Gene L. Dodaro

Acting Comptroller General of the United States

Preparing the Accountability Profession for 21st Century 

Challenges

The Institute of Internal Auditors2008 International ConferenceSan Francisco, CA July 8, 2008

GAO-08-1017CG
GAO-08-1017CG 

Presentation Outlin

• Many dynamics shaping our e

• Gauging current and eme

challenges

• Strengthening the accountabil

profession to:

• Enhance stewardship and • Help transform organizatio
GAO-08-1017CG 

Gauging Current and Em

Challenges

• Escalating fiscal pressures• Increasing critical infrastructur

protection

• Strengthening homeland secu

capabilities

• Growing expectations for the 

accountability profession
GAO-08-1017CG 

Composition of Federal S

21%

10%

14%

27% 28%

2%

7%

14%

32%

45%

1967 1987 

Defense Social Security

Net interest

All other spending

Source: GAO analysis of data from the Office of Management and Budget.
GAO-08-1017CG 

Debt Held by the Public as 

of GDP (1797-2007

0

20406080

100120

1797 1820 1840 1860 1880 1900 1920 1940 1960 

Percent of GNP/GDP

Source: GAO analysis of data from the Department of Commerce, Office of Management and BudgetNote: Data until 1929 are shown as a percent of gross national product (GNP); data from 1930 to pres
GAO-08-1017CG 

State and Local Fiscal Challen

the Nation’s Fiscal Diffic

-20-15-10

-5

05

2000 2005 2010 2015 2020 2025 2030 2035 

Fiscal year

Percent of GDP

Combined 

Surplus/Defici

Source: GAO’s April 2008 analysis.aUnder GAO’s Alternative simulation.
GAO-08-1017CG 

Potential Fiscal Outco

Under Alternative Simulation Revenues and C

Spending as a Share of GDP

0

1020304050

2007 2018 2030 

Fiscal year

Percent of GDP

Net interest Social Security Medicare & Medicaid 

Revenue

Source: GAO’s January 2008 analysis.Note: Discretionary spending grows with GDP after 2008. AMT exemption amount is retained at the 2007 leveare extended. After 2018, revenue as a share of GDP returns to its historical level of 18.3 percent of GDP plui.e. taxes on withdrawals from retirement accounts. Medicare spending is based on the Trustees April 2007 pr

Medicare and Medicaid Services alternative assumption that physician payments are not reduced as specified 
GAO-08-1017CG 

Public and Privat

Health Care Spend

Exceeds Economic G

0

100200300400500600700800

19601962196419661968197019721974197619781980198219841986198819901992199419961

Real health care spending per capita Real GD

Source: GAO analysis of data from the Centers for Medicare & Medicaid ServicesBureau of Economic Analysis.Note: The most current data available on health care spending per capita are for 2

%%%%%%%%%
GAO-08-1017CG 

Earnings Keep up with In

But not with Insurance Pr

0

20406080

100120

2000 2001 2002 2003 2004 200

Employer-sponsored health insurance premiums

Workers' earnings

Overall inflation

Cumulative percentage

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Bureau of LaNote: Data on premium increases reflect the employer’s and employee’s cost of hea

a family of four.
GAO-08-1017CG 

Aged Population as a S

of Total U.S. Populat

05

10152025

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 206

Calendar year

Percent of total population

Source: GAO analysis of data from the Office of the Chief Actuary, Social Security AdNote: Projections based on the intermediate assumptions of the 2008 Trustees’ Rep

Population 
GAO-08-1017CG 

Examples of Critic

Infrastructure Syste

• Power distribution• Water supply• Telecommunications• National defense• Emergency servicesAll rely on computerized informatelectronic data
GAO-08-1017CG 

Federal Information Se

Continues to be We

06

121824

AccessControl

Contingency

Management

Segregation of

Duties

Service

Continu

Source: GAO analysis of agency and IG reports for FY2007.

Number of agencies
GAO-08-1017CG 

Reported Security Inci

Are on the Rise

26%

30%

Denial of Se

Malicious C

Scans/Prob

Unauthorize

Improper Us

Investigatio

Source: GAO an

0

2000400060008000

100001200014000

2005 2006 2007

Number of incidents reported

Fiscal years

Source: GAO analysis of US-CERT data.
GAO-08-1017CG 

Emergency Preparedne

Homeland Defens

• Role of the “new” FEMA• NORTHCOM collaboration• National Guard and Reserve re• Public health systems and pand

planning
GAO-08-1017CG 

The New FEMA

• FEMA given the lead to prepare for 

to major disasters, including catastdisasters and terrorist incidents

• FEMA, rather than the Red Cross, 

the lead for mass care and shelter 

• FEMA to build robust partnerships 

local governments, and nonprofit/porganizations
GAO-08-1017CG 

The New FEMA 

FEMA has enhanced its responsibilities for cactivities of voluntary organizations: 

• established a national council and 10 re

councils

• created regional planning positions to fa

coordinated federal, state, and local empreparedness plans

However, GAO has found that FEMA needespecialized staff to meet this responsibility
GAO-08-1017CG 

NORTHCOM’s Collabo

• NORTHCOM officials need more in

with states in developing homeland civil support plans

• NORTHCOM officials need to be m

with state emergency response pla

• Existing agreement between NORT

National Guard Bureau needs to be defined for roles and responsibilitie
GAO-08-1017CG 

Public Health Syste

and Pandemic Plann

• An integrated GAO effort intended to h

prepare for a pandemic in ways that arover the long-term

• Lessons learned from prior emergencie

Hurricanes Andrew and Katrina, Y2K, S

• Collaboration and partnership with inte

state and local auditors that enhances areas such as key intergovernmental isrelationships
GAO-08-1017CG 

Growing Expectations 

Accountability Profes

To face current and emerging challenaccountability profession must:

• Identify problem spots before cri• Recognize problems often need 

organizations to work together

• Provide more detailed recommen• Add value by providing timely sp• Cope with constrained resources
GAO-08-1017CG 

Ways to Strengthen 

Accountability Profes

• Focusing on strategic planning• Modernizing professional standard• Leading the way on fiscal steward• Helping identify needed transform• Building audit capacity
GAO-08-1017CG 

The Importance of Collab

Strengthen accountability and strplanning on an international and basis:

• International Organization of Sup

Institutions (INTOSAI) 

• National Intergovernmental Audi

(NIAF)
GAO-08-1017CG 

INTOSAI Strategic Go

First ever strategic plan adopted in • Promoting accountability and pro

standards

• Building institutional capacity• Sharing knowledge and collabor• Organizing and governing as a m

international organization
GAO-08-1017CG 

INTOSAI:

Promoting Professional S

PROFESSIONAL STANDARDS COMMITTestablish an effective framework for professithat correspond to the needs of member SAFINANCIAL AUDIT GUIDELINES SUBCOMdevelops high quality guidelines that are glofor the audit of financial statements in the puACCOUNTING AND REPORTING SUBCOstudies issues concerning public sector accofinancial reportingINTERNAL CONTROL STANDARDS SUBCprovides standards and guidance on internastrengthen financial management and accouPublic Sector
GAO-08-1017CG 

INTOSAI: Building Cap

• Building capabilities and professional c

SAIs through:

• Training• Technical assistance • Other development activities

• Efforts implemented by a main steering 

and 3 sub-committees (includes IDI anbilateral cooperative projects)

• Potential for a multi-lateral donor trust 
GAO-08-1017CG 

INTOSAI and IIA Collabo

• Memorandum of Understanding 

• Important for SAIs to be able to rely on 

internal auditors

• IIA representation on the INTOSAI com• INTOSAI representation on IIA’s Stand

other IIA professional committees

• The IIA is an Associate Member of INTOSA

• Participate in INTOSAI events and prog

benefit from INTOSAI’s capabilities
GAO-08-1017CG 

NIAF Strategic Goa

• Foster networking, dialogue, an

collaboration on current and emissues

• Enhance the capability, credibi

capacity, effectiveness, and professionalism of audit organi

• Improve the Forum’s outreach, 

management, and impact
GAO-08-1017CG 

Illustrative Example: Partne

the DWG on Pandemic P

GAO and other members of the DWG arenhance the tools of state and local audievaluate pandemic planning:

• sharing information • focusing on a set of common audit qu• reminding auditors that they have an 

well as a responsibility, to make sure communities are prepared
GAO-08-1017CG 

GAO’s Goals for Establ

Government Auditing Sta

• Develop high quality Government Auditing 

are well understood, highly regarded, widel

• Provide leadership in modernizing and tran

accountability profession

• Encourage the development of consistent, 

standards 

• Provide a foundation for an accountability p

is effective, ethical, and prepared for the chthe 21st century
GAO-08-1017CG 

Yellow Book Ethical Prin

(Chapter 2)

Five principles:

• Public interest• Integrity• Objectivity• Proper use of governmen

information, resources, an

• Professional behavior
GAO-08-1017CG 

Ethics

Yellow Book

• Ethical Principles

– Public interest– Integrity– Objectivity– Proper use of government 

information, resources and position

– Professional Behavior

IIA• Code o

Conduc

– Integ– Obje– Conf– Com

• Rules o

– Norm

inter

*auditors may also be subject to professional ethics of other organizations or governments
GAO-08-1017CG 

GAO and IIA Working To

• August 2005 – GAO adds a Certified Internal Aud

Book staff

• October 2007 – GAP News: “Yellow Book and Re

Together for Strong Government Audits.”

• January 2008 – GAO/IIA Webcast: “Integrating IIA 

Auditing Standards.”

• February 2008 – GAO presentation to the DC cha

“Government Auditing Standards and IIA StandardAudits.”

• GAO and IIA actively comment on the most recen

revisions of the other organization’s auditing stand
GAO-08-1017CG 

GAO’s Other Collabora

Auditing Standards:• Creating the U.S Auditing Stan

Coordinating Forum (i.e., GAOASB)

• Providing technical and policy 

PCAOB, AICPA, IAASB, INTOIntergovernmental Audit Forum
GAO-08-1017CG 

Enhancing Fiscal Stewa

and Education

Special GAO reports focus on:

• The urgency and importance of fis

stewardship

• Understanding basic budgeting co• Deciphering the consolidated finan

statements

http://www.gao.gov/financial/fy2007finan
GAO-08-1017CG 

Fiscal Outlook

• GAO maintains and updates a long

simulation of federal budget trends 

• The model’s results dramatically ill

need for action sooner rather than address a structural long-term fisca

http://www.gao.gov/special.pubs/longterm
GAO-08-1017CG 

High-Risk Program Hi

• Started in 1990 with focus on fra

and abuse 

• Evolved to include broad-based 

transformations 

• Provided impetus for governmen

reform

• Promoted sustained congressio• Influenced Presidents’ Managem
GAO-08-1017CG 

Broad-based Transform

• Providing strategic human capital m• Protecting the nation’s critical infrast• Financing the nation’s transportation • Ensuring the protection of critical tec• Transforming federal oversight of fo• Managing federal real property
GAO-08-1017CG 

Financing the Natio

Transportation Syst

• An efficient transportation infrastruct

our economy and quality of life 

• Congestion is increasing while funds 

constrained 

• Need to reassess the federal role, re

streams and funding allocations
GAO-08-1017CG 

Ensuring the Effect

Protection of Critical Tech

• The U.S. spends billions annually on wea

advanced technologies

• Many items are sold overseas and techno

targets for theft, espionage, reverse enginillegal export

• Existing programs to protect critical techn

established decades ago, are ill-equipped competing U.S. interests

• Need for a strategic re-examination of exi

to identify needed changes and ensure thof U.S. interests
GAO-08-1017CG 

Transforming Federal Ov

of Food Safety

• Overall risks to the economy a

health and safety

• Current oversight is fragmente

involving 15 agencies, at least 

• Need for a fundamental re-exa

the system
GAO-08-1017CG 

Examples of GAO/CG Forums 

and Emerging Challeng

• Trans-national terrorism• Homeland security risk manage• Global competitiveness and hig

education

• Tax gap
GAO-08-1017CG 

Looking Inward: Build

GAO’s Institutional Cap

GAO, like other audit entities, must stand retain employees with the proper order to deal effectively with current achallenges:

• Implementing core leadership tra• Growing faculty from within (“adj• Contracting with the National Aca

Sciences (NAS), when needed

• Hiring a Chief Scientist• Designing a state of the art comp
GAO-08-1017CG 

Key Elements: 

• Focus on strategic planning• Modernize professional standards• Lead the way on fiscal stewardshi• Help identify needed transformatio• Build audit capacity
Gene L. Dodaro

Acting Comptroller General of the United States

Preparing the Accountability Profession for 21st Century 

Challenges

The Institute of Internal Auditors2008 International ConferenceSan Francisco, CA July 8, 2008

GAO-08-1017CG
GAO-08-1017CG 

On the Web

Web site: www.gao.gov/cghome.htm

Contact

Chuck Young, Managing Director, Public AffairsYoungC1@gao.gov (202) 512-4800 

U.S. Government Accountability Office441 G Street NW, Room 7149Washington, D.C. 20548

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