a

GAO

United States General Accounting Office

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, September 17, 2003

RESULTS-ORIENTED 

GOVERNMENT

Shaping the Government to 

Meet 21st Century 

Challenges

Statement of David M. Walker

Comptroller General of the United States

GAO-03-1168T
Through normal evolution and inertia over the years, the United States now 

has a government that is weighed down by organizations with significant 

performance and management problems as well as duplicative and 

overlapping missions and functions. This situation is exacerbated by ways 

of doing business that, in some cases, are better suited for the beginning of 

the 20th century than the 21st century. Given the changed circumstances and 

stark fiscal realities, the nation simply cannot afford unnecessary, 

redundant, or inefficient organizations, programs, or operations. 

Periodic reexamination and reevaluation of federal agencies’ activities have 

never been more important than they are today. The federal government 

must address and adapt to major trends in the nation and around the world. 

At the same time, our nation faces serious, long-term fiscal challenges. 

Fundamental reexamination of federal agencies’ roles, functions, and 

structure is never easy. Reorganizing government can be an immensely 

complex and politically charged activity. Those who would reorganize 

government must make their rationale clear and build a consensus for 

change if proposed reorganizations are to succeed. All key players must be 

involved in the process—the Congress, the President, affected executive 

branch agencies, their employees and unions, and other interested parties, 

including the public. 

Regardless of the number and nature of federal entities, the government’s 

goal should be to create high-performing organizations. The federal 

government needs to look not only at what business it is in, but how it does 

business. Practices that were good 50 years ago may not make sense today. 

Old, outdated practices and systems result in inefficiency and waste of 

resources that the nation cannot afford. Management reform will be vitally 

important to agencies in transforming their cultures to address the changing 

role of the government in the 21st century. 

Strategic human capital management should be a centerpiece of any serious 

change management initiative or any effort to transform the cultures of 

government agencies. It is a vital element to the success of any government 

restructuring efforts, whether within an existing agency or across current 

agency boundaries. People are an agency’s most important organizational 

asset. An organization’s people define its character, affect its capacity to 

perform, and represent the knowledge base of the organization. 

GAO has sought to assist the 

Congress and the executive branch 

in considering the actions needed 

to support the transition to a more 

high-performing, results-oriented, 

and accountable federal 

government. At the 

Subcommittee’s request, GAO 

provided perspectives on the 

federal government’s overall 

structure and the need for 

reorganization to improve 

performance. 

We did not make recommendations 

in this testimony. However, we 

suggested a range of options that 

the Congress could use to eliminate 

redundancy and improve federal 

operations to meet the challenges 

the federal government faces at the 

beginning of the 21st century. 

www.gao.gov/cgi-bin/getrpt?GAO-03-1168T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Patricia A. 

Dalton at (202) 512-6737 or 

daltonp@gao.gov. 

Highlights of GAO-03-1168T, a report to 

the Subcommittee on Civil Service and 

Agency Organization, Committee on 

Government Reform, House of 

Representatives 

September 17, 2003

RESULTS-ORIENTED GOVERNMENT

Shaping the Government to Meet 21st 

Century Challenges 
Page 1 GAO-03-1168T 

Chairwoman Davis and Members of the Subcommittee:

I appreciate the opportunity to address this vital topic: how can the federal 

government meet the large and emerging challenges it faces and become 

more effective?

The federal government is in a period of profound transition and faces an 

array of challenges and opportunities to enhance performance, ensure 

accountability, and position the nation for the future. A number of 

overarching trends, such as diffuse security threats and homeland security 

needs, increasing global interdependency, the shift to knowledge-based 

economies, and the looming fiscal challenges facing our nation drive the 

need to reconsider the role of the federal government in the 21st century, 

how the government should do business (including how it should be 

structured), and in some instances who should do the government’s 

business. The proposed Government Accountability and Streamlining Act 

of 2003 (H.R. 2743), introduced by Chairwoman Davis, recognizes the need 

to address these critical issues.

The challenges we face are significant and require action by a variety of 

parties. Through normal evolution and inertia over the years, we now have 

a government that is weighed down by organizations with significant 

performance and management problems as well as duplicative and 

overlapping missions and functions. This situation is exacerbated by ways 

of doing business that, in some cases, are better suited for the beginning of 

the 20th century than the 21st century. Given the changed circumstances 

and stark fiscal realities, we simply cannot afford unnecessary, redundant, 

or inefficient organizations, programs, or operations.

We need to begin by reexamining the base of government programs, 

policies, and operations to make government more effective and relevant 

to a changing society—a government that is as free as possible of 

outmoded commitments and operations. This is true for at least two 

reasons. First, as I will discuss briefly, known demographic and health care 

cost trends drive a fiscal future that is—absent significant changes—clearly 

unsustainable. Second—and this will be the main focus of this testimony—

whatever role the American people choose for the federal government, its 

activities should be conducted in the most effective manner possible.

We now have both an opportunity and an obligation to take a look at what 

the government should be doing and how it should go about doing its work. 

Based on GAO’s recent experiences with restructuring, such a fundamental 
Page 2 GAO-03-1168T 

reexamination of government missions, functions, and activities could 

improve government effectiveness and efficiency and enhance 

accountability by reducing the number of entities managed, thereby 

broadening spans of control, reducing unnecessary overhead, increasing 

flexibility, and fully integrating—rather than merely coordinating—related 

government activities.

GAO has sought to assist the Congress and the executive branch in 

considering the actions needed to support the transition to a more highperforming, results-oriented, and accountable federal government. We 

believe that it is crucial for both the Congress and the executive branch to 

work together constructively and on a bipartisan basis in addressing a 

range of “good government” issues.

My statement today will focus on six points:

• the impact of current trends and increasing fiscal challenges,

• the need to reexamine how departments and agencies are managing 

their programs and organizations,

• the need to reassess how federal agencies do business,

• the importance of strategic human capital management,

• GAO as an example of positive change, and

• options for strengthening congressional oversight.

This testimony draws upon our wide-ranging, ongoing, and completed 

work on government transformation, organization, management, human 

capital, and budget issues. We conducted our work in accordance with 

generally accepted government auditing standards.

Impact of Emerging 

Trends and Fiscal 

Challenges

Periodic reexamination and reevaluation of federal agencies’ activities has 

never been more important than it is today. The federal government must 

address and adapt to major trends in our country and around the world. At 

the same time, our nation faces a serious, long-term fiscal challenge. 

Increased pressure also comes from world events: both from the 

recognition that we cannot consider ourselves “safe” between two 

oceans—which has increased demands for spending on homeland 
Page 3 GAO-03-1168T 

security—and from the U.S. role in combating terrorism and an 

increasingly interdependent world.

Our country’s transition into the 21st century is characterized by a number 

of key trends, including:

• the national and global response to terrorism and other threats to our 

personal and national security;

• the increasing interdependence of enterprises, economies, markets, civil 

societies, and national governments, commonly referred to as 

globalization;

• the shift to market-oriented, knowledge-based economies;

• an aging and more diverse U.S. population;

• rapid advances in science and technology and the opportunities and 

challenges created by these changes;

• challenges and opportunities to maintain and improve the quality of life 

for the nation, communities, families, and individuals; and

• the changing and increasingly diverse nature of governance structures 

and tools.

As the nation and government policymakers grapple with the challenges 

presented by these evolving trends, they do so in the context of rapidly 

building fiscal pressures. GAO’s long-range budget simulations show that 

this nation faces a large and growing structural deficit due primarily to 

known demographic trends and rising health care costs. The fiscal 

pressures created by the retirement of the baby boom generation and rising 

health costs threaten to overwhelm the nation’s fiscal future. As figure 1 

shows, by 2040, absent reform or other major tax or spending policy 

changes, projected federal revenues will likely be insufficient to pay more 

than interest on publicly held debt. Further, our recent shift from surpluses 

to deficits means the nation is moving into the future in a weaker fiscal 

position.
Page 4 GAO-03-1168T 

Figure 1: Composition of Spending as a Share of GDP Assuming Discretionary 

Spending Grows with GDP after 2003 and All Expiring Tax Provisions Are Extended

Notes: Although all expiring tax cuts are extended, revenue as a share of gross domestic product 

(GDP) increases through 2013 due to (1) real bracket creep, (2) more taxpayers becoming subject to 

the Alternative Minimum Tax, and (3) increased revenue from tax-deferred retirement accounts. After 

2013, revenue as a share of GDP is held constant. This simulation assumes that currently scheduled 

Social Security benefits are paid in full throughout the simulation period.

The United States has had a long-range budget deficit problem for a 

number of years, even during recent years in which we had significant 

annual budget surpluses. Unfortunately, the days of surpluses are gone, and 

our current and projected budget situation has worsened significantly. The 

bottom line is that our projected budget deficits are not manageable 

without significant changes in “status quo” programs, policies, processes, 

and operations.

Doing nothing is simply not an option nor will marginal efforts be enough. 

Tough, difficult choices will have to be made. Clearly, the federal 

government must start to exercise more fiscal discipline on both the 

spending side and the tax side. While many spending increases and tax cuts 

0

10

20

30

40

50

2003 2015 2030 2040

Fiscal year

Percentage of GDP

Net interest

Social Security

Medicare and Medicaid

All other spending

Source: GAO.
Page 5 GAO-03-1168T 

may be popular, they may not all be prudent. However, there is not a single 

solution to the problems we face, but a number of solutions are needed. 

And, it will take the combined efforts of many parties over an extended 

period to address these fiscal challenges successfully.

One needed improvement is streamlining and simplifying the federal 

government’s organizational structure to make it more economical, 

efficient, effective, flexible, responsive, and accountable. This includes 

addressing both fragmentation of effort and duplicative, overlapping, and 

conflicting government programs, policies, and operations. We need 

governmental organizations that embrace modern management practices 

of the 21st century, including a strategic human capital management 

approach. Streamlining the federal government to eliminate unnecessary 

redundancy and inefficient operations will help address our growing fiscal 

problems. It will not by itself solve the problem, but it certainly will help. 

Need to Reexamine 

How Departments and 

Agencies Are Managing 

Their Programs and 

Organizations

It is important to reexamine periodically whether current programs and 

activities remain relevant, appropriate, and effective in delivering the 

government that Americans want, need, and can afford. This includes 

assessing the sustainability of the programs over time as well as the 

effectiveness of a range of tools—such as grants, loan guarantees, tax 

incentives, regulation, and enforcement—that are used to achieve results. 

Many federal programs—their goals, organizations, processes, and 

infrastructures—were designed years ago to meet the demands as 

determined at that time and within the technological capabilities of earlier 

eras. We currently have 15 departments and numerous independent 

agencies. The recent report of the Volcker Commission found that “fifty 

years have passed since the last comprehensive reorganization of the 

government” and that “the relationship of the federal government to the 

citizens it services became vastly broader and deeper with each passing 

decade.” The commission recommended a fundamental reorganization of 

the federal government into a limited number of mission-related executive 

departments to improve its capacity to design and implement public policy. 

I believe that GAO’s past and present work supports the validity of this 

finding. As a result, we should begin to take the steps necessary to make 

this recommendation a reality. This hearing is one step toward doing so.

I believe that a number of events over the last few years, combined with a 

greater understanding of broad trends, have fostered growing recognition 

that fundamental change is necessary. This presents the Congress and the 

executive branch with an opportunity to create highly effective, 
Page 6 GAO-03-1168T 

performance-based organizations that can strengthen the nation’s ability to 

meet the challenges of the 21st century and reach beyond our current level 

of achievement. Many departments and agencies were created in a 

different time and in response to problems and priorities very different 

from today’s challenges. Some have achieved their one-time missions, yet 

they are still in operation. Many have accumulated responsibilities beyond 

their original purposes. Others have not been able to demonstrate how they 

are making a difference in real and concrete terms. Still others have 

overlapping or conflicting roles and responsibilities. Redundant, 

unfocused, and uncoordinated programs waste scarce resources, confuse 

and frustrate program customers, and limit overall program effectiveness.

Fundamental reexamination of federal agencies’ roles, functions, and 

structure is never easy. Reorganizing government can be an immensely 

complex and politically charged activity. Those who would reorganize 

government must make their rationale clear and build a consensus for 

change if proposed reorganizations are to succeed. All key players must be 

involved in the process—the Congress, the President, affected executive 

branch agencies, their employees and unions, and other interested parties, 

including the public.

In recent years, events have driven us to reassess several major 

components of government. In response to the events of September 11, 

2001, the Department of Homeland Security was established. Seeing a 

pressing need, the government moved expeditiously to form this new 

agency and thus consolidate many disparate homeland security functions 

under a single agency. However, the formation of the Department of 

Homeland Security is still a work in progress. In January of this year, we 

designated the implementation and transformation of the Department of 

Homeland Security as high risk.1

 The size and complexity of the effort and 

the challenges the department inherited will require sustained attention 

over time for the department to reach its full potential.

Driven in part by the events of September 11, 2001, the Federal Bureau of 

Investigation (FBI) is also undergoing a major transformation, including a 

multiphase reorganization, first announced in December 2001. The first 

phase is designed to strengthen the FBI’s management structure, enhance 

accountability, reduce executive span of control, and establish two new 

1

U.S. General Accounting Office, Major Management Challenges and Program Risks: 

Department of Homeland Security, GAO-03-102 (Washington, D.C.: January 2003).
Page 7 GAO-03-1168T 

divisions for Records Management and Security. The second phase is 

designed to build, among other things, a national terrorism response 

capability that is larger and more mobile, agile, and flexible by shifting 

resources from other areas within the FBI. In June of this year, 18 months 

into the effort, we reported progress in several areas but noted that major 

challenges remain. These challenges included the continued need for a 

comprehensive transformation plan, an updated strategic plan, and a 

human capital strategic plan.2

The tragedy of Columbia has turned a spotlight on the weaknesses in the 

National Aeronautics and Space Administration’s (NASA) organization and 

culture. The recent report of the Columbia Accident Investigation Board 

made a number of very specific recommendations related to the NASA’s 

organization. NASA now must take a hard look at its organizational 

structure and culture. While NASA has undertaken numerous programs 

that have greatly advanced scientific and technological knowledge, the 

agency is at a critical juncture, and major management improvements are 

needed. Earlier this year, we outlined several major management 

challenges at NASA in human capital, contract, and financial management, 

some of which have existed for years.3

Improved performance has been a primary goal of several other 

restructuring efforts under way. For example, the Internal Revenue Service 

(IRS) is in the midst of a long-term modernization.4

 In addition, the 

Department of Defense (DOD) is in the process of transforming its 

business operations, and the U.S. Postal Service faces the challenge of 

transforming its business model for the 21st century.5

2

U.S. General Accounting Office, FBI Reorganization: Progress Made in Efforts to 

Transform but Major Challenges Continue, GAO-03-759T (Washington, D.C.: June 18, 

2003).

3

U.S. General Accounting Office, NASA: Major Management Challenges and Program 

Risks, GAO-03-849T (Washington, D.C.: June 12, 2003).

4

U.S. General Accounting Office, IRS Modernization: Continued Progress Necessary for 

Improving Service to Taxpayers and Ensuring Compliance, GAO-03-796T (Washington, 

D.C.: May 20, 2003).

5

U.S. General Accounting Office, U.S. Postal Service: Key Postal Transformation Issues, 

GAO-03-812T (Washington, D.C.: May 29, 2003) and U.S. General Accounting Office, 

Opportunities for Oversight and Improved Use of Taxpayer Funds: Examples from 

Selected GAO Work, GAO-03-1006 (Washington, D.C.: Aug. 1, 2003).
Page 8 GAO-03-1168T 

These are some recent examples of building consensus and undertaking 

restructuring to meet new or changed missions and goals. To a great extent, 

these changes were driven by catastrophic events. Even with dramatic 

events demonstrating the need for change, these reorganizations and 

transformations will not be easy. It is likely to be even more difficult to 

build consensus for reorganization and change when there is not such an 

event driving it. However, current trends, poor performance, and growing 

fiscal pressures demand that we make the effort. We simply cannot afford 

unnecessary redundancy and inefficiency in the government, especially in 

light of impending fiscal challenges and taxpayers deserve better.

GAO’s work has documented the widespread fragmentation and overlap in 

both federal missions and individual federal programs. As new needs are 

identified, the common response has been to add new responsibilities and 

roles within federal departments and agencies, perhaps targeted to a newly 

identified clientele or involving a new program delivery approach. In the 

worst-case scenario, new programs are layered onto existing programs that 

have failed or performed poorly. Though our work also suggests that some 

issues, such as security, may warrant the involvement of multiple agencies 

or more than one approach, fragmentation and overlap often adversely 

affect the economy, efficiency, and effectiveness of the federal government.

Last month, we issued a report, Opportunities for Oversight and Improved 

Use of Taxpayer Funds: Examples from Selected GAO Work.

6

 In this 

report, we highlight opportunities for and specific examples of legislative 

and administrative change that might yield budgetary savings. Several 

examples clearly illustrate the need to take a hard look at our 

organizational structures.

• The responsibilities of the four major land management agencies—the 

National Park Service, the Bureau of Land Management (BLM), the Fish 

and Wildlife Service within the Department of the Interior, and the 

Forest Service within the Department of Agriculture (USDA)—have 

grown more similar over time. Most notably, the Forest Service and BLM 

now provide more noncommodity uses, including recreation and 

protection for fish and wildlife, on their lands. In addition, managing 

federal lands has become more complex. Managers have to reconcile 

differences among a number of laws and regulations, and the authority 

for these laws is dispersed among several federal agencies as well as 

6

GAO-03-1006.
Page 9 GAO-03-1168T 

state and local agencies. These changes have coincided with two other 

developments—the federal government’s increased focus on downsizing 

and budget constraints and scientists’ increased understanding of the 

importance and functioning of natural systems, the boundaries of which 

may not be consistent with existing jurisdictional and administrative 

boundaries. Together, these changes and developments suggest a basis 

for reexamining the processes and structures under which the federal 

land management agencies operate.

Two basic strategies have been proposed to improve federal land 

management: (1) streamlining the existing structure by coordinating and 

integrating functions, systems, activities, programs, and field locations and 

(2) reorganizing the structure by combining agencies. The two strategies 

are not mutually exclusive. Some small steps have been taken. For 

example, the Forest Service and BLM have colocated some offices or 

shared space with other federal agencies. However, more needs to be done.

• In 1987, the Congress passed the Stewart B. McKinney Act (Pub. L. No. 

100-77) to address the multiple needs of homeless people. The act 

encompasses both existing and new programs. Over the years, some of 

the original McKinney programs have been consolidated or eliminated, 

and some new programs have been added. Today, homeless people 

receive assistance through these programs as well as other federal 

programs that are not authorized under the McKinney Act but are 

nevertheless specifically targeted to serve the homeless population. In 

February 1999, we reported that seven federal agencies administer 16 

programs that serve the homeless population, with the Department of 

Housing and Urban Development (HUD) responsible for most of the 

funds.7

 Consolidating all of the homeless assistance programs under 

HUD could increase administrative and operational efficiencies at the 

federal level as well as reduce administrative and coordination burdens 

for state and local governments, which also face fiscal challenges.

• Each of the three military departments (Army, Navy, and Air Force) 

operates its own health care system, providing medical care to active 

duty personnel, their dependents, retirees, and survivors of military 

personnel. To a large extent, these separate, costly systems perform 

many of the same administrative, management, and operational 

7

U.S. General Accounting Office, Homeless: Coordination and Evaluation of Programs Are 

Essential, GAO/RCED-99-49 (Washington, D.C.: Feb. 26, 1999).
Page 10 GAO-03-1168T 

functions. Since 1949, numerous studies, the most recent completed in 

2001, have reviewed whether a central entity should be created within 

DOD to manage and administer the three health care systems. Most of 

these studies encouraged some form of organizational consolidation. A 

DOD health agency would consolidate the three military medical 

systems into one centrally managed system, eliminating duplicative 

administrative, management, and operational functions.

Similarly, there are potential benefits to be achieved by greater 

coordination with the veterans health care system. In an effort to save 

federal health care dollars, the Department of Veterans Affairs (VA) and 

DOD have sought ways to work together to gain efficiencies. For 

example, some local VA and DOD facilities have entered into joint 

venture agreements, pooling resources to build a joint facility or 

capitalizing on an existing facility. To ensure maximize use of federal 

health care dollars, this area needs continued attention.

• A multitude of agencies oversee food safety, with two agencies 

accounting for most federal spending on, and regulatory responsibilities 

for, food safety. The Food Safety and Inspection Service, under USDA, is 

responsible for the safety of meat, poultry, eggs, and some egg products, 

while the Food and Drug Administration, under the Department of 

Health and Human Services, is responsible for the safety of most other 

foods.

The current food safety system emerged from a patchwork of often 

archaic laws and grew into a structure that actually hampers efforts to 

address existing and emerging food safety risks. Moreover, the current 

regulatory framework concentrates on only a segment—primarily food 

processing—of the continuum of activities that bring food from farm to 

table. The threat of deliberate contamination of the food supply and 

scientific and technical advances in the production of food, such as the 

development of genetically modified foods, have further complicated 

the responsibilities of the existing federal food safety structure. The 

food safety system suffers from overlapping and duplicative 

inspections, poor coordination, and inefficient allocation of resources. 

Consolidation of the federal food safety agencies under a single, 

independent agency or under a single department could improve both 

the efficiency and effectiveness of the system.

These examples illustrate a few of the opportunities that exist to improve 

effectiveness and efficiency by reexamining the government’s 
Page 11 GAO-03-1168T 

organizational structure. As part of this reexamination, it is important to 

ask the fundamental question of whether an existing program, policy, or 

activity “fits” the work we face today and will face in the future. It is 

important not to accept all existing activities as givens by subjecting new 

proposals to greater scrutiny than existing ones undergo. However, such a 

fundamental reexamination is not easy. Success will depend on 

establishing clear goals, having all the key players actively involved, and 

using a process that can help build consensus.

Throughout the 20th century, efforts to structure the federal government to 

address the economic and political concerns of the time met with varying 

degrees of success. The first Hoover Commission,8

 which lasted from 1947 

through 1949, is considered by many to have been the most successful of 

government restructuring efforts. The membership of the commission was 

bipartisan, including members from the administration and both houses of 

the Congress. Half of the members were from outside government. The 

commission had a clear vision, making reorganization proposals that 

promoted what it referred to as “greater rationality” in the organization and 

operation of government agencies, and enhanced the President’s role as the 

manager of the government—principles that were understood and 

accepted by both the White House and the Congress.9

 Former President 

Hoover himself guided the creation of a citizens’ committee to build public 

support for the commission’s work. More than 70 percent of the first 

Hoover Commission’s recommendations were implemented, including 26 

reorganization plans. According to the Congressional Research Service, 

“the ease with which most of the reorganization plans became effective 

reflected two factors: the existence of a consensus that the President ought 

to be given deference and assistance by Congress in meeting his managerial 

responsibilities, and the fact that most of the reorganization plans were 

pretty straightforward proposals of an organizational character.”10

8

The commission’s formal name was the Commission on Organization of the Executive 

Branch. Its membership was as follows: Former President Herbert Hoover, Dean Acheson, 

Senator George Aiken, Representative Clarence Brown, Arthur Flemming, James A. 

Forrestal, Joseph P. Kennedy, Representative Carter Manasco, Senator John L. McClellan, 

George Mead, James K. Pollock, and James Rowe.

9

Ronald C. Moe, The Hoover Commissions Revisited (Boulder, Colo.: Westview Press, 

1982), 2.

10Congressional Research Service, The President’s Reorganization Authority: Review and 

Analysis (Washington, D.C.: Mar. 8, 2001).
Page 12 GAO-03-1168T 

History teaches lessons that are applicable today. Those who would 

reorganize government must make their rationale clear and must build a 

consensus for change before submitting specific proposals to the Congress 

if these efforts are to succeed. To achieve substantive changes, it is 

important that all players, particularly the Congress and the President, 

agree on restructuring goals and establish processes to achieve their 

objectives that provides needed transparency. The processes used may 

vary depending on the significance of the changes sought. However, the 

risk of failure is high if key players are not involved and no processes for 

reaching consensus on specific reorganization proposals submitted to the 

Congress for consideration are in place. Both having the right processes 

and the right players are critical to success.

Restructuring existing programs is part of the solution to meeting the 

challenges faced by our government. However, those decisions are not the 

end of the story. Restructuring is not easy and takes time to fully 

implement, even once consensus exists on specific proposals. This is why 

we have designated the implementation and transformation of the 

Department of Homeland Security as high risk.11 In addition to the 

implementation actions taken within the executive branch, congressional 

oversight throughout the implementation will be crucial to ultimate 

success.

Need to Reassess How 

Federal Agencies Do 

Business

Regardless of the number and nature of federal entities, the government’s 

goal should be to create high-performing organizations. We need to look at 

not only at what business we are in, but how we do business. Practices that 

were good 50 years ago may not make sense today. Old, outdated practices 

and systems result in inefficiency and waste of resources that we cannot 

afford.

Our work has identified opportunities to change how the government does 

business.12 The following three examples illustrate opportunities to 

improve business practices and to make them more efficient and effective.

• USDA’s meat and poultry inspection system is hampered by inflexible 

legal requirements and relies on outdated inspection methods. Current 

11GAO-03-102.

12GAO-03-1006.
Page 13 GAO-03-1168T 

law requires mandatory inspections that do not factor in risk. Inspectors 

continue to largely rely on their sense of sight, smell, and touch in 

making judgments about disease conditions, contamination, and 

sanitation. Microbial testing for such things as salmonella, listeria, and 

generic E. coli has increased but is still not sufficient. Legislative 

revisions could allow USDA to emphasize risk-based inspections. Much 

of the funding used to fulfill current, mandatory meat and poultry 

inspection activities could be redirected to support more effective food 

safety initiatives, such as increasing the frequency of inspections at 

high-risk food plants.

• Recently, GAO identified at least 21 different grant programs that can be 

used by the nation’s first responders to address homeland security 

needs.13 Multiple, fragmented grant programs can create a confusing and 

administratively burdensome process for state and local officials 

seeking to use federal resources to meet pressing homeland security 

needs. In addressing the fragmentation prompted by the current 

homeland security grant system, the Congress has taken the initial step 

of bringing many of these programs under the Department of Homeland 

Security. Additional administrative and legislative steps, such as block 

grants, waivers, performance partnerships, and grant waivers, might be 

considered. These approaches could provide state and local 

governments with increased flexibility while potentially improving 

intergovernmental efficiency and homeland security program outcomes. 

Better integration, including consolidation, of programs could yield 

administrative efficiencies that result in savings or improved 

performance. In taking any additional steps, it will be important to 

ensure accountability for both performance and funding.

• The U.S. overseas presence at more than 260 overseas posts consists of 

more than 90,000 people (including dependents of federal workers). The 

workforce has been estimated at as many as 60,000 employees, 

representing over 30 agencies. The Department of State employs about a 

third of the U.S. workforce overseas, and its embassies and consulates 

have become bases for the operations of agencies involved in hundreds 

of activities. The costs of overseas operations and related security 

requirements are directly linked to the size of the overseas workforce. 

By reducing the number of employees at posts where U.S. interests are a 

13U.S. General Accounting Office, Homeland Security: Reforming Federal Grants to Better 

Meet Outstanding Needs, GAO-03-1146T (Washington, D.C.: Sept. 3, 2003).
Page 14 GAO-03-1168T 

lower priority, consolidating functions, establishing regional centers, or 

relocating personnel to the United States, the costs of overseas 

operations could be significantly reduced. In August 2001, The 

President’s Management Agenda noted that the U.S. overseas presence 

is costly, increasingly complex, and of growing security concern.14 It 

concluded that the cost and security considerations demand that the 

overseas staffing process be improved.

Creating high performing organizations will require a cultural 

transformation in government agencies and new ways of doing business. 

Hierarchical management approaches will need to yield to partnerial 

approaches. Process-oriented ways of doing business will need to yield to 

results-oriented ones. “Siloed” organizations will need to become more 

horizontal and integrated to make the most of the knowledge, skills, and 

abilities of their people. Internally focused agencies will need to focus 

externally to meet the needs and expectations of their ultimate clients—the 

American people. Major programs and operations need urgent attention 

and transformation to ensure that the government functions as 

economically, efficiently, and effectively as possible. Management reform 

will be vitally important for agencies to transform their cultures to address 

the changing role of the government in the 21st century.

The key to effective public management in the 21st century is to ensure that 

organizations have the characteristics and capabilities needed to 

effectively influence and leverage partners, people, processes, and 

technology to achieve results. As part of a continuing series of forums, 

GAO will convene a forum in November that will focus specifically on the 

implications of the public management environment in the 21st century for 

federal agencies as they strive to become high performing organizations. 

This forum is intended to help identify key characteristics and capabilities 

of high-performing organizations in this environment, challenges facing 

federal agencies in transitioning into high-performing organizations, and 

ways in which the Congress and the executive branch can foster these 

transformation efforts.

14GAO-03-1006.
Page 15 GAO-03-1168T 

Importance of 

Strategic Human 

Capital Management

Strategic human capital management should be a centerpiece of any 

serious change management initiative or any effort to transform the 

cultures of government agencies. It is a vital element to the success of any 

government restructuring efforts, whether within an existing agency or 

across current agency boundaries. People are an agency’s most important 

organizational asset. An organization’s people define its character, affect its 

capacity to perform, and represent the knowledge base of the organization. 

Human capital issues have been a focus of this Congress and certainly this 

Subcommittee. They will require continuing attention.

Since 2001, we have designated human capital as a governmentwide high 

risk. The Congress and the executive branch have taken a number of steps 

to address the federal government’s human capital shortfalls. However, 

serious human capital challenges continue to erode the ability of many 

agencies, and threaten the ability of others, to perform their missions 

economically, efficiently, and effectively. A consistent strategic approach to 

maximize government performance and ensure its accountability is vital to 

the success of any reorganization efforts as well as to transforming existing 

agencies.

A high-performing organization should focus on human capital. Human 

capital approaches are aligned with accomplishing missions and goals. 

Strategies are designed, implemented, and assessed based on their ability 

to achieve results and contribute to an organization’s mission. Leaders and 

managers stay alert to emerging demands and human capital challenges. 

They reevaluate their human capital approaches through the use of valid, 

reliable, and current data, including inventories of employee skills and 

competencies. Recruiting, hiring, professional development, and retention 

strategies focus on ensuring that an agency has the needed talent to meet 

organizational goals. Individual performance is clearly linked with 

organizational performance. Effective performance management systems 

provide a “line of sight” showing how unit, team, and individual 

performance can contribute to overall organizational goals.

The first step in meeting the government’s human capital challenges is for 

agency leaders to identify and make use of all the appropriate 

administrative authorities available to them to manage their people both 

effectively and equitably. The second step is for policymakers to purse 

incremental legislative reforms. Most recently, the Congress has been 

considering legislative proposals for the DOD.
Page 16 GAO-03-1168T 

As we have previously testified, agency-specific human capital reforms 

should be enacted to the extent that the problems being addressed and the 

solutions offered are specific to a particular agency (e.g., military 

personnel reforms for DOD). In addition, targeted reforms should be 

considered in situations in which additional testing or piloting is needed for 

fundamental governmentwide reform.

Moving forward, we believe it would be preferable to employ a 

governmentwide approach to address human capital issues and the need 

for certain flexibilities that have broad-based application and serious 

potential implications for the civil service system, in general, and for the 

Office of Personnel Management (OPM), in particular. Some examples, that 

have been pursed, include broadbanding, pay for performance, 

reemployment, and pension offset waivers. As federal agencies compete 

for resources, it is important to maintain a level playing field among 

agencies.

However, whether through a governmentwide authority or agency-specific 

legislation, in our view, such additional authorities should be put in 

operation only when an agency has the institutional infrastructure in place 

to use the new authorities effectively. This institutional infrastructure 

includes, at a minimum, a human capital planning process that integrates 

the agency’s human capital policies, strategies, and programs with its 

program goals, mission, and desired outcomes; the capabilities to develop 

and implement a new human capital system effectively; and a modern, 

effective, and credible performance management system that includes 

adequate safeguards, including reasonable transparency and appropriate 

accountability mechanisms, to ensure the fair, effective, and 

nondiscriminatory implementation of the system.

GAO as an Example of 

Positive Change

Transforming an organization is not an easy endeavor. It requires a 

comprehensive, strategic approach that takes leadership, time, and 

commitment. Because GAO is the agency that reviews others, we strive to 

lead by example. To create a model federal agency and world-class 

professional services organization, we have undertaken a comprehensive 

transformation effort over the past few years. Our strategic plan, which is 

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

on the key trends emerging at the beginning of the 21st century that were 

discussed earlier and relate to the United States and its position in the 

world community.
Page 17 GAO-03-1168T 

We also have restructured our organization to align with our goals, 

resulting in significant consolidation—going from 35 to 13 teams, 

eliminating an extra organizational layer, and reducing the number of field 

offices from 16 to 11. We have become more strategic, results-oriented, 

partnerial, integrated, and externally focused. Our scope of activities 

includes a range of oversight-, insight-, foresight-related engagements. We 

have expanded and revised our product lines to better meet client needs. 

We also continue to provide certain legal and adjudicatory services, as 

specified in our authorizing legislation. In addition, we have redefined 

success in result-oriented terms and linked our institutional and individual 

performance measures. We have strengthened our client relations and 

employed a “constructive engagement approach” with the entities we 

review. The impact on our results has been dramatic. Client feedback 

reports show significant improvement, and results for several of our key 

performance indicators have almost doubled in only 4 years.

There are four lessons to be learned from our experiences. First, one 

should not minimize how challenging it is for an organization to undertake 

a comprehensive transformation. Second, transformation is multifaceted 

and takes time. Our transformation began in 2000 and continues to be a 

work in progress. Third, transformation must be based on the best, most 

up-to-date management practices to reach its full potential. Fourth, 

transformation requires continual management commitment, monitoring, 

and oversight. Because of the 15-year terms for comptrollers general, GAO 

has the advantage of stable, long-term leadership that many other agencies 

do not have. However, our approach—based on best management 

practices—can serve as a guide to others.

We employed a strategic, not an incremental, approach to transforming 

GAO. Our approach is based on a regularly updated 6-year strategic plan 

for serving the Congress. GAO’s strategic plan, which is currently being 

updated, established clear goals and objectives. Three goals aimed at 

providing Congress timely, quality service to: (1) address challenges to the 

well-being and financial security of the American people, (2) respond to 

changing security threats and the challenges of global interdependence, 

and (3) transform the federal government’s role and how it does business. 

Our fourth goal is to be a model federal agency and a world-class 

professional organization. Our strategic plan provides a firm foundation 

from which to identify priorities and opportunities for eliminating 

redundancies and improving operations. It is the basis for our workforce 

planning. It also sets the stage for maximizing our effectiveness and 

efficiency. Our strategic planning process provides for updates with each 
Page 18 GAO-03-1168T 

new Congress, ongoing analysis of emerging conditions and trends, 

extensive consultations with congressional clients and outside experts, and 

assessments of our internal capabilities and needs.

Our strategic plan formed the basis for a major organizational realignment. 

This realignment focused the organization on our goals and resulted in 

significant streamlining. The process employed to accomplish the 

realignment required time, energy, and commitment from GAO’s senior 

leadership. Input was sought from GAO executives and employees at all 

levels throughout the process. Extensive communications with GAO staff 

and key congressional stakeholders were maintained on an ongoing basis. 

The result has been a more agile, effective, responsive, and accountable 

organization that has been able to effectively respond to the many new 

challenges presented to it.

People are an organization’s most important asset. Modern, effective, and 

credible human capital policies are critical to the successful functioning of 

any enterprise. This has been the case at GAO. In 2000, we sought and 

received certain narrowly tailored human capital authorities, including 

early out and buyout authorities. We have used these authorities 

responsibly to strategically reshape GAO. In addition, we have 

implemented a comprehensive recruiting program, instituted a 

competency-based performance management system, made significant 

investments in training and staff development, and continued to refine our 

staffing process to maximize resource utilization. We continually seek to 

refine and improve our human capital practices. Recently, I have sought 

additional flexibilities for GAO to ensure quality service to the Congress; 

continue leading by example in government transformation; and continue 

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

workforce. I appreciated the support from you Chairwoman Davis and the 

Subcommittee on this request.

Continual communication with GAO staff is a critical feature of our human 

capital strategy. Among other things, we periodically survey staff on a wide 

range of human capital and organizational issues. I am pleased to report 

that the results of our latest comprehensive survey, completed last month, 

continued to demonstrate remarkably positive results.

Finally, we are continually evaluating, reengineering, and refining our work 

processes to reflect the best management practices to ensure the most 

effective and efficient service delivery. For example, we have employed 

two new management strategies within the organization—risk 
Page 19 GAO-03-1168T 

management and matrix management. GAO’s risk management approach 

allows management to identify and involve internal stakeholders with 

needed subject matter expertise throughout an engagement to transcend 

traditional organizational boundaries, maximize institutional value, and 

minimize related risks. 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, changing, and 

multidimensional problems facing the nation. As part of this effort, we 

continually strive to provide GAO’s people with necessary tools, 

technology, and training, and a world-class working environment.

GAO’s transformation can provide lessons about what can be 

accomplished. To measure ourselves, we use a balanced scorecard, 

measuring client service, results, and employees. On all three dimensions, 

we are reporting very positive results. To illustrate, in fiscal year 2002, 

GAO’s efforts helped the Congress and government leaders achieve 

$37.7 billion in financial benefits—an $88 return on every dollar invested in 

GAO, up from $19.7 billion and $58 return in fiscal 1998. The return on the 

public’s investment in GAO extends beyond dollar savings to improvements 

in how the government serves its citizens. The results in 2002 are in part 

attributed to work we have done to transform GAO using a strategic, 

comprehensive approach.

Similar benefits can be achieved in other governmental organizations. 

Building on GAO’s experience, a comprehensive approach grounded in a 

sound strategic plan and appropriate organizational alignment, and based 

on the best management practices, including human capital management, 

can yield optimal results in terms of effectiveness and efficiency. 

Successful transformation is not easy. It will take strong, committed, and 

persistent leadership, and it will take time. We are still working on it, but 

we are ahead of schedule and are pleased with our progress.

Options for 

Strengthening 

Congressional 

Oversight

The challenges facing our nation are many and difficult. Clearly, there is a 

need to reexamine how the federal government is organized both in the 

executive and legislative branches. We need to reassess how the federal 

government does business. Fundamental questions need to be asked about 

what the federal government should be doing and who should be doing it, 

given past changes and 21st century challenges. Clearly any major 

organizational change is both complex and controversial. In considering 

government restructuring and changes in business practices, it is important 
Page 20 GAO-03-1168T 

to focus not just on the present but on the future trends and challenges. 

Identifying goals for addressing these trends and challenges can provide a 

framework for achieving the needed consensus. In fact, the effects of any 

changes will be felt more in the future than they are today. Because the 

world is not static and never will be, it is vital to take the long view, 

positioning the government to meet challenges throughout the 21st century.

There is no easy answer to the challenges federal departments and 

agencies face in transforming themselves. Multiple actions are required. 

This is illustrated by the examples I have provided today. As the Congress 

moves forward, it will be important to keep three things in focus: goals, 

players, and processes. Clear goals are essential. Defining clear goals 

forces decision makers to reach a shared understanding of what really 

needs to be fixed in government, what the federal role ought to be, how to 

balance differing objectives, and what steps need to be taken to create not 

just short-term progress but long-term success. All key players must be 

engaged if viable solutions are to be achieved—this means the Congress 

and the President, as well as other parties with vested interests. Excluding 

key players increases the risk of failure. Finally, the process used must be 

tailored to the task at hand. Straightforward changes, such as the 

consolidation of agency payment operations, may call for agency-centered 

processes, requiring minimal involvement by the Congress or others. Other 

changes, such as revamping the U.S. food safety system, will require a 

process that involves key congressional stakeholders and administration 

officials as well as others, ranging from food processors to consumers. 

Even more ambitious changes like reorganizing the executive branch or 

rationalizing the existing federal infrastructure will likely require 

commission approaches similar to the Hoover Commission that I discussed 

previously.

On September 24, 2002, GAO convened a forum to identify and discuss 

useful practices and lessons learned from major private and public sector 

organizational mergers, acquisitions, and transformations that federal 

agencies could implement to transform their cultures successfully.15 While 

there is no one right way to manage a successful merger, acquisition, or 

transformation, the experiences of both successful and unsuccessful 

15U.S. General Accounting Office, Highlights of a GAO Forum: Mergers and 

Transformation: Lessons Learned for a Department of Homeland Security and Other 

Federal Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 2002), and Results-Oriented 

Cultures: Implementation Steps to Assist Mergers and Organizational Transformations, 

GAO-03-669 (Washington, D.C. July 2, 2003). 
Page 21 GAO-03-1168T 

efforts suggest that there are practices that are key to their success. These 

key practices should be considered as federal agencies seek to transform 

their cultures in response to governance challenges. These practices 

include the following.

• Ensure that top leadership drives the transformation.

• Establish a coherent mission and integrated strategic goals to guide the 

transformation.

• Focus on a key set of principles and priorities at the outset of the 

transformation.

• Set implementation goals and a timeline to build momentum and show 

progress from day one.

• Dedicate an implementation team to manage the transformation 

process.

• Use the performance management system to define responsibility and 

ensure accountability for change.

• Establish a communication strategy to create shared expectations and 

report related progress.

• Involve employees to obtain their ideas and gain their sense of 

ownership of the transformation.

• Build a world-class organization.

Eliminating redundancy and improving federal operations are critical to 

meeting the challenges we are facing at the beginning of the 21st century. 

Chairwoman Davis has introduced the Government Accountability and 

Streamlining Act of 2003. This bill is aimed at stopping the creation of any 

additional unnecessary redundancy. As it considers this proposal, the 

Congress may also want to consider other options, such as reinstituting 

some form of budget controls, granting the President executive 

reorganization authority, establishing special commissions, and enhancing 

oversight. The Congress may want to consider giving federal department 

and agencies additional tools to assist in the transformations that they 

undertake, including creating chief operating officer positions in selected 

departments and agencies and human capital reforms. As I have 
Page 22 GAO-03-1168T 

emphasized, multiple approaches are needed to address not only future but 

also existing redundancy and inefficiency in federal operations. Each of the 

following seven tools has merit depending on the situation.

• Government Accountability and Streamlining Act of 2003. This 

proposal would require GAO to prepare statements for bills and 

resolutions reported by congressional committees and subcommittees 

on whether the responsibilities of any proposed new federal entities, 

programs, or functions are redundant. While I appreciate the respect for 

our work shown by this proposal, I also think it is important that we be 

practical in designing such a mandate. This kind of evaluation is very 

resource intensive, and there are currently no agreed-upon criteria for 

determining whether an activity is actually duplicative or redundant. 

Each year, there are hundreds of bills proposed by committees alone. 

Though not all bills would have potential redundancy implications, the 

number might be significant and could affect our other work for the 

Congress. An alternative might be to provide the Chair of the House 

Committee on Government Reform and its Senate counterpart with the 

authority to request such an evaluation for any bill before it goes to the 

floor. At a minimum, some way to limit the number of bills analyzed 

would be necessary.

• Reinstitution of budget controls. The appropriations caps and “pay-go” 

requirements—which expired in 2002—limited the expansion and 

creation of new government programs and activities. Such controls 

could be beneficial given our current and future fiscal challenges. In 

addition, the reconciliation process could be used more to force tradeoffs as well as a reexamination of existing programs.

• Executive reorganization authority. Earlier this year, the House 

Committee on Government Reform held hearings on reinstating the 

President’s executive reorganization authority. Though a bill has not yet 

been introduced, this authority could provide a useful tool in 

reexamining the federal government’s organizational structure. 

Essentially, it would reinstate the authority of the President to submit 

government restructuring plans to the Congress and obtain expedited 

review. Such authority can better enable the President to propose 

government organization designs that would be more efficient and 

effective in meeting existing and emerging challenges. But it is 

important to achieve consensus on identified problems, needs, and 

solutions. The Congress has a vital role in this process. As I testified at 

the April 2003 hearing, some expedited congressional consideration may 
Page 23 GAO-03-1168T 

be appropriate for specific issues.16 However, the Congress may want to 

consider different tracks for proposals that encompass significant 

policy changes versus those that focus more narrowly on specific 

government operations. 

• Special commissions. In the past, there have been special commissions 

chartered to examine and make recommendations on difficult structural 

issues. The most successful had both executive and bipartisan 

legislative branch support. For example, the first Hoover Commission 

had more than 70 percent of its recommendations implemented, 

including 26 of 35 reorganization plans. More recently, the Base 

Realignment and Closure process was used successfully to reduce 

unneeded defense assets. Provided there is a clear statement of goals 

and the process to be used, such commissions can provide an effective 

means of examining issues in depth and formulating recommendations 

for the consideration of the Congress.

• Enhanced oversight. A management and oversight process that is 

narrowly focused or one that considers only incremental changes, while 

beneficial, will not allow the government to reach its full performance 

potential. The government is composed of organizations, programs, and 

functions that are overlapping, fragmented, and interdependent. 

Structuring management and oversight only according to preexisting 

boundaries, whether they be executive departments or congressional 

committee structures, limits the full potential of any review. The 

importance of seeing the overall picture cannot be overestimated. It is 

important to be asking the right questions.

The traditional oversight that the Congress provides to individual 

organizations, programs, and activities has an important role in 

eliminating redundancy and inefficiencies. There are important benefits 

to be achieved through focused oversight if the right questions are asked 

about program design and management. Five key questions for program 

oversight are as follows:

• Does the program duplicate or even work at cross-purposes with 

related programs and tools?

16U.S. General Accounting Office, Executive Reauthorization Authority: Balancing 

Executive and Congressional Roles in Shaping the Federal Government’s Structure, GAO03-624T (Washington, D.C.: Apr. 3, 2003). 
Page 24 GAO-03-1168T 

• Is the program targeted properly?

• Is the program financially sustainable and are there opportunities for 

instituting appropriate cost-sharing and recovery mechanisms?

• Can the program be made more efficient through reengineering or 

streamlining processes or restructuring organizational roles and 

responsibilities?

• Are there clear goals, measures, and data with which to track 

progress built into its planning and reporting systems?

• Chief operating officer (COO). Transformation of a large organization 

is a difficult undertaking, especially in government. Success depends on 

committed, top-level leadership and sustained attention to management 

issues. A COO could provide the sustained management attention 

essential for addressing key infrastructure and stewardship issues and 

could facilitate the transformation process. Establishing a COO in 

selected federal agencies could provide a number of benefits. A COO 

would be the focal point for elevating attention on management issues 

and transformational change, integrating various key management and 

transformation efforts, and instituting accountability for addressing 

management issues and leading transformational change. A COO would 

provide a single organizational position for key management functions, 

such as human capital, financial management, information technology, 

acquisition management, and performance management as well as for 

transformational change initiatives. To be successful, in many cases, a 

COO will need to be among an agency’s top leadership (e.g., deputy 

secretary or under secretary). However, consistent with the desire to 

integrate responsibilities, the creation of a senior management position 

needs to be considered with careful regard to existing positions and 

responsibilities so that it does not result in unnecessary “layering” at an 

agency. Consideration also should be given to providing a term 

appointment, such as a 5—7 year term. A term appointment would 

provide sustained leadership. No matter how the positions are 

structured, it is critical that the people appointed to these positions have 

a proven track records in similar positions and be vested with sufficient 

authority to achieve results. To further clarify expectations and 

responsibilities, the COO should be subject to a clearly defined, resultsoriented performance contract with appropriate incentives, rewards, 

and accountability mechanisms. For selected agencies, a COO should be 

subject to a Senate confirmation. In creating such a position, the 
Page 25 GAO-03-1168T 

Congress might consider making certain subordinate positions, such as 

the chief financial officer, not subject to Senate confirmation.

• Governmentwide human capital reforms. There are a number of 

reforms that might be considered. As I have previously testified, 

Congress should consider providing governmentwide authority to 

implement broadbanding, other pay for performance systems, and other 

authorities whereby whole agencies are allowed to use additional 

authorities after OPM has certified that they have the institutional 

infrastructures in place to use them effectively and fairly. In addition to 

requiring a human capital strategic plan from each agency, the Congress 

should establish statutory principles for standards that an agency must 

have in place before OPM can grant additional pay flexibilities. 

Additional efforts should be taken to move the Senior Executive Service 

to an approach wherein pay and rewards are more closely tied to 

performance. Further, the Congress might consider establishing a 

governmentwide fund where agencies, based on a sound business case, 

could apply to OPM for funds to be used to modernize their 

performance management systems and ensure that those systems have 

adequate safeguards to prevent abuse. The governmentwide fund would 

provide for targeted investments needed to prepare agencies to use their 

performance management systems as strategic tools to achieve 

organizational results and drive organizational change.

Government leaders are responsible and accountable for making needed 

changes to position the federal government to meet current and future 

challenges and to take advantage of emerging opportunities. In meeting 

this responsibility, leaders must take advantage of every tool that is 

available to them. Each of the seven tools that I have discussed has unique 

characteristics and benefits that can be highly effective depending on the 

goals to be achieved.

Concluding Remarks In view of the trends and fiscal challenges facing the nation, there is a need 

to consider the proper role of the federal government, how the government 

should be structured, how the government should do business, and in some 

instances who should do the government’s business. We cannot afford 

unnecessary redundancy and inefficient operations, and taxpayers deserve 

better. The federal government’s large and growing fiscal gap means that 

doing nothing is simply not an option. Tough choices will have to be made 

by elected officials. The Congress and the administration will need to use 

every tool at their disposal to address these challenges. In addressing these 
Page 26 GAO-03-1168T 

challenges, it will be important to set clear goals, involve all key players, 

and establish viable processes that will lead to positive and sustainable 

results. We in GAO take our responsibility to assist the Congress in these 

crucial efforts very seriously.

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