a

U.S. GENERAL ACCOUNTING OFFICE

SERVING THE CONGRESS AND THE NATION

Performance and 

Accountability

HIGHLIGHTS

Fiscal 2002
GAO’S MISSION

CORE VALUES

GAO exists to support the Congress in meeting its constitutio

responsibilities and to help improve the performance and ensu

accountability of the federal

government for the benefit of the American people.

ACCOUNTABILITY INTEGRITY RELI

We help the Congress oversee 

federal programs and operations to 

ensure accountability to the 

American people. GAO’s analysts, 

auditors, lawyers, economists, 

information technology 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. 

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.

We at GAO want 

viewed by the Co

American public 

produce high-qua

testimony, briefin

and other produc

are timely, accura

and candid.

Source: NARA and GAO.

GAO performs a range of oversight-, insight-, and foresight-related engagements, a 

of which are conducted in response to congressional mandates or requests. GAO's 

include evaluations of federal programs and performance, financial and managem

policy analyses, legal opinions, bid protest adjudications, and investigation

SCOPE OF WORK
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

From the Comptroller General

January 31, 2003

It is indeed a pleasure to present GAO

and accountability report for fiscal 20

of the Government Performance and R

(GPRA), this annual report informs the 

the American people about what we h

their behalf. Importantly, we received 

from independent auditors on our fina

for the 16th consecutive year. I am co

financial information and the data me

performance contained in this report 

and reliable. 

The year 2002 was marked by certain new and 

challenges for the federal government. In the a

September 11, 2001, terrorist attacks and the d

anthrax spores through the mail, securing the s

cans at home and abroad became the foremost n

It was also a year of economic challenges: not 

prices, but diminished public confidence in cer

institutions and in the ability of government to 

see financial markets. The troubles experience

other corporations and the related conduct of a

ous other parties had far reaching effects.

The threat of terrorism and the damage done to 

nomic well-being in 2002 were but two challen

many—some of them long-standing challenges 

Congress continues to grapple. The nation’s ch

graphics, the educational needs of its children, 

viability of Social Security and Medicare, the ris

health care and the millions of Americans who 

the vulnerability of the government’s compute

otage, the requirements of the armed forces in 

threats to national security—these and other ch

ued to engage the attention of the Congress an

helped define the year’s priorities at GAO.
2 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

As a key source of objective information and analysis, G

played a crucial role in supporting congressional decisi

ing. For example, GAO’s work informed the debate ove

national preparedness strategy, helping the Congress an

questions about the associated costs and program trade-

providing perspectives on how best to organize and ma

the new Transportation Security Administration and the 

Department of Homeland Security. GAO’s input was a m

factor in helping to shape the Sarbanes-Oxley Act, whic

ated the Public Company Accounting Oversight Board as 

new rules to strengthen corporate governance and ensu

tor independence. Further, GAO’s work helped the Con

develop and enact election reform legislation in the form 

Help America Vote Act of 2002.

The Congress and the executive agencies took a wide r

actions based on GAO analyses and recommendations. 

included reducing improper payments under the Medic

gram, reducing the risks associated with agriculture loan 

grams, and improving the oversight of contingency 

appropriations for defense. In total, GAO’s efforts helpe

Congress and government leaders achieve $37.7 billion 

cial benefits—an $88 return on every dollar invested in 

That return on the public’s investment in GAO extends 

dollar savings to improvements in how the government 

its citizens. Whether by spurring efforts to coordinate e

gency preparedness by federal, state, and local agencies

informing the Congress and the public about the risks i

in private pension plans; or by helping federal agencies 

improve their oversight of the nation’s food safety syste

is contributing directly to bettering Americans’ daily live

Another way we do this is by raising congressional and 

awareness of emerging national problems. For example

underscored for the Congress the prevalence of securit

nesses at American seaports, the nature and growing co

identity theft, weaknesses in export controls over sophi

weapons technologies, inadequacies in nursing home c

shortages of children’s vaccines. The more the nation’s 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

in the public, nonprofit, and private sectors kno

growing challenges, the sooner they will be abl

tive responses.

Access to the information the Congress wishes 

a special issue for GAO during the year when, f

in our history, we used our statutory authority 

order to obtain certain government records fro

branch official. The action came about after we 

gressional requests from four Senate Committee 

committee Chairs and two House Members for 

meetings between private-sector individuals an

energy task force chaired by the Vice President 

ment of the President’s proposed National Ene

ing in May 2001, we sought limited factual infor

Vice President in his capacity as chairman of th

Energy Policy Development Group. He refused 

range of information, such as the dates, location

attendees involved in the group’s meetings wit

ties. We repeatedly explained our explicit statu

access authority, streamlined our requests, and 

White House flexibility in how the information 

vided. Furthermore, the administration did not 

of the statutory provision that could have prev

did not claim executive privilege. We reluctant

federal district court in February 2002 under th

GAO’s statutory authorities, asking the court to 

requested records be produced. 

In December 2002, the district court dismissed 

of standing. In doing so, the court did not addr

the case—including GAO’s fundamental audit o

but instead ruled that as Comptroller General, I 

to enforce this agency’s access rights in court. 

judge stated that the issues involved and the na

gressional interest in the records were not suffic

court decide the dispute. We strongly disagree 

ruling, but as this report goes to press, we are r

court’s decision and analyzing its basis and pot
4 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

tions. Once this review is completed and we have cons

with the Congress’s leadership on a bipartisan basis, I w

decide whether to appeal the decision to the circuit co

The value of information in serving our clients is driven 

to us every day at GAO. It is not just a matter of obtaini

from the executive branch but also of observing best pr

in and out of government and how they are or can be a

For instance, how well the government delivers on its p

frequently depends on how well it applies fundamental 

management principles. Strategic planning, organizatio

alignment, performance management, financial managem

information technology, human capital strategy, knowle

management, and change management are key element

maximizing performance and ensuring accountability. W

significantly increased the amount of our work focused 

these areas to enhance the implementation of these pri

throughout the federal government.

We don’t just preach modern management principles a

We practice what we preach, and we aim to lead by exa

We continued this year to make significant progress in i

ing our human capital programs, our information techn

capabilities, and our change management practices. All 

are key areas in which we seek to be a model for other 

agencies.

Visitors to GAO headquarters may have fe

do, that the building itself some

conveys a sense of solidity 

purpose. There is 

plaque in th

of GAO hea

ters that co

orates anoth

quality of th

nization and 

people: a re

to contribu
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

whatever way may be needed to support our c

gress, and the continuity of representative gove

October 23, 2001, with only 3 days’ notice, we 

doors to the 435 members of the House of Rep

selected members of their staffs. As they set up 

GAO, their Capitol Hill offices were checked fo

anthrax. It was the first time since the War of 1

Capitol and the White House were burned, that 

Representatives sought alternative housing. 

Working with congressional and contractor sta

to provide the telecommunications, computer, 

vices needed to conduct the business of the Ho

members of our staff shifted to alternative locat

all, our work went on, and we continued to issu

testify on issues important to the Congress and 

very proud of how, in a time of uncertainty, the 

responded with a positive attitude in doing wh

country required and an unwavering resolve to 

work. Knowing this organization as I do, I was 

In summary, fiscal 2002 was truly an exception

that those who read this report will agree with 

ers receive an excellent return on their investm

David M. Walker

Comptroller General 

of the United States 
■ Create a national preparedness strategy at the federal, state, and 

levels that will make Americans safer from terrorism 

■ Devise election reforms to restore voter confidence 

■ Protect investors through better oversight of the securities indu

and the accounting profession

■ Ensure a safer national food supply

■ Expose the inadequacy of nursing home care 

■ Make income tax collection fair, effective, and less painful to 

taxpayers 

■ Strengthen public schools’ accountability for educating children

■ Keep sensitive American technologies out of the wrong hands

■ Protect American armed forces confronting chemical or biologi

weapons

■ Identify the risks to employees in private pension programs

■ Identify factors causing the shortage of children’s vaccines

■ Assist the postal system in addressing anthrax and various 

management challenges 
■ Identify security risks at ports, airports, and transit system

■ Save billions by bringing sound business practices to the 

of Defense 

■ Foster human capital strategic management to create a c

effective, well-managed federal workforce

■ Ensure that the armed forces are trained and equipped t

nation’s defense commitments 

■ Enhance the safety of Americans and foreign nationals at 

installations worldwide 

■ Assess ways of improving border security through biom

technologies and other means

■ Reduce the international debt problems faced by poor c

■ Reform the way federal agencies manage their finances 

■ Protect government computer systems from security thr

■ Enhance the transition to e-government—the new “elect

connection” between government and the public 
8 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

Introduction

The U.S. General Accounting Office is an 

independent, nonpartisan, professional 

services agency in the legislative branch 

that is commonly regarded as the audit, 

evaluation, and investigative arm of the 

Congress. Created in 1921 as a result of 

the Budget and Accounting Act, GAO’s 

“watchdog” role has evolved over the 

decades as the Congress expanded our 

statutory authority and called on us with 

increasing frequency for support in carrying out its legislative and oversight 

responsibilities. 

Today, we examine the full breadth and 

scope of federal activities and programs, 

publish thousands of reports and other 

documents annually, and provide a number of related services intended to aid 

decision makers and the general public 

alike. We also study national and global 

trends to anticipate their implications for 

public policy. By making recommendations to improve the accountability, 

operations, and services of government 

agencies, GAO contributes not only to 

the increased effectiveness of federal 

spending, but also to the enhancement 

of the taxpayers’ trust and confidence in 

their government. 

To accomplish our mission, we r

workforce of highly trained profe

who hold degrees in many acade

ciplines, including accounting, la

neering, public and business 

administration, economics, comp

science, and the social and physi

ences. They are arrayed in 13 res

audit, and evaluation teams and o

porary or “virtual” team on natio

paredness. These teams are back

staff offices and mission support 

About three-quarters of our appr

mately 3,200 employees are base

headquarters in Washington, D.C

rest are deployed in 11 field offic

On the pages that follow, we sum

our performance for fiscal 2002. 

present condensed financial stat

and the independent auditor’s op

on them. If you would like addit

information, please see the full-le

version of our performance and 

ability report at www.gao.gov/sp

Our performance plan for fiscal 

will be available through that sam

as soon as the budget process pe
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

GAOs Performance

Fiscal 2002 was a year of challenges, not 

just for GAO but also for the Congress 

and the nation GAO serves. The nation’s 

vulnerabilities were exposed in a series 

of crises—America’s vulnerability to 

sophisticated terrorist networks, America’s vulnerability to bioterrorism waged 

through mechanisms as mundane as the 

daily mail, and America’s vulnerability to 

corporate misconduct capable of wiping 

out jobs, pensions, and investments virtually overnight. 

As the Congress’s priorities evolved to 

meet these crises, GAO’s challenge was 

to respond quickly and effectively to our 

congressional clients’ changing needs. 

Under our original strategic plan, published in spring 2000, we had already 

streamlined and realigned GAO’s structure and resources to better serve the 

Congress in its legislative, oversight, and 

investigative roles. The new human capital initiatives we had begun, including 

recruiting, hiring, and professional 

development, equipped us to operate in 

a constantly changing knowledge environment. The steps that we took to 

enhance our information technology 

capabilities served to increase our productivity, consistency, and responsiveness. And with work already under way 

across a spectrum of critical policy and 

performance issues, we had a head start 

toward meeting the Congress’s needs in 

a year of unexpected and often tumultuous events.

We were, for instance, a

with the deliberations o

ment of Homeland Secu

by looking into question

bilities for managing hu

information sharing, ma

acquisition, budget and 

authorities; and lessons 

other reorganizations in 

private sectors. Teams w

specialties from across G

rated on that effort and 

cific aspects of national 

For example, building o

body of completed wor

important information t

as it drafted the Aviation 

tion Security Act, while 

tinuing assistance with 

aviation, port, and transi

Building on our previou

outbreak of West Nile vi

examination of state and 

meet the challenges all 

pose—those of detectio

ment—we aided the Co

making about how to eq

nize the Department of 

rity to prepare for and r

bioterrorism. 

We were also deeply inv

gressional efforts to add

insurance issues—raisin

strategies and suggestin

ples based on past effor

tries and firms in times 
10 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

the savings and loan industry and, more 

recently, the aviation industry. 

As we gathered information and conducted analyses for the Congress, developed recommendations for 

improvements, and detailed the potential ramifications of policies to address 

the national problems the Congress was 

confronting, we continued work on the 

issues that the Congress had faced 

before homeland security gripped the 

nation’s attention. Among these was a 

wide range of issues that also directly 

affect the lives of Americans:

■ We, for instance, helped policymakers 

probe the issues behind the shortages 

in the supplies of vaccines for 

childhood illnesses, such as measles, 

mumps, rubella, and tetanus, 

clarifying the variety of contributing 

factors and exploring the key 

questions, such as how more 

manufacturing and competition can 

be encouraged, how adequate 

oversight can be provided, and how 

stockpiles can be amassed. 

■ Our work also helped policymakers—

and the public—understand private 

pension issues in the wake of the 

Enron bankruptcy and other 

corporate failures, including the 

questions they raised for workers 

nationwide. For instance, in early 

2002, the Comptroller General 

convened a forum on corporate 

governance, transparency, and 

accountability that highlighted a 

number of systemic issues, inc

concerns related to employee 

pension and savings plans. An

alerted the Congress to weakn

that may exist in the legal pro

for employee pensions. We 

highlighted the ways in which 

employers’ stock investment 

decisions can increase the risk

which employees’ pension pla

exposed and recommended 

improvements to the informat

employees must receive. We a

issued a guide for Members of 

Congress, their staffs, and the 

called Answers to Key Questio

about Private Pension Plans

(www.gao.gov/cgi-bin/getrpt?

GAO-02-745sp), which explain

easy-to-understand terms the 

concepts and rules that last ye

became sharply relevant to th

economic security of millions 

Americans.

■ Our work on the elections pro

contributed to reform legislati

drafted in response to the vot

problems that came to nation

prominence in the November 

presidential election. A series 

reports disclosed major challe

involving the people, processe

technology used at each stage 

election process—registering 

absentee and early voting, pre

for and conducting election d

activities, and tabulating votes 

10,000 local election jurisdict

nationwide. The legislation pa
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

Selected Public Laws to Which GAO Contributed 

Fiscal 2002 Included —

■ Prescription Drug User Fee Amendments of 2002, P.L. 107-188

■ Best Pharmaceuticals for Children Act, P.L. 107-1092

■ No Child Left Behind Act of 2001, P.L. 107-110

■ Food Stamp Reauthorization Act of 2002, P.L. 107-171 

■ Help America Vote Act of 2002, P.L. 107-252

■ Homeland Security Act of 2002, P.L. 107-296

■ Public Health Security and Bioterrorism Preparedness and Resp

2002, P.L. 107-188

■ Aviation and Transportation Security Act, P.L. 107-71

■ Department of Defense Appropriation Act, 2003, P.L. 107-248

■ Department of Defense and Emergency Supplemental Appropria

Recovery From and Response to Terrorist Attacks on the United 

2002, P.L. 107-117

■ Bob Stump National Defense Authorization Act for Fiscal Year 20

107-314

■ Foreign Relations Authorization Act, Fiscal Year 2003, P.L. 107-2

■ Small Business Paperwork Relief Act of 2002, P.L. 107-198

■ Federal Information Security Management Act of 2002, P.L. 107-

■ Sarbanes-Oxley Act of 2002, P.L. 107-204

■ National Defense Authorization Act for Fiscal Year 2002, P.L. 107

■ Legislative Branch Appropriations, Fiscal Year 2002, P.L. 107-68

■ Improper Payments Information Act of 2002, P.L. 107-300

■ Trade Act of 2002, P.L. 107-210

■ Terrorism Risk Insurance Act of 2002, P.L. 107-297

■ E-Government Act of 2002, P.L. 107-347
12 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

the Congress addresses federal 

subsidies for voting machinery, 

standards for the equipment, 

improved voter registration rolls, and 

improved access for voters with 

disabilities. 

By year’s end, we had testified 216 times 

before the Congress, sometimes on as little as 24 hours’ notice, on a range of 

issues, including those listed on the next 

page. We had filled hundreds of urgent 

requests for information. We had developed 1,950 recommendations for 

improving the government’s operations, 

including, for example, those we made 

to the Secretary of State calling for the 

development of a governmentwide plan 

to help other countries combat nuclear 

smuggling and those we made to the 

Chairman of the Federal Energy Regulatory Commission calling for his agency 

to develop an action plan for overseeing 

competitive energy markets. We also 

had continued to track the recommendations we had made in past years, checking to see that they had been 

implemented and, if not, whether we 

needed to do follow-up work on problem areas. We found, in fact, that 79 percent of the recommendations we had 

made in fiscal 1998 had been implemented, a significant step when the 

work we have done for the Congress 

becomes a catalyst for creating tangible 

benefits for the American people. 
GOAL 1 GOAL 2 GO

Well-Being and Financial

Security of the American People

Changing Security Threats and

Challenges of Globalization

Transform

Govern

Aviation security

Bioterrorism

Blood supplies

Child Welfare

Childhood vaccines

Coast Guard’s security missions

Customs’ cargo inspections

Disability programs

EPA cabinet status

FBI reorganization

Federal property management 

reform

Food safety

Highway trust fund

Housing

HUD management reform

Identity theft

Immigration enforcement

Indian tribal recognition

Intercity passenger rail

Long-term care

Medicare payments

Nuclear waste storage

Nursing homes

Postal Service challenges

Public health aspects of 

homeland security

Retiree health insurance

SBA’s human capital challenges

Social Security reform

Transit safety and security

VA health care

Welfare reform

Wildfire threats

Workforce development

A-76 competitive sourcing

Anthrax vaccine

Ballistic missile defense

Chemical and biological 

preparedness

Combating terrorism

Compact with Micronesia

Conflict diamonds

Debt relief for poor countries

Encroachment on training ranges

Export controls

Food aid

Foreign language needs

Gulf War illnesses

Information security aspects 

of homeland security

International trade

Nuclear smuggling

Organizational aspects of 

homeland security

SEC’s human capital 

challenges

Strategic seaport protection

Terrorism insurance

U.S. overseas presence

Weapons of mass destruction

Contract manag

Contracting for s

Corporate gove

accountabilit

Debt collection

DOD financial m

Electronic Gove

Electronic-gove

Enterprise archi

Federal budget 

Federal building 

Federal financia

reform

Federal rulemak

Freedom to Man

Human capital s

Illegal tax schem

Intergovernmen

homeland se

IRS modernizat

Medicaid financ

NASA’s manage

President’s Man

Purchase card c

Securing Americ

U.S. governmen

statements

Source: GAO.
14 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

In fiscal 2002, we recorded 906 

instances in which our work led to 

improvements in government operations or programs. For example, by acting on GAO’s findings or 

recommendations, the federal government has taken important steps toward 

enhancing aviation safety, improving 

pediatric drug labeling based on 

research, better targeting of funds to 

high-poverty school districts, greater 

accountability in the federal acquisition 

process, and more effective delivery of 

disaster recovery assistance to other 

nations, among other achievements.

Note: Changes GAO made to its methodology 

for tabulating financial benefits caused the fiscal 

2002 results to increase about 11 percent. See 

the full-length version of this report at 

www.gao.gov/sp.html for details.

In another 115 instances, federal 

on GAO’s findings or recommen

produced financial benefits for t

American people: a total of $37.

was achieved by making governm

services more efficient, improvin

budgeting and spending of tax d

and strengthening the managem

federal resources. Increased fun

improved safeguards against frau

abuse helped the Medicare prog

better control improper paymen

$8.1 billion over 2 years, for insta

and better policies and controls r

losses from farm loan programs b

$4.8 billion across 5 years. Altog

GAO’s fiscal 2002 financial bene

translate into a financial return o

ment of $88 for every dollar bud

for GAO. 

Of our seven agencywide annua

mance targets (see the table), on

was not met: timeliness. While w

vided 96 percent of our product

their congressional requesters by 

37.7

30.0

26.4

23.2

20.1

Actual Target Actual

Source: GAO.

Financial Benefits

Dollars in billions

0

10

20

30

40

1999 2000 2001 2002 2002

0

100

200

300

400

500

600

700

800

900

1000 

770 788 799

607

Actual Targe

Source: GAO.

Other Benefits

Number of actions

1999 2000 2001 2002 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

date promised, we did not hit this measure’s target of 98 percent on-time delivery. The year’s turbulent events played a 

part in our missing the target, causing us 

to delay work in progress when 

higher-priority requests came in from 

the Congress. We know we will continue to face factors beyond our control 

as we strive to improve our performance 

in this area. But we believe the agency 

protocols we are piloting will help clarify aspects of our intera

agencies we evaluate an

thus, expedite our work 

could improve the timel

products. We also believ

tinuing investments in h

and information techno

improve our timeliness 

us to maintain our high 

tivity and performance 

Annual Measures and Targets

1999

Actual

2000

Actual

2001

Actual

2002 4

APerformance measure Target Actual 

Financial benefits 

(billions) $20.1 $23.2 $26.4 $30.0 $37.7a 

Other benefits 607 788 799 770 906 

Past recommendations 

implemented 70% 78% 79% 75% 79% 

New recommendations 

made 940 1,224 1,563 1,200 1,950 

New products with 

recommendations 33% 39% 44% 45% 53% 

Testimonies 229 263 151 200 216 

Timeliness 96% 96% 95% 98% 96% 

aChanges GAO made to its methodology for tabulating financial benefits caused t

results to increase about 11 percent. See the full-length version of this report at 

www.gao.gov/sp.html for details.

bFour targets published in GAO’s performance plan for fiscal 2003 were subsequ

based on more current information. Two were raised; two were lowered. The orig

financial benefits, $35 billion; other benefits, 785; recommendations made, 1,200; 

210.

N/A = not applicable
16 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

At the beginning of fiscal 2002, as we 

prepared an updated draft of our strategic plan for congressional comment—

extending the plan to fiscal 2007 and factoring in developments that had 

occurred since we first issued it in fiscal 

2000—it was clear that the world had 

changed considerably. When the original plan was issued, the nation had been 

enjoying a period of peace and prosperity, with large budget surpluses projected into the future. When the 

updated plan went onto the Web in 

2002, the nation was at war against terrorism, both within and outside its borders. The economic outlook had 

become difficult to predict. And the federal government faced the return of serious, long-range budget deficits and the 

burden they impose on the nation’s 

future prosperity. 

The updated plan carried forward the 

four strategic goals we had already established as the organizing principles for a 

body of work that is as wide-ranging as 

the interests and concerns of the Congress itself. While these strategic goals, 

shown on page 18 with their strategic 

objectives, help us plan our work and 

assess our progress in fulfilling our mission to serve the Congress and the 

nation, they are not separate endeavors. We developed them with the intention of moving away from “siloed”—or 

compartmentalized—approaches to 

doing business on a matrixed basis. As 

the challenges facing policymakers grow 

more complex and interdependent, the 

only way a knowledge-based, mu

plinary professional services org

tion such as GAO can be effectiv

be flexible and capable of respon

quickly to change. As a result, w

sought more cooperative, partne

approaches that maximize the sk

expertise of people working tog

toward the same ends. 

In later sections of this booklet, w

light our performance under eac

strategic goals and the strategies 

challenges involved in achieving 

goals—including the manageme

lenges and external factors we fa

also summarize how we used ou

resources in fiscal 2002, includin

costs by strategic goal.
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

Helping the Government Improve Performance and 

Accountability

Every 2 years, with the start of each new Congress, GAO issues an 

of the high-risk series, which identifies and reports on federal prog

and operations that have greater vulnerabilities to waste, fraud, ab

mismanagement or that have major challenges associated with th

economy, efficiency, or effectiveness.

Lasting solutions to high-risk problems offer the potential to save b

dollars, dramatically improve service to the American public, stren

public confidence and trust in the performance and accountability 

national government, and ensure the ability of government to deliv

promises.

Since 1990, the Congress’s and federal agencies’ commitment to r

serious, long-standing high-risk problems has paid off—the root ca

half the 14 high-risk areas on our original list have been addressed

sustained commitment continues to produce results. In 2001, GAO 

fied 23 high-risk areas. Since then, demonstrable progress has bee

in virtually all of them. 

GAO has increasingly used the high-risk designation to draw atten

the challenges faced by government programs and operations in n

broad-based transformation. Three of the new high-risk areas on t

list fall into that category, while a fourth new area involves fraud, w

abuse, and mismanagement, the type of problem GAO continues t

identify.

To learn more about these new high-risk areas, to review the full li

high-risk areas, or to download the update in full, go to 

www.gao.gov/pas/2003/.
COREVALUES

Fiscal 200

Health care needs and financing

Education and protection of children

Work opportunities and worker 

protection

Retirement income security

Effective system of justice

Viable communities

Natural resources use and 

environmental protection

Physical infrastructure

Address Current and Emerging Challenges to the Well-Being address Current and Emerging Challenges to the Well-Being a

Financial Security of the American People inancial Security of the American People related to . . . related to . . .

Diffuse security threats

Military capabilities and readiness

Advancement of U.S. interests

Global market forces

Respond to Changing Security Threats and the Challenges of spond to Changing Security Threats and the Challenges of 

Global Interdependence lobal Interdependence involving . . . involving . . .

Roles in achieving federal 

objectives

Human capital and other capacity for 

serving the public

Progress toward results-oriente

accountable, and relevant gove

Fiscal position and financing of 

government

Help Transform the Federal Government elp Transform the Federal Government’s Role and How It Role and How It 

Does Business to Meet 21st Century Challenges es Business to Meet 21st Century Challenges by assessing . . . assessing . . .

Client and customer service

Leadership and management focus

Institutional knowledge and experience

Process improvement

Employer of choice

Maximize the Value of GAO by Being a Model Federal Agency anximize the Value of GAO by Being a Model Federal Agency an

a World-Class Professional Services Organization a World-Class Professional Services Organization in the areas of . . . in the areas of . . .

Provide Timely, Quality Service to the Congress and the vide Timely, Quality Service to the Congress and the 

Federal Government to nment to . . . 

THEMES GOALS & OBJECTIVES

Demographics

Security 

and 

Preparedness

Globalization

Changing 

Economy

Science 

and 

Technology

Quality 

of 

Life

Governance

SERVING THE CONGRESS 

GAO’S STRATEGIC PLAN FRAMEWORK

MISSION

GAO exists to support the Congress in meeting its constitutional 

responsibilities and to help improve the performance and ensure the accountabilit

of the federal government for the benefit of the American people.

Source: GAO.

Accountability Integrity Reliab

18 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG
Well-being and financial

security of American people

Goal 1 Goal 2 Goal 3 

Results

 $24.1 billion in financial benefits

-Safeguarding Medicare from fraud and abuse, $8.1 billion

-Improving HUD’s budget practices, $4.9 billion

-Reducing losses from farm loans, $4.8 billion

-Reducing costs of hazardous waste cleanup at Hanford, $1.5 billion

-Additional financial benefits, $4.8 billion

226 other benefits

-Improving pediatric drug research and labeling

-Simplifying requirements for food stamp eligibility and benefits

-Better targeting education funds to high-poverty school districts

-Protecting taxpayers from faulty analyses of major public works programs

-222 additional benefits

524 new recommendations made

-Develop strategy for expanding stockpiles of childhood vaccines

-Develop an action plan for overseeing competitive energy markets

-522 additional improvements recommended

111 testimonies

-Aviation security

-Bioterrorism

-Food safety

-Nursing homes

-107 additional hearings on topics of national importance

Source: GAO.
Changing security

threats and challenges

of globalization

Goal 1 Goal 2 Goal 3 

Results

$8.4 billion in financial benefits 

-Reducing DOD’s foreign currency exchange estimates, $1.5 billion

-Consolidating and modernizing DOD's computer center activities, $859 million

-Reducing funding for the V-22 development program, $763.8 million

-Better management of DOD’s satellite capacity, $702 million 

-Additional financial benefits, $4.6 billion

218 other benefits

-First steps toward unifying homeland security efforts

-Stronger measures to prevent unapproved export of missile parts

-More effective delivery of disaster recovery assistance to other nations

-Improving Peace Corps’ safety and security practices

-214 additional benefits

618 new recommendations made

-Develop governmentwide plan to help other countries combat nuclear smuggling

-Make engineering and manufacturing investments in technologies proven to be 

-Develop overall investment plan for the National Security Space Strategy

-615 additional improvements recommended

38 testimonies

-Combating terrorism

-Chemical and biological preparedness

-Conflict diamonds

-Foreign language needs

-34 additional hearings on topics of national importance

Source: GAO.
Goal 1 Goal 2 Goal 3 

$5.2 billion in financial benefits

-Improving Defense Department’s computer centers’ operations, $859 million

-Improving collection of nontax debts owed to the U.S. government, $300 millio

-Additional financial benefits, $4 billion

462 other benefits

-Greater accountability in the federal acquisition process

-Improved implementation of Paperwork Reduction Act

-Data stewardship strategies to protect individuals’ privacy

-Audit testing approach for forensic audits to identify fraud, waste, and abuse

-Improved government debt management

-457 additional benefits

808 new recommendations made

-Better protect government credit cards from misuse

-Audit agencies’ compliance with cost accounting standards

-Reassess the requirements for recertifying eligibility for the Earned Income

Tax Credit

-805 additional improvements recommended

65 testimonies

-Intergovernmental aspects of homeland security

-Contract management

-Corporate governance and accountability

-Human capital

-Illegal tax schemes and scams

-U.S. government's financial statements

-59 additional hearings on topics of national importance

Source: GAO.

Transforming th

federal governmen

role

Results
Goal 1 Goal 2 Goal 3

Sharpen focus on clients’ and customers’ requirements

-Piloted Web-based feedback system for congressional clients

-Provided emergency relocation support

-Developing agency and international protocols

Enhance leadership and promote management excellence

-Increased security of GAO’s facilities and information systems

-Maintained integrity in financial management

-Continued to provide leadership in human capital strategy and management

Leverage institutional knowledge and experience

-Improved management of agency records

-Piloted knowledge-sharing among GAO units

-Increased capacity through knowledge-sharing and collaboration

Continuously improve business and management processes

-Improved guidance and tracking for GAO engagements

-Developed “highlights” page to encapsulate information from a GAO report on a sin

-Donated excess computer equipment to schools

Become professional services employer of choice

-Implemented competency-based performance system for analysts, specialists, and 

-Developed new training process and expanded executive training opportunities

-Continued recruitment focus on diversity 

Source: GAO.

Results
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

Strategies and Challenges

As the audit, evaluation, and investigative arm of the Congress, GAO has a 

unique role to play. Within the legislative branch, we are the only agency with 

staff in the field, conducting performance analyses and financial accounting among other congressionally 

requested activities, and reporting our 

findings not only to our congressional 

clients but also to the American public. 

While we work with the Inspectors General at every federal agency, our engagements differ from theirs in that ours are 

often more strategic and longer-range in 

nature, governmentwide in scope, and 

initiated by requests from the Congress. 

Achieving our goals and objectives rests, 

for the most part, on providing professional, fact-based, balanced, nonpartisan 

information. We develop and present 

this information in a number of ways to 

support the Congress in carrying out its 

constitutional responsibilities, including 

the following:

■ evaluating federal policies and the 

performance of agencies;

■ overseeing government operations 

through financial and other 

management audits to determine 

whether public funds are spent 

efficiently, effectively, and in 

accordance with applicable laws;

■ investigating whether illegal or 

improper activities are occurring;

■ analyzing the financing for 

government activities;

■ conducting construct

in which we work pr

agencies, when appro

provide advice that m

efforts toward positiv

■ providing legal opinio

determine whether a

compliance with app

regulations;

■ conducting policy an

needed actions and th

of proposed actions; 

■ providing additional 

Congress in support 

and decision-making 

Because achieving our s

and objectives also requ

coordinating with other 

with similar or complem

we 

■ use advisory panels a

to inform GAO’s strat

work planning, and 

■ initiate and support c

national and internati

technical assistance, a

knowledge-sharing ef

Those two types of stra

relationships allow us to 

institutional knowledge 

and, in turn, to improve 

the Congress and the Am

Our External Liaison offi

and provides strategic fo

with crosscutting organ

our research, audit, and 
24 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

lead the work with most of the issue-specific organizations. 

Among these efforts is our work with 

the International Organization of 

Supreme Audit Institutions (INTOSAI)—

the professional organization of the 

national audit offices of 184 countries. 

During fiscal 2002, GAO led a 10-nation 

task force in developing a strategic planning framework for the organization that 

was approved in October 2002. In fiscal 

2003, the task force will expand the 

framework into a comprehensive strategic plan. The Comptroller General also 

leads the Global Working Group, in 

which the heads of GAO’s counterparts 

from 15 countries discuss mutual challenges, share experiences, and identify 

opportunities for collaboration with one 

another. GAO also chairs INTOSAI’s 

accounting standards committee and is 

an active member of the auditing standards, internal control standards, and 

public debt committees.

Domestically, the Comptroller General 

chairs the National Intergovernmental 

Audit Forum, and through 10 regional 

intergovernmental audit forums, GAO 

consults regularly with federal inspectors general and state and local auditors. In addition, through the Domestic 

Working Group, the Comptroller General and the heads of 18 federal, state, 

and local audit organizations exchange 

information and seek opportunities to 

collaborate. The Comptroller General is 

also one of the four principals of the 

Joint Financial Management Imp

ment Program, who are actively 

ing financial management reform 

governmentwide.

Addressing Management 

Challenges That Could Aff

Our Performance

GAO has three management cha

that may affect our performance

the challenges—human capital a

ical security—were identified in 

vious performance and accounta

report. We have made progress in 

addressing each of these challen

we still have work to do. The thir

lenge, information security, will r

our previous challenge of inform

technology. With the establishme

stable and reliable computer net

and institutionalized standard ro

updates of network and desktop 

ing systems and equipment, we w

have completed our work on the 

nal management challenge. How

independent reviews of our info

security program indicate a need 

ther improvement. 

Given GAO’s role as a key provid

information and analyses to the C

gress, maintaining the right mix 

nical knowledge and expertise a

general analytical skills is vital to 

ing our mission. We spend about 

cent of our resources on our peo

without excellent human capital 

agement, we could still run the r

being unable to deliver what the 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

gress and the nation expect from us. In 

1999, after an extended hiring freeze, 

GAO’s workforce was sparse at the entry 

level, and we faced succession planning 

issues as a large number of our senior 

managers and analysts became eligible 

to retire. The development and training 

of our senior executives had been curtailed for funding reasons. And at the 

same time, more of our staff needed 

enhanced technical skills if they were to 

assist the Congress effectively. In all 

those respects, GAO was little different 

from the government as a whole. In the 

years since, we have addressed these 

issues in a variety of ways and are continuing to do so. For example, we developed a recruitment program that 

allowed us to hire 430 permanent staff 

during fiscal 2002, revamped and modernized the performance appraisal system for analysts and attorneys, and 

implemented a succession-planning program.

Over the next several years, we need to 

continue to address skill gaps, maximize 

staff productivity and effectiveness, and 

reengineer our human capital 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. We will reengineer our 

human capital systems and practices to 

increase their efficiency and to take full 

advantage of technology

ensure that our staff hav

skills and training to fun

reengineered environm

we are developing a com

performance system for 

port employees. 

During the 108th Congr

work with our appropri

sight committees to ach

of legislation to support 

efforts to be a leader in 

capital management and 

organization. To build o

capital flexibilities prov

gress in 2000, we will id

nities for additional flex

would, among other thi

GAO’s continuing effort

more performance-base

system, realign our work

vide greater opportunit

phase into retirement. 

In the aftermath of the S

rorist attacks and subseq

incidents, our ability to 

and secure workplace e

lenge for our agency. Pro

ple and our assets is crit

to carry out our mission

additional resources to t

implemented measures 

ing vehicle and pedestri

installing an additional x

adding more security gu

windows, and relocating 

are in the process of res
26 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

designing other projects to better control building access and security around 

the building. We plan to implement 

these projects over the next several 

years. 

Ensuring information systems security 

and disaster recovery systems that allow 

for continuity of operations is a critical 

requirement for the agency, particularly 

in light of the events of September 11 

and the anthrax incidents. The risk is 

that our information could be compromised and that we would be unable to 

respond to the needs of the Congress in 

an emergency. In light of this risk, and in 

keeping with our goal of being a model 

federal agency, we are 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 Authorization Act for Fiscal Year 

2001. 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. 

However, we need to complete certain 

key actions to be better able to detect 

intruders in our systems, identify our 

users, and recover in the event of a disaster. Among our current efforts and plans 

for these areas are completing the installation of software that helps us detect 

intruders on all our internal serv

completing the implementation 

secure user authentication proce

refining the disaster recovery pla

developed last year.

At GAO, management challenges 

identified by the Comptroller Ge

and the agency’s senior executiv

through the agency’s strategic pl

management, and budgeting pro

Our progress in addressing the c

lenges is monitored through our 

performance and accountability p

Under strategic goal 4, we establ

formance goals focused on each 

management challenges and trac

progress in completing the key e

for those performance goals qua

The performance goals are asses

updated each year.

GAO’s Inspector General review

agement’s assessment of the cha

and the agency’s progress in add

them. The memorandum on the 

tor General’s findings is reprinte

end of this report. 

Mitigating External Facto

That Could Affect Our 

Performance

Several external factors could aff

achievement of our performance 

including national and internatio

developments and the resources 

receive. Limitations imposed on 

work by other organizations or l

tions on the ability of other fede
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

cies to make the improvements we 

recommend are other factors that could 

affect the achievement of our goals. 

As the Congress focuses on unpredictable events—such as the global threat 

posed by sophisticated terrorist networks, international financial crises, or 

natural disasters—the mix of work we 

are asked to undertake may change, 

diverting our resources from some of 

our strategic objectives and performance goals. We can and do mitigate the 

impact of these events on the achievement of our goals in various ways:

■ We are alert to possibilities that could 

shift the Congress’s and, therefore, 

our priorities.

■ We continue to identify in our 

products and meetings with the 

Congress conditions that could trigger 

new priorities.

■ We quickly redirect our resources, 

when appropriate, so that we can 

deal with major changes that do 

occur.

■ We maintain broad-based staff 

expertise so that we can readily 

address emerging needs.

As this report goes to press, the uncertainty about our fiscal 2003 funding levels was affecting when we will 

complete—and, in some cases, begin—

initiatives to address our management 

challenges and other issues. Meeting the 

fiscal 2003 performance targets in this 

report and completing the work under 

way to meet our 2-year 

goals are contingent on 

resources we are reques

Congress. Once actual f

known, we may adjust o

performance goals to en

congressional priorities 

A final external factor is 

which GAO can obtain 

types of information. M

recent developments ha

cerns about whether re

challenges are likely to i

future. First, in Decemb

trict court dismissed a la

to obtain information ab

held with private-sector 

the Vice President, in hi

chairman of the Nationa

Development Group, an

members and staff. The 

address the merits of th

stated that the Comptro

lacked standing in the m

the current administrati

tendency to not readily 

information with GAO a

that both have received 

In addition, with concer

tional security being un

home and abroad, GAO 

difficulty obtaining info

reporting on sensitive is

cally, our auditing and in

ering has been limited w

intelligence community 

have we had the author
28 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

inspect records or other materials held 

by other countries or, generally, by the 

multinational institutions that the United 

States works with to protect its interests. 

Consequently, our ability to fully assess 

the progress being made in addressing 

homeland security issues may be hampered, and because some of our reports 

may be subjected to greater classification 

reviews than in the past, their public dissemination may be limited. We will 

work with the Congress to identify both 

legislative and nonlegislative opportunities for strengthening GAO’s access 

authority as necessary and appropriate.
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

Managing Our Resources

GAO’s financial statements for fiscal 

2002 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. The auditor found no instances of 

noncompliance with the laws or regulations in the areas they tested. The statements and their accompanying notes, 

along with the auditor’s report, appear 

later in this report. The table below summarizes key data.

Compared with the statements of large 

and complex agencies in the executive 

branch, GAO’s statements present a relatively simple picture of 

the legislative branch th

financial activity focuse

tion of its congressional

get and most of its resou

the human capital need

of supporting the Cong

mation and analysis.

GAO’s budget consists o

appropriation covering 

expenses and revenue f

able audit work and ren

fiscal 2002, GAO’s total 

resources increased by 

from fiscal 2001. This in

primarily of additional c

appropriations to meet 

gram requirements and 

transfers of budget auth

GAO’s Financial Highlights: Resource Information

Dollars in millions

Fiscal 2

Total budgetary resources $3

Total outlays $3

Net cost of operations

Goal 1: Well-being and financial security of the American people $1

Goal 2: Changing security threats and challenges of globalization 

Goal 3: Transforming the federal government’s role 1

Goal 4: Maximizing the value of GAO 

Less reimbursable services not attributable to goals (

Total net cost of operations $4

Actual full-time equivalents 3

Note: The net cost of operations figures include nonbudgetary items, such as imp

depreciation costs, which are not included in the figures for total budgetary resou

outlays.
30 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

safety and security efforts to respond to 

the events of September 11. GAO’s total 

assets were $126.8 million, consisting 

mostly of property and equipment 

(including the headquarters building, 

land, and improvements and computer 

equipment and software) and funds with 

the Treasury. Our total liabilities of 

roughly $91.7 million were composed 

largely of employees’ accrued annual 

leave, amounts owed to other government agencies, accounts payable, and 

workers’ compensation liability. 

GAO reports net costs by strategic goal 

to align our net costs with our strategic 

plan. As the figure indicates, our first 

goal, under which we organize our work 

on challenges to the well-being and 

financial security of the American people, accounted for the largest share of 

the costs. We expect this goal to continue to represent the largest share of 

our costs. 

For fiscal 2003, GAO has request

budget of $457.8 million to main

rent operations to support the C

as outlined in our strategic plan. 

funding level—which is 6 percen

our 2002 funding level—would a

to support our authorized level o

full-time-equivalent personnel an

includes $4 million to meet nonr

ring requirements to enhance th

and security of GAO’s staff. 

The following table provides an 

view of how our budgetary and 

capital resources will be allocate

among GAO’s four strategic goal

6%

Goal 3

31%

Goal 4

Goal 2

24%

Goal 1

39%

Source: GAO.

Net Cost of Operations

FY 2002 total $453 million

GAO’s Revised Fiscal 2003 Budget

Strategic Goal

Dollars in

millions

F

equivale

Goal 1: Well-being and financial security of the American people $177.6 

Goal 2; Changing security threats and challenges of globalization 119.5 

Goal 3: Transforming the federal government’s role 141.0 

Goal 4: Maximizing the value of GAO 19.7 

Total $457.8 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

Almost 80 percent of GAO’s fiscal 2003 

budget will provide for employee compensation and benefits. The next largest 

portion of our budget—about $55 million—is for contract services supporting 

both GAO’s mission work and administrative operations, including information technology, training, security, and 

building maintenance and operations 

services. During fiscal 2003, we plan to 

increase our investments in human capital, information technology and security, 

and the safety and security of GAO’s people, facilities, and other assets.
32 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

Overview of Financial Statements

GAO recognizes the importance of 

strong financial systems and internal 

controls to ensure our accountability, 

integrity, and reliability. To achieve a high 

level of quality, management maintains a 

quality control program and seeks 

advice and evaluation from both internal 

and external sources. 

GAO is committed to fulfilling the internal control objectives of 31 U.S.C. 3512, 

formerly the Federal Managers’ Financial Integrity Act (the Integrity Act) and 

the Federal Financial Management 

Improvement Act of 1996 (the Improvement Act). Although GAO is not subject 

to the acts, we comply voluntarily with 

the acts’ requirements. GAO’s management assesses compliance with these 

controls through a series of comprehensive internal reviews, applying the evaluation criteria in the Office of 

Management and Budget’s guidance for 

implementing the Integrity Act. The 

results of these reviews are discussed 

with GAO’s Audit Advisory Committee, 

and action is taken to correct deficiencies as they are identified.

GAO has assessed our internal controls 

as of September 30, 2002, based on the 

criteria mentioned above for effective 

internal controls in the federal government. On the basis of this assessment, 

we believe that we have effective internal controls in place, as of September 

30, 2002. Additionally, an independent 

auditor found that GAO maintained 

effective internal controls over financial 

reporting and compliance with l

regulations. Consistent with GAO

uation, the auditor found no mat

internal control weaknesses.

GAO’s Audit Advisory Committee 

the Comptroller General in over

the effectiveness of our financial 

ing and audit processes, internal 

trols over financial operations, an

processes to ensure compliance 

laws and regulations relevant to 

financial operations. As of Septem

2002, the committee consisted o

■ Sheldon S. Cohen (Chairman)

certified public accountant an

practicing attorney in Washing

D.C., former Commissioner an

Counsel of the Internal Reven

Service, and Senior Fellow of t

National Academy of Public 

Administration;

■ Alan B. Levenson, a practicing 

attorney in Washington, D.C., a

former senior official at the Se

and Exchange Commission; an

■ Katherine D. Ortega, a certified 

accountant, former Treasurer o

United States, former Commis

of the Copyright Royalty Tribu

a former member of the Presi

Advisory Committee on Small 

Minority Business.

Condensed financial statements f

follow. Our detailed statements 

their accompanying notes appea

full-length version of this report. 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

financial statements for the fiscal year 

ended September 30, 2002, were 

audited by an independent auditor, Cotton & Co., LLP, which rendered unqualified opinions on our statements and on 

the effectiveness of our internal controls 

over financial reporting and compliance 

with laws and regulations. The auditor 

also reported that we had substantially 

complied with the applicable requirements of the Improvement Act and 

found no reportable instances of noncompliance with selected provisions of 

laws and regulations. In the opinion of 

the auditor, the financial statements are 

presented fairly in all material respects 

and are in conformity with generally 

accepted accounting principles.
34 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

U.S. General Accounting Office

Condensed Balance Sheet

As of September 30, 2002 and 2001

(Dollars in thousands)

2002 

Assets

Intragovernmental assets including funds with the U.S. Treasury $62,442 

Property and equipment, net 63,888 

Other 486 

Total Assets $126,816 

Liabilities

Intragovernmental liabilities $16,845 

Accounts payable and salaries and benefits 23,227 

Accrued annual leave and other 29,357 

Workers' compensation 12,331 

Capital leases 9,968 

Total Liabilities $91,728 

Net Position

Unexpended appropriations $29,925 

Cumulative results of operations 5,163 

Total net position 35,088 

Total Liabilities and Net Position $126,816 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

U.S. General Accounting Office

Condensed Statement of Net Cost

For Fiscal Years Ended September 30, 2002 and 2001

(Dollars in thousands)

200

Net Costs by Goal 

Goal 1: Well-being/financial security of American people $178,38

Goal 2: Changing security threats/challenges of global 

Interdependence 110,53

Goal 3: Transforming the federal government's role 140,96

Goal 4: Maximize the value of GAO 25,27

Less: reimbursable services not attributable to goals (2,12

Net Cost of Operations $453,03
36 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

U.S. General Accounting Office

Condensed Statement of Changes in Net Position

For Fiscal Years Ended September 30, 2002 and 2001

(Dollars in thousands)

2002

Cumulative

Results of 

Operations

2002

 Unexpended 

Appropriations

2001

Cumulative

Results of

Operations

20

Unexp

Approp

Balances, Beginning of 

Fiscal Year $15,349 $21,258 $18,761 

Budgetary Financing 

Sources

Current year 

appropriations - 421,844 - 

Appropriations used 419,046 (419,046) 387,148 (

Other - 5,869 - 

Other Financing Sources

Employee benefit costs 

imputed to GAO 21,007 - 19,681 

Other 2,796 - 2,813 

Total Financing Sources 442,849 8,667 409,642 

Net Cost of Operations (453,035) - (413,054) 

Balances, End of Fiscal 

Year $5,163 $29,925 $15,349 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

U.S. General Accounting Office

Condensed Statement of Budgetary Resources

For Fiscal Years Ended September 30, 2002 and 2001

(Dollars in thousands)

Budgetary Resources 20

Current year appropriations $421,8

Transfers of budget authority 7,6

Unobligated appropriations, beginning of fiscal year 7,5

Reimbursements 5,6

Total Budgetary Resources $442,6

Status of Budgetary Resources

Obligations incurred $426,7

Unobligated appropriations, end of fiscal year 14,1

Lapsed budget authority 1,7

Total Status of Budgetary Resources $442,6

Relationship of Obligations to Outlays

Obligations incurred $426,7

Obligated balance, net - beginning of fiscal year 48,9

Less: Obligated balance, net - end of fiscal year (47,85

Total Outlays $427,8

Outlays

Disbursements $427,8

Collections (5,68

Net Outlays $422,1
38 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

U.S. General Accounting Office

Condensed Statement of Financing

For Fiscal Years Ended September 30, 2002 and 2001

(Dollars in thousands)

Resources Used to Finance Activities 2002 

Budgetary Resources Obligated

Obligations incurred $426,714 

Less: Reimbursements (5,687) 

Net Obligations 421,027 

Other Resources

Employee benefit costs imputed to GAO 21,007 

Other 2,796 

Net other resources used to finance activities 23,803 

Total resources used to finance activities 444,830 

Resources Used to Finance Items Not Part of the Net Cost of 

Operations

Net (increase) decrease in unliquidated obligations (1,980) 

Costs capitalized on the balance sheet (13,180) 

Total resources used to finance items not part of the net cost of 

operations (15,160) 

Total resources used to finance the net cost of operations 429,670 

Costs That Require Resources in Future Periods

Expenses to be funded by future appropriations 6,213 

Costs That Do Not Require Resources

Depreciation 17,152 

Net Cost of Operations $453,035 
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

Independent Auditors Report

333 NORTH FAIRFAX STREET ♦ SUITE 401♦ ALEXANDRIA, VIRGINIA 22314 703/836/6701♦ FAX 703/836/0941♦ WWW.COTTONCPA.COM ♦ DCOTTON@COTTONCPA.CO

DAVID L. COTTON, CPA, CFE, CGFM  CHARLES HAYWARD, CPA, CFE, CISA  MICHAEL W. GILLESPIE, CPA, CFE  CATHERI

MATTHEW H. JOHNSON, CPA, CGFM  SAM HADLEY, CPA, CGFM  COLETTE Y. WILSON, CPA  ALAN RO

established 1981

Independent Auditor’s Report 

We audited the General Accounting Office’s (GAO) Balance Sheets as of September 30, 2002

related Statements of Net Cost, Changes in Net Position, Budgetary Resources, and Financing for the ye

our report dated December 11, 2002, we stated that we found: 

• The 2002 and 2001 financial statements referred to above are fairly presented, in all 

conformity with U.S. generally accepted accounting principles, 

• GAO maintained effective internal control over financial reporting (including safegu

and compliance with laws and regulations as of September 30, 2002, 

• GAO’s financial management systems substantially complied with the applicable req

Federal Financial Management Improvement Act of 1996 (FFMIA), and 

• No reportable noncompliance with laws and regulations tested. 

In our opinion, the information set forth in the accompanying condensed financial statements i

in all material respects, in relation to the financial statements from which it has been derived. 

We performed our audit and examinations in accordance with Government Auditing Standards

accepted auditing standards, the American Institute of Certified Public Accountants’ attestation standard

Management and Budget (OMB) Bulletin No. 01-02, Audit Requirements for Federal Financial Statem

With respect to our opinion on internal control, misstatements, losses, or noncompliance may 

and not be detected because of inherent limitations in internal control. Also, projections of any evaluati

control to future periods are subject to the risk that internal control may become inadequate as the resul

conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

With respect to our opinion on GAO’s financial management systems’ compliance with FFMI

does not provide a legal determination of GAO’s financial management systems compliance with specif

We are responsible for testing compliance with selected provisions of laws and regulations tha

material effect on the financial statements. We did not test compliance with all laws and regulations ap

We limited our tests of compliance to those laws and regulations required by OMB audit guidance that 

applicable to the financial statements for the fiscal year ended September 30, 2002. We caution that no

occur and not be detected by these tests and that such testing may not be sufficient for other purposes. O

compliance with laws and regulations is intended solely for the information and use of the management 

Congress and is not intended to be, and should not be, used by anyone other than these specified parties

report is a matter of public record and its distribution is not limited. 

COTTON & COMPANY LLP 

Charles Hayward, CPA 

Alexandria, Virginia 

December 11, 2002 
40 GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIG

Memorandum

Date: November 27, 2002

To: Comptroller General

From: Inspector General – Frances Garcia

Subject: Management Challenges

We have reviewed management’s assessment of the

management challenges. Based on our work and

institutional knowledge, we agree that human capital,

physical security, and information security are the

management challenges that may affect our performance.

We are in agreement with management’s assessment of

progress made in addressing these challenges.

In addition, we reviewed all fiscal 2002 accomplishment

reports claiming financial benefits of $1 billion or more

and found that GAO has a reasonable basis for claiming

these benefits. We plan to review the internal controls for

several key performance measures in fiscal 2003.
GAO PERFORMANCE AND ACCOUNTABILITY HIGHLIGHTS 2002 

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