GAO-07-235R Potential Oversight Issues 

United States Government Accountability Office

Washington, DC 20548 

Comptroller General

of the United States

November 17, 2006 

Subject: Suggested Areas for Oversight for the 110th Congress 

Congressional Leadership: 

As I publicly announced in early September, I am pleased to offer three sets of 

recommendations, based on the work of the U.S. Government Accountability Office 

(GAO), for your consideration for the agenda of the 110th Congress. The first 

suggests targets for near-term oversight; the second proposes policies and programs 

that are in need of fundamental reform and re-engineering; and the third lists 

governance issues that should be addressed to help ensure an economical, efficient, 

effective, ethical, and equitable federal government capable of responding to the 

various challenges and capitalizing on related opportunities in the 21st century. 

Details on each of these recommendations can be found in the enclosure. 

As you know, GAO has three key roles to play in making a difference for the Congress 

and the American people: oversight, insight, and foresight. The attached lists reflect 

those missions and represent an effort to synthesize GAO’s institutional knowledge 

and special expertise for the benefit of you and your colleagues in your planning 

efforts. In this regard, I believe that to be effective, congressional oversight needs to 

be constructive. For example, related hearings and other activities should offer 

opportunities for leading federal agencies to share best practices and facilitate 

governmentwide transformation. They should also hold people accountable for 

delivering positive results in an economical, efficient, effective, ethical, and equitable 

manner. This balanced approach is likely to help accelerate progress while avoiding 

a further erosion of the public’s trust and confidence in government. 

We at GAO stand ready to assist the 110th Congress in meeting its constitutional 

responsibilities, just as we have assisted the 109th Congress. For example, during 

fiscal year 2006, GAO witnesses testified at 240 hearings and provided 17 additional 

statements for the record. As you know, we are preparing updates of our Strategic 

Plan and High-Risk List for publication early in calendar year 2007. However, I also 

wanted to offer these sets of recommendations in order to give you and other leaders 

a jump-start on your planning for the next Congress. 

There are two general themes that support our recommendations. First, we cannot 

afford to continue business as usual in Washington, given our current deficit and 
growing long-term fiscal challenges. Second, most of the federal government’s 

current policies, programs, functions, and activities are based on conditions that 

existed decades ago, are not results-based, and are not well aligned with 21st century 

realities. Therefore, there is a need to engage in a fundamental review, 

reprioritization, and re-engineering of the base of government. These themes 

provided the foundation for our February 2005 report 21st Century Challenges: Reexamining the Base of the Federal Government (GAO-05-325SP). 

I would be pleased to discuss these recommendations with you and other members of 

the leadership team at your earliest convenience. GAO’s Office of Congressional 

Relations will be contacting your staff to schedule a meeting. In the meantime, I will 

be sharing these ideas with your colleagues on both sides of the aisle in both 

chambers. 

Thank you in advance for your time and consideration. 

Sincerely yours, 

David M. Walker 

Comptroller General 

of the United States 

Enclosure 

Page 2 GAO-07-235R Potential Oversight Issues 
List of Addressees

The Honorable Bill Frist 

Majority Leader 

United States Senate 

The Honorable Harry Reid 

Minority Leader 

United States Senate 

The Honorable J. Dennis Hastert 

Speaker of the House of Representatives 

The Honorable John Boehner 

Majority Leader 

House of Representatives 

The Honorable Nancy Pelosi 

Minority Leader 

House of Representatives 

The Honorable Thad Cochran 

Chairman 

The Honorable Robert C. Byrd 

Ranking Minority Member 

Committee on Appropriations 

United States Senate 

The Honorable Wayne Allard 

Chairman 

The Honorable Richard J. Durbin 

Ranking Minority Member 

Subcommittee on Legislative Branch 

Committee on Appropriations 

United States Senate 

The Honorable Susan M. Collins 

Chairman 

The Honorable Joseph I. Lieberman 

Ranking Minority Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable Jerry Lewis 

Chairman 

The Honorable David Obey 

Ranking Minority Member 

Committee on Appropriations 

House of Representatives 

Page 3 GAO-07-235R Potential Oversight Issues 
The Honorable Tom Davis 

Chairman 

The Honorable Henry A. Waxman 

Ranking Minority Member 

Committee on Government Reform 

House of Representatives 

Page 4 GAO-07-235R Potential Oversight Issues 
Enclosure 

Page

Targets for Near-Term Oversight

1. Reduce the Tax Gap 7

2. Address Governmentwide Acquisition and Contracting Issues 8

3. Transform the Business Operations of the Department of Defense, Including 

Addressing All Related “High-Risk” Areas 

9

4. Ensure the Effective Integration and Transformation of the Department of 

Homeland Security 

10

5. Enhance Information Sharing, Accelerate Transformation, and Improve 

Oversight Related to the Nation’s Intelligence Agencies 

11

6. Enhance Border Security and Enforcement of Existing Immigration Laws 12

7. Ensure the Safety and Security of All Modes of Transportation and the 

Adequacy of Related Funding Mechanisms 

13

8. Strengthen Efforts to Prevent the Proliferation of Nuclear, Chemical, and 

Biological Weapons and Their Delivery Systems (Missiles) 

14

9. Ensure a Successful Transformation of the Nuclear Weapons Complex 15

10. Enhance Computer Security and Deter Identity Theft 16

11. Ensure a Cost Effective and Reliable 2010 Census 17

12. Transform the Postal Service’s Business Model 18

13. Ensure Fair Value Collection of Oil Royalties Produced from Federal Lands 19

14. Ensure the Effectiveness and Coordination of U.S. International 

Counterterrorism Efforts 

20

15. Review the Effectiveness of Strategies to Ensure Workplace Safety 21

Policies and Programs That Are in Need of Fundamental Reform and ReEngineering

1. Review U.S. and Coalition Efforts to Stabilize and Rebuild Iraq and 

Afghanistan 

22

2. Ensure a Strategic and Integrated Approach to Prepare for, Respond to, 

Recover, and Rebuild from Catastrophic Events 

23

3. Reform the Tax Code, Including Reviewing the Performance of Tax 

Preferences 

24

4. Reform Medicare and Medicaid to Improve Their Integrity and Sustainability 25

Page 5 GAO-07-235R Potential Oversight Issues 
Page

5. Ensure the Adequacy of National Energy Supplies and Related Infrastructure 26

6. Reform Immigration Policy to Ensure Equity and Economic Competitiveness 27

7. Assess Overall Military Readiness, Transformation Efforts, and Existing 

Plans to Assure the Sustainability of the All-Volunteer Force 

28

8. Assure the Quality and Competitiveness of the U.S. Education System 29

9. Strengthen Retirement Security Through Reforming Social Security, 

Increasing Pension Saving and Promoting Financial Literacy 

30

10. Examine the Costs, Benefits, and Risks of Key Environmental Issues 31

11. Reform Federal Housing Programs and Related Financing and Regulatory 

Structures 

32

12. Ensure the Integrity and Equity of Existing Farm Programs 33

13. Review Federal Efforts to Improve the Image of the United States 34

Governance Issues That Should be Addressed to Help Ensure an 

Economical, Efficient, Effective, Ethical, and Equitable Federal 

Government Capable of Responding to the Various Challenges and 

Capitalizing on Related Opportunities in the 21st Century 

1. Review the Need for Various Budget Controls and Legislative Process 

Revisions in Light of Current Deficits and Our Long-Range Fiscal Imbalance 

35

2. Pursue the Development of Key National Indicators 36

3. Review the Impact and Effectiveness of Various Management Reforms 

Enacted in Recent Years (e.g., GPRA, CFO Act, FFMIA, Clinger-Cohen, etc.) 

37

4. Review the Effectiveness of the Federal Audit and Accountability 

Community, Including the Oversight, Structure, and Division of 

Responsibility 

38

5. Modernize the Federal Government’s Organizational and Human Capital 

Models 

39

6. Re-examine the Presidential (Political) Appointment Process 40

7. Ensure Transparency over Executive Policies and Operations 41

8. Monitor and Assess Corporate Financial Reporting and Related Standards 

for Public Companies Accountability 

42

Page 6 GAO-07-235R Potential Oversight Issues 
Reduce the Tax Gap

The tax gap—the difference between the amounts taxpayers pay voluntarily and on time and 

what they should pay under the law—has been a long-standing problem. Most recently, the 

Internal Revenue Service (IRS) estimated a gross tax gap for tax year 2001 of $345 billion and, 

after enforcement efforts and late payments, a net tax gap of $290 billion. When some 

taxpayers fail to comply, the burden of funding the nation’s commitments falls more heavily 

on compliant taxpayers. Reducing the tax gap would help improve the nation’s fiscal stability. 

Based on IRS’s estimate, each 1 percent reduction in the net tax gap would likely yield $3 

billion annually. The gap can be reduced, though not eliminated, through a multiprong strategy 

of better service and enforcement of existing tax laws, plus legislative actions.

Key Topics Needing Congressional Oversight 

• Provide IRS with additional tools, such as enhanced withholding and information returns 

authorities for sources of income like capital gains on securities sales. 

• Require IRS to obtain data on the extent of, and reasons for, noncompliance. 

• Ensure that IRS leverages technology to improve efficiency and effectiveness in its 

taxpayer service and enforcement efforts. 

• Examine how IRS seeks to optimize the allocation of its resources, including how it 

balances enforcement and service efforts. 

• Assess whether IRS’s tax-gap reduction goals are adequate and whether it has a data-based 

strategy for achieving its goals. 

• Simplify the tax code and broaden the base by, for example, consolidating existing tax 

preferences (e.g., retirement). 

Selected GAO Products 

Capital Gains Tax Gap: Requiring Brokers to Report Securities Cost Basis Would Improve 

Compliance if Related Challenges Are Addressed. GAO-06-603. June 13, 2006. 

Tax Gap: Making Significant Progress in Improving Tax Compliance Rests on Enhancing 

Current IRS Techniques and Adopting New Legislative Actions. GAO-06-453T. February 15, 

2006. 

Tax Compliance: Better Compliance Data and Long-term Goals Would Support a More 

Strategic IRS Approach to Reducing the Tax Gap. GAO-05-753. July 18, 2005. 

Primary GAO Contacts 

Michael Brostek, Director, Strategic Issues, (202) 512-9110, brostekm@gao.gov. 

James White, Director, Strategic Issues, (202) 512-9110, whitej@gao.gov. 

Page 7 GAO-07-235R Potential Oversight Issues 
Address Governmentwide Acquisition and Contracting Issues

The acquisition of products and services from contractors consumes about a quarter of the 

government’s discretionary spending. In fiscal year 2005, federal agencies spent over $388 

billion on such contracts. The work of the government is increasingly being performed by

contractors, including emergency and large-scale logistics operations such as hurricane 

response and recovery and the war in Iraq. Many agencies rely extensively on contractors to 

carry out their basic missions. At the same time, GAO’s list of government high-risk areas 

includes acquisition and contract management issues that collectively expose hundreds of 

billions of taxpayer dollars to potential waste and misuse. The Congress should continue to 

monitor agencies’ efforts to address existing problems, while facilitating a re-examination of 

the rules and regulations that govern the government-contractor relationship in an 

increasingly blended workforce.

Key Topics Needing Congressional Oversight 

• Require agencies to report on mechanisms in place to ensure that contractors are playing 

appropriate roles and that agencies have retained sufficient workforce capacity to monitor 

contractor cost, quality, and performance, particularly in such critical operations as 

responding to Hurricane Katrina and rebuilding Iraq. 

• Assess agencies’ efforts to ensure that acquisitions are performance- and outcome-based, 

with appropriate risk-sharing contracts in place. 

• Require agencies with significant acquisition budgets, such as the Department of Defense 

(DOD) and the National Aeronautics and Space Administration (NASA), to better align 

requirements, budget, and acquisition processes to reconcile the differences between 

wants, needs, affordability, and sustainability, given current and future demands and 

resources. 

• Monitor the implementation of agency action plans to address the GAO high-risk areas 

related to acquisition and contract management. These include contracting at DOD, the 

Department of Energy, and NASA, as well as interagency contracting practices through the 

General Services Administration and other means. 

Selected GAO Products

Highlights of a GAO Forum: Federal Acquisition Challenges and Opportunities in the 21st 

Century. GAO-07-45SP. October 6, 2006. 

DOD Acquisitions: Contracting for Better Outcomes. GAO-06-800T. September 7, 2006. 

High-Risk Series: An Update. GAO-05-207. January 2005. 

Primary GAO Contact 

Katherine Schinasi, Managing Director, Acquisition and Sourcing Management, (202) 512-4841, 

schinasik@gao.gov. 

Page 8 GAO-07-235R Potential Oversight Issues 
Transform the Business Operations of the Department of Defense, Including 

Addressing All Related “High-Risk” Areas 

Of the 26 areas on GAO’s 2005 high-risk list of federal programs or activities that are at risk for 

waste, fraud, abuse, or mismanagement, 8 are Department of Defense (DOD) programs or 

operations and 6 are government high-risk areas for which DOD shares some responsibility. 

These high-risk areas relate to DOD’s major business operations intended to support the 

warfighter, including DOD’s overall management approach to business transformation, 

business systems modernization, financial management, the personnel security clearance 

process, supply chain management, support infrastructure management, weapon systems 

acquisition, and contract management. Billions of dollars have been wasted annually because 

of the lack of adequate transparency and appropriate accountability across DOD’s business 

areas. We have consistently reported and testified on the need for DOD to develop an 

integrated, enterprisewide business transformation plan and establish a chief management 

official position to lead the department’s overall business transformation efforts. To its credit, 

DOD has established management structures such as the Defense Business Systems 

Management Committee (DBSMC)—intended by DOD to be its primary transformation 

leadership and oversight mechanism—and the Business Transformation Agency to support the 

DBSMC. DOD has also established and updated its Business Enterprise Architecture and 

Enterprise Transition Plan, as well as a Financial Improvement and Audit Readiness Plan. To 

date, however, DOD’s primary focus has been on business systems modernization. 

Key Topics Needing Congressional Oversight 

• Require DOD to establish management accountability at an appropriate level of the 

organization with significant authority, experience, and tenure to provide sustained 

leadership needed to achieve successful and sustainable transformation. 

• Require DOD to develop and implement a viable strategic plan with goals, objectives, key 

milestones, and measures to monitor and report on progress in transforming its key 

business operations. 

• Evaluate DOD’s progress in complying with legislative requirements to improve its 

business systems modernization and financial management modernization efforts. 

• Require DOD to develop and implement plans to address its high-risk areas. 

Selected GAO Products 

Defense Business Transformation: A Comprehensive Plan, Sustained Leadership, and 

Integrated Efforts at All Levels Are Needed to Maintain Progress. GAO-07-229T. November 

16, 2006. 

Business Systems Modernization: DOD Continues to Improve Institutional Approach, but 

Further Steps Needed. GAO-06-658. May 15, 2006. 

High-Risk Series: An Update. GAO-05-207. January 2005. 

Primary GAO Contacts 

Henry L. Hinton, Jr., Managing Director, Defense Capabilities and Management, (202) 512-

4300, hintonh@gao.gov. 

Randy Hite, Director, Information Technology, (202) 512-6256, hiter@gao.gov. 

Page 9 GAO-07-235R Potential Oversight Issues 
Ensure the Effective Integration and Transformation 

of the Department of Homeland Security 

After its creation in 2003, the Department of Homeland Security (DHS) had to transform 22 

agencies—several with major management challenges—into one department. This is a highrisk endeavor because failure to effectively address its management challenges and program 

risks could have serious consequences for our national security. The areas GAO identified as 

at risk include planning and priority setting; accountability and oversight; and a broad array of 

management, programmatic, and partnering challenges. 

Key Topics Needing Congressional Oversight 

• Evaluate the progress of DHS and its components in strategic planning, particularly 

whether strategic plans conform to best practices and link performance goals to resource 

requirements. 

• Assess the progress of DHS in developing and integrating key management functions—

financial, acquisition, information, and human capital—across its components. 

• Review the progress of DHS and its components in performing risk assessments—

particularly in the mission areas like border and transportation security and critical 

infrastructure protection—as part of a risk management approach to the allocation of 

resources. 

• Examine the progress of DHS and its components in improving partnering with other 

federal, state and local governments, and private entities in the fulfillment of its homeland 

security and non-homeland security missions. 

Selected GAO Products

Risk Management: Further Refinements Needed to Assess Risks and Prioritize Protective

Measures at Ports and Other Critical Infrastructure. GAO-06-91. December 15, 2005. 

Results-Oriented Government: Improvements to DHS’s Planning Process Would Enhance 

Usefulness and Accountability. GAO-05-300. March 31, 2005. 

Department of Homeland Security: A Comprehensive and Sustained Approach Needed to

Achieve Management Integration. GAO-05-139. March 16, 2005.

Primary GAO Contacts

Cathleen Berrick, Director, Homeland Security and Justice, (202) 512-3404, berrickc@gao.gov. 

Bernice Steinhardt, Director, Strategic Issues, (202) 512-6543, steinhardtb@gao.gov.

Page 10 GAO-07-235R Potential Oversight Issues 
Enhance Information Sharing, Accelerate Transformation, and Improve Oversight 

Related to the Nation’s Intelligence Agencies 

Since September 11, 2001, the nation has made some progress in fixing a major vulnerability—

intelligence and law enforcement agencies’ failure to “connect the dots” and share information 

on the terrorists. Key legislation, presidential directives, and several commissions have 

focused on enhancing the management of the intelligence community’s budgets and activities 

and information sharing within the community and beyond. But progress has been slow in 

some key areas, including implementing the policies needed to govern information sharing. 

The December 2004 Intelligence Reform and Terrorism Prevention Act and several 

presidential directives established the Director of National Intelligence (DNI), which absorbed 

the functions of the previous Director of Central Intelligence. Following the March 2005 report 

of the President’s Commission on Weapons of Mass Destruction Intelligence Capabilities, the 

DNI further created numerous offices intended to enhance and transform the intelligence 

community’s functions and operations through a variety of initiatives throughout the 

intelligence community. These include improved central oversight of the National and Military 

Intelligence Program budgets, use of open sources, intelligence fusion centers, human capital 

policies and practices, and intelligence collection, analysis, and reporting. Moreover, the 

March 2005 report also recommended improvements in internal and external oversight to 

make sure reform occurs. Without continued congressional oversight of these issues, the 

progress and results of the many requirements and initiatives will remain unclear. 

Key Topics Needing Congressional Oversight 

• Assess the progress in transforming the intelligence community across the wide range of 

current initiatives. 

• Review how well the National Counter Terrorism Center and the Counter Proliferation 

Center have improved the quality of intelligence and how it is shared within the 

intelligence community and beyond. 

• Evaluate how well the Program Manager for the Information Sharing Environment 

responsible for implementing the policy and technological road map for sharing has 

achieved this objective. 

Selected GAO Products

Information Sharing: The Federal Government Needs to Establish Policies and Processes for 

Sharing Terrorism-Related and Sensitive but Unclassified Information. GAO-06-385. March 

17, 2006. 

High-Risk Series: An Update. GAO-05-207. January 2005 

Primary GAO Contacts

Eileen Larence, Director, Homeland Security and Justice, (202) 512-6510, larencee@gao.gov. 

Davi M. D’Agostino, Director, Defense Capabilities and Management, (202) 512-5431, 

dagostinod@gao.gov. 

Page 11 GAO-07-235R Potential Oversight Issues 
Page 12 GAO-07-235R Potential Oversight Issues 

Enhance Border Security and 

Enforcement of Existing Immigration Laws 

The terrorist attacks of September 11, 2001, showed how weak border security measures and 

ineffective enforcement of our nation’s immigration laws could be exploited to a tragic end. 

Although enhancing passport and visa security procedures, securing the borders and enforcing 

immigration laws have received increased funding and attention, millions of aliens live and 

work in the United States after entering the country illegally or overstaying the terms of a visa. 

This may present a significant national security challenge and could adversely affect citizens 

who compete with illegal aliens for jobs and bear immigration-related costs. The Departments 

of State and Homeland Security (DHS) have taken some steps to address these challenges, 

such as deploying additional personnel and technology overseas and at the borders, and using 

computer verification systems to detect fraudulent documents and reduce employment of 

unauthorized foreign workers. However, successful implementation of these steps has often 

been hampered by inadequate planning and guidance, misaligned priorities and resources, and 

outdated information technology systems. Additional congressional oversight can help ensure 

that travel document, border security, and immigration enforcement initiatives are yielding 

improved national and economic security for our nation’s citizens. 

Key Topics Needing Congressional Oversight 

• Assess DHS progress in implementing the multibillion-dollar Secure Border Initiative 

program to secure the borders. 

• Assess existing enforcement of laws that prohibit the employment of illegal aliens. 

• Require DHS to better balance its resources devoted to border security and enforcing 

immigration laws in the interior. 

• Assess DHS efforts to provide high-quality and timely services to legal immigrants. 

• Assess DHS and State Department efforts to improve passport and visa security 

procedures and in mitigating risks in the visa waiver program. 

Selected GAO Products

Border Security: US-VISIT Program faces Strategic, Operational, and Technological 

Challenges at Land Ports of Entry. GAO-07-56. November 13, 2006. 

Border Security: Stronger Actions Needed to Assess and Mitigate Risks of the Visa Waiver 

Program. GAO-06-854. June 28, 2006. 

Immigration Benefits: Improvements Needed to Address Backlogs and Ensure Quality of 

Adjudications. GAO-06-20. November 21, 2005. 

Immigration Enforcement: Weaknesses Hinder Employment Verification and Worksite 

Enforcement Efforts. GAO-05-813. August 31, 2005. 

Overstay Tracking: A Key Component of Homeland Security and a Layered Defense. GAO04-82. May 21, 2004. 

Primary GAO Contacts 

Richard M. Stana, Director, Homeland Security and Justice, (202) 512-8816, stanar@gao.gov. 

Jess T. Ford, Director, International Affairs and Trade, (202) 512-4268, fordj@gao.gov. 
Ensure the Safety and Security of All Modes of Transportation and 

the Adequacy of Related Funding Mechanisms 

The nation’s economic vitality and the quality of life of its citizens depend greatly on the 

safety, security, and efficiency of its transportation infrastructure, and major challenges exist 

in all three of these areas. Safety continues to be a concern, with an average of over 40,000 

traffic deaths, 6 commercial airline, and over 350 general aviation fatal crashes annually, and 

over 2,200 major pipeline accidents over a recent 10-year period. Regarding security, despite 

significant progress in securing commercial aviation, the Transportation Security 

Administration must continue to adapt to changing threats, while coordinating efforts with 

international partners. Nonaviation transportation modes also remain vulnerable given their 

easy accessibility and many potential targets. On efficiency, between 2000 and 2010, travel on 

roads is expected to increase by 25 percent and freight traffic by 43 percent. Further, 

forecasted continuing growth in air traffic is straining both airport and air traffic control 

infrastructure. While addressing these challenges will likely require substantial resources, 

federal transportation trust fund revenues are eroding and long-term trust fund viability is 

questionable. 

Key Topics Needing Congressional Oversight

• Alternative mechanisms to increase revenues for infrastructure improvements, including 

user fees and alternatives to stimulate private investment. 

• The extent to which funding allocation methods ensure the equity, efficiency, 

accountability, and performance of transportation investments. 

• Effectiveness of federal grants, incentives, and regulation to improve transportation safety. 

• Efforts of the federal government to find new technologies and solutions for increasing the 

safety and security of the transportation system. 

• The extent to which homeland security resources are being allocated across the entire 

transportation network based on a common risk-managed framework. 

• Federal and private-sector efforts to ensure the security of surface transportation modes, 

and federal efforts in developing and enforcing related security requirements. 

Selected GAO Products

Aviation Safety: FAA’s Safety Efforts Generally Strong but Face Challenges. GAO-06-1091T. 

September 20, 2006. 

Highway Trust Fund: Overview of Highway Trust Fund Estimates. GAO-06-572T. April 4, 

2006. 

Aviation Security: Significant Management Challenges May Adversely Affect 

Implementation of the Transportation Security Administration’s Secure Flight Program. 

GAO-06-374T. February 9, 2006. 

Passenger Rail Security: Enhanced Federal Leadership Needed to Prioritize and Guide 

Security Efforts. GAO-05-851. September 2005. 

Primary GAO Contacts 

Patricia Dalton, Managing Director, Physical Infrastructure Issues, (202) 512-2834, 

daltonp@gao.gov. 

Norm Rabkin, Managing Director, Homeland Security and Justice, (202) 512-8777, 

rabkinn@gao.gov.

Page 13 GAO-07-235R Potential Oversight Issues 
Strengthen Efforts to Prevent the Proliferation of Nuclear, Chemical, 

 and Biological Weapons and Their Delivery Systems (Missiles) 

On February 11, 2004, the President stated that “the greatest threat before humanity today is 

the possibility of secret and sudden attack with chemical or biological or radiological or 

nuclear weapons.” He also stated that these weapons are becoming easier to acquire, build, 

hide, and transport. U.S. policy is to stop the spread of weapons of mass destruction (WMD) 

and their delivery systems, such as missiles, and the executive branch has initiated or 

expanded several activities to address this threat. In recognition of these threats, the Congress 

provided the Departments of Defense (DOD), Energy (DOE), and State more than $8 billion 

since 1992 to prevent the proliferation of weapons of mass destruction material and expertise. 

The U.S. has also played a leading role strengthening multilateral efforts to control trade in 

WMD materials. Additional congressional oversight can help assess the effectiveness of these 

activities and how U.S. resources might be better planned and managed to achieve 

nonproliferation goals. A failure to effectively implement nonproliferation programs could 

result in wasted resources or, at worst, a devastating WMD attack on the United States or its 

allies. 

Key Topics Needing Congressional Oversight

• Ensure that DOD, DOE, and State integrate their various nonproliferation programs to 

ensure they are efficiently addressing the most significant needs. 

• Evaluate U.S. efforts to support and enhance nonproliferation activities of individual 

nations and multilateral regimes. 

• Require DOD and State to develop management controls on Proliferation Security Initiative 

activities and a strategy to work with foreign governments on issues beyond the control of 

the United States. 

Selected GAO Products

Nonproliferation: Better Controls Needed to Plan and Manage Proliferation Security 

Initiative Activities. GAO-06-937C. September 28, 2006. 

Nuclear Nonproliferation: IAEA Has Strengthened Its Safeguards and Nuclear Security 

Programs, but Weaknesses Need to Be Addressed. GAO-06-93. October 7, 2005. 

Weapons of Mass Destruction: Nonproliferation Programs Need Better Integration. GAO-05-

157. January 28, 2005. 

Primary GAO Contacts 

 

Gene Aloise, Director, Natural Resoures and Environment, (202) 512-6870, aloisee@gao.gov. 

Joseph A. Christoff, Director, International Affairs and Trade, (202) 512-8979, 

christoffj@gao.gov.

Page 14 GAO-07-235R Potential Oversight Issues 
Ensure a Successful Transformation of the Nuclear Weapons Complex 

Over the past several years, there has been a serious reevaluation of how the United States 

maintains its nuclear deterrent. The National Nuclear Security Administration (NNSA), a 

separately organized agency within the Department of Energy (DOE), is responsible for 

overseeing the weapons complex, which comprises three nuclear weapons design 

laboratories, four production plants, and the Nevada Test Site, at an annual cost of over $6 

billion. Recently, NNSA offered a proposal to the Congress for transforming the weapons 

complex over the next 25 years. NNSA’s proposal calls for building a consolidated plutonium 

processing center, removing weapons-grade nuclear material from the laboratories, and 

modernizing the remaining production facilities at their existing locations. NNSA’s preliminary 

analysis estimates its proposal will cost over $150 billion. The proposal largely depends on the 

successful design of a Reliable Replacement Warhead (RRW) to replace some of the existing 

weapons in the stockpile. Given the importance of the nation’s nuclear deterrent, the large 

amount of funding required, and DOE’s history of poor project management, it is vital that the 

Congress closely oversee NNSA’s implementation of its proposal. 

Key Topics Needing Congressional Oversight 

• Require the Department of Defense to establish clear, long-term requirements for the 

nuclear stockpile by determining the types and quantities of weapons needed for our 

nation’s nuclear deterrent. 

• Require NNSA to develop accurate cost estimates of its proposal, as well as alternative 

proposals, for transforming the weapons complex. 

• Evaluate NNSA’s proposed need, cost, and schedule for the RRW and compare with plans 

to refurbish the existing weapons in the stockpile. 

• Ensure that NNSA develops a clear plan containing measurable milestones for its proposed 

transformation of the weapons complex. 

Selected GAO Products 

Nuclear Weapons: Views on Proposals to Transform the Nuclear Weapons Complex. GAO-06-

606T. April 26, 2006. 

Nuclear Weapons: NNSA Needs to Refine and More Effectively Manage Its New Approach 

for Assessing and Certifying Nuclear Weapons. GAO-06-261. February 3, 2006. 

Nuclear Security: DOE Needs to Resolve Significant Issues Before It Fully Meets the New 

Design Basis Threat. GAO-04-623. April 27, 2004. 

Primary GAO Contact 

Gene Aloise, Director, Natural Resources and Environment, (202) 512-6870, aloisee@gao.gov. 

Page 15 GAO-07-235R Potential Oversight Issues 
Enhance Computer Security and Deter Identity Theft 

Over the last several years, identity theft and the need to protect personal information has 

received heightened national attention. Recent incidents of data theft and loss at federal 

agencies expose Americans to increased risk of identity theft and raise concern about how 

well the federal government is securing its computer systems; protecting sensitive information 

from unauthorized use, disclosure, and modification; and notifying the public when data 

breaches occur. Moreover, the aggregation of personal information and Social Security 

Numbers (SSN), in large corporate databases and the display of SSNs in public records have 

provided opportunities for identity thieves. Thus, SSNs are a valuable commodity for persons 

seeking to assume another individual’s identity or to commit financial crimes. Fraudulent and 

stolen SSNs are also frequently used by noncitizens to work illegally in the United States. 

Although the Congress has passed a number of laws to address this issue, the continued 

reliance on SSNs by private and public-sector entities underscores the need for increased 

vigilance. 

Key Topics Needing Congressional Oversight

• Establish accountability measures for implementing effective information security 

programs at federal agencies, including effective policies and practices for detecting, 

responding, and reporting information on security incidents. 

• Provide the Social Security Administration (SSA) with additional tools to further 

strengthen its processes for issuing SSNs and replacement cards and continue to assess 

options for making Social Security cards and other identity documents less vulnerable to 

alteration and counterfeiting. 

• Enhance data sharing between SSA, other federal agencies, and the states to better verify 

information submitted by individuals seeking public benefits or services and require that 

SSA, the Department of Homeland Security, and the Internal Revenue Service work 

collaboratively on to deter SSN abuse and violations of immigration laws. 

• Reduce the presence and display of SSNs in state and local public records. 

• Re-examine current gaps in federal requirements for safeguarding SSNs and other personal 

information used by private sector companies. 

Selected GAO Products 

Information Security: The Centers for Medicare & Medicaid Services Needs to Improve 

Controls Over Key Communication Network. GAO-06-750. August 30, 2006. 

Personal Information: Key Federal Privacy Laws Do Not Require Information Resellers to

Safeguard All Sensitive Data. GAO-06-674. June 26, 2006. 

Information Security: Leadership Needed to Address Weaknesses and Privacy Issues at

Veterans Affairs. GAO-06-897T. June 20, 2006. 

Social Security Administration: Improved Agency Coordination Needed for Social Security 

Card Enhancement Efforts. GAO-06-303. March 29, 2006. 

Primary GAO Contacts

Gregory Wilshusen, Director, Information Security Issues, (202) 512-6244, wilshuseng@gao.gov. 

Daniel Bertoni, Acting Director, Education, Workforce, and Income Security Issues, (202) 512-

5988, bertonid@gao.gov.

Page 16 GAO-07-235R Potential Oversight Issues 
Ensure a Cost-Effective and Reliable 2010 Census 

The 2010 Census is an estimated $11.3 billion, constitutionally mandated enterprise with many 

interdependent activities, immutable deadlines, and high stakes. The Census produces data 

used to reapportion the seats of the U.S. House of Representatives and to allocate about $200 

billion yearly in federal financial assistance. To contain costs, the Census Bureau (Bureau) has 

re-engineered the 2010 Census toward a more automated approach rather than relying as 

extensively on paper-based processes as in the past, and has deployed contractors to assist 

with these reforms. Given the size and complexity of the Census, new processes being 

introduced, and interrelated nature of those processes, sound risk management can promote a 

successful Census. GAO’s work on Census matters over several decades has also shown that a 

shortcoming in one operation could cause other operations to spiral downward. For example, 

reduced reliability in hand-held mobile computing devices could imperil the success of 

operations to update key address files and follow up on nonresponses to survey forms. 

Key Topics Needing Congressional Oversight 

• Ensure that the Bureau maximizes coverage and accuracy while managing costs. 

• Oversee the overall cost of the Census, including the emergence of unforeseen operational 

and managerial challenges; and the Bureau’s ability to identify, diagnose, and devise costeffective solutions to those challenges as well as to integrate refinements and fixes for 

evaluation during the 2008 Dress Rehearsal. 

• Monitor the Bureau’s management of risks associated with key programs. 

• Assess the reliability and utility of the Bureau’s hand-held mobile computing devices to 

avoid the possibility of having to revert to the costly paper-based Census used in 2000 and 

prior years.

• Examine the Bureau’s ability to effectively monitor contracts (about $1.9 billion of the 

$11.3 billion life-cycle costs will be spent on seven major contracts). 

Selected GAO Products 

2010 Census: Redesigned Approach Holds Promise, but Census Bureau Needs to Annually 

Develop and Provide a Comprehensive Project Plan to Monitor Costs. GAO-06-1009T. July 27, 

2006. 

2010 Census: Costs and Risks Must Be Closely Monitored and Evaluated with Mitigation 

Plans in Place. GAO-06-822T. June 6, 2006. 

2010 Census: Planning and Testing Activities Are Making Progress. GAO-06-465T. March 1, 

2006. 

Primary GAO Contact 

Mathew J. Scire, Acting Director, Strategic Issues, (202) 512-6794, sciremj@gao.gov.

Page 17 GAO-07-235R Potential Oversight Issues 
Transform the Postal Service’s Business Model 

The U.S. Postal Service is under increasing financial pressure as the Internet, electronic bill 

payment, and growing competition from private delivery companies change the nation’s 

communication and delivery sectors and negatively impact mail volumes. These changes raise 

questions about the role of the federal government in providing postal services and whether the 

Postal Service can remain a self-financing government provider of affordable universal postal 

services in the 21st century. The Postal Service’s business model, established when it was 

reorganized in 1970, relies upon growth in mail volume to cover the costs of its ever-increasing 

nationwide delivery network to all homes and businesses. This business model is increasingly 

outmoded as First-Class Mail volume declines and the changing mail mix provides less revenue 

contribution, which has put the Postal Service’s financial viability at risk. The Service is 

working to cut costs, improve productivity, reduce its workforce, and make other changes 

under its existing authority. However, comprehensive postal reform legislation is needed to 

provide the necessary incentives and flexibilities needed for the Service to transition to a 

modernized business model so that it can continue providing high-quality, universal postal 

services. 

Key Topics Needing Congressional Oversight 

• Ensure that the Postal Service maintains services consistent with its standards as it 

implements changes to reduce costs related to providing postal services. 

• Assess the Postal Service’s changes to its mail processing and transportation networks to 

ensure that they are reasonable, transparent, and coordinated with affected stakeholders, 

and that they achieve intended cost savings and efficiencies. 

• Adopt flexible, performance-oriented, and market-based compensation systems for postal 

employees.

Selected GAO Products 

U.S. Postal Service: Delivery Performance Standards, Measurement, and Reporting Need 

Improvement. GAO-06-733. July 27, 2006. 

U.S. Postal Service: Despite Recent Progress, Postal Reform Legislation Is Still Needed. GAO05-453T. April 14, 2005.

U.S. Postal Service: The Service’s Strategy for Realigning Its Mail Processing Infrastructure 

Lacks Clarity, Criteria, and Accountability. GAO-05-261. April 8, 2005. 

Primary GAO Contact 

Katherine Siggerud, Director, Physical Infrastructure Issues, (202) 512-2834, 

siggerudk@gao.gov. 

Page 18 GAO-07-235R Potential Oversight Issues 
Ensure Fair Value Collection of Oil Royalties Produced from Federal Lands 

The United States consumes over 21 million barrels of oil per day, and about 40 percent of this 

is produced in the United States. About 35 percent of the oil and 26 percent of the natural gas 

produced in the United States come from federal and Native American lands. Companies that 

lease these lands pay royalties to the Department of the Interior’s Minerals and Management 

Service (MMS). MMS collected about $8 billion in royalty payments in fiscal year 2005––an 8 

percent increase over 2001, far below the 90 percent increase in oil and 30 percent in gas prices 

between 2001 and 2005, raising questions about whether these royalties reflect the full value 

these companies should pay. 

A number of royalty relief collection provisions have been designed to assist the oil and gas 

industry in exploring and producing energy. These have included reducing the amount of 

royalties paid to the U.S. government and states, particularly in the drilling of deep waters in 

the Gulf of Mexico. According to MMS preliminary estimates, these royalty relief provisions 

could result in up to $60 billion in foregone revenues on oil and gas production over the next 25 

years. Additional oversight would help ensure that the calculation and collection of royalties 

yield the maximum possible revenue based on fair market value. 

Key Topics Needing Congressional Oversight 

• Assess the reliability of data on oil production volume, price, and royalty rates. 

• Determine the financial impacts of royalty relief on Federal lands and waters. 

• Determine the extent to which royalty provisions reflect changing market conditions. 

Selected GAO Products 

Royalty Revenues: Total Revenues Have Not Increased at the Same Pace as Rising Oil and 

Natural Gas Prices due to Decreasing Production Sold. GAO-06-786R. June 21, 2006. 

Motor Fuels: Understanding the Factors That Influence the Retail Price of Gasoline. GAO-05-

525SP. May 2, 2005. 

Energy Markets: Mergers and Other Factors that Affect the U.S. Refining Industry. GAO-04-

982T. July 15, 2004. 

Primary GAO Contact 

Robert A. Robinson, Managing Director, Natural Resources and Environment, (202) 512-3841, 

robinsonr@gao.gov. 

Page 19 GAO-07-235R Potential Oversight Issues 
Ensure the Effectiveness and Coordination of 

U.S. International Counterterrorism Efforts 

After the events of September 11, 2001, combating terrorism became a central focus of the U.S. 

national security policy. The 9/11 Commission made numerous recommendations and the 

Congress passed several acts (including the Intelligence Reform and Terrorism Prevention Act 

of 2004) focused on U.S. efforts to combat terrorism overseas. In response, the U.S. took 

several steps to respond to potential terrorist-related threats to the homeland and U.S. interests 

abroad such as increasing and realigning resources devoted to this effort and taking steps to 

revise diplomatic, military, intelligence, and law enforcement priorities at home and abroad. As 

such, the Congress has an important role to play in overseeing the implementation of these 

recommendations and in assessing the effectiveness and coordination of U.S. diplomatic, 

military, intelligence, and law enforcement efforts to combat terrorism abroad. 

Key Topics Needing Congressional Oversight 

• Evaluate the management and effectiveness of U.S. programs designed to train and equip 

foreign countries to prevent, combat, and respond to terrorism. 

• Assess U.S. efforts to protect overseas personnel, facilities, and interest from terrorist 

attack. 

• Assess the effectiveness and coordination of U.S. international programs focused on 

combating and preventing the growth of terrorism. 

Selected GAO Products 

Foreign Assistance: Recent Improvements Made, but USAID Should Do More to Help Ensure 

Aid Is Not Provided for Terrorist Activities in West Bank and Gaza GAO-06-1062R. 

September 29, 2006. 

Terrorist Financing: Agencies Can Improve Efforts to Deliver Counterterrorism-Financing 

Training and Technical Assistance Abroad. GAO-06-632T. April 06, 2006. 

Overseas Security: State Department Has Not Fully Implemented Key Measures to Protect 

U.S. Officials from Terrorist Attacks Outside of Embassies. GAO-05-688T. May 10, 2005. 

Primary GAO Contacts 

Jacquelyn Williams-Bridgers, Managing Director, International Affairs and Trade, 

(202) 512-3101, williamsbridgersj@gao.gov. 

Charles Michael Johnson, Acting Director, International Affairs and Trade, (202) 512-7331, 

johnsoncm@gao.gov. 

Page 20 GAO-07-235R Potential Oversight Issues 
Review the Effectiveness of Strategies to Ensure Workplace Safety 

Regulations and activities designed to provide protections for workers may need to be revised 

to reflect dramatic changes in the demographics of the national workforce and changes in the 

nature of work itself. For example, traditional work arrangements are giving way to 

alternatives such as temporary employment, blended workforces, and teleworking. Industries 

such as meatpacking have had large increases in the number of immigrant workers, and 

membership in organized labor has declined. The federal government has greater dependencies 

on a total multi-sector workforce. In addition to these changing conditions, some industries, 

such as underground coal mining, face inherent long-term challenges that threaten the safety 

and health of workers. Now more than ever, it is important to find the right balance between 

ensuring the safety and health of workers and employers’ needs to increase productivity in an 

increasingly competitive global environment. 

Key Topics Needing Congressional Oversight 

• Determine how well the Department of Labor’s Occupational Safety and Health 

Administration’s (OSHA’s) enforcement program has adapted to changes in the workforce, 

including demographic changes, work arrangements, and the use of new technology. 

• Assess the effectiveness of OSHA’s recent efforts to provide assistance to employers in 

improving the safety and health of workers through compliance assistance programs, such 

as the Voluntary Protection Program and alliances with employers.

• Examine the impact of recent efforts by the Department of Labor’s Mine Safety and Health 

Administration (MSHA) to protect the safety and health of mine workers, particularly those 

who work in underground coal mines. 

• Assess the preparedness of federal agencies to protect their employees in emergencies, 

such as a pandemic, while relying on a multi-sector workforce to perform its essential 

operations and return to normal operations. 

Selected GAO Products 

Workplace Safety and Health: Safety in the Meat and Poultry Industry, while Improving, 

Could Be Further Strengthened. GAO-05-96. January 12, 2005. 

Workplace Safety and Health: OSHA’s Voluntary Compliance Strategies Show Promising 

Results, but Should Be Fully Evaluated before They Are Expanded. GAO-04-378. March 19, 

2004. 

Mine Safety: MSHA Devotes Substantial Effort to Ensuring the Safety and Health of Coal 

Mines, but Its Programs Could Be Strengthened. GAO-03-945. September 5, 2003. 

Primary GAO Contacts 

Cynthia Fagnoni, Managing Director, Education Workforce and Income Security Issues, (202) 

512-7202, fagnoni@gao.gov. 

Daniel Bertoni, Director, Education Workforce and Income Security Issues, (202) 512-5988, 

bertonid@gao.gov. 

Page 21 GAO-07-235R Potential Oversight Issues 
Review U.S. and Coalition Efforts to Stabilize and Rebuild

Iraq and Afghanistan

The Congress has provided the Department of Defense and other federal agencies more than 

$320 billion to stabilize and rebuild Iraq and Afghanistan between fiscal years 2001 and 2006. 

Guiding U.S. efforts in Iraq are the National Strategy for Victory in Iraq, along with the Joint 

Campaign Plan issued by the U.S.-led Multinational Force-Iraq and the U.S. embassy in 

Baghdad. The overall strategy calls for integrated political, economic, and security measures to 

stabilize and rebuild the country. After 3 years of effort, the security situation in Iraq continues 

to deteriorate, Iraqi security forces have limited capabilities and divided loyalties, the central 

government has limited ability to govern the country, and reconstruction lags. In Afghanistan, 

the NATO-led International Security Assistance Force has recently expanded its mission and 

assumed some security responsibilities from U.S. military forces in the country. This transition 

is occurring as security conditions deteriorate and undermine efforts to rebuild Afghanistan, 

the Taliban is becoming resurgent in some areas, and drug trafficking is dramatically 

increasing. 

Key Topics Needing Congressional Oversight 

• Re-examine the strategies, campaign plans, and programs for stabilizing Iraq and 

Afghanistan, including changing missions of international forces in each country. 

• Assess progress in achieving the political, economic, and security conditions required for 

stabilizing Iraq and Afghanistan. Assess 

o Trends in the security situation nationwide and in key cities, 

o Readiness and logistics capabilities of security forces, 

o Capabilities of local and national government institutions, 

o Progress in rebuilding the economy and key sectors, and 

o Status of basing arrangements in Iraq. 

• Identify current and future U.S. costs for efforts in Iraq and Afghanistan. 

Selected GAO Products 

Afghanistan Drug Control: Despite Improved Efforts, Deteriorating Security Threatens 

Success of U.S. Goals. GAO-07-78. November 2006. 

Stabilizing Iraq: An Assessment of the Security Situation. GAO-06-1094T. September 11, 

2006. 

Global War on Terrorism: Observations on Funding, Costs, and Future Commitments. GAO06-885T. July 18, 2006.

Rebuilding Iraq: More Comprehensive National Strategy Needed to Help Achieve U.S. Goals. 

GAO-06-788. July 11, 2006. 

Rebuilding Iraq: Governance, Security, Reconstruction, and Financing Challenges. GAO-06-

697T. April 25, 2006. 

Primary GAO Contacts 

Joseph A. Christoff, Director, International Affairs and Trade, (202) 512-8979, 

christoffj@gao.gov. 

William Solis, Director, Defense Capabilities and Management, (202) 512-8365, solisw@gao.gov. 

David Gootnick, Director, International Affairs and Trade, (202) 512-3149, gootnickd@gao.gov.

Page 22 GAO-07-235R Potential Oversight Issues 
Ensure a Strategic and Integrated Approach to Prepare for, Respond to, 

Recover, and Rebuild from Catastrophic Events 

Recent events—notably Hurricane Katrina and the threat of an influenza pandemic—have 

illustrated the importance of ensuring a strategic and integrated approach to catastrophic

disaster management. Disaster preparation and response that is well planned and coordinated 

can save lives and mitigate damage, and an effectively functioning insurance market can 

substantially reduce the government’s exposure to postcatastrophe payouts. Managing risk is 

also a key component of GAO’s model for managing risk provides a tool to assist the Congress, 

Department of Homeland Security, and other key players in preparing for and responding to 

such events. Lessons learned from past national emergencies provide an opportunity for the 

Congress to look at actions that could mitigate the effects of potential catastrophic events. 

Similarly, the Congress could also consider how the federal government can work with other 

nations, other levels of government, and nonprofit and private-sector organizations, such as 

the Red Cross and private insurers, to help ensure the nation is well prepared and recovers 

effectively. Given the billions of dollars dedicated to preparing for, responding to, and 

recovering/rebuilding from catastrophic disasters, congressional oversight is critical. 

Key Topics Needing Congressional Oversight 

 

• Ensure that leadership, roles, responsibilities, and authorities are clear, well 

communicated, and understood and the capacity of the nation to prepare for, respond to, 

and recover/rebuild from catastrophic events is effectively assessed and exercised. 

• Determine the extent to which relevant federal and state organizations consider risk-based 

factors when making management and resource decisions relating to catastrophic events. 

• Identify and track the types and amount of federal assistance provided for addressing 

catastrophic events and develop metrics to inform congressional oversight. 

• Examine the availability of private insurance for catastrophes and identify ways that the 

National Flood Insurance Program can improve the sufficiency of its financial resources 

and funding mechanism, mitigate repetitive losses, increase compliance with mandatory 

purchase requirements, and expedite the Federal Emergency Management Agency’s flood 

map modernization efforts. 

Selected GAO Products 

Influenza Pandemic: DOD Has Taken Important Actions to Prepare, but Accountability, 

Funding, and Communications Need to Be Clearer and Focused Departmentwide. GAO-06-

1042. September 21, 2006. 

Catastrophic Disasters: Enhanced Leadership, Capabilities, and Accountability Controls 

Will Improve the Effectiveness of the Nation's Preparedness, Response, and Recovery 

System. GAO-06-618. September 6, 2006. 

Primary GAO Contacts 

Stan Czerwinski, Director, (202) 512-6806, czerwinskis@gao.gov (Gulf Coast rebuilding).

William O. Jenkins, Director, (202) 512-8757, jenkinswo@gao.gov (disaster preparedness and 

response). 

Bernice Steinhardt, Director, (202) 512-6543, steinhardtb@gao.gov (pandemic influenza). 

Orice M. Williams, Director, (202) 512-8678, williamso@gao.gov (insurance issues).

Page 23 GAO-07-235R Potential Oversight Issues 
Reform the Tax Code, Including Reviewing the Performance of Tax Preferences

Our complex income tax system causes individuals and businesses to change behaviors in 

ways that reduce economic efficiency and thereby taxpayers’ well-being. The system fails to 

follow some common principles for good tax systems, such as raising sufficient revenue over 

time to fund current and future expected national expenditures. Further, a large, persistent 

annual gap—caused, in part, by the complexity of the tax code—exists between the taxes that 

should be and are paid. Additionally, since 1974, credits, deductions, and other tax 

preferences, statutorily defined as tax expenditures, more than doubled in number and the 

sum of their revenue loss estimates tripled in real terms to about $775 billion in 2005. These 

tax expenditures add to the tax system’s complexity and cause tax rates to be higher than they 

otherwise would be to raise a given amount of revenue. Given our current and projected fiscal 

imbalance, we must re-examine federal spending and tax policies, including tax expenditures, 

to ensure that they achieve their purposes; appropriately balance economic impacts, equity, 

transparency, simplicity, and administrability; and fit the needs of the 21st century. 

Key Topics Needing Congressional Oversight 

• Consider establishing a credible, capable, and bipartisan commission to examine options 

for a combination of selected entitlement, transformation, and tax reform issues. 

• Simplify the tax code by eliminating, consolidating, or simplifying tax expenditures, 

thereby broadening the tax base and possibly lowering tax rates. 

• Ensure that the Office of Management and Budget develops guidance on incorporating tax 

expenditures in agency strategic plans, annual performance plans, and performance and 

accountability reports and ensures performance reviews of tax expenditures are 

conducted.

• Increase, to the extent consistent with other objectives, tax system neutrality related to 

economic decisions, such as whether, where, when and how to work, save and invest. 

Selected GAO Products 

Business Tax Reform: Simplification and Increased Uniformity of Taxation Would Yield 

Benefits. GAO-06-1113T. September 20, 2006. 

Individual Income Tax Policy: Streamlining, Simplification, and Additional Reforms are 

Desirable. GAO-06-1028T. August 3, 2006.

Government Performance and Accountability: Tax Expenditures Represent a Substantial 

Federal Commitment and Need to Be Reexamined. GAO-05-690. September 23, 2005. 

Primary GAO Contact 

James White, Director, Strategic Issues, (202) 512-9110, whitej@gao.gov. 

Page 24 GAO-07-235R Potential Oversight Issues 
Reform Medicare and Medicaid to Improve Their Integrity and Sustainability 

Absent reform, Medicare’s and Medicaid’s long-term fiscal sustainability for supporting health 

care for elderly, disabled, and low-income Americans is in jeopardy. In 2006, Medicare 

spending is estimated to be 3.2 percent of Gross Domestic Product; it is expected to increase 

to 7.3 percent by 2035. With about 42 million beneficiaries and $330 billion in 2005 spending, 

and the addition of a new prescription drug benefit in 2006, the program’s size and complexity 

make it vulnerable to improper payments and inefficient payment systems. Medicaid, the 

federal-state program that covers acute health and long-term care services for about 56 million 

low-income Americans, is also at risk of increased and inappropriate federal spending. 

Medicaid consists of more than 50 distinct “state” programs; joint federal/state expenditures 

for fiscal year 2004 are estimated to be $298 billion, and federal expenditures are projected to 

double in a decade. By law, the federal government pays from 50 percent to 83 percent of each 

state’s reported Medicaid expenditures. 

Key Topics Needing Congressional Oversight 

• Modernize Medicare payment policies to reward quality and efficiency and foster fiscal 

discipline while preserving access to care. 

• Assess the Centers for Medicare & Medicaid Services’ (CMS) managerial oversight of 

Medicare, including efforts to ensure program integrity and provide information to assist 

beneficiaries in making choices about the prescription drug benefit. 

• Reform Medicaid to curtail states’ use of financing schemes to inappropriately obtain 

federal matching funds by limiting Medicaid payments to government facilities to the costs 

of providing services. 

• Ensure that initiatives to restructure Medicaid eligibility and benefits are consistent with 

the administration’s goal of budget neutrality for the federal government. 

• Assess CMS’s efforts to improve financial management oversight of Medicaid. 

Selected GAO Products 

Medicare Integrity Program: Agency Approach for Allocating Funds Should Be Revised. 

GAO-06-813. September 6, 2006. 

Medicare Physician Payments: Trends in Service Utilization, Spending, and Fees Prompt 

Consideration of Alternative Payment Approaches. GAO-06-1008T. July 25, 2006. 

Medicaid Financial Management: Steps Taken to Improve Federal Oversight but Other 

Actions Needed to Sustain Efforts. GAO-06-705. June 22, 2006. 

Medicare: Communications to Beneficiaries on the Prescription Drug Benefit Could Be 

Improved. GAO-06-654. May 3, 2006. 

Medicaid: States’ Efforts to Maximize Federal Reimbursements Highlight Need for 

Improved Federal Oversight. GAO-05-836T. June 28, 2005. 

Long-Term Care Financing: Growing Demand and Cost of Services Are Straining Federal 

and State Budgets. GAO-05-564T. April 27, 2005. 

Primary GAO Contacts 

Marjorie Kanof, Managing Director, Health Care, (202) 512-5055, kanofm@gao.gov. 

Kathryn G. Allen, Director, Health Care, (202) 512-7059, allenk@gao.gov. 

Bruce Steinwald, Director, Health Care, (202) 512-7681, steinwalda@gao.gov. 

Page 25 GAO-07-235R Potential Oversight Issues 
Ensure the Adequacy of National Energy Supplies and Related Infrastructure 

The energy systems that have made America prosperous are showing increasing signs of strain 

and instability, and the consequences of our energy choices on the natural environment and 

national security are becoming more apparent. U.S. demand for energy and our dependence on 

oil in recent decades have begun to outpace supply. As a result, the country has witnessed 

rising energy imports (oil about 60 percent) and exposure to unstable international energy 

markets (e.g., Venezuela), rapid price increase, and volatility in natural gas markets and 

reliability problems in others, such as gasoline price spikes and the recent Northeast blackout 

that left millions in the dark. Additional federal government leadership and oversight of the 

nation’s energy systems would help ensure that they continue to meet the nation’s needs in the 

21st century. 

Looking forward, the country faces many difficult choices with regard to its energy future. The 

Energy Information Administration estimates that, based on current trends, U.S. energy 

demand could increase by about another 30 percent over the next 20 years (with imports of 

natural gas potentially increasing by 140 percent). Meeting this rising demand could require 

significant investments into infrastructure such as power plants, transmission lines, refineries, 

and other key equipment and technologies. However, U.S. energy policy is largely determined 

by markets that reflect a chorus of individual market choices—decisions by policymakers, 

consumers, producers, and sellers of energy technologies—and these choices will shape how 

much energy is needed and how it is supplied. Therefore, federal oversight of our energy 

systems and markets, through examination of policies, regulatory rules, incentives, and 

investment decisions will be fundamental to determining what changes are needed and 

whether solutions are realized. 

Key Topics Needing Congressional Oversight 

• Evaluate the risks, benefits, and implications for national security of investments that 

deepen our ties to international energy markets (e.g. overseas refineries, oil imports). 

• Examine the Nuclear Regulatory Commission’s licensing process for new power plants. 

• Examine the implications of the Department of Energy’s R&D portfolio. 

• Assess development of evolving renewable energy markets. 

• Evaluate programs that encourage energy efficiency and reduced energy demand. 

Selected GAO Products 

Natural Gas: Factors Affecting Prices and Potential Impacts on Consumers. GAO-06-420T. 

February 13, 2006. 

Electricity Restructuring: Key Challenges Remain. GAO-06-237. November 15, 2005. 

Motor Fuels: Understanding the Factors That Influence the Retail Price of Gasoline. GAO-05-

525SP. May 2, 2005. 

Meeting Energy Demand in the 21st Century: Many Challenges and Key Questions. GAO-05-

414T. March 16, 2005. 

Primary GAO Contact 

Robert A. Robinson, Managing Director, Natural Resources and Environment, (202) 512-3841, 

robinsonr@gao.gov. 

Page 26 GAO-07-235R Potential Oversight Issues 
Reform Immigration Policy to Ensure Equity 

and Economic Competitiveness 

Our current immigration system is difficult to enforce and does not serve the national interest. 

While opportunities to legally immigrate to the United States are limited, ineffective border 

security and immigration enforcement measures have resulted in millions of aliens entering 

the country to find employment and remaining here illegally. The lack of effective enforcement 

coupled with the lack of management controls has led to a substantial reliance on 

unauthorized and mainly unskilled foreign workers in many industries. Moreover, it created an 

underground population which could exacerbate security concerns and tensions between 

citizens and illegal aliens. The Departments of Homeland Security (DHS) and Labor also have 

done little to anticipate global economic forces or match the needs of the domestic labor 

market with legal alien skills. Remaining competitive in the global economy will require the 

U.S. to attract higher skilled immigrants and their families and provide legal avenues for 

workers to temporarily meet unskilled labor needs. The Congress will need to ensure that any 

immigration reform proposal is structured within a reliable enforcement framework that 

promotes system integrity and the interests of employers, workers, and humanitarian needs. 

Key Topics Needing Congressional Oversight 

• Assess DHS’s capacity to control the borders and enforce immigration laws within the 

country. 

• Ascertain the lessons learned from prior immigration reform experiences about the need 

for enforcement, management controls, and social integration. 

• Determine DHS’s capacity to adjudicate naturalization and work authorization requests 

from aliens currently residing in the U.S. 

Selected GAO Products 

Foreign Workers: Information on Selected Countries’ Experiences. GAO-06-1055. September 

8, 2006. 

H-1B Visa Program: Labor Could Improve Its Oversight and Increase Information Sharing 

with Homeland Security. GAO-06-720. June 22, 2006. 

Immigration Benefits: Improvements Needed to Address Backlogs and Ensure Quality of 

Adjudications. GAO-06-20. November 21, 2005. 

Primary GAO Contacts 

Richard M. Stana, Director, Homeland Security and Justice, (202) 512-8816, stanar@gao.gov. 

Sigurd R. Nilsen, Director, Education, Workforce, and Income Security Issues, (202) 512-7003, 

nilsens@gao.gov.

Page 27 GAO-07-235R Potential Oversight Issues 
Assess Overall Military Readiness, Transformation Efforts, and Existing Plans to 

Assure the Sustainability of the All-Volunteer Force

To adapt to the new security environment, the Department of Defense (DOD) is embarking on 

an effort to transform its warfighting capabilities while maintaining near-term readiness of its 

all-volunteer force to sustain ongoing operations in support of the global war on terrorism. 

Since September 11, 2001, U.S. forces, both active duty and reserves, continue to experience a 

high pace of operations, requiring many units and personnel to redeploy for second and third 

tours and, in some cases, to remain for extended tours. Given the duration and intensity of

current operations, DOD faces challenges in maintaining readiness levels and sustaining 

deployments, particularly with respect to repairing and replacing equipment, and providing 

units and personnel with specialized skills, such as military police and civil affairs. Amid these 

commitments, DOD and the military services are embarked on an effort to transform military 

capabilities, including acquiring next-generation weaponry. For example, the Army is 

restructuring its entire operational force from large Cold War-era divisions to smaller, more 

agile, brigade-based forces. In addition, the services are undertaking expensive and complex 

efforts, such as the Army’s Future Combat System, the Air Force’s Joint Strike Fighter, and the 

Navy’s advanced-design ships and submarines. At the same time, personnel costs are climbing 

dramatically, with compensation costs growing nearly 30 percent, inflation-adjusted, between 

fiscal years 2000 and 2004. Given the competing demands and fiscal realities facing the 

military and the nation, we have consistently reported on the need for DOD to realistically 

assess needs and develop affordable investment plans. 

Key Topics Needing Congressional Oversight 

• Require DOD to assess the readiness impacts of operational demands, and realistic and 

affordable plans and funding requirements to address these impacts. 

• Require DOD to develop an affordable investment strategy that strikes a balance between 

maintaining near-term readiness and addressing future needs. 

• Re-examine recruitment, retention, and compensation systems to determine whether 

changes are needed to assure the sustainability of the all volunteer force. 

Selected GAO Products

Defense Management: Additional Actions Needed to Enhance DOD’s Risk-Based Approach 

for Making Resource Decisions. GAO-06-13. November 2006. 

Defense Logistics: Preliminary Observations on Equipment Reset Challenges and Issues for 

the Army and Marine Corps. GAO-06-604T. March 2006. 

Military Personnel: DOD Needs to Improve the Transparency and Reassess the 

Reasonableness, Appropriateness, Affordability, and Sustainability of Its Military 

Compensation System. GAO-05-798. July 2005. 

Primary GAO Contacts 

Butch Hinton, Managing Director, Defense Capabilities and Management, (202) 512-9619, 

hintonh@gao.gov. 

Katherine Schinasi, Managing Director, Acquisition and Sourcing Management, (202) 512-4841, 

schinasik@gao.gov.

Page 28 GAO-07-235R Potential Oversight Issues 
Assure the Quality and Competitiveness of the U.S. Education System 

In the coming years, the United States will continue to face increased economic competition 

from countries around the world. The shift to a global economy and technological advances, 

and the changing population demographics are converging, challenging existing federal 

approaches to ensuring an educated citizenry that can effectively compete in a world 

economy. To compete in a knowledge-based economy, our educational systems must equip

children with the appropriate skills to meet high standards and provide the means for an 

increasingly diverse citizenry to pursue new skills and enhance existing ones. Yet, large 

achievement gaps between school-age students of different backgrounds persist, and many of 

the federal government’s higher education policy tools, designed decades ago, may not be as 

well suited for an increasingly diverse population. Moreover, the United States has long been 

one of the most desired higher education destinations for international students, and these 

students fill important skill gaps in the domestic workforce after they graduate. However, 

international student enrollment has slowed in recent years, and stricter U.S. student visa 

policies may be making it more difficult for students who want to study here. Against this 

backdrop, other countries are improving their educational capacities and have implemented 

coordinated national strategies to recruit students worldwide. 

Key Topics Needing Congressional Oversight

• Assess the impact of efforts to close achievement gaps among disadvantaged populations 

in K-16+ education. 

• Assess the effectiveness of education programs in meeting the needs of the 21st century 

workforce.

• Assess the efficiency and effectiveness of programs designed to promote access to and 

affordability of postsecondary education. 

• Assure a proper balance between immigration policies—such as work and student visa 

programs to address the nation’s need for people with skills, particularly math and 

science—and the nation’s homeland security requirements. 

Selected GAO Products

No Child Left Behind Act: Assistance from Education Could Help States Better Measure 

Progress of Students with Limited English Proficiency. GAO-06-815. July 26, 2006. 

No Child Left Behind Act: States Face Challenges Measuring Academic Growth That 

Education’s Initiatives May Help Address. GAO-06-661. July 17, 2006. 

Higher Education: Science, Technology, Engineering, and Mathematics Trends and the Role 

of Federal Programs. GAO-06-702T. May 3, 2006. 

Student Aid And Postsecondary Tax Preferences: Limited Research Exists on Effectiveness 

of Tools to Assist Students and Families through Title IV Student Aid and Tax Preferences. 

GAO-05-684. July 29, 2005. 

Primary GAO Contacts

Cornelia Ashby, Director, Education, Workforce and Income Security Issues, (202) 512-8403, 

ashbyc@gao.gov. 

George Scott, Director, Education, Workforce and Income Security Issues, (202) 512-5932, 

scottg@gao.gov.

Page 29 GAO-07-235R Potential Oversight Issues 
Strengthen Retirement Security Through Reforming Social Security, Increasing 

Pension Saving and Promoting Financial Literacy 

The future fiscal imbalances in the Social Security program and the increased insecurity of 

other traditional sources of retirement income suggest the need for public policies that restore 

fiscal solvency and stability to Social Security and assure the security of employer pension 

promises. Also, the rise of self-directed saving plans such as 401(k)s and IRAs suggests the 

need for policies to better inform Americans about their retirement prospects and how to 

improve them. Americans must learn not only the importance of accumulating adequate 

retirement savings and understanding the retirement benefits their employers may offer, but 

also how to invest such assets wisely, to preserve them for the future, and, ultimately, to 

husband them effectively in retirement; failure to do so could result in additional calls for 

federal income support. Yet many Americans, especially those with less education and lower 

incomes, lack a basic understanding of how to manage money and make wise financial 

decisions. Many do not save adequately for retirement or preserve the savings they 

accumulate; those who do save do not always make good investment choices; and Americans 

may not have the information needed to manage their savings prudently during retirement.

Key Topics Needing Congressional Oversight

• Take actions to restore fiscal solvency and sustainability to the Social Security programs. 

• Monitor the effectiveness of recent pension legislation designed to strengthen plan funding 

and reduce reliance on the federal pension insurance program. 

• Examine adequacy of 401(k) balances and other forms of self-directed saving 

• Improve federal agencies’ efforts to inform American workers about the importance of 

saving, the amounts that will be necessary for an adequate retirement, and the importance 

of annuitizing retirement balances. 

• Evaluate and improve federal agencies’ coordinated leadership of financial literacy 

initiatives to enhance such programs’ effectiveness. 

• Identify and estimate the cost of ways of evaluating financial literacy programs to 

determine if they promote positive behavioral change. 

Selected GAO Products

Baby Boom Generation: Retirement of Baby Boomers Is Unlikely to Precipitate Dramatic

Decline in Market Returns, but Broader Risks Threaten Retirement Security. GAO-06-718. 

July 28, 2006. 

Social Security Reform: Early Action Would Be Prudent. GAO-05-397T. March 9, 2005. 

Highlights of a GAO Forum: The Federal Government’s Role in Improving Financial 

Literacy. GAO-05-93SP. November 15, 2004. 

Pension Benefit Guaranty Corporation: Single-Employer Pension Insurance Program Faces 

Significant Long-Term Risks. GAO-04-90. October 29, 2003. 

Primary GAO Contacts 

Cynthia Fagnoni, Managing Director, Education, Workforce and Income Security Issues, (202) 

512-7202, fagnonic@gao.gov. 

Richard Hillman, Managing Director, Financial Markets and Community Investment, (202) 512-

9073, hillmanr@gao.gov. 

Page 30 GAO-07-235R Potential Oversight Issues 
Examine the Costs, Benefits, and Risks of Key Environmental Issues 

One of the greatest challenges confronting the new Congress will be the conflict between the 

nation’s social and economic goals and the recognized need to assure the long-term 

sustainability of it’s natural resources and the environment. The United States has enacted a 

broad array of environmental laws and regulations to protect human health and the 

environment, but given the gravity of the issues, oversight of their implementation has been 

limited. Thoughtful policymaking on these issues has been impeded by (1) gaps in the 

knowledge of environmental stressors and their effects on ecological conditions and human 

health, (2) limited information on the economic benefits of environmental protection, and (3) 

reluctance to act without more complete information. GAO has consistently reported on the 

lack of quality information needed to understand the state of the nation’s environment, the 

extent of compliance by the regulated community, and the need to consider the full costs and 

benefits associated with alternative regulatory and management strategies in policymaking. 

Without this kind of information, the nation’s environmental policy and priorities will continue 

to be driven by anecdote and perception, rather than fact. 

Key Topics Needing Congressional Oversight 

• Assess implementation of laws and compliance, as well as opportunities for enhancing the 

cost-effectiveness and efficiency of environmental programs. 

• Identify information needed to better assess the state of the environment, emerging 

problems, and social and economic impacts of environmental programs. 

• Prioritize activities to fill knowledge gaps and strengthen the information needed for 

assessing existing and emerging environmental risks, as well as evaluating the costs and 

benefits of alternative approaches to achieving environmental outcomes. 

• Determine whether changes to statutes and regulations could help ensure that the nation’s 

environmental, social, and economic goals are being achieved in a balanced and 

sustainable manner. 

Selected GAO Products 

Clean Air Act: Observations on EPA’s Cost-Benefit Analysis of Its Mercury Control Options. 

GAO-05-252. February 28, 2005. 

Environmental Indicators: Better Coordination Needed to Develop Environmental Indicator 

Sets That Inform Decisions. GAO-05-52. November 17, 2004. 

Watershed Management: Better Coordination of Data Collection Efforts Needed to Support 

Key Decisions. GAO-04-382. June 7, 2004. 

Environmental Information: EPA Needs Better Information to Manage Risks and Measure 

Results. GAO-01-97T. October 3, 2000. 

Primary GAO Contact 

John Stephenson, Director, Natural Resources and Environment, (202) 512-6225, 

stephensonj@gao.gov. 

Page 31 GAO-07-235R Potential Oversight Issues 
Reform Federal Housing Programs and Related Financing and Regulatory Structures 

The federal government promotes homeownership and rental housing for lower-income 

households through various housing finance programs, incentives, and requirements. The 

federal agencies and government-sponsored enterprises (GSE) responsible for advancing 

national housing goals have faced a number of challenges in recent years. First, the Federal 

Housing Administration’s (FHA) single-family mortgage insurance programs have experienced 

higher-than-expected insurance claims and a sharp decline in participation due partly to the 

wide availability of subprime mortgage products. These factors have prompted proposals to 

modernize and broaden the customer base for FHA’s programs. Second, risk management and 

accounting deficiencies at the GSEs have called into question the effectiveness of the 

regulatory structure for these entities. Legislation on reforming the structure has been 

intensely debated. Third, the rising cost of rental housing assistance programs and large 

backlog of public housing capital needs have made it increasingly difficult to keep rental units 

affordable and available to lower-income households. Recent reform efforts have focused on 

giving state and local program administrators the flexibilities and incentives to operate the 

programs more efficiently and leverage private financing for capital improvements. 

Key Topics Needing Congressional Oversight

• Evaluate potential changes to the GSE regulatory framework and determine how new 

regulatory authorities and responsibilities would help in GSE oversight. 

• Assess how proposed FHA reforms are likely to affect the agency’s role in the mortgage 

market and the extent to which FHA has the risk management capabilities necessary to 

implement the reforms. 

• Assess federal agencies’ efforts to ensure that federally assisted rental housing is 

effectively managed, remains in good physical and financial condition and, to the extent 

practicable, remains available for lower-income households. 

Selected GAO Products

Rental Housing Assistance: Policy Decisions and Market Factors Explain Changes in the 

Costs of the Section 8 Programs. GAO-06-405. April 28, 2006. 

Mortgage Financing: Additional Action Needed to Manage Risks of FHA-Insured Loans with 

Down Payment Assistance. GAO-06-24. November 9, 2005. 

Housing Government-Sponsored Enterprises: A New Oversight Structure Is Needed. GAO-05-

576T. April 21, 2005. 

Primary GAO Contact 

William Shear, Director, Financial Markets and Community Investment, (202) 512-4325, 

shearw@gao.gov.

Page 32 GAO-07-235R Potential Oversight Issues 
Ensure the Integrity and Equity of Existing Farm Programs

The federal government spends more than $25 billion each year on subsidies and disaster and 

conservation payments for farmers. The largest farming entities—10 percent of the 

recipients—collect about 70 percent of the benefits. While the United States farm sector 

continues to provide the American people with ample quantities of low cost food, our work 

has shown that the U.S. Department of Agriculture’s (USDA) enforcement of support program 

rules is not always effective. For example, we have found that each year, thousands of 

producers falsely collect crop insurance payments, and individuals with limited involvement in 

farming have qualified for payments and evaded payment limits. USDA support programs may 

also have unintended consequences, including incentives for producers to grow crops on land 

prone to drought or erosion. The Congressional Budget Office estimated that eliminating 

support for marginal lands could save $1.4 billion. Without better oversight to ensure that farm 

program funds are spent as economically, efficiently, and effectively as possible, there is little 

assurance that they benefit the agricultural sector as intended or protect rural areas from land 

degradation and diminished water quality. 

Key Topics Needing Congressional Oversight 

• Increase the monitoring of the compliance provisions in the farm bill. 

• Strengthen internal controls in the federal crop insurance program to weed out fraud, 

waste, and abuse. 

• Eliminate loopholes in the agriculture subsidy programs that allow recipients to avoid 

payment limitations and annually collect millions of dollars in payments. 

• Assess financial incentives for producers to convert native rangeland to produce crops, 

resulting in increased program costs and lost environmental benefits. 

Selected GAO Products 

Conservation Security Program: Despite Cost Controls, Improved USDA Management Is 

Needed to Ensure Proper Payments and Reduce Duplication with Other Programs. GAO-06-

312. April 28, 2006.

Crop Insurance: Actions Needed to Reduce Program’s Vulnerability to Fraud, Waste, and 

Abuse. GAO-05-528. September 30, 2005. 

Farm Program Payments: USDA Needs to Strengthen Regulations and Oversight to Better 

Ensure Recipients Do Not Circumvent Payment Limitations. GAO-04-407. April 30, 2004. 

Agricultural Conservation: USDA Needs to Better Ensure Protection of Highly Erodible 

Cropland and Wetlands. GAO-03-418. April 21, 2003. 

Primary GAO Contact 

Lisa Shames, Acting Director, Natural Resources and Environment, (202) 512-2649, 

shamesl@gao.gov. 

Page 33 GAO-07-235R Potential Oversight Issues 
Review Federal Efforts to Improve the Image of the United States 

The U.S. government has failed to implement a strategic, coordinated approach to counter 

increasingly negative foreign public opinion. U.S. strategic communication efforts, led by the 

State Department and supported by U.S. Agency for International Development, the 

Broadcasting Board of Governors, and the Department of Defense, support a number of 

national security interests, including countering terrorism and promoting democracy. Of 

particular interest and concern is the growing consensus that the United States is engaged in a 

“war of ideas” with extremists that must be countered with “soft power” assets, strategies, and 

programs. Failure to win this war of ideas will jeopardize the ability of the United States to 

limit the growth of terrorist networks and their operational effectiveness. 

Key Topics Needing Congressional Oversight

• Monitor State Department efforts to develop a comprehensive strategic communication

plan—integrated with other U.S. departments and agencies—with clear goals and 

strategies for improving overseas public opinion of the United States. 

• Assess State Department efforts to develop country-level public diplomacy and 

communications plans, particularly in nations that are considered key in the global war on 

terror. 

• Examine the extent to which the State Department has the organizational structure and 

human resources necessary to carry out its public diplomacy and strategic communication 

goals. 

• Assess the implementation of the Department of Defense’s 2006 Quadrennial Strategic 

Communication Execution Roadmap, which is intended to institutionalize a strategic 

communications process to improve the department’s ability to fight the global war on 

terrorism. 

• Assess the Broadcasting Board of Governor’s actions to document the audience reach of 

Radio Sawa and the Alhurra satellite television network—the United States’ two primary 

vehicles for communicating with mass audiences in the Muslim world. 

Selected GAO Products

U.S. International Broadcasting: Management of Middle East Broadcasting Services Could 

Be Improved. GAO-06-762. August 4, 2006. 

U.S. Public Diplomacy: State Department Efforts to Engage Muslim Audiences Lack Certain 

Communication Elements and Face Significant Challenges. GAO-05-323. May 3, 2006. 

Primary GAO Contact 

Jess T. Ford, Director, International Affairs and Trade, (202) 512-4268, fordj@gao.gov. 

Page 34 GAO-07-235R Potential Oversight Issues 
Review the Need for Various Budget Controls and Legislative Process Revisions in 

Light of Current Deficits and Our Long-Range Fiscal Imbalance 

Fiscal policy is on an unsustainable path. GAO’s long-term simulations show that absent a 

change in policy, the nation faces escalating deficits and debt. This outlook is largely driven by 

health care costs and demographics. Failure to grapple with these challenges will result in a 

government unable to respond to any new challenges and a crushing fiscal burden for future 

generations. 

The budget controls that restrained expansion of the deficit have expired without being 

replaced. Future budget controls and enforcement mechanisms and legislative processes will 

need to move beyond the previous regimes to facilitate difficult choices and attention to the 

long term. 

Key Topics Needing Congressional Attention 

• Reimpose caps on discretionary spending. 

o Under caps, consider special rules for well-defined “emergency” designations. 

o Consider whether there should be an explicit allocation between investment and 

consumption within discretionary spending. 

• Reintroduce pay-as-you-go (PAYGO) requirements—on both the spending and revenue side 

of the ledger—and examine ways of moving from “do no harm” to facilitating a change in 

direction. 

• Consider budget triggers that would signal the need for action when there is significant 

growth in mandatory programs. 

• Require estimates of long-term cost implications of major policy proposals (tax and 

spending) before they are acted upon. 

• Require information on tax expenditures—cost implications, performance goals, etc. (See 

the suggested oversight issue on “Reform the Tax Code, Including Reviewing the 

Performance of Tax Preferences” p.24). 

• Review the use of supplementals and earmarks in order to determine needed reforms. 

• Consider biennial budgeting and other broader reforms. 

 

Selected GAO Products

The Nation’s Long-Term Fiscal Outlook: September 2006 Update. GAO-06-1077R. September 

15, 2006. 

Budget Process: Better Transparency, Controls, Triggers, and Default Mechanisms Would 

Help to Address Our Large and Growing Long-Term Fiscal Challenge. GAO-06-761T. May 25, 

2006. 

Mandatory Spending: Using Budget Triggers to Constrain Growth. GAO-06-276. January 31, 

2006.

Budget Process: Long-Term Focus Is Critical. GAO-04-585T. March 23, 2004. 

Primary GAO Contact

Susan J. Irving, Director for Federal Budget Analysis, Strategic Issues, (202) 512-8288, 

irvings@gao.gov.

Page 35 GAO-07-235R Potential Oversight Issues 
Pursue the Development of Key National Indicators 

As the pace of change accelerates, the nation is faced with new and more complex challenges, 

including globalization, emerging scientific and technological changes, public health, and 

environmental issues. One tool to help address these challenges is the development of key 

national indicators to measure progress toward national outcomes, assess conditions and 

trends, and help communicate complex issues. Some other countries have key national 

indicator systems, but not the United States. 

Congressional attention is needed. The Key National Indicators Initiative, under the auspices 

of the National Academies, has begun efforts to develop a national indicator system to inform 

strategic planning, enhance performance and accountability reporting, inform congressional 

oversight and decision making, facilitate oversight, and stimulate greater citizen engagement. 

GAO’s work has pointed to the need for a governmentwide strategic plan, supported by key 

national indicators to assess performance, position, and progress. A governmentwide strategic 

plan could provide an additional tool for re-examining existing programs and proposing new 

programs. GAO has also called for a governmentwide performance report linked to key 

indicators to articulate the government’s accomplishments. A key national indicator system 

for the United States, however, cannot be fully developed without the interest and critical 

attention that congressional involvement provides. 

Key Topics Needing Congressional Oversight

• Encourage awareness and education through public hearings. The Congress could take a 

leadership role in highlighting the need for a U.S. national indicator system. 

• Strengthen partnerships to enhance the dissemination of quality information, including 

engaging with citizens and local indicator systems in congressional districts across the 

country to ensure that proposals for the State of the USA system are configured to 

effectively and efficiently meet national information needs. 

• Focus attention on the role and contributions of the federal statistical system in providing 

key data and assessing areas where improvements are needed. 

• Examine the possible role of a public-private partnership to further develop and operate a 

system of key national indicators. 

Selected GAO Products

Environmental Indicators: Better Coordination Is Needed to Develop Environmental 

Indicator Sets That Inform Decisions. GAO-05-52. November 17, 2004. 

Informing Our Nation: Improving How to Understand and Assess the USA’s Position and 

Progress. GAO-05-1. November 10, 2004. 

Primary GAO Contact 

Bernice Steinhardt, Director, Strategic Issues, (202) 512-6543, steinhardtb@gao.gov. 

Page 36 GAO-07-235R Potential Oversight Issues 
Review the Impact and Effectiveness of Various Management Reforms Enacted in 

Recent Years (e.g., GPRA, CFO Act, FFMIA, Clinger-Cohen, etc.)

The Congress and the executive branch have implemented a statutory framework to improve 

the performance and accountability of the executive branch and to enhance executive branch 

and congressional decision making. This framework includes as its key elements: resultsoriented management reforms, especially the Government Performance and Results Act 

(GPRA); financial management reforms, including the Chief Financial Officers (CFO) Act, the 

Federal Financial Management Improvement Act (FFMIA), and other related legislation; and 

information technology reforms, such as the Clinger-Cohen Act. 

As a result of this framework, there has been substantial progress in establishing the basic 

infrastructure needed to create high-performing organizations across the federal government. 

However, agencies are still in the early stages of using this statutory framework to transform 

their organizational cultures, inform their decision making, improve their performance, and 

strengthen their accountability. Sustained congressional attention has been and will continue 

to be a critical factor to ensuring achievement of various management reforms, such as the 

goals and objectives of key legislative reforms. 

Key Topics Needing Congressional Oversight

• Examine the progress federal agencies are making in integrating these reforms to drive a 

broader transformation of their cultures to be more results-oriented, high performing 

organizations. 

• Oversee federal agency efforts to implement modern financial management systems that 

routinely produce information that is timely, useful, and reliable for decision-making. 

• Review agencies’ delivery of information technology to improve mission performance by 

determining whether major provisions of the Clinger-Cohen Act are being effectively 

addressed (e.g., capital planning and investment control processes, enterprise architecture, 

information technology leadership and human capital). 

Selected GAO Products

Enterprise Architecture: Leadership Remains Key to Establishing and Leveraging 

Architectures for Organizational Transformation. GAO-06-831. August 14, 2006. 

CFO Act of 1990: Driving the Transformation of Federal Financial Management. GAO-06-

242T. November 17, 2005. 

Results-Oriented Government: GPRA Has Established a Solid Foundation for Achieving 

Greater Results. GAO-04-38. March 10, 2004. 

Primary GAO Contact

J. Christopher Mihm, Managing Director, Strategic Issues, (202) 512-6806, mihmj@gao.gov.

Page 37 GAO-07-235R Potential Oversight Issues 
Review the Effectiveness of the Federal Audit and Accountability Community, 

Including the Oversight, Structure, and Division of Responsibility 

Current national and global issues and a challenging fiscal outlook make the oversight role of 

government auditors especially important to help ensure that public functions are carried out 

efficiently, economically, effectively, ethically, and legally and to limit exposure to fraud, 

waste, mismanagement, and abuse. The current federal audit oversight structure includes 

GAO, 62 statutory inspector general (IG) offices, and about 6,000 CPA firms that annually 

perform more than 34,000 audits of entities receiving federal funding (single audits). While the 

Single Audit Act has provided oversight of more than $300 billion in annual federal grants,

questions have been raised about the usefulness and effectiveness of oversight for federal 

funds. Given the current challenges, government auditing must be focused and coordinated in 

order to provide the most effective oversight of federal programs and funds. Finally, there are 

numerous federally established entities receiving significant federal funding that lack statutory 

requirements for accountability oversight and should be included in the federal audit oversight 

structure. 

Key Topics Needing Congressional Oversight 

• Require GAO and the IGs to evaluate the current structure and division of responsibilities 

to develop reform proposals to achieve more effective audit oversight of federal programs 

and funding in the 21st century. 

• Establish a governmentwide accountability council to establish priorities and develop 

strategies to address federal accountability issues among GAO, the Office of Management 

and Budget, the President’s Council on Integrity and Efficiency and the Executive Council 

on Integrity and Efficiency, and other oversight organizations. 

• Review the Single Audit Act and propose reforms to ensure continuing effective oversight 

of the more than $300 billion in annual federal grants awarded to nonfederal entities to 

meet the needs for oversight of federally funded programs. 

• Schedule a series of oversight hearings to deliberate GAO’s and the IGs federal audit 

reform proposals and the council’s priorities and strategies. 

Selected GAO Products 

Highlights of the Comptroller General’s Panel on Federal Oversight and the Inspectors 

General. GAO-06-931SP. September 11, 2006. 

Inspectors General: Office Consolidation and Related Issues. GAO-02-575. August 15, 2002. 

Single Audit: Single Audit Act Effectiveness Issues. GAO-02-877T. June 26, 2002. 

Primary GAO Contact 

Jeanette M. Franzel, Director, Financial Management and Assurance, (202) 512-9471, 

franzelj@gao.gov. 

Page 38 GAO-07-235R Potential Oversight Issues 
Modernize the Federal Government’s Organizational and Human Capital Models

The federal government is faced with new and more complex economic, demographic, social, 

technological, security, and other challenges that it alone cannot address. In fact, achieving

meaningful national results and outcomes increasingly requires the coordinated efforts of 

various federal agencies, other governments both internationally and as well as at the state 

and local levels, nongovernment organizations, for-profit and not-for-profit contractors, the 

private sector, and others. To respond to current and emerging demands, federal agencies 

must become more partnership-based, results-oriented, integrated, and externally focused. In 

that regard, strategic human capital management must be the centerpiece of any serious 

change management and transformation effort. Yet, as amply shown by GAO’s long-standing 

work on human capital issues—including the designation of strategic human capital 

management as a governmentwide high-risk area—federal agencies do not consistently have 

the modern, effective, economical, and efficient human capital programs, policies, and 

procedures they need to respond to current and emerging governance challenges. 

Key Topics Needing Congressional Oversight

• Require the Office of Management and Budget to develop an executive branch annual 

performance plan—as already mandated by the Government Performance and Results 

Act—and issue annual summary reports of the financial results and performance outcomes 

of the federal government. 

• Authorize agencies to implement market-based and performance-oriented compensation 

reform, based on a “show me” test; that is, an agency may not implement new authorities 

until it has demonstrated it has in place a modern, effective, and credible performance 

management system with adequate safeguards. 

• Ensure that agencies’ strategic workforce plans and accompanying succession plans 

incorporate the critical transformation and governance challenges each agency faces and 

do not merely seem to replicate a status quo that is outmoded, ineffective, and not 

sustainable in the future. 

• Review the efforts at the Departments of Defense and Homeland Security to ensure that 

they effectively implement their new human capital systems. 

Selected GAO Products

Human Capital: Principles, Criteria, and Processes for Governmentwide Federal Human

Capital Reform. GAO-05-69SP. December 1, 2004. 

Human Capital: Key Principles for Effective Strategic Workforce Planning. GAO-04-39. 

December 11, 2003. 

Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned for a

Department of Homeland Security and Other Federal Agencies. GAO-03-293SP. November 14, 

2002. 

Primary GAO Contact 

J. Christopher Mihm, Managing Director, Strategic Issues, (202) 512-6806, mihmj@gao.gov. 

Page 39 GAO-07-235R Potential Oversight Issues 
Re-examine the Presidential (Political) Appointment Process 

The presidential (political) appointment process does not distinguish among the different 

types of responsibilities inherent in the appointed positions. Further, the positions generally 

do not require any particular set of qualifications, even though the appointees may be 

responsible for non-policy related functions. In addition, some federal agencies, particularly 

those agencies with political appointees in positions with operational and management 

responsibilities may benefit from term appointments. For example, there is proposed 

legislation to implement deputy secretaries for management/chief management officer (CMO) 

positions at the Departments of Defense and Homeland Security. If put in place, these CMOs 

would be at an Executive Level II position in these agencies and would have term 

appointments and statutory qualifications. 

Key Topics Needing Congressional Oversight

• Examine whether Presidential (political) appointees can be categorized by the differences 

in their roles and responsibilities, such as by the following categories: 

o Appointees that have responsibility for various policy issues; 

o Appointees that have leadership responsibility for various operational and 

management matters; and 

o Appointees that require an appropriate degree of professional competence, 

objectivity, and independence (e.g., judges, the comptroller general, inspectors 

general). 

• Review which appointee positions should be Presidentially-Appointed-Senate Confirmed 

(PAS) versus Presidentially-Appointed (PA). (For example, those appointees that have 

policy leadership responsibility should be PAS, while many of those with operational and 

management responsibility could be PA, with an appropriate advance appointment 

congressional notification requirement). 

• Assess appropriate qualifications for selected positions (including the possibility of 

establishing specific statutory qualifications criteria for certain categories of appointees). 

• Review the use of tenures and term appointments (i.e. for Inspectors General and selected 

Executive Level II positions in federal agencies). 

• Examine a variety of compensation schemes, given the different roles noted above. 

Selected GAO Products

Highlights of the Comptroller General’s Panel on Federal Oversight and the Inspectors 

General. GAO-06-931SP. September 11, 2006. 

Human Capital: Trends in Executive and Judicial Pay. GAO-06-708. June 21, 2006. 

Highlights of a GAO Roundtable: The Chief Operating Officer Concept: A Potential Strategy 

to Address Federal Governance Challenges. GAO-03-192SP. October 4, 2002. 

Primary GAO Contact 

J. Christopher Mihm, Managing Director, Strategic Issues, (202) 512-6806, mihmj@gao.gov. 

Page 40 GAO-07-235R Potential Oversight Issues 
Ensure Transparency over Executive Policies and Operations 

A fundamental principle of democratic government is that its policies and operations be 

reasonably transparent to the press and the public and subject to effective oversight to ensure 

they are achieving the will of the Congress and American people. Key oversight and 

transparency mechanisms include requests from the Congress, GAO, and the Offices of 

Inspectors General (IG) for information from executive agencies that demonstrates how well 

policies and operations are achieving agencies’ missions and using taxpayer dollars. In 

addition, similar information is sought by members of the press and public through the 

Freedom of Information Act (FOIA). Executive agencies, in turn, are responsible for ensuring 

that they respond to requests for information in a manner consistent with national security 

interests. To achieve this balance, agencies may determine that the information requested 

must be classified, or designated as sensitive but unclassified. The tradeoff, however, is that 

the Congress, GAO, and IGs may be restricted in the further dissemination of this information 

and the public may be denied timely access. Thus, agencies’ processes for deciding how to 

respond to such requests for information and whether to restrict it are critical to transparency 

and oversight. From time to time, agencies’ processes have come under scrutiny because they 

appear to limit timely access and interfere with legislative oversight.

Key Topics Needing Congressional Oversight 

• Compare and contrast how agencies respond to requests from the Congress, GAO, IGs, and 

the public under FOIA, for information on agency policies and operations. 

• Determine how responsive agencies have been to these requests.

• Review how agencies determine that the response involves information that needs to be 

classified or designated as sensitive but unclassified, and determine the impact this had on

agencies’ ability to respond.

Selected GAO Products 

Managing Sensitive Information: DOJ Needs a More Complete Staffing Strategy for

Managing Classified Information and a Set of Internal Controls for Other Sensitive 

Information. GAO-07-83. October 22, 2006. 

Managing Sensitive Information: Actions Needed to Ensure Recent Changes in DOE 

Oversight Do Not Weaken an Effective Classification System. GAO-06-785. June 30, 2006. 

Managing Sensitive Information: DOD Can More Effectively Reduce the Risk of 

Classification Errors. GAO-06-706. June 30, 2006. 

Managing Sensitive Information: Departments of Energy and Defense Policies and 

Oversight Could Be Improved. GAO-06-369. March 7, 2006. 

Primary GAO Contact 

Eileen Larence, Director, Homeland Security and Justice, (202) 512-6510, larencee@gao.gov. 

Page 41 GAO-07-235R Potential Oversight Issues 
Monitor and Assess Corporate Financial Reporting and Related Standards 

for Public Companies Accountability

Investor confidence in reliable financial reporting is at the core of the effective functioning of 

the capital markets. The significant corporate failures that occurred due to corporate 

mismanagement and fraud caused a loss of investor confidence and resulted in the Congress 

passing the Sarbanes-Oxley Act of 2002, to reform corporate financial reporting and auditing. 

The act has improved the quality of auditing and the quality of corporate financial reporting 

and related internal controls. Many larger companies experienced challenges and high costs 

associated with implementing the internal control requirements of the act. As smaller public 

companies, about 60 percent of total public companies, begin to implement these 

requirements it is crucial that the Securities and Exchange Commission (SEC) and the Public 

Company Accounting Oversight Board (PCAOB) resolve implementation issues in order to 

achieve effective reforms. In addition, as financial markets continue to globalize, the U.S. and 

international accounting standard setters must work to improve relevance, usefulness, 

consistency, and efficiency of financial reporting. Finally, the accounting and auditing 

profession needs to develop well-defined objectives and business practices that are widely 

shared and accepted so that reliable and useful financial reporting and auditor assurance can 

be accomplished in an effective and efficient manner. 

Key Topics Needing Congressional Oversight 

• Require SEC and PCAOB to assess the Sarbanes-Oxley Act’s internal control-related 

guidance and standards to determine their sufficiency and how management and auditors 

can achieve economical and effective implementation. 

• Require periodic SEC assessment of progress on improving the usefulness, effectiveness, 

and efficiency of financial reporting, including related internal control requirements, as 

well as identification of current and emerging issues that could impact financial reporting, 

accountability, and investor confidence. 

• Require GAO assessment of the progress of the accounting and auditing standard setters 

and regulators in addressing issues impacting efficiency and effectiveness of corporate 

financial reporting, internal control, and auditing. 

 

Selected GAO products 

Financial Restatements: Update of Public Company Trends, Market Impacts, and 

Regulatory Enforcement Activities. GAO-06-678. July 24, 2006. 

Sarbanes-Oxley Act: Consideration of Key Principles Needed in Addressing Implementation 

for Smaller Public Companies. GAO-06-361. April 13, 2006. 

Public Accounting Firms: Required Study on the Potential Effects of Mandatory Audit Firm 

Rotation. GAO-04-216. November 21, 2003. 

Public Accounting Firms: Mandated Study on Consolidation and Competition. GAO-03-864. 

July 30, 2003. 

Primary GAO contact 

Jeanette M. Franzel, Director, Financial Management and Assurance, (202) 512-9471, 

franzelj@gao.gov.

(450552) 

Page 42 GAO-07-235R Potential Oversight Issues 
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