman would have changed the election result; by comparison, in 2016, a shift in the state with the closest vote margin, Michigan , would not have altered the election  While the 2000 election's "misfire" did not result in consideration of a constitutional amendment, it did prompt considerable study and investigation into new approaches to electoral reform among scholars of the presidential election process and political activists  Law professors Robert W  Bennett of Northwestern University, Vikram Amar of the University of California-Davis, and Akhil Amar of Yale University School of Law are generally credited as the intellectual godparents of the concept that ultimately evolved into the National Popular Vote Interstate Compact, which relies on the Constitution's broad grant of power to each state to "appoint, in such Manner as the Legislature thereof may direct [emphasis added], a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress " Project FairVote, an issue advocacy group self-described as a nonprofit, nonpartisan "501(c)(4)" organization, appears to have been an incubator of the NPV concept  FairVote has supported NPV for "over a decade," and was an early supporter of National Popular Vote Inc , the plan's official advocacy group; moreover, longtime FairVote board members Robert Richie and the late Representative John B  Anderson were early supporters of the National Popular Vote initiative and contributors to its manifesto, Every Vote Equal   As noted previously, the NPV initiative was the ultimate result of the various studies and proposals offered following the presidential election of 2000  The NPV initiative seeks to establish direct popular election of the President and Vice President through an interstate compact, rather than by constitutional amendment  Ideally, under the compact's provisions, legislatures of the 50 states and the District of Columbia would pass legislation binding the signatories to appoint presidential electors committed to the presidential/vice presidential ticket that gained the most votes nationwide   If all 50 states and the District of Columbia were compact members, this would deliver a unanimous electoral college decision for the candidates winning a plurality of the popular vote  Specifically, the plan calls for an agreement among the states, an interstate compact effected through state legislation, in which the legislature in each of the participating states agrees to appoint electors pledged to the candidates who won the nationwide popular vote   State election authorities would count and certify the popular vote in each state, which would be aggregated and certified as the "nationwide popular vote " The participating state legislatures would then choose the slate of electors pledged to the "nationwide popular vote winner," notwithstanding the results within their particular state s   To ensure success, the initiative would come into effect only if states whose total electoral votes equal or exceed the constitutional majority of 270 were to approve the plan  If the nationwide popular vote were effectively tied, the states would be released from their commitment under the compact, and could choose electors who represented the presidential ticket that gained the most votes in each particular state  One novel NPV provision would enable the presidential candidate who won the national popular vote to fill any vacancies in the electoral college with electors of his or her own choice  States would retain the right to withdraw from the compact, but if a state chose to withdraw within six months of the end of a presidential term, the withdrawal would not be effective until after the succeeding President and Vice President had been elected  The NPV advocacy effort is managed by National Popular Vote Inc , a "501(c)(4)" nonprofit corporation established in California in 2006 by Barry Fadem, an attorney specializing in initiative and referendum law, and John R  Koza, Ph D , an automated systems scientist and entrepreneur  As a 501(c)(4) entity, it is permitted to engage in political activity in furtherance of its goal, without forfeiting its tax-exempt status, so long as this is not its primary activity  NPV states on its website that its "specific purpose is to study, analyze and educate the public regarding its proposal to implement a nationwide popular election of the President of the United States " Dr  Koza serves as chairman of NPV Inc , and Mr  Fadem serves as president  NPV's advisory board includes former Senators and Representatives of both major political parties  In 2006, National Popular Vote Inc  published a detailed handbook, Every Vote Equal: A State-Based Plan for Electing the President by National Popular Vote   This publication, in its fourth edition at the time of this writing, provides a detailed account of various issues related to the NPV initiative, including the electoral college, earlier reform efforts, interstate compacts, the text of the proposed compact, a strategy for advancing the initiative, and a 340-page section addressing "myths about the National Popular Vote Compact " National Popular Vote Inc  maintains an office in Mountain View, CA  Supporters in various state legislatures began to introduce measures to adopt the interstate compact shortly after NPV's inaugural press conference on February 23, 2006  The NPV Compact has been introduced at various sessions in the legislatures of all 50 states and the Council of the District of Columbia, which performs the functions of a state legislature in the nation's capital, and has received some form of active consideration in 38 states and the D C  Council  Among other activities, NPV maintains a regular communications program of email newsletters announcing activities and soliciting readers to petition governors and state legislators to support the compact  At the time of this writing, NPV claims that 3,112 state legislators have either sponsored or cast a recorded vote in their respective legislatures for the compact  NPV also claims endorsements from legislators and endorsements by the New York Times , Los Angeles Times , Chicago Sun-Times , Minneapolis Star Tribune , Boston Globe , Miami Herald , and other newspapers  NPV also advocates use of the citizen initiative process where available to enact state adherence to the compact; it asserts that when Article II, Section 1, clause 2 grants authority to the states to appoint "in such Manner as the Legislature thereof may direct," the authority extends to the states' entire lawmaking process, which in some states includes the proposal and passage of legislation and constitutional amendments through citizen initiative  The citizen initiative approach to the interstate compact, however, has yet to be used at the time of this writing  At the time of this writing, in May 2019, the following 14 states and the District of Columbia have adopted the National Popular Vote Compact  Collectively, they are assigned a total of 189 electoral votes  The National Popular Vote Interstate Compact has been introduced since its inception in all 50 states and the District of Columbia  States that have adopted NPV at the time of this writing are listed in chronological order, by year of adoption, as follows: Hawaii (4 electoral votes), 2008; Illinois (20 electoral votes), 2008; Maryland (10 electoral votes), 2008; New Jersey (14 electoral votes), 2008; Washington (12 electoral votes), 2009; Massachusetts (11 electoral votes), 2010; District of Columbia (3 electoral votes), 2010; Vermont (3 electoral votes), 2011; California (55 electoral votes), 2011; Rhode Island (4 electoral votes), 2013; New York (29 electoral votes), 2014; Connecticut (7 electoral votes), 2018; Colorado (9 electoral votes), 2019; Delaware (3 electoral votes), 2019; and New Mexico (5 electoral votes), 2019  After initial momentum in 2008, when four states joined the compact in one year, NPV made slower progress toward its goal of approval by states accounting for 270 electoral votes  Highlights were California's approval in 2011, which added 55 electoral votes to the tally, and New York's accession to the compact in 2014  Beginning with Connecticut's approval in 2018, followed in 2019 by Colorado, Delaware, and New Mexico, 24 additional electoral votes were added to the NVP count, bringing the total to 189, 70% of the 270 votes needed for NPV to go into effect  By early May 2019, legislation to join the NPV had been introduced in the current session of at least one chamber of the legislature in 14 states that controlled a combined total of 150 electoral votes  As of April 17, the compact had been approved in Nevada by the Assembly (lower chamber of the legislature) and in Oregon by the Senate  Accession by these two states would raise the NPV member total to 202 electoral votes  Conversely, proposals to rescind approval of the NPV Interstate Compact have been introduced in the legislatures of Connecticut, Hawaii, Maryland, Massachusetts, New Jersey, and Washington, to date; none has been approved  Some observers note that, despite NPV's assertion of bipartisan support, all the jurisdictions that have joined the compact to date could be identified as "leaning" Democratic or "solid" Democratic in their support of the Democratic Party, as classified by a recent Gallup survey  For instance, 11 of the 14, including California, Delaware, the District of Columbia, Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New Mexico, Rhode Island, and Vermont, were found by Gallup to be among the "most solidly Democratic states in 2017 " Alluding to this fact, one commentator observed that [a]ll the states to have joined so far are very blue  Until some purple states and red states sign on, the compact has little in the way of territory to conquer     The seven states where President Obama won [in 2012] by the widest margins, along with D C , have joined  So have three others—New Jersey, Illinois and Washington—where Obama won by at least 15 percentage points  But none below that threshold have done so  The 2016 presidential election results in Colorado, Connecticut, Delaware, and New Mexico, the most recent adherents to the NPV compact, arguably confirm this observation—the Democratic candidates won the popular vote in all four states, by margins of between 4 9% in Colorado to 13 7% in Connecticut  On the other hand, several states where the NPV remained under active consideration in 2019—Arizona, Florida, Georgia, Idaho, Indiana, Kansas, North Carolina, Ohio, and South Carolina—were carried by the Republican presidential ticket in 2016  As the NPV campaign developed momentum in the states, particularly between 2008 and 2011, defenders of the existing arrangements and the electoral college announced measures to promote retention of the electoral college system  In October 2011, the Heritage Foundation, a conservative public policy institute, released a report opposing the NPV compact  That same month, Roll Call reported that the State Government Leadership Foundation, a project of the Republican State Leadership Committee, would begin a campaign to defend the electoral college and counter recent NPV gains  Further activity, however, does not appear to have been undertaken by these groups by the time of this writing  Arguments in support of and opposed to the National Popular Vote proposal resemble those advanced in favor of and against direct popular election of the President  The central issue turns on the question of the asserted simplicity and democratic attractiveness of the direct election idea as compared to a more complex array of factors cited by supporters of the electoral college system  Proponents of the NPV initiative arguably share the philosophical criticism voiced by proponents of direct popular election, who maintain that the electoral college system is intrinsically undemocratic—it provides for "indirect" election of the President and Vice President  This, they assert, is an 18 th century anachronism, dating from a time when communications were poor, the literacy rate was much lower, and the nation had yet to develop the durable, sophisticated, and inclusive democratic political system it now enjoys  They maintain that only direct popular election of the President and Vice President is consistent with modern democratic values and practice  Beyond this fundamental challenge, critics cite what they identify as a wide range of technical failings of the electoral college arrangement  Perhaps the most prominent of these is that the electoral college system can result in the election of a President and Vice President who have won the electoral vote, but gained fewer popular votes than their major opponent  This condition results at least in part from the nearly universal reliance on the "winner-take-all" or general ticket system of awarding electoral votes in the states, which is also criticized by NPV advocates  Under the general ticket system, the candidates winning the most popular votes in a state (a plurality is sufficient) are awarded all that state's electors and electoral votes; under these circumstances, a presidential ticket can gain all of a state's electoral votes on even a slim margin of popular votes  Presidents were elected in 1876, 1888, 2000, and 2016 who received fewer popular votes than their major party opponents, while the runner-up in both popular and electoral votes was elected by the House of Representatives when four candidates split the vote in the presidential election of 1824  NPV supporters advocate the compact on the grounds of fairness and respect for the voters' choice  At the core of their arguments, they assert that the process would be simple, national, and democratic; the NPV interstate compact would provide de facto for a single, democratic choice, allowing all the nation's voters to choose the President and Vice President directly, with no intermediaries  The "people's choice," they assert, would win in every election, and every vote would carry the same weight in the election, no matter where in the nation it was cast  No state would be advantaged, nor would any be disadvantaged  According to NPV, the central argument in favor is that the compact "would guarantee the Presidency to the candidate who receives the most popular votes [or at least a plurality] in all 50 states (and the District of Columbia) " According to NPV, there would never again be a presidential election "misfire" or another "wrong winner " Other elements of the electoral college system criticized by NPV advocates (and other electoral college reformers) would arguably disappear or be rendered irrelevant  These include the faithless elector phenomenon, the general ticket system's asserted "disfranchisement" of voters who backed the losing candidates, and various asserted "voting power" advantages attributed to large (populous) states, small states, states with large populations of noncitizens, states with low rates of voter participation, and populous states with concentrations of minority-group voters  In addition, the NPV compact would almost certainly eliminate the need for contingent election of the President and Vice President under the Twelfth Amendment  NPV advocates also assert the compact would provide a practical benefit to states that tend to be noncompetitive in presidential elections and which therefore receive fewer campaign visits by major party candidates  With "every vote equal," NPV maintains that presidential and vice presidential nominees and their organizations would need to spread their presence and resources more evenly as they campaigned for every vote nationwide, rather than concentrate on winning key "battleground" states  They assert that, under the present system candidates have no reason to poll, visit, organize, campaign, or worry about the concerns of voters of states that they cannot possibly win or lose  This means that voters in two thirds of the states are effectively disenfranchised in presidential elections because candidates concentrate their attention on a small handful of "battleground" states  In 2004, candidates concentrated over two-thirds of their money and campaign visits in just five states; over 80% in nine states, and over 99% of their money in just 16 states  For instance, NPV notes that California voters seldom see the presidential or vice presidential nominees or benefit from campaign spending because the Golden State, having voted Democratic since 1988, is considered to be reliably "blue," and Democratic Party candidates are said to take its 55 electoral votes for granted  They also note that Republican candidates make few California appearances, but, NPV asserts, for the opposite reason: why spend time and resources in support of an apparently hopeless cause? Similar arguments made by NPV on the Republican side apply to Texas, a state that has voted for Republican presidential nominees since 1980  In 2016 for instance, NPV claims that no Democratic nominee participated in a general election campaign event in California or Texas, while a Republican nominee appeared in only one campaign event in each of those states  By comparison, according to their calculations, the hotly contested battleground states of Florida, North Carolina, and Pennsylvania received, respectively, 71, 55, and 54 candidate appearances  According to NPV's analysis of campaign appearances, the 2016 major party candidates for President and Vice President appeared at a total of 375 campaign events during the general election campaign, but they visited only 12 states; by NPV's calculation, 38 states and the District of Columbia were bypassed during the campaign  NPV advocates also maintain that the concentration of campaign resources, advertising, and candidate appearances in battleground states depresses turnout in "flyover" states, where candidates make few campaign appearances  The U S  Elections Project report, America Goes to the Polls, 2016 , appears to offer statistics consistent with this assertion, finding that the participation rate of the population eligible to vote in 14 battleground states was 65% in the 2016 presidential election, as opposed to comparable nationwide turnout of 60%  It also reports findings similar to those advanced by NPV: 95% of campaign visits during the 2016 campaign were made in battleground states, as was 99% of "ad spending " The NPV manifesto also cites a Brookings Institution study of the 2004 presidential election in support of its argument, stating, "Because the electoral college has effectively narrowed elections like the last one to a quadrennial contest for the votes of a relatively small number of states, people elsewhere are likely to feel that their votes don't matter " It should be noted, however, that a range of other political, social, cultural, and economic factors may also contribute to the disparity in turnout between battleground and non-battleground states  NPV further suggests that the disparity in participation may ultimately damage the ability to govern on the state and local levels and could have a negative impact on the legitimacy of public institutions: Diminished voter turnout in presidential races in non-battleground states weakens down-ballot candidates, thereby making the state even less competitive in the future  Governance—not just electioneering—is affected by the winner-take-all rule


Report 2:  National Popular Vote opponents oppose the compact on various grounds  Some argue that it is unconstitutional or "anticonstitutional," that is, contrary to the Founders' intentions and the spirit of the nation's fundamental charter  It is also asserted that NPV would solve few of the electoral college system's alleged problem issues and would create some of its own  Finally, some observers note that the NPV compact is an interstate compact as defined in Article I, Section 10, clause 3 of the Constitution, and as such would be subject to congressional approval  This issue is examined in greater detail in a separate section of this report  On the most fundamental philosophical basis, opponents might argue that the NPV compact violates one of the basic principles of majoritarian democracy: it does not require that candidates win a majority of the popular vote in order to gain the presidency  Rather, it would anoint as winner the ticket that gains more popular votes than any other  A majoritarian democracy, it may be argued, should require a majority in order to elect; it may be further noted that the existing system, by comparison, requires a majority in the electoral college  As one commentary noted only the strictest of majoritarians desire a purely majoritarian presidential election system, and those individuals should be deeply troubled by the prospect of plurality presidencies, which the NPVC [sic] expressly countenances  Indeed, the NPVC promises to create more difficulties and "misfires" in its own way than the Electoral College system its proponents so earnestly seek to replace  Further, opponents might ask how the NPV compact would function in the event of a multicandidate election, a phenomenon that recurs from time to time in U S  presidential elections  One commentator posited the following problematic scenario under such circumstances: Under the compact, one can easily imagine a multi-candidate race in which a candidate would win, say, a thirty-four percent plurality of the popular vote nationwide while losing in every state and D C  If all of the states and D C  were signatories to the compact, all the electoral votes in such a hypothetical race would be awarded contrary to the will of voters choosing electors (still not voting directly for President under this plan)  Would the United States accept a President who wasn't the choice of sixty-six percent of those voting, nor even the choice of a single state? The existing electoral college system, NPV skeptics might also assert, is a fundamental element in the federal constitutional arrangements established by the Constitution  Fearing "the tyranny of the majority," the Founders established a system of government that provides checks and balances designed to restrain the majority and secure minority rights  These principles are also embedded in the structure of federal elections: the Senate, the House of Representatives, and the presidency were deliberately provided with different terms of office and different electorates, and the states were given an important role in the federal election process  In particular, through the electoral college the United States elects its national Presidents and Vice Presidents in a state-based federal election  Successful nominees are compelled under this system to present a broad political vision that commands nation-spanning "concurrent majorities" and appeals to the great variety of Americans  As in the case of the Senate, less populous states are accorded a small numerical advantage by assignment of two at-large electors reflecting the Constitution's equal apportionment of Senators to each state regardless of its population  The NPV initiative, they could claim, would discard the Founders' intentions in favor of what they consider to be a flawed "majoritarian" presidency that would ill-serve a continent-spanning and profoundly diverse republic  Another criticism centers on the use of the NPV compact to effect a fundamental change in the presidential election process and a de facto amendment to the Constitution, but without following the procedures set out in Article V  Critics may note that NPV's founders admit their plan is an "end run" around the Constitution  Proponents might counter with the argument that Article V presents too high a hurdle for what they consider a necessary reform of the system  Opponents, however, could respond that the Founders intended the various supermajority requirements in Congress and the states to ensure that successful constitutional amendments enjoy broad national support  The bare majority of electoral votes required to implement NPV, they might note, meets none of these supermajority requirements  As one study critical of the NPV initiative concluded, because the use of an interstate compact "does not conform to the constitutional means of changing the original decisions of the Framers, NPV could not [therefore] be a legitimate innovation " A final argument on this line might be that one "end run" around the amendment process might lead to others, setting a dangerous precedent for similar efforts in the future  Opponents might note that the NPV would eliminate the electoral college system's multiplier effect generated by the winner-take-all or general ticket system used in 48 states and the District of Columbia, which tends to magnify the winning ticket's margin of victory, and is said to confer greater legitimacy to the victors  For instance, in 2016, Republican nominee Donald Trump's clear electoral vote majority of 304 votes (56 5% of the total), compared with Democratic nominee Hillary Clinton's 227 (42 2% of the total) could be said to reinforce and confirm his victory, notwithstanding Clinton's plurality of the popular vote (48 2%), compared with Trump's 46 1%  From a practical standpoint, NPV opponents might argue that the NPV would actually lead to an increase in contested election results and legal challenges in the states, as the political parties maneuver to claim every possible vote  They assert that the existing tabulation of popular votes within each state reduces contested results and recounts  Under NPV, the incentive to gain every vote would arguably lead to far broader disputes and widespread recounts at every level of election administration  As a Heritage Foundation study concluded Under the NPV … any suspicions necessitating a recount in even a single district would be an incentive for a national recount     The prospect of a candidate challenging "every precinct, in every county, in every state of the Union" should be abhorrent to anyone who witnessed the drama, cost, delay, and undue litigation sparked by the Florida recount of 2000  Opponents might also assert that the increased incidence of recounts would be further complicated by wide-ranging disparities in state procedures, potentially leading to prolonged periods of uncertainty following close presidential elections  Critics may also note that the NPV plan contains no "statute of limitations," unlike proposed constitutional amendments, for which Congress typically sets a seven-year ratification period  Where, critics may ask, is a similar time limit that would "sunset" the NPV compact, after which it would expire or return to "square one"? According to its website, NPV was launched on February 23, 2006; if it were a constitutional amendment proposed by Congress, it would have expired on February 23, 2013, since by the end of the customary seven-year deadline it was "ratified" by only eight states and the District of Columbia  By what reasoning, they might ask, should the NPV be exempt from the standards of timeliness and contemporaneity Congress customarily sets for constitutional amendments? Opponents might reject claims that, under NPV, campaign spending and candidate appearances would be spread and scheduled more widely, beyond the current concentration of time and resources in battleground states  They might argue that spreading campaign resources and candidate events in non-battleground states is a questionable argument to justify a fundamental change in the presidential election process  Campaign appearances and spending, they could assert, should not be considered to be a local economic stimulus package, nor are the amounts in question sufficient to make much of a difference in the economic condition of most states  As one critical analysis notes, "    the nation does not hold presidential elections to foster local economic development " Moreover, they might continue, it is equally dubious to assert that nominees will slight the concerns of citizens of the non-battleground states from which they draw their greatest support, or that concentrated campaigning in the battleground states somehow "disenfranchises" voters in others  In the modern era, a small percentage of voters actually attends an in-person presidential or vice presidential candidate appearance  Television (especially broadcast and cable TV news networks), social media, the internet, and newspapers—not the traditional rallies, torchlight parades, and handbills—dominate presidential election campaigns in the 21 st century  In addition to policy issues discussed previously, some observers have also raised questions related to the NPV initiative based on the fact that it is an interstate compact as defined in the Constitution  Others have questioned whether NPV might conflict with some provisions of the Voting Rights Act  The NPV initiative has been described by its supporters variously as a bill, a state-level statute, and an interstate compact  The latter reference necessitates an analysis of whether the initiative complies with the Compact Clause of the Constitution  An interstate compact—under the broadest understanding—is a contract between two or more consenting states  The Supreme Court has further suggested that an interstate compact often requires reciprocal commitments between the governments of two or more states, such that one state's commitment is conditioned on the action of another state and no state can unilaterally repeal its commitment  The use of interstate compacts predates the Constitution, as the Articles of Confederation contained a similar Compact Clause that provided a qualified prohibition on states entering into any agreements between them without the consent of Congress  The chaos resulting from the disunity created by the Articles of Confederation prompted the Framers of the Constitution generally to "impose more uniformity" among the states, resulting in a Constitution that wholly prohibits states from entering into any treaties, alliances, and federations  Nonetheless, the Constitution maintained the Articles of Confederation's qualified prohibition on interstate compacts and agreements, allowing states to enter into an interstate compact so long as the participating states seek the consent of Congress  Specifically, the Compact Clause provides that "No State shall, without the Consent of Congress     enter into any Agreement or Compact with another State     " While the historical rationale for Article I's qualified prohibition on interstate compacts is unclear, the Compact Clause generally reflects the view of the Framers that states should be able to work cooperatively together, as well as the concern that unchecked interstate alliances might threaten the harmony of the Union or the authority vested by the Constitution in the federal government  As the Supreme Court noted in Cuyler v  Adams , "By vesting in Congress the power to grant or withhold consent, or to condition consent on the states' compliance with specified conditions, the Framers sought to ensure that Congress would maintain ultimate supervisory power over cooperative state action that might otherwise interfere with the full and free exercise of federal authority " The Compact Clause places no limits on what might be done through an interstate compact other than the requirement of congressional consent  In the early years of government under the Constitution, compacts were used almost exclusively to settle boundary disputes  Beginning with the establishment of the Port of New York Authority in 1921, however, compacts began to be used to address more complex, regional issues requiring intergovernmental cooperation  Some compacts are merely advisory in form, but others may be regulatory, with significant powers granted to multistate commissions  More recently, compacts have addressed such wide-ranging concerns as mental health treatment, law enforcement and crime control, education, driver licensing and enforcement, environmental conservation, energy, nuclear waste control, facilities operations, transportation, economic development, insurance regulation, placement of children and juveniles, disaster assistance, and pollution control  Approximately 200 interstate compacts are in effect today  Accordingly, the central legal issue with respect to the Compact Clause is whether a given interstate compact requires the consent of Congress  While a "literal" reading of the Compact Clause "would require the States to obtain congressional approval before entering into any agreement among themselves, irrespective of form, subject, duration, or interest to the United States [emphasis added]," the Supreme Court has repeatedly rejected such a reading  In 1893, in Virginia v  Tenness e e , Justice Stephen Field, writing for the Court, contended that a broad reading of the Compact Clause would "embrace all forms of stipulation, written or verbal, and relating to all kinds of subjects[,]" requiring congressional consent to agreements "which the United States can have no possible objection or have any interest in interfering with," as well as those that "may tend to increase     the political influence of the contracting states, so as to encroach upon or impair the supremacy of the United States     " Surmising that the Compact Clause could not have been intended to have such a broad reach, Justice Field concluded that the Clause prohibits states from entering into compacts without congressional consent only when the underlying compact is "directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States " The Supreme Court has subsequently reaffirmed Justice Field's "functional view of the Compact Clause," and, accordingly, generally where an agreement does not fall within the scope of the Compact Clause as envisioned by the Court in Virginia v  Tennessee , the agreement "will not be invalidated for lack of congressional consent " Whether the NPV initiative requires congressional consent under the Compact Clause first requires a determination as to whether NPV even constitutes an interstate compact  At times, its supporters have resisted framing the initiative as an interstate compact, arguably out of concern for running afoul of the Compact Clause's provisions  For example, Professor Akhil Amar has argued that because the initiative does not create a "new interstate governmental apparatus," the NPV should not be considered an interstate compact, as NPV compact signatory states are merely exercising power collectively that each state could exercise on its own  It is unclear, however, whether the creation of a new interstate governmental entity formed out of an agreement between two or more states is necessary, as opposed to sufficient, in order to deem an agreement as being an interstate compact subject to the Compact Clause  While the Supreme Court, in Northeast Bancorp , suggested that a "joint organization or body" formed out of an interstate agreement is a "classic indic[ium] of a compact," the Court has never adopted a definition of an interstate compact that solely rests on the existence of an interstate governmental body  Instead, the Court appears to have adopted a broader definition of what an interstate compact can entail  For example, in Virginia v  Tennessee , the Court noted that the words "compacts" and "agreements" are synonymous and "cover all stipulations affecting the conduct or claims of the parties " In other words, when two or more states enter into a stipulated agreement whereby one state agrees to perform an act in consideration for a reciprocal act by the other state(s), that agreement can be considered an interstate compact  This broad definition of a compact appears to encompass the NPV compact, as the initiative requires signatory states to agree mutually to appoint their electors to the winner of the national popular vote  Moreover, NPV binds each assenting state, as no member state can withdraw from it within six months or less of the end of a President's term  Because NPV prohibits states from freely "modify[ing] or repeal[ing] [the agreement] unilaterally" and requires "reciprocation" of mutual obligations, it appears that the initiative can be described as an interstate compact  Assuming the NPV initiative is an interstate compact, the question remains whether it is one that implicates the Compact Clause  The answer to that question primarily depends on whether NPV is "directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States  " In other words, the "test" for whether a particular interstate compact requires congressional consent is centrally concerned with vertical balances of power between the federal government and the states; namely, "whether the Compact enhances state power quoad the National Government " While the NPV arguably increases the political power of the states that have consented to it by ensuring that those states' desired outcome for the presidential election—the awarding of the majority of electoral votes to the presidential candidate supported by the majority of the voting populace—it is unclear how that increase in political power would be at the expense of the power of the federal government  After all, the Constitution provides the federal government with no role in determining the members of the electoral college  One scholar has suggested that the NPV initiative would lead to a vertical alteration of power by eliminating the possibility that the House of Representatives would resolve a presidential election in the absence of an electoral majority for a single candidate because it is premised on a majority of electoral votes going to a single candidate  The House of Representatives, however, has decided only two presidential elections in American history, and whether such an arguably hypothetical and de minimis diminishment of federal power through the NPV would be sufficient to require congressional consent under the Compact Clause is simply unresolved by the relevant case law  While the Supreme Court's case law interpreting the Compact Clause is centrally concerned with vertical federalism concerns (i e , the balance of power between the state and federal governments), the Court has recognized a potential secondary rationale suggested for the Compact Clause: to preserve the horizontal balance of powers among the various states  And horizontal federalism concerns could very well be implicated by the Compact Clause, as the provision appears to have been included in the Constitution out of concern both for the supremacy of the federal government and unity among the various states  Whether the NPV compact threatens the powers of nonconsenting states has been the subject of much debate among academics  Those in support of the initiative have contended that the nonconsenting states do not lose any power as a result of the NPV  According to this line of argumentation, even under the NPV, all states would retain their right to select the electors of their choosing, as nonmember state electors would still be counted in the electoral vote  Others, however, have pointed to the underlying premise of the NPV—to enhance the political power of more populous states in presidential elections—as evidence that the initiative diminishes the power of nonconsenting states  In other words, while non-compacting states would still retain the power to appoint electors, the influence that comes with that power would arguably be diminished because a state's role in the national election would be defined by its percentage of the popular vote and not by its percentage of electors, warranting congressional interest in approving a compact that effectuated such a change in national elections  Ultimately, however, whether the NPV actually threatens the power of nonconsenting states is a debate that remains active within academia but would likely be the source of considerable litigation if the initiative ever became effective  If congressional consent is needed for the NPV, that consent can take various forms  Usually congressional consent to an interstate compact takes the form of a joint resolution or act of Congress specifying its approval of the text of the compact and adding any conditions or provisions it deems necessary, often embodying the compact document  As with most congressional actions, consent to an interstate compact must occur with the approval of both houses and must be signed by the President before it becomes law  Rarely has the President vetoed or threatened to veto consent legislation by Congress  While congressional consent to an interstate compact is most often explicit, consent by Congress may also be implied by subsequent acts of Congress as "[a]n inference clear and satisfactory that Congress     intended to consent" to a compact may be sufficient  Congress may also delegate its power to approve a compact to a federal official so long as an "intelligible principle" against which approval can be measured is apparent  Ultimately, if congressional consent is truly needed for NPV to be effective, the initiative might have difficulty ever being enacted because the approval of both houses of Congress and the President would likely necessitate additional hurdles beyond the already challenging task of amassing support at the state level for the NPV  Beyond the legal issues raised with respect to the Compact Clause, the NPV initiative also potentially raises other broader constitutional concerns, including whether the states can functionally obviate the role of the electoral college through the NPV  Article II of the Constitution establishes that the election of the President should occur indirectly through the election by the electoral college  The choice of an indirect election for the President was a deliberate one by the Framers of the Constitution, because, while noting the importance that the "sense of the people" should influence the choice for President, they found it "equally desirable" for the "immediate election" of the President to be made by a body representative of distinct state interests and removed from the threat of unchecked majoritarianism  The result was that the Constitution established a presidential election process that was "manifestly nonmajoritarian," with the electoral college, a body established to represent the distinct views of each state, as the centerpiece of the election process  The central constitutional issue presented by the NPV, therefore, is whether the states, through an interstate compact, can functionally transform the presidential election system enshrined in the Constitution into a more majoritarian process  Supporters of the NPV argue that the Constitution provides the legal means for states to transform the presidential election system into one where the President is elected based solely on the result of the national popular vote  Specifically, clause 2 of Article II, Section 1 of the Constitution provides the states with the power to "appoint, in such Manner as the Legislature thereof may direct," the electors who represent the state in the electoral college  Facially, the Constitution's primary limitation on the power of a state to select its electors is the final number of electors awarded to each state  While perhaps an argument can be made that the structure, logic, and history of the Constitution place limits on the manner or method in which a state chooses its electors, the text of the Constitution simply does not impose any such limits  Supreme Court case law also supports reading Article II of the Constitution to broadly provide states with wide discretion as to the manner in which its electors are selected  Specifically, in 1892 in McPherson v  Blacker, a unanimous Supreme Court upheld a Michigan law providing for the election by individual congressional district of presidential electors against a challenge that the law violated Article II of the Constitution  In so holding, the Court placed great emphasis on a number of state laws that existed shortly after the ratification that provided a variety of "modes of choosing the electors," including selection by the legislature itself, by a "vote of the people for a general ticket," "by vote of the people in districts," or by some permutation of those methods  Viewing this evidence together with the text of Article II and the historical evidence from the Constitutional Convention led the Court to broadly conclude state legislatures have "conceded plenary power     in the matter of the appointment of electors," allowing the Michigan law to stand  Applying McPherson to the case of the NPV, the argument can and has been made that if the states have plenary power with respect to the manner of how electors are appointed, the power necessarily allows states to select electors in line with the results of the national popular vote  More recently, supporters of the NPV have relied on the Supreme Court's 2015 ruling in Arizona Legislature v  Arizona Independent Redistricting Commission (AIRC) —which held that the State of Arizona had wide discretion under the Elections Clause of the Constitution to select the method by which the state provided for redistricting —to argue that the states retain broad discretion in selecting electors under Article II, which uses similar language to the provision interpreted in AIRC  Others have argued that the structure of the Constitution and historical evidence suggest that the states do not have such vast discretion in appointing electors as to functionally transform the election for President into a national popular referendum  As noted elsewhere in this report, the electoral college was created by the Framers to ensure that states with the least population retained power in the selection of the President, providing a check against domination by the most populous states  The electoral college, being a product of the choices of individual state legislatures, was envisioned by the Framers as a body that would represent the specific interests of a given state, as opposed to the undifferentiated nation at large  Accordingly, it may be argued that allowing the most populous states to collude to ensure that the national popular vote, as opposed to the wishes of an individual state, dictates the results of a state's slate of electors, could arguably be irreconcilable with the Framers' intentions with respect to the electoral college  As such, for those who find the NPV compact constitutionally suspect under Article II, McPherson 's broad pronouncements about the nature of a state's power to appoint electors should be viewed in the context of that particular case, where the state of Michigan was attempting to appoint its electors based on the votes of an individual district in the state, as opposed to the state as a whole  In contrast to the law at issue in McPherson , with NPV, there appears to be no evidence contemporaneous with the ratification of the Constitution of a state selecting its electors in accordance with the results of the national popular vote  Unlike the State of Michigan in McPherson , an NPV state's electors might not be a product of the views of the state at the time of the election, but instead would reflect national popular sentiment about who should be the President  Moreover, the Supreme Court, in interpreting arguably analogous language from Article I of the Constitution allowing states to regulate the manner of the selection of the Members of the House of Representatives and Senate, concluded that the states cannot exercise their delegated authority in a way that would "effect a fundamental change in the constitutional structure " The question that remains is whether the Court in a future case challenging the NPV compact would interpret the states' authority under Article II to appoint electors to be broad enough to allow the President to be selected as a result of the national popular vote, a question that, given the lack of any precise precedent respecting the constitutionality of the NPV compact under Article II, will likely remain unresolved until such time  Other critics claim the NPV compact might violate Sections 2 and 5 of the Voting Rights Act (VRA)  Writing in Columbia Law Review , David Gringer invokes the voting power theory  He argues that the plan conflicts with Section 2 of the VRA because moving from "a state-based [vote] to a national popular vote dilutes the voting strength of a given state's minority population by reducing its ability [voting power] to influence the outcome of presidential elections " Gringer also asserts that the NPV compact may violate Section 5 of the act  In 2013, however, the U S  Supreme Court invalidated Section 4(b) of the VRA, which contained a formula prescribing which states and jurisdictions with a history of discrimination were required to obtain prior approval or "preclearance" under Section 5 before changing any voting standard, practice, or procedure  Although the Court invalidated only the coverage formula in Section 4, by extension, Section 5 has been rendered currently inoperable  Prior to the Supreme Court ruling, Gringer argued that the NPV compact would qualify as a covered practice under Section 5, and that the legislatures of all the "covered" states would have been required to obtain preclearance before implementing the compact  Responding to this point, National Popular Vote Inc  noted the following: The National Popular Vote bill manifestly would make every person's vote for President equal throughout the United States in an election to fill a single office (the Presidency)  It is entirely consistent with the goal of the Voting Rights Act  There have been court cases under the Voting Rights Act concerning contemplated changes in voting methods for various representative legislative bodies     However, these cases do not bear on elections to fill a single office (i e , the Presidency)  In 2012, the Justice Department's Civil Rights Division specifically declined to challenge California's accession to the NPV compact on VRA grounds  The states' authority to appoint electors by any method their legislatures choose is not absolute  Federal court decisions have struck down state laws concerning appointment of electors that were found to be in violation of the Fourteenth Amendment's guarantee of equal protection: Although Clause 2 (of Article II, Section 1 of the Constitution) seemingly vests complete discretion in the states, certain older cases had recognized a federal interest in protecting the integrity of the process  Thus, the Court upheld the power of Congress to protect the right of all citizens who are entitled to vote to lend aid and support in any legal manner to the election of any legally qualified person as a presidential elector     [I]n Oregon v  Mitchell (42 U S  112 (1970)), the Court upheld the power of Congress to reduce the voting age in presidential elections and to set a thirty-day durational residency period as a qualification for voting in presidential elections  Although the Justices were divided on the reasons, the rationale emerging from this case, considered with Williams v  Rhodes , (393 U S  20 1968)) is that the Fourteenth Amendment limits state discretion in prescribing the manner of selecting electors and that Congress in enforcing the Fourteenth Amendment may override state practices that violate that Amendment and may substitute standards of its own  Critics of the electoral college system have sought direct election of the President and Vice President without success for more than two centuries  The NPV initiative represents a novel effort to achieve this goal by use of an interstate compact that would circumvent the stringent requirements necessary for the proposal and ratification of constitutional amendments  Since its inception in 2006, NPV has achieved a degree of success: 14 states and the District of Columbia, controlling a total of 189 electoral votes, have joined the compact since 2008  Progress has arguably been sporadic, however, notwithstanding active campaigning by National Popular Vote Inc  Over the course of more than a decade, NPV has heretofore failed to develop a sustained momentum toward its stated goal of states controlling 270 electoral votes  The action of three states in joining NPV to date in 2019 marks the most activity in a single year since 2008; it remains to be seen whether this trend will continue  To date, certain Democratic-leaning states have joined the compact  The arguable lack of support in Republican-controlled state legislatures raises questions about further accessions to the compact in the immediate future, particularly given the fact that the GOP controlled both legislative chambers in 30 states following the 2018 elections  To date, while the NPV initiative has generated interest among supporters of direct popular election of the President, it does not appear to have gained widespread awareness among the public at large  The findings of the March 27, 2019, Politico/Morning Consult survey cited earlier in this report arguably suggest that greater public knowledge of NPV might spur popular support for the compact  This might then contribute to further momentum if additional states were to join, particularly populous ones like Florida (29 electoral votes), Georgia (16 electoral votes), and Ohio (18 electoral votes) where the compact was under active consideration in 2019  Under these circumstances, proponents might be energized and encouraged by a sense of progress for the initiative  At the same time, NPV opponents could be expected to coalesce around the issues identified earlier in this report, and renew and increase their efforts in defense of the electoral college system  The activities of both might ultimately bring the NPV initiative to the more immediate attention of Congress 

ground_truth: Medicaid has grown by over 50 percent over the last decade, with about $370 billion in federal spending in fiscal year 2017. CMS is responsible for assuring that expenditures—reported quarterly by states—are consistent with Medicaid requirements and matched with the correct amount of federal funds. CMS's review of reported expenditures has become increasingly complex due to variation in states' Medicaid programs and an increasing number of different matching rates. GAO was asked to examine CMS's oversight of state-reported Medicaid expenditures. In this report, GAO examined how CMS assures that (1) expenditures are supported and consistent with requirements; and (2) the correct federal matching rates were applied to expenditures subject to a higher match. GAO also examined the financial impact of resolved errors. GAO reviewed documentation for the most recently completed quarterly reviews by 3 of CMS's 10 regional offices for six states that varied by Medicaid program expenditures and design. GAO also reviewed policies, procedures, and data on resolved errors; and interviewed CMS and state officials. GAO assessed CMS's oversight processes against federal standards for internal control. The Centers for Medicare & Medicaid Services (CMS), which oversees Medicaid, has various review processes in place to assure that expenditures reported by states are supported and consistent with Medicaid requirements. The agency also has processes to review that the correct federal matching rates were applied to expenditures receiving a higher than standard federal matching rate, which can include certain types of services and populations. These processes collectively have had a considerable federal financial benefit, with CMS resolving errors that reduced federal spending by over $5.1 billion in fiscal years 2014 through 2017. However, GAO identified weaknesses in how CMS targets its resources to address risks when reviewing whether expenditures are supported and consistent with requirements. CMS devotes similar levels of staff resources to review expenditures despite differing levels of risk across states. For example, the number of staff reviewing California's expenditures—which represent 15 percent of federal Medicaid spending—is similar to the number reviewing Arkansas' expenditures, which represents 1 percent of federal Medicaid spending. CMS cancelled in-depth financial management reviews in 17 out of 51 instances over the last 5 years. These reviews target expenditures considered by CMS to be at risk of not meeting program requirements. CMS told GAO that resource constraints contributed to both weaknesses. However, the agency has not completed a comprehensive assessment of risk to (1) determine whether oversight resources are adequate and (2) focus on the most significant areas of risk. Absent such an assessment, CMS is missing an opportunity to identify errors in reported expenditures that could result in substantial savings to the Medicaid program. GAO also found limitations in CMS's processes for reviewing expenditures that receive a higher federal matching rate. Internal guidance for examining variances in these expenditures was unclear, and not all reviewers in the three CMS regional offices GAO reviewed were investigating significant variances in quarter-to-quarter expenditures. Review procedures for expenditures for individuals newly eligible for Medicaid under the Patient Protection and Affordable Care Act were not tailored to different risk levels among states. For example, in its reviews of a sample of claims for this population, CMS reviewed claims for the same number of enrollees—30—in California as for Arkansas, even though California had 10 times the number of newly eligible enrollees as Arkansas. Without clear internal guidance and better targeting of risks in its review procedures for expenditures receiving higher matching rates, CMS may overpay states. GAO is making three recommendations, including that CMS improve its risk-based targeting of oversight efforts and resources, and clarify related internal guidance. The Department of Health and Human Services concurred with these recommendations.