GAO

United States General Accounting Office

A

Testimony

Before the Senate Committee on Governmental Affairs

For Release on Delivery 

Expected at 9:30 a.m. EDT 

Tuesday, September 16, 2003

GAO

Transformation, 

Challenges, and 

Opportunities

Statement of David M. Walker

Comptroller General of the United States

GAO-03-1167T
As an arm of the legislative branch, GAO exists to support the Congress in 

meeting its constitutional responsibilities to improve the performance and 

ensure the accountability of the federal government for the American 

people. Established in 1921 by the Budget and Accounting Act to follow the 

federal dollar and ensure that it is spent in an economical, efficient, and 

effective manner, GAO has evolved over its 82-year history to meet the 

changing needs of the Congress and the nation. Faced with a budgetary 

reduction in the mid-1990s that had to be implemented over a 2-year period, 

GAO undertook measures that, while necessary, also increased the risk that 

the agency would not be positioned well to serve the Congress in the future. 

To effectively position itself for the future, GAO has been undergoing a 

major transformation effort over the past 4 years that even in the best of 

organizations takes 7 or more years to implement. Based on its strategic 

plan developed in consultation with the Congress, GAO’s effort is focused on 

three specific areas: achieving results, serving the client, and investing in 

people. GAO has realigned the agency to eliminate a management layer, 

consolidate 35 issue areas into 13 teams, and reduce its field offices from 16 

to 11. Today, GAO is a significantly smaller organization—40 percent 

smaller than in 1992—with slightly over 3,250 staff on board. GAO has 

worked with its appropriations committees to obtain targeted funding for 

such particularly acute risk areas as human capital and information 

technology. GAO also launched a range of internal and external initiatives 

that have helped it become more strategic, results-oriented, partnerial, 

integrated, flexible, responsive, employee-oriented, and externally focused. 

Since 1998, GAO’s work has produced a steady increase in financial benefits 

and nonfinancial benefits including many improvements in government 

operations. For example, in fiscal year 2002, GAO’s work helped achieve 

$37.7 billion in financial benefits—a $88 return for every dollar invested in 

GAO. In addition, GAO’s work informed the debate and the resulting 

legislation relating to such areas as our nation’s national security, homeland 

security, economic security, and the financial security of Americans. 

GAO faces a number of challenges. Issues that GAO is either watching 

closely and/or believes require congressional attention include supply and 

demand imbalances, unfunded mandates, access to records, the Deputy 

Comptroller General selection process, performance and accountability 

community coordination, and additional bid protest volume. S. 1522, the 

GAO Human Capital Reform Act of 2003, which mirrors H.R. 2751, which has 

been marked-up and reported to the full House Government Reform 

Committee, is urgently needed to help address GAO’s challenges. Some 

specific initiatives that the Comptroller General plans to focus on for the 

future include helping the Congress address challenges relating to the longterm fiscal outlook, transforming government and how government does 

business, and making GAO the federal employer of choice and the gold 

standard for a world class professional services organization. 

The Committee sought GAO’s 

views on GAO’s accomplishments, 

challenges, and opportunities for 

its oversight hearing. The 

Committee also sought GAO’s 

views on its latest human capital 

proposal, which has been 

introduced in the Senate as S. 1522.

GAO recommends that the 

Committee act on S. 1522 promptly 

and that the Congress enact the 

GAO Human Capital Reform Act of 

2003 before it adjourns this year. 

GAO believes that its latest human 

capital proposal is both well 

reasoned and reasonable. There 

are compelling reasons why GAO 

ought to be given this additional 

human capital authority. These 

include the fact that GAO already 

has a hybrid pay system 

established by the authority that 

the Congress granted it over two 

decades ago, the proposal is 

modest if viewed in light of 

authorities granted and requested 

by other agencies, and GAO already 

has a number of key systems and 

safeguards in place and has plans 

to build in additional safeguards. 

GAO has conducted extensive 

external and internal outreach 

efforts on this proposal. GAO 

respectfully requests the 

Committee’s support and prompt 

passage by the Congress. 

www.gao.gov/cgi-bin/getrpt?GAO-03-1167T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gene Dodaro 

at (202) 512-5600 or dodarog@gao.gov. 

Highlights of GAO-03-1167T, a testimony 

before the Senate Committee on 

Governmental Affairs 

September 16, 2003

GAO 

Transformation, Challenges, and 

Opportunities 
Page 1 GAO-03-1167T 

Madam Chair and Members of the Committee:

I am pleased to appear before you today—almost 5 years after becoming 

the seventh Comptroller General of the United States—to discuss what 

GAO has accomplished during my tenure thus far, the challenges we face at 

GAO, including why passage of S. 1522, the GAO Human Capital Reform 

Act, is an integral part of helping GAO prepare for those challenges, and 

what we are contemplating for the future. Before I begin, I would like to 

commend you for holding this oversight hearing, the first oversight hearing 

this Committee has held on GAO since 1995. In addition, Madam Chair, I 

would like to thank both you and Sen. Voinovich for sponsoring S. 1522, the 

GAO Human Capital Reform Act, and for introducing the bill before the 

August recess. 

When I became Comptroller General in November 1998, I found an 

organization, with a long-standing reputation for doing good work and a 

talented workforce, that was doing many things right. However, the agency 

was in need of revitalization because it had not had a confirmed agency 

head for more than 2 years and had undergone many years of downsizing 

and severe budgetary reductions. I also found an organization that, in my 

opinion, was still too hierarchical, process-oriented, “siloed,” internally 

focused, and somewhat risk adverse. My consultations with congressional 

members and staff, external entities in both the public and private sectors, 

and GAO staff led me to the belief that GAO must do things differently as 

we move forward in order to continue to maximize our value to the 

Congress and the country, especially in view of the strong likelihood of 

constrained resources and client demands. Specifically, we needed to take 

steps to transform GAO to make it more results-oriented, more client 

focused, more partnerial, more externally aware, more transparent, more 

strategic, more employee oriented, and more constructive in dealing with 

those who are the subject of our work. Over the past 5 years, we believe 

that we have accomplished much. Nevertheless, we recognize that we still 

have much to do and welcome and value the comments of every Member of 

this Committee in helping us become and stay a model federal agency that 

supports the Congress’ important responsibilities under the U. S. 

Constitution. 

GAO’s Evolving Role Established in 1921 by the Budget and Accounting Act to follow the federal 

dollar and ensure that it is spent in an economical, efficient, and effective 

manner, GAO has evolved over its 82-year history to meet the changing 

needs of the Congress and the nation. Today’s GAO is profoundly different 
Page 2 GAO-03-1167T 

in organization than the one established in 1921. For example, over the 

years, GAO has changed from an entity that once

• operated as an independent entity (the law did not state that GAO was 

to be part of the legislative branch) to one that is recognized as an 

independent agency within the legislative branch whose primary client 

is the institution of the Congress; 

• audited the government’s vouchers to one that evaluates the efficiency 

and effectiveness of a wide range of federal policies and programs; 

• performed work mostly of a self-initiated basis to one where 89 percent 

of its work in fiscal year 2002 was either mandated or requested by the 

Congress; 

• conducted work primarily in the area of oversight to one that now 

performs work in the areas of oversight, insight, foresight, and 

legal/adjudicatory activities.

• employed principally voucher examiners to an organization that 

employs a highly educated, skilled, and diverse professional staff with 

degrees in a variety of academic disciplines, such as accounting, law, 

engineering, public administration, business administration, computer 

science, economics, medicine, and social and physical sciences. 

Although today’s GAO is different from that of 1921, it has remained faithful 

throughout its history to its original mandate of assuring the government’s 

accountability to the American people. In addition, GAO has historically 

defended its ability to conduct and report its work in an independent, 

objective, professional, and nonpartisan manner in order to maintain the 

credibility that an “honest broker” must have in order to have its 

information, analyses, and judgments trusted by lawmakers, policymakers, 

and the American people. 

GAO has benefited from the past leadership of several of my predecessors. 

In particular, I would like to commend my most recent predecessors, Elmer 

B. Staats, who served from 1966 to1981 and, Charles A. Bowsher, who 

served from 1981 to 1996, both of whom accomplished a great deal during 

their 15 year tenures. Mr. Staats strengthened GAO’s emphasis on program 

evaluation and policy analysis so that GAO would be better equipped to 

review the expanded social programs of the Great Society. He also 

promoted progress in federal financial and program accountability both 
Page 3 GAO-03-1167T 

domestically and internationally. In addition, Mr. Staats was responsible 

for the United States’ joining the International Organization of Supreme 

Audit Institutions (INTOSAI), an organization composed of national audit 

offices of 184 nations who share knowledge and expertise on an ongoing 

basis. Mr. Bowsher championed federal financial management reform, in 

general, and the Chief Financial Officers (CFO) Act, in particular. He also 

initiated GAO’s high-risk series. In the human capital arena, it was Mr. 

Staats who in 1980 successfully gained GAO’s legislative authority to 

establish a broad-banding and pay for performance system that Mr. 

Bowsher subsequently was able to implement in 1989. It is because of 

their leadership efforts that GAO had certain initial human capital tools and 

flexibilities for over two decades that many executive branch agencies are 

either just requesting or recently received and was able to exercise them.

Today, GAO is an agency uniquely poised to serve the Congress with the 

information it needs to address the full range of important issues and 

challenges our nation faces in a complex, rapidly changing, and 

increasingly interdependent world. We examine a broad range of federal 

activities and programs, publish thousands of reports and other documents 

annually, and provide a number of other services to the Congress. We also 

look at national and international trends and challenges to anticipate their 

implications for the Congress and our country. By making 

recommendations to improve the practices and operations of government 

agencies, we contribute not only to the increased effectiveness of federal 

spending, but also to the enhancement of the taxpayers’ trust and 

confidence in their federal government.

For us, achieving our goals and objectives rests on providing professional, 

objective, fact-based, nonpartisan, nonideological, fair, and balanced 

information to the Congress and the public at large. We develop and 

present this information in a number of ways to support the Congress, 

including the following:

• evaluations of federal policies and the performance of agencies;

• oversight of government operations through financial and other 

management audits to determine whether public funds are spent 

efficiently, effectively, and in accordance with applicable laws;

• insight related work that involves determining which programs work 

and which do not; 
Page 4 GAO-03-1167T 

• foresight related work that is future oriented and involves identifying 

key trends and emerging challenges before they reach crisis 

proportions; 

• reviews and analyses of agencies’ budgets in support of the 

appropriations process;

• investigations to assess whether illegal or improper activities are 

occurring; 

• analyses of the financing for government activities;

• legal/adjudicatory activities, including legal opinions to determine 

whether agencies are in compliance with applicable laws and 

regulations and resolution of bid protests by disappointed bidders 

seeking to obtain federal contracts;

• policy analyses to assess needed actions, develop options, and note the 

implications of possible actions; 

• “constructive engagements” whereby we help agencies make progress 

in key areas by “helping them to help themselves” through the issuance 

of self-help guides, benchmarking and best practice studies, etc.; and

• additional assistance to the Congress in support of its oversight and 

decision- making involving legislative branch entities, activities, and 

functions.

See appendix I for graphics describing GAO past and present. 

GAO’S Downsizing The 1990s was a difficult period for the GAO. Beginning in 1992, GAO 

began an over 5-year period of significant staff downsizing. During the mid1990s, GAO underwent a 25 percent budgetary reduction that had to be 

implemented over a 2-year period. In order to absorb such a large 

budgetary reduction within such a short period of time, GAO undertook a 

number of measures such as closing 5 field offices (including our European 

and Far East field offices) and 4 sublocations in 1995. GAO also reduced its 

workforce, using authority granted by the Congress, by granting voluntary 

early retirements and buyouts and by conducting a reduction in force or 

“layoffs” of staff in select field offices and in Washington, D.C. While the 

measures taken allowed the agency to address the immediate budgetary 
Page 5 GAO-03-1167T 

challenge, they also increased the risk that GAO would not be positioned 

well to serve the Congress in the future. For example, GAO’s hiring freeze 

at the entry level produced an over 5-year gap in the workforce pipeline 

that affected a smooth succession and resulted in a top heavy workforce. 

GAO also significantly reduced its investments in technology by curtailing 

upgrades of hardware and software, which adversely affected its ability to 

apply technology to perform work better, faster, and more efficiently. GAO 

also eliminated bonuses and reduced other investments in its people. 

Today, we have a significantly smaller staff--40 percent smaller than in 

1992—with slightly over 3,250 staff on board. About 75 percent of our staff 

are located in our headquarters in Washington, D. C. and 25 percent in 11 

field offices around the country. While maintaining approximately the 

same number of staff, we have been able to accomplish much in support of 

the Congress. How was this made possible? First, we conducted a 

comprehensive outreach and risk assessment shortly after I became the 

Comptroller General. We identified risks that could undermine our ability 

to support the Congress in future years, such as in the areas of human 

capital and information technology and worked with our appropriations 

committees to obtain targeted funding for those areas. We also determined 

that the agency needed to undertake a transformation that even in the best 

of organizations typically takes 7 or more years to accomplish. Critical to 

that transformation was the development of a strategic plan that would 

provide the agency a clear set of strategic goals and objectives. 

Becoming More 

Strategic, Partnerial, 

and Externally Aware

Fortunately, before my becoming Comptroller General, GAO had 

recognized the need to prepare a strategic plan. We made this a top priority 

after my appointment as Comptroller General. GAO’s strategic plan, which 

is developed in consultation with the Congress, is forward looking and built 

on several key themes or trends that relate to the United States and our 

position in the world community. GAO’s strategic plan continues to be a 

model for others, a framework for aligning our organization and resources, 

and a basis to help inform client requests and identify work initiated on the 

Comptroller General’s authority (also termed research and development 

work). Our strategic planning process provides for updates every 2 years, 

including an ongoing analysis of emerging conditions and trends, extensive 

consultation with congressional clients and outside experts, and 

assessments of internal capacities and needs. 

Our first strategic plan, issued in the spring of 2000, set forth the issues 

around which we needed to focus and develop our resources to effectively 
Page 6 GAO-03-1167T 

serve the Congress in covering the period 2000-2005. We updated the plan 

in fiscal 2002, carrying forward the following four strategic goals, and will 

retain these goals for our latest update scheduled to be issued in early 2004 

(see appendix I of this statement for our strategic plan framework):

• Goal 1: Address current and emerging challenges to the well-being and 

financial security of the American people.

• Goal 2: Respond to changing security threats and the challenges of 

global interdependence.

• Goal 3: Help transform the government’s role and how it does business 

to meet 21st century challenges.

• Goal 4: Maximize the value of GAO by being a model federal agency and 

a world-class professional services organization.

Because achieving our strategic goals and objectives also requires 

strategies for coordinating with other organizations with similar or 

complementary missions, we use (1) advisory panels and other bodies (e.g., 

the Comptroller General Advisory Board, the Educators’ Advisory Panel, 

the Accountability Advisory Board) to inform GAO’s strategic and annual 

work planning and (2) initiate and support collaborative national and 

international audit, technical assistance, and other knowledge-sharing 

efforts. In order to leverage our resources and tap certain expertise not 

resident in GAO, we have entered into a partnership agreement with the 

National Academy of Sciences. Also, we have worked to foster 

partnerships with other “good government” organizations, such as the 

National Academy for Public Administration, the Private Sector Council, 

the Council for Excellence in Government, the Partnership for Public 

Service, and the Association of Government Accountants. These types of 

strategic working relationships allow us to extend our institutional 

knowledge and experience and, in turn, to improve our service to the 

Congress, the country, and the American people.

As previously mentioned, since 1970 GAO has been part of an international 

network, INTOSAI, which is composed of 184 accountability organizations. 

We have benefited from this network directly as an organization doing 

work in support of the Congress in that the relationships fostered by 

INTOSAI have facilitated our access to people, information, and knowledge 

sharing needed to maximize the value and ensure the expeditious 

completion of our international engagements. It is my opinion that our 
Page 7 GAO-03-1167T 

country has also benefited from our participation in this network because 

our efforts have served to promote democratic institutions and fight 

corruption through strengthening accountability organizations around the 

world. I serve on the Board of INTOSAI and head of the Accounting 

Standards Committee and the Board’s Strategic Planning Task Force. In 

this regard, during fiscal 2002, GAO was asked to lead a 10-nation task 

force to develop a strategic planning framework for INTOSAI. INTOSAI’s 

draft strategic planning framework, which was based on GAO’s approach 

to strategic planning, was approved by INTOSAI’s Board in October 2002. 

During fiscal 2003, the task force has been working to expand that 

framework into a comprehensive strategic plan. GAO also is an active 

member of the auditing standards, internal control standards, and public 

debt committees. I am a founder of the Global Working Group (GWG), in 

which the heads of GAO’s counterparts from 17 countries and I meet 

annually to discuss mutual challenges and share best practices. These 18 

members represent over 75 percent of global gross domestic product 

(GDP), and the efforts of this group have helped all member countries as 

well as INTOSAI as a whole.

Domestically, I chair the National Intergovernmental Audit Forum, and 

through 10 regional intergovernmental audit forums, GAO consults 

regularly with federal inspectors general as well as state and local auditors 

on issues of mutual interest and concern. In addition, through the 

Domestic Working Group (DWG), the Comptroller General and the heads 

of 18 federal, state, and local audit organizations exchange information and 

seek opportunities to collaborate in a manner similar to the GWG. As 

Comptroller General, I also serve as one of the four principals of the Joint 

Financial Management Improvement Program (JFMIP), who are actively 

fostering financial management reform. The JFMIP principals have met 

five times during the past 2 years with significant progress being made 

during this period of time. 

GAO’S Transformation 

Efforts

In a testimony on executive reorganization authority that I delivered in 

April this year, I stated that creating high performing organizations requires 

a cultural transformation within agencies. Hierarchical management 

approaches will need to yield to participative approaches. Processoriented ways of doing business will need to yield to results-oriented ones. 

Siloed organizations—burdened with overlapping functions, inefficiencies, 

and turf battles—will need to become more horizontal and integrated 

organizations if they expect to make the most of the knowledge, skills, and 

abilities of their people. Internally focused agencies will need to focus 
Page 8 GAO-03-1167T 

externally in order to meet the needs and expectations of their ultimate 

clients—the American people. 

Consistent with our strategic plan’s fourth goal, I believe that GAO should 

“lead by example” and be a model federal agency and world-class 

professional services organization. As the leading performance and 

accountability organization in the United States and possibly the world, 

GAO should be the federal government’s model for best practices in every 

major operational area, from strategic planning and organizational 

alignment to performance and accountability reporting, client service, 

human capital practices, financial management, information technology, 

change management, and knowledge management. To achieve this, we 

have undertaken a comprehensive transformation effort over the past few 

years. Leading this transformation team is an Executive Committee that I 

established to provide strategic leadership. The members of the Committee 

include myself as Chief Executive Officer; Gene Dodaro, Chief Operating 

Officer; Sallyanne Harper, Chief Mission Support Officer and Chief 

Financial Officer; and Anthony Gamboa as our General Counsel. Together, 

we have focused GAO’s transformation efforts on three primary areas: 

results, clients, and people. 

Our efforts to transform GAO into a high performing organization have 

included a range of internal and external initiatives that has helped us 

become more strategic, results-oriented, partnerial, integrated, responsive, 

flexible, employee oriented, externally focused and constructive with those 

who we audit. Our strategic and annual planning processes, as discussed 

earlier, have helped us look forward and allowed us to proactively engage 

our clients in planning work that is focused on a more balanced time 

horizon and results orientation. Our organizational restructuring efforts 

have resulted in a significant streamlining and consolidation. We have 

expanded and revised our products to better meet client needs. In 

addition, we have redefined success in results-oriented terms and have 

linked our goals both to institutional and individual performance measures. 

We have strengthened our client relations and employed a constructive 

engagement approach to those we review. The impact of these and other 

efforts has been dramatic.

Over the past 4 years, we have worked on continuously improving GAO’s 

performance measures, including most recently the development of a 

balanced scorecard that would allow us to better monitor, track, and report 

the achievement of results. Measuring the right things is vitally important 

because you manage what you measure and measurements ultimately drive 
Page 9 GAO-03-1167T 

basic organizational and individual behaviors. The performance measures 

that I found upon arriving at GAO were similar to other traditional 

performance measures in that, among other things, some of them focused 

on items that can be easily counted (e.g., numbers of reports); were 

numerous and of undifferentiated significance; and were process-oriented 

rather than results oriented. Our balanced scorecard is based on the three 

key areas that I mentioned earlier: results, clients, and people. For results, 

we measure such items as: financial benefits, other (nonfinancial) benefits, 

progress towards meeting the strategic plan’s goals and objectives, number 

of recommendations made, the percentage of reports with 

recommendations; and the percentage of our recommendations adopted. 

For clients, we measure such items as: direct client feedback on individual 

products and testimonies, number of testimonies, and timeliness. For 

people, we measure: attracting and retaining quality talent; developing, 

supporting, and using staff; and leading, recognizing, and listening to staff. 

Realigning the Organization After our strategic plan was developed in 2000, we used it to restructure 

our organization in that same year to align with the goals and objectives of 

our strategic plan. Restructuring can be an important tool, but in order to 

be effective, it must be focused on clear goals and specific desired 

outcomes. GAO’s restructuring resulted in the elimination of a layer of 

management and the consolidation of 35 issue areas into 13 teams. These 

teams perform the bulk of our research, analysis, and audit work for the 

Congress. 

Of the agencies in the legislative branch, GAO is the only one with a field 

office presence that has allowed it to be Congress’ “eyes and ears” beyond 

the nation’s capital. However, with changes in air transportation, computer 

technology, demographics, and federal presence, our field office structure 

needed to be reexamined. After extensive study, we continued a process 

that began in 1986 and, as a result of the organizational realignment effort 

referenced above, further reduced our field offices from 16 to 11. 

Subsequently, we further restructured our field offices by eliminating the 

position of regional manager—a Senior Executive Service level position—

in the individual field offices and consolidating the remaining field offices 

into three regions—the eastern region, the central region, and the western 

region, each headed by a single senior executive. 

Achieving Results GAO’s contributions to the Congress and our country are significant and 

varied. While our contributions to financial benefits are quantifiable, what 
Page 10 GAO-03-1167T 

is more difficult to quantify and yet very valuable, are contributions to help 

inform the national debate on a broad spectrum of issues; providing the 

Congress with assistance such as reviews of agency budgets that help 

identify areas of potential savings; preventing major problems from 

occurring through constructive engagement efforts, when appropriate, 

with agencies to “help them help themselves” make progress in key areas; 

leading by example to demonstrate to agencies what can be done to 

advance management reform; and advancing the accountability 

community, both domestically and internationally, through the sharing of 

best practices and methodologies in areas where GAO is a recognized 

leader, such as performance auditing, financial auditing and reporting, 

standards setting, and governance. 

To move towards a results orientation, we have reexamined our desired 

outcomes and are working to simplify and improve our performance 

measures to capture those contributions that are most significant. 

Beginning with the issuance of our strategic plan, we monitor our progress. 

Fortunately, by any reasonable benchmark, we are making excellent 

progress towards achieving most of our performance goals. We also 

modified our performance measures and eliminated specific goals, such as 

the number of products issued, which, while easy to count, was not resultsoriented and did not have a strong enough correlation to positive results. 

GAO delivers by any benchmark, an excellent return on investment to the 

Congress and the American people. I would like to briefly summarize some 

of our achievements over the past 5 years. Our financial and nonfinancial 

accomplishments have increased steadily over the past 5 years, and some 

have almost doubled. See table 1 for a summary of GAO’s financial and 

nonfinancial benefits.
Page 11 GAO-03-1167T 

Table 1: Annual Measures and Targets

Source: GAO.

a

Changes GAO made to its methodology for tabulating financial benefits caused the fiscal 2002 results 

to increase about 11 percent.

b

Four targets published in GAO’s performance plan for fiscal 2003 were subsequently revised based 

on more current information. Two were raised; two were lowered. The original targets were financial 

benefits, $35 billion; other benefits, 785; recommendations made, 1,200; and testimonies, 210.

As depicted in table 1, in fiscal year 1998, for every dollar invested in GAO, 

we helped the Congress and the agencies produce about $58 in financial 

benefits or $19.7 billion in total. In fiscal year 2002, for every dollar 

invested in GAO, we helped the Congress and the agencies produce about 

$88 in financial benefits or $37.7 billion in total. The 5-year average for 

financial benefits was $25.4 billion for fiscal years 1998 through 2002. 

These financial benefits were achieved through actions taken by the 

Congress and federal departments and agencies that led to budget 

reductions, avoided costs, deferred appropriations, or resulting in 

additional revenue collections. Several recent examples of where our work 

resulted in significant financial benefits include our work in preventing 

inappropriate Medicare payments (financial benefits of $8.1 billion) and 

our work on the Department of Defense’s (DOD) consolidation initiatives 

at its computer centers (financial benefits of $859 million). Based on our 

results to date, we fully expect our fiscal year 2003 financial benefits to 

significantly exceed the 5-year average. 

GAO’s work has helped inform congressional deliberations and debate on a 

broad spectrum of issues. During the 107th Congress, we made substantive 

contributions through our products, testimonies, briefings, and technical 

assistance in areas vital to helping legislators address challenges to our 

nation’s national security, homeland security, economic security, as well as 

2002

Performance measure

1998

Actual

1999

Actual

2000

Actual

2001

Actual Target Actual

5-year 

Avg. 

Actual

2003

Target

Financial benefits (billions) $19.7 $20.1 $23.2 $26.4 $30.0 $37.7a $25.4 $32.5b

Other benefits 537 607 788 799 770 906 727 800b

Past recommendations implemented 69% 70% 78% 79% 75% 79% N/A 77%

New recommendations made 987 940 1,224 1,563 1,200 1,950 1,333 1,250b

New products with recommendations 33% 33% 39% 44% 45% 53% 40% 50%

Testimonies 256 229 263 151 200 216 223 180b

Timeliness 93% 96% 96% 95% 98% 96% 95% 98%
Page 12 GAO-03-1167T 

the financial security of Americans. For example, during the 107th

Congress, GAO’s work supported legislative deliberations and policy 

decisions involving the Homeland Security Act of 2002, Public Law 107-296; 

the Aviation Security and Transportation Act, Public Law 107-71; the 

Sarbanes-Oxley Act of 2002, Public Law 107-204; Help America Vote Act of 

2002, Public Law 107-252; Best Pharmaceuticals for Children Act, Public 

Law 107-1092; Terrorism Insurance Act of 2002, Public Law 107-297; and the 

E-Government Act of 2002, Public Law 107-347. Our work has also helped 

facilitate the transformation of the federal government in general. More 

specifically, our efforts have helped identify the attributes of high 

performing organization, challenges in the human capital arena, 

competitive sourcing, and reforms needed for specific entities like the U. S. 

Postal Service and the Pension Benefit Guaranty Corporation. 

In addition to financial benefits, GAO’s work has led to improvements in a 

wide range of government operations and activities. GAO’s work was 

instrumental in bringing 906 needed improvements in the effectiveness and 

efficiency of government operations and services in fiscal year 2002. Since 

most of the results of our work take the form of action initiated in response 

to our recommendations, we use the number of recommendations made 

during the year as a performance measure. In fiscal year 2002, we made 

1,950 recommendations for improvements in the economy, efficiency, and 

effectiveness of federal operations. An example of recommendations that 

led to such improvements is our work on improper payments, where we 

made recommendations on actions agencies should take to reduce 

improper payments. These recommendations not only led to the 

enactment of the Improper Payments Information Act of 2002, Public Law 

107-300, but also resulted in action by the Office of Management and 

Budget (OMB) through the President’s Management Agenda which required 

selected agencies to report improper payment rates and the causes of those 

payments. Because our recommendations take time to implement, we 

track recommendations made in past years. Specifically, in fiscal year 

2002, we noted that 79 percent of the recommendations we had made in 

fiscal 1998 had been implemented, a significant percentage when the work 

we have done for the Congress becomes a catalyst for creating tangible 

benefits for the American people. 

GAO continued its long-standing tradition of providing the Congress a 

framework for oversight through the issuance of our Performance and 

Accountability Series and High-Risk Update. Our 2001Update identified 

close to 100 major management challenges and program risks at 21 federal 

agencies and highlighted actions to address these serious problems. In 
Page 13 GAO-03-1167T 

preparing the 2001 update, we established a new framework with respect 

to the High Risk list that provided greater consistency in determining 

which areas should be designated high risk and which areas would be 

eligible for getting off the high risk list. Our 2003Update added the new high 

risk issues Implementing and Transforming the New Department of 

Homeland Security, Modernizing Federal Disability Programs, Federal Real 

Property, and the Medicaid Program; subsequently, we added the Pension 

Benefit Guaranty Corporation’s Single-Employer Insurer Program. We are 

currently examining ways of improving on our Performance and 

Accountability Series and High-Risk Update with an eye towards making 

it even more strategic and foresight oriented.

Serving the Client From the beginning of my tenure, I have sought to strengthen relations and 

improve communications with our congressional clients. Addressing client 

needs is critical to any organization’s success, and while GAO is unique in 

that it must provide the Congress its best professional opinion in a political, 

and sometimes contentious, environment, it must be perceived by its client 

as meeting its needs. Both prior to and subsequent to my appointment as 

Comptroller General, I consulted broadly with key Members and staff in 

both houses and on both sides of the aisle as well as with a variety of other 

parties. Based on this outreach, some believed or perceived that GAO may 

have strayed from important values related to its mission, may have 

become closer to one political party, and, may not have effectively 

managed its staff details to certain congressional committees. Another 

concern that I heard was that GAO’s basis for decision making on requests 

was not very transparent, well known, or understood. 

To address these issues, upon becoming the Comptroller General, I 

immediately worked with GAO’s top management to establish and 

communicate to all GAO staff our mission and core values, to guide what 

we do and how we do our work. Our mission statement states: “GAO 

exists to support the Congress in meeting its constitutional responsibilities 

and to help improve the performance and ensure the accountability of the 

federal government for the benefit of the American people.” After a lot of 

discussion and debate, we agreed on an express set of core values to guide 

our work. GAO’s core values are accountability, integrity, and reliability. 

The values are further defined as follows:

• Accountability: We help the Congress oversee federal programs and 

operations to ensure accountability to the American people. GAO’s 

analysts, lawyers, auditors, economists, information technology 
Page 14 GAO-03-1167T 

specialists, investigators, and other multidisciplinary professionals seek 

to enhance the economy, efficiency, effectiveness, and credibility of the 

federal government both in fact and in the eyes of the American people.

• Integrity: We set high standards for ourselves in the conduct of GAO’s 

work. Our agency takes a professional, objective, fact-based 

nonpartisan, nonideological, fair and balanced approach to all activities. 

Integrity is the foundation of reputation and the GAO approach to work 

ensures both.

• Reliability: We at GAO want our work to be viewed by the Congress and 

the American public as reliable. We produce high-quality reports, 

testimony, briefings, legal opinions, and other products and services that 

are timely, accurate, useful, clear and candid.

These are values that represent our institutional beliefs and boundaries. I 

use them every day in my internal and external decision making. Both our 

mission and core values are communicated externally and internally 

through many venues. 

In addition, we also developed and implemented a set of Congressional 

Protocols—policies and procedures—to guide our interactions with and 

ensure our accountability to the Congress. These protocols, which 

underwent a 9-month pilot test, set out clear, transparent, consistently 

applied policies and practices for GAO’s relations with the Congress. They 

are designed to help reduce miscommunications and ensure that our 

congressional requesters are treated both consistently and equitably. The 

final protocols were issued in November 2000 and have been well received. 

We are in the process of updating our Congressional Protocols now and 

will be vetting them with your Committee and others before finalizing the 

revisions.

To respond more effectively to the Congress, we changed our process for 

accepting congressional requests (if accepted, these requests are termed 

engagements) and our approach to identifying related risk. We have 

become increasingly sophisticated in meeting our clients’ needs within 

available resources. We believe that our engagement acceptance process 

has provided more structure; a broader institutional perspective; greater 

internal collaboration; and additional awareness of the external 

environment, including potential partnerships in connection with GAO 

engagements. Annually, in addition to mandates established in law, we 

receive over a thousand requests from the Congress, with most coming 
Page 15 GAO-03-1167T 

from congressional committees and lesser numbers from individual 

members of Congress and the senior leaders. To address these requests in 

a timely basis and allow for prompt communication back to the requesters, 

the requests are reviewed and discussed in a weekly meeting chaired by 

Gene Dodaro, our Chief Operating Officer. During that meeting, members 

of the Executive Committee and GAO’s managing directors discuss 

congressional requests received during the previous week. As part of that 

discussion, we determine whether to accept the request based on 

consideration of factors such as our ability to carry out the work in terms 

of both authority and resources available, work that may already be 

ongoing, and the priority assigned to the requester based on those set forth 

in our Congressional Protocols. Also, during that meeting, a risk factor is 

assigned to the engagement that will, among other things, determine the 

level of product review required before issuance. To facilitate the 

timeliness of our response to our clients, I have delegated to our team 

managing directors the authority to sign off on products with lower risk 

designations. 

In the interest of leading by example and promoting transparency and 

accountability in government, we provide annual Performance and 

Accountability reports to the Congress and the public. We have also 

improved congressional access to GAO information on our active 

assignments and our products. GAO’s first Accountability Report to the 

Congress, which discusses our performance and accountability in serving 

the Congress and the American people, was issued for fiscal year 1999. For 

fiscal year 2001, we issued a performance plan that contained the 

performance measures and annual performance targets we planned to use 

to gauge progress towards accomplishing our strategic goals and 

objectives. For 2002, we combined an assessment of our accomplishments 

in fiscal year 2001 with our plans for continued progress through fiscal year 

2003 into one performance and accountability report and issued a new and 

condensed “highlights report.” George Mason University’s Mercatus 

Center evaluated our fiscal year 2002 Performance and Accountability 

report at our request and ranked GAO’s report number one in the federal 

government. The report earned a Certificate of Excellence in 

Accountability Reporting from the Association of Government Accountants 

(AGA). It also earned honors for graphics design in the annual American 

Graphics Design Award competition of 2003. The annual competition 

attracts about 10,000 entries from advertising agencies, graphic design 

firms, corporate creative departments, and publishers in a wide range of 

categories, and fewer than 10 percent were selected for awards. 
Page 16 GAO-03-1167T 

In the past, GAO has made several attempts to devise systems for 

measuring how well it was meeting the needs of our congressional clients, 

yet none of these attempts proved to be particularly successful. We now 

seek direct client feedback through our continuous congressional outreach 

effort and a Web-based client feedback survey on certain individual 

products and testimonies. These initiatives are set forth as follows.

• Continuous congressional outreach. Since the mid-1990s, we have 

conducted a structured outreach to our key congressional clients—the 

Senate and House senior leaders and the congressional committees—in 

order to obtain feedback on our performance, discuss the legislative 

agenda for the coming year and how GAO can best support the 

Congress, and obtain information needed to update our strategic plan. 

• Feedback on individual products. In fiscal year 2001, we developed a 

Web-based process to more effectively collect feedback from 

congressional clients on our reports and products. This new system, 

which we piloted for 7 months with our oversight committees and 

implemented in fiscal year 2002, used E-mail and a Web site to obtain 

client feedback on (1) product timeliness and (2) communications and 

professional conduct during the engagement for a sample of recently 

issued products. For example, of those who responded, we received a 

91 percent favorable response rate for our testimonies and a 93 percent 

favorable response rate for our written products for the period covering 

March through November 2002. Indications are that the favorable 

response rate for our products and testimonies is holding for this fiscal 

year as well. 

• Congressional testimonies. Since the early 1980s, GAO’s testimonies at 

congressional hearings have increased. At one time, only the 

Comptroller General and a few others could testify. My predecessor, Mr. 

Bowsher, expanded the pool of potential GAO witnesses to our senior 

executive corps. During fiscal 2002, members of our senior executive 

service or I testified 216 times in fiscal year 2002 across a broad 

spectrum of congressional committees, sometimes on as little as 24 

hours notice. 

• Timeliness. Given the time sensitive nature of the legislative process 

and the fact that information delivered after decisions have been made 

is not useful, we have worked hard to make sure that information is 

provided in a timely manner. In fiscal year 2002, our on-time delivery 
Page 17 GAO-03-1167T 

rate was 96 percent. Of our seven agencywide annual performance 

targets, timeliness was the only measure that we did not fully meet. 

Recognizing that members and key staff are inundated with information 

and pressed for time, we sought better ways of communicating information 

to them. We initiated efforts in fiscal year 2001 to revamp our 

communications strategy. We piloted and have now implemented for most 

of our products and testimonies a new reporting product line entitled 

Highlights—a one-page summary that provides the key findings and 

recommendations from a GAO engagement. This summary has been 

extremely well-received by our congressional audience as well as the press 

and the general public. In addition, we continue seeking better ways to 

communicate, including presenting information in a visual manner to 

quickly convey the message. 

We have applied technology and used our Website to issue and publicize 

our products not only to the Congress, but also to the general public. Our 

external website now logs about 130,000 hits each day and more than 1 

million GAO products are downloaded every month by our congressional 

clients, the public, and the press. Further, to better inform the client about 

the work we have in progress, we have implemented a Web-accessible 

active assignment list for congressional clients and to facilitate key 

contacts, enhanced the search capability for GAO products on our external 

Web site. 

In yet another example of serving the Congress, GAO opened our doors to 

Members of the House of Representatives and their staffs on October 23, 

2001, in response to the anthrax incident on Capitol Hill. As an outgrowth 

of that experience, the House of Representatives has designated GAO one 

of its contingency sites in the event of an emergency in order to maintain 

legislative continuity of operations. 

Fostering Constructive 

Agency Relations

To better maximize our value to the Congress and work smarter, we have 

increased our constructive engagement efforts with other agencies. Rather 

than deal with problems after the fact, piecemeal, or when they’ve reached 

crisis proportions, we are working to prevent problems by pointing out 

what is right, recognizing the progress made, and guiding agencies to 

positive results by publishing self-assessment guides that provide tools 

with which agencies can help themselves. One area in particular where 

this has made a big difference is information technology. As we have 

reported repeatedly, the federal government does not have the systems in 
Page 18 GAO-03-1167T 

place that can provide accurate and real-time information for legislators 

and policymakers to evaluate program effectiveness and efficiency. 

However, our benchmarking and best practices studies are recognized 

industrywide for their excellence. Other examples of our assisting 

agencies include GAO’s work in strategic planning, human capital, and 

financial management.

To this end, we have worked hard to cultivate good working relations with 

the Office of Management and Budget (OMB) and Cabinet-level officials. 

These relations have proven mutually beneficial. Because Congress’ need 

for information is time sensitive, having good working relations with the 

executive branch agencies has helped us overcome bureaucratic inertia or 

resistance in their providing information in a timely manner. As part of our 

constructive engagement efforts, we have assisted in the congressional and 

presidential transitions and provided new legislators and officials with 

information about the challenges facing them. These and other 

constructive engagement efforts are helping focus increased attention on 

major management challenges and high-risk issues, thus contributing to 

good government. Our Performance and Accountability Series and High 

Risk Update has proven useful in carrying out our responsibility under the 

Presidential Transition Act in that it helped serve as a key source of 

information for the incoming administration and Members of the 107th

Congress. In addition, the President’s Management Agenda (PMA) for 

reforming the federal government mirrors many of the management 

challenges and program risks that GAO reported on in its 2001 

Performance and Accountability Series and High-Risk Update, including 

a governmentwide initiative to focus on strategic management of human 

capital. 

To minimize misunderstanding and miscommunication between us and the 

agencies relating to how we do our work and report the results, we piloted 

a first-ever set of agency protocols for a 6-month period from December 

2002 through June 2003, to guide our interactions with federal agencies and 

provide clearly defined, consistently applied, well-documented, and 

transparent policies for conducting our work with these federal agencies. 

In developing the protocols, we sought comments from 28 federal 

departments, agencies, and entities and are in the process of considering 

their comments. After analyzing the comments from the pilot, we plan to 

implement the agency protocols in fiscal year 2004. 
Page 19 GAO-03-1167T 

Investing in People: Human 

Capital Initiatives

Given GAO’s role as a key provider of information and analyses to the 

Congress, maintaining the right mix of technical knowledge and expertise 

as well as general analytical skills is vital to achieving our mission. We 

spend about 80 percent of our resources on our people. I think it is fair to 

say that while our people account for 80 percent of our costs, they 

constitute 100 percent of our real assets. Without excellent human capital 

management, we could still run the risk of being unable to deliver what the 

Congress and the nation expects of us. For this and other reasons, we seek 

the additional human capital flexibilities contained in S. 1522. 

At the beginning of my term in fiscal year 1999, we completed a selfassessment that profiled our human capital workforce and identified a 

number of serious challenges facing our workforce, including significant 

issues involving succession planning and imbalances in the structure, 

shape, and skills of our workforce. As presented below, through a number 

of strategically planned human capital initiatives over the past few years, 

we have made significant progress in addressing these issues. The 

flexibilities provided GAO in the GAO Personnel Flexibilities Act of 2001, 

Public Law 106-303, enacted on October 26, 2000, was a contributing factor 

in helping us reshape the organization. In fiscal years 2002 and 2003, 

because of the authority granted us under the law, we granted voluntary 

early retirement to 52 employees in fiscal year 2002 and 37 employees in 

fiscal year 2003. As a result of our various human capital initiatives, as 

illustrated in figure 1, by the end of fiscal year 2002, we had almost a 60 

percent increase in the percentage of staff at the entry-level (Band I) as 

compared with fiscal year 1998. Also, the proportion of our workforce at 

the mid-level (Band II) decreased by 8 percent. 
Page 20 GAO-03-1167T 

Figure 1: GAO’s Human Capital Profile

a

Attorneys and criminal investigators.

b

Mission support includes both mission and mission support offices.

One of my top priorities when I became Comptroller General was to 

enhance internal communications as a means of empowering staff and 

facilitating our agency transformation and our change management efforts. 

This has been accomplished through various means. For example, any 

GAO staff member can e-mail me with comments and concerns, and 

believe me, I do respond. Since becoming Comptroller General, I have 

provided employees throughout GAO the opportunity to provide me their 

views through a periodic, now annual, confidential employee survey. An 

independent contractor collects the survey results and aggregates them. 

They then are provided to GAO’s managing directors and me. Employees 

are also given the opportunity to provide written narrative comments that I, 

and I alone, receive for review. I recently received the results of the 3rd

employee survey in which 89 percent of GAO’s workforce responded and 

2,101 provided me with written narrative comments, which I personally 

read. Highlights of this most recent employee survey are as follows.

• The results of the 2003 Employee Survey were by and large very 

positive. Of those questions with a basis for year-to-year comparisons, 

employee satisfaction (as measured by the number of strongly 

agree/agree responses) was up in 72 of the 83 areas, with one area 

remaining unchanged.

• Critical “People Measures Scores,” which are used in our balanced 

scorecard and reported externally, went up in all four areas (i.e., 

Mission

Mission Supportb

SES/SL

Band III

Band II

Band I

Othera

Figures in percentages

FY 1998 FY 2002

12.2

45.6

13.1

21.5 19.5

3.4 3.5

12.0

38.1

22.8

4.2 4.1

Source: GAO.
Page 21 GAO-03-1167T 

organizational climate, staff utilization, leadership, and staff 

development) in 2003 versus 2002. The increases in people measures 

were attributable to both new and experienced staff responses to the 

2002 survey.

• In comparing our results to OPM’s 2002 survey of executive branch 

agencies for 11 benchmark questions, our 2003 survey results were 

higher than the governmentwide benchmark numbers for 9 of 11 

comparable questions. GAO’s overall average positive score for these 

11 benchmark questions was about 10 percent higher than the OPM 

benchmark questions’ average. Similarly, for the four benchmark 

questions also applicable to the private sector, GAO’s scores were higher 

than both the private sector and government averages in all four areas, 

significantly so in three of the four questions. 

• Some areas, such as encouraging innovation and creativity and soliciting 

and considering employee views, went up dramatically, which are big 

steps in the right direction with respect to our overall transformation 

effort.

• There was only one area where the positives went down and the 

negatives went up, and that was in the area of requiring our employees 

to prepare Individual Development Plans (IDP). As a result, we are 

reassessing and reconsidering our approach to IDPs. 

I have also used periodic CG “Chats,” which are closed-circuit telecasts to 

all agency staff. Through the years, I have used these telecasts on 

numerous occasions to discuss critically important issues, such as GAO’s 

strategic plan and congressional protocols, client service, employee survey 

results, work processes, organizational alignment, information technology-

- including our most recent human capital initiative, which your committee 

is considering today. In addition, we established an employee suggestion 

program in October 1999 as a means of tapping the ideas and ingenuity of 

GAO staff members to improve the agency’s processes, products, and 

services. Since the start of the program, 2,348 suggestions have been 

submitted, of which 345 have been accepted, with most of the remaining 

either rejected or closed because they didn’t meet the program’s criteria or 

had duplicated earlier suggestions. 

One of the areas of which I am most proud is the establishment of our now 

fully democratically elected Employee Advisory Council (EAC). This 23-

member Council represents virtually every group of GAO employees. The 
Page 22 GAO-03-1167T 

members of the Executive Committee and I use this Council to discuss 

current and emerging issues of mutual interest and concern and to 

continuously improve GAO. While the EAC opted not to testify today, I 

understand that they have submitted a statement for the record on GAO’s 

human capital proposal. 

Other major human capital initiatives include the following:

• Recruiting talented staff. Because of the budget reductions of the mid1990s, GAO froze hiring, which created an over 5-year gap in its 

workforce pipeline. In fiscal year 1998, we resumed hiring, and in fiscal 

year 2002, we hired nearly 430 permanent staff and 140 interns. We also 

developed and implemented a strategy to place more emphasis on 

diversity in campus recruiting. A recent article in the Washington Post 

lauded GAO’s recruitment innovations and efforts as an example of a 

federal agency that is approaching recruiting right. 

• Identifying and assessing skills. A modern professional services 

organization needs to know what skills its workforce possesses and be 

able to readily assess those skills in support of its clients. GAO has 

conducted an agencywide assessment and inventory of our workforce’s 

knowledge and skills that is updated periodically. 

• Retaining staff with critical skills. A challenge facing the federal 

government is the retention of critical skills, particularly in the technical 

areas. Using the authority granted us by Public Law 106-303, we 

established a corps of senior level executives who have the pay and 

benefits of the Senior Executive Service but need not be generalist 

managers. To retain staff with critical skills and staff with less than 3 

years of GAO experience, we implemented legislation authorizing 

federal agencies to offer student loan repayments in exchange for 

certain federal service commitments. GAO ranks as one of the top 

agencies in providing student loan repayments. GAO also periodically 

administers an employee preference survey that is being used along 

with the results of the knowledge and skills inventory to meet our 

institutional work needs while accommodating staff preferences for 

types of work to the extent possible. In addition, we have recently 

instituted a new knowledge transfer and succession planning program 

that would allow select retirees to become reemployed annuitants for 

up to 2 years following retirement in order to facilitate the transfer of 

knowledge in critical areas and allow for a smooth transfer of 

responsibilities.
Page 23 GAO-03-1167T 

• Modernizing the performance assessment system. In fiscal year 2002, 

GAO completed an overhaul of its performance assessment system and 

implemented a new, modern, effective, and credible performance 

appraisal system for analysts and specialists; adapted the system for 

attorneys; and began modifying the system for administrative 

professional and support staff. Our performance standards were 

revised to incorporate our core values and strategic goals. We also 

updated descriptions of performance to better reflect the current nature 

of our work and implemented other key concepts, such as leadershipby-example, client service, measurable results, matrix management, 

open and constructive communications, and balancing people and 

product considerations. 

• Investing in training. One of the down sides of the budget reductions of 

the mid-1990s was that GAO reduced its training investment in 

employees. World-class professional service organizations with staffs 

similar to GAO’s multidisciplinary workforce invest nearly 6 percent of 

their budgets in training staff. GAO’s investment in training its staff in 

fiscal year 1998 was less than that. We have resumed our training 

investment, but with an eye towards maximizing the efficiency and 

effectiveness of our investment. To this end, we have hired a Chief 

Learning Officer and established a new Learning Board to guide our 

Center for Performance and Learning in formulating its training 

priorities. We have also begun developing a new core training 

curriculum for managers and staff to provide additional training on the 

key competencies required to perform GAO’s work. 

• Creating incentives and improving recognition. One of the areas that I 

have championed since coming into office has been establishing the 

allocation of pay on a more performance-oriented basis. We have been 

fortunate to be the beneficiaries of excellent recruits, due in part to the 

economic downturn, a renewed interest in public service following the 

events of September 11, 2001, and our innovative human capital 

strategies. Retaining these recruits, however, will require a range of 

efforts including providing a continuous learning environment, adequate 

technological support, and reasonably competitive compensation. Also, 

for those who have made GAO their careers, there should be rewards for 

outstanding performance. For example, during fiscal year 2003, we 

began providing performance bonuses to top performers who are “pay 

capped”—those who, because they have reached the pay ceiling, are 

ineligible for any permanent pay increases. 
Page 24 GAO-03-1167T 

S. 1522 would help us continue to invest in our people and attract, recruit, 

and retain staff with the critical skills we need. 

Building an Integrated and 

Reliable Information 

Technology Infrastructure

Information technology is critical to our productivity, success, and viability. 

As such, we have been working on a number of initiatives to enhance and 

protect our investments in information technology. Specifically, we have

• completed a comprehensive review of our information technology;

• rechartered and reestablished our Information Technology Investment 

Committee to provide high-level vision, review, and approval of program 

initiatives to transition from the current technological environment to 

the target one. 

• developed, as required by the Clinger-Cohen Act, an enterprise 

architecture program—a blueprint for operational and technological 

change;

• expanded information systems security efforts and disaster recovery 

systems that allow for continuity of operations;

• made progress to implement a risk-based, agencywide security program, 

provide security training and awareness, and develop and implement an 

enterprise disaster recovery solution; and 

• begun implementing an information security program consistent with 

the requirements in the Government Information Security Reform 

provisions (commonly referred to as “GISRA”) enacted in the Floyd D. 

Spence National Defense Authority Act for fiscal year 2001. 

During 2002 and 2003, we acquired new hardware and software and 

developed user-friendly systems that enhanced our productivity and 

responsiveness to the Congress. Specifically, we replaced aging desktop 

workstations with notebook computers that provided greater computing 

power, speed, and mobility; developed new, integrated, user-friendly Webbased systems that eliminate duplicate data entry while ensuring the 

reusability of existing data; expanded the availability of cellular phones and 

personal digital assistants to GAO’s senior management; and added video 

broadcast capability to the desktop. In addition, we upgraded remote 

access capability, improving the speed and reliability of dial-up connections 

to GAO’s information technology facilities; completed communications 
Page 25 GAO-03-1167T 

upgrades to the field to provide high-speed, reliable connectivity to the 

GAO network; replaced aging videoconferencing equipment with current 

technology; and began planning communications upgrades to support 

evolving video technologies. 

Recently, the CIO Magazine’s August 15, 2003, issue named GAO as a “CIO 

100” organization, thereby recognizing GAO’s excellence in managing 

information technology resources. Of the over 400 applicants from both 

the public and private sectors, GAO was one of just three federal agencies 

named a “CIO 100”. Specifically, GAO was recognized for asset 

management (i.e., getting the most out of it existing systems), staffing and 

sourcing (i.e., flexible and creative approaches to meeting personnel 

needs), and partnerships (i.e., building internal and external relationships 

to deliver new products and services). In addition, GAO was specifically 

cited for a best practice—staffing new projects through internal “help 

wanted” ads. 

Reengineering Business 

Processes

As part of the organizational realignment implemented in calendar year 

2000, we established an internal group whose mandate was to focus on 

business process reengineering as a tool for increased productivity and 

knowledge management. One of the accomplishments of this group was 

the launching of the Electronic Assistance Guide for Leading 

Engagements—the EAGLE, which is the prototype of a comprehensive 

Web-based guide to conducting GAO engagements. Recently, we have 

established a Continuous Improvement Board to guide the activities of the 

group that has been integrated into our Quality and Continuous 

Improvement office. 

Along with our realignment, we also implemented two new management 

strategies: risk management and matrix management. GAO’s risk 

management approach allows management to identify key stakeholders 

throughout an engagement, to transcend traditional organizational 

boundaries, to maximize value, and manage risks in connection with GAO’s 

engagements and other activities. GAO’s matrix management approach 

maximizes our value to the Congress by leveraging the knowledge, skills, 

and experience of all employees to ensure the highest quality products and 

services and to help the Congress address the challenging, complex, rapidly 

changing, and multidimensional problems facing the nation. 
Page 26 GAO-03-1167T 

Being Good Stewards of Our 

Financial Resources

As the leading performance and accountability organization in the public 

sector, it is vital that GAO set the example in the area of financial 

management as well. GAO’s financial statements for fiscal years 2002, like 

those for fiscal years past, received an unqualified opinion from an 

independent auditor. No material weaknesses in internal control were 

identified, and the auditor reported substantial compliance with the 

requirements in the Federal Financial Management Improvement Act of 

1996 (the Improvement Act) for financial systems. In addition, the auditor 

did not find any instances of noncompliance with the laws or regulations 

for which they tested. 

Challenges As with any organization, we face a range of internal and external 

challenges that could affect our ability to effectively support the Congress 

in the future. Some of these challenges are those that require ongoing 

management vigilance and attention (e.g., assuring product quality and 

adherence to core values, human capital, physical security, and information 

security) while others are special challenges that warrant monitoring 

and/or congressional attention. 

While we have put in place a good risk management system for our 

engagements, whereby all the engagements are reviewed weekly and 

categorized by a variety of factors including risk, we nevertheless must 

always be vigilant that GAO does not stray from its values and therefore, 

lose its reputation for being an “honest broker” on important government 

operations and policy issues. Given that about 25 percent of our staff have 

been with GAO for 3 years or less, it is vitally important that we inculcate 

these values in our staff and train them in the proper conduct of our work. 

Also, we need to make sure the staff who have been here for more than 3 

years remain true to our values and our quality assurance standards and 

practices. To ensure that we have an independent quality check in place, 

GAO has had, beginning with its financial audits issued in 1995 and 

continuing for every 3 years thereafter, an external group—an independent 

CPA firm—performs a peer review of our work. We are currently in the 

process of extending this practice to our non-financial work and expect our 

products issued in 2004 to be peer reviewed by a team headed by the 

Auditor General’s office of Canada who will conduct their work between 

2004 and 2005. To prepare for this, we have invested much effort in 

revamping our quality assurance framework. 
Page 27 GAO-03-1167T 

We named in our fiscal year 2002 Performance and Accountability report 

three risk areas—human capital, physical security, and information 

security—as areas that could affect our ability to perform work for the 

Congress. We have made progress in addressing each of these challenges, 

but still have work to do. 

In the human capital area, we are faced with a challenge because a 

significant percentage of our workforce is nearing retirement age, while 

marketplace, demographic, economic, and technological changes indicate 

that competition for skilled workers will be greater in the future. We are 

recruiting diverse, high-caliber staff with the skills and abilities we need to 

achieve our strategic goals and objectives. Whether we will be able to 

retain them when the economy improves remains to be seen, but I can 

assure you that we are doing our best to do so. Given GAO’s role as a key 

provider of information and analyses to the Congress, maintaining the right 

mix of technical knowledge and expertise as well as general analytical 

skills is vital to achieving our mission. Over the next several years, we need 

to continue to address skill gaps, maximize staff productivity and 

effectiveness, and reengineer our human capital policies, programs, and 

processes to make them more user-friendly. We plan to address skill gaps 

by further refining our recruitment and hiring strategies to target gaps 

identified through our workforce planning efforts, while taking into 

account the significant percentage of our workforce eligible for 

retirement. 

In the aftermath of the September 11 terrorist attacks and subsequent 

anthrax incidents, the ability to provide a safe and secure workplace 

emerged as a challenge for our agency. Protecting our people and our 

assets is critical to our ability to carry out our mission to serve the 

Congress and the American people. Also in light of these incidents, we 

need to ensure information systems security and disaster recovery systems 

that allow for the continuity of operations. We have made progress through 

our efforts to, among other things, implement a risk-based, agencywide 

security program; provide security training and awareness; and develop 

and implement an enterprise disaster recovery solution. 

Special Challenges The following are some special challenges that we are carefully monitoring 

and may need to work with the Congress on to address: 

• Unfunded mandates. Since becoming the Comptroller General, I have 

not asked for any increase in our staffing levels and have requested 
Page 28 GAO-03-1167T 

targeted investments in human capital, information technology and 

security, and physical security initiatives based on specific business 

cases. Last year, the Congress passed a 4.1 pay increase but did not 

provide funding for all of the increase. While we were able to reallocate 

our budget to cover these increases, we are concerned that if this 

becomes a regular practice, we will be unable to effective discharge our 

responsibilities in view of the fact that our employees’ salaries and 

related benefits comprise 80 percent of our budget. We have worked 

hard with available resources to cover mandatory expenses, including 

inflation and compensation costs. In addition, there has been recent 

interest in having GAO expand the scope of its activities in such areas as 

evaluating regulatory costs and benefits as well as conducting 

technology assessments. While I obviously want to be sure that we meet 

the changing needs of the Congress, I believe strongly that any 

significant expansion of the scope of our work should be coupled with 

appropriate funding. Doing otherwise would ultimately undermine our 

ability to carry out our core activities. Looking longer-term, we are 

concerned about the future fiscal outlook and its potential impact on 

our organization. We hope that the Congress will resist the tendency, in 

responding to budgetary constraints, to institute across the board 

budget reductions or reward the “basket cases” with additional 

flexibilities and appropriations, instead of rewarding organizations such 

as ours that generate positive results, do many things right, and are 

trying to do the right things. 

• Supply and demand imbalances. While the overall number of 

congressional requests has decreased, the quality of these requests has 

improved which is reflected in the results we are achieving. Also, more 

requests are of a bipartisan nature. However, we are monitoring closely 

the number of engagements that we have accepted but not yet staffed, 

which has increased during the past 4 years. These engagements, 

totaling over a hundred, are spread among our 13 teams. The backlog is 

particularly acute in certain teams and areas (e.g., health care) because 

of increasing congressional demands. While we are working to achieve 

more flexibility in the way we staff and are reexamining our inventory, 

there is a limit to our ability to address these challenges by shifting 

resources from one area to another because of the specialized skills and 

knowledge required. We are concerned that we may not be able to 

respond to engagements we accept in a timely manner if the backlog 

builds. Also, if this supply and demand imbalance continues to grow, we 

will need to work with this Committee, the House Government Reform 

Committee, our appropriations committees, and senior leaders in 
Page 29 GAO-03-1167T 

making some tough choices, such as possibly reconsidering and 

reprioritizing any pending requests and not being able to accept requests 

from individual Members. Further, we may have to limit the small 

percentage of resources dedicated to research and development work 

(work that by law the Comptroller General is able to initiate on his own 

authority), which would hamper our ability to respond to urgent issues 

as we were able to do in the areas like national preparedness, homeland 

security, human capital, and Postal Service reform. I believe that it is 

important for GAO to be able to dedicate roughly 10 - 15 percent of its 

total resources to research and development work, which ultimately 

improves our ability to respond to longer-range issues. In this regard, 

the percentage of resources devoted to research and development work 

was 13 percent in FY 01, 11 percent in FY 02, and 9 percent year to date 

in FY 03.

• Access to records. Not surprisingly, GAO has faced access to record 

problems periodically in its history. Most of the time, we have been able 

to work with the executive branch. In my opinion, it was very 

unfortunate that we could not work out our information request relating 

to the National Energy Policy Development Group with the Vice 

President, who chaired the Group. We felt that we had no choice but to 

seek redress through the courts because the request was backed by four 

Senate committee or subcommittee chairmen, and as you know, we are 

required by law to perform work for committees. In addition, the 

administration did not exercise its option to withhold the information 

based on executive privilege or under the certification provision in 

GAO’s statute. The federal district court ruled in its decision that GAO 

did not have the standing to sue, but did not render an opinion on the 

merits of the case. We decided not to proceed with an appeal for a 

variety of reasons. Since then, we have monitored our access-to-record 

issues closely and have not experienced thus far a proliferation of 

access to records problems. In light of certain records access 

challenges during the past few years, and with concerns about national 

and homeland security unusually high at home and abroad, it may 

become more difficult for us to obtain information from the executive 

branch and report on certain issues. If this were to occur, it would 

hamper our ability to complete congressional requests in a timely 

manner. We are updating GAO’s engagement acceptance and review 

policies and practices to address this issue. However, we do not require 

legislative changes in this area at the present time. 
Page 30 GAO-03-1167T 

• Selection process for the Deputy Comptroller General. GAO has only 

two political appointee positions—the Comptroller General and the 

Deputy Comptroller General. GAO has not had an official Deputy 

Comptroller General since the appointment process was changed by law 

in 1980. Under the law, the Deputy Comptroller General is nominated by 

the same 10 member board that nominates the Comptroller General (i.e., 

Senate and House leaders and the Chairmen and Ranking Minority 

Members of the Senate Committee on Governmental Affairs and the 

House Committee on Government Reform) working with the 

Comptroller General. Under the current scheme, the Deputy 

Comptroller General is supposed to serve in the Comptroller General’s 

absence or after his 15-year term is completed. I believe the time has 

come to consider having the Comptroller General, in consultation with 

the aforementioned board, be able to pick the Deputy, which is how it 

works in most of our international counterpart organizations. 

• Performance and accountability community coordination. Related to 

trying to do more with the resources we have in the performance and 

accountability area is determining how GAO and the Inspectors General 

should best complement each other and coordinate. The Inspectors 

General Act of 1978 as amended, Public Law 95-452, which established 

the Inspectors General, has been in existence for almost 25 years and 

merits a review. Given the challenges facing the federal government, I 

believe that the past should not be prologue in this arena. The law 

currently requires that the Inspectors General coordinate with GAO to 

ensure that they are not duplicating efforts. The traditional division of 

responsibilities has been that GAO looks horizontally at programs and 

functions across government, while the Inspectors General have been 

the “local cop” on the beat focusing on combating fraud, waste, abuse 

and mismanagement within their respective agencies. With OMB’s 

efforts to make performance and financial reports more relevant to 

management decision-making, our collaborative efforts in improving 

governmentwide financial management will merit review. Over the next 

few years, GAO will need to invest more resources, (through use of 

GAO’s own staff and/or through contractors) in assuring the work of the 

Inspectors General and external auditors in the financial statements 

area. This resource investment is necessary if we are to be able to 

render an opinion on the consolidated financial statements of the U.S. 

government. 

• Additional bid protest volume. Over the past year, GAO has seen the 

number of bid protests filed increase by close to ten percent, and that 
Page 31 GAO-03-1167T 

upward trend is continuing. In addition to its other roles, GAO also 

serves as a quasi-judicial forum, hearing bid protests from disappointed 

bidders seeking to obtain federal contracts. GAO provides an objective, 

independent, and impartial forum for resolving protests, and GAO’s 

decisions, which are published on our website, are relied on by the 

courts, the contracting agencies, and the public. This means of 

resolving disputes saves both time and money in that the parties need 

not go through the federal court system. Two particularly significant 

areas in which GAO has issued, and expects to continue issuing, 

decision on bid protests are public/private competitions under OMB 

Circular A-76 and procurements involving purchases under GSA’s 

Federal Supply Schedules. 

• Work involving other legislative branch entities. GAO is increasingly 

being requested to provide assistance on work involving other 

legislative branch entities such as the Architect of the Capitol, including 

its Capitol Visitors Center project, the Capitol Police, the Government 

Printing Office, and the Library of Congress. This assistance can take 

different forms (e.g., direct assistance, contract procurement and 

monitoring, or management and technical assistance) and can be of a 

sensitive and high risk nature. 

Need for S. 1522 I believe that it is vitally important to GAO’s future to continue modernizing 

and updating its human capital policies and practices in light of the 

changing environment and anticipated challenges ahead. GAO’s proposal 

represents a logical incremental advancement in modernizing our human 

capital policies. Given GAO’s human capital infrastructure and unique role 

in leading by example in major management areas, the rest of the federal 

government can also benefit from GAO’s pay system experience. We 

respectfully request the Committee’s support of our request. We also 

respectfully request prompt passage of S. 1522 by the Congress, since some 

of our existing authorities are set to expire at the end of this calendar year.

GAO has used the narrowly tailored flexibilities granted by the Congress 

previously in Public Law 106-303, the GAO Personnel Flexibilities Act, 

responsibly, prudently, and strategically. GAO’s latest proposal combines 

diverse initiatives that, collectively, should further GAO’s ability to enhance 

its performance; assure its accountability; and help ensure that we can 

attract, retain, motivate, and reward a top-quality and high-performing 

workforce both now and in future years. Specifically, GAO is requesting 

that the Congress (1) make permanent GAO’s 3-year authority to offer early 
Page 32 GAO-03-1167T 

outs and buyouts, (2) allow GAO to set its own annual pay adjustment 

system separate from the executive branch, (3) permit GAO to set the pay 

of an employee demoted as a result of workforce restructuring or 

reclassification to keep his/her basic pay but to set future increases 

consistent with the new position’s pay parameters, (4) provide authority to 

reimburse employees for some relocation expenses when that transfer has 

some benefit to GAO but does not meet the legal requirements for 

reimbursement, (5) provide authority to place upper-level hires with fewer 

than 3 years of federal experience in the 6-hour leave category, (6) 

authorize an executive exchange program with the private sector, and (7) 

change GAO’s legal name from the “General Accounting Office” to the 

“Government Accountability Office.” 

We believe that our proposal is both well reasoned and reasonable. 

Although GAO’s request for authority to adjust its annual pay system 

separate from the executive branch may appear to be dramatic to some, 

there are compelling reasons why GAO ought to be given this authority. 

These include the fact that GAO already has a hybrid pay system 

established by the authority the Congress granted it over two decades ago. 

In addition, the proposal is modest if viewed in the light of authorities 

already granted and requested by other agencies (e.g., DHS, DOD). 

Further, GAO already has a number of key systems and safeguards in place 

(e.g., a validated performance measurement system for its analysts and 

attorneys; a grievance process which allows employees to appeal to an 

independent Personnel Appeals Board; and opportunity periods for 

employee improvement) and has plans to build in additional safeguards if 

the additional authorities that we are seeking are granted. 

Since submitting the proposal, I testified on July 16, 2003, before the House 

Government Reform Subcommittee on Civil Service and Agency 

Organization, along with Chris Keisling, the Employee Advisory Council’s 

representative, Paul Light of Brookings Institution, and Pete Smith of the 

Private Sector Council. See Appendix II for a copy of the statement that I 

presented before the House. GAO’s proposal was introduced that same 

day as H. 2751, the GAO Human Capital Reform Act of 2003, and was 

subsequently marked up and reported out of the Subcommittee on July 23, 

2003, with an amendment that added a requirement that we periodically 

report on the status of certain provisions; modified the target group for the 

increased annual leave benefit from upper-level hires to key officers and 

employees; and limited our exchange program to no more than 30 people 

coming to GAO from the private sector and no more than 30 people leaving 

GAO for a detail to the private sector. We concurred with these 
Page 33 GAO-03-1167T 

amendments. The bill that Senator Voinovich introduced on July 31, 2003, 

S. 1522, which you co sponsored, Madam Chair, mirrors the bill that was 

marked up in the House. 

Based on employee feedback, there is little concern relating to most of our 

legislative proposal. Although some elements of GAO’s initial straw 

proposal were very controversial (e.g., GAO’s pay adjustment provision), I 

have made a number of changes, clarifications, and commitments to 

address employee concerns. While I believe that some employees remain 

concerned about the pay adjustment provision, I also believe that employee 

concerns have been reduced considerably due to the clarifications, 

changes, and commitments I have made. This view has been underscored 

by the results of the recent employee staff survey. Of the 2,101 GAO 

employees who provided narrative comments, only a small percentage 

commented on our legislative proposal. 

Opportunities Over the balance of my tenure, I will seek to continue the transformation of 

GAO into a world class professional services firm able to provide the 

Congress the best information and analyses possible delivered in a manner 

timely for appropriations, oversight, authorization, and legislative policy 

decision-making. While many think that this is a difficult goal to achieve, I 

believe that we are well on the way there. We will continue seeking to lead 

by example in all the aforementioned areas, including strategic planning, 

human capital management, process reengineering, information 

technology, and financial management. We will continue to examine what 

we do and how we do it focusing on achieving results. Some specific 

initiatives contemplated include the following:

• Helping the Congress in addressing challenges relating to the long-term 

fiscal outlook. GAO’s mission of assuring accountability has been and 

will remain closely linked to supporting congressional oversight and 

improving government efficiency and effectiveness. However, we 

believe in the years ahead, this support will prove even more critical 

because of the pressures that will be created by our country’s fiscal 

outlook. These pressures will require the Congress to make tough 

choices on what the government does, including how the government 

does business and who does the government’s business in the future. I 

believe that GAO can be of invaluable assistance in helping the Congress 

review and reprioritize existing mandatory and discretionary spending 

programs and tax policies. 
Page 34 GAO-03-1167T 

• Transforming government and how government does business. While 

supporting congressional oversight will remain a major part of our 

mission, we believe that the work GAO performs in the areas of insight 

(e.g., determining which programs and policies work and which don’t 

and sharing best practices and benchmarking information, both 

horizontally across government and vertically through different levels of 

government) and foresight (e.g., identifying key trends and emerging 

challenges before they reach crisis proportions and developing 

proposed frameworks for moving forward, including various options 

with related pros and cons) will be increasingly important and that our 

work in these areas needs to be further increased. I believe that GAO 

can do much to promote and facilitate government transformation, 

including how government does business. GAO’s work in the 

government transformation area (e.g., DOD business practices, 

information technology, human capital, Postal Service, and Social 

Security) has helped the Congress reexamine what the federal 

government does, what it should do, and how it does it best. An 

additional focus on foresight activities will be crucial in developing 

information for congressional decision makers facing the challenges 

and opportunities of the 21st century so that they can fully assess the 

long-term consequences of today’s policy choices. 

• Making GAO the federal employer of choice and the gold standard for a 

world class professional services organization. Creating highperforming organizations often requires a cultural transformation that 

can take years to accomplish. GAO is no exception. GAO needs to 

continue its transformation process. We have made great progress in 

the past 3 years, but much remains to be done. For example, we have 

established task teams to examine how we staff our assignments and 

how we can best facilitate additional matrix management and 

knowledge sharing. As part of this cultural transformation, we are also 

hard at work in transforming GAO into a continuous learning 

organization. Opinion surveys of employees, such as our entry-level 

staff, indicate that one of the critical elements in their staying with an 

organization is the ability to continuously learn. Therefore, we must 

continue to strive to create such an environment through our training 

programs and employee development efforts. We must also continue, 

while addressing any skills imbalances and succession planning needs, 

to invest in our staff. 
Page 35 GAO-03-1167T 

Concluding 

Observations

Since its creation, GAO has demonstrated that it has been able to adapt to 

the changing needs of the nation, the Congress, and the American people. 

Today, we live in a different world than even that of 2 years ago. The 

increasing interconnectedness of today’s world is demonstrated in the 

issues we care most about—our national security, our economic security, 

our financial security, our personal security, and our personal health. As 

evidenced by the testimony that I’ve delivered today, I have done my best, 

working closely with our congressional clients and all of GAO’s employees, 

to provide the best professional products and services to the Congress 

today and to position ourselves to continue to be able to do so in the future. 

We’ve also demonstrated that being “world class” doesn’t mean a 

substantial appropriation increase, but rather that an effective, efficient, 

and creative use of resources, aided by selected additional legislative 

authorities and flexibilities, can translate into significant pay-offs in the 

form of real and measurable positive results. However, we believe that 

GAO, similar to most public and private sector organizations, is only as 

good as our people. S. 1522 will help us address many of the challenges 

we face, particularly in the human capital arena, and we urge that this 

Committee mark up the legislation and, working with the House, enact it 

before the Congress adjourns for the year. 

Madam Chair Collins and Members of the Committee, this concludes my 

prepared statement. I would be happy to respond to any questions that you 

may have. 

Contacts For further information regarding the testimony, please contact David M. 

Walker, the Comptroller General of the United States, on (202) 512-5500 or 

at walkerd@gao.gov, Gene L. Dodaro, Chief Operating Officer (202) 512-

5600 or at dodarog@gao.gov, or Helen H. Hsing, Director of Special 

Strategic Projects (202) 512-5500 or at hsingh@gao.gov
Page 36 GAO-03-1167T 

Appendix I

GAO’s Strategic Plan 2002-2007 ApendxiI

GAO’s Strategic Plan

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 37 GAO-03-1167T 

Annual Performance Measures

(1998 and 2002)

Timeliness 93% 96%

Financial benefits per employee (millions) $6.1 $11.7

Return on investment (ROI) 58:1 88:1

Past recommendations implemented 69% 79%

Other benefits 537 906

Financial benefits (billions) $19.7 $37.7

Performance measure FY 1998 FY 2002

Actual

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 38 GAO-03-1167T 

GAO’s 2002 Reports

Food Safety

Performance-Based Budgeting

Military Transformation

School Vouchers

Restructured Energy Markets

Securities Regulation

Election Reform

Information Security

FBI Reorganization

Nursing Homes

Space Station

Homeland Security

Private Pensions

Social Security

Prescription Drugs

Aviation Safety

Welfare Reform

Army Readiness

Water Quality

Nuclear Waste

Export Controls

Tax Administration

Drug Control

Postal Transformation

Corporate Governance & 

Auditing Failures

Selected Topics

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 39 GAO-03-1167T 

The Nature of GAO’s Work

FY 1966 FY 1981

R& D Mandates Requests

22 11 15 2

33

90

10

FY 1998 FY 2002

65 74 74

4

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 40 GAO-03-1167T 

GAO’s

High

Risk

List

July 2003

*Additional authorizing legislation is likely to be required as one element of addressing this high risk area.

Collection of Unpaid Taxes 1990

DOD Contract Management 1992

NASA Contract Management 1990

Department of Energy Contract Management 1990

DOD Weapon Systems Acquisition 1990

High Risk Areas Designated High Risk

Managing Large Procurement Operations More Efficiently

Pension Benefit Guaranty Corporation Single-Employer Insurance Program* 2003

Medicaid Program* 2003

DOD Support Infrastructure Management 1997

Earned Income Credit Noncompliance 1995

HUD Single-Family Mortgage Insurance and Rental Assistance Programs 1994

Student Financial Aid Programs 1990

DOD Inventory Management 1990

Medicare Program* 1990

Reducing Inordinate Program Risks

FAA Financial Management 1999

Forest Service Financial Management 1999

IRS Financial Management 1995

DOD Financial Management 1995

Providing Basic Financial Accountability

DOD Systems Modernization 1995

IRS Business Systems Modernization 1995

FAA Air Traffic Control Modernization 1995

Ensuring Major Technology Investments Improve Services

Federal Real Property* 2003

Modernizing Federal Disability Programs* 2003

Implementing and Transforming the New Department of Homeland Security 2003

U.S. Postal Service Transformation Efforts and Long-Term Outlook* 2001

Strategic Human Capital Management* 2001

1997 Protecting Information Systems Supporting the Federal Government and

The Nation’s Critical Infrastructures

Addressing Challenges in Broad-based Transformations

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 41 GAO-03-1167T 

Sources of Requested Work 

During Congressional Sessions

0

20

40

60

80

100

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Majority

Minority

Both

Percent

103rd 104th 105th 106th 107th

Note: As of 11-18-02

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 42 GAO-03-1167T 

Engagements For Congressional Committees

107th Congress

1%

7%

24%

68%

2%

35%

9%

54%

House Committees Senate Committees

Budget

Appropriations

House Committee on Government Reform

Authorizing and other

Budget

Appropriations

Senate Committee on Governmental Affairs

Authorizing and other

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 43 GAO-03-1167T 

Engagements For Senate Committees

107th Congress

*Other includes 12 committees: Small Business and Entrepreneurship (27), Judiciary (23), Aging (18), Agriculture, Nutrition and Forestry (14), Veterans Affairs (12), 

International Narcotics Control (8), Foreign Relations (8), Intelligence (5), Indian Affairs (5), Energy and Natural Resources (5), Budget (4), and Rules and 

Administration (3).

Source: GAO.

Banking, Housing

&

Urban Affairs

Health,

Education,

Labor

& Pensions

Commerce, Science &

Transportation

87 80

47 45 39 38 34

132

161

0

50

100

150

200

Governmental Affairs

Armed Services

Finance

Appropriations

Environment &

Public Works

Other*
Appendix I

GAO’s Strategic Plan 2002-2007

Page 44 GAO-03-1167T 

Engagements For House Committees

107th Congress

89 84 77 70 62 58 51

148

341

0

100

200

300

400

Government

Reform

Appropriations

Judiciary

Energy &

Commerce

Ways

&

Means

Armed

Services

Transportation

Financial Services

Other*

*Other includes 12 committees: Veterans Affairs (33), International Relations (26), Budget (18), Resources (17), Education and Workforce (17), Small 

Business (13), Science (9), Agriculture (5), Intelligence (4), Administration (4), Homeland Security (1), and Rules (1).

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 45 GAO-03-1167T 

Testimonies (91% Favorable Responses)

Strongly Agree 70%

Generally Agree 21%

Neither Agree Nor Disagree 4%

Generally Disagree 4%

Strongly Disagree 1%

March through November 2002

Surveyed Senate Governmental Affairs and House Government Reform

57 out of 113 Responses (50%) 

70%

21%

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 46 GAO-03-1167T 

Written Products (93% Favorable)

Strongly Agree 80%

Generally Agree 13%

Neither Agree Nor Disagree 4%

Generally Disagree 1%

Strongly Disagree 2%

March through November 2002

Surveyed Senate Governmental Affairs and House Government Reform

38 out of 80 Responses (48%)

80%

13%

Source: GAO.
Appendix I

GAO’s Strategic Plan 2002-2007

Page 47 GAO-03-1167T 

GAO’s Budget Authority and FTE Levels

Fiscal Years 1992-2003

*Budget authority is shown in inflation-adjusted 1992 dollars

Source: GAO.

0

1000

2000

3000

4000

5000

6000

0

100

200

300

400

500

600 FTE level Dollars in millions

FTE’s Budget authority*

1992

1994

1996

1998

2000

2002

Fiscal years

1993

1995

1997

1999

2001

2003
Appendix I

GAO’s Strategic Plan 2002-2007

Page 48 GAO-03-1167T 

Strategic Perspectives of GAO and OIGs

GAO OIGs

We both maximize government performance and ensure accountability

 Government-wide scope

 Horizontal and longer range issues 

 Proportionately more audits, 

evaluations, policy analyses

 Renders opinion on consolidated 

financial statements

 Performance/Accountability and 

High Risk List

 Agency scope

 Vertical and immediate issues

 Proportionately more 

investigations

 Audit agency financial 

statements

 Management challenges lists

Source: GAO.
Page 49 GAO-03-1167T 

Appendix II

Comptroller General’s Testimony of July 16, 

2003 ApendxiI

GAO

United States General Accounting Office

A

Testimony

Before the Subcommittee on Civil Service and Agency 

Organization, Committee on Government Reform, House 

of Representatives

For Release on Delivery

Expected at 2:00 p.m. EDT

Wednesday, July 16, 2003

GAO

Additional Human Capital 

Flexibilities Are Needed

Statement of David M. Walker

Comptroller General of the United States

GAO-03-1024T
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 50 GAO-03-1167T 

As an arm of the legislative branch, GAO exists to support the Congress in 

meeting its constitutional responsibilities and to help improve the 

performance and ensure the accountability of the federal government for the 

American people. Unlike many executive branch agencies, which have 

either recently received or are just requesting new broad-based human 

capital tools and flexibilities, GAO has had certain human capital tools and 

flexibilities for over two decades. GAO’s latest proposal combines diverse 

initiatives that, collectively, should further GAO’s ability to enhance its 

performance, assure its accountability, and help ensure that it can attract, 

retain, motivate, and reward a top-quality and high-performing workforce 

currently and in future years. 

Specifically, GAO is requesting that the Congress (1) make permanent GAO’s 

3-year authority to offer early outs and buyouts, (2) allow GAO to set its own 

annual pay adjustment system separate from the executive branch, 

(3) permit GAO to set the pay of an employee demoted as a result of 

workforce restructuring or reclassification to keep his/her basic pay but to 

set future increases consistent with the new position’s pay parameters,

(4) provide authority to reimburse employees for some relocation expenses 

when that transfer has some benefit to GAO but does not meet the legal 

requirements for reimbursement, (5) provide authority to place upper-level 

hires with fewer than 3 years of federal experience in the 6-hour leave 

category, (6) authorize an executive exchange program with the private 

sector, and (7) change GAO’s legal name from the “General Accounting 

Office” to the “Government Accountability Office.” 

GAO has used the narrowly tailored flexibilities granted by the Congress 

previously in Public Law 106-303, the GAO Personnel Flexibilities Act, 

responsibly, prudently, and strategically. GAO believes that it is vitally 

important to its future to continue modernizing and updating its human 

capital policies and system in light of the changing environment and 

anticipated challenges ahead. GAO’s proposal represents a logical 

incremental advancement in modernizing GAO’s human capital policies. 

Based on employee feedback, there is little or no concern relating to most of 

the proposal’s provisions. Although some elements of GAO’s initial straw 

proposal were controversial (e.g., GAO’s pay adjustment provision), the 

Comptroller General has made a number of changes, clarifications, and 

commitments to address employee concerns. While GAO believes that some 

employees remain concerned about the pay adjustment provision, GAO also 

believes that employee concerns have been reduced considerably due to the 

clarifications, changes, and commitments the Comptroller General has 

made. Given GAO’s human capital infrastructure and unique role in leading 

by example in major management areas, the rest of the federal government 

can benefit from GAO’s pay system experience. 

The Subcommittee seeks GAO’s 

views on its latest human capital 

proposal that is slated to be 

introduced as a bill entitled the 

GAO Human Capital Reform Act of 

2003. 

GAO believes that its proposal is 

well reasoned and reasonable. 

Although GAO’s request for 

authority to adjust its annual pay 

system separate from the executive 

branch appears broad based, there 

are compelling reasons why GAO 

ought to be given this authority. 

These include the fact that GAO 

already has a hybrid pay system 

established by the authority the 

Congress granted it over two 

decades ago, the proposed 

authority is not radical if viewed in 

the light of authorities already 

granted and requested by other 

agencies, and GAO already has a 

number of key systems and 

safeguards in place and has plans 

to build in additional safeguards if 

granted the authority. 

GAO has conducted extensive 

external and internal outreach 

efforts on its latest human capital 

proposal. GAO respectfully 

requests the Subcommittee’s 

support and prompt passage by the 

Congress. 

www.gao.gov/cgi-bin/getrpt?GAO-03-1024T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Sallyanne 

Harper at (202) 512-5800 or 

harpers@gao.gov. 

Highlights of GAO-03-1024T, a testimony 

before the Subcommittee on Civil Service 

and Agency Organization, Committee on 

Government Reform, House of 

Representatives 

July 16, 2003 

GAO

Additional Human Capital Flexibilities Are 

Needed
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 51 GAO-03-1167T 

Page 1 GAO-03-1024T 

Madam Chairwoman and Members of the Subcommittee:

I am pleased to be here today to discuss GAO’s latest human capital 

proposal. Chairwoman Davis, we at GAO appreciate your support of our 

proposal and your leadership in seeking additional sponsors for the bill you 

plan to introduce, the GAO Human Capital Reform Act of 2003.

As I have testified on many occasions, strategic human capital management 

must be the centerpiece of any serious government transformation effort. 

A key component of this is modern, effective, and credible human capital 

policies, which are critical to the successful functioning of any enterprise, 

both public and private. As the Chief Executive Officer and primary 

steward of GAO, I am not just responsible for GAO’s current economy, 

efficiency, and effectiveness, I am also responsible for ensuring that we are 

well positioned to serve our congressional clients, maximize our 

performance, and assure our accountability in the future. 

With this important responsibility in mind, I asked this committee and 

others over 3 years ago to grant GAO certain additional narrowly tailored 

human capital authorities. In enacting Public Law 106-303, known as the 

GAO Personnel Flexibilities Act, the Congress granted GAO certain 

flexibilities, which we have used responsibly to help strategically reshape 

the organization in order to better support the Congress and the American 

people. After reviewing the range and limits of our existing administrative 

and legal authorities, I have concluded that we now need to seek from the 

Congress additional human capital flexibilities in order for GAO to: ensure 

quality service to the Congress; continue leading by example in the 

government transformation, in general, and human capital reform areas in 

particular; and continue to attract, retain, motivate, and reward a quality 

and high- performing workforce, both currently and in future years. We 

believe that our proposal is well reasoned and reasonable, especially if 

viewed in the light of authorities already granted and requested by other 

agencies and the extensive external and internal outreach efforts we have 

conducted. We also respectfully request your support and prompt passage 

by the Congress. 

GAO: A Unique Agency 

with a Hybrid System

As an arm of the legislative branch, GAO exists to support the Congress in 

meeting its constitutional responsibilities and to help improve the 

performance and ensure the accountability of the federal government for 

the benefit of the American people. Today, GAO is a multidisciplinary 

professional services organization, comprised of about 3,250 employees, 
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that conducts a wide range of financial and performance audits, program 

evaluations, management reviews, investigations, and legal services 

spanning a broad range of government programs and functions. GAO’s 

work covers everything from the challenges of securing our homeland, to 

the demands of an information age, to emerging national security threats, 

and the complexities of globalization. We are committed to transforming 

how the federal government does business and to helping government 

agencies become organizations that are more results oriented and 

accountable to the public. We are also committed to leading by example in 

all major management areas.

Given GAO’s role as a key provider of information and analyses to the 

Congress, maintaining the right mix of technical knowledge and subject 

matter expertise as well as general analytical skills is vital to achieving the 

agency’s mission. Carrying out GAO’s mission today is a multidisciplinary 

staff reflecting the diversity of knowledge and competencies needed to 

deliver a wide array of products and services to support the Congress. Our 

mission staff—at least 67 percent of whom have graduate degrees—hold 

degrees in a variety of academic disciplines, such as accounting, law, 

engineering, public administration, economics, and social and physical 

sciences. I am extremely proud of our GAO employees and the difference 

that they make for the Congress and the nation. They make GAO the 

world-class organization that it is, and I think it is fair to say that while they 

account for about 80 percent of our costs, they constitute 100 percent of 

our real assets. 

Because of our unique role as an independent overseer of federal 

expenditures, fact finder, and honest broker, GAO has evolved into an 

agency with hybrid systems. This is particularly evident in GAO’s 

personnel and performance management systems. Unlike many executive 

branch agencies, which have either recently received or are just requesting 

new broad-based human capital tools and flexibilities, GAO has had certain 

human capital tools and flexibilities for over two decades. As a result, we 

have been able to some extent to operate our personnel system with a 

degree of independence that most agencies in the executive branch do not 

have. For example, we are excepted from certain provisions of Title 5, 

which governs the competitive service, and we are not subject to Office of 

Personnel Management (OPM) oversight. 

Until 1980, our personnel system was indistinguishable from those of 

executive branch agencies—that is, GAO was subject to the same laws, 

regulations, and policies as they were. However, with the expansion of 
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GAO’s role in congressional oversight of federal agencies and programs, 

concerns grew about the potential for conflicts of interest. Could GAO 

conduct independent and objective reviews of executive branch agencies, 

such as OPM, when these agencies had the authority to review GAO’s 

internal personnel activities? As a result, GAO worked with the Congress 

to pass the GAO Personnel Act of 1980, the principal goal of which was to 

avoid potential conflicts by making GAO’s personnel system more 

independent of the executive branch. 

Along with this independence, the act gave GAO greater flexibility in hiring 

and managing its workforce. Among other things, it granted the 

Comptroller General authority to

• appoint, promote, and assign employees without regard to Title 5 

requirements in these areas;

• set employees’ pay without regard to the federal government’s General 

Schedule (GS) pay system’s classification standards and requirements; 

and

• establish a merit pay system for appropriate officers and employees. 

By excepting our agency from the above requirements, the GAO Personnel 

Act of 1980 allowed us to pursue some significant innovations in managing 

our people. One key innovation was the establishment of a “broad 

banding,” or “pay banding,” approach for classifying and paying our Analyst 

and Attorney workforce in 1989. This was coupled with the adoption of a 

pay for performance system for this portion of our workforce. Therefore, 

while other agencies are only now requesting the authority to establish 

broad banding and pay for performance systems, GAO has had almost 15 

years of experience with such systems. 

Although GAO’s personnel and pay systems are not similar to those of 

many executive branch agencies, I must emphasize that in important ways, 

our human capital policies and programs are very much and will continue 

to remain similar to those of the larger federal community. GAO’s current 

human capital proposal will not change our continued support for certain 

national goals (e.g., commitment to federal merit principles, protection 

from prohibited personnel practices, employee due process through a 

specially created entity—the Personnel Appeals Board (PAB), and 

application of veterans’ preference consistent with its application in the 

executive branch for appointments and all appropriate reductions-in-
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force). Furthermore, our pay system is and will continue to be consistent 

with the statutory principle of equal pay for equal work while making pay 

distinctions on the basis of an individual’s responsibilities and 

performance. In addition, we are covered and will remain covered by Title 

VII of the Civil Rights Act, which forbids employment discrimination. At 

GAO, we also emphasize opportunity and inclusiveness for a diverse 

workforce and have zero tolerance for discrimination of any kind. We have 

taken and will continue to take disciplinary action when it “will promote 

the efficiency of the service”—which for us includes such things as GAO’s 

ability to do its work and accomplish its mission. 

Although we are not subject to OPM oversight, we are nevertheless subject 

to the oversight of the Congress including our appropriations 

committees—the Senate Committee on Appropriations’ Subcommittee on 

the Legislative Branch and the House Committee on Appropriations’ 

Subcommittee on Legislative—and our oversight committees—the Senate 

Committee on Governmental Affairs and the House Committee on 

Government Reform. In addition, GAO’s management actions are subject 

to the review of an independent five member board, the Personnel Appeals 

Board, which performs functions similar to those provided by the Merit 

Systems Protection Board for federal executive branch employees’ 

personnel grievances. The Congress authorized the establishment of the 

PAB specifically for GAO in order to protect GAO’s independence as an 

agency. As with other federal executive branch employees, our employees 

have the right to appeal certain kinds of management actions including 

removal, suspension for more than 14 days, reductions in pay or grade, 

furloughs of not more than 30 days, a prohibited personnel practice, an 

action involving prohibited discrimination, a prohibited political activity, a 

within-grade denial, unfair labor practices or other labor relations issue. 

However, they do so to the PAB rather than the MSPB. 

While we currently do not have any bargaining units at GAO, our 

employees are free to join employee organizations, including unions. In 

addition, we engage in a range of ongoing communication and coordination 

efforts to empower our employees while tapping their ideas. For example, 

we regularly discuss a range of issues of mutual interest and concern with 

our democratically elected Employee Advisory Council (EAC). Chris 

Keisling, who is a Band III field office representative of the EAC, is 

testifying with me today. In addition, I consult regularly with our managing 

directors on issues of mutual interest and concern. In that spirit, I will 

consult with the managing directors and the EAC before implementing the 

provisions related to our human capital proposal. As we did with the 
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flexibilities granted it under Public Law 106-303, the GAO Personnel 

Flexibilities Act, we will implement the authorities granted under this 

provision of our proposal only after issuing draft regulations and providing 

all employees notice and an opportunity for comment. Specifically, for the 

authorities granted to us under Public Law 106-303, we posted the draft 

regulations on our internal Web site and sent a notice to all GAO staff 

advising them of the draft regulations and seeking their comments. 

Key Elements of GAO’s 

Proposal

GAO’s proposal combines diverse initiatives that, collectively, should 

further GAO’s ability to enhance our performance, assure our 

accountability, and help ensure that we can attract, retain, motivate, and 

reward a top quality and high-performing workforce currently and in future 

years. These initiatives should also have the benefit of helping guide other 

agencies in their human capital transformation efforts. Specifically, we are 

requesting that the Congress provide us the following additional human 

capital tools and flexibilities: 

• make permanent GAO’s 3-year authority to offer voluntary early 

retirement and voluntary separation payments; 

• allow the Comptroller General to adjust the rates of basic pay of GAO on 

a separate basis than the annual adjustments authorized for employees 

of the executive branch; 

• permit GAO to set the pay of an employee demoted as a result of 

workforce restructuring or reclassification at his or her current rate 

with no automatic annual increase to basic pay until his or her salary is 

less than the maximum rate of their new position; 

• provide authority in appropriate circumstances to reimburse employees 

for some relocation expenses when that transfer does not meet current 

legal requirements for entitlement to reimbursement but still benefits 

GAO;

• provide authority to put upper-level hires with less than 3 years of 

federal experience in the 6-hour leave category; 

• authorize an executive exchange program with private sector 

organizations working in areas of mutual concern and involving areas in 

which GAO has a supply-demand imbalance; and
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• change GAO’s legal name from the “General Accounting Office” to the 

“Government Accountability Office.”

I will go into more detail later in my testimony on the details and rationale 

for each of these proposals.

Process for Developing 

the Proposal

In developing our proposal, we used a phased approach that involved 

(1) developing a straw proposal, (2) vetting the straw proposal broadly 

both externally and internally, and (3) making appropriate adjustments 

based on comments and concerns raised during the vetting process. As we 

have previously testified, many of the management tools and flexibilities 

we needed to pursue modern human capital management approaches are 

already available to us and we have used them. We have chosen to come to 

the Congress for legislation only where the tools and flexibilities we have 

were inadequate for addressing the challenges we faced. For example, the 

Congress enacted Public Law 106-303 to provide us with certain narrowly 

tailored flexibilities we needed to reshape our workforce and establish 

senior-level technical positions in critical areas. These flexibilities were 

needed to help GAO address the past decade’s dramatic downsizing 

(approximately 40 percent from 1992 through 1997) combined with a 

significant increase in the retirement-eligible workforce that jeopardized 

our ability to perform our mission in the years ahead. 

In developing our preliminary proposal, we gathered suggestions for 

addressing GAO’s human capital challenges as well as challenges faced by 

the rest of the federal government, discussed and debated them internally, 

and compiled a preliminary list of proposals. We received a number of 

viable proposals that we separated into two groups: (1) proposals that 

would be more applicable government-wide and (2) proposals GAO should 

undertake. I had our Office of General Counsel review the proposals GAO 

should undertake to determine whether we needed to seek legislative 

authority to implement them or whether I could implement them under the 

Comptroller General’s existing authority. 

Mindful of the need to keep the Congress appropriately informed, my staff 

and I began our outreach to GAO’s appropriations and oversight 

committees on the need for additional human capital flexibilities beginning 

late last year. In early spring of this year, we shared with these committees 

a confidential draft of a preliminary draft proposal. We also advised them 

that we planned to conduct a broad range of outreach and consultation on 

the proposal with our employees and other interested parties and that we 
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would send them our revised legislative proposal at a later date. We 

conducted an extensive outreach and consultation effort with members of 

the Congress, including chairmen and ranking minority members of our 

appropriations and oversight committees and a number of local delegation 

members; congressional staff; the Director of OPM; the Deputy Director for 

Management of the Office of Management and Budget; public sector 

employee associations and unions; and various “good government” 

organizations. 

Within GAO, members of the Executive Committee (EC), which includes 

our Chief Operating Officer, our General Counsel, our Chief Mission 

Support Officer and me, engaged in an extensive and unprecedented range 

of outreach and consultation with GAO employees. This outreach included 

numerous discussions with our managing directors, who manage most of 

GAO’s workforce, and members of the EAC. 

The EAC is an important source of input and a key communications link 

between executive management and the constituent groups its members 

represent. Comprising employees who represent a cross-section of the 

agency, the EAC meets at least quarterly with me and members of our 

senior executive team. The EAC’s participation is an important source of 

front-end input and feedback on our human capital and other major 

management initiatives. Specifically, EAC members convey the views and 

concerns of the groups they represent, while remaining sensitive to the 

collective best interest of all GAO employees; propose solutions to 

concerns raised by employees; provide input to and comment on GAO 

policies, procedures, plans, and practices; and help to communicate 

management’s issues and concerns to employees. 

I have also used my periodic “CG chats,” closed circuit televised broadcasts 

to all GAO employees, as a means of explaining our proposal and 

responding to staff concerns and questions. Specifically, I have held two 

televised chats to inform GAO staff about the proposal. One of these chats 

was conducted in the form of a general listening session, open to all 

headquarters and field office staff, featuring questions from members of 

the EAC and field office employees. I have also discussed the proposal 

with the Band IIs (GS-13-14 equivalents) in sessions held in April 2003, and 

with our Senior Executive Service (SES) and Senior Level members at our 

May off-site meeting. In addition to my CG chats, I have personally held a 

number of listening sessions, including a session with members of our 

Office of General Counsel, two sessions with our administrative support 

staff, and sessions with staff in several field offices. Furthermore, the Chief 
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Operating Officer represented me in a listening session with Band I field 

office personnel. Finally, I have also personally received and considered a 

number of E-mails, notes, and verbal comments on the human capital 

proposal. 

I would like to point out to others seeking human capital flexibilities that 

the outreach process, while necessary, is indeed time-consuming and 

requires real and persistent commitment on the part of an agency’s top 

management team. In order for the process to work effectively, it also 

requires an ongoing education and dialogue process that will, at times, 

involve candid, yet constructive, discussion between management and 

employees. This is, however, both necessary and appropriate as part of the 

overall change management process. To facilitate the education process on 

the proposal, we posted materials on GAO’s internal website, including 

Questions and Answers developed in response to employees’ questions and 

concerns, for all employees to review. Unfortunately, others who have 

sought and are seeking additional human capital flexibilities have not 

employed such an extensive outreach process.

Nature of GAO 

Employee Concerns

Based on feedback from GAO employees, there is little or no concern 

relating to most of the provisions in our proposal. There has been 

significant concern expressed over GAO’s proposal to decouple GAO’s pay 

system from that of the executive branch. Some concerns have also been 

expressed regarding the pay retention provision and the proposed name 

change. As addressed below, we do believe, however, that these employee 

concerns, have been reduced considerably due to the clarifications, 

changes, and commitments resulting from our extensive outreach and 

consultation effort. 

On the basis of various forms of GAO employee feedback, it is not 

surprising, since pay is important to all employees, that the provision that 

has caused the most stir within GAO has been the pay adjustment 

provision. Fundamentally, some of our employees would prefer to remain 

with the executive branch’s GS system for various types of pay increases.

There are others close to retirement who are concerned with their “high 

three” and how the modified pay system, when fully implemented, might 

affect permanent base pay, which is the key component of their retirement 

annuity computation. Overall, there is a great desire on the part of GAO 

employees to know specifically how this authority would be implemented. 
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It is important to note that, even in the best of circumstances, it is difficult 

to garner a broad-based consensus of employee support for any major pay 

system changes. While it is my impression, based on employee feedback, 

that we have made significant strides in allaying the significant initial 

concerns expressed by employees regarding the pay adjustment provision, 

I believe that some of these concerns will remain throughout 

implementation. In addition, some can never be resolved because they 

involve philosophical differences or personal interest considerations on 

behalf of individual GAO employees.

GAO’s history with pay banding certainly is illustrative of how difficult it is 

for an organization to allay employee fears even in the face of obvious 

benefits. While history has proven that an overwhelming majority of GAO 

employees have benefited from GAO’s decision to migrate our Analysts and 

Attorneys into pay banding and pay for performance systems, there was 

significant opposition by GAO employees regarding the decision to move 

into these systems. The experience of the executive branch’s pay 

demonstration projects involving federal science and technology 

laboratories shows that employee support at the beginning of the pay 

demonstration projects ranged from 34 percent to 63 percent. In fact, OPM 

reports that it takes about 5 years to get support from two-thirds of 

employees with managers generally supporting demonstrations at a higher 

rate than employees. 

Following the pay adjustment provision but a distant second in terms of 

employee concern, has been the pay reclassification provision, which 

would allow GAO employees demoted as a result of workforce 

restructuring or reclassification to keep their basic pay rates; however, 

future pay increases would be set consistent with the new positions’ pay 

parameters. Currently, employees subject to a reduction-in-force or 

reclassification can be paid at a rate that exceeds the value of their duties 

for an extended period. 

A distant third in terms of employee concern is the proposed name change 

from the “General Accounting Office’ to the “Government Accountability 

Office,” which would allow the agency’s title to more accurately reflect its 

mission, core values, and work. My sense is that some GAO employees 

who have been with GAO for many years have grown comfortable with the 

name and may prefer to keep it. At the same time, I believe that a 

significant majority of our employees support the proposed name change. 

Importantly, all of our external advisory groups, including the Comptroller 

General’s Advisory Council, consisting of distinguished individuals from 
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the public and private sectors, and the Comptroller General’s Educators 

Advisory Council, consisting of distinguished individuals from the 

academic community, and a variety of “good government” groups strongly 

support the proposed name change. 

Changes Made in 

Response to Employee 

Feedback

The members of the EC and I took our employees’ feedback seriously and 

have seriously considered their concerns. Key considerations in our 

decision making were our institutional responsibility as leaders and 

stewards of GAO and the overwhelming support expressed through 

anonymous balloting by our senior executives, who also serve as leaders 

and stewards for GAO, for proceeding with all of the provisions of our 

human capital proposal, including the pay adjustment provision. 

Specifically, in a recent confidential electronic balloting of our senior 

executives, support for each element of our proposal ranged from over 2 to 

1 to unanimous, depending on the provision. Support for the proposed pay 

adjustment provision was over 3 to 1, and support for the proposed pay 

protection provision was over 4 to 1. Given this and other considerations, 

ultimately, we decided to proceed with the proposal but adopted a number 

of the suggestions made by employees in these sessions, including several 

relating to the proposal to decouple GAO annual pay adjustments from 

those applicable to many executive branch agencies. 

A key suggestion adopted include a minimum 2-year transition period for 

ensuring the smooth implementation of the pay provisions which would 

also allow time for developing appropriate methodologies and issuing 

regulations for notice and comment by all employees. Another key 

suggestion adopted was the commitment to guarantee annual across the 

board purchase power protection and to address locality pay 

considerations to all employees rated as performing at a satisfactory level 

or above (i.e., meeting expectations or above) absent extraordinary 

economic circumstances or severe budgetary constraints. We have chosen 

to implement this guarantee through a future GAO Order rather than 

through legislative language because prior “pay protection” guarantees 

relating to pay banding made by my predecessor, Comptroller General 

Charles A. Bowsher, used this means effectively to document and 

operationalize that guarantee. I have committed to our employees that I 

would include this guarantee in my statement here today so that it could be 

included as part of the legislative record. Additional safeguards relating to 

our pay proposal are set forth below. 
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The following represents additional information regarding our specific 

proposal.

Voluntary Early 

Retirement and 

Separation Incentive 

Payment Authorities

Section 2 of our proposal would make permanent the authority of GAO 

under section 1 and 2 of Public Law 106-303, the GAO Personnel 

Flexibilities Act of 2000, to offer voluntary early retirements (commonly 

termed “early outs”) and voluntary separation payments (commonly 

termed “buyouts”) to certain GAO employees when necessary to realign 

GAO’s workforce in order to meet budgetary or mission needs, correct skill 

imbalances, or reduce high-grade positions. We believe that we have 

behaved responsibly in exercising the flexibilities that the Congress 

granted us and deserve a permanent continuation of these authorities. In 

addition, the two flexibilities which we would like to be made permanent 

are narrowly drawn and voluntary in nature, since the employees have the 

right to decide if they are interested in being considered for the benefits. 

Further, the provisions also have built in limits: no more than 10 percent of 

the workforce in any one year can be given early outs and no more than 5 

percent can be given buyouts. 

GAO’s transformation effort is a work in progress, and for that reason, the 

agency is seeking legislation to make the voluntary early retirement 

provision in section 1 of the law permanent. While the overall number of 

employees electing early retirement has been relatively small, GAO 

believes that careful use of voluntary early retirement has been an 

important tool in incrementally improving the agency’s overall human 

capital profile. Each separation has freed resources for other uses, enabling 

GAO to fill an entry-level position or to fill a position that will reduce a skill 

gap or address other succession concerns. Similarly, we are seeking 

legislation to make section 2—authorizing the payment of voluntary 

separation incentives—permanent. Although GAO has not yet used its 

buyout authority and has no plans to do so in the foreseeable future, we are 

seeking to retain this flexibility. The continuation of this provision 

maximizes the options available to the agency to deal with future 

circumstances, which cannot be reasonably anticipated at this time. 

Importantly, this provision seems fully appropriate since the Homeland 

Security Act of 2002 provides most federal agencies with permanent early 

out and buyout authority.

Public Law 106-303 required that GAO perform an assessment of the 

exercise of the authorities provided under that law, which included the 

authority for the Comptroller General to provide voluntary early retirement 
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and voluntary separation incentive payments. With your permission, I 

would like to submit the assessment entitled Assessment of Public Law 

106-303: The Role of Personnel Flexibilities in Strengthening GAO’s 

Human Capital, issued on June 27, 2003, for the record. I will now 

highlight for you our observations from that assessment on voluntary early 

retirement and buyouts. 

Voluntary Early Retirement Public Law 106-303 also allows the Comptroller General to offer voluntary 

early retirement to up to 10 percent of the workforce when necessary or 

appropriate to realign the workforce to address budgetary or mission 

constraints; correct skill imbalances; or reduce high-grade, supervisory, or 

managerial positions. This flexibility represents a proactive use of early 

retirement to shape the workforce to prevent or ameliorate future 

problems. GAO Order 2931.1, Voluntary Early Retirement, containing the 

agency’s final regulations, was issued in April 2001. Under the regulations, 

each time the Comptroller General approves a voluntary early retirement 

opportunity, he establishes the categories of employees who are eligible to 

apply. These categories are based on the need to ensure that those 

employees who are eligible to request voluntary early retirement are those 

whose separations are consistent with one or more of the three reasons for 

which the Comptroller General may authorize early retirements. Pursuant 

to GAO’s regulations, these categories are defined in terms of one or more 

of the following criteria:

• organizational unit or subunits,

• occupational series,

• grade or band level, 

• skill or knowledge requirements,

• performance appraisal average,

• geographic location, or

• other similar factors that the Comptroller General deems necessary and 

appropriate.

Since it is essential that GAO retain employees with critical skills as well as 

its highest performers, certain categories of employees have been ineligible 
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under the criteria. Some examples of ineligible categories are employees 

receiving retention allowances because of their unusually high or unique 

qualifications; economists, because of the difficulty that the agency has 

experienced in recruiting them; and staff in the information technology 

area. In addition, employees with performance appraisal averages above a 

specified level have not been eligible under the criteria. 

To give the fullest consideration to all interested employees, however, any 

employee may apply for consideration when an early retirement 

opportunity is announced, even if he or she does not meet the stated 

criteria. Furthermore, under our order, the Comptroller General may 

authorize early retirements for these applicants on the basis of the facts 

and circumstances of each case. The Comptroller General or his EC 

designee considers each applicant and makes final decisions based on 

GAO’s institutional needs. Only employees whose release is consistent 

with the law and GAO’s objective in allowing early retirement are 

authorized to retire early. In some cases, this has meant that an employee’s 

request must be denied. 

GAO held its first voluntary early retirement opportunity in July 2001.

Employees who were approved for early retirement were required to 

separate in the first quarter of fiscal 2002. As required by the act, 

information on the fiscal 2002 early retirements was reported in an 

appendix to our 2002 Performance and Accountability Report. Another 

voluntary early retirement opportunity was authorized in fiscal 2003, and 

employees were required to separate by March 14, 2003. In anticipation of 

the 3-year sunset on our authority to provide voluntary early retirements, I 

have recently announced a final voluntary early retirement opportunity 

under our current authority. Table 1 provides the data on the number of 

employees separated by voluntary early retirement as of May 30, 2003. 
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Table 1: Summary Data on Voluntary Early Retirements

Source: GAO.

As you can see from the table, of the 79 employees who separated from 

GAO through voluntary early retirement, 66, or 83.5 percent, were highgrade, supervisory, or managerial employees. High-grade, supervisory, or 

managerial employees are those who are GS-13s or above, if covered by 

GAO’s GS system; Band IIs or above, if covered by GAO’s banded systems 

for Analysts and Attorneys; or in any position in GAO’s SES or Senior-Level 

system.

In recommending that GAO’s voluntary early out authority be made 

permanent, I would like to point to our progress in changing the overall 

shape of the organization. The 1990s were a difficult period for ensuring 

that GAO’s workforce would remain appropriately sized, shaped, and 

skilled to meet client demands and agency needs. Severe downsizing of the 

workforce, including a suspension of most hiring from 1992 through 1997, 

and constrained investments in such areas as training, performance 

incentives, rewards, and enabling technology left GAO with a range of 

human capital and operational challenges to address. Over 3 years ago, 

when GAO sought additional human capital flexibilities, our workforce was 

sparse at the entry level and plentiful at the midlevel. We were concerned 

about our ability to support the Congress with experienced and 

knowledgeable staff over time, given the significant percentage of the 

agency’s senior managers and analysts reaching retirement eligibility and 

the small number of entry-level employees who were training to replace 

more senior staff. 

As illustrated in figure 1, by the end of fiscal year 2002, GAO had almost a 

74 percent increase in the proportion of staff at the entry level (Band I) 

Applications/Status

of applications

Fiscal 2002 Fiscal 2003 Totals

Number

Percentage

of total Number

Percentage

of total Number

Percentage

of total

Total applications submitted 78 100.0 39 100.0 117 100.0

Approved applications 72 92.3 37 94.8 109 93.1

Disapproved applications 6 7.7 2 5.1 8 6.8

Approved applications withdrawn by 

employees 18 23.0 12 30.7 30 25.6

Applicants separated by voluntary early 

retirement 54 69.3 25 64.1 79 67.5
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compared with fiscal year 1998. Also, the proportion of the agency’s 

workforce at the midlevel (Band II) decreased by 16 percent. 

Figure 1: GAO’s Human Capital Profile

Voluntary Separation 

Payments

In addition to authorizing voluntary early retirement for GAO employees, 

Public Law 106-303 permits the Comptroller General to offer voluntary 

separation incentive payments—buyouts—when necessary or appropriate 

to realign the workforce to meet budgetary constraints or mission needs; 

correct skill imbalances; or reduce high-grade, supervisory, or managerial 

positions. Under the act, up to 5 percent of employees could be offered 

such an incentive, subject to criteria established by the Comptroller 

General. 

The act requires GAO to deposit into the U.S. Treasury an amount 

equivalent to 45 percent of the final annual basic salary of each employee to 

whom a buyout is paid. The deposit is in addition to the actual buyout 

amount, which can be up to $25,000 for an approved individual. Given the 

many demands on agency resources, these costs present a strong financial 

disincentive to use the provision if at all. GAO anticipates little, if any, use 

of this authority because of the associated costs. For this reason, as well as 

to avoid creating unrealistic employee expectations, GAO has not 

developed and issued agency regulations to implement this section of the 

act. Nevertheless, as stated earlier, it is prudent for us to seek the 

continuation of this provision because it maximizes the options available to 

the agency to deal with future circumstances. Since GAO is also eligible to 

request buyouts under the provisions of the Homeland Security Act, the 

Mission

Mission Supportb

SES/SL

Band III

Band II

Band I

Othera

Figures in percentages

FY 1998 FY 2002

12.2

45.6

13.1

21.5 19.5

3.4 3.5

12.0

38.1

22.8

4.2 4.1

Source: GAO.
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 66 GAO-03-1167T 

Page 16 GAO-03-1024T 

agency will consider its options under this provision as well. However, 

under the Homeland Security Act, GAO would have to seek OPM approval 

of any buyouts, which raises serious independence concerns.

Annual Pay Setting 

Policy and 

Adjustments

Section 3 and 4 of our proposal would provide GAO greater discretion in 

determining the annual across the board and locality pay increases for our 

employees. Under our proposal, GAO would have the discretion to set 

annual pay increases by taking into account alternative methodologies 

from those used by the executive branch and various other factors, such as 

extraordinary economic conditions or serious budgetary constraints. 

While the authority requested may initially appear to be broad based, there 

are compelling reasons why GAO ought to be given such authority. First, as 

I discussed at the beginning of my testimony, GAO is an agency within the 

legislative branch and already has a hybrid pay system established under 

the authority the Congress granted over two decades ago. Therefore, our 

proposal represents a natural evolution in GAO’s pay for performance 

system. Second, GAO’s proposal is not radical if viewed from the vantage 

point of the broad-based authority that has been granted the Department of 

Homeland Security (DHS) under the Homeland Security Act of 2002; 

agencies that the Congress has already granted the authority to develop 

their own pay systems; the authorities granted to various demonstration 

projects over the past two decades; and the authority Congress is currently 

contemplating providing the Department of Defense (DOD). Third, GAO 

already has a number of key safeguards and has plans to build additional 

safeguards into our modified pay system if granted this authority. 

Our proposal seeks to take a constructive step in addressing what has been 

widely recognized as fundamental flaws in the federal government’s 

approach to white-collar pay. These flaws and the need for reform have 

been addressed in more detail in OPM’s April 2002 White Paper, A Fresh 

Start For Federal Pay: A Case for Modernization, and more recently the 

National Commission on the Public Service’s January 2003 report on 

revitalizing the public service. The current federal pay and classification 

system was established over 60 years ago for a federal workforce that was 

made up largely of clerks performing routine tasks which were relatively 

simple to assess and measure. Today’s federal workforce is composed of 

much higher graded and knowledge-based workers.

Although there have been attempts over the years to refine the system by 

enacting such legislation as the Federal Employees Pay Comparability Act 

(FEPCA) which sought to address, among other things, the issue of pay 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 67 GAO-03-1167T 

Page 17 GAO-03-1024T 

comparability with the nonfederal sector, the system still contains certain 

fundamental flaws. The current system emphasizes placing employees in a 

relative hierarchy of positions based on grade; is a “one size fits all 

approach” since it does not recognize changes in local market rates for 

different occupations; and is performance insensitive in that all employees 

are eligible for the automatic across the board pay increases regardless of 

their performance. Specifically, the annual across the board base pay 

increase, also commonly referred to as the cost of living adjustment 

(COLA) or the January Pay Increase which the President recommends and 

the Congress approves, provides a time driven annual raise keyed to the 

Employment Cost Index (ECI) to all employees regardless of performance. 

In certain geographic areas, employees receive a locality adjustment tied to 

the local labor markets. However, in calculating the locality adjustment, 

for example, it is my understanding that FEPCA requires the calculation of 

a single average, based on the dominant federal employer in an area, which 

does not sufficiently recognize the differences in pay rates for different 

occupations and skills. In view of the fact that today we are in a knowledgebased economy competing for the best knowledge workers in the job 

market, I believe that new approaches and methodologies are warranted. 

This is especially appropriate for GAO’s highly educated and skilled 

workforce.

Our proposed pay adjustment provision along with the other provisions of 

GAO’s human capital proposal are collectively designed to help GAO 

maintain a competitive advantage in attracting, motivating, retaining, and 

rewarding a high performing and top-quality workforce both currently and 

in future years. First, under our proposal, GAO would no longer be 

required to provide automatic pay increases to employees who are rated as 

performing at a below satisfactory level. Second, when the proposal is fully 

implemented, GAO would be able to allocate more of the funding—

currently allocated for automatic across-the-board pay adjustments to all 

employees—to permanent base pay adjustments that would vary based on 

performance. In addition, our proposal would affect all GAO, non-wage 

grade employees, including the SES and Senior Level staff. 

Ultimately, if GAO is granted this authority, all GAO employees who 

perform at a satisfactory level will receive an annual base pay adjustment 

composed of purchase power protection and locality based pay increases 

absent extraordinary economic circumstances or severe budgetary 

constraints. GAO will be able to develop and apply its own methodology 

for annual cost-of-living and locality pay adjustments. The locality pay 

increase would be based on compensation surveys conducted by GAO and 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 68 GAO-03-1167T 

Page 18 GAO-03-1024T 

which would be tailored to the nature, skills, and composition of GAO’s 

workforce. The performance part of an employee’s annual raise would 

depend on the level of the employee’s performance and that employee’s pay 

band. We estimate that at least 95 percent of the workforce will qualify for 

an additional performance-based increase. However, under this provision, 

employees who perform below a satisfactory level will not receive an 

annual increase of either type. 

How GAO Plans to Use This 

Authority

GAO’s major non-SES pay groups include (1) Analysts and Attorneys which 

comprises the majority of our workforce and is our mission group, (2) the 

Professional Development Program staff (PDP) which is our entry level 

mission group, (3) the Administrative Professional Support Staff (APSS), 

which is our mission support group for the most part, and (4) Wage Grade 

employees who primarily operate our print plant. Each of these groups 

currently operate in a different pay system. Generally, our mission staff are 

all in pay bands whereby they currently receive the annual across-theboard base pay increase and locality pay increase similar to the GS pay 

system, along with performance-based annual increases that are based on 

merit. Generally, our mission support staff, with some exceptions, remain 

in a system similar to the GS pay system with its annual across- the-board 

pay increases, locality pay, quality step increases, and within grade 

increases. We are currently in the process of migrating the mission support 

staff into pay bands and a pay for performance system. Our Wage Grade 

staff will continue to be covered by the federal compensation system for 

trade, craft, and laboring employees. Because of the small number of 

employees and the nature of their work, we have no plans to apply the pay 

adjustment provision authority to this group. 

I would like to point out the tables in appendices I through IV, which 

succinctly describe how GAO plans to operationalize our authority under 

our proposed annual pay adjustment provision over time. 

GAO’s Proposed Pay 

Authority Is Reasonable

GAO’s proposal for additional pay flexibility is reasonable in view of the 

authority the Congress has already granted DHS through the Homeland 

Security Act of 2002; the other agencies for whom the Congress has granted 

the authority to develop their own pay systems; the demonstration projects 

that OPM has authorized; and the authorities that other agencies in the 

executive branch are currently seeking (e.g., DOD). 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 69 GAO-03-1167T 

Page 19 GAO-03-1024T 

While we are aware that the passage of the Homeland Security Act of 2002 

was not without its difficult moments, particularly with respect to the 

broad-based authorities granted the department, we are also aware that the 

process employed by DOD and certain of its human capital proposals are 

highly controversial. It is important to point out that GAO’s proposal and 

proposed pay flexibilities pale in respect to those granted to the DHS and to 

those requested by the DOD in the Defense Transformation for the 21st

Century Act of 2003. Collectively, these two agencies represent almost 45 

percent of the non-postal federal civilian workforce. Specifically, in 

November 2002, the Congress passed the Homeland Security Act of 2002, 

which created DHS and provided the department with significant 

flexibilities to design a modern human capital management system, which 

could have the potential, if properly developed, for application 

governmentwide. DOD’s proposed National Security Personnel System 

(NSPS) would provide wide-ranging changes to its civilian personnel pay 

and performance management systems, collective bargaining, rightsizing, 

and a variety of other human capital areas. NSPS would enable DOD to 

develop and implement a consistent, DOD-wide civilian personnel system. 

In addition to DHS, there are a number of federal agencies with authority 

for their own pay systems. Some of these agencies are, for example, the 

Congressional Budget Office, which is one of our sister agencies in the 

legislative branch; the Federal Aviation Administration (FAA); the 

Securities and Exchange Commission (SEC) ; and the Office of the 

Comptroller of the Currency (OCC) within the Department of the Treasury. 

When the Congress created the CBO in 1974, it granted that legislative 

branch agency significant flexibilities in the human capital area. For 

example, CBO has “at will” employment. In addition, CBO is not subject to 

the annual executive branch pay adjustments. Further, CBO has extensive 

flexibility regarding its pay system subject only to certain statutory annual 

compensation limits.

Furthermore, there are twelve executive branch demonstration projects 

involving pay for performance. These projects have taken different 

approaches to the sources of funding for salary increases that are tied to 

performance and not provided as entitlements. Many of the demonstration 

projects reduce or deny the annual across the board base pay increase for 

employees with unacceptable ratings (e.g., the Department of Navy’s China 

Lake demonstration, DOD’s Civil Acquisition Workforce demonstration, the 

Department of Air Force’s Research Laboratory demonstration, and the 

Department of Navy’s Research Laboratory demonstration, among others.) 

Others, including the National Institute of Standards and Technology and 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 70 GAO-03-1167T 

Page 20 GAO-03-1024T 

the Department of Commerce demonstration projects, deny both the 

annual across the board base pay increase and the locality pay adjustment 

for employees with unacceptable ratings. 

Currently, this Congress is considering a NASA human capital proposal. 

This proposal would provide NASA with further flexibilities and authorities 

for attracting, retaining, developing, and reshaping a skilled workforce. 

These include a scholarship-for-service program; a streamlined hiring 

authority for certain scientific positions; larger and more flexible 

recruitment, relocation, and retention bonuses; noncompetitive 

conversions of term employees to permanent status; a more flexible critical 

pay authority; a more flexible limited-term appointment authority for the 

SES; and greater flexibility in determining annual leave accrual rate for 

new hires.

Safeguards Provided As we have testified, agencies should have modern, effective, credible, and 

as appropriate, validated performance management systems in place with 

adequate safeguards, including reasonable transparency and appropriate 

accountability mechanisms, to ensure fairness and prevent politicization 

and abuse. While GAO’s transformation is a work in progress, we believe 

that we are in the lead compared to executive branch agencies in having 

the human capital infrastructure in place to provide such safeguards and 

implement a modified pay system that is more performance oriented. 

Specifically, for our Analyst pay group, we have gone through the first cycle 

of a validated performance management system that has adequate 

safeguards, including reasonable transparency and appropriate 

accountability mechanisms. We have learned from what has worked and 

what improvements can and should be made with respect to the first cycle. 

In fact, we have adopted many of the recommendations and suggestions of 

our managing directors and EAC and are now in the process of 

implementing these suggestions. 

The following is an initial list of possible safeguards, developed at the 

request of Congressman Danny Davis, for Congress to consider to help 

ensure that any pay for performance systems in the government are fair, 

effective, and credible. GAO’s current human capital infrastructure has 

most of these safeguards built in, and the others are in the process of being 

incorporated.

• Assure that the agency’s performance management systems (1) link to 

the agency’s strategic plan, related goals, and desired outcomes and 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 71 GAO-03-1167T 

Page 21 GAO-03-1024T 

(2) result in meaningful distinctions in individual employee 

performance. This should include consideration of critical 

competencies and achievement of concrete results.

• Involve employees, their representatives, and other stakeholders in the 

design of the system, including having employees directly involved in 

validating any related competencies, as appropriate.

• Ensure that certain predecisional internal safeguards exist to help 

achieve the consistency, equity, nondiscrimination, and 

nonpoliticization of the performance management process (e.g., 

independent reasonableness reviews by the human capital offices 

and/or the offices of opportunity and inclusiveness or its equivalent in 

establishing and implementing a performance appraisal system, as well 

as reviews of performance rating decisions, pay determinations, and 

promotion actions before they are finalized to ensure that they are 

merit-based; internal grievance processes to address employee 

complaints; and pay panels predominately made up of career officials 

who would consider the results of the performance appraisal process 

and other information in making final pay decisions). 

• Assure reasonable transparency and appropriate accountability 

mechanisms in connection with the results of the performance 

management process (e.g., publish overall results of performance 

management and pay decisions while protecting individual 

confidentiality, and report periodically on internal assessments and 

employee survey results).

Transition Period We have provided a statutory period minimum to allow for a smooth 

implementation of the law as it applies to both our mission and mission 

support staff. Specifically, for our Analyst and Attorney communities, we 

plan to allow for at least a two-year period, during which they will continue 

to receive their annual across the board pay raise and their locality pay, if 

applicable, based on the amount set by the GS system. Once the proposal 

is fully implemented, the new across-the-board increase, which provides 

for inflation protection and locality pay where applicable, would be 

computed based on GAO compensation studies, and the performancebased merit pay would be provided based on an employee’s performance. 

For our APSS employees, the transition period of at least 2 years would 

allow for a smooth migration to the pay bands and the implementation of at 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 72 GAO-03-1167T 

Page 22 GAO-03-1024T 

least one performance cycle of a newly validated competency based 

performance appraisal system for that component of GAO’s workforce. 

Our APSS employees are currently still in the GS system, but we are in the 

process of moving them into pay bands. We will allow time for the group 

to migrate to broad bands and to have at least one performance cycle under 

pay bands before moving it into the new pay system. Therefore, as with the 

analysts and attorneys, the administrative support staff will move into a 

hybrid pay system once they migrate to pay bands. Also, as with the 

analysts and attorneys, I have committed to providing them “pay 

protection.” This guarantee would continue even after GAO’s authority to 

adjust pay is fully implemented. 

We have a small Wage Grade community of under 20 employees. As 

mentioned earlier, we do not contemplate having the pay adjustment 

provision apply to them. 

“Pay Protection” Guarantee My predecessor, Comptroller General Charles A. Bowsher, provided the 

analysts and attorneys a “pay protection” guarantee at the time of their 

conversion to broad bands. This guarantee, later spelled out in a GAO 

order, provided that the analyst and attorneys rated as meeting 

expectations in all categories would fare at least as well under pay bands as 

under the GS system. This guarantee would not apply to employees who 

are promoted after conversion or demoted, and to new employees hired 

after the conversion. It is my understanding that this guarantee provided 

by my predecessor is unique to GAO and has generally not been applied by 

other agencies that have migrated their employees to pay bands. 

Currently, 535 GAO employees are still covered by this “pay protection” 

guarantee, while less than 10 employees annually have their pay readjusted 

after the merit pay process. I have committed to GAO employees that even 

if we receive the new pay adjustment authority, I would still honor my 

predecessor’s pay protection guarantee. In addition, our mission support 

staff will also receive this guarantee upon conversion to pay bands. This 

guarantee will continue through the implementation period for our new 

human capital authority. 

Pay Retention Section 5 of our proposal would allow GAO not to provide any automatic 

increase in basic pay to an employee demoted as a result of workforce 

restructuring or reclassification at his or her current rate until his or her 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 73 GAO-03-1167T 

Page 23 GAO-03-1024T 

salary is less than the maximum rate of the new position. Under current 

law, the grade and pay retention provisions allow employees to continue to 

be paid at a rate that exceeds the value of the duties they are performing for 

an extended period. Specifically, employees who are demoted (e.g., incur a 

loss of grade or band) due to, among other things, reduction-in-force 

procedures or reclassification receive full statutory pay increases for 2 

years and then receive 50 percent of the statutory pay increases until the 

pay of their new positions falls within the range of pay for those positions. 

We believe that this antiquated system is inconsistent with the merit 

principle that there should be equal pay for work of equal value. 

In granting GAO this authority, we would be able to immediately place 

employees in the band or grade commensurate with their roles and 

responsibilities. It is important to note that we have a key safeguard—

employees whose basic pay exceeds the maximum rate of the grade or 

band in which the employee is placed will not have their basic pay reduced. 

These employees, who would still be eligible to increase their overall pay 

through certain types of performance-based awards (e.g., incentive 

awards), would retain this rate until their basic pay is less than the 

maximum for their grade or band. As with all the provisions in our 

proposal, we will not implement this pay retention provision until we have 

consulted with the EAC and managing directors and have provided all GAO 

employees an opportunity for notice and comment on any regulations. 

Relocation Expenses Section 6 would provide GAO the authority, in appropriate circumstances, 

to reimburse employees for some relocation expenses when transfers do 

not meet current legal requirements for entitlement to reimbursement but 

still benefit GAO. Under current law, employees who qualify for relocation 

benefits are entitled to full benefits; however, employees whose transfer 

may be of some benefit or value to the agency would not be eligible to 

receive any reimbursement. This provision would provide these employees 

some relief from the high cost of relocating while at the same time allowing 

GAO the flexibility to promulgate regulations in order to provide such 

relief. This authority has been previously granted to other agencies, 

including the FAA. 

Leave for Upper Level 

Hires

Section 7 of the proposal provides GAO the authority to provide 160 hours 

(20 days) of annual leave to appropriate employees in high-grade, 

managerial or supervisory positions who have less than 3 years of federal 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 74 GAO-03-1167T 

Page 24 GAO-03-1024T 

service. This is narrowly tailored authority that would apply only to GAO 

and not to executive branch agencies. While it is been a long-standing tenet 

that all federal employees earn annual leave based on years of federal 

service, we believe that there is substantial merit in revisiting this in view 

of today’s human capital environment and challenges. We have found that, 

in recruiting experienced mid- and upper-level hires, the loss of leave they 

would incur upon moving from the private to the federal sector is a major 

disincentive. For example, an individual, regardless of the level at which 

he enters first enters the federal workforce, is eligible to earn 4 hours of 

annual leave for each pay period and, therefore, could accrue a total of 104 

hours (13 days) annually so long as they do not use any of that leave during 

the year. This amount increases to 6 hours of annual leave after 3 years of 

federal service. By increasing the annual leave that certain newly hired 

officers and employees may earn, this provision is designed to help attract 

and retain highly skilled employees needed to best serve the Congress and 

the country. 

Executive Exchange 

Program

Section 8 would authorize GAO to establish an executive exchange 

program between GAO and private sector entities. Currently, GAO has the 

authority to conduct such an exchange with public entities and non profit 

organizations under the Intergovernmental Personnel Act; there is no such 

authority for private sector exchanges. Under this program, high-grade, 

managerial or supervisory employees from GAO may work in the private 

sector, and private sector employees may work at GAO. While GAO will 

establish the details of this program in duly promulgated regulations, we 

have generally fashioned, with exceptions where appropriate, the legal 

framework for this program on the Information Technology Exchange 

Program authorized by Public Law 107-347, the E-Government Act of 2002, 

which the Congress enacted to address human capital challenges within 

the executive branch in the information technology area. 

While the Information Technology Exchange Program only involves 

technology exchanges, GAO’s exchange program will cover not only those 

who work in information technology fields, but also accountants, 

economists, lawyers, actuaries, and other highly skilled professionals. This 

program will help us address certain skills imbalances in such areas as well 

as a range of succession planning challenges. Specifically, by fiscal year 

2007, 52 percent of our senior executives, 37 percent of our managementlevel analysts, and 29 percent of our analysts and related staff will be 

eligible for retirement. Moreover, at a time when a significant percentage 

of our workforce is nearing retirement age, marketplace, demographic, 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 75 GAO-03-1167T 

Page 25 GAO-03-1024T 

economic, and technological changes indicate that competition for skilled 

employees will be greater in the future, making the challenge of attracting 

and retaining talent even more complex. 

One of the key concerns raised in the past regarding private sector 

exchange programs has been the issue of conflict of interest. We believe 

that in this regard GAO differs from executive branch agencies in that, as 

reviewers, we are not as subject to potential conflicts of interest. 

Nevertheless, it is important to note in requesting this authority that we 

have made clear that the private sector participants would be subject to the 

same laws and regulations regarding conflict of interest, financial 

disclosure, and standards of conduct applicable to all employees of GAO. 

Under the program, private sector participants would receive their salaries 

and benefits from their employers and GAO need not contribute to these 

costs. We also believe that this will also encourage private sector 

individuals to devote a portion of their careers to the public sector without 

incurring substantial financial sacrifice. 

Changing GAO’s Name 

to the “Government 

Accountability Office”

Section 9 would change the name of our agency from the “General 

Accounting Office” to the “Government Accountability Office.” At the 

same time, the well-known acronym “GAO,” which has over 80 years of 

history behind it, will be maintained. We believe that the new name will 

better reflect the current mission of GAO as incorporated into its strategic 

plan, which was developed in consultation with the Congress. As stated in 

GAO’s strategic plan, our activities are designed to ensure the executive 

branch’s accountability to the American people. Indeed, the word 

accountability is one of GAO’s core values along with integrity and 

reliability. These core values are also incorporated in GAO’s strategic plan 

for serving the Congress. 

The GAO of today is a far cry from the GAO of 1921, the year that the 

Congress established it through the enactment of the Budget and 

Accounting Act. In 1921, GAO pre-audited agency vouchers for the legality, 

propriety, and accuracy of expenditures. In the 1950s, GAO’s statutory 

work shifted to the comprehensive auditing of government agencies. Later, 

beginning during the tenure of Comptroller General Elmer B. Staats, GAO’s 

work expanded to include program evaluation and policy analysis. 

Whereas GAO’s workforce consisted primarily of accounting clerks during 

the first three decades of its existence, today it is a multidisciplinary 

professional services organization with staff reflecting the diversity of 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 76 GAO-03-1167T 

Page 26 GAO-03-1024T 

knowledge and skills needed to deliver a wide range of services to the 

Congress. 

Although currently less than 15 percent of agency resources are devoted to 

traditional auditing and accounting activities, members of the public, the 

press, as well as the Congress often incorrectly assume that GAO is still 

solely a financial auditing organization. In addition, our name clearly 

confuses many potential applicants, who assume that GAO is only 

interested in hiring accountants. We believe that the new name will help 

attract applicants and address certain “expectation gaps” that exist outside 

of GAO. 

Concluding

Observations

In conclusion, I believe that GAO’s human capital proposal merits prompt 

passage by this committee and, ultimately, the Congress. We have used the 

narrowly tailored flexibilities the Congress provided us previously in Public 

Law 106-303 responsibly, prudently, and strategically to help posture GAO 

to ensure the accountability of the federal government for the benefit of the 

Congress and the American people. Although some elements of our initial 

straw proposal were controversial, we have made a number of changes, 

clarifications, and commitments to address various comments and 

concerns raised by GAO employees. We recognize that the pay adjustment 

provision of this proposal remains of concern to some of our staff. 

However, we believe that it is vitally important to GAO’s future that we 

continue modernizing and updating our human capital policies and system 

in light of the changing environment and anticipated challenges ahead. We 

believe that the proposal as presented and envisioned is well reasoned and 

reasonable with adequate safeguards for GAO employees. Given our 

human capital infrastructure and our unique role in leading by example in 

major management areas, including human capital management, the 

federal government could benefit from GAO’s experience with pay for 

performance systems. Overall, we believe that this proposal represents a 

logical incremental advancement in modernizing GAO’s human capital 

policies, and with your support, we believe that it will make a big difference 

for the GAO of the future.

Chairwoman Jo Ann Davis, Mr. Davis, and Members of the Committee, this 

concludes my prepared statement. I would be pleased to respond to any 

questions you may have. 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 77 GAO-03-1167T 

Page 27 GAO-03-1024T 

Contacts For further information regarding this testimony, please contact Sallyanne 

Harper, Chief Mission Support Officer, on (202) 512-5800 or at 

harpers@gao.gov or Jesse Hoskins, Chief Human Capital Officer, on (202) 

512-5553 or at hoskinsj@gao.gov.
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 78 GAO-03-1167T 

Page 28 GAO-03-1024T 

Appendix I

Analysts and Attorneys: Pay Increases under 

GAO’s Current System and Human Capital 

Proposal ApendxiI

a

The percentage allocated to each type of pay increase varies annually. 

b

Under our current pay system, GAO is linked to the executive branch for annual base and locality pay 

adjustments; however, since the implementation of broad banding, has not been linked to the executive 

branch for performance-based merit pay increases, performance bonuses/dividends, and other 

incentive award pay increases. The Executive Committee determines on an annual basis which pay 

categories, if any, are eligible for bonuses and dividends. For example, individuals in pay categories 

one and two received dividends for their FY 02 performance. 

c

During the transition period, GAO staff rated as performing at a satisfactory level (i.e., meeting 

expectations or higher) will be guaranteed, at a minimum, barring extraordinary economic 

Included Included Included

Locality pay

Incentive awards

 This element is applicable

N/A This element is not applicable

One-time

One-time

One-time

One-time

One-time

One-time

One-time

One-time

One-time

Source: GAO.

(Percentages 

determined by EC 

annually; actual 

incremental amount 

will vary over time) 

(Percentage 

decoupled from 

executive branch GS;

 for all satisfactory 

performers) 

(Percentage 

decoupled from 

executive branch GS;

 for all satisfactory 

performers) 

(Percentages determined 

by EC annually; initial 

additional performancebased funds limited due 

to transition period 

guarantee) 

(Same percentage as 

executive branch GS; 

for all satisfactory 

performers) 

(Same percentage as 

executive branch GS; 

for all satisfactory 

performers) 

Implementation Periodd

(Pay Protection from Band 

Conversion)

Permanent

base pay 

Permanent

base pay 

Permanent

base pay 

Transition Periodc

(Guaranteed Minimum; 

Pay Protection from Band Conversion)

Current Pay Systemb

(Broad band)

Types of Pay 

Increasesa

Annual across-the-board 

base pay 

(Percentages 

determined by 

EC annually)

Performance-based pay 

(Merit increases) 

Performance bonusesb-d

 (for individuals who are 

pay capped) 

Dividendsb-d
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 79 GAO-03-1167T 

Appendix I

Analysts and Attorneys: Pay Increases under 

GAO’s Current System and Human Capital 

Proposal

Page 29 GAO-03-1024T 

circumstances or serious budgetary constraints, base pay and locality pay according to the same 

adjustment provided to executive branch employees. All such GAO staff will also be eligible for 

additional performance-based merit pay increases, performance bonuses (if pay capped)/dividends, 

and incentive awards. During the transition period, GAO will continue to raise the pay cap for its pay 

bands commensurate with executive branch pay cap increases absent extraordinary economic 

circumstances or serious budgetary constraints. The Executive Committee will determine on an 

annual basis which categories, if any, are eligible for bonuses and dividends. 

d

Under its human capital proposal, GAO proposes to decouple itself from the executive branch for base 

and locality pay adjustments after a 2 plus year transition period. After the transition period, GAO will 

fully implement a modified pay system in which absent extraordinary economic conditions or serious 

budgetary constraints, all GAO staff rated as performing at a satisfactory level (i.e., meeting 

expectations or higher) can expect to receive at a minimum an annual adjustment designed to protect 

purchasing power (e.g., the Consumer Price Index) and address differences in compensation ranges 

by localities. In addition, all such staff will continue to be eligible for performance-based merit pay 

increases, performance bonuses (if pay capped)/dividends, and incentive awards. Before finalizing 

and implementing a modified pay system, GAO will seek the advice of the managing directors and 

GAO’s Employee Advisory Council. We will also draft revised pay regulations and publish them for 

review and comment by all employees. 
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 80 GAO-03-1167T 

Page 30 GAO-03-1024T 

Appendix II

Professional Development Program (PDP) Apendxies

Staff: Pay Increases under GAO’s Current 

System and Human Capital Proposal ApendxiI

Note: PDP Staff who are Band IF (full performance) are covered by the merit pay system. See chart for 

Analysts & Attorneys.

a

The percentage allocated to each type of pay increase varies annually.

b

Under our current pay system, GAO is linked to the executive branch for base and locality pay. Band I 

staff in the PDP are eligible for periodic performance based PDP pay increases that are not available in 

the executive branch. PDP staff are not eligible for performance based merit increases and dividends. 

c

During the transition period, PDP staff rated as performing at a satisfactory level (i.e., meeting 

expectations or higher) will be guaranteed, at a minimum, barring extraordinary economic 

circumstances or serious budgetary constraints, base pay and locality pay according to the same 

adjustment provided to the executive branch employees. PDP staff rated as performing at the 

satisfactory level (i.e., meeting expectations or higher) will be eligible for performance-based PDP pay 

increases. During and after the transition period, PDP staff will not be eligible for dividends because 

PDP staff are evaluated every 6 months for performance based PDP increases. During the transition 

period, GAO will raise the pay cap for its Band I pay band commensurate with executive branch pay 

cap increases absent extraordinary economic circumstances or serious budgetary constraints. The 

Current Pay Systemb

(Broad band/PDP)

Transition Periodc

Guaranteed Minimum

Implementation

Periodd Types of Pay

Increasesa

Included Permanent 

base pay Included Permanent

base pay Included Permanent

base pay 

Annual across-the-board

base pay 

Locality pay

Performance-based pay (Percentages

determined by

EC annually)

(Percentages

determined by

EC annually)

(Percentages

determined by

EC annually)

Performance bonusesb-e

(for individuals who are 

pay capped)

Dividendsc-e N/A N/A N/A N/A N/A N/A

Incentive awards

 This element is applicable

N/A This element is not applicable

(Same percentage 

as executive 

branch GS; 

for all satisfactory 

performers) 

(Same percentage 

as executive 

branch GS; 

for all satisfactory 

performers) 

(Percentage 

decoupled

from executive 

branch GS; 

for all satisfactory 

performers) 

(Percentage 

decoupled

from executive 

branch GS; 

for all satisfactory 

performers) 

One-time One-time One-time

One-time One-time One-time

Source: GAO.
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 81 GAO-03-1167T 

Appendix II

Professional Development Program (PDP) 

Staff: Pay Increases under GAO’s Current 

System and Human Capital Proposal

Page 31 GAO-03-1024T 

Executive Committee will determine on an annual basis which pay categories, if any, are eligible for 

PDP bonuses.

d

Under its human capital proposal, GAO proposes to decouple itself from the executive branch for base 

and locality pay after a 2 plus year transition period. After the transition period, GAO will fully 

implement a modified pay system in which absent extraordinary economic conditions or serious 

budgetary constraints, all PDP staff rated as performing at a satisfactory level (i.e., meeting 

expectations or higher) can expect to receive at a minimum, an annual adjustment designed to protect 

purchasing power (e.g., the Consumer Price Index) and address differences in compensation ranges 

by localities. In addition, PDP staff rated as performing at a satisfactory level (i.e., meeting 

expectations or higher) will continue to be eligible for additional performance-based compensation, 

including performance-based PDP pay increases and incentive awards. Before finalizing and 

implementing a modified pay system, GAO will seek the advice of the managing directors and GAO’s 

Employee Advisory Council. We will also draft revised pay regulations and publish them for review and 

comment by all employees.
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 82 GAO-03-1167T 

Page 32 GAO-03-1024T 

Appendix III

Administrative Professional Support Staff 

(APSS): Pay Increases under GAO’s Current 

System and Human Capital Proposal ApendxiI

a

The percentage allocated to each type of pay increase varies annually. This chart applies only to 

APSS employees who are under the General Schedule (GS) system. APSS employees who are 

already in broad bands should see the chart for Analysts and Attorneys. 

b

Under our current pay system, GAO is linked to the executive branch for annual base, locality, QSI, 

and WIG pay adjustments. APSS staff are eligible for performance incentive award pay increases; 

however, they are not eligible for performance bonuses (if pay capped) or dividends. 

c

During the transition period, GAO will implement broad banding for the APSS community between 

April – June 2004 and allow at least one full cycle of a new competency-based performance appraisal 

system before implementing any additional performance-based pay adjustments envisioned under HC 

II. Upon conversion to broad bands, GAO, as it did with its Analyst and Attorney communities, will 

replace QSIs and WIGs with performance pay increases that are not linked to the executive branch. 

Also, as it did with its Analyst and Attorney communities when they were converted to bands, GAO will 

provide a pay protection guarantee. Specifically, APSS staff who perform at the meets expectations 

level on any performance rating will earn a salary at least as high as they would have received had 

they remained under the General Schedule at their grade at the time of conversion. However, this 

Current Pay Systemb

(GS)

Types of Pay

Increasesa

Included Included Included

Locality pay

N/A N/A N/A N/A

N/A N/A N/A N/A

Performance-based pay

(merit increases)

N/A N/A

N/A

N/A

N/A

Dividendsb-d N/A

Incentive awards

N/A

 This element is applicable

N/A This element is not applicable

One-time One-time

One-time One-time One-time

Source: GAO.

Transition Periodc

(Broad band)

Pay Protection from Band 

Conversion

Implementation Periodd

Pay Protection from Band Conversion

Permanent

base pay 

Permanent

base pay

Permanent

base pay 

Performance bonusesb-d

(for individuals who are 

pay capped)

(Percentages determined by 

EC annually; actual incremental 

amount will vary over time) 

Percentage decoupled from 

executive branch GS; 

for all satisfactory performers) 

Percentage decoupled from 

executive branch GS; 

for all satisfactory performers) 

Annual across-the-board

base pay

(Same percentage 

as executive 

branch GS)

(Same percentage 

as executive 

branch GS)

(Percentages 

determined by 

EC annually)

Within grade increase 

(WIG)

Quality step increase 

(QSI)
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 83 GAO-03-1167T 

Appendix III

Administrative Professional Support Staff 

(APSS): Pay Increases under GAO’s Current 

System and Human Capital Proposal

Page 33 GAO-03-1024T 

guarantee will not apply to staff who are promoted after conversion or demoted and to new employees 

hired after the conversion. APSS staff will be eligible for performance-based merit increases, 

performance bonuses (if pay capped) /dividends, and incentive awards. During the transition period, 

GAO will continue to raise the pay cap for its pay bands commensurate with executive branch pay cap 

increases. The Executive Committee will determine on an annual basis which pay categories, if any, 

are eligible for bonuses and dividends. 

d

Under its human capital proposal, GAO proposes to decouple itself from the executive branch for base 

and locality pay after a two plus year transition for the broad band conversion. After the transition 

period, GAO will fully implement a modified pay system in which absent extraordinary economic 

conditions or serious budgetary constraints, all GAO staff rated as performing at a satisfactory level 

(i.e., meeting expectations or higher) can expect to receive at a minimum, an annual adjustment 

designed to protect purchasing power (e.g., the Consumer Price Index) and address differences in 

compensation ranges by localities. In addition, all APSS staff will continue to be eligible for 

performance-based merit pay increases, performance bonuses (if pay capped)/dividends, and 

incentive awards. Before finalizing and implementing a modified pay system, GAO will seek the advice 

of the managing directors and GAO’s Employee Advisory Council. We will also draft revised pay 

regulations and publish them for review and comment by all employees. In addition, APSS staff 

receiving the pay protection guarantee from their conversion into pay bands will continue to be eligible 

for pay protection during the implementation period.
Appendix II

Comptroller General’s Testimony of July 16, 

2003

Page 84 GAO-03-1167T 

Page 34 GAO-03-1024T 

Appendix IV

Wage Grade (WG) Staff: Pay Increases under 

GAO’s Current System and Human Capital 

Proposal ApendxiIV

Note: HC II refers to GAO’s human capital proposal.

a

The percentage allocated to each type of pay increase varies annually. 

b

Under its current wage grade pay system, GAO is linked to the executive branch for base, locality, and 

WIG pay increases. Wage grade employees are not eligible for QSIs and locality pay increases in 

GAO or anywhere in the federal government. Because its wage grade community is so small, GAO 

does not plan to include the wage grade community in the modified pay system under its human 

capital proposal. 

c

Wage grade staff are not eligible for bonuses and dividends. 

Types of Pay Increasesa

Current Pay Systemb

(Wage Grade)

System Same Under HC II

Included Permanent 

Annual across-the-board base pay

Locality pay N/A N/A

Quality step increase (QSI) N/A N/A

Within grade increase (WIG)

Incentive awardsc One-time

· This element is applicable

N/A This element is not applicable

Source: GAO.

(997900)

(996000)
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