U.S. GOVERNMENT PRINTING OFFICE

73–593 DTP WASHINGTON : 2001

THE U.S. GENERAL ACCOUNTING OFFICE

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

SECOND SESSION

JULY 18, 2000

Serial No. 106–243

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: (202) 512–1800 Fax: (202) 512–2250

Mail: Stop SSOP, Washington, DC 20402–0001

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

HELEN CHENOWETH-HAGE, Idaho

DAVID VITTER, Louisiana

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY

STEPHEN HORN, California, Chairman

JUDY BIGGERT, Illinois

THOMAS M. DAVIS, Virginia

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

JIM TURNER, Texas

PAUL E. KANJORSKI, Pennsylvania

MAJOR R. OWENS, New York

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

J. RUSSELL GEORGE, Staff Director and Chief Counsel

HEATHER BAILEY, Professional Staff Member

BRYAN SISK, Clerk

TREY HENDERSON, Minority Counsel

(III)

C O N T E N T S

Page

Hearing held on July 18, 2000 ............................................................................... 1

Statement of:

Bowsher, Charles, former Comptroller General of the United States

(1981–1996) ................................................................................................... 65

Ink, Dwight, president emeritus, Institute of Public Administration .......... 74

Staats, Elmer, former Comptroller General of the United States (1966–

1981) ............................................................................................................... 63

Walker, David, Comptroller General of the United States, General Accounting Office, accompanied by Gene Dodaro, Chief Operating Officer . 6

Letters, statements, etc., submitted for the record by:

Bowsher, Charles, former Comptroller General of the United States

(1981–1996), prepared statement of ............................................................ 67

Horn, Hon. Stephen, a Representative in Congress from the State of

California, prepared statement of ................................................................ 3

Ink, Dwight, president emeritus, Institute of Public Administration, prepared statement of ........................................................................................ 77

Turner, Hon. Jim, a Representative in Congress from the State of Texas,

prepared statement of ................................................................................... 5

Walker, David, Comptroller General of the United States, General Accounting Office, accompanied by Gene Dodaro, Chief Operating Officer,

prepared statement of ................................................................................... 13

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THE U.S. GENERAL ACCOUNTING OFFICE

TUESDAY, JULY 18, 2000

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

INFORMATION, AND TECHNOLOGY,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2154, Rayburn House Office Building, Hon. Stephen Horn (chairman of the subcommittee) presiding.

Present: Representatives Horn, Biggert, Ose, Turner, and

Maloney.

Staff present: J. Russell George, staff director and chief counsel;

Heather Bailey, professional staff member; Bonnie Heald, director

of communications; Bryan Sisk, clerk; Elizabeth Seong, staff assistant; Will Ackerly and David Hulfish, interns; Trey Henderson, minority counsel; Mark Stephenson, minority professional staff member; and Jean Gosa, minority assistant clerk.

Mr. HORN. The subcommittee will come to order.

Today’s hearing on the General Accounting Office is especially

important because of the agency’s vital and unique role in the Nation’s legislative process and in Congress’s oversight of government

operations. Today, the subcommittee will review the GAO’s ongoing

programs and the agency’s vision for the future.

Since its establishment in 1921, the role of the General Accounting Office has evolved from one of auditing agency vouchers to its

present role of providing in-depth studies upon which Congress

bases its legislative and oversight agenda. The GAO is a key investigative resource for the legislative branch of government.

The question naturally arises: How has the GAO transitioned

from its 20th century functions to those of the 21st century?

We are very fortunate to have before us today a number of witnesses who are in a unique position to answer that question. Our

first presenter is the current Comptroller General of the United

States, David Walker. Since assuming this office in November

1998, the Comptroller General has initiated a number of reforms

that we look forward to hearing more about today.

His testimony will be followed by a panel of witnesses whose insights are invaluable to the subcommittee as we consider the subject before us. We will hear from the honorable Elmer Staats, who

served as Comptroller General from 1966 until 1981. We will also

hear from Mr. Staats’ successor, former Comptroller General

Charles Bowsher, who served from 1981 until 1996. In addition, we

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are pleased to have before us a familiar voice, that of Dwight Ink,

president emeritus of Institute for Public Administration.

We welcome all of our witnesses today, and look forward to their

testimony.

I am now delighted to give time to the ranking member of this

subcommittee, the gentleman from Texas, Mr. Turner, who has

been a wonderful colleague to have with this group. I know that

he shares the respect for the General Accounting Office and the

Comptroller Generals that I do. Mr. Turner.

[The prepared statement of Hon. Stephen Horn follows:]

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Mr. TURNER. Thank you, Mr. Chairman.

It is good to have General Walker here this morning and to be

able to hear from the General Accounting Office. I think we share

respect for the good work that the GAO has done for us throughout

the years.

GAO I know was founded in 1921. Its mission is to help Congress

oversee Federal programs to ensure accountability to the American

people. Over the years, Congress has expanded the GAO’s statutory

authority to reflect the growing complexity of government and of

our society. GAO’s evaluators, lawyers, economists, public policy

analysts, information technology specialists and other multidisciplinary professionals seek to enhance the economy, the efficiency,

the effectiveness and the credibility of the Federal Government,

both in fact and in the eyes of all American people.

The GAO is able to accomplish its mission through a variety of

activities, including financial audits, program reviews, investigations, legal support, and policy and program analysis.

I am very pleased to note that for fiscal year 1999 the General

Accounting Office’s work resulted in more than $20 billion in financial benefits to the Federal Government and over 600 actions leading to a more effective government. It is without question that the

General Accounting Office has been extremely helpful to our subcommittee, and I again commend General Walker and his staff for

the good work that they do on behalf of the Congress.

We are here to learn more about the challenges facing the agency

and what we in Congress can and should do to ensure that we receive the type of credible, unbiased data that the GAO has constantly provided us in the past. I commend Chairman Horn for

calling the hearing, and I welcome each of our witnesses. I want

to conclude by saying that the General Accounting Office is an

agency which is truly dedicated to good government, and for that

I am very appreciative.

Thank you, Mr. Chairman.

[The prepared statement of Hon. Jim Turner follows:]

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Mr. HORN. I thank the gentleman, and we will now swear in the

witnesses.

[Witnesses sworn.]

Mr. HORN. The clerk will note that the witnesses affirmed the

oath.

We will start with the Comptroller General of the United States,

Mr. Walker, now. And you have a wonderful 40-page, single-spaced

document which is already headed for the Government Printing Office; and I know that you have a very good slide presentation. If

you can do it in 15 to 20 minutes, we would be appreciative, because we would like to have a dialog.

STATEMENT OF DAVID WALKER, COMPTROLLER GENERAL OF

THE UNITED STATES, GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY GENE DODARO, CHIEF OPERATING OFFICER

Mr. WALKER. I will be happy to do that.

First, let me say that I am pleased to be here. As you know, Mr.

Chairman and Ranking Member Turner, I am now one and a half

years into a 15-year term as Comptroller General, 10 percent down,

90 percent to go.

I am proud to be the head of GAO. I believe GAO is one of the

best agencies in the Federal Government, and one of the best accountability organizations in the world, if not the best. There is a

simple reason for that. We are the best because we have the best

people. We do, however, have a number of people or human capital

challenges that I will mention later in my testimony that need to

be addressed with a matter of urgency.

As you noted, I have submitted my full statement for the record;

and I am going to cover it in a PowerPoint presentation. But, before I do, I would like to note for the record that Gene Dodaro, who

is Chief Operating Officer, to my right, has joined me. Bob Murphy,

who is our General Counsel, is behind me. Sallyanne Harper, who

is our Chief Mission Support Officer, is to my right. The four of us

make up the Executive Committee for GAO.

In addition to that, I am pleased that we have 10 to 12 members

of the Employee Advisory Council in row two. They represent a diverse group of GAO employees. We get together periodically to discuss mutual issues of interest and concern, and I am pleased to say

that we have talked about a number of human capital issues together. I look forward to working with them on these and other

issues.

If I can, the first slide, please.

As both of you noted, GAO was formed in 1921 and is headed by

the Comptroller General of the United States. I am the seventh

Comptroller General in the approximately 80-year history of GAO.

Every Comptroller General has made noteworthy contributions to

our agency and to the country. I am especially pleased and honored

to appear here today with my two immediate predecessors, Elmer

Staats and Chuck Bowsher. Both made significant contributions to

GAO and our country, and I have noted several of them in my written statement.

GAO has changed significantly over the years, both as to size,

scope and focus over the years. The agency almost tripled its size

in World War II in order to preaudit all government payments. The

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agency was reduced in size after World War II but broadened in

both its range of services and the scope of skills that its staff possessed. The resulting expansion in scope of services since World

War II served to reinforce the fact that we are about accountability,

not accounting.

Most recently, the agency was forced to downsize by approximately 40 percent in the 1990’s due to budget cuts; and there are

some scars that resulted from that, which I will touch on in a few

minutes.

Next slide.

As you can see, the size of GAO has changed over the years. I

have picked three dates for illustrative purposes: 1966, which was

the first year that Elmer Staats was Comptroller General; 1981,

which was the first year in which Chuck Bowsher was Comptroller

General; and 1999, which was the first fiscal year in which I served

as Comptroller General. And you can see the size has fluctuated

over the years. When Elmer Staats took over GAO, there were just

over 4,000 personnel; when Chuck Bowsher took over the agency,

it had grown to over 5,000; and when I took over the agency we

had an authorized staff of 3,275.

Next slide, please.

There has been a significant change over the years in the mix

of GAO’s work. It has changed dramatically over time. When Elmer

Staats took office in 1966, 90 percent of GAO’s work was research

and development or self-initiated work; and there were no congressional mandates. When Chuck Bowsher took over the office, the

percentage of research and development or self-initiated work had

declined to 65 percent; and mandates were becoming more common

but they were still new on the scene, only representing about 2 percent of GAO’s work.

When I took over the Office of Comptroller General in late 1998

or fiscal year 1999, only 5 percent of our work was R&D or selfinitiated and 23 percent related to mandates. Stated differently, 95

percent of the work that GAO did was either based on mandates

or specific congressional requests.

Next slide, please.

The next slide shows the dramatic decline in our field office presence. It has declined dramatically from 46 offices in 1984 to 16

today, and effective November 2000 we will go down to 11 field offices. This decline is due to a variety of reasons, in some cases

budget cuts, but also because of economy, efficiency, effectiveness

and technology reasons.

Next slide, please.

As Mr. Turner mentioned, GAO has always provided the Congress and the American people with an outstanding return on their

investment. This slide shows the financial benefits that GAO has

returned since 1966 on an annual basis as well as the 4-year average.

I am pleased to say in fiscal year 1999 we had $20.1 billion in

financial benefits. In some cases, that represents costs reduced; in

other cases, it is asset recoveries enhanced; spending deferred; or

reserves reclaimed. There are a number of different things that

come under the definition of financial benefits, and I am happy to

answer questions on that if you would like. But the bottom line is

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this: The Congress and the American people had a return in 1999

of $57 for every dollar invested, probably No. 1 in the world.

The next slide, please.

GAO has also made a number of contributions over the years in

the area of improved government operations. The adoption of GAO

recommendations not only serve to accrue financial benefits but

also nonfinancial benefits such as improved government operations

in the area of computer security, airline safety, sustainable development and national security, etc. A number of examples are included in our 1999 accountability report, which I know has been

provided to the committee as well as the Congress at large.

The trend in nonfinancial benefits has been up over the last several years, but we did have particularly impressive years in 1998

and 1999 due to the Y2K involvement that we had and the many,

many recommendations associated with that effort. The Y2K effort

is an example of what government can do if the executive branch

and the legislative branch work together in a concerted and constructive fashion to address a known problem with a positive outcome, and hopefully we can learn from that in the future.

The next slide, please.

One of the basic market tests that we can look to for the value

of GAO is how many times the Congress requests GAO representatives to testify on a wide variety of issues. This next chart shows

that our numbers have been impressive in that regard, that we

have, on average, testified over 200 times a year before the House

and the Senate on a wide variety of topics; and I myself typically

will testify about 25 times a year. We expect for our fiscal year

2000 numbers to exceed the 1999 level, even though this is an election year and a shortened legislative year.

The next slide, please.

Timeliness is critical, especially for the Congress. The Congress

is our client. We have had a concerted effort since 1996 to significantly enhance the timeliness of the work that we do for the Congress, namely to try to be able to deliver when we promise that we

will deliver, and you can see there has been a dramatic improvement in our timeliness. But, importantly, it is not just whether or

not we deliver when we promise that we are going to deliver; it is

also whether or not we deliver within the timeframes that the Congress needs it in order to be able to make informed decisions. So

we are looking to refine these measures and enhance these measures, as we will continue to do in the future.

The next slide, please.

Both of you mentioned GAO’s mission. GAO exists to support the

Congress in meeting its constitutional responsibilities and to help

improve the performance and accountability of the Federal Government for the benefit of the American people. We are truly about

good government; and, in fact, I would say our vision is to simply

make government work better for all Americans.

The next slide, please.

In order to do that, we have to do our work in accordance with

applicable professional standards as well as a specific set of core

values that I worked with our executive team as well as others to

come up with shortly after becoming Comptroller General. We have

three core values that drive everything that we do, both internally

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and externally. The first is accountability, the second, integrity;

and the third, reliability.

With regard to accountability, that word describes what we do.

We are called the General Accounting Office, but that is really a

misnomer. Only about 25 percent of what we do deals with traditional accounting and financial management; 75 percent deals with

program evaluation, policy analysis, legal research, a whole range

of activities, investigations, etc. As a result, the common denominator is the word accountability and in some ways you can say we

are the government accountability office is more descriptive of what

we do.

Integrity describes how we must do our work. We must be professional, objective, fact-based, nonpartisan, nonideological, fair and

balanced. We must say what we mean, mean what we say, provide

the facts and let the elected officials decide what to do once they

have the facts. We must provide those facts in advance before

issues reach crisis proportions. In fact, I think one of the advantages of having a 15-year term and an agency being headed by a

nonpartisan professional is to look longer and broader and to bring

matters to the attention of Congress before they represent crises.

That is critically important.

The third core value is the word reliability which describes how

we want our work to be received—timely, accurate, useful, clear,

and candid. Now, I would like to be able to add the word concise,

Mr. Chairman; and we are working on that. That is why we have

a PowerPoint executive summary, rather than the 40-page written

testimony.

Next slide, please.

This represents a summary of our strategic plan. This represents

a framework for everything that we do at GAO, both internally and

externally. We develop the strategic plan through extensive outreach efforts with the Congress. Yes, this is GAO’s strategic plan,

but it is our plan to serve our client, the Congress and the American people, and it was put together with extensive consultations

with our client.

We voluntarily have complied with GPRA. As you know, we are

not subject to GPRA, but we believe it makes sound business sense

to comply with GPRA for a variety of reasons. In addition, we believe, as the leading accountability organization in the United

States, we have a responsibility to lead by example. We should be

as good or better than anybody else we evaluate, otherwise we are

hypocrites, and we don’t ever want to be called a hypocrite. So we

have focused on our mission.

We have four goals. The first two goals are tied to the Constitution of the United States. We know that there can be a lot of disagreement in Washington nowadays, but we believe that the Constitution has stood the test of time and to build our first two goals

on the Constitution is both prudent and appropriate. The third goal

is based upon a recognition of a global trend at Federal and State

and local levels, and that is to the push for more results-oriented

and accountable government. And fourth is for us to seek to lead

by example, to be a model organization, to practice what we

preach.

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We have got six themes underneath that that have no boundaries. They have no boundaries globally, domestically, or within the

Congress, within the executive branch or within GAO. They deal

with issues like changing demographic trends, like increased

globalization, different quality of life considerations, emerging security threats, rapidly evolving technology and, again, the move toward a desire for a more results-oriented and accountable government.

We have 17 objectives that tie in most cases very closely to the

committees and the various departments and agencies. And last

but not least, as I mentioned before, the foundation of everything

that we do represents our core values.

The next slide, please.

If I can, Mr. Chairman and Mr. Turner, let me now change to

some of the challenges that we face in the human capital area. As

I mentioned, people represent our most valuable asset. We are a

knowledge business. In fact, I would say, with all due respect, that

there is probably a broader range of skills and knowledge in GAO

than any organization on Earth, bar none. Let me repeat that.

There is probably a broader range of skills and knowledge in GAO

than any organization on Earth and a tremendous amount of institutional knowledge that is critically important to the Congress and

the Nation.

But the fact of the matter is that we have a number of human

capital challenges in a post-downsizing era. We are smaller and out

of shape, as this chart shows. Only 11 percent of our personnel are

at the lower levels, as compared to about 27 percent in 1989. In

addition, we are heavy in certain other areas. We need to address

these imbalances over time through a variety of management actions and other types of activities. It is important that we get in

shape for the future. We are in shape to do our job today, but we

are not well positioned to be able to do our job in future years.

The next slide, please.

This next chart shows our appropriation and FTE level since

1992. We have had a significant decline in our budget. We experienced that in the mid-1990’s. This resulted in an approximate 40

percent reduction in the size of GAO. There were a number of RIFs

that had to be run. Offices were closed, all or nothing; and whole

units were abolished. The fact of the matter is, is that we have not

had reasonable resource stability for several years. And while last

year was the first year in 10 years that we received a resource allocation in excess of our mandatories, this year again there is a debate as to how much resources GAO will receive.

The House has us for a 2 percent cut without considering inflation or other mandatories; the Senate has us for a 2.5 percent increase. We can live with the Senate number, but the House number would force us to run RIFs again or otherwise to freeze hiring,

which would be totally unacceptable and would further mortgage

our future. We are hopeful that the Senate numbers will prevail in

Congress, with all due respect to the House.

It is critically important that we have reasonable stability in

funding and not have to fight these annual battles over what our

budget is going to be, especially given the return on investment

that we are bringing to the taxpayers. Having to fight the annual

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battles and deal with the annual uncertainty over what our budget

is going to be has an extremely deleterious affect on morale as well

as our ability to attract and retain a qualified work force.

We had a virtual 5-year hiring freeze from 1993 to 1997. This

served to mortgage our future in certain ways. The average age of

GAO has increased 6 years in the last 6 years. The average age of

GAO is 48. Mr. Chairman, Mr. Turner, that is my age. We cannot

continue to repeat hiring freezes. That would only serve to further

mortgage our future.

The next slide, please.

We have serious succession planning challenges. We must begin

to prepare for our future. Thirty-four percent of all of GAO personnel are eligible to retire within 4 years—4 years, 34 percent. Fiftyfive percent of our SES members are eligible to retire in 4 years.

That is a tremendous amount of institutional knowledge and expertise. We must become more actively involved in succession planning. The combined effect of past hiring freezes, budget cuts and

the current RIF rules have put this agency at risk; and we need

to address them.

The next slide, please.

GAO contracting. While our FTE levels have gone down, our contracting has gone up, in part to recognize that there are certain aspects that the private sector can do more effectively and, in addition, there are certain areas where we need assistance or expert assistance or we are not going to have the ability to attract, retain

and motivate an adequate number of people. So we are going to

have to go to the private sector from time to time to do that, and

we will be prudent about how we do that.

The next slide, please.

A few summary points.

What are some of the GAO challenges that we face?

First, supply and demand imbalances. We have significantly increased demand from the Congress and significantly reduced supply in the form of human as well as financial resources. We have

got to work together to achieve a better balance.

Second, we critically need stability in our annual resource levels.

Failure to have that undermines our ability to attract and retain

a motivated and skilled work force. We need to have flexibility to

do some self-initiated R&D work. It is unreasonable to expect that

the Congress will identify all of the issues that need to be focused

on. And, in fact, it is important that we be able to look at some

issues before they reach crisis proportions and to bring those to the

attention of the Congress before they are immediate crises. Having

some type of reasonable flexibility to do that is essential in order

for us to accomplish our mission.

We both need to work together, meaning the Congress and GAO,

to reinvigorate and to improve congressional oversight. We need to

work in a bicameral, nonpartisan manner to form a partnership in

order to be able to buildupon the management reforms of the

1990’s, the skills and knowledge and institutional expertise of

GAO; and we have got some ideas about how to do that that we

would like to work with you and others on.

We critically need the Congress’s help in the area of human capital. We need to enact our human capital legislation. It has been

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passed in the Senate. It is scheduled to go to conference as part of

the appropriations process. Chairman Burton and Ranking Member

Waxman support the legislation that is in the budget process. We

critically need that legislation to help prepare GAO for the future,

but, in addition, we need the Congress to consider other areas that

we are happy to work with you on.

We need to look at the possibility of debt relief for new hires. We

already have a compensation differential between the private sector options and in the government, but, in addition, over half of

GAO’s employees are Master’s and Doctor degree candidates. They

often come out of college with significant debt. They face a double

whammy. They face less compensation and tremendous debt loads.

We need to do something like the military to be able to try to deal

with that in a reasonable manner.

We need to work to change our pension laws, the government’s

pension laws, to allow people to retreat into retirement rather than

forcing them to go all or nothing. We have a lot of skills and knowledge and expertise. Many people want to start working part time

and retreat into retirement, but then they can’t access their pension. We need to figure out, just as the private sector is doing, to

allow more flexibility to retain that knowledge, given work force

imbalances, skill shortages and other factors.

We need to move, over time, to a more reasonable compensation

approach that is focused more on skills and knowledge and performance; and we need to look at some things that don’t sound that

significant but they add insult to injury. Things like frequent flyer

miles. The private sector has for years allowed individuals who fly

on their own time to keep their miles. You know the burdens of flying nowadays—it is not a pleasant experience. In times of budget

deficits it is understandable how you might want to recapture those

miles, but our people are already underpaid, overtraveled, overworked, and now we have a budget surplus. It almost adds insult

to injury to say you need to give those miles back. We need to revisit that policy in order to be more competitive going forward.

Last, records access issues. More and more of what government

is doing involves a partnership between Federal, State and local

levels as well as public private. We are seeing more and more that

the issues that we are being asked to address are requiring us to

access records outside the Federal Government—at the State and

local level, and the private sector. This is going to be an issue that

is going to be increasingly important that we need to work with

Congress on how best to address with regard to proposed expansion

of Federal programs. For example, prescription drugs, where a lot

of research and analysis needs to be done, is not in the Federal

Government. It is in the private sector, and it is in the State and

local government areas.

Mr. Chairman, that concludes my summary. I very much appreciate your time, both your time and attention; and I am more than

happy to answer any questions that you might have. Thank you.

Mr. HORN. Well, we thank you. That is a very fine statement.

[The prepared statement of Mr. Walker follows:]

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Mr. HORN. We are now going to have a dialog between we members and you, and it will be 5 minutes between each of us.

Let me ask you about the institutional memory situation. I think

that is a very crucial matter.

What is your intent as to try and get that type of wisdom that

people have over time? Is it to have opportunities for a half load

and half retirement or fourth load, fourth retirement? Some institutions do that.

Are we doing oral histories of a lot of people when they retire?

It seems to me that is a—for historians such as White in the

1930’s, looking at the administrations from George Washington up,

it seems to me that would be a very useful file for GAO, the archives, the Library of Congress, whatever, to have them in the days

of disks that you can find any particular thing on a disk. That

might be one possibility. I just would be wondering, what are you

thinking of?

Mr. WALKER. We are doing a number of things.

First, we have embarked on an aggressive succession planning

effort to try to ascertain how many of our people plan to retire and

when. I mentioned that 55 percent of our executives are eligible to

retire within 4 years. We have met with each of those executives

and covered a number of issues. Fortunately, many of those individuals want to work past retirement eligibility, and that is great.

We need to do the same thing at other levels, and we need to tap

and understand what skills and knowledge that we have.

We just rolled out an electronic skills and knowledge form that

every GAO employee will fill out. Therefore, we will have electronically what skills and knowledge we have within our building and

how we can better deploy those skills and knowledge and capitalize

on it. We need to look at mentoring by capturing this institutional

knowledge and passing it on to others.

In addition, we need to look at what I mentioned about changing

the pension laws, about retreating into retirement. We can allow

people to work part-time right now, and we do, and we can experiment with certain policies, but there are real economic barriers and

disincentives under current law that need to be addressed. They

are being addressed in the private sector. In fact, there is legislation pending in Congress now to change the private pension rules.

The prospects look good to allow in-service distributions for people

that work part time after a certain age. We need to do the same

thing in the public sector.

So these are just a few of the things that I think we can and

should do, and we will do whatever it takes.

Mr. HORN. What about the idea of research and development? I

would be curious in 1966 what do we mean by that and what do

we need now between the two predecessors and Mr. Staats. It went

from 90 percent research and development in 1981 to 65 percent

and now 5 percent. How is that defined?

Mr. WALKER. Let me clarify how we define it. You may want to

ask Comptroller Generals Staats and Bowsher how they define it.

The previous term was self-initiated work. That doesn’t engender

a positive response on behalf of a number of parties; and, therefore,

we recharacterized it as R&D work. Basically, what that says is

when Mr. Staats came in as Comptroller General, 90 percent of the

54

work that GAO did was at its own initiative. It determined what

functions needed to be looked at and provided to the Congress.

That, over the years, has changed dramatically. There are more

and more mandates. Sometimes we are consulted on a mandate;

sometimes we are not. Sometimes we get the resources we need,

and sometimes we don’t. Sometimes there are independent issues

that don’t get adequately considered. What has happened in part

is because of increasing congressional requests, which is good. We

are a client service organization. On the other hand, the combination of increased requests and the downsizing of the agency has

meant that what gives is the self-initiated work or the R&D work.

That is what is left over, and some of that can be critically important. Because, quite frankly, many of the challenges that our Nation faces are not immediate. They are challenges at the horizon

and beyond because of changing demographics, because of environmental issues and other things that we need to be looking at before

they become a crisis.

Mr. HORN. In my last 19 seconds here I am going to ask you, on

the mandates, were those saved from the appropriators? And that

was an annual report that you needed to do time and again. Does

anybody ever ask if they read it or need it? Some of these things

are stuck automatically in appropriations bills.

Mr. WALKER. I am going to ask Gene Dodaro to comment. Because, as our Chief Operating Officer, he is into the details on some

of these things.

Mr. DODARO. We look every week at potential mandates that are

coming to the forefront in legislation, both in appropriations and in

the authorizing process. They come in both forms.

Within the last 2 years, we went back and looked at all of the

preexisting mandates to see if they were still relevant, and consulted with the committees; and, in fact, indeed a lot of them were

sunsetted. Very few of them are dated, although some date back,

for example, to the 1994 requirement to audit the financial statements of the Federal Government. But we are trying to work early

with committees on potential mandates. Most of them fall in areas

where we think there are legitimate issues and which correspond

to items that are actually in our strategic plan. Others are event

driven, like the Los Alamos fires.

Mr. HORN. I thank you.

Mr. Turner, 5 minutes for questioning the Comptroller General.

Mr. TURNER. It is amazing, General Walker, to notice the increase in the number or the percentage of requests from Members

and from committees. Quantify that for me. How many requests do

you get a year from committee chairs? How many requests do you

get from rank-and-file Members?

Mr. WALKER. In a given week, we typically get 40 to 50 requests

a week. Most of our requests are either from the chairman or the

ranking member of a committee or subcommittee. They receive a

priority with regard to resource allocation.

The next priority would be Members that are on a relevant committee of jurisdiction, and the last priority would be Members who

are not on a relevant committee of jurisdiction.

I think unless something gives we are going to have to relook at

whether or not we are going to be able to deal with individual

55

Members’ requests. The statute only requires us to deal with mandates and committee requests. We have tried to deal with individual Members’ requests as we have the resources and will continue

to, but the squeeze continues.

Mr. TURNER. When you get a request just from a Member—I am

sure you get all kinds of requests—do you try to work with that

Member to narrow that request or make it where it is something

that you can have a little more management control over?

Mr. WALKER. We have instituted a new process where we have

an engagement acceptance meeting, and I will ask Gene if he

wants to elaborate because he chairs it every week. We look at

every request—what is it? What are they asking us to do? Is it

within our scope and competency? What kinds of resources and

skills will it take? How much risk is associated with the assignment, complexity, degree of difficulty, political contentiousness, if

you will; and in some situations they will ask us to do things that

we don’t think are appropriate. In some cases, they will ask us

where the scope is too broad; and we will work to narrow that

scope.

Yes, we have an ongoing and interactive exchange with both

committees and Members in conjunction with requests.

Mr. DODARO. What we try to do, along the lines that Dave is

talking about, is that, for many requests that we get from individual Members we may already be doing that scope of work for a

committee. So we try to marry up the requests from the Member

with the committee. And in some cases they just want some help

answering a request from a constituent. We will look into the matter quickly.

Also, it might be something that is within the scope of the responsibilities of the Inspector General, say, for example, looking at

a particular contract award at DOD. Our goal is to try to help answer a request from every Member in some way, manner, shape or

form, even if we can’t undertake the assignment ourselves. But we

actively manage that process and get back to everybody quickly to

try to get a good outcome and try to get the information that people

need.

Mr. TURNER. I was looking at page 13, human capital profile; and

it might help if you would explain these bands that are listed here,

what category of employee is represented there. I assume the very

top category is the executive staff. Where are the researchers?

Mr. WALKER. This represents pay bands. We went to broad banding, which is a compensation structure, in the 1990’s under Comptroller General Bowsher’s tenure. Band 3 represents a GS–15. It is

either management personnel or very senior specialist. A band 2

represents 14, 13, 12 level. And a band 1 is below that in a professional category. The other would represent the General Counsel’s

Office or Office of Special Investigations. And then the mission support would be just that. It would be individuals who contribute to

our mission but aren’t in a line function. They are more in a staff

function.

Mr. DODARO. Just to give you a benchmark, for example, at the

SES, a senior executive would be someone like a Joel Willemssen;

and he leads a whole body of work. And then the researchers at

the band 2 and band 3 level and band 1 actually conduct the audits

56

and the investigations. So the people who really do the work and

go out and interview people and go through the files and records

are at the 2 and 1 level. And the band 3s are issue area experts.

We will have an expert in housing, transportation, etc. So we try

to maintain expertise at the senior level; and the researchers, auditors, and investigators are at the band 2 and band 1 level. That

is why band 1 is so important, because that is where we begin to

develop good institutional knowledge in the long run. We are trying

to do a lot of things to retain senior executives, to hang on to institutional memory, but there is no substitute for having a good pipeline of people coming through the organization that are going to be

here beyond Dave’s tenure and mine.

Mr. TURNER. So the chart is designed to show that you would

prefer to have a profile that looks like the 1989 profile as opposed

to what you have today?

Mr. WALKER. I think the actual profile is between 1989 and 1999,

but closer to 1989 than 1999; and we need to do that over time.

We are taking management action, but we need to continue to hire

and recruit, we need to do succession planning, and we also need

the human capital legislation.

Mr. TURNER. Thank you. Thank you, Mr. Chairman.

Mr. HORN. I thank the gentleman. And now 5 minutes for my

colleague from California, Mr. Ose.

Mr. OSE. Thank you, Mr. Chairman.

My question really boils down to one that I have asked previously and that is, at least from my experience, there are just two

irreplaceable assets I have access to, one is GAO and the other is

CRS. Great resources. In both cases, I am concerned about retaining personnel who have been trained, level 1, level 2, what have

you. Tell us about the challenges you face there as it relates to retention of people who have started——

Mr. WALKER. Well, we face serious challenges. One of the ways

that we face a serious challenge is because we don’t have stability

in our budget. Every year there is debate about what we are going

to get for a budget and whether or not we are going to get inflation.

That creates instability and uncertainty on behalf of our current

people regarding RIFs.

Mr. OSE. Let me take you a slightly different direction. In terms

of the people who work at GAO, obviously they have options from

an employment standpoint. Your options might be Arthur Andersen, it might be some consulting firm, what have you. What kind

of competitive environment are you having to confront in terms of

retaining those people?

Mr. WALKER. An increasingly competitive environment with regard to new hires. For example, many of the major public policy

schools—the Kennedy School at Harvard, the Maxwell School at

Syracuse, Berkeley, etc.—a significant percentage of their graduates who they thought were going to go into public service end up

going into the private sector, and that is an increasing challenge.

I think we have to recognize that the government will never be

competitive from the standpoint of compensation. Stated differently, you are always going to be able to make more money in

the private sector if that is what you want to do.

57

However, the government does offer some things that the private

sector can’t offer as much of—the challenge, the diversity, the ability to make a difference for the country. Therefore, what we have

to do is identify top-flight people who are motivated toward those

types of things and to make sure that we have the tools available

to attract them and to retain them. It is also critically important

that we get resource stability because when we go out to hire a

new person, if they know that they are the first person that is

going to get let go, that is a real disincentive for them to come with

us.

Mr. OSE. Do you see a difference—obviously, you are the legislative branch people, but do you see a difference in terms of our ability to retain people on the legislative side as opposed to the executive side?

Mr. WALKER. I think the GAO has a greater ability to retain people; and, in fact, statistics show that. We have very low turnover.

After 3 years, our turnover is about 4 percent a year, and that also

counts retirements. But for the newer people, the first 3 years, the

turnover is much higher. It is double digit—around 15 to 18 percent a year. The new generation, the graduates of today, are more

mobile than they have been in the past. We have to recognize that

and do what we can to minimize turnover, but we are going to have

more turnover. I have a 26-year-old and a 23-year-old, and I can

assure you that there is going to be more mobility among their age

group.

One of the things that GAO has to offer is that you can have lifelong learning at GAO. We deal with everything that the Federal

Government does anywhere in the world and so you can move into

different areas, different specialties, different issues, different geographic areas without having to change employers and still be challenged. That is an advantage that many government agencies don’t

have.

Mr. DODARO. One of the most critical things for retention, particularly of highly skilled people, is additional training. They really

want to keep their skills current, and we are trying to find more

money available to provide training to them. And that, coupled

with the diversity of the work and the interesting nature, of assignments really is the key to holding people, because they want to be

known in the professional communities in which they have studied

and do the work.

Mr. OSE. Mr. Chairman, are we going to have a second round?

Mr. HORN. We are.

Mr. OSE. Thank you.

Mr. HORN. Let me ask about the SES staff. I notice on your

chart, page 13, it represents roughly 2.8 percent and 3.7 percent

of all employees through fiscal year 1989 through fiscal year 2000.

I wonder to what degree can SES be rotated within the executive

branch and do you have any difficulties in getting them for a year

or 2 years or 3 years when you see something coming up that they

might have the expertise to do. Have we had any examples like

that?

Mr. WALKER. We have not had that happen with great frequency

in the past. We have had people come from the executive branch

to GAO. In particular, when we had our first SES candidate develVerDate 11-MAY-2000 10:33 Aug 02, 2001 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 C:\DOCS\73593.TXT HGOVREF1 PsN: HGOVREF1
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opment class, we had a number of applicants from the executive

branch apply because they view GAO as a very good place to work.

One of the things that we need to look at with increasing frequency is, not only with regard to the government but also the private sector, the opportunity to do rotations and fellowships and

that type of activity. Obviously, we are going to have to be careful,

because there are potential conflict issues which we need to carefully monitor in that regard. We need to look at that more.

Mr. HORN. Also, on the education aspects, the military does a

wonderful job in this town of keeping their people moving and letting them go off for masters degrees or doctorates. Are you thinking of doing that essentially at GAO?

Mr. WALKER. Most of our people already have a masters or doctorate, but I think, because of the competitive pressures in the

marketplace, we may end up having to hire more people with a

bachelor’s degree who may want to obtain a masters. That is something I would like to be able to consider as well as the personal

debt relief, etc. Part of the difficulty is not just whether or not we

have the authority but whether or not we have the resources to do

that.

Mr. HORN. What other things do you think are worthwhile that

are not always seen when you recruit somebody? It is a good environment, you meet a lot of interesting people and so forth. Where

is the weak spot, if any?

Mr. WALKER. Where is the weak spot? Well, part of the weak

spot is that a lot of people that come into government come into

government to make a difference, to learn, lifelong learning and for

a better quality of life and for better job security. The last two have

been significantly eroded in the last 10 years. We are asking our

people to do more and more with less and less. In many cases, they

are working as many or more hours than the private sector dues—

and I was a global partner with Arthur Andersen for 10 years—

with much less compensation. The increased uncertainty about

what our resources are going to be has a deleterious effect. So I

would say those last two factors, work/family and job security considerations that are beyond our control, have declined significantly.

Something needs to be done about that.

Mr. HORN. We had, as you know, in the Supreme Court case

about 20 years ago a sweeping away of about 200 laws that permitted the Congress to get into the hair of the executive department is I guess putting it bluntly. To what degree do you feel that

GAO might well be utilized in some type of arrangement where the

Congress, the executive branch, might find that useful? Are there

any situations like that that you are thinking about?

Mr. WALKER. In what regard, Mr. Chairman?

Mr. HORN. Advisory board or something like that?

Mr. WALKER. There is an increasing range of activities that the

Congress is asking either GAO as an institution or the Comptroller

General as a position to get involved with. For example, we have

been asked in the past to do—the Comptroller General has been

asked to chair a panel on the Cost Accounting Standards Board.

There is now pending legislation to ask the Comptroller General to

chair a commission on A–76.

59

In addition, there are requests from time to time to expand our

responsibilities to get into regulatory reviews and other types of activities. I think there is a lot of things that we can do. I think the

real key is, A, do we have the resources to do it; B, to be able to

consider what, if any, independence implications there are before

Congress acts so that there are not any surprises in that regard.

Mr. HORN. I thank the gentleman.

We now have the vice chair with us, Mrs. Biggert, the gentlewoman from Illinois; 5 minutes for questioning.

Mrs. BIGGERT. Thank you.

Since the time I have been here I certainly appreciate all that

GAO has done; and I think particularly for this committee and

walking into something like Y2K and all of the things that we had

to deal with in that, we certainly got to know Mr. Willemssen very

well; and he did a great job.

Mr. WALKER. Mr. Willemssen won the gold medal last year on

congressional hearings, and I had to take the silver because he was

so popular last year.

Mrs. BIGGERT. Mr. Walker, when you get something to do for either a Member of Congress or however it comes about, do you have

any peer review of your work? When you do the oversight for some

many other——

Mr. WALKER. We have internal quality reviews, and we have

peer reviews. With regard to all of the work that we have, we are

moving toward what I would call a second partner review where we

will have at least one other SES person involved as a second set

of eyes to take a look at the work. We have extensive quality assurance mechanisms with regard to all of our work. In addition, in

connection with certain types of engagements where they are highly technical and complex and where we may not have adequate expertise internally, we have and will continue from time to time to

have expert panels, groups of people from the outside who are expert. It has to be balanced, and we have to be concerned with any

potential conflicts.

We also have a formal peer review in financial auditing. KPMG

Peat Marwick does that, and we are also looking at working with

other colleagues, other auditor generals around the world to do

peer review of our evaluation work. I have met with a number of

my colleagues within the last 6 months, and we are going to try

to do a peer review of each other’s institutions.

Mrs. BIGGERT. Where do the outside experts come from, the private sector or other agencies?

Mr. WALKER. It could be a combination. It could be the not-forprofit sector, it could be the private sector, or other agencies. When

we do that, we need to be careful that we know about whether or

not there are any potential conflicts, that we have balance from the

standpoint of the issue. But sometimes, as you can imagine when

you are dealing with experts, just like when you are dealing with

advisory councils, sometimes you will get people who are integrally

involved with an industry and get comfortable with the conflicts

and disclose them.

Mrs. BIGGERT. Do you tend to go back to the same people when

you establish a relationship with the expert?

60

Mr. WALKER. This is one of the things that we are looking at

right now, and one of the things that I have been pursuing since

I became Comptroller General. In the past, each unit did what they

were comfortable with, and one of the things that we are doing is

looking at these issues. What type of criteria are we using as to

when we use expert panels? What type of procedures do we have

in place in order to ensure balance and be aware of any potential

conflicts? Undoubtedly, in the past, there have been situations

where individual units might get comfortable with certain persons,

but we are going to start looking at this on an agency-wide basis

because I think we need to look at GAO as a whole rather than

individual units.

Mrs. BIGGERT. Do you have to pay a consulting fee to these experts?

Mr. WALKER. It varies. Some do it for their country. The consulting fee, as you know, is not very high. When I was a trustee of Social Security and Medicare, I got paid $300 a day which I gave to

my firm. Some are pro bono, and some we will pay up to around

$300 a day.

Mrs. BIGGERT. Would there be an impact then of the proposed 25

percent reduction in appropriations? Would this make any change

in that?

Mr. WALKER. Right now the only thing that is on the table is the

Senate has us for a 2.5 percent increase, the House has us for a

2 percent cut. We are hopeful that we are going to get the Senate

number, for obvious reasons. We had a significant cut—the 5 percent you are talking about was a 25 percent cut that occurred in

the 1990’s. Obviously, with dramatic reductions in resources like

that, not only do you have RIFs but you have less ability for contracting.

Mrs. BIGGERT. What was the impact of that?

Mr. WALKER. It was drastic. It was a tremendous loss of institutional knowledge. It was putting us in a position where we can get

our job done today, but we are at risk of not being able to get it

done in the future. And cutting back on training and enabling technology, things that you will pay a price for in the future if you don’t

reverse it.

Mrs. BIGGERT. Thank you.

Mr. HORN. Mr. Ose, the Member from California, for pursuing

the questioning.

Mr. OSE. Thank you, Mr. Chairman.

I want to go back to the issue on the retention of people as it

relates to your proposals. Have you had any reaction from the executive branch or elsewhere on the hill?

Mr. WALKER. With regard to our legislative proposal?

Mr. OSE. Yes.

Mr. WALKER. First, OPM is not taking a position on our legislation because we are a legislative branch agency, there is a separation of powers, plus we are not proposing any changes in the Civil

Service rules.

Mr. OSE. OPM did not take a position on their proposal because

they are a legislative branch. Mr. Chairman, I wonder if we can get

them to not take a position on anything you and I put up because

we are legislative, too.

61

Mr. WALKER. An innovative thought. But they see us as the legislative branch. We are not proposing to change the Civil Service

rules, etc.

With regard to the Hill, the situation is as follows: We have

strong bipartisan and bicameral support. We have support from the

Government Reform Committee, the chair and ranking member.

We have support from the Governmental Affairs Committee, the

chair and ranking member. We have support, strong bipartisan

support, in the Senate Appropriations Committees, because the bill

is on the Senate bill that passed. And we have support in the

House as well, and we are very hopeful that it will be enacted soon.

We do have some concerns that have been expressed by certain

members of the local delegation. That is understandable. They

have many Federal Government employees as their constituents.

Some of their concern is because of misperceptions. At first, they

thought we were talking about changing the Civil Service rules. We

are not. There is some question about veterans preference. We are

maintaining that. So we are hopeful that we will be able to get everybody on board, but we critically need this legislation.

Mr. OSE. If I understand correctly—and I want to examine a couple of these employees’ protections. Could you just go through some

of the protections that are built into your proposal that would help

the employees or satisfy the employees?

Mr. WALKER. I appreciate you asking that question. I think it is

critically important that management have reasonable flexibility,

but you also have to have protections to safeguard employees. We

have several internal appeal processes that individuals can go

through. I have proposed and I have stated publically, since we

have to propose regulations, that I would add an additional appeal

as part of that regulatory process where individuals would have an

expedited appeal directly to me in addition to what their current

rights are. In addition, we have an independent Personnel Appeals

Board comprised of three independent attorneys paid for by GAO

but with no relationships to GAO that individuals can appeal to

even after the internal appeal process. In addition, for certain types

of actions, they can go to Federal court. By the way, we pay for the

Personnel Appeals Board. So there are a number of substantive

protections.

Unlike executive branch agencies which are headed by political

appointees of a particular party, the Comptroller General has a 15-

year term. He is a nonpartisan professional and therefore must suffer the consequences of whatever he does. And therefore, given that

we are in the people and knowledge business, I can assure you that

my successors would be prudent, because we would pay the price

if we weren’t. Plus congressional oversight obviously serves to keep

us in check.

Mr. OSE. My final question, Mr. Chairman, before I offer one observation at the end of the response, would be that a lot of what

happens up here is either legislative or regulatory. Does GAO have

any authority right now to issue regulations from a regulatory

standpoint to handle this rather than pursuing it on a legislative

basis?

Mr. WALKER. We have the authority to do regulations. However,

we are talking about adding some criteria, namely, skills, knowlVerDate 11-MAY-2000 10:33 Aug 02, 2001 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 C:\DOCS\73593.TXT HGOVREF1 PsN: HGOVREF1
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edge, and increasing the weight of performance that could be contested if we tried to do it through the regulatory route. Arguably,

we could go that route, but there are significant litigation risks, my

general counsel has told me, if we go that route. We believe that

we prepared a sound business case, that we have got adequate protections, and we would respectfully request the support.

Mr. OSE. The reservation that I mentioned moments ago had to

do with following up on comments from my good friend from Illinois, and that is that Mr. Willemssen has been a star and a source

of great information for me, at least as a Member, and I want to

commend his efforts from you.

Mr. WALKER. He received the Comptroller General’s Award last

year, which is the highest award we can give, as well as Helen

Hsing, who is head of Congressional Affairs. He is an outstanding

individual.

Mr. HORN. One of the key things in the results-oriented program

that we are pushing and that this has been done on a bipartisan

way 10 years ago, we are trying to make it happen; and if it is

going to happen, we really need a cadre, and maybe you already

have it, that can experiment with different approaches to how do

we measure the effectiveness of Federal programs. And I just wonder what your thinking is along that line.

Mr. WALKER. It is part of the recent reorganization that I announced at GAO. One of the things that I am creating is the Strategic Studies Group; and they have the expertise to do some of the

type of work that you are talking about, Mr. Chairman.

If I can, I would like to mention one other thing before we wrap

up. That is we have not had a Deputy Comptroller General in GAO

for over 20 years. The current statutory framework for appointing

the Deputy Comptroller General has never worked. It is broken. It

needs to be fixed. We need to work together. We need a Deputy

Comptroller General. Gene Dodaro would make an outstanding

Deputy Comptroller General.

Mr. HORN. I think we can all testify to that. He has been an outstanding witness in the 8 years I have been involved with this committee.

Well, we thank you, and we hope that you will stay with us as

we get your two predecessors.

We would like at this time to have Comptroller General Staats

and Comptroller General Bowsher and Mr. Ink, President Emeritus, Institute of Public Administration.

Mr. Walker, you can remain at the table, by the way.

We are delighted to have with us today Elmer Staats, who has

a great reputation in this city, over 40 to 50 years. He became a

member at the Bureau of the Budget in the 1930’s, in 1939, and

was Assistant to the Director and Assistant Director of Legislative

Reference. I think you followed Roger Jones, I believe. Or did you

precede him?

He has been Executive Assistant to the Director of the Bureau

of the Budget in the late 1940’s and Deputy Director in the 1950’s

and in the 1960’s. Then he was in private industry for awhile and

then he was nominated to be Comptroller General of the United

States and served from 1966 to 1981.

63

We would appreciate any comments that you might have. You

have watched the agency more than any of us. Anything that you

would like to stay, we would be glad to listen to it.

STATEMENT OF ELMER STAATS, FORMER COMPTROLLER

GENERAL OF THE UNITED STATES (1966–1981)

Mr. STAATS. Thank you, Mr. Chairman. I do not have any prepared testimony. I came mostly to answer your questions.

Two things I would like to say: The bottom line for GAO is its

credibility and that has a lot of implications for the length of term

of the Comptroller General and the bipartisanship. I think that is

something that we have to keep in mind.

The other thing I want to say concerns program results and program evaluation. President Johnson, when he appointed me,

thought the job of the Comptroller General to involve those activities—and he had been in the House a long time and in the Senate

a long time. He thought for a moment; and he said, when Congress

passes a bill and I sign it, it is your job to tell both of us whether

that law is being carried out as we intended it to be carried out.

And that is a pretty good definition of the job of GAO.

GAO has changed a lot since the time I joined it in 1966. I don’t

think Comptrollers General could have done all they did if they

didn’t have a 15-year term. It takes a long time to make some of

these changes, but it has changed a lot.

When I joined the GAO, the personnel was entirely lawyers and

accountants, so I had a job of convincing people that we could use

other disciplines and other backgrounds. That was a real problem

in recruiting because you have accounting in the name of your organization and you have to tell them, no, we are an accountability

organization. We even thought some about changing the name of

GAO. If you look at the rest of the world, most of the people in

comparable jobs are called Comptrollers General or auditors general, and so we decided to stick with the title General Accounting

Office.

A couple of comments. I think Congress is making a big mistake

in cutting back on the staff of GAO—an organization that is putting more money in instead of taking it out. If you look at the cost

and benefits of what comes out of GAO—I think Congress tends to

look at GAO as they would any operating agency in the executive

branch. There are obvious ways to save money. Here you are dealing with an organization whose sole job is to try to make government more efficient; and to save money and to cut GAO—I think

it is a little like a penny-wise/pound-foolish approach, to be very

blunt about it.

On the whole, I had pretty good success in persuading Congress.

We were not always happy, but most of the times we were. I think

Congress tends to look at the GAO from the standpoint of an operating agency, like the Pentagon or something else, but what can

Congress get from the GAO that is going to help them do their job,

and that is what GAO is about.

I am little concerned about the fact that GAO has no—has less

freedom to initiate work of their own. When I was at GAO, less

than 10 percent of our work was requested by Congress; and the

answer that I got from Members of Congress was we know that

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GAO is a good organization but not really relevant for what we

need. From the time I left in 1966 we were up to a little over 40

percent.

Now you can look at that both ways. If the GAO keeps in touch

with the Congress as to its work plans, a lot of its work plans will

be accommodated to the committees of Congress. So part of our objective was we worked to contact all of the committees and Members and to see what they thought about, so a lot of our priorities

were established by consultation, and that tended to relieve some

of the congressional requests.

There is always the question, how does GAO decide what it is

going to work on? I don’t think that it is right for Congress to deny

GAO to initiate its own work. GAO is intended to be an independent auditor of the Federal Government. If you are an independent

auditor, you have to make your judgment as to whether or not

what you are going to do is going to be the correct thing to do.

Independence is kind of the keystone of what we are talking about.

This 15-year term, the fact that GAO is given a lot of freedom to

initiate work, these are all parts of it.

I think the GAO is always going to be in a position of trying to

anticipate, I call it early warning, where we can look down the road

and see what is going to be important before it reaches the stage

of having legislation or a hearing and so on. I think we can—GAO

can do a lot of that. But they don’t do that unless they have a little

freedom to do it.

When I went to GAO, I found that Congress had not mandated

any work for IRS. We didn’t have any authority. We didn’t have

any authority to do anything with respect to the Federal Reserve

Board. The international lending agencies, those were out of our

providence. So we had the job of trying to persuade Congress that

they overlooked something. Generally, we had pretty good cooperation from Congress on that.

I came to Congress to get GAO its own personnel system. It

didn’t make any sense for GAO to be under the rules of the executive branch in that respect. I had some opposition to that in the

executive branch, but it has worked out all right. GAO needs that

kind of flexibility to write its own rules as far as its own work force

is concerned.

There are two or three things that I want to say and then maybe

answer your questions.

Mr. HORN. I would like you to confirm or deny the following

statement. As I remember the LaFollette-Monroney Act that created the CRS, the research service for Congress, there was also a

hope of professionalism on the part of the staffs. Before that, they

had a clerk that was sort of keeping the show running, but they

didn’t have a professional staff until the LaFollette-Monroney Act

was recognized in both the office and the committee.

As I remember, there was a role for GAO, and that was to get

into the programmatic review. And yet your predecessors could not

implement that because Mr. Rayburn did not think it was a good

idea; and neither did Clarence Cannon, the chairman of the Appropriations Committee. Both of them, I believe, were dead before you

got there; and I think, under your leadership, the GAO moved into

programmatic analysis. And I think that is exactly what they ought

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to be doing, along with the fiscal debt, and they don’t that much.

You contract a lot of it out. I just wondered, am I correct on that

bit of history or am I wrong?

Mr. STAATS. The first Comptroller General was under President

Roosevelt, and he decided a lot of things that Roosevelt was doing

was illegal.

Mr. HORN. Wasn’t that Mr. McCarl?

Mr. STAATS. Yes. So that the relationship between the executive

branch and GAO at that time couldn’t be worse. But he stuck it

out for 15 years. He never was convinced that the Roosevelt program was the right thing to do. He tried to find some way to make

it illegal. The GAO does have some authority to pass on the legality of funds, there is no question about that, but I think he overdid

it.

I think the—in general, the Congress has been very supportive

of the GAO. I say that as a general statement. I had a problem

with the budget and their approach to it. GAO is different from

CRS and the CBO. Their whole job is to help Congress. GAO has

also the role of being an independent auditor. That means you seek

out things that need to be done and look at it and report to Congress on it. So it is a very different relationship. There has to be

some coordination obviously.

In general, I would like to say if Congress looks at the GAO in

the same way it looks at CRS and CBO, I think they overlook

something.

Mr. HORN. To what degree do you believe the existence of inspectors general that Congress put in everywhere 20 years ago, did

that, in essence, do some of the work that ordinarily the General

Accounting Office would take care of?

Mr. STAATS. I was concerned about that when the law was

passed, but it didn’t turn out to be a matter of concern. For one

thing, the inspectors general are dealing with a lot more internal

problems than we are. Very rarely do they deal with problems of

interagency concern or governmentwide concern. They were looking

primarily at issues pertaining to that agency. It didn’t turn out to

be a real problem. I think, on the whole, it has been a good development.

Mr. HORN. Well, let’s call on Mr. Bowsher; and then we will have

questions from all members of the panel.

Mr. Bowsher, it is a pleasure to see you. You were also a complete 15 years. So it must be a healthy job. It is like being President.

STATEMENT OF CHARLES BOWSHER, FORMER COMPTROLLER

GENERAL OF THE UNITED STATES (1981–1996)

Mr. BOWSHER. It is a very healthy job. My predecessors all lived

to be into their 80’s, and so I have confidence that this has been

a good job for my health.

Let me just say that I think the Comptroller General job is really

one of the great jobs in government. I have been working recently

with Dave Ruder, who was chairman of the SEC for a period of

time and was a dean at Northwestern Law School; and he always

introduces me as having one of the best jobs in Washington and the

GAO as one of the great agencies in the government.

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I think the mission that the GAO has, which is we have to look

at all of the various programs of the Federal Government is something that attracts the outstanding talent that does come to GAO;

and I know Dave is right at this moment in time, because of the

competitiveness, the strong economy, the big salaries that the private sector is offering that it is harder to get talent. But I am sure

that GAO will be able to attract really talented people and keep

them over the years because of the mission and the work that they

get to do at the GAO.

I would strongly urge that the Congress give the Comptroller

General and the GAO budget stability. I had it for 10 years. The

first 10 years I was in office, Vic Fazio was the chairman of my

subcommittee in the House Appropriations; and Jerry Lewis was

the ranking person; and they gave me budget stability. And I always remember saying to them, if you can do that for me I will run

a great GAO; and we made a lot of progress at the GAO in those

10 years.

When the budget deficits got so large and we had to take a cut,

I remember saying to Connie Mack, if you let us do it the right

way, we will be able to bring the organization down in the right

way, and that was a big help. I will always be very grateful to Senator Connie Mack. And Bill Clinger, too, was very helpful at that

point.

But Dave is right. I think today there has to be some rebalancing

at the GAO for the 21st century, and I would hope that the Congress could give them that kind of support.

The GAO is an agency that is like very few others. It is a much

smaller agency today than it was years ago, and yet it produces so

much more, so many more reports and testimony, so many more

dollars saved. It is a real tribute to this agency that they can compare themselves to the best in the private sector.

I remember working with Booz Allen at the end of my 15-year

term on a management review of another agency, and the managing partner at Booz Allen said I never saw an agency in the government and very few in the private sector that have a better work

ethic than the GAO. The people worked hard and did it on a timely

basis.

And one time I had Dr. Demming at the GAO on a Saturday. He

said he would come for nothing if we would meet on Saturday or

he would charge me $10,000 if it was on a weekday. I said, I’ll take

the Saturday option.

John Sawhill came, a former partner of McKinsey; and he was

amazed what a breadth of testimonies and reports that our SES

members had to handle. He compared it to the partners at

McKinsey. I was a former partner at Arthur Andersen. I too, knew

that the leadership of GAO carries a very big load and does it extremely well.

So I think if the Congress can support the current Comptroller

General and the GAO, I tell you, you are going to get a good payoff.

I will conclude on that note.

[The prepared statement of Mr. Bowsher follows:]

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Mr. HORN. Let’s turn to Dwight Ink, who has been a regular

helper on this subcommittee, president emeritus of the Institute of

Public Administration and formally in all types of roles under numerous presidents.

STATEMENT OF DWIGHT INK, PRESIDENT EMERITUS,

INSTITUTE OF PUBLIC ADMINISTRATION

Mr. INK. Thank you, Mr. Chairman. I did not serve in the GAO,

which I guess is why I am not listed as honorable on the witness

list here, but I did serve in the Executive Office of the President

and a number of other agencies. My perspective is from that type

of service.

I certainly think highly of the General Accounting Office. It has

an extremely important role to play, and it has provided strong

leadership under both Mr. Staats and Mr. Bowsher in improving

management. But Congress needs to take great care to make sure

that its own actions support a highly skilled agency that can function effectively in a rapidly changing environment, and that is important. I have found the GAO staff to be competent, dedicated;

and there have been occasions when I thought that the GAO was

really about the only ally I had in addressing management problems and mismanagement in particular.

Over the years, the General Accounting Office has made a particularly enormous contribution in financial management. Great as

those contributions are, I have on occasion felt that they could

make an even greater contribution if Congress let them be more selective in its work regarding departmental management and focus

more heavily on basic issues and the root causes of these problems.

I give some examples in my written testimony, in one of which Mr.

Bowsher believes I have overlooked some early reports by the GAO

on the S&L problem. I will go back and look at that, Chuck.

But I have found as I picked up responsibility for various agencies and bureaus, very useful GAO reports about their accounting

systems. But it has been very difficult for the GAO to have the resources, particularly now, to devote to the more basic problems and

issues.

I mention the Community Service Administration, for example,

where it was clear that there were financial problems, clear that

financial management was not good. But the IG reports and GAO

reports didn’t really get to the depth of the problems, such as the

fact that no program manager was permitted to know his or her

unobligated balance, which is pretty fundamental. No career person was permitted to make recommendations with respect to major

contracts or grants in order to ease the rewarding of political

friends. Those are basic building blocks for corruption, and it is important that GAO be given the kind of flexibility and the ability to

initiate its own work, so that it can choose these kinds of targets

early on and devote whatever resources are necessary to deal with

them.

With respect to cross-cutting issues among government agencies,

GAO has not been able to devote the kinds of resources I think it

needs to address directly issues such as the difficulties in the executive branch in implementing effectively the Civil Service Reform

Act of 1978. Yet that legal framework, and the concepts behind the

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legal provisions, are extremely important for effective execution of

the laws passed by Congress.

Neither has the GAO been able to look in depth at the management performance of the Office of Management and Budget. You

may recall when this committee asked the GAO to review the management impact of the most recent OMB reorganization, the GAO

declined and opted instead to look just at its effect on the budget

operations. I would like to see the General Accounting Office be in

a position to address these very broad cross-cutting issues that

have such a tremendous impact on government operation as a

whole.

I opposed the GAO having to follow the executive branch reinventing government policy of reducing staff levels simply on the

ideological notion that government is too big and the best way to

reduce it is to make staff cuts without first looking at what can be

done differently and where such cuts might best be applied.

Thanks to Mr. Bowsher, there was some attention in this instance

given to at least alleviating the worse impact of these cuts, something which did not occur in the executive branch agencies.

I want to stress the support that I have for the move by Mr.

Walker to increase training and development within GAO as a part

of his very welcome emphasis on human capital management.

Again, this is an area which in the executive branch, outside of the

military, has declined when it should be increasing. With the different roles of the employees and their different focus and their different culture, you need greater emphasis, not less emphasis, on

employee development and training.

Mr. Chairman, it seems like I am always commending you and

this committee on holding hearings; and I do it again today. The

interest that this committee shows in the General Accounting Office it is very important, because the interest in Congress as a

whole is often very much focused on an individual problem or individual issue, so that Congress really doesn’t deal with the health

of the General Accounting Office as a whole and its overall ability

to help and respond to Congress.

Congress has a responsibility to discipline itself in what it asks

GAO to do. The large volume of individual and committee requests

that we have heard this morning has reduced the capacity of the

General Accounting Office to pursue important avenues that it believes needs attention. Its capacity to pursue the basic problems

and root causes of systemic shortcomings such as I have mentioned

has been sharply limited by a combination of these many congressional requests and the ill-advised reduction in staff of several

years ago. Congress must address both of these issues.

I suggest this committee work with GAO in exploring ways in

which individual congressional requests might be better screened

or required to meet certain conditions. I also urge this committee

to provide support to the General Accounting Office in giving greater priority to those issues which the General Accounting Office

leadership regards as the most serious problems facing the departments and their root causes. In other words, permit the General

Accounting Office to do more self-initiated work as it did through

much of its earlier history.

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In conclusion, let me reiterate the high regard in which I hold

the General Accounting Office, its leadership and its staff; and I

wish Mr. Walker well as he moves ahead with a new vision for

GAO. Thank you.

Mr. HORN. Well, we thank you. You’ve always been a very sound

voice before the committee.

[The prepared statement of Mr. Ink follows:]

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Mr. HORN. I would like to call on my colleague, Mrs. Biggert, the

vice chair of the subcommittee and the gentlewoman from Illinois.

Mrs. BIGGERT. Thank you, Mr. Chairman.

Mr. Walker had a chart that I believe he went over a little bit,

but I would like to ask Mr. Bowsher and Mr. Staats about it. It

looks like in 1966, when Mr. Staats had this office, that 90 percent

of the work conducted for Congress was research and development

and then 10 percent was committee and Member requests.

By 1981, when Mr. Bowsher took over, 65 percent research and

development, 33 percent committee and Member requests, and

then a small little portion came in there of 2 percent of mandates,

and then now it is 72 percent committee/Member requests and a

small portion of research and development and 23 percent for mandates.

I guess I am wondering how research and development really differed from committee or Member requests and why there was such

a dramatic change in these charts since the period of time that you

started, Mr. Staats, and then pretty much of a change in 1981 until

today when we have 72 percent for committee and Member requests? Or what is the difference I guess between research and development and committee and Member requests?

Mr. STAATS. I have a little trouble with the research and development term as such because the General Accounting Office is supposed to take the initiative on anything that it sees that needs to

be looked at. Research and development, I would prefer to call research and development in the training of the staff. GAO has done

a very limited job in terms of training. When I was there, very little was done. We didn’t have the staff to do the training. So I

looked to the consulting firms and the public accounting firms.

They are spending a lot of money, in some cases as much as 25 percent of their total budget, on training. That is what I call capital

investment. That is kind of the key to the diversification that you

need for the GAO’s work. I had actuaries, I had all kinds of disciplines, but you have to do a lot of training to accomplish that.

Mrs. BIGGERT. Mr. Bowsher.

Mr. BOWSHER. When Elmer Staats first came into office, the Congress was saying that the GAO is a good organization, but it

doesn’t work on the issues that we find important. He got it going

in the right direction. When I came into office, GAO was working

more and more on the important issues in the eyes of the Congress,

and that trend continued during my tenure.

Also, a lot of the self-initiated work that had previously been

done with very little communication with Congress really became,

lots of times, congressional requests. In other words, when we

would do our planning in the housing or in the agriculture area,

then we would come over and show it to the committees. They

would say, that is good, let me send you a request. So I guess I

never worried about it getting too high a percent as long as I always said to my SES leaders, is there any important work that we

are not doing right now because we have too many congressional

requests? And there were a couple of times when we had to come

to the chairmen of the committees and ask them to be more of a

referee as to some of the requests coming over.

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But, on balance, in my 15 years I thought we were able to do the

important work. Most of it ended up being congressional requests.

I think Dwight Ink is right. It is one of the things that you have

to be concerned about. Because if you are getting congressional requests but not doing the important work, that is not good.

The S&L crisis, we did not expect to spend as much time on the

S&L area as we did for 5 years, so we had to move our talent over

into that area. And I think we did tremendous work in the S&L

area. I think the Japanese have found out by not addressing the

issue directly it has caused a tremendous drag on their economy.

So those are the problems that you face as the Comptroller General working I think with the leadership of the Congress, but I

think it can be worked out. I really do.

Mrs. BIGGERT. Then maybe you could just comment on mandates.

How does that differ from the other work that is done? Or what

do you do with mandates?

Mr. BOWSHER. Mandates are a little tougher because that gets

into legislation. If I understand the Comptroller General here and

his deputy, Mr. Dodaro, they are going to work on that to make

sure that doesn’t get too large and doesn’t get too repetitive. We

did review the mandates every so many years and say are there

things that were needed at one time and maybe we can go back to

the committee and not have to provide that on a contention basis.

So I think mandates to me is more of a concern than the other

issue.

Mrs. BIGGERT. Thank you. Thank you, Mr. Chairman.

Mr. HORN. We are now delighted to have the ranking member,

who has been with this committee over the years; and we are delighted that she can be here today, the gentlewoman from New

York, Mrs. Maloney.

Mrs. MALONEY. I made a special point of being here when I

heard that the Honorable Elmer Staats, who came here during the

New Deal and watched us progress—it is a great honor to welcome

you and Mr. Bowsher, with whom I worked when I first came to

Congress, and now Mr. Walker and Mr. Ink.

Page 14 shows the number of your staff falling. I am all for reinventing government and being more productive, but you have to

have enough people to get the job done. The last hearing I had in

this committee, we had one from the McIntosh subcommittee which

would have GAO doing a cost-benefit analysis on the private sector

for any changes in bills or regulations. That is going to cause your

workload to go much higher, and so my question really is a budgetary one. I would like to know how much is in your budget—and

it hasn’t gone through the appropriations process yet. What is the

funding in the Senate? What is the funding in the House? Why is

your personnel dropping?

With the new demands—I know that I put a lot of them on you,

Mr. Dan Miller and myself from the Census Committee, we have

been asking for all kinds of things. Do you have enough people to

get the job done? I would like to understand your staffing.

I don’t know if you have had a chance to review the McIntosh

bill, and it appears to me that is going to require even a greater

professional attention from your group.

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I just want to use my 1 second here to congratulate the General

Accounting Office. I think you do a fantastic job. You provide a

service to the American people and to both sides of the aisle, an

impartial, professional analysis so our decisionmaking is better. I

think you are great.

But I would like you to comment on your own paperwork here

and let us know where you are in the budget process. Why is your

personnel falling?

Mr. WALKER. Mrs. Maloney, thank you for your kind comments.

The Senate bill has us for a 2 percent increase over our current

year appropriation level.

Mrs. MALONEY. How much is that?

Mr. WALKER. It is about $380 million.

The House bill has us for a 2.5 percent decrease over this year’s

budget. We are hopeful, with all due respect to the House, that the

Senate number will prevail. We think that is critical in order for

us——

Mrs. MALONEY. What is the dollar amount in the House?

Mr. WALKER. It is about 4.5 percent. It is about $15 million less,

something like that.

Mrs. MALONEY. OK.

Mr. WALKER. I will be happy to provide those numbers for you.

I think it may go to conference as quickly as this week.

With regard to staffing, the primary reason we have had a significant reduction in staffing is because of budget cuts over the

1990’s. Eighty-four percent of our budget is for people. We don’t

have a whole lot of flexibility for that other 16 percent. There are

certain things that you just have to pay for. It is critically important that we obtain budget stability.

With regard to the McIntosh proposal, clearly we are capable of

doing that work, but one of the issues that we have raised is resources.

Mrs. MALONEY. Do you need more resources to do that work?

Mr. WALKER. Yes. The comparable bill in the Senate provides for

supplemental resources for us to be able to do that work. We think

that is important.

Mrs. MALONEY. How much more do you need to do that work?

Mr. WALKER. The Senate has provided $5 million for the amount

of work that they are requesting that we do. The scope and timing

are different, and obviously they have provided for a resource allocation, so resource only represents one difference regarding the

specific numbers, the House mark is $379 million and the Senate

mark is $387 million, for a difference of $16 million.

Mrs. MALONEY. Now, is that sufficient to do your work? Is that

what you requested? Is that what was in the President’s budget?

Mr. WALKER. No, that is not what we requested. We are in the

legislative branch, and we requested $399 point something million.

That is what we felt we needed. The Senate bill, obviously, is below

that; and it is vastly superior to the House proposal. The House

proposal notes if we impose another hiring freeze we could avoid

another reduction in force. We had a virtual 5-year freeze in the

1990’s. That served to mortgage the future. We cannot return to

those ways.

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Mrs. MALONEY. How is your turnover? Do you keep a professional staff? How is your staffing in terms of—— Mr. WALKER. It splits by level of experience. For individuals with

3 or more years of experience, we have very low turnover. It is

about 4 percent a year. That includes retirement. But we have a

big retirement bulge coming up. Younger, it is 15 to 18 percent;

and obviously there are reasons for that. That is one of the reasons

that we are trying to focus on human capital.

Mrs. MALONEY. Are you backlogged in your requests for analysis?

Mr. WALKER. Constantly—in some areas more than others.

Health care, we are way oversubscribed in health care. Other

areas, we don’t have as large a backlog, and we are constantly trying to set priorities.

Mr. HORN. We now call on Mr. Ose, the gentleman from California, for 5 minutes.

Mr. OSE. Thank you, Mr. Chairman.

Mr. Walker, I am confused about something. You testified in

your verbal testimony about access or problems accessing State and

local records, and I went through your testimony trying to find the

written reference, and I couldn’t. I am trying to make sure that I

understand your point there. Could you elaborate on that, please?

Mr. WALKER. Basically more and more of the work that we are

being asked to do involves multiple government agencies, multiple

levels of government and, as Mr. Staats mentioned, sometimes

multiple national governments.

In addition, more and more work is involving both the public and

private sector. For example, in the health care area, much of health

care is provided by private sector parties, whereas HCFA is a financing mechanism. They don’t provide the benefits.

My only point is that—— Mr. OSE. They don’t provide the service?

Mr. WALKER. That is correct. They have a regulatory——

Mr. OSE. They pay for the benefits?

Mr. WALKER. Right, but they don’t provide the service, etc.

My point is, if you look at our strategic plan going forward, we

are going to be asked to do more things, not only with regard to

existing government programs but proposed government programs,

for example, prescription drugs for Medicare, that are going to involve us having to obtain access to records that we currently don’t

have the statutory authority to obtain. That is something that we

need to work on. We don’t have express statutory authority. Therefore, we have to rely upon cooperation.

On page 38 of the testimony—and I agree, I didn’t elaborate significantly in the testimony—but the second from the last full paragraph provides just a few—a couple of examples that might be

helpful.

Mr. OSE. I knew Mr. Dodaro would find it.

Mr. WALKER. That is why I did an executive summary.

Mr. OSE. Is it your concern that, in terms of GAO performing its

statutory duty, when the delivery of the benefit is, if you will, block

granted out, or whatever the appropriate phrase is, when that burden is placed on the local or State agency, the only way for GAO

to make sure that those agencies at the State or local level are

complying with Federal intent is to have access to the records?

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Mr. WALKER. Well, I think in certain regards we will try to partner with the State auditors who clearly do have access, and we are

trying to do that more and more, but there could be circumstances

when we are not able to do that in that regard. I think we need

to talk in more detail about what the nature and extent of our

challenges are. But I see this as an emerging issue. I don’t think

it is critical right now but in the years ahead could become so.

Mr. OSE. I don’t like chasing my tail, so my next question is, are

you suggesting that we need to consider legislation now in anticipation of this challenge?

Mr. WALKER. I am suggesting that what we ought to do is have

the staff for the committee, for the subcommittee, get together with

our staff to explore this issue further to make sure that there is

an understanding of the nature and extent and timing of the challenge, and while we may not need it today we may well need it in

the not-too-distant future.

Mr. OSE. And you are saying current statutory authority does not

give you the ability to obtain this information?

Mr. WALKER. That’s correct. We can request it, and in many

cases we are successful, but not in all.

Another example is, to the extent that you are talking about prescription drugs and to the extent that we are trying to analyze the

cost of prescription drugs, the cost of prescription drugs through

VA versus DOD versus Medicaid versus the Federal health plan

versus other nonFederal payers, and trying to understand whether

or not the Federal Government is getting the best price which it

is supposed to get under certain contracts, it is tough to do that

if you don’t have access to records that are nonFederal payers.

Mr. OSE. Does GAO have the ability to subpoena such information?

Mr. WALKER. No, we do not. We do not at the present point in

time.

Mr. OSE. Thank you, Mr. Chairman.

Mr. HORN. That is a very good question that you just asked, and

that is one I was going to use. To what sense do you feel, now that

you are in there a couple of years, that GAO sometimes does not

really want to press the executive agency, feeling that they might

not be given information, than other times? What can we do about

that?

Mr. WALKER. One of the things that we are doing at GAO is we

are looking at records access under current law. We do have certain statutory authorities right now. For example, I can issue as

Comptroller General a demand letter which is very similar to a

subpoena in its effect.

I have found over the years that many times we have had difficulties obtaining records from existing executive branch agencies

where we do have the authority to obtain it and there is resistance

to try to push them. We have implemented a process where that

gets surfaced a lot quicker, and we make conscious decisions

whether we are going to escalate it to higher levels within the respective department and agency and under what circumstances we

would issue a demand letter.

I have already had personal conversations with either the secretary or deputy secretary of three Cabinet departments that were

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reluctant to provide us information and provided it within a short

timeframe after I got on the phone with them.

I don’t like issuing demand letters. I think it should be a last resort. But we need to have mechanisms in place where we can get

it within a reasonable period of time so we can meet our client’s

needs.

Mr. HORN. Looking at the Inspectors General and their role, do

you feel they get the information when they do internal studies?

Some of them are very critical, and I just wondered, do you feel

that you are both being treated the same way or does the inspector

general have an edge on GAO?

Mr. WALKER. Candidly, Mr. Chairman, I am not in a great position to answer that. I would need to outreach more on that specific

area.

I will tell you that we are taking a number of steps to increase

our coordination and cooperation with the inspector general community and the State and local audit community. Because, to me,

where we can have the most value is cross governmental and intergovernmental areas as well as longer-range issues, and that requires more coordination, and so I will followup on that.

Mr. INK. Mr. Chairman, I think you will find that this varies considerably from agency to agency, in part because of different types

of leadership. Some agencies have a better understanding of the

role and the importance of providing this kind of information to

GAO and inspectors general. Also, there is considerable difference

among the inspectors general and how they use that information.

Some of them use it more responsibly than others. I think the General Accounting Office is a much more stable organization, and resulting in more consistency in the way in which the agencies deal

with the GAO.

Mr. WALKER. Mr. Chairman, I would agree. It is clear, based on

my experience to date, that there is a significant difference between different offices of Inspector General and how they approach

their work and whether or not they are likely to have problems.

I would like to add for the record, as you know, we have recently

published some congressional protocols which are now in the trial

stage where we set our priorities and note what our obligations are

with regard to our client. We plan to do the same thing with regard

to departments and agencies, and records access will be part of

that as to what our policies will be with regard to that.

Mr. STAATS. I would like to comment on the access to records,

Mr. Chairman.

It is true that agencies, unless they cooperate, can almost turn

off your water. I think they have to have a feeling that you are

dealing with them fairly and openly and giving them access to your

draft reports and have an opportunity to present their own views

alongside the GAO. If you do that, I don’t think that you are going

to have problems. But, legally, GAO can still take agencies into

court to get access to records if they need them.

Mr. HORN. I am glad to hear that, because I think that is what

they ought to do.

The gentleman from California, do you have any more questions?

Mr. OSE. Thank you, Mr. Chairman. I do have one on the issue.

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As I move from being a young man to a confused middle-aged

man, I have often wondered where is my path going to take me as

I move into more senior years. If I look beyond my longer term in

office, I am curious what the panel’s perspective might be what

GAO might evolve into?

Let me just construct a particular situation or scenario. With the

advancement in information technology, there are people in my office who may very well have access to records they have never had

access to before, and they may come to my office with training of

a nature that might otherwise have previously qualified them to

only work at GAO, in other words, a very refined set of qualifications. Twenty-five or 50 years from now, I would appreciate your

perspective on what your view on what GAO might be—their role

or status or construction, what have you?

Mr. WALKER. Let me take a shot, and I am sure my colleagues

would like to add to that.

I think our role should be the same, but how we do our role will

evolve. We are about maximizing government performance and accountability. I think we will do work on two sides, what government does and how government does business. I think technology

clearly will play a major role.

But let me articulate why I think GAO is going to be more important in the years ahead. Right now, there is an absolute information overload. You can obtain information that would absolutely

drown you. There are unlimited assertions on the Internet, and

that is exactly what they are. They are assertions—unvalidated assertions. There is an infinite amount of information on the Internet.

On the other hand, what GAO does in a vast array of areas is

to convert assertions and information into facts and knowledge

such that Congress can make informed judgments about what government should do, what is working, what isn’t and how it should

be changed and how government should do business.

I believe today we are a multidisciplinary professional services

organization. We are a wholly owned subsidiary of the Congress.

We will have to do business differently, but I think we are going

to be more important, and that is because more and more issues

we have to address involve multiple skills and multiple governmental entities, multiple perspectives, and we can pull it all together.

Mr. OSE. Mr. Bowsher.

Mr. BOWSHER. I also believe that one of the great problems in

government and has been for a number of years is the budget process. The budget systems are very antiquated and people hold back

information thinking that it gives them power. In other words, I

won’t show you my numbers until later on and things like that.

And that works all of the way.

I served as Assistant Secretary of the Navy for 4 years, I was the

Chief Financial Officer of the Navy, and one of the problems was

getting the information up through the system. I remember working with John Chafee and John Warner. They were the Secretary

and Under Secretary. They couldn’t believe how that information

would get buried and then all of a sudden popped up, and the same

in relation to the Congress.

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I have always felt in this modern day and age of computers and

communications that one of the things that government has to do

is to modernize the budget and accounting system to the point that

everybody can have the information on their PC and therefore get

away from all of the waste of time that there is meetings, debating

the numbers and also the waste of time for the auditors to sort it

all out. So, in addition to what Dave is saying, which I think is

right on the mark for GAO, I think one of the great things for government in total is this modernization of the Government and Accounting Act so the Federal Government looks like a modern corporation. They just don’t spend that kind of time massaging all of

the numbers that the government does.

Mr. WALKER. One quick point on that. One of the biggest challenges we face in the Nation is the fact that today—and CBO just

came out at 9 this morning with a revised budget forecast which

shows higher estimated surpluses for a longer period of time. But

our budget simulations show that, because of known demographic

trends, the fact that we have gone from 16 workers paying into Social Security to 1 in 1950 to 3.3 to 1 today, and we are going down

to 2 to 1 by 2025, we are going to have renewed budget deficits as

sure as the sun rises in the morning, especially if we end up spending the on-budget surplus, and it looks like that is going to happen

sooner or later, a variety of different ways.

We need to look at our budgeting system so people can make

more informed judgments about not just whether or not we can afford things today but can we afford it tomorrow because we have

mortgaged the future. If we are not careful, we will reload the debt.

Mr. STAATS. One thing which would be helpful is getting the

committees to more clearly articulate what they want in legislation. We would have to go back in committee reports and see what

Congress intended to do. Sometimes the House had one idea and

the Senate had a different idea. It is hard to evaluate a program

unless you know what Congress intended.

Mr. OSE. Mr. Staats, the Senate is wrong in those situations.

Mr. STAATS. I remember in one case the committee said, if we

had any idea what we were doing, we wouldn’t have done it.

Mr. OSE. Mr. Ink.

Mr. INK. Being a non-GAO person, I won’t try to predict where

it will be 50 years from now.

Another handicap which has not been mentioned, however. GAO

would be well served if it had a much stronger partner in OMB

possessing more effective managerial component. A great deal of information can be shared back and forth, which is available now on

only a very limited basis because the OMB has such a very limited

management capacity to address broad problems.

When Mr. Staats was Comptroller General, we in Bureau of the

Budger had conversations with him going on all the time. We had

meetings going on all of the time. Remember, Elmer, we met with

Senator Proxmire; and that is what led to the productivity program

getting going. The real initiative came from Mr. Staats, the Comptroller General. I, representing the President, took the leadership

in moving forward with implementing it. That degree of cooperation is very difficult today. The initiative of Mr. Horn for an office

of management would be very helpful in that respect.

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Mr. OSE. Thank you. Thank you, Mr. Chairman.

Mr. HORN. We thank you.

Let me thank the staff that have put this fine hearing together.

On my left, your right, J. Russell George, the staff director and

chief counsel of the subcommittee. In back of him is Heather Bailey, professional staff member; Bonnie Heald, director of communications; Bryan Sisk, our clerk; Elizabeth Seong, staff assistant;

Will Ackerly, a faithful intern; and Davidson Hulfish, a faithful intern. This is the summer, when we get free labor and bright people.

For minority staff, we have Trey Henderson, counsel, and Jean

Gosa, minority clerk.

And Doreen Dotzler, the court reporter, who is getting an education in government sitting with this committee.

We thank you all, and we thank you all for coming. We are adjourned.

[Whereupon, at 12:03 p.m., the subcommittee was adjourned.]

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