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90–235 PDF 2004

S. Hrg. 108–262

OVERSIGHT OF GAO: WHAT LIES AHEAD FOR

CONGRESS’ WATCHDOG?

HEARING

BEFORE THE

COMMITTEE ON 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

SEPTEMBER 16, 2003

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

ARLEN SPECTER, Pennsylvania 

ROBERT F. BENNETT, Utah 

PETER G. FITZGERALD, Illinois 

JOHN E. SUNUNU, New Hampshire 

RICHARD C. SHELBY, Alabama 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

RICHARD J. DURBIN, Illinois 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

MICHAEL D. BOPP, Staff Director and Chief Counsel 

BONNIE HEALD, Professional Staff Member 

JENNIFER A. HEMINGWAY, Professional Staff Member 

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel 

LAWRENCE B. NOVEY, Minority Counsel 

AMY B. NEWHOUSE, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Collins ................................................................................................. 1

Senator Voinovich ............................................................................................. 8

Senator Pryor .................................................................................................... 16

Senator Carper ................................................................................................. 17

Senator Lautenberg .......................................................................................... 28

Prepared statement: 

Senator Coleman .............................................................................................. 33 

WITNESSES 

TUESDAY, SEPTEMBER 16, 2003

Hon. David M. Walker, Comptroller General, U.S. General Accounting Office . 3

Maurice P. McTigue, Director, Government Accountability Project, Mercatus 

Center, George Mason University ...................................................................... 21

ALPHABETICAL LIST OF WITNESSES

McTigue, Maurice P.: 

Testimony .......................................................................................................... 21

Prepared Statement ......................................................................................... 120

Walker, Hon. David M.: 

Testimony .......................................................................................................... 3

Prepared Statement ......................................................................................... 34

APPENDIX

GAO’s Employee Advisory Council, prepared statement ..................................... 127

Post-hearing Questions for the Record submitted to Mr. Walker by Senator 

Fitzgerald .............................................................................................................. 139

(1)

OVERSIGHT OF GAO: WHAT LIES AHEAD FOR 

CONGRESS’ WATCHDOG? 

TUESDAY, SEPTEMBER 16, 2003

U.S. SENATE, COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 9:30 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Susan M. Collins, 

Chairman of the Committee, presiding. 

Present: Senators Collins, Voinovich, Pryor, Carper, and Lautenberg. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. The Committee will come to order. Good 

morning. 

For more than 80 years, the General Accounting Office has 

worked with Congress to make Federal agencies and programs 

more accountable. The GAO works for Congress, but its beneficiaries are the American people, who rightfully expect the Federal 

Government to spend their tax money carefully. The GAO has 

played the role of auditor, overseer, investigator, evaluator, and 

watchdog. Today, we consider the GAO itself by examining its 

work, the results it has achieved, and the challenges it faces. 

This morning’s hearing on the GAO, the investigative arm of 

Congress, has two purposes. First, we want to examine the GAO’s 

efforts to support Congress in meeting its constitutional responsibilities to help improve the performance and accountability of the 

Federal Government. Second, we will discuss legislation pending 

before this Committee that would provide the Comptroller General, 

who leads this important agency, with greater flexibility in allocating and enhancing its workforce. 

When it was first established in 1921, the General Accounting 

Office provided the services its name suggests. It examined the legality, propriety, and accuracy of government expenditures. GAO 

clerks checked vouchers and approvals and whether the items purchased were actually received. 

Over the years, the GAO’s mission has expanded far beyond 

these bookkeeping functions. To better meet its broadened scope of 

responsibility, in the 1970’s, the GAO added physical scientists, social scientists, computer professionals, and experts in fields such as 

health care, public policy, and information management to its staff 

of accountants. 

In 1998, David Walker, who will testify before us today, became 

the Nation’s seventh Comptroller General. Under his leadership, 

2

the depth and breadth of the agency’s work on behalf of Congress 

have continued to expand along with the myriad challenges that 

confront the Federal Government. GAO auditors, investigators, and 

analysts have helped Congress address broad, challenging areas, 

such as military transformation, restructured energy markets, private pensions, prescription drugs, homeland security, and postal reform. 

The Senate Governmental Affairs Committee, along with the 

House Government Reform Committee, has a uniquely close relationship with the GAO. Last year, for example, nearly one-third of 

the GAO’s projects were completed for these two oversight committees. Currently, this Committee has made 32 work requests of the 

GAO that are either pending or already underway. We depend on 

the GAO to help identify waste, fraud, and abuse in government 

programs. We look to the GAO for recommendations on making 

Federal programs operate more efficiently and effectively for the 

American people, whose hard-earned tax dollars support their government. 

The GAO’s expanded role in the Legislative Branch of government also poses many challenges, which Mr. Walker will discuss 

today, including the agency’s human capital needs. The GAO is requesting additional personnel flexibilities in order to assure quality 

service to the Congress, to continue leading by example in the government, and to attract, retain, motivate, and reward a high-performing workforce. 

I am pleased to have joined Senator Voinovich in introducing the 

GAO Human Capital Reform Act of 2003, which would allow the 

GAO to reward employees based on their knowledge, skills, and 

performance. This proposal is part of a larger program to strengthen the management systems and capacity of the GAO. 

I commend the Comptroller General and his human capital team 

for working collaboratively with GAO employees during the development of the proposed reform. In developing its reforms, the GAO 

undertook an extensive, phased approach that involved developing 

a proposal that was vetted broadly both externally and internally, 

and then it made adjustments based on employee comments and 

concerns raised during the process. 

The GAO worked closely with its Employee Advisory Council, 

which represents a cross-section of the agency, to obtain the feedback necessary as part of a successful process. I want to commend 

the GAO for taking that approach, which contrasts with the approach that some other departments and agencies have taken. I 

think that is why GAO’s system has been more successful. That 

kind of collaborative, inclusive approach has worked well. 

The GAO’s past use of management flexibilities and continued efforts to build the infrastructure necessary to responsibly shape its 

organization should serve as a model for the rest of the Federal 

Government. The GAO has demonstrated well how to be responsive 

to the concerns of its employees. As agencies move forward in implementing various human capital reform initiatives they should 

carefully examine this fine example. 

Before I turn to our first witness today, I just want to say that 

I don’t know how this Committee would be able to do its work 

without the invaluable assistance of the GAO. We rely on the GAO 

3

1The prepared statement of Mr. Walker appears in the Appendix on page 34. 

in so many areas, and the breadth of expertise that the GAO now 

brings to Federal projects requested by Congress is truly impressive. 

I am very pleased to welcome our first witness today, the Hon. 

David M. Walker, the Comptroller General of the United States. 

Mr. Walker has been a very valuable contributor to the Committee’s work on a variety of issues. I am particularly grateful for his 

recent assistance with the Committee-passed version of the civilian 

personnel reform legislation for the Department of Defense. Today, 

we will benefit from a discussion of GAO’s performance as a whole, 

and we will use this opportunity to build a legislative record on the 

legislation that Senator Voinovich and I have introduced. 

So, Mr. Walker, we welcome you and you may proceed with your 

testimony. 

TESTIMONY OF HON. DAVID M. WALKER,1 COMPTROLLER 

GENERAL, U.S. GENERAL ACCOUNTING OFFICE 

Mr. WALKER. Thank you, Madam Chairman. It is a pleasure to 

be here. It has been almost 5 years since I became the seventh 

Comptroller General of the United States. Much has happened during that 5-year period of time and I look forward to providing an 

executive overview of what has happened, along with the changes, 

the challenges, and the opportunities that are before us. 

I also would like to thank you and Senator Voinovich for your 

sponsorship of the GAO Human Capital Act of 2003. That is a critical piece of legislation and we are hopeful that the Congress can 

act on it this year. 

If I can, I would like for my entire statement to be inserted into 

the record and I will summarize now. 

Chairman COLLINS. Without objection. 

Mr. WALKER. Thank you. When I came to GAO 5 years ago, I 

found an organization with a longstanding reputation, thousands of 

outstanding and dedicated public servants, and an organization 

that did many things right. At the same point in time, I found, like 

many organizations in the public sector, an organization that had 

not changed very much in a number of decades, who had gone 

through significant downsizing in the last several years and needed 

to reposition itself for the future in order to best serve the Congress, the country, and American citizens for the 21st Century. 

As a result, we embarked on nothing less than a fundamental 

transformation of the GAO, which has been ongoing now for about 

4 years. I think we have accomplished a tremendous amount, but 

much remains to be done. 

As you pointed out, Senator Collins, the GAO is very different 

today than it was in 1921 in so many different ways, although we 

are still faithful to our responsibility to assure accountability for 

the American people. I have benefited from the positive efforts of 

all of my predecessors, six predecessors, but in particular, Elmer 

Staats and Chuck Bowsher, who made major contributions to the 

agency over a number of years and I am pleased and proud to have 

succeeded them and to lead GAO. 

4

We are in a situation now where I believe we need to lead by example in helping the Federal Government and the Congress determine how best to position itself for the 21st Century. This includes 

what the government should do, how the government should be organized, how the government should do business, and in some 

cases, who should do the government’s business. 

And to do that, I believe very strongly that as the leading performance and accountability organization in the United States and 

arguably the world, we have a responsibility to lead by example. 

We have a responsibility to be as good or better than any other entity that we evaluate, audit or investigate. Not only do I think we 

can and we should, I think it adds to our credibility by doing so. 

That way, we are practicing what we preach, walking the talk, if 

you will. 

Over the last 4 years, we have taken a number of steps and we 

have adopted what I would call a strategic and balanced scorecard 

approach to transforming the agency. As you know, any organization has to have a strategic plan. If you don’t have a strategic plan, 

any road is going to get you to an uncertain future. You may go 

nowhere fast. 

I found at GAO that in the past, we had a number of individual 

plans, but we really didn’t have a strategic plan. So we worked 

with the Congress in a very participative, partnership-oriented 

fashion to, in the year 2000, issue our first truly strategic plan that 

has four main goals, a foundation based on our core values, and 

identifies certain key trends and challenges that face the United 

States and many other countries to help drive our work. 

We used that plan to reorganize and streamline GAO. We eliminated a layer of management. We didn’t lay off any of those management officials or their support staff. We redeployed them. But 

we eliminated a layer of management, which makes us more economical, efficient, and effective. We consolidated from 35 teams to 

13. We went from 16 field offices to 11. We redeployed resources 

horizontally and to focus externally with our clients, with our accountability partners, and with other good government organizations. 

The result of that has been profound and positive results. If you 

look at the first factor of the balanced scorecard approach, results, 

our financial benefits, as evidenced by either savings achieved or 

resources freed up for redeployment to other high priorities, have 

gone up from $19.7 billion in 1998 to $37.7 billion in 2002. That 

is an almost doubling. Our return on investment just for financial 

benefits alone has gone from $58 for every dollar invested in GAO 

to $88 for every dollar invested in GAO, and this doesn’t count a 

whole range of other accomplishments as a result of adopting our 

recommendations that can’t be measured in dollar terms. These 

deal with safety, security, and privacy issues, that can’t be measured in dollar terms, but they are very important. 

And obviously, in the testimony, I have a number of other indicators. But results count. 

At the same point in time, we have tried to do a number of 

things with regard to our clients. We have had a continuous Congressional outreach effort. We sought feedback, first from this Committee, and then the House Government Reform Committee, on our 

5

testimonies and our products that we did for the Committee with 

very favorable outcome, over 90 percent positive ratings for both 

products as well as testimonies. We have now expanded that to 

other committees throughout the Congress. We would like the response rate to be a little bit higher, but the positive results are continuing. And so we are encouraged by that and we are going to try 

to do what we can to see if we can get the response rate a little 

bit higher. 

We have improved our timeliness. We are holding steady on 200-

plus testimonies a year for Congress. That is important, because if 

Congress thinks that our work is important enough for us to testify 

at a hearing, that is a good sign. It is an interim measure, it is not 

an outcome, but as you know, Congress through appropriations, 

oversight, authorization, many times will end up having hearings, 

and to the extent that our employees or our work is a subject of 

hearings, it increases the likelihood that we will have positive outcomes down the road. 

And last but not least, one of the things that we have done to 

try to help our clients on the other side of the Hill is because of 

the anthrax events, we actually became the home for the U.S. 

House of Representatives for about 2 weeks back in 2001 and now 

we are one of several contingency sites. So we not only have to concern ourselves with the safety and security of our own employees 

and also those who we lease space to, namely the headquarters of 

the Army Corps of Engineers in our headquarters building, but we 

also have to be concerned with the potential safety and security of 

our clients in the event of a contingency. 

With regard to agencies, we have tried to employ a constructive 

approach with agencies, not just to point out what is wrong, but 

to acknowledge what is right, to benchmark them on progress, and 

to benchmark them against other agencies. I think this is a more 

constructive way to approach our role and we have had very positive results as a result of it. 

Last but certainly not least with regard to what we have done 

so far is our people. People, by far, are our most important asset. 

We are only as good as our people. We have arguably the most diverse, as to skills and knowledge, professional workforce of any entity, even in the private sector. And as I said previously, I am 

pleased and proud to lead them. 

We make people a top priority at GAO and we have led the way, 

I believe, in human capital reforms, both administratively and legislatively. That is part of what the bill is about today, is the next 

installment, which would be the third installment on our human 

capital reforms legislatively. But we also partner very much with 

our Employee Advisory Council and our employees to try to make 

a great agency even better. 

For example, every year, we ask our employees to fill out a confidential electronic survey asking them how we are doing, where 

we are making progress, and what is important to you. This past 

couple of months, we got the results back from the most recent survey. We had an 89 percent response rate on a voluntary survey, 

which is phenomenal. Two-thirds of GAO’s employees wrote me a 

personal and confidential note, anywhere from two lines to twoVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
6

1The prepared statement of the GAO’s Employee Advisory Council appears in the Appendix 

on page 127. 

and-a-half pages. I read every one of them during the first weekend 

that I had the information. 

Our positive results went up in 72 out of 83 areas. We are ahead 

of the Federal Government in 9 out of 11 areas and we are ahead 

of the private sector in all four benchmark areas. So we are making 

great progress, but we can always be better and we will continue 

to strive to do that. 

I know the Employee Advisory Council has a statement that they 

have prepared for the record and I appreciate your willingness to 

be able to insert it into the record at the appropriate time.1

Let me last say that as noted within the last 2 weeks, one of the 

areas where we have also made tremendous progress is information 

technology. Specifically, within the last 2 weeks, GAO was recognized as one of the top 100 CIO organizations in the United States, 

and that includes the private sector. 

So we are making real progress on leading by example, serving 

the Congress and serving the country. Now, what about challenges? 

There are several challenges which I will hit the highlights on. Details are in my testimony. 

Our challenges include continuing our transformation, and continuing to build on our positive results and to make sure that they 

are sustainable. Some of our special challenges include unfunded 

mandates. We are concerned about unfunded mandates. Many 

times, when you are successful, Congress wants you to do more. It 

is fine if Congress asks us to do certain reports as a part of the 

legislative process. That is fine. But when Congress wants to expand the scope of our authority and get us in new lines of business, 

we think it is important that somehow there will be funding for it. 

Otherwise, we are diluting our ability to do our primary mission. 

Second, sometimes Congress will end up passing pay raises without fully funding the pay raises. That is very difficult when 80 percent of your costs are people costs. You can eat that maybe in 1 

year, but you cannot eat that on a recurring basis without adverse 

outcomes. 

Supply and demand imbalances—when you are doing a good job, 

you get requests for more work. That is good news. The bad news 

is, you have a certain amount of resources. We have supply and demand imbalances that we manage very carefully. Some of them are 

particularly acute in areas like health care, which means that 

sometimes we are going to have to end up going back to leadership 

of the committees as well as overall to try to relook at what is in 

the in basket and see if we can reprioritize. Obviously, we are having to place more and more attention on committee and subcommittee requests and less on individual member requests because of that supply and demand imbalance. 

Access to records—while we had one highly publicized problem 

within the last couple of years, we have not had a proliferation of 

records access problems and, therefore, do not need any legislation 

at this point in time. We are hopeful that we will not have problems in the future. 

7

The Deputy Comptroller General position has never been filled 

since the law was enacted in 1980. The current process just doesn’t 

work, and I would respectfully request that the time has come to 

reconsider that process and hopefully follow a process similar to 

what other supreme audit institutions around the world do, and 

that is to allow the Comptroller General, in consultation with certain parties on the Hill, to make that appointment or make a recommendation for that appointment. I think we need to do something because the current process just doesn’t work. 

Performance and accountability community coordination—we are 

only part of a broader portfolio, the Inspector Generals, for example. This is the 25th anniversary of the IG Act. I think there is a 

need over the next year or so to look at what is working, what is 

not, how can we achieve economies, improve efficiency and effectiveness in that community, as well. 

Our bid protest volume is also continuing to increase. 

And last but not least, we are being asked to do more and more 

work for the Legislative Branch on the Legislative Branch. By that, 

I mean where we are being asked to do work on the Capitol Police, 

the Capitol Visitors Center, the Architect of the Capitol, the Government Printing Office, and a variety of other entities. Obviously, 

we are happy to help our client, and yet these engagements do create certain challenges that have to continually be assessed. 

Finally, S. 1522, the GAO Human Capital Reform Act of 2003. 

Again, thanks to both you, Senator Collins, and you, Senator 

Voinovich, for your sponsorship of this legislation. We believe that 

this is both a reasoned and reasonable proposal. We believe that 

it will make GAO a more effective place and a better place to work. 

We believe it will help us to continue to lead by example in this 

critically important area. We believe that we followed a model process and we believe that we have got a proposal that deserves your 

support and this Committee’s support and hopefully the Congress’ 

support this year. 

As I look forward, in closing, there are three areas that I, along 

with my colleagues at GAO, would like to help the Congress on in 

the next 10 years. 

First, help the Congress address our large and growing fiscal imbalance. The numbers just don’t add up. Tough choices are going 

to be required. We are not going to grow our way out of this problem. I have a speech at the National Press Club tomorrow and I 

will talk more about this issue then. 

Second, helping to transform what the government does and how 

the government does business is critically important for the 21st 

Century. Right now, a vast majority of government is an amalgamation of programs, policies, functions, and activities over decades and the base has not been reviewed thoroughly for its relevancy in the 21st Century. The base is not OK and the base is 

unsustainable going forward, especially if the Congress wants flexibility to meet new demands that is placed on it. 

And last, to continue efforts to make GAO the Federal employer 

of choice and the gold standard for a world class professional services organization that just happens to be in the public sector. 

With that, thank you for your time. I appreciate the opportunity. 

I would be happy to answer any questions that you may have. 

8

Chairman COLLINS. Thank you very much, Mr. Walker. 

Before I turn to my questions, I would like to call on Senator 

Voinovich for any opening comments that he might have. As you 

are well aware, he is the Senate’s expert on human capital issues, 

and he is the primary sponsor of S. 1522, which I was very pleased 

to join him in introducing. Senator Voinovich. 

OPENING STATEMENT OF SENATOR VOINOVICH 

Senator VOINOVICH. Thank you, Madam Chairman. Comptroller 

General Walker, it is always a pleasure to see you and receive your 

testimony. I apologize, Madam Chairman, for not being here until 

now. I had a little plane problem. 

I want to thank you, Mr. Walker, for being a pace-setter on Federal strategic human capital management and for serving on my 

human capital working group. I appreciate your balanced review of 

the administration’s proposed human capital performance fund and 

the Defense Department’s national security personnel system, as 

well as your forthrightness about the Federal budget situation. We 

are hopeful that your comments and our legislation will make its 

way into the Conference Committee that is being held on the defense authorization bill. 

Mr. McTigue, thank you for being here, as well. I am grateful for 

the excellent analysis you and your colleagues at the Mercatus 

Center provide on Federal performance and accountability issues. 

Both of you have assisted in my efforts to reform the Federal workforce during my 5 years in the Senate and I look forward to making 

some other changes as we finish the year. 

Madam Chairman, as you know, I have a keen interest in the 

management of Federal agencies, and during my 5 years in the 

Senate, GAO really has played an integral role in providing comprehensive analyses and thoughtful recommendations on reforming 

the Federal Government’s strategic human capital management, an 

issue that I have made a centerpiece of my efforts, as you mentioned, as Chairman of the Oversight of Government Management 

Subcommittee. 

I would say that, Comptroller General Walker, we have made 

some real progress. I remember being in my office 2 or 3 years ago 

when you indicated that reform was going to be very difficult. It 

is amazing when I think about how much change has occurred so 

far, and hopefully more will occur before the end of this year. 

In addition to receiving the benefit of GAO’s excellent research 

on personnel and management issues, the Federal Government has 

in its own midst an examplar of excellent management practices. 

In the first 5 years of his 15-year term as Comptroller General, Mr. 

Walker has begun an important cultural transformation of his 

agency. Assisted in part by Congress’ enactment of special personnel flexibilities in GAO in 1980 and in 2000, Mr. Walker is in 

the process again of restructuring GAO’s workforce in order to 

maintain its mission both now and in the coming years. That 

makes GAO noteworthy not only for recommending to other agencies how to improve their management, but for setting an example 

for those agencies through its own practices. In other words, GAO 

is a best practices organization. It is difficult to go out and tell 

9

other people what to do if you are not doing them in your own 

shop. 

On July 31, I was pleased to introduced S. 1522, the GAO 

Human Capital Reform Act of 2003. This legislation, which was developed by GAO, I believe will further enhance those personnel authorities. 

Madam Chairman, I hope that we will be able to report out the 

bill at the Committee’s next business meeting in October. I am 

pleased to note that the House Civil Service Subcommittee already 

has reported out a companion bill. Madam Chairman, Mr. Walker 

has often observed that for too long, Federal employees have been 

seen as ‘‘costs to be cut rather than assets to be valued.’’ I mentioned that yesterday when I spoke with a group of representatives 

from labor unions in the Federal Government. He has done a good 

job in changing that perception at GAO. I think, frankly, that perception has been changed during the last couple of years, from 

beating up on Federal employees to valuing them and you have 

been a great leader in that area. 

I thank you for your testimony, and Madam Chairman, thank 

you for giving me a chance to make this opening statement. 

Chairman COLLINS. Thank you, Senator Voinovich. 

Mr. Walker, in your testimony, you gave some impressive statistics on the return on investment. I believe you said for each dollar 

that GAO receives that there is a return of $88, and that is up 

from $58, which is very impressive. 

Could you quantify for the Committee how much money the GAO 

has saved the Federal Government through its recommendations 

being implemented during the past 4 years, and could you also tell 

us, since there are undoubtedly some skeptics out there, how GAO 

goes about estimating the savings? 

Mr. WALKER. It would be around $100 billion or a little bit more, 

but let me clarify for the interest of full and fair disclosure. The 

financial benefits are a combination of two things. They are either 

outright savings, or they are resources that are freed up that Congress decides to redeploy to other priorities, which we don’t control. 

Obviously, the Congress has the prerogative to do that. But we believe that it is a better utilization of taxpayer resources and, therefore, appropriate for us to count as a financial benefit, because if 

that had not occurred, then they may have spent both, if you will. 

The way that we go about it is we have a very disciplined process 

where the teams who want to claim these financial benefits have 

to be able to document what was the recommendation that we 

made and was it adopted by the department or agency or the Congress, can we demonstrate that we are the primary or a major reason why this change occurred as a result of our work, and then an 

estimation of what the financial benefits were as a result of adopting that recommendation, whether it is a one-time savings, whether it is a multi-year savings. If it is, we don’t consider forever. We 

just consider several years and come back to a discounted present 

value. 

For this year, for anything that involves $500 million or more, 

our Inspector General independently reviews the estimated savings 

and either signs off or doesn’t sign off, and if the Inspector General 

10

doesn’t sign off, we don’t count it. And if she does sign off, then we 

do count it. 

We also are going to be undergoing a peer review that is going 

to be led by the Auditor General of Canada. It will involve a consortium of other countries within a couple of years and we expect 

that they will probably take a look at this, as well. 

We are also trying to get our external auditors to take a look at 

our financial benefits. We have had a clean opinion, no material 

control weaknesses, no compliance problems with our financial 

management reporting for years. We are trying to get our external 

auditors to be willing to express an opinion on our performance statistics. That is something CPAs haven’t done and I am trying to, 

frankly, get the profession to modernize itself and to lead by example in that area, as well, and I am hopeful that we will be able to 

get them to assume that responsibility. But right now, it is not in 

accordance with professional standards, so we need to update professional standards to make them more relevant for the 21st Century, as well. 

Chairman COLLINS. And as you know, the need for an independent outside evaluation is an issue Mr. McTigue has raised. Do 

you agree that it would be helpful? 

Mr. WALKER. I agree, and we are very much on the case. We 

would like for our external auditors to do it. Again, it is going to 

take a change in professional standards for that to happen and we 

are also trying to explore whether or not as part of the peer review 

something might be able to be done. That is where our peers, other 

supreme audit institutions, are going to take a look at us. 

Chairman COLLINS. When the GAO makes recommendations to 

agencies, whether they would result in cost savings or simply better operation and more effective delivery of services, what percentage of those recommendations are adopted by agencies. Are agencies generally receptive to the recommendations, or is there a pushback and resistance? 

Mr. WALKER. Well, first, that is an indicator. That is something 

that we follow, what percentage of our recommendations are adopted. For 2002, 79 percent of the recommendations that we made 4 

years prior had been adopted by 2002. Now, some were adopted immediately. Some are adopted 1 year to 4 years later. We use 4 

years because we believe that if you don’t adopt it within 4 years, 

you are probably not going to adopt it. So 79 percent, which we 

think is very high. And then from that 79 percent, what were the 

financial benefits, the non-financial benefits which occurred, which 

we report, as well. 

As you know, they are not required to adopt our recommendations, but as a result of our constructive engagement approach, 

where we are trying to work with them on a much more constructive basis to make government work better for everybody, we have 

actually seen the percentage go up. Specifically, we have also seen 

the percentage of our recommendations implemented go up. This 

year, I think it may go up a little bit from what it was last year. 

Chairman COLLINS. That is encouraging to hear, as well. 

Could you give us some examples of major recommendations the 

GAO has made that have resulted in either significant cost savings 

or in significant program improvements? 

11

Mr. WALKER. Well, we have made a number of recommendations 

in the area of acquisition practices and contract management as to 

how the government goes about engaging those types of activities 

that have resulted in significant dollar savings. We have also 

made—been involved in past base closure and realignment commissions and related activities to try to rationalize the excess infrastructure that the Federal Government has, which, by the way, is 

not just DOD, it is also the Postal Service, it is also VA, it is also 

a variety of other departments and agencies who are built on infrastructures and organizational systems for the 1950’s rather than 

the 21st Century, in many cases. 

There is a whole list in our performance and accountability report, which is on our website, which is www.gao.gov. 

Chairman COLLINS. I am going to ask you one more question before I turn to my colleague, and then we will do a second round, 

and you led me into it nicely. The GAO, as you well know, issues 

a high-risk list of programs or activities in the Federal Government 

that are particularly vulnerable to mismanagement or not reaching 

their goals to limit waste, fraud, and abuse. One of the disturbing 

aspects of that list is while there are additions to it, such as the 

real property issue that you have just mentioned, there are also 

programs that have been on the list for over a decade—I think 

since the list was first formulated. Medicare, DOD contracting are 

examples of that. 

What can we do? This Committee really wants to play a role in 

ensuring that programs don’t appear year after year on the highrisk list with no progress being made to remove them from the list 

by identifying management weaknesses and correcting them. I am 

going to try to follow up. We are working very closely with the 

GAO on the real property management issue, and we are going to 

have a hearing on it shortly. 

Mr. WALKER. Sure. 

Chairman COLLINS. But what can we do so that we don’t repeat 

this cycle, of seemingly making little or no progress? 

Mr. WALKER. Well, several things. First, on Medicare, just to 

touch on that for a second, that is another area where there were 

significant financial benefits because we have done a lot of work 

with improper payments, and improper payments have come down 

from about $23 billion a year to about $13 billion a year, still unacceptable, but that is a $10 billion difference every year. We still 

need to make more progress. 

With regard to the items that remain on the list, there are a variety of things that I think Congress has to consider doing. First, 

hold agencies accountable as part of the oversight process. Second, 

consider as part of the appropriations process whether and to what 

extent they should be given incremental resources to solve a problem or resources should be pulled back when they are not making 

progress in certain areas. 

Let me give you an example of DOD, and I think it is a good case 

study. In my view, DOD is No. 1 in the world in fighting and winning armed conflicts. There is nobody even close. We are the gold 

standard. So they are an A-plus on fighting and winning armed 

conflicts. 

12

DOD is, however, a D on economy, efficiency, transparency, and 

accountability. They have 8 of 25 high-risk areas, and they probably would have had them for decades before we had the high-risk 

list. They haven’t made much progress. I think there are several 

reasons that they haven’t made much progress, one of which is 

they are in the line of business of fighting and winning armed conflicts, and as long as they do well there, there is not a whole lot 

of time and attention focused on the other and they still get what 

resources they want. 

I think the other reason is, is that if we look at leadership in the 

Executive Branch, we are talking about the need for cultural transformation. We are talking about changing how the government 

does business. Authoritative literature will tell you that is a 7-plusyear effort to do that and to make it stick, and yet the typical leader in the Executive Branch stays 2 to 3 years. You can’t transform 

an organization, you can’t deal with the kind of issues that have 

to be dealt with in a 2- to 3-year period of time no matter how good 

you are. It just doesn’t work. 

And so as a result, one of the things that we have thrown out 

is the idea that for selected departments and agencies who face 

major challenges—not everybody, and DOD is clearly one—the concept of exploring the possibility of a chief management officer or a 

chief operating officer, a level two official whose job is to focus on 

these key management issues—strategic planning, organizational 

alignment, financial management, IT, human capital strategy, 

knowledge management, change management. This person would 

have a term appointment, ideally for five to 7 years, with a performance contract, who would end up focusing on these issues that 

just frankly don’t get focused on. 

Now, I know under the current administration, we have the 

President’s Management Council, which is comprised primarily of 

the deputies. But the problem is the deputies already have fulltime jobs. Many of them have backgrounds and interests in the 

area that I am talking about, but most don’t. But the fact is, even 

if they do, they don’t have the time to be able to do what needs 

to be done. 

So I think that is a modest proposal. If you do that, I think you 

could then look at CFOs, CIOs, and some other positions. You 

might make this job a PAS and you may not have to have PASs 

on the others. I mean, you could actually streamline and simplify 

the process and expedite getting some good people in some of these 

other jobs. That is one example. 

Chairman COLLINS. Thank you very much. 

I know that I said we would do two rounds of questions for Mr. 

Walker, but now that we have been joined by two additional colleagues, we will do 10 minutes on this round and then go to our 

next witness. 

Senator Voinovich. 

Senator VOINOVICH. Thank you. I have been impressed with your 

comments about the fiscal crisis that is looming for us. I recall that 

when I became Governor, I said that gone are the days when public 

officials will be judged by how much they spend on a problem. The 

new realities dictate that public officials must work harder and be 

smarter and do more with less. 

13

It seems to me that with the budget problems that we have, we 

really need to do a comprehensive budget review, what I would 

refer to as an operations improvement task force in the Federal 

Government to look at the areas where we have the most opportunity to reduce spending. I would be interested, do you believe 

that the place to start on that would be to knock off those highrisk areas that the Chairman has spoken about? 

Mr. WALKER. Well, I think you have to recognize that the highrisk areas represent an opportunity for improving economy, efficiency, and effectiveness. They are not just fraud, waste, abuse, 

and mismanagement. I mean, we have really made a concerted effort since 2001 to make that list more strategic. It includes a number of transformational challenges, like human capital, the Postal 

Service, disability programs, etc. I think if you look at the high-risk 

list, there is a lot of opportunity for savings——

Senator VOINOVICH. In other words, is the high-risk list—if you 

looked at the Federal Government, that list was reflective of what 

you think would result in the most savings for the Federal Government and improvement in efficiency? 

Mr. WALKER. I would say that they represent an opportunity for 

significant savings and significant improvement. But one of the 

things that I am also asking GAO executives to do, which is new, 

is that our high-risk list is based to a great extent on work we have 

already done. 

One of the things that I am asking GAO executives to do is that 

given our fiscal challenge, and based upon their experience, expertise, and institutional memory, we are going to have some internal 

brainstorming sessions on areas that we may not have done work 

on yet but we believe represent opportunities that we want to bring 

to the Congress for exploration and consideration. This is more 

proactive than historically GAO has done. We need to do this in 

conjunction with the Congress. We don’t want to do this on our 

own. But I think the time has come to do it. 

Senator VOINOVICH. I do, too. I think if you had a comprehensive 

list of things—if you surveyed the whole operation of the Federal 

Government, broke it down and prioritizing the areas where we 

would get the biggest return for the time that we would spend, that 

would be very helpful to us as we move through the next several 

years. 

I am a little bit concerned about the one statement that you 

made in terms of the Defense Department and we have talked 

about this before, saying that the only way that we can handle the 

high-risk list would be to have a chief operating officer who would 

have continuing responsibilities. It would seem to me that once 

people come on board at the Defense Department, you would have 

one group that would be concentrating on doing the war thing and 

then the other would be just strictly working on the management 

and dotting the ‘‘i’’s and crossing the ‘‘t’’s and following up on some 

of the recommendations that you folks have made. 

Obviously, they have been on there a long time, and so you are 

basically saying that under the current structure, it is not going to 

happen without something like what you are suggesting? 

Mr. WALKER. I don’t think that the chief operating officer or chief 

management official, or call it whatever you want, is a panacea, 

14

but I think it is a significant missing link, and in the absence of 

having that, I think it is not likely that you are going to be successful. I think you need to do other things, too, and some of which the 

Department of Defense, Secretary Rumsfeld and his people are trying to focus on now. 

I am an ex officio member of the Defense Department Transformation Advisory Board to the Secretary. I use that as a way to 

make sure they are aware of all the good work that GAO is doing, 

and I am pleased to say that they have liked a lot of our work and 

have made a number of recommendations to the Secretary to move 

on some of them. I also understand they are going to make a recommendation to Secretary Rumsfeld around this chief management 

officer/chief operating officer concept soon, and hopefully he will 

view that favorably, but it would take legislation to make it happen. 

Senator VOINOVICH. I am sure that this Committee would be interested in that. 

I would also like your thoughts on other things that we can do. 

We talked a couple of years ago about better oversight by Congress. 

One of the areas that was discussed, Madam Chairman and Senator Carper, was the area of the Appropriations Committee and the 

fact that they have the power of the purse. I believe they should 

be more involved in looking at what is going on in those agencies 

because all they do is come in and ask them for money. I just wonder how much real oversight is occurring while they are looking at 

the appropriations to these various areas. 

It seems to me that perhaps if we could come up with some kind 

of a process where the authorizing committees would work with the 

Appropriations Committees to talk about some real significant 

problems that we have in some of these agencies and really come 

together and say, we have a problem here, we have to get it taken 

care of, and use both the authorizing and the appropriations processes to really put the pressure on and get some action on these 

things that have been laying around for the last 5 or 10 years. 

Mr. WALKER. Senator, I think you have put your finger on a very 

important issue. The old saying, money talks. And in this town, for 

years and years and years, it was ‘‘get the money, spend the 

money.’’ The fact is, I think there is a tremendous opportunity and 

a tremendous need for a partnering arrangement between the authorizing committees and the appropriators to focus on those areas 

of opportunity, because in the end, if there aren’t consequences, if 

people aren’t making progress and there’s not consequences, then 

why should they pay attention? 

At the same point in time, sometimes to solve a problem, you 

need an investment. It may be a one-time investment, but that is 

something that has to be pointed out, as well. 

Senator VOINOVICH. Well, it is something and I think that we are 

really going to have to spend some more time on it if we are going 

to get any kind of action. I think a lot of people show up and we 

talk with them and importune them to do things and they walk out 

and say, well, they had their hearing and they just go back to doing 

what they have been doing before. 

I also think in the military area that we should recall Dwight Eisenhower’s admonitions about the military-industrial complex. We 

15

have people leaving the Defense Department and going to the private sector. There is just a little club that is there. Even, I think, 

some of the members of the Appropriations Committee in that area 

have been around a long time and they know all the same people 

and they don’t want to rock the boat or do anything to make anybody unhappy. 

I think it is long overdue that we really look at that area, particularly because of the money that we are putting in today for the 

defense establishment. 

Mr. Walker, in regard to your budget, how much has your budget 

increased in the last couple of years? I should know that, but I 

don’t. 

Mr. WALKER. Well, this year, do we have that number right off, 

how much the budget has gone up? While we are looking for that 

real quick, I can tell you that what we are asking for, which, I 

think, is another example of leading by example, for 2004, we are 

asking for a 2 to 3 percent increase. 

Now, in fairness, in the interest of full and fair disclosure, our 

budget went down by $100 to $110 million the 5 years before I 

came. In the 5 years since I have been here, our budget has gone 

up about $100 million, and part of that is to be able to reinvest in 

our people, to deal with pentup technology, safety, and security 

issues. 

But now we are in a situation where I think we have dealt with 

the most acute needs and what we are doing now is trying to tighten our belt, recognizing that we have got a situation where the 

Congress faces a growing deficit. We are holding the line on what 

we are asking for on future increases. We are having business 

cases, to the extent that we need something other than basic inflation and the mandates that Congress tells us that we have to comply with. And I just hope that the Congress will consider the results that they are getting from us and the return on investment 

when they are making resource allocations and decisions in the future so they don’t take an across-the-board approach, which obviously is not the best way to do it. 

Senator VOINOVICH. And the budget is adequate, and you have 

the manpower to respond? Every time we turn around, there is another request. In fact, this is a little provincial, but I was shocked 

at the report that you folks came out with on medical malpractice. 

Frankly, I thought the conclusions were off the wall. I don’t know 

if anybody reviews those before they are released. Do you do that? 

Mr. WALKER. The Medicare—are you talking about the objective——

Senator VOINOVICH. I am talking about the crisis that I have in 

my State with people dropping out of the medical profession because of the high cost——

Mr. WALKER. Medical malpractice? 

Senator VOINOVICH. Medical malpractice. 

Mr. WALKER. Well, first, I think it is important to put it in context, Senator. I understand your frustration. The fact of the matter 

is, medical malpractice is a problem. There is no question that it 

is a problem. Is it the only problem? Absolutely not. Is it the same 

degree of problem on a State-by-State basis? No. And so I think 

what our report is trying to say is, yes, medical malpractice is a 

16

problem, but it is not the only problem and the degree or the acuteness of that problem varies significantly depending upon what 

State you go to. In some States, it is not a big problem. In other 

States, it is a big problem. 

Senator VOINOVICH. Do you have a team that reviews those reports before they hit the street? 

Mr. WALKER. The way that we deal with it, Senator, is that we 

do it on a risk-based approach. Depending upon the complexity and 

the controversy of the work, among other things, we have different 

levels of review within the agency and different entities within the 

agency involved. 

The other thing that we do, as you probably know, is that we 

also have stakeholders either within the government and sometimes outside the Federal Government—it could be State and local 

government, it could be other professions or whatever—have an opportunity to comment if they are significant stakeholders before we 

finalize our report, and we consider their input and make adjustments as appropriate before we finalize our report. 

So we have a very thorough process and it is rare that we have 

any controversies associated with our report. But sometimes we do, 

especially on issues like health care. 

Senator VOINOVICH. My time is up. 

Chairman COLLINS. Thank you. Senator Pryor. 

OPENING STATEMENT OF SENATOR PRYOR 

Senator PRYOR. Thank you, Madam Chairman. I just have a couple of lines of questions here very quickly. 

One is, as I understand it, the GAO requested feedback on its 

proposal relating to human capital on its internal website. I was 

curious about what kind of feedback you received from the employees. 

Mr. WALKER. With regard to our human capital proposal, there 

was two phases of the human capital proposal. The first phase was 

an initial straw proposal where we went out, and I had not even 

had an opportunity to explain it yet, and we got feedback at that 

point in time and then we got subsequent feedback through various 

mechanisms. 

Initially, I would say that most of the proposals were not controversial. There was one proposal that was very controversial and 

that was the proposal to decouple our annual pay increases from 

the automatic adjustments in the Executive Branch. That was by 

far the most controversial proposal. 

After putting out the straw proposal, there were a number of 

supplemental outreach efforts, listening sessions, talking to the 

Employee Advisory Council, the managing directors. I went out to 

a number of field offices, a variety of different mechanisms was 

used. Also, employees had the opportunity to make comments, either confidentially or associating their name, directly to me and to 

other parties, including the Employee Advisory Council. 

Based on that, we made a number of changes, clarifications, and 

commitments, such that, in my view, the only area where there is 

any degree of controversy still is the decoupling of pay. I believe 

I have gone about as far as I can go to deal with employee concerns, to the extent that they exist there, and still maintain the 

17

concept of we want to have a somewhat more pay-for-performanceoriented system. And so I believe that what we are asking for is 

reasoned and reasonable and I believe it will make GAO a better 

place. 

Senator PRYOR. And the other question I had is somewhere I 

have read that you want to establish an executive exchange program with the private sector, which I actually kind of like that concept, but the question I have is, how do you do that and make sure 

that you are protecting yourself against conflicts of interest? How 

do you set that up? 

Mr. WALKER. A very important point. First, let me clarify what 

we are asking for. We are asking for the authority to be able to 

have up to 30 people come into GAO at any given point in time 

and/or up to 30 people to go out of GAO at any given point in time 

for knowledge exchange, best practices, etc. Candidly, I expect that 

this is going to be more people coming into GAO than people going 

out of GAO for a variety of reasons. For example, supply and demand. 

Senator PRYOR. Do you think those would be government people 

coming into GAO or private sector——

Mr. WALKER. It could be private sector or government people, if 

you will. We are very concerned with the conflict of interest issue. 

You raise an excellent point. That is particularly acute in the Executive Branch, because in the Executive Branch, they have responsibility for policy making and for enforcement. They are on the front 

line of actually making government decisions. 

In our case, we are doing audits, investigations, and evaluations. 

We are not the ones making the final call. We are the ones gathering facts and doing analysis. We are very sensitive to that and 

we will make sure that the assignments that they have are such 

that they would not present a real or perceived conflict of interest. 

Senator PRYOR. That is all I have, Madam Chairman. Thank you. 

Chairman COLLINS. Thank you, Senator. Senator Carper. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. Thanks, Madam Chairman. General, how are 

you doing? 

Mr. WALKER. It is good to see you again, Senator. 

Senator CARPER. It is nice to see you, as well. Thanks for joining 

us today and thank you for your leadership and your stewardship. 

You talked a little bit about an Employee Advisory Council. Describe that council to me—who is on it, how do they get appointed, 

how long do they serve, that kind of thing. 

Mr. WALKER. Well, it has evolved. The way that it is right now, 

it is a 23-member group. It is comprised of people from different 

levels of the organization, different occupations, and different locations. It is entirely democratically elected now. Depending upon the 

nature of the group, they could—for example, if it is an association 

dealing with Asian Americans, or African Americans where they 

have an association, then they will end up electing their representative. If it is a level, for example, supervisory personnel or senior 

analysts, if you will, then they will run an election to elect one or 

more representatives to represent them. So it is a fully democratVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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1The prepared statement of the GAO’s Employee Advisory Council appears in the Appendix 

on page 127. 

ically-elected body that is representative of the diverse workforce 

that we have. 

That body meets with the Executive Committee, which is myself, 

Gene Dodaro, Chief Operating Officer, Sallyanne Harper, Chief 

Mission Support Officer, and Tony Gamboa, our General Council—

the four of us make up the Executive Committee—and others at 

least once a quarter to talk about issues of mutual concern and 

how to make GAO a better place. They set the agenda. We may 

add to it. We don’t take items off though. But I think it is one of 

the reasons why we have been able to make real progress, is having this mechanism where we are partnering with our employees, 

partnering for progress. 

Senator CARPER. Just describe for me, if you will, the evolution. 

How long have you been head of GAO now? 

Mr. WALKER. It will be 5 years effective November 8, I think. 

Senator CARPER. Just describe for us, if you will, the evolution 

of the relationship and the interchange between the leadership that 

you represent and the council. 

Mr. WALKER. Well, when I first came in, we didn’t have a collective council. We had individual councils. Specifically, we had councils representing various interest groups and we didn’t really have 

a collective council. 

I looked at it and I said, we need to maximize progress for all 

rather than for segments. We don’t have a union at GAO, but I believe very strongly that we need to have our employees as key players to help us figure out what we are doing well and how we need 

to make additional progress. 

And so we started out with a concept of let us create an Employee Advisory Council that has representatives from these previous councils that were more interest group councils and then let 

us make it more diverse and more representative. I initially appointed representatives for groups that didn’t have representation. 

And then, believing in democracy and working with the council, we 

agreed to make this a fully democratically-elected body over time, 

and we did. About a year ago, we ran elections for the slots that 

I used to appoint and now it is a fully democratically-elected body. 

So it has been a mechanism that is in place now for several 

years. It is a very important mechanism because I talk to them at 

the same time as we talk to the managing directors, which includes 

the senior executives that lead the 13 teams. We are talking to 

them basically at the same time on important issues and give their 

input great weight. 

Senator CARPER. I don’t believe the council or representatives of 

the council are going to be testifying today. 

Mr. WALKER. They have a statement for the record.1

Chairman COLLINS. They have submitted testimony, which will 

be included in the record. 

Senator CARPER. Good. I have not seen their statement. If they 

were here, what might we hear from them? 

Mr. WALKER. Well, they were at the House hearing and I would 

commend that statement to you. I think what they would say is baVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
19

sically what their statement says, is that with regard to what we 

are asking for, that our employees don’t have a concern about a 

vast majority of the provisions, that the only area where there is 

still some concern is our proposal decoupling from the Executive 

Branch with regard to automatic pay adjustments. 

At the same point in time, they acknowledge that the process 

was a good process, that we have made changes, clarifications, and 

commitments to try to deal with employee concerns. They acknowledge that we need to continue to modernize our human capital 

practices, and they acknowledge that there is mixed opinions about 

changing our name. They don’t take a position one way or the other 

on that. 

My view is, is that we haven’t had a tremendous problem in the 

past, but you don’t know who you miss because of your name. If 

you are trying to hire lawyers, if you are trying to hire Ph.D. economists, if you are trying to hire people who aren’t accountants, you 

don’t know who you miss. What I do know is our name is very confusing to the public. They think we are in the accounting business, 

and less than 15 percent of what we do has anything to do with 

accounting or traditional financial management. And so it is a 

problem. 

Senator CARPER. As I understand it, what you are trying to do 

is put in place a pay-for-performance system, but one that does not 

undercut the ability of your employees to meet the rising cost of 

living. How do you do that? Have I mischaracterized that? 

Mr. WALKER. Here is what we are trying to do. This is very, very 

important. First, unlike most Federal agencies, GAO has had a 

pay-for-performance system since about 1989. And so what we are 

trying to do here is to make it somewhat more pay-for-performance 

oriented. 

Specifically, what we are looking to do is that while we have our 

own personnel system and we have broadbanding and pay for performance, we are still subject to the annual across-the-board increase that applies to the Executive Branch, even though we are 

not in the Executive Branch under the current system, which 

means your best performer and your worst performer, even those 

individuals who are not performing at a satisfactory level, are 

guaranteed by law that across-the-board increase, irrespective of 

their skills, knowledge, performance, and irrespective of where they 

live. 

What we want to be able to do is to say that for the 97-plus percent of our employees who are performing at an acceptable level or 

better, that we will protect them against inflation at a minimum; 

that we will consider differences in competitive compensation by locality, but based upon surveys that are more reflective of our workforce rather than how it is currently done; and that with regard to 

anything else, that the increases will be based on performance. 

And so what we are doing, basically, is taking what otherwise—

there was a 4.1 percent pay increase last year that applied to everybody. Basically, what we would be saying is if you are not performing at a satisfactory level—that is less than 5 percent of our 

workforce—you are not guaranteed that. But if you are, then you 

will get inflation, consideration for differences by locality, and 

20

something on top of that for your performance, but that will vary 

based upon what your performance is. 

Senator CARPER. I think you have indicated that GAO’s responsibilities continue to expand. I know I asked you and your agency 

to do a variety of things, and I am sure other Senators do, as well. 

My understanding is that you are attempting to meet the requests 

that are made of GAO without adding to the number of employees 

that you have. Just talk a little bit about how you manage to balance all that. 

Mr. WALKER. That is an excellent question. Here is what we do. 

We have a much more disciplined and transparent process with regard to what the rights of our clients are, what our responsibilities 

are to our clients, and what our engagement acceptance practices 

are. 

Basically, the priorities that we have are if it is a mandate by 

law, including something that is in the Committee report, we consider that top priority because the Congress as a whole has spoken. 

We monitor potential mandates a lot closer because sometimes 

there are mandates that may not represent a good use of your resources and the taxpayers’ resources and so we will try to intervene 

before they become law. But if they become law, they are our top 

priority. 

We are also required, in accordance with current law, to do work 

for committees. Therefore, if we get a request from a committee 

chair or a subcommittee chair, we are bound to do it. As a matter 

of policy, and in accordance with our wanting to be professional, objective, and nonpartisan in nature, we accord the same priority to 

ranking minority member requests, even though as a matter of law 

they don’t have the same legal standing. And so as a matter of policy, we give them the same priority. We give them the same rights. 

The next level would be individual member requests, which, candidly, we are not doing a whole lot of individual member requests. 

We tell members that they need to go to a chair or ranking member for two reasons. One, we have a supply and demand imbalance. 

And two, in order for our work to be able to benefit the Congress, 

the country and the taxpayers, realistically, you are probably going 

to have to have it go through a committee or subcommittee. And 

so what we are trying to do is to have more chair and ranking 

member requests. We are also trying to encourage bipartisan requests. They have gone up. We can’t require that, but they have 

gone up, as well. 

And so we have a much more disciplined and transparent process 

and we are getting a lot more results out of the same level of employees. But that can only go so far. 

Senator CARPER. And that is only so far as my time goes, too. It 

has expired. Thanks very much. 

Mr. WALKER. Thank you, Senator. 

Chairman COLLINS. Thank you, Senator Carper. 

Mr. Walker, I want to thank you on behalf of the Committee for 

your testimony this morning, but also for your first-rate leadership 

of the GAO. Under your leadership, the GAO has continued to 

make great strides in the work that it does. It is very important 

work, particularly to this Committee and to the American taxVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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1The prepared statement of Mr. McTigue appears in the Appendix on page 120. 

payers. So I thank you for your excellent leadership and look forward to continuing to work with you. 

Mr. WALKER. Thanks, and if I could just say for the record, I am 

pleased and proud to lead this agency. We have a great executive 

committee and executive team and a lot of very bright and dedicated public servants. We look forward to working with this Committee and others in the future. Thank you very much. 

Chairman COLLINS. Thank you. 

Our next witness this morning is the Hon. Maurice McTigue, the 

Director of the Government Accountability Project at George Mason 

University’s Mercatus Center. 

As a former cabinet minister and member of Parliament in New 

Zealand, Mr. McTigue has a unique perspective on issues relating 

to government management, and more specifically, results-oriented 

government. 

From 1984 to 1994, Mr. McTigue led an ambitious and successful 

effort to restructure New Zealand’s public sector. In his current position, Mr. McTigue conducts annual evaluations of how Federal 

agencies are performing. He reviews their performance plans and 

reports required under the Government Performance and Results 

Act. For the last 2 years, the Comptroller General has asked Mr. 

McTigue to conduct a similar evaluation of GAO’s performance reports, and that will be the subject of his testimony today. 

Mr. McTigue, we very much appreciate your appearing today, 

and I look forward to hearing your statement. Please proceed. 

TESTIMONY OF MAURICE P. McTIGUE,1 DIRECTOR, GOVERNMENT ACCOUNTABILITY PROJECT, MERCATUS CENTER, 

GEORGE MASON UNIVERSITY 

Mr. MCTIGUE. Thank you, Madam Chairman and Senator 

Voinovich. I am honored to have been asked to present myself before you today and to give to you some of the knowledge that I have 

acquired in the 6 years that I have been here in the United States 

at George Mason University’s Mercatus Center, working with your 

government, and in particular the experience that I have had in 

working with GAO. 

Madam Chairman, when we talk about GAO, we have to recognize that we are talking about the best of the best. It is my considered opinion that GAO is certainly the premier organization in government. Also, I think that in David Walker, you have an extraordinary leader who stands head and shoulders above most in the 

public sector. 

However, when you are looking at the best of the best, it doesn’t 

mean that there is no room left for improvement, and I certainly 

think that there are areas in which GAO can continue to show improvement on the role that it has played in the past. 

First, I want to really look at the perception of GAO. What is its 

role? Many people might look at it as the research arm of Congress, 

and that would be true. They might look at it as the government’s 

auditor, and that would be true. They might look at it as the government’s accountability office, and that also would be true. 

22

But of all things, I think that the most important contribution 

that GAO makes is that it maintains the public confidence in the 

institutions of government. Any erosion of public confidence in the 

institutions of government is detrimental to all of us. 

How does it do that, because GAO does not actually have any 

power to instruct organizations to do things? It doesn’t have any 

power to compel people to do things. It just has the power of influence, and that power of influence is directly proportional to its reputation. So for GAO, continuously enhancing its reputation is a 

high priority. 

In enhancing its reputation, I think that there are important values that are involved. The first of those is the quality of the work 

that it does. If it doesn’t meet a very high standard, then its reputation is damaged, and it seems to be able to continually excel 

itself in improving on the quality of its work. 

It is the integrity with which it does that work. It is the fairness 

with which it does its work. It is also the perception of fairness by 

those who are examined and the public at large. 

It is the fearlessness with which it approaches its job, because 

it must not be put off from examining something that might be controversial or difficult because it fears consequences for itself. And 

it is the reliability with which it produces its information. 

One of the areas of reform that occurred in my country while I 

was in government was a reform of the equivalent of the GAO, 

which we called the Auditor General’s Office. We rewrote its law 

between 1984 and 1994. We made it very independent so that it 

is answerable only to the Parliament, it is not able to be compelled 

by any particular party or the government to do anything. The 

Auditor General makes his or her own decisions as they think appropriate. 

It still does much of the investigative research for the government and it still does two-thirds of the auditing for government, 

but not all of it, and that is a deliberate policy so that there is a 

chance to compare what private sector auditing produces as opposed to what is produced by the Auditor General’s Office. 

It also has the liberty to examine issues of its own volition, because the auditor general perceives them as risks or failures. It 

might be why certain social problems have not responded to the investment that the government has made in those social problems, 

or, indeed, the programs used have not produced results. 

This is my view in an area of inquiry that is going to become increasingly more important for GAO as the U.S. Government moves 

to results accountability. I want to touch on that a little bit more 

in a moment or two, but there are two other things that I think 

are important and that I see as challenges for GAO. 

The first of those is the world post-September 11. Given GAO’s 

role in maintaining public trust in the institutions of government 

and given the necessity for the U.S. Government to take unto itself 

additional powers that in many ways compete with or infringe on 

the rights of individuals, being able to maintain public trust in how 

those powers are used may be an important part of protecting trust 

in the institutions of government. 

Looking at how the Immigration Service uses its extended powers, looking at how the FBI uses its extended powers, and acceptVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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ing that some of this inquiry may have to be done in confidence, 

GAO could indeed examine the use of those extended powers, assure itself that the use of the powers was appropriate, and then 

give such an assurance to the public without having to disclose 

things that might be damaging to our security. This is a different 

world. GAO has to have both the resources and the time to be able 

to examine these powers or a dangerous erosion of confidence could 

occur. 

While thinking of that expanded role for GAO, it raises another 

issue, and that is the changing world of government. GAO, like all 

other government organizations, is going to have to manage its 

human capital, to produce the capability necessary to accomplish 

its mission. 

I think that your move to give to GAO more flexibility in how 

it manages its human capital is a good move. I think that GAO 

should use that opportunity to set itself up as a role model for the 

rest of government setting up a template that can be copied by 

other government organizations. 

I want to make a comment here about the concept of human capital. Many people think about human capital in the way in which 

they have thought about human resources in the past. In my view, 

that is incorrect. 

Human capital encompasses two concepts. The first of those concepts is the concept of being a good employer. Do we do all of the 

things that we should for our staff? Everybody knows the principles 

of being a good employer and should be able to practice them. 

The new and more important concept is that human capital is 

really a reflection of the capability of the organization. Do the people, the skills, and the talents necessary to do the job exist? How 

do we manage that capability? How do we assess what capability 

we need in the future? How to develop policies that will bridge the 

gap from the organizations capability now and the capability needs 

of the future? 

For example, the expanded role that GAO will have to play in 

examining how enhanced security measures are utilized inside the 

American Government may well require capabilities they don’t 

have today. The Congress should be cognizant of that and should 

allow them both the latitude and the resources to be able to accomplish that task. 

Another area of challenge, in my view, is the world of results 

managed government. A few moments ago, Senator Voinovich 

asked David Walker about the challenges on the fiscal side of government and how they might actually be addressed. In my review, 

results-based management of government is one of the best ways 

of addressing that. 

Having been a member of Parliament and having sat where you 

sit from time to time, Madam Chairman, one of the challenges we 

faced was that we were very badly served with the information necessary to make good decisions about allocating scarce resources. We 

didn’t know what was being achieved in public benefit trends by 

different activities. Minus that knowledge and often minus the 

knowledge also of what it cost to do that, we couldn’t make very 

good decisions. 

24

As that capability improved and we were to compare these activities results against those activities results, it became possible to 

strategically move funding into those activities that worked better. 

Consequentially it became possible to enhance public benefit with 

considerably less in resources. 

In my view, the U.S. Government is in the early evolutionary 

stages of this process at the moment. You will not see the full benefits of this change until about the 2005 or 2006 fiscal year. It will 

take that long to get the full results-based information necessary 

to be able to compare activities and reallocate resources accordingly. 

GAO will play a significant role in determining the validity of 

measures used by agencies. If I can just, as an example, Madam 

Chairman, use something that David Walker mentioned in his testimony and you questioned him on, and that was the recoveries of 

$37 billion made by GAO last year. It can be said, that is a fine achievement. It is an increase of $11 

billion over the year before. However, those recoveries were able to 

be made because there was some inappropriate practice, malfeasance, misallocation, or misappropriation of monies or resources inside government. Success should be measured in terms of whether 

that number comes down as a result of GAO’s actions. The public 

benefit would then go where Congress intended. Over time it 

should become more difficult for GAO to be able to find those monies. This would then become a measure of the outcome. The complained-of behavior is gradually being eliminated. 

In exactly the same way when looking at the recommendations 

made by GAO the fact that they are accepted by agencies is an important interim measure, but the final measure is, did they cure 

the complained-of behavior. Achieving the cure is what we need to 

know if we are going to focus on outcomes. To me, GAO playing 

a role in examining government organizations and determining 

what result was achieved would be a major contribution towards 

good government here in the United States. 

That is the conclusion of my comments, Madam Chairman, I 

would like to ask that my written statement be included in the 

record. Thank you. 

Chairman COLLINS. It will be entered in full, without objection. 

Mr. McTigue, thank you very much for your testimony and also 

the very important work you are doing in this area, not only with 

the GAO but also with other agencies in evaluating their performance reports. 

We looked long and hard to try to find an expert who could comment on the GAO. The GAO comments on everybody else, and we 

thought it would only be fair to have an outside group. I suggested 

to my staff that they contact your organization, the Accountability 

Project. I was delighted to learn that you had, indeed, done work 

in this area, and I give David Walker credit for asking you to do 

this work, as well. 

We heard today the Comptroller General’s discussion of how the 

GAO prioritizes the requests it receives from Congress. As a committee chair, needless to say, I like the priority the GAO gives to 

requests that come from committee chairmen and their ranking 

members. But I understand you have a slightly different perspecVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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tive on how the requests should be prioritized. I would invite you 

to share that with us today. 

Mr. MCTIGUE. Madam Chairman, if I was sitting in your chair, 

I would feel exactly the same way that you do. [Laughter.] 

And certainly, I think that the bulk of what GAO does is going 

to continue to be the work that it does for Congress. But Congress 

itself may well have to start to think about the prioritization of 

that work so that low-value work from Congress isn’t setting aside 

some other things that GAO might be looking at that would be 

very much more valuable. 

I think the visionary role that GAO plays is very important in 

identifying risks to the American Government, doing work on those 

risks, and then starting to publicize that activity or lead that debate. 

I would pose the question that if David Walker had not spent so 

much time on commenting on the crisis in human capital in the 

Federal Government, would it have got the attention that it has received to date and would the American Government be taking action on it? And I think the answer is probably no, or it might have 

been postponed 2 or 3 years into the future. 

I think the work that he is leading now in taking a long-term 

look at the fiscal crisis so that there are more options available to 

government before the crisis becomes incurable is work that is extremely valuable. Congress does need to weigh the value of these 

tasks against the requests that Congress is making and accepting 

some prioritization. 

The reassurance of the American people about the trustworthiness of institutions of government is incredibly important, 

particularly at a time of crisis of security accompanied by some erosion of civil liberties. The guarantee that new powers are used with 

the greatest propriety is very important. To me GAO has the reputation and credibility to give those assurances. 

So what I am really saying is that in allocating to GAO tasks, 

I think Congress has to be cognizant of the fact that there is a limited resource, there are other activities that are carried out by GAO 

that are very important for the quality of government. Congress 

should not crowd those activities out with requests that are of a 

lower priority. 

I think David Walker’s suggestion that from time to time members are going to have to work through committees rather than 

making individual requests is a good one. I think that making collective requests rather than partisan requests is a good one. 

Chairman COLLINS. Thank you. The other issue I want to have 

you comment on is the GAO’s high-risk list. I have found this list 

to be useful in directing our attention to problem areas in the Federal Government, but I am troubled by the fact that programs stay 

on the list year after year after year. How could the GAO change 

its assessment of the high-risk list to make it more useful to Congress and to Federal agencies? 

Mr. MCTIGUE. In my view there are a variety of approaches that 

could be given consideration. Madam Chairman, there are activities in government that are inherently high risk and might need 

to be included all the time. For example, in the field of taxation, 

the collection of revenue is always something that is subject to atVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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tack by clever lawyers and accountants who want to find legal 

ways for their clients to minimize their taxes. So a risk exists that 

there will be continuing erosion to the tax base and there needs to 

be protective measures taken to deal with that. That might mean 

that tax collection is something that inherently remains on a highrisk list. 

Other activities currently on the high-risk list may be making 

significant progress towards getting off the high-risk list. It would 

be good to know that significant progress is being made. 

It is of concern that some risks are there for 12 or 13 years. 

These are things that should be readily manageable, like contract 

management, acquisitions. There is plenty of experience around the 

United States on how you do those things well. The fact that it 

takes 12 or 13 years to eliminate these risks is unacceptable. 

Perhaps GAO has to be more aggressive in detailing the unacceptable nature of these failures. GAO may need to say to Congress, there needs to be legislative action to eliminate this problem. 

Chairman COLLINS. Thank you. Senator Voinovich. 

Senator VOINOVICH. It is interesting that that last question you 

asked was one that I had on my list. [Laughter.] 

From your experience in government, and based on my comments to General Walker about getting the Appropriations Committee involved in coming up with some kind of strategy where 

they really could lean on some of these agencies to get done what 

needs to be done. 

What would your reaction be if this Committee was going to pick 

out a couple of areas, get letters off to the heads of those agencies, 

let them know that we are dead serious about something being 

done, drag them in here, and then let them know that every 2 

months, we are going to drag them back in here until we start to 

see some kind of action taken as a result of that and maybe highlight some of these issues to the point where they will feel they 

have to do it because they are being pressured. 

The point around here is you don’t know the number of letters 

I have sent to some of these agencies, and it takes them 5 months 

to get something back to me. They just ignore them. They just figure it is going to go away. If you don’t stay on them over and over 

and over again, you don’t get any action from them. What is your 

reaction to that? 

Mr. MCTIGUE. I don’t really have an opinion, sir, about the recalcitrance of agencies in answering your questions, but what I do 

have some views about is one of the areas in which you might move 

that would help to relieve some of these problems. 

I think that you have already ‘‘put in train’’ by passing in 1993 

the Government Performance and Results Act something that is 

having a quiet revolution throughout the Federal Government but 

which you at Congress level have not yet become the beneficiaries 

of. Gradually, you will get information that tells you that a variety 

of different activities are addressing the same outcome, but they 

have a huge range of success rates in addressing that outcome and 

they have very different costs. 

What would happen if you were to invest in the most successful 

of those activities and to either give the others the chance to perform at that level or to lose their funding? That would make a big 

27

difference. I think that Congress will be doing business in this 

manner by the 2005 or 2006 fiscal year. 

Regarding Congress itself, it would be worthwhile to study the 

reforms of legislatures around the world. Many have dealt with the 

disconnect between the processes of policy decisionmaking, authorizing and oversight, and the appropriation process. 

Many legislatures have reformed their operations by using their 

committee structure as fact finding opportunities to inform the appropriation process. Direct recommendations coming from those 

committees require that appropriators take note. Certainly, the 

New Zealand legislature made reforms of that nature. Those reforms made the work of the Parliament much more meaningful. 

For Congress, there are issues that need to be addressed so that 

appropriators take note of the work that goes on in your other committees. Otherwise, if they don’t, why do you do oversight and why 

do you do authorization work? 

Senator VOINOVICH. This has been raised by some of the appropriators. I know I have talked to Senator Stevens about this on a 

couple of occasions. The spirit is willing but the flesh is weak. We 

just have so many other things that we are doing, we just never 

get to it and I am afraid that the people who are supposed to do 

it know it. [Laughter.] 

That is the problem. 

In your written testimony, you said Congress should ensure that 

the GAO has the freedom and the flexibility to be a role model in 

human capital management. Could you comment on how the flexibilities contained in S. 1522, the GAO Human Capital Reform Act, 

could assist GAO in further improving its workforce management 

as an example for other Federal agencies? 

Mr. MCTIGUE. Senator, while you were out of the room, I made 

some comments, some of which I will need to repeat now. 

Senator VOINOVICH. I apologize. 

Mr. MCTIGUE. What GAO has to deal with is developing different 

capabilities as it addresses some of its tasks. Those capabilities are 

going to require different skills, some of which it will have internally, but some of which it may have to go out into the marketplace 

and buy. It needs to be able to buy those skills because its credibility is very important to its main task, which is reassuring the 

American people that they can trust the institutions of government, 

particularly as they examine the utilization of the new powers required to maintain the security of the homeland and whether they 

are being used appropriately. 

GAO needs to become a 21st Century employer, recognizing that 

we as individuals, will approach work in a very different way. We 

will move frequently in our jobs. We will work from different locations. GAO has to have the flexibility to be able to acquire talent, 

to let talent go and to bring it back again if necessary. Being able 

to reward the performance of high achievers, is going to be an essential part of employing in the 21st Century if you are to keep 

your high performers working for you. 

Senator VOINOVICH. Thank you. 

Chairman COLLINS. Thank you, Senator. Senator Lautenberg. 

28

Senator LAUTENBERG. Thank you very much, Madam Chairman, 

Senator Voinovich. It is always a pleasure to work with my colleagues here, even when they are wrong sometimes. [Laughter.] 

But it is a pleasure to be here and to welcome you, Mr. McTigue. 

Madam Chairman, do I have just a couple of minutes for an introductory statement? 

Chairman COLLINS. Certainly. We are expecting a vote very 

shortly, so you are going to be the last, but please, go ahead. 

OPENING STATEMENT OF SENATOR LAUTENBERG 

Senator LAUTENBERG. I do thank you for holding this hearing on 

this very important department of government. Usually, we see 

Comptroller General Walker here to testify about government policy or another Federal agency, but today we are here to discuss the 

management and performance of his Department, GAO. 

And by all accounts, GAO is a model agency. In 2002, their programmatic and policy recommendations have helped Congress and 

the Executive Branch to achieve nearly $38 billion in financial benefit. That is a return of 88 cents on each dollar invested in GAO, 

and that is a pretty good return. I come out of the corporate world 

and I know a good one when I see one and that is good. We can 

only hope that other government investments, such as an administration’s tax cuts for people who don’t need it, and I had a good 

run in some years of business. 

Frankly, I like investing where I get a good return, and investing, in my view, in government, where we have the ability to do 

things that no one else has for our society, sounds like a good idea 

to me. I think I do a lot better for my children and my grandchildren and over the years ahead if we continue to build our internal strength even as we protect our security from external attempts to disrupt it. 

The value of GAO should not only be measured in dollars. Waste, 

fraud, abuse don’t just cost money. They erode the public’s confidence in government. That confidence, that faith, is something too 

precious to calculate. The fact is that GAO, Comptroller General 

Walker and his 3,200 employees help Congress meet responsibilities to the American people by improving the accountability, efficiency, and the overall performance of the Federal Government. 

One particular matter does concern me, and I think it is regrettable that we don’t have administration cooperation with GAO’s investigation of the White House’s secretive energy task force. And 

if the stories are true, it is regrettable that the administration supporters here in Congress have threatened GAO’s funding because 

of the investigation. 

Congress needs to stick up for GAO. They are an arm or a tool 

for us, a resource for us to really understand what is taking place, 

even when the agency has some unpleasant truths to tell us. We 

shouldn’t stand idly by while people who might be discomforted by 

what GAO might try to cow it into submission. 

So I just have a question, because we are seeing changes that are 

contemplated, and Mr. McTigue, I wanted to get your response. According to GAO’s performance and accountability report for fiscal 

year 2002, GAO conducted its first voluntary early retirement of 52 

employees. They also implemented new performance appraisals, reVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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vised pay, promotion and rewards system. And now they are working on implementing a broadband pay-for-performance system for 

administrative professionals and support staff. I understand that 

GAO also wanted to eliminate locality pay. 

I mentioned the fact that I had some experience in the corporate 

world, and the company that I helped found is a company today 

that has more than 40,000 employees, and when I left to come to 

the Senate, we had 16,000, not a small company, but it also shows 

you what happens when progress comes with new leadership. 

[Laughter.] 

But the fact is, I had a lot of experience in the kind of bonuses 

and natural expense increases that we had to be concerned with. 

We couldn’t, in our earliest days in business—my company is 

called ADP—we could transfer people willy-nilly and just say, hey, 

you are going to—I don’t want to name the cities, but those that 

are less desirable, let us say, than San Francisco or Washington, 

D.C., or Portland, Maine, of course, and they would go. But as time 

went on and people assessed the value of family life in a different 

way, they would say to me, ‘‘Yes, Frank, I would like to go, but I 

am going to need something more than just a transfer to take care 

of my family needs, etc.,’’ and I approved of that. 

I approve it when we have tension-filled jobs like those in the 

control towers, to take someone from a quiet area with not too 

many flights each day, put them into the New York region, Chicago 

region, Los Angeles and say, OK, you are going to go to work there. 

Yes, expenses are higher, but it is service for your country. That 

is not good enough. 

So all of that is a preface to what I want to ask you. Mr. 

McTigue, did you assess the morale within GAO in contemplation 

and in expectation of these changes that might be made? 

Mr. MCTIGUE. The answer, Senator, to your question is, no, we 

didn’t do a specific assessment of morale. I could comment, though, 

from my observations because we work closely with GAO in a wide 

range of areas. GAO has some of the most capable people that you 

have in the civil service in the United States. They also are people 

who have skills that are in very high demand in the private sector 

and there is no indication that there is a significant exodus from 

GAO. 

Modern human capital management, sir, I think is going through 

some major evolutions, and a wise manager today is going to recognize that the ability of his organization to function successfully is 

going to be directly attributable to the skills and talents of the people who work for him or her and being able to keep those people 

is going to be one of the most essential tasks that you would carry 

out as a manager. 

Acting in a way that is contrary to the best interests of people 

means that you are going to lose them, because we are talking 

about people who will not have difficulty finding other jobs. They 

are people who are already in high demand. They have high quality skills where there is plenty of demand for them. So you don’t 

have the liberty to be able to say, I can make these decisions without there being a consequence. There will be a consequence. 

And at GAO, we did not see a high exodus rate. So in my view, 

GAO have people who find the work rewarding, they find the manVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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agement acceptable, and they find the rewards acceptable. Otherwise, there would be a significant exodus. Morale is not something 

that GAO can be complacent about, though, because the expectations of the workforce will change over time and management has 

to be astute enough to be able to meet those changed expectations 

as they develop. 

Senator LAUTENBERG. I would ask you this. I am sure that the 

people who do their work there really like working for the U.S. 

Government, as I see in staff personnel all around, whether it is 

Committee personnel or my own staff personnel, and having 

worked in the private sector for as long as I did and being able to 

make a comparison about the dedication to service is quite striking, 

and that is that people will work for the government for less 

money, for less often recognition, but because there is an inner satisfaction that is drawn from doing the right thing. 

However, if you want to transfer somebody, no matter how much 

they love their job, is it fair to say, OK, you are going to go into 

this high-cost area and that is where you are going to be located 

and carry out this responsibility. Do you think that would have any 

effect on one’s view of the transfer that might occur for a family 

who is trying to get by, educate their children? There isn’t anybody—there are few in government that are paid excessive 

amounts of money, and it would be terribly political for me to suggest otherwise, but the fact—I am teasing, obviously. 

But people have to live and they have to be able to be paid on 

a relative basis so that they can sustain themselves and their families. And even though they can go get jobs in the private sector, it 

does mean some kind of a disruption. It does mean some kind of 

a risk. It does necessitate change of some significance. 

Mr. MCTIGUE. Unless I knew the specific circumstances, sir, I 

don’t think I can give you a definitive answer, but I can give you 

this answer, and that is that if you are thinking as a manager 

about transferring somebody to somewhere else, particularly if it is 

a more expensive place to live, it is a more densely populated city, 

the presumption is that there is probably a promotion, as well. And 

unless you compel the person to move, then it seems to me that it 

is going to be a matter of choice by you, the manager, to ask them 

to move and they, the employee, to decide to move. 

If they decide to turn it down, then I presume that they have to 

accept the consequences for that. It would mean that perhaps they 

don’t get the increase in pay that might have gone with the move 

and perhaps it may also impact their ability to be able to achieve 

promotion in the organization. 

But as long as you are not constrained in terms of the choices 

that you make and you are able to make those choices open and 

freely, then I think that that is something that between the employer and the employee they are going to have to work out and 

it may be different decisions for each employee. 

Senator LAUTENBERG. We don’t have the liberty of saying, in my 

view, that a lateral transfer, which is graded based on the civil 

service system, at the same level of pay, is automatically the province of the manager. There are other conditions that dictate what 

happens, and I think when you try to put someone in a high-cost 

area, much higher costs than they have, and if they are familyVerDate 0ct 09 2002 11:03 Jan 22, 2004 Jkt 090235 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 C:\DOCS\90235.TXT SAFFAIRS PsN: PHOGAN
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bound, that is a tough decision and I, frankly, am very wary of 

those proposals to limit that. 

Thank you very much, and thank you, Madam Chairman. 

Chairman COLLINS. Thank you, Senator. 

We do have a vote in progress, so I am going to thank Mr. 

McTigue for his testimony. We may have a few questions for the 

record that we may submit for either you or Mr. Walker. The 

record for this hearing will remain open for 15 days for the submission of any additional materials. 

But I want to thank both of our witnesses this morning. I think 

this was a very useful oversight and legislative hearing on the General Accounting Office, and I thank you both for your participation. 

After the vote, we will resume with the second hearing of the 

day. It will be a new hearing on the nomination of Suzanne Mencer 

to be the Director of the Office for Domestic Preparedness for the 

Department of Homeland Security. 

This hearing is now adjourned. 

[Whereupon, at 11:16 a.m., the Committee was adjourned.] 

(33)

A P P E N D I X 

PREPARED STATEMENT OF SENATOR COLEMAN 

Thank you Chairman Collins for holding this hearing. 

At the outset, Mr. Walker, I want to take a brief moment and commend you for 

your teams that are working closely with my staff on two oversight matters. The 

GAO team headed by Gene Aloise is assisting in the Permanent Subcommittee on 

Investigations’ continued review of the Federal Government’s response to nuclear 

terrorism, particularly the deployment of radiation portal monitors by the Bureau 

of Customs and Border Protection, Second Line of Defense and the Department of 

Energy. The GAO team headed by Rich Stana is assisting us in our assessment of 

the Container Security Initiative and the targeting techniques employed by Customs 

at our nation’s ports and borders. In addition, Marjorie Kanof’s team has already 

produced one investigation concerning SARS and is currently working on another 

looking at infectious disease surveillance. You are well served by these three individuals and their teams. Please ensure that they have the resources and cooperation 

to continue their vital work with us. 

As the members of this committee know, in order for Congress to do its job, it 

needs to be adequately informed on the issues before it. Of course we rely on our 

staffs for a great deal of advice, but on more complex issues the role of specialists 

is crucial. The General Accounting Office, along with the Congressional Research 

Service and the Congressional Budget Office play a vital role in helping us fulfill 

our Constitutional duties. GAO is especially important to this committee and the 

Permanent Subcommittee on Investigations, which I chair, since we are responsible 

for overseeing government itself. 

GAO has already undergone significant structural transformation in order to 

adapt to changes in finance, technology, society, and politics. It has had to develop 

expertise in new skills while struggling to replace an aging workforce. It has had 

to adapt to the creation of independent inspector generals who are tasked with performing many of the type of investigations it traditionally handled. Yet it retains 

a vital role in keeping us informed. 

Like any tool, GAO’s ultimate value depends on how well it is maintained and 

used. I commend both the Chairman and Sen. Voinovich for introducing S. 1522, 

the ‘‘GAO Human Capital Reform Act of 2003.’’ It is my understanding that this legislation reflects extensive external and internal research on GAO’s part, including 

consultation with both its Employee Advisory Council and the Office of Personnel 

Management. I intend to cosponsor it and look forward to voting for its passage.

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