PERFORMANCE

AND

ACCOUNTABILITY

REPORT

FISCAL YEAR 2007

Serving the Congress and the Nation

GAO

UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

Accountability l Integrity l Reliability
Source: GAO.

MISSION

GAO exists to support the Congress in meeting its 

constitutional responsibilities and to help improve the 

performance and ensure the accountability of the federal 

government for the benefit of the American people. 

ACCOUNTABILITY

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.

INTEGRITY 

We set high standards for ourselves in the conduct of 

GAO’s work. Our agency takes a professional, objective, 

fact-based, nonpartisan, nonideological, fair, and 

balanced approach to all activities. Integrity is the 

foundation of our reputation, and the GAO approach 

to work ensures it. 

RELIABILITY 

We at GAO want our work to be viewed by 

the Congress and the American public as 

reliable. We produce high-quality reports, 

testimonies, briefings, legal opinions, 

and other products and services that 

are timely, accurate, useful, clear, and 

candid. 

SCOPE OF WORK 

GAO performs a range of oversight-, 

insight-, and foresight-related 

engagements, a vast majority of 

which are conducted in response 

to congressional mandates or 

requests. GAO’s engagements 

include evaluations of federal 

programs and performance, 

financial and management audits, 

policy analyses, legal opinions, 

bid protest adjudications, and 

investigations.

SERVING THE CONGRESS
GAO Performance and Accountability Report 2007

GAO-08-1SP Contents

Contents

Source: See Image Sources.

Abbreviations.................................................................................................................................iii

How to Use This Report.................................................................................................................v

Introduction ............................................................................................................................................1

From the Comptroller General.....................................................................................................2

Financial Reporting Assurance Statements.................................................................................6

About GAO......................................................................................................................................8

Mission.....................................................................................................................................8

Strategic Planning and Management Process.....................................................................9

Organizational Structure......................................................................................................13

How We Measure Our Performance..................................................................................17

Part I: Management’s Discussion and Analysis..........................................................................19

Promoting a Transparent and Accountable Government by Providing Fact-Based,

Objective Information to the Congress and the Public.........................................................20

Focusing on Results..............................................................................................................23

Focusing on Our Client........................................................................................................34

Focusing on Our People.......................................................................................................36

Focusing on Our Internal Operations.................................................................................39

Building and Sustaining Partnerships................................................................................40

GAO’s High-Risk Program...................................................................................................41

General Counsel Decisions and Other Legal Work..........................................................43

Managing Our Resources....................................................................................................44

Strategies for Achieving Our Goals.....................................................................................48

Internal Management Challenges and Mitigating External Factors That Could Affect

Our Performance................................................................................................................55

Part II: Performance Information...................................................................................................63

Performance Information by Strategic Goal..............................................................................64

Goal 1 Overview............................................................................................................................65

Financial Benefits..................................................................................................................67

Nonfinancial Benefits...........................................................................................................67

Testimonies...........................................................................................................................68
GAO Performance and Accountability Report 2007

ii GAO-08-1SPContents 

This is a work of the U.S. government and is not subject to copyright protection in the United States. The published 

product may be reproduced and distributed in its entirety without further permission from GAO. However, because this 

work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you 

wish to reproduce this material separately.

Goal 2 Overview............................................................................................................................69

Financial Benefits..................................................................................................................71

Nonfinancial Benefits...........................................................................................................71

Testimonies...........................................................................................................................71

Goal 3 Overview............................................................................................................................73

Financial Benefits..................................................................................................................75

Nonfinancial Benefits...........................................................................................................75

Testimonies...........................................................................................................................76

Goal 4 Overview............................................................................................................................77

Data Quality and Program Evaluation........................................................................................78

Verifying and Validating Performance Data.......................................................................78

Program Evaluation..............................................................................................................93

Part III: Financial Information.........................................................................................................97

From the Chief Financial Officer................................................................................................98

Overview of Financial Management and Controls..................................................................100

Financial Systems and Internal Controls.........................................................................100

Audit Advisory Committee’s Report.........................................................................................102

Independent Auditor’s Report...................................................................................................103

Notes to Financial Statements...................................................................................................112

Part IV: From the Inspector General............................................................................................125

From the Inspector General......................................................................................................126

Part V: Appendixes............................................................................................................................127

1. Accomplishments and Contributions...................................................................................128

2. GAO’s Report on Personnel Flexibilities.............................................................................185

3. GAO’s FISMA Efforts............................................................................................................189

Image Sources.....................................................................................................................................193

Providing Comments on This Report...........................................................................................194

Obtaining Copies of GAO Documents..........................................................................................194
GAO Performance and Accountability Report 2007

GAO-08-1SP iii

Abbreviations

ACF	 Administration for Children and 

Families 

BEA	 business enterprise architecture 

BMDS	 Ballistic Missile Defense System 

CAO	 Chief Administrative Officer and 

Chief Administrative Office 

CBO	 Congressional Budget Office 

CBP	 Customs and Border Protection 

CDP	 collection due process 

CFO	 Chief Financial Officer 

CMS	 Centers for Medicare & Medicaid 

Services 

DHS	 Department of Homeland Security 

DI	 disability insurance 

DOD	 Department of Defense 

DOE	 Department of Energy 

DOT	 Department of Transportation 

DTV	 digital television 

EAC	 Employee Advisory Council 

EAS	 Emergency Alert System 

EBT	 electronic benefit transfer 

EEOC	 Equal Employment Opportunity 

Commission 

EPA	 Environmental Protection Agency 

ERMS	 Electronic Records Management 

System 

FAA	 Federal Aviation Administration 

FAS	 Financial Audit System 

FBI	 Federal Bureau of Investigation 

FDA	 Food and Drug Administration 

FCC	 Federal Communications 

Commission 

FCS	 Future Combat System 

FEMA Federal Emergency Management 

Agency 

FFMIA	 Federal Financial Management 

Improvement Act 

FHA	 Federal Housing Administration 

FICA	 Federal Insurance Contributions 

Act 

FISMA	 Federal Information Security 

Management Act 

FMFIA	 Federal Managers’ Financial 

Integrity act 

FOIA	 Freedom of Information Act 

FSI	 Forensic Audits and Special 

Investigations 

FTA	 Federal Transit Administration 

FTE	 full-time equivalent 

FWS	 Federal Wage System 

GAO	 Government Accountability Office 

GOES-R	 Geostationary Operational 

Environment Satellite-R series 

GS	 General Schedule 

HHS	 Department of Health and Human 

Services 

HUD	 Department of Housing and Urban 

Development 

IDP	 individual development plan 

IED	 improvised explosive device 

IESS	 Integrated Electronic Security 

System 

IG	 Inspector General 

IFPTE	 International Federation of 

Professional and Technical 

Engineers 

HIP	 Individual and Households 

Program

INTOSAI	 International Organization of 

Supreme Audit Institutions 

IRS	 Internal Revenue Service 

IS	 information security 

ISTS	 Information Systems and 

Technology Services 

IT	 information technology 

LEP	 limited English proficiency 

MCA	 managerial cost accounting 

MCC	 Millennium Challenge Corporation 

MDA	 Missile Defense Agency 

MSA	 Metropolitan statistical areas 

Abbreviations
GAO Performance and Accountability Report 2007

iv GAO-08-1SP

NASA	 National Aeronautics and Space 

Administration 

NCMEC	 National Center for Missing and 

Exploited Children 

NextGen	 Next Generation Air 

Transportation System 

NFC	 National Finance Center 

NIST	 National Institute of Standards 

and Technology 

NPOESS	 National Polar-Orbiting 

Operational Environment Satellite 

System 

NRC	 Nuclear Regulatory Commission 

NSPS	 National Security Personnel 

System 

O&M	 operations and maintenance 

OASI	 Old Age and Survivors Insurance 

OMB	 Office of Management and Budget 

OPM	 Office of Personnel Management 

PBC	 performance-based compensation 

PBGC	 Pension Benefit Guaranty 

Corporation 

PCA	 private collection agency 

PEO	 Program Executive Office 

PIN	 personal identification number 

PPA	 Pension Protection Act of 2006 

PRISM	 Program Review Instrument for 

Systems Monitoring 

PT	 program and technical 

QCI	 Quality and Continuous 

Improvement 

QDR	 Quadrennial Defense Review 

SAN	 storage area network 

SBA	 Small Business Administration 

SBI	 Secure Border Initiative 

SCHIP	 State Children’s Health Insurance 

Program 

SEC	 Securities and Exchange 

Commission 

SLI	 Space Launch Initiative 

SNF	 skilled nursing facility 

SSA	 Social Security Administration 

SSI	 Supplemental Security Income 

SSN	 Social Security number 

TAP	 Transition Assistance Program 

TSA	 Transportation Security 

Administration 

TSCA	 Toxic Substances Control Act 

TSP	 Thrift Savings Plan 

UN	 United Nations 

USACE	 U.S. Army Corps of Engineers 

USAID	 U.S. Agency for International 

Development 

USDA	 United States Department of 

Agriculture 

USPS	 United States Postal Service 

US-VISIT	 United States Visitor and 

Immigrant Status Indicator 

Technology 

VA	 Department of Veterans Affairs 

Abbreviations
GAO Performance and Accountability Report 2007

GAO-08-1SP How to Use This Report

How to Use This Report

This report describes the U.S. Government 

Accountability Office’s (GAO) performance 

measures, results, and accountability 

processes for fiscal year 2007. In assessing 

our performance, we compared actual results 

against targets and goals that were set in our 

annual performance plan and performance 

budget and were developed to help carry 

out our strategic plan. Our complete set of 

strategic planning and performance and 

accountability reports is available on our 

Web site at http://www.gao.gov/sp.html. 

This report has an introduction, 

four major parts, and supplementary 

appendixes as follows: 

Introduction

This section includes the letter from the 

Comptroller General and a statement 

attesting to the reliability of our performance 

and financial data in this report and the 

effectiveness of our internal control over 

our financial reporting. This section 

also includes a summary discussion of 

our mission, strategic planning process, 

organizational structure, and process 

for assessing our performance. 

Management’s Discussion and 

Analysis

This section discusses our agencywide 

performance results and use of resources in 

fiscal year 2007. It also includes information 

on the strategies we use to achieve our 

goals and the management challenges and 

external factors that affect our performance. 

Performance Information

This section includes details on our 

performance results by strategic goal 

in fiscal year 2007 and the targets we 

are aiming for in fiscal year 2008. It also 

includes an explanation of how we ensure 

the completeness and reliability of the 

performance data used in this report. 

Financial Information

This section includes details on our finances 

in fiscal year 2007, including a letter from 

our Chief Financial Officer, audited financial 

statements and notes, and the reports from 

our external auditor and audit advisory 

committee. This section also includes 

information on our internal controls and 

an explanation of the kind of information 

each of our financial statements conveys. 

From the Inspector General

This section includes our Inspector 

General’s assessment of our agency’s 

management challenges. 

Appendixes

These sections include detailed write-ups 

about our most significant accomplishments 

and contributions recorded in fiscal year 

2007 and information on certain human 

capital management flexibilities and on 

information security management efforts. 
GAO Performance and Accountability Report 2007

vi GAO-08-1SP
Serving the Congress and the Nation

Source: See Image Sources.

Introduction
GAO Performance and Accountability Report 2007

Introduction GAO-08-1SP

Source: GAO.

From the 

Comptroller General of the United States, David M. Walker

November 15, 2007

I am pleased to present our performance and accountability report for 

fiscal year 2007. We accomplished a great deal for the Congress and the 

American people with the resources we received. We continued to focus 

our efforts on increasing the transparency, efficiency, and accountability 

of federal operations by giving the Congress and the public the information 

they need to ensure that the federal government makes prudent decisions 

now and in the future. We performed our work in accordance with our 

strategic plan for serving the Congress, guided by our core values, and 

consistent with applicable professional standards. You can be assured that 

the information in this report is complete and reliable and meets our high 

standards.

In fiscal year 2007 we exceeded the targets for five of our six key 

performance measures—financial benefits, nonfinancial benefits, past 

recommendations implemented, new products with recommendations, 

and testimonies—that gauge how well we produced results and served 

our client, the Congress. With this level of performance we were able to 

achieve a return on investment for the American people of about $94 for 

every dollar the Congress gave us. Specifically, we recorded $45.9 billion 

in financial benefits from our work and 1,354 nonfinancial benefits, which 

helped improve government operations and better serve the public. We also 

documented that the Congress and federal agencies implemented 82 percent 

of the recommendations we made 4 years ago and that 66 percent of the 

new products we issued during the fiscal year contained recommendations 

that in time should have a positive impact on the efficiency and 

effectiveness of the federal government. Moreover, this was a banner year 

for us in testimonies. Our senior executives and I delivered testimonies 

at 276 hearings, 36 more hearings than in fiscal year 2006. In fact, our 

performance on this measure is the fourth highest over the last 25 years and 

an all-time high for us on a per capita basis. Though we issued our products 

on time 94 percent of the time, we fell short on our timeliness measure by 

1 percentage point, just shy of our 95 percent target.

We also met or exceeded five of the eight targets we set for our people 

measures—new hire rate, acceptance rate, retention rate with retirements, 

retention rate without retirements, and staff development. While these 

From the Comptroller General

Comptroller General
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction 

measures were largely similar to last year’s results, we missed the 

performance targets for staff utilization, leadership, and organizational 

climate by 5 percentage points or less in spite of the challenges we faced 

internally. These challenges included meeting tight deadlines and being 

responsive to our clients when demand for our work was extremely high and 

budgetary and staffing resources were extremely constrained. During fiscal 

year 2007, we also had to manage a large workload in the wake of significant 

human capital transformation efforts and other changes within our agency, 

including a union organizing campaign.

While supporting the Congress’s oversight efforts with more than 

1,200 reports and testimonies we issued during the fiscal year, in November 

2006, we sent a letter to the incoming leadership of the new Congress 

suggesting three dozen areas for additional oversight. In addition, we 

welcomed the new congressional Members in January with several special 

publications to help them make the transition to their responsibilities 

as stewards of the federal purse. All of these publications—Fiscal 

Stewardship: A Critical Challenge Facing Our Nation (GAO-07-362SP, 

January 2007); Understanding Similarities and Differences between 

Accrual and Cash Deficits (GAO-07-117SP, December 2006); and 

Understanding the Primary Components of the Annual Financial Report 

of the United States Government (GAO-05-958SP, September 2005)—are 

available through our Web site at www.gao.gov. Though we received a clean 

opinion on our own financial statements, the federal government’s books are 

not yet in order and will require focused leadership and sustained attention 

to get them there, especially in connection with the Department of Defense.

The Congress needs information to make sound judgments that will benefit 

this nation in the short term and over the long run. Thus, to further assist 

our client with its oversight function and aid its insight and foresight, we 

revised our list of federal programs and areas at risk of fraud, waste, abuse, 

and mismanagement and in need of broad-based transformation and issued 

our biennial report card called High-Risk Series: An Update (GAO-07-310, 

January 2007). We continue to do this work to bring visibility and urgency 

to these areas and to prompt needed actions sooner rather than later. I 

also continued to speak around the country about the fiscal condition and 

long-term fiscal outlook of our country as part of the Fiscal Wake-Up Tour 

sponsored by the Concord Coalition—a nationwide, nonpartisan, grassroots 

organization dedicated to educating the public about the consequences of 

fiscal deficits and promoting a generationally responsible fiscal policy. The 

tour also involves the Brooking Institution and the Heritage Foundation 

and a range of other organizations. To date, the tour has held events in 

24 states and the District of Columbia reaching thousands of people. The 

purpose of this effort is to state the facts and speak the truth about the fiscal 

challenges that this country faces if we continue to do business in the same 

way, increase public awareness about the consequences, and help create the 

impetus and support for appropriate federal, state, and local officials to take 

much needed and long overdue action.

From the Comptroller General
GAO Performance and Accountability Report 2007

 Introduction GAO-08-1SP

Closer to home, we updated our strategic plan to guide our own actions in 

the near future and ensure that we have the foresight needed to support 

the Congress. Our strategic plan includes bodies of work that address 

anticipated requests for evaluations of current and emerging issues and 

anticipated work related to government transformation efforts, especially 

in the areas of homeland security and defense. Seven broad themes provide 

the context for our strategic plan and we describe them in detail in Forces 

That Will Shape America’s Future: The Themes from GAO’s Strategic Plan 

(GAO-07-467SP, March 2007). We believe these themes will shape the many 

requests and mandates we expect to receive from the Congress over the next 

3 years as well as the work we plan to do under my statutory authority as 

Comptroller General of the United States.

An effective, transparent government requires a first-rate workforce and 

one of our agencywide goals is to create a model federal agency and worldclass professional services organization. We want to continue to attract staff 

from a variety of disciplines who can gather the facts and develop innovative 

solutions to both old and new problems challenging the federal government. 

Thus, in fiscal year 2007 we improved our recruiting and hiring practices by 

clarifying our hiring goals and making it a priority to aggressively recruit at 

select colleges and universities. We also instituted an executive exchange 

program to help us tap talent outside of the federal government for shortterm projects. In addition, we began a professional development program 

for entry-level administrative and professional support staff (similar to 

our development program for analyst staff), initiated a formal mentoring 

program, and continued to support employees working flexible schedules 

and telecommuting to help them balance the demands of work and home. 

I am very proud to say that we rated second among large federal agencies 

on the Partnership for Public Service’s list of the Best Places to Work in the 

Federal Government for 2007, up from fourth place in 2005. Furthermore, in 

September 2007 we were named as one of Washington’s top 60 employers by 

Washingtonian magazine.

However, not all of our human capital initiatives have been easy—or 

without controversy, especially the 2006 restructuring of our midlevel 

(Band II) analyst workforce. Reforms that affect an employee’s pay and job 

classification tend to be very controversial and this is particularly true in a 

workforce like ours that is highly educated and, by training and disposition, 

highly skeptical and analytical. In May 2007 I testified at oversight hearings 

to discuss changes we made to many of our human capital policies and 

procedures over the last several years and other related issues. For example, 

employees’ pay and compensation are now more directly tied to the market 

and to achieving results—measurable outcomes that further the agency’s 

mission. Also, jobs for our employees are classified according to employees’ 

roles and responsibilities, and pay is based on a employees’ job as well as 

market-based conditions and their performance rather than longevity on 

the job. We believe we are the first major federal agency to adopt such an 

approach on an agencywide basis. At the same time, due to my concern 

From the Comptroller General
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction 

regarding the trends in ratings differences associated with our performance 

appraisals over time, we also contracted with a private firm to assess the 

possible reasons for the differences and make related recommendations.

For some staff, these changes are unsettling; thus listening and responding 

to employees’ concerns and comments is particularly important during 

this time of change. I and the other executives encouraged employees to 

provide their input about the changes taking place and the direction the 

agency is headed—and we heard them. During fiscal year 2007, we made 

certain adjustments to our annual pay parameters and I proposed legislation 

known as the Government Accountability Act of 2007, which, if passed, will 

benefit our existing employees and will serve to further enhance our ability 

to attract, retain, and reward a top-flight workforce. For example, under 

one provision of the act, employees below the senior executive level would 

be able to include the bonus part of their performance awards in their highthree average salary for retirement purposes, which is not currently possible.

We hope to work through these human capital issues and our other 

management challenges related to physical and information security 

in partnership with the agency’s recently elected employee’s union, the 

International Federation of Professional and Technical Engineers, which will 

serve as the exclusive representative of entry and midlevel analysts as well 

as other employees in dealing with management on issues related to certain 

terms and conditions of employment. I and the rest of management will 

bargain in good faith with the union and hope to reach timely agreements on 

issues of mutual interest and concern.

The challenge before us as servants of the Congress and the nation is to 

maintain a government that is effective, transparent, and relevant for this 

generation and generations to come. This agency has never wavered in its 

belief that the Congress and the public deserve to be fully informed about 

all major aspects of government operations. I am committed to ensuring 

that we will continue to “lead by example” in transforming government 

while providing the most professional, objective, fact-based, nonpartisan, 

nonideological, fair, and balanced information possible to the Congress and 

the American people.

David M. Walker

Comptroller General 

of the United States

From the Comptroller General
GAO Performance and Accountability Report 2007

 Introduction GAO-08-1SP

November 15, 2007

We, as GAO’s executive committee, are responsible for preparing and 

presenting the financial statements and other information included in this 

performance and accountability report. The financial statements included 

herein are presented in conformity with U.S. generally accepted accounting 

principles; incorporate management’s reasonable estimates and judgments, 

where applicable; and contain appropriate and adequate disclosures. 

Based on our knowledge, the financial statements are presented fairly 

in all material respects, and other financial information included in this 

report is consistent with the financial statements.

We are also responsible for establishing and maintaining adequate internal 

control over financial reporting. We conducted an assessment of the 

effectiveness of our internal control over financial reporting consistent 

with the criteria in 31 U.S.C. 3512 (c), (d) (commonly referred to as the 

Federal Managers’ Financial Integrity Act (FMFIA) and in Appendix 

A of Office of Management and Budget (OMB) Circular No. A-123, 

Management’s Responsibility for Internal Control. Based on the results 

of this assessment, we have reasonable assurance that internal control 

over financial reporting as of September 30, 2007, was operating effectively 

and that no material weaknesses exist in the design or operation of the 

internal control over financial reporting.

On the basis of our comprehensive management control program, we are 

pleased to certify, with reasonable assurance, the following:

Our financial reporting is reliable—transactions are properly recorded, 

processed, and summarized to permit the preparation of financial 

statements in conformity with U.S. generally accepted accounting 

principles, and assets are safeguarded against loss from unauthorized 

acquisition, use, or disposition.

We are in compliance with all applicable laws and regulations—

transactions are executed in accordance with laws governing the use of 

budget authority and other laws and regulations that could have a direct 

and material effect on the financial statements.

Our performance reporting is reliable—transactions and other data 

that support reported performance measures are properly recorded, 

processed, and summarized to permit the preparation of performance 

information consistent with the criteria set forth in the Government 

Performance and Results Act of 1993 and related OMB guidance.

■

■

■

Financial Reporting

Assurance Statements

Financial Reporting Assurance Statements
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction

We also believe that (1) these same systems of accounting and internal 

controls provide reasonable assurance that we are in compliance with the 

spirit of FMFIA and (2) we have implemented and maintained financial 

systems that comply substantially with federal financial management 

systems requirements, applicable federal accounting standards, and the 

U.S. Government Standard General Ledger at the transaction level 

consistent with the requirements in the Federal Financial Management 

Improvement Act (FFMIA) and OMB guidance. These are objectives that 

we set for ourselves even though, as part of the legislative branch of the 

federal government, we are not legally required to do so.

David M. Walker Gene L. Dodaro

Comptroller General Chief Operating Officer

of the United States

Sallyanne Harper Gary L. Kepplinger

Chief Financial Officer General Counsel

Financial Reporting Assurance Statements
GAO Performance and Accountability Report 2007

Introduction GAO-08-1SP

GAO is an independent, nonpartisan, 

professional services agency in the legislative 

branch of the federal government. Commonly 

known as the “audit and investigative arm 

of the Congress” or the “congressional 

watchdog,” we examine how taxpayer dollars 

are spent and advise lawmakers and agency 

heads on ways to make government work 

better. As a legislative branch agency, we 

are exempt from many laws that apply to 

the executive branch agencies. However, 

we generally hold ourselves to the spirit of 

many of the laws, including 31 U.S.C. 3512 

(commonly referred to as the Federal 

Managers’ Financial Integrity Act), the 

Government Performance and Results Act of 

1993, and the Federal Financial Management 

Improvement Act of 1996.1 Accordingly, this 

performance and accountability report for 

fiscal year 2007 supplies what we consider to 

be information that is at least equivalent to 

that supplied by executive branch agencies in 

their annual performance and accountability 

reports.

1

The Federal Managers’ Financial Integrity Act requires ongoing evaluations and annual reports on the adequacy of the 

systems of internal accounting and administrative control of 

each agency. The Government Performance and Results Act 

seeks to improve public confidence in federal agency performance by requiring that federally funded agencies develop 

and implement accountability systems based on performance measurement, including setting goals and objectives 

and measuring progress toward achieving them. The Federal 

Financial Management Improvement Act emphasizes the 

need to improve federal financial management by requiring 

that federal agencies implement and maintain financial management systems that comply with federal financial management systems requirements, applicable federal accounting 

standards, and the U.S. Government Standard General 

Ledger at the transaction level. 

Mission

Our mission is to support the Congress in 

meeting its constitutional responsibilities 

and to help improve the performance and 

ensure the accountability of the federal 

government for the benefit of the American 

people. The strategies and means that we use 

to accomplish this mission are described in 

the following pages. In short, we accomplish 

our mission by providing reliable information 

and informed analysis to the Congress, 

to federal agencies, and to the public, 

and we recommend improvements, when 

appropriate, on a wide variety of issues. 

Three core values—accountability, integrity, 

and reliability—form the basis for all of our 

work, regardless of its origin. These are 

described on the inside front cover of this 

report.

GAO’s History

The Budget and Accounting Act of 1921 

required the President to issue an annual 

federal budget and established GAO as 

an independent agency to investigate how 

federal dollars are spent. In the early years, 

we mainly audited vouchers, but after 

World War II we started to perform more 

comprehensive financial audits that examined 

the economy and efficiency of government 

operations. By the 1960s, GAO had begun 

to perform the type of work we are noted for 

today—program evaluation—which examines 

whether government programs are meeting 

their objectives. 

We exist to support the Congress in meeting its constitutional 

responsibilities and to help improve the performance and 

ensure the accountability of the federal government for the 

benefit of the American people.

About GAO

Source: GAO.

About GAO
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction 

Strategic Planning and 

Management Process

To accomplish our mission, we use a 

strategic planning and management process 

that is based on a hierarchy of four elements 

(see fig. 1), beginning at the highest level with 

the following four strategic goals:

Strategic Goal 1: Provide Timely, Quality 

Service to the Congress and the Federal 

Government to Address Current and 

Emerging Challenges to the Well-Being 

and Financial Security of the American 

People

Strategic Goal 2: Provide Timely, Quality 

Service to the Congress and the Federal 

Government to Respond to Changing 

Security Threats and the Challenges of 

Global Interdependence

Strategic Goal 3: Help Transform the 

Federal Government’s Role and How 

It Does Business to Meet 21st Century 

Challenges

Strategic Goal 4: Maximize the Value of 

GAO by Being a Model Federal Agency 

and a World-Class Professional Services 

Organization

■

■

■

■

Figure 1: GAO’s Strategic Planning Hierarchy 

Source: GAO.

Our audit, evaluation, and investigative 

work is primarily aligned under the first 

three strategic goals, which span issues that 

are both domestic and international, affect 

the lives of all Americans, and influence 

the extent to which the federal government 

serves the nation’s current and future 

interests (see fig. 2).

About GAO
GAO Performance and Accountability Report 2007

10 Introduction GAO-08-1SP

In fiscal year 2007, GAO provided information that helped to...

Strategic Goal 1

Provide timely, quality 

service to the Congress 

and the federal 

government to address 

current and emerging 

challenges to the wellbeing and financial 

security of the American 

people

highlight ways to address problems affecting the delivery of health and disability services for injured 

soldiers and veterans 

improve the Food and Drug Administration’s process for removing dangerous drugs from the 

marketplace 

identify physician practice patterns to improve efficiency in the Medicare program

encourage the preservation of affordable housing 

identify Food Stamp Program areas vulnerable to payment errors and fraud 

improve the Small Business Administration’s timely delivery of disaster assistance 

outline various approaches used in the United States and abroad to negotiate drug prices 

assess the housing needs of low-income veterans 

focus attention on the Pension Benefit Guaranty Corporation’s premium structure

evaluate the Federal Housing Administration’s role and modernizing efforts 

increase knowledge sharing about federal and state efforts to improve older driver safety

highlight inadequacies in the management of federal oil and gas royalties 

raise awareness about the financial risks to the insurance industry posed by climate change 

improve transportation efficiency

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

Strategic Goal 2

Provide timely, quality 

service to the Congress 

and the federal 

government to respond to 

changing security threats 

and the challenges of 

global interdependence

identify key issues for congressional oversight of U.S. efforts to stabilize and rebuild Iraq 

improve the transparency of military compensation costs

promote federal efforts to secure sensitive information 

identify the need for a Chief Management Officer to improve the Department of Defense’s business 

processes 

highlight challenges with securing energy commodity carrying tankers from terrorist attacks

strengthen security at airport passenger screening checkpoints 

identify shortcomings in the Department of Homeland Security’s program to track the visa status of 

visitors and immigrants to the United States

improve licensing procedures for radioactive materials 

enhance the sharing of federal homeland security information with states and localities 

contribute to congressional dialogue on the U.S. food aid provisions of the 2007 Farm bill 

improve oversight and procurement practices at the United Nations 

improve financial literacy in the United States 

better protect consumers who purchase title insurance 

improve the financial supervision of holding companies

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

Strategic Goal 3

Help transform the 

federal government’s role 

and how it does business 

to meet 21st century 

challenges

identify the risks of relying on military and homeland security contractors 

alert the Congress to cost and schedule risks affecting major weapon systems 

uncover fraud, waste, and abuse in financial assistance payments to people affected by hurricanes 

Katrina and Rita

promote a coordinated approach to improving standards and educating professionals in the 

accountability community 

identify multiple approaches needed to reduce the tax gap

enlighten the public about the nation’s long-term fiscal challenges 

inform the Congress about the status of recovery and rebuilding efforts in the aftermath of 

hurricanes Katrina and Rita 

enhance national preparedness for an influenza pandemic 

gauge agencies’ progress with implementing the Freedom of Information Act

ensure that individuals’ personal information is protected 

summarize progress and challenges and identify federal financial implications of rebuilding the 

Gulf Coast 

strengthen the Department of Defense’s business systems modernization program 

strengthen the oversight of an environmental satellite program

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

▪

Strategic Goal 4

Maximize the value of 

GAO by being a model 

federal agency and a 

world-class professional 

services organization

inform the Congress and the public through our strategic plan about the forces that are likely to 

shape our nation’s future, its place in the world, and the changing role of the federal government

develop and implement the Financial Audit System—an automated tool used to audit the financial 

statements of executive branch agencies

▪

▪

Figure 2: Examples of How GAO Assisted the Nation

Source: GAO.

About GAO
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction 11

The fourth goal is our only internal one and 

is aimed at maximizing our productivity 

through such efforts as investing steadily in 

information technology (IT) to support our 

work; ensuring the safety and security of our 

people, information, and assets; pursuing 

human capital transformation; and leveraging 

our knowledge and experience. We revisit 

the focus and appropriateness of these four 

strategic goals each time that we update our 

strategic plan. We updated our strategic plan 

in March 2007.

An Example of Our Strategic

Planning Elements

Strategic Goal 1: Provide Timely, Quality 

Service to the Congress and the Federal 

Government to Address Current and 

Emerging Challenges to the Well-Being and 

Financial Security of the American People 

Strategic Objective: A Safe, Secure, and 

Effective National Physical Infrastructure

Performance Goal: Assess the Federal 

Government’s Role in Fostering and 

Overseeing Telecommunications in the Public 

Interest

Key Efforts:

Assess the federal universal 

service program in promoting the 

availability and affordability of basic 

and advanced telecommunications 

services to all Americans

Assess the effectiveness of key federal 

agencies in managing the technical 

resources needed to meet the growing 

demand for telecommunications 

services by government and 

commercial users

Assess the ability of the Federal 

Communications Commission 

to respond to and resolve legal, 

regulatory, capacity, and policy 

issues that affect how the commercial 

telecommunication industry can 

develop and operate

■

■

■

The four strategic goals are supported 

by strategic objectives that are in turn 

supported by and achieved through 

numerous performance goals and key efforts. 

Our strategic planning framework for serving 

the Congress, which lists the strategic 

objectives under each goal, is depicted on 

page 12.

Complete descriptions of the steps in our 

strategic planning and management process 

are included in our strategic plan for fiscal 

years 2007 through 2012, which is available 

on our Web site at http://www.gao.gov. This 

site also provides access to our annual 

performance plans since fiscal year 1999 and 

our performance and accountability reports 

since fiscal year 2001.

To ensure that we are well positioned to meet 

the Congress’s current and future needs, we 

update our 6-year strategic plan every 3 years, 

consulting extensively during the update with 

our clients on Capitol Hill and with other 

experts (see our complete strategic plan on 

http://www.gao.gov/sp/d04534sp.pdf). Using 

the plan as a blueprint, we lay out the areas in 

which we expect to conduct research, audits, 

analyses, and evaluations to meet our clients’ 

needs, and we allocate the resources we 

receive from the Congress accordingly. Given 

the increasingly fast pace with which crucial 

issues emerge and evolve, we design a certain 

amount of flexibility into our plan and staffing 

structure so that we can respond readily to 

the Congress’s changing priorities. When we 

revise our plan or our allocation of resources, 

we disclose those changes in annual 

performance plans, which are posted—like 

our strategic plan—on the Web for public 

inspection (http://www.gao.gov/sp.html).

In fiscal year 2007, we revised our strategic 

plan for the third time since we first issued 

a strategic plan in 2000. The broad goals and 

objectives of our strategic plan for 2007-2012 

did not change significantly since our last 

update, but events such as the continuing 

war in Iraq and recent and predicted natural 

About GAO
GAO Performance and Accountability Report 2007

12 Introduction GAO-08-1SP

Serving the Congress and the Nation 

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 accountability of 

the federal government for the benefit of the American people.

Themes Goals & Objectives

Provide Timely, Quality Service to the Congress and the 

Federal Government to . . .

. . . Address Current and Emerging Challenges to the Well-being

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

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

Global Interdependence involving . . .

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

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

Maximize the Value of GAO by Being a Model Federal Agency and 

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

Accountability	 Integrity	 Reliability

Core Values

Changing

Security Threats

Sustainability

Concerns

Economic

Growth &

Competitiveness

Global

Interdependency

Societal Change

Quality of Life

Science &

Technology Client and customer satisfaction

Strategic leadership

Institutional knowledge and experience

•

•

•

Process improvement

Employer of choice

•

•

Health care needs

Lifelong learning

Work benefits and protections

Financial security

Effective system of justice

•

•

•

•

•

Viable communities

Natural resources use and 

environmental protection

Physical infrastructure

•

•

•

Homeland security

Military capabilities and readiness

•

•

Advancement of U.S. interests

Global market forces

•

•

Roles in achieving federal 

objectives

Government transformation

•

•

Key management challenges 

and program risks

Fiscal position and financing of the 

government

•

•

Source: GAO. GAO Strategic Plan 2007-2012

About GAO

Figure 3: GAO’s Strategic Plan Framework
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction 13

disasters account for some modification in 

emphasis. Seven broad issues or “themes” 

provide the context for our strategic plan 

(see GAO’s Strategic Plan Framework on 

p. 12), many of which were raised repeatedly 

by our client and other stakeholders during 

our outreach efforts and discussions we 

initiated while preparing the plan. For 

more information about the themes see 

Forces That Will Shape America’s Future: 

The Themes from GAO’s Strategic Plan

(GAO-07-467SP, March 2007).

Each year, we hold ourselves accountable to 

the Congress and to the American people for 

our performance, primarily through the annual 

performance and accountability report. 

We have included some information about 

future plans in this report to provide as 

cohesive a view as possible of what we have 

done, what we are doing, and what we expect 

to do to support the Congress and to serve 

the nation. Last year, the Association of 

Government Accountants awarded us for the 

fifth consecutive year its Certificate of 

Excellence in Accountability Reporting for 

our fiscal year 2006 performance and 

accountability report. According to the 

association, this certificate means that we 

produced an interesting and informative 

report that achieved the goal of complete and 

fair reporting. We also received an award 

from Graphic Design USA for the Highlights 

version of our fiscal year 2006 report. 

(See fig. 4.)

Organizational Structure

As the Comptroller General of the United 

States, David M. Walker is the head of GAO 

and is serving a 15-year term that began 

in November 1998. Three other executives 

join Comptroller General Walker to form 

our Executive Committee: Chief Operating 

Officer Gene L. Dodaro, Chief Administrative 

Officer/Chief Financial Officer Sallyanne 

Harper, and General Counsel Gary 

Kepplinger.

To achieve our strategic goals, our staff is 

organized as shown in figure 5. For the most 

part, our 13 evaluation, audit, and research 

teams perform the work that supports 

strategic goals 1, 2, and 3—our three 

external strategic goals—with several of the 

teams working in support of more than one 

strategic goal. Also, our Forensic Audits and 

Special Investigations (FSI) unit, within our 

Financial Management and Assurance team, 

provides the Congress with high-quality 

forensic audits; investigates fraud, waste, 

and abuse; evaluates security vulnerabilities; 

and conducts other appropriate investigative 

services as part of its own assignments or 

in support of other teams. In addition, FSI 

follows up on engagements and referrals from 

our other teams when its special services 

are required to help determine whether 

legislative or administrative actions are 

necessary. FSI is composed of investigators, 

auditors who have experience with forensic 

audits, and staff in General Counsel who 

work with FraudNet—our online system 

designed to facilitate follow up of allegations 

of fraud, waste, abuse, or mismanagement of 

federal funds.

Senior executives in charge of the teams 

manage a mix of engagements to ensure 

that we meet the Congress’s need for 

information on quickly emerging issues as 

we also continue longer-term work efforts 

that flow from our strategic plan. To serve 

the Congress effectively with a finite set of 

resources, senior managers consult with 

our congressional clients and determine the 

timing and priority of engagements for which 

they are responsible.

As described below, General Counsel 

supports the work of all of our teams. 

In addition, the Applied Research and 

Methods team assists the other teams on 

About GAO
GAO Performance and Accountability Report 2007

14 Introduction GAO-08-1SPAbout GAO 

Figure 4: GAO’s Performance and Accountability Report 2006 Awards

Source: GAO.
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction 15

matters requiring expertise in areas such as 

economics, research design, and statistical 

analysis. Staff in many offices, such as 

Strategic Planning and External Liaison, 

Congressional Relations, Opportunity and 

Inclusiveness, Quality and Continuous 

Improvement, Public Affairs, and the Chief 

Administrative Office, support the efforts 

of the teams. This collaborative process, 

which we refer to as matrixing, increases 

our effectiveness, flexibility, and efficiency 

in using our expertise and resources to meet 

congressional needs on complex issues.

General Counsel is structured to facilitate 

the delivery of legal services to the teams 

and staff offices that support our four 

strategic goals. This structure allows General 

Counsel to (1) provide legal support to our 

staff offices and audit teams concerning 

all matters related to their work and 

(2) produce legal decisions and opinions for 

the Comptroller General. Specifically, the 

goal 1, goal 2, and goal 3 groups in General 

Counsel are organized to provide each of 

the audit teams with a corresponding team 

of attorneys dedicated to supporting each 

team’s needs for legal services. In addition, 

these groups prepare advisory opinions to 

committees and members of the Congress 

on agency adherence to laws applicable 

to their programs and activities. General 

Counsel’s Legal Services group provides 

in-house support to our management on a 

wide array of human capital matters and 

initiatives and on information management 

and acquisition matters and defends the 

agency in administrative and judicial forums. 

Finally, attorneys in the Procurement Law 

and the Budget and Appropriations Law 

groups prepare administrative decisions and 

opinions adjudicating protests to the award 

of government contracts or opining on the 

availability and use of appropriated funds.

For strategic goal 4—our fourth and only 

internal strategic goal—staff in our Chief 

Administrative Office take the lead. They 

are assisted on specific key efforts by the 

Applied Research and Methods team and by 

staff offices such as Strategic Planning and 

External Liaison, Congressional Relations, 

Opportunity and Inclusiveness, Quality and 

Continuous Improvement, and Public Affairs. 

In addition, attorneys in General Counsel, 

primarily in the Legal Services group, provide 

legal support for goal 4 efforts. 

We maintain a 

workforce of highly 

trained professionals 

with degrees in many 

academic disciplines, 

including accounting, 

law, engineering, 

public and business 

administration, 

economics, and the 

social and physical 

sciences. About 

three-quarters of 

our approximately 

3,200 employees are 

based at our headquarters in Washington, 

D.C.; the rest are deployed in 11 field offices 

across the country. Staff in these field 

offices are aligned with our research, audit, 

and evaluation teams and perform work 

in tandem with our headquarters staff in 

support of our external strategic goals.

GAO Field

Locations

Atlanta 

Boston 

Chicago 

Dallas 

Dayton 

Denver 

Huntsville 

Los Angeles 

Norfolk 

San Francisco

Seattle 

About GAO
GAO Performance and Accountability Report 2007

16 Introduction GAO-08-1SP

Figure 5: Organizational Structure

Note: General Counsel’s structure largely mirrors the agency’s goal structure, and attorneys who are assigned to goals work with the 

teams on specific engagements. Thus, the dotted lines in this figure indicate General Counsel’s support of or advisory relationship with 

the goals and teams rather than a direct reporting relationship. 

Opportunity and Inspector General

Inclusiveness

Congressional

Relations

Public

Affairs

Source: GAO.

Teams/

Field Operations

Comptroller General

of the United States

Chief Operating Officer

Quality and

Continuous

Improvement

Strategic Planning

and External Liaison

General

Counsel

Chief Administrative Officer/

Chief Financial Officer

Goal

4

Goal

2

Goal

3

Goal

1

Goal

4

Goal

3

Goal

2

Goal

1

• Provide audit and 

other legal support 

services for all goals 

and staff offices

• Manage GAO’s bid 

protest and 

appropriations law work

Provide timely, quality

service to the Congress

and the federal

government to respond

to changing security

threats and the

challenges of global

interdependence

• Acquisition and 

Sourcing 

Management

• Defense Capabilities 

and Management

• International Affairs 

and Trade

Provide timely, quality

service to the Congress

and the federal

government to address

current and emerging

challenges to the wellbeing and financial

security of the

American people

• Education, 

Workforce, and 

Income Security

• Financial Markets 

and Community 

Investment

• Health Care

• Homeland Security 

and Justice

• Natural Resources 

and Environment

• Physical 

Infrastructure

Help transform the

federal government’s

role and how it does

business to meet 21st

century challenges

• Applied Research 

and Methods

• Financial 

Management and 

Assurance

 – Forensic Audits

 and Special

 Investigations

• Information 

Technology

• Strategic Issues

Maximize the value of

GAO by being a model

federal agency and a

world-class professional

services organization

• Controller

• Human Capital 

Office

– Chief Human

 Capital Officer

• Information Systems 

and Technology 

Services

– Chief Information

 Officer

• Knowledge Services

 – Chief Knowledge

 Services Officer

• Professional 

Development 

Program

Opportunity and Inspector General

Inclusiveness

Congressional

Relations

Public

Affairs

Source: GAO.

Teams/

Field Operations

Comptroller General

of the United States

Chief Operating Officer

Quality and

Continuous

Improvement

Strategic Planning

and External Liaison

General

Counsel

Chief Administrative Officer/

Chief Financial Officer

Goal

4

Goal

2

Goal

3

Goal

1

Goal

4

Goal

3

Goal

2

Goal

1

• Provide audit and 

other legal support 

services for all goals 

and staff offices

• Manage GAO’s bid 

protest and 

appropriations law work

Provide timely, quality

service to the Congress

and the federal

government to respond

to changing security

threats and the

challenges of global

interdependence

• Acquisition and 

Sourcing 

Management

• Defense Capabilities 

and Management

• International Affairs 

and Trade

Provide timely, quality

service to the Congress

and the federal

government to address

current and emerging

challenges to the wellbeing and financial

security of the

American people

• Education, 

Workforce, and 

Income Security

• Financial Markets 

and Community 

Investment

• Health Care

• Homeland Security 

and Justice

• Natural Resources 

and Environment

• Physical 

Infrastructure

Help transform the

federal government’s

role and how it does

business to meet 21st

century challenges

• Applied Research 

and Methods

• Financial 

Management and 

Assurance

 – Forensic Audits

 and Special

 Investigations

• Information 

Technology

• Strategic Issues

Maximize the value of

GAO by being a model

federal agency and a

world-class professional

services organization

• Controller

• Human Capital 

Office

– Chief Human

 Capital Officer

• Information Systems 

and Technology 

Services

– Chief Information

 Officer

• Knowledge Services

 – Chief Knowledge

 Services Officer

• Professional 

Development 

Program

About GAO
GAO Performance and Accountability Report 2007

GAO-08-1SP Introduction 17

How We Measure Our 

Performance

We measure our performance using annual 

quantitative measures. Together, these 

indicators help us to determine how well 

we are meeting the needs of the Congress 

and maximizing our value as a world-class 

organization.

For several years, we assessed our 

performance annually using quantitative 

performance measures that are related 

to our work results and the usefulness of 

those results to our primary client—the 

Congress. We subsequently expanded our 

focus to include a more balanced set of 

performance measures that focus on four key 

areas—results, clients, people, and internal 

operations.2 These categories of measures 

are briefly described below.

Results. Focusing on results and the 

effectiveness of the processes needed 

to achieve them is fundamental to 

accomplishing our mission. To assess 

our results, we measure financial 

benefits, other (nonfinancial) benefits, 

recommendations implemented, and 

percentage of new products with 

recommendations. Financial benefits and 

nonfinancial benefits provide quantitative 

and qualitative information, respectively, 

2

In addition, we are continuing to explore measures that 

could help us assess how well we develop mutually beneficial relationships with other accountability organizations. 

Such partnerships are important because they (1) create 

opportunities for collaboration and cooperation that help 

all organizations involved address common challenges and 

enhance their ability to improve government operations and 

serve the public better, (2) allow us and other organizations 

to make meaningful changes in our internal accountability 

processes and policies, and (3) allow us to better leverage 

available resources. In part I of this report, the section on 

Building and Sustaining Partnerships describes our progress 

with measuring the quality of our partnerships and the section on Strategies for Achieving Our Goals provides additional information about the partnerships we established or 

continued in fiscal year 2007.

■

on the outcomes or results that have 

been achieved from our work. They often 

represent outcomes that occurred or 

are expected to occur over a period of 

several years. The remaining measures 

are intermediate outcomes in that they 

often lead to achieving outcomes that are 

ultimately captured in our financial and 

nonfinancial benefits.

For financial benefits and nonfinancial 

benefits, we first set targets for the agency 

as a whole and then we set targets for 

each of the external goals—that is, goals 

1, 2, and 3—so that the sum of the targets 

for the goals equals the agencywide 

targets. For past recommendations 

implemented and percentage of products 

with recommendations, we set targets and 

report performance for the agency as a 

whole because we want our performance 

on these measures to be consistent across 

goals. We track our performance by 

strategic goal in order to understand why 

we meet or do not meet the agencywide 

target. We also use this information to 

provide feedback to our teams on the 

extent to which they are contributing to 

the overall target and to help them identify 

areas in which they need to improve.

Clients. To judge how well we are serving 

our clients, we measure the number of 

times we are asked to present expert 

testimony at congressional hearings 

as well as our timeliness in delivering 

products to the Congress. Our strategy 

in this area draws upon a variety of 

data sources (e.g., our client feedback 

survey and in-person discussions with 

congressional staff) to obtain information 

on the services we are providing to our 

congressional clients.

We set a target at the agencywide level for 

the number of testimonies and then assign 

a portion of the testimonies as a target 

for each of the external goals—that is, 

■

About GAO
GAO Performance and Accountability Report 2007

18 Introduction GAO-08-1SP

goals 1, 2, and 3—based on their expected 

contribution to the agencywide total. As 

in measuring the results of our work, we 

track our progress on this measure at the 

goal level in order to understand why we 

met or did not meet the agencywide target. 

We set agencywide targets for timeliness 

because we want our performance on 

these measures to be consistent across 

goals.

People. As our most important asset, 

our people define our character and 

capacity to perform. A variety of data 

sources, including an internal survey, 

provide information to help us measure 

how well we are attracting and retaining 

high-quality staff and how well we are 

developing, supporting, using, and leading 

staff. We set targets for these measures at 

the agencywide level.

Internal operations. Our mission and 

people are supported by our internal 

administrative services, including 

information management, building 

management, knowledge services, human 

capital, and financial management 

services. Through an internal customer 

satisfaction survey, we gather information 

on how well our internal operations 

help employees get their jobs done and 

improve employees’ quality of work life. 

Examples of surveyed services include 

providing secure Internet access and voice 

communication systems, performance 

management, and benefits information 

and assistance. Fiscal year 2007 is only 

the second year in which we reported how 

well we performed against the targets we 

set for our internal operations measures. 

We set targets for these measures at the 

agencywide level.

■

■

Setting Performance Targets

To establish targets for all of our measures, 

we examine what we have been able to 

achieve in the past (for example, by looking 

at our 4-year rolling averages for most of our 

results measures (see p. 23) and the external 

factors that influence our work (see p. 60). 

The teams and offices that are directly 

engaged in the work discuss their views of 

what must be accomplished in the upcoming 

fiscal year with our top executives, who 

then establish targets for the performance 

measures.

Once approved by the Comptroller General, 

the targets become final and are presented 

in our annual performance plan and budget.3

We may adjust these targets after they are 

initially published when our expected future 

work or level of funding provided warrant 

doing so. If we make changes, we include the 

changed targets in later documents, such as 

this performance and accountability report, 

and annotate that we have changed them. In 

part II, we include detailed information on 

data sources that we use to assess each of 

these measures, as well as the steps we take 

to verify and validate the data (see pp. 78-95).

On the pages that follow, we assess our 

performance for fiscal year 2007 against our 

previously established performance targets. 

We also present our financial statements, the 

independent auditor’s report, and a statement 

from GAO’s Inspector General.

3

Our most recent performance plan is available on our Web 

site at http://www.gao.gov/cgi-bin/getrpt?rptno=GAO-07-

421SP. 

About GAO
Serving the Congress and the Nation

Source: See Image Sources.

Part I

Management’s 

Discussion and 

Analysis
GAO Performance and Accountability Report 2007

20 PART I Management’s Discussion and Analysis GAO-08-1SP

Promoting a Transparent and

Accountable Government by Providing

Fact-Based, Objective Information to

the Congress and the Public

The work we did in fiscal year 2007, as well 

as some of our past work, contributed greatly 

to our performance on our results and client 

measures shown in table 1. We surpassed 

our financial benefits target of $40 billion by 

almost $6 billion this fiscal year and exceeded 

our annual target for nonfinancial benefits 

by about 23 percent. Our financial benefits 

of $45.9 billion represent about a $94 return 

on every dollar invested in us. While our 

financial benefits for fiscal year 2007 were 

lower than what we achieved last fiscal year, 

due to various reasons such as legislation 

pending at the close of the fiscal year, our 

financial benefits have continued to increase 

on average over the last 4 years as shown in 

table 2. Also, the more than 1,300 nonfinancial 

benefits resulting from our work helped to 

improve the efficiency and effectiveness of 

government programs that serve the public. 

In addition, we exceeded our targets for 

past recommendations implemented and 

new products with recommendations by 

2 percentage points and 6 percentage points, 

respectively.

We believe we served the Congress very well 

during fiscal year 2007. Our senior executives 

delivered testimony at 276 hearings, 

exceeding our target of 185 by 49 percent. 

Many of these testimonies focused on Iraq 

reconstruction and stabilization efforts, 

fraudulent activity and mismanagement 

associated with the Hurricane Katrina relief 

effort, and the global war on terrorism 

(see p. 35 for a list of other topics we testified 

on during fiscal year 2007). Though we 

missed our timeliness target of 95 percent 

by 1 percentage point, our performance 

indicates that 94 percent of congressional 

staff responding to our client feedback 

survey either strongly or generally agreed 

that our written products were delivered on 

time. We discuss the client feedback survey 

in detail part II of this report.

Concerning our eight people measures, 

we met or exceeded our targets for five 

of them—new hire rate, acceptance rate, 

retention rate with retirements, retention rate 

without retirements, and staff development—

but did not meet the remaining three 

measures—staff utilization, leadership, 

and organizational climate. We missed our 

target of 78 percent for staff utilization by 

5 percentage points. We also missed our 

leadership and organizational climate targets 

by very small margins—1 and 2 percentage 

points, respectively.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 21

Table 1: Agencywide Summary of Annual Measures and Targets

Performance 

measure

2003

actual

2004

actual

2005

actual

2006

actual

2007

target actual

Met/

Not met

2008

target

Results

Financial benefits

(dollars in billions) $35.4 $44.0 $39.6 $51.0 $40.0 $45.9 Met $40.0a

Nonfinancial benefits 1,043 1,197 1,409 1,342 1,100 1,354 Met 1,150

Past recommendations 

implemented 82% 83% 85% 82% 80% 82% Met 80%

New products with 

recommendations 55% 63% 63% 65% 60% 66% Met 60%

Client

Testimonies 189 217 179 240 185 276 Met 220

Timelinessb N/Ac 89% 90% 92% 95% 94% Not met 95%

People

New hire rate 98% 98% 94% 94% 95% 96% Met 95%

Acceptance rate 72% 72% 71% 70% 72% 72% Met 72%

Retention rate

With retirements 92% 90% 90% 90% 90% 90% Met 90%

Without 

retirements 96% 95% 94% 94% 94% 94% Met 94%

Staff development 67% 70% 72% 76% 75% 76% Met 76%

Staff utilizationd 71% 72% 75% 75% 78% 73% Not met 75%e

Leadership 78% 79% 80% 79% 80% 79% Not met 80%

Organizational climate 71% 74% 76% 73% 76% 74% Not met 75%f

Internal operationsg

Help get job done 3.98 4.01 4.10 4.10 4.00 N/Ac N/Ac 4.00

Quality of work life 3.86 3.96 3.98 4.00 4.00 N/A N/A 4.00

Source: GAO.

Note: Information explaining all of the measures included in this table appears on pages in the Data Quality and Program Evaluations 

section in part II of this report.

a

Our fiscal year 2008 target for financial benefits differs from the target we reported for this measure in our fiscal year 2008 

performance budget in January 2007. Specifically, we decreased our financial benefits target by $1.5 billion based on (1) our 

assessment of our past recommendations that are likely to be implemented by federal agencies and the Congress in the coming 

fiscal year and (2) the impact that our constrained budget could have on the work that leads to financial benefits. We are currently 

operating under a continuing resolution which is only slightly higher than our fiscal year 2006 funding level. See pages 44 to 48 for 

more information about our budget.

b

Since fiscal year 2004 we have collected data from our client feedback survey on the quality and timeliness of our products, and in 

fiscal year 2006 we began to use the independent feedback from this survey as a basis for determining our timeliness.

c

N/A indicates that the data are not available yet or are not applicable because we did not collect the data during this period.
GAO Performance and Accountability Report 2007

22 PART I Management’s Discussion and Analysis GAO-08-1SP

Concerning our two internal operations 

measures, we will assess our performance 

related to how well our internal 

administrative services (e.g., computer 

support, mail service, and Internet service) 

help employees get their jobs done or improve 

employees’ quality of work life once data 

from our November 2007 annual customer 

satisfaction survey have been analyzed. 

These measures are directly related to our 

goal 4 strategic objectives of continuously 

enhancing our business and management 

processes and becoming a professional 

services employer of choice. There will 

always be a lag in reporting on this measure 

because our customer feedback survey is 

distributed after we issue the performance 

and accountability report. In fiscal year 2006, 

we exceeded our target of 4.0 by a tenth 

of a percentage point for our help get job 

done measure and met our 4.0 target for our 

quality of work life measure. These scores 

indicate that our employees were generally 

very satisfied with the internal administrative 

services they used during their work day. The 

survey asked staff to rank the importance 

of each service to them and indicate their 

satisfaction with it on a scale from 1 to 5.

To help us examine trends over time, we also 

look at 4-year averages for our results and 

client measures except the percentage of past 

recommendations implemented—because it 

is a composite that is drawn from a number of 

years rather than an annual percentage—and 

timeliness—because we have no trend data for 

our current timeliness measure. Calculating 

4-year rolling averages for the other measures 

minimizes the effect of an atypical result in 

any given year. We consider this calculation, 

along with other factors, when we set our 

performance targets. Table 2 shows that 

from fiscal year 2003 through fiscal year 

2007 financial benefits, nonfinancial benefits, 

and new products with recommendations 

have increased steadily during this period. 

The average number of hearings at which 

we testified has climbed since 2004 with a 

significant increase from fiscal year 2006 to 

2007.

Though we consider our 4-year rolling 

averages and our past performance when 

setting our target for the number of hearings 

at which our senior executives testify, 

we base our testimonies target largely on 

the cyclical nature of the congressional 

calendar. Our experience has shown that 

during the fiscal year in which an election 

occurs, generally the Congress holds fewer 

hearings, which provide fewer opportunities 

for us to be invited to testify, because the 

congressional members are reorganizing 

during the months after the election. However, 

in fiscal year 2007—the year after an 

election—the new Congress held many more 

hearings than we anticipated and seemed 

especially interested in our work.

dOur employee feedback survey asks staff how often the following occurred in the last 12 months (1) my job made good use of my 

skills, (2) GAO provided me with opportunities to do challenging work, and (3) in general, I was utilized effectively.

e

Our fiscal year 2008 target for staff utilization differs from the target we reported for this measure in our fiscal year 2008 

performance budget in January 2007. We lowered the staff utilization target by 3 percentage points because we determined that, 

based on our past performance, the target was unrealistic, and we reset it at a level that is still challenging but more likely to be achieved.

f

Our fiscal year 2008 target for organizational climate differs from the target we reported for this measure in our fiscal year 2008 

performance budget in January 2007. We decreased the organizational climate target by 1 percentage point because we determined 

that based on our past performance, the target was unrealistic, and we reset it at a level that is still challenging but more likely to be 

achieved.

g

For our internal operations measures, we will report actual data for fiscal year 2007 once data from our November 2007 internal 

customer satisfaction survey have been analyzed. Information explaining all of the measures included in this table appears in the Data 

Quality and Program Evaluations section in part II of this report.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 23

Table 2: Four-Year Rolling Averages for Selected GAO Measures

Performance measure 2003 2004 2005 2006 2007

Results

Financial benefits (billions) $30.7 $35.9 $39.2 $43.0 $45.1

Nonfinancial benefits 884 986 1,139 1,248 1,325

New products with recommendations 48% 54% 58% 61% 64%

Client

Testimonies 205 193 200 206 228

Source: GAO.

Focusing on Results

Focusing on outcomes and the efficiency 

of the processes needed to achieve them is 

fundamental to accomplishing our mission. 

The following four annual measures—

financial benefits, nonfinancial benefits, past 

recommendations implemented, and new 

products containing recommendations—

indicate that we have fulfilled our mission 

and delivered results that benefit the nation.

Financial Benefits and Nonfinancial 

Benefits

We describe many of the results produced by 

our work as either financial or nonfinancial 

benefits. Both types of benefits result from our 

efforts to provide information to the Congress 

that helped to (1) change laws and regulations, 

(2) improve services to the public, and 

(3) promote sound agency and governmentwide 

management. In many cases, the benefits we 

claimed in fiscal year 2007 are based on work 

we did in past years because it often takes the 

Congress and agencies time to implement our 

recommendations or to act on our findings.

To claim either type of benefit, our staff 

must document the connection between 

the benefits reported and the work that we 

performed. We can claim benefits within 

2 years of when the Congress or an agency 

takes action on our recommendations.

Financial Benefits

Our findings and recommendations produce 

measurable financial benefits for the federal 

government after the Congress acts on or 

agencies implement them and the funds 

are made available to reduce government 

expenditures or are reallocated to other 

areas. The monetary effect realized can be 

the result of 

changes in business operations and 

activities;

the structure of federal programs; or

entitlements, taxes, or user fees.

Financial benefits result if, for example, the 

Congress were to reduce the annual cost of 

operating a federal program or lessen the 

cost of a multiyear program or entitlement. 

Financial benefits could also result from 

increases in federal revenues—because of 

changes in laws, user fees, or asset sales—

that our work helped to produce.

In fiscal year 2007, our work generated 

$45.9 billion in financial benefits (see fig. 6), 

exceeding our target by about 15 percent. 

We exceeded the target primarily as a result 

of a few unexpected and large financial 

accomplishments. Thus, we believe our target 

of $40.0 billion for fiscal year 2008 (shown 

on p. 21) is reasonable and achievable. Of 

■

■

■
GAO Performance and Accountability Report 2007

24 PART I Management’s Discussion and Analysis GAO-08-1SP

the total amount documented in fiscal year 

2007, about $21.1 billion (or approximately 

46 percent) resulted from changes in laws or 

regulations (see fig. 7).

Figure 6: Financial Benefits GAO Recorded 

in Fiscal Year 2007

Dollars in billions

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

2003 2004 2005 2006 2007 2007

$45.9

$40.0

$51.0

$39.6

$44.0

$35.4

Figure 7: Types of Financial Benefits 

Recorded in Fiscal Year 2007 from Our 

Work

Agencies acted on GAO information to improve services 

to the public

Information GAO provided to the Congress resulted in 

statutory or regulatory changes 

Core business processes improved at agencies and 

governmentwide management reforms advanced by 

GAO’s work

Categories

Source: GAO.

Financial Benefits

Total $45.9 billion

$16.3 billion

(35.5%)

$8.5 billion

(18.5%)

$21.1 billion

(46%)

Financial benefits included in our performance 

measures are net benefits—that is, estimates 

of financial benefits that have been reduced by 

the costs associated with taking the action that 

we recommended. We convert all estimates 

involving past and future years to their net 

present value and use actual dollars to represent estimates involving only the current year. 

Financial benefit amounts vary depending on 

the nature of the benefit, and we can claim 

financial benefits over multiple years based 

on a single agency or congressional action. To 

ensure conservative estimates of net financial 

benefits, reductions in operating cost are typically limited to 2 years of accrued reductions, 

but up to 5 fiscal years of financial benefits 

can be claimed if the reductions are sustained 

over a period longer than 2 years. Multiyear 

reductions in long-term projects, changes 

in tax laws, program terminations, or sales 

of government assets are limited to 5 years. 

Estimates come from non-GAO sources. These 

non-GAO sources are typically the agency that 

acted on our work, a congressional committee, 

or the Congressional Budget Office.

To document financial benefits, our staff 

complete reports documenting accomplishments that are linked to specific products or 

actions. All accomplishment reports for financial benefits are documented and reviewed by 

(1) another GAO staff member not involved in 

the work and (2) a senior executive in charge 

of the work. Also, a separate unit, our Quality 

and Continuous Improvement office, reviews 

all financial benefits and approves benefits 

of $100 million or more, which amounted to 

about 94 percent of the total dollar value of 

benefits recorded in fiscal year 2007. The GAO 

Inspector General (IG) also performed an 

independent review of all accomplishment reports claiming benefits of $500 million or more 

in fiscal year 2007.

Figure 8 lists several of our major financial 

benefits for fiscal year 2007 and briefly 

describes some of our work contributing to 

financial benefits.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 25

Figure 8: GAO’s Selected Major Financial Benefits Reported in Fiscal Year 2007

Description Amount

Helped to ensure funding for United States Postal Service (USPS) retirement-related health care 

benefits. For many years we have reported on USPS’s significant liabilities and obligations, including tens 

of billions of dollars in post-retirement health care benefits that were not yet funded. In December 2006, 

the Postal Accountability and Enhancement Act (Pub. L. No. 109-435) was enacted, which created the 

Postal Service Retiree Health Benefits Fund into which USPS is to make a series of 10 annual payments to 

fund its retiree health care obligations. In fiscal year 2007, USPS made the first of its annual payments into 

the fund. This $5.4 billion payment, funded through additional January 2006 and May 2007 postal service 

rate increases, helped to avoid requiring the federal government to finance this substantial obligation. 

(Goal 3) $5.4

Improved the Internal Revenue Service’s (IRS) methodology for pursuing delinquent taxes. Our 

previous financial audit work determined that IRS did not have systems or procedures in place to allow it 

to identify and actively pursue cases with collection potential. We recommended that IRS improve its capacity to assess the collectibility of delinquent taxes as a way to better target debt collection resources. In 

2004, IRS began implementing sophisticated modeling technology to differentiate between more and less 

productive cases in order to make better resource allocation decisions. In 2007, we reported that IRS’s actions in response to our recommendations increased its collections of delinquent taxes using approximately 

the same level of resources by about $4.2 billion or almost 20 percent in fiscal year 2006 from fiscal year 

2003 levels. (Goal 3) $4.2

Encouraged the National Aeronautics and Space Administration’s (NASA) decision to terminate 

the space launch initiative (SLI). In a September 2002 report, we questioned NASA’s overall acquisition 

strategy to develop a new generation of space transportation vehicles—the SLI. We reported that NASA 

faced considerable challenges defining basic requirements for SLI. We also noted that most of the key 

technologies under consideration by SLI were very immature and that management controls necessary to 

estimate cost and gauge progress were not in place. We recommended that the NASA Administrator take 

several steps, including completing the reassessment of NASA’s Integrated Space Transportation Plan, 

before moving forward with SLI. NASA concurred and in November 2002 took action to delay decisions 

regarding future launch vehicles and refocused SLI on conducting basic research on advanced launch technologies and developing a vehicle to service the International Space Station. In 2005, NASA terminated 

the entire SLI program and redirected $3.7 billion in funding originally programmed for SLI toward future 

exploration activities. (Goal 3) $3.7

Financial Benefits

(Dollars in billions)

Source: See Image Sources.
GAO Performance and Accountability Report 2007

26 PART I Management’s Discussion and Analysis GAO-08-1SP

Helped to reduce food stamp fraud and abuse. Since 1994, we repeatedly reported and testified on 

reducing fraud and abuse in the Department of Agriculture’s (USDA) Food Stamp Program by reducing 

the trafficking of benefits. In our 1994 and 1995 reports, we found that USDA’s reliance on paper coupons 

to provide food stamp benefits had resulted in fraud and abuse through trafficking, counterfeiting, and mail 

theft. To reduce this fraud and abuse, we supported the use of electronic benefit transfer (EBT) systems to 

replace the coupon-based system that states were using. In response, the Congress passed legislation that 

required that each state implement EBT for the Food Stamp Program by October 1, 2002, unless the Secretary of Agriculture granted a waiver. USDA reported in December 2006 that the Food Stamp Program’s 

integrity had substantially improved, estimating that trafficking had diverted only about $241 million per 

year between 2002 and 2005—or about 1 cent of each food stamp dollar—compared with an estimated 

$660 million per year—or about 3-1/2 cents of each food stamp dollar—diverted between 1996 and 1998. 

USDA found that the decline in food stamp trafficking corresponded with the increased use of EBT. This 

will result in an estimated $3.4 billion in cumulative financial benefits between fiscal years 2005 and 2009. 

Also, in fiscal year 2007 we recommended that USDA use its electronic data to perform risk assessments 

of retailers most likely to traffic in food stamp benefits and develop a strategy to increase penalties for this 

offense. USDA responded by proposing new penalties and expedited processes. (Goal 1) $3.4

Recommended that the Department of Housing and Urban Development (HUD) track and reallocate 

unspent housing funds. We recorded about $2.19 billion in financial benefits based on our work involving 

the HUD recaptured fiscal year 2005 unexpended balances. Prior to 2002 HUD did not routinely review its 

unexpended fund balances to determine whether these funds could be recaptured. In 2001, we expressed 

concerns over unexpended balances in a briefing to the incoming Administration and testified before the 

Subcommittee on Housing and Transportation, Senate Committee on Banking Housing and Urban Affairs, 

about long-standing problems HUD had in the management and oversight of its unexpended balances. 

Using the Public Housing Capital fund as an example, we stated, and HUD agreed, that it did not have the 

information it needed to routinely quantify unexpended balances that might be available for recapture. 

Given the importance of this information in formulating and justifying budget requests, we recommended 

that HUD (1) develop systems that routinely provide timely and reliable information on the status of its 

unexpended balances to quantify amounts available for recapture or rescission, (2) incorporate this information into the management of its programs, and (3) use this information in formulating budget requests. 

In response to our recommendations, HUD made many operational changes that since 2002 have enabled 

the agency to routinely incorporate information on unexpended balances into the management and operation of its programs and to take unexpended balances into account in setting forth budget needs. HUD has 

routinely recaptured unutilized funds to offset its budget requests. (Goal 1) $2.19

Helped to increase collections of civil debt. In July 2001, we reported that the Department of Justice’s 

(Justice) financial litigation units, which are responsible for both criminal and civil debt collection, did not 

have adequate procedures for enforcing collections. We made a number of recommendations to the Attorney General to help the units improve criminal debt collections and stem the growth in reported uncollected criminal debt. One such recommendation was to reinforce policies and procedures for entering cases 

into debt-tracking systems; filing liens; issuing demand letters, delinquent notices, and default notices; 

performing asset discovery work; and using other enforcement techniques. These policies and procedures 

are applicable to the units’ civil as well as criminal debt collection efforts. In January 2002, Justice completed actions to address this recommendation, including providing training materials to unit staff involved 

in debt collection. These actions helped it to increase collections of civil debt in fiscal years 2004 and 

2005—the third and fourth years for which we are claiming financial benefits over a 5-year period—by a 

total of about $1.70 billion on a net present value basis. (Goal 3) $1.70

Recommended that the Congress reduce the Department of Defense’s (DOD) fiscal year 2007 operations and maintenance budget. The congressional appropriations committee conferees reduced DOD’s 

fiscal year 2007 operations and maintenance appropriations by $1.459 billion based in part on the analysis 

we provided identifying fiscal year 2004 and 2005 underexecution of some budget subactivity groups. Staff 

members used the analysis of underexecution (designations exceeded obligations) for fiscal years 2004 and 

2005 in part to reduce DOD’s fiscal year 2007 budget request by $598.8 million for subactivity groups that 

have been historically underexecuted. In addition, the conferees reduced DOD’s fiscal year 2007 budget 

request by $860.6 million for peacetime training and flying hour offsets also based in part on our analysis 

of underexecution in multiple subactivity groups used to fund these activities. The combined impact—as 

indicated above—is about $1.459 billion. (Goal 2) $1.46
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 27

Identified an opportunity for DOD to reallocate funds to cover new initiatives. In a November 2002 

report, we suggested that the Congress consider extending the deadline for the submission of DOD’s 

Quadrennial Defense Review in order to provide additional time for DOD to align its upcoming budget 

request with its newest strategic thinking as reflected in the Quadrennial Defense Review. In our view, this 

extra time would allow DOD to take full advantage of the review’s results and shift resources where they 

would be needed most, that is, provide for a better allocation of resources, and avoid unnecessary costs of 

lower priority programs. The Congress adopted our approach and the 2006 Quadrennial Defense Review 

is the first to benefit from the extended deadline and reallocate defense resources in accordance with 

DOD’s new strategic plan. As a result, DOD’s fiscal year 2007 budget shifts resources into new programs 

advocated by the Quadrennial Defense Review, including over $1 billion for a special operations initiative to help fight the war on terror. To pay for these initiatives, DOD shaved billions of dollars from other 

programs. The 2006 Quadrennial Defense Review stated that by shifting the completion date of the review 

to coincide with the submission of the President’s fiscal year 2007 budget request, DOD had included a 

limited number of new initiatives in the budget submission for fiscal year 2007, rather than waiting until 

the fiscal year 2008 budget cycle. The final congressional action on DOD’s proposal provided a $1.2 billion 

increase in funding for Special Operations Forces in fiscal year 2007. (OMB documents state that DOD 

made offsetting reductions before the President’s budget was sent to the Congress.) The financial benefit is 

the $1.2 billion made available from the reallocation of resources. (Goal 2) $1.2

Source: GAO.

Nonfinancial Benefits

Many of the benefits that result from our 

work cannot be measured in dollar terms. 

During fiscal year 2007, we recorded a total 

of 1,354 nonfinancial benefits (see fig. 9). We 

significantly exceeded our target because of 

actions taken by agencies governmentwide 

on several of our reports dealing with 

governmentwide IT and accounting issues. 

We believe that we will achieve our fiscal 

year 2008 target of 1,150 nonfinancial 

benefits (shown on p. 21) though we do not 

expect there will be as many situations 

similar to fiscal year 2007 where agencies 

will take governmentwide actions on our 

recommendations.

Figure 9: Nonfinancial Benefits GAO 

Recorded in Fiscal Year 2007

0

300

600

900

1200

1500

2003 2004 2005 2006 2007 2007

Number

Source: GAO.

Actual Target Actual

1,354

1,100

1,342 1,409

1,197

1,043
GAO Performance and Accountability Report 2007

28 PART I Management’s Discussion and Analysis GAO-08-1SP

In fiscal year 2007 we documented 

646 instances where federal agencies 

used our information to improve services 

to the public, 74 instances where the 

information we provided to the Congress 

resulted in statutory or regulatory 

changes, and 634 instances where agencies 

improved core business processes or 

governmentwide reforms as a result of our 

work. (See fig. 10.) These actions covered 

a variety of issues such as improving the 

Department of Veteran’s Affairs’ (VA) 

ability to process veteran’s claims for 

disability benefits, identifying weaknesses 

in telecommunications data, providing 

information on the rising cost of military 

pay and compensation, and improving the 

strategic planning of U.S. diplomacy efforts. 

In figure 11, we provide examples of some 

of the nonfinancial benefits we claimed as 

accomplishments in fiscal year 2007. The 

laws that we cite in the first section of this 

figure were enacted in fiscal year 2007.

Figure 10: Types of Nonfinancial Benefits 

Documented in Fiscal Year 2007 from Our 

Work

Agencies acted on GAO information to improve services 

to the public

Information GAO provided to the Congress resulted in 

statutory or regulatory changes 

Core business processes improved at agencies and 

governmentwide management reforms advanced by 

GAO’s work

Categories

Source: GAO.

Nonfinancial Benefits

Total 1,354

634

(46.8%) 646

(47.7%)

74

(5.5%)
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 29

Figure 11: GAO’s Selected Nonfinancial Benefits Reported in Fiscal Year 2007

Nonfinancial benefits that helped to change laws

Department of 

Homeland Security 

Appropriations Act 

of 2007, Pub. L. No. 

109-295

Our work is reflected in this law in different ways.

Developing a center to locate children after disasters. After hurricanes Katrina and Rita, 

GAO found that the National Center for Missing and Exploited Children (NCMEC) faced 

problems getting access to American Red Cross and Federal Emergency Management Agency 

(FEMA) data because of these organizations’ concerns about privacy. GAO found that a lesson learned from these disasters is that agreements for data sharing between NCMEC and 

the American Red Cross and FEMA can help locate missing persons more quickly. We spoke 

about these concerns several times with congressional staff. Subsequently, Pub. L. No. 109-295 

provided for a National Emergency Child Locator Center to be established within NCMEC 

and requires the FEMA Administrator to establish procedures to make all relevant information available to the center in a timely manner to facilitate the expeditious identification and 

reunification of children with their families. The law also requires the center to enter into a 

cooperative agreement with federal and state agencies and with other organizations, such as 

the American Red Cross, as necessary to implement their missions.

Improving FEMA information on the status of hurricane relief and recovery funds. In 

September 2006, we recommended four actions to improve reporting by FEMA to the appropriations committees on the status of governmentwide hurricane relief and recovery. These actions included (1) explicitly recognizing that FEMA’s weekly reporting on mission assignment 

obligations and expenditures does not reflect the status from a governmentwide perspective, 

(2) requesting and including actual obligation and expenditure data from agencies performing mission assignments in FEMA reporting at specified intervals, (3) including in the weekly 

report amounts reimbursed to other agencies that are in suspense because FEMA has not yet 

reviewed and approved the documentation supporting the expenditures, and (4) reiterating 

to agencies performing mission assignments FEMA’s policies on (a) the detailed information 

required in supporting documentation for reimbursements and (b) the timeliness of agency 

billings. As requested, we provided language that was included in Pub. L. No. 109-295 which 

implemented these recommendations.

The John Warner 

National Defense 

Authorization Act 

for Fiscal Year 2007, 

Pub. L. No. 109-364

U.S. Troop 

Readiness, Veterans’ 

Care, Katrina 

Recovery, and Iraq 

Accountability 

Appropriations Act, 

2007, Pub. L. No. 

110-28

In December 2005 and January 2007, we reported that DOD and NASA structured monetary 

incentives in ways that led to significant disconnects between the fees paid to contractors 

and program outcomes. We made recommendations aimed at strengthening the link between 

incentives and outcomes. The Comptroller General testified on this issue in April 2006 and we 

briefed multiple congressional committees. The result has been changes to award and incentive 

fee policies across several agencies including DOD, NASA, and the Department of Homeland 

Security (DHS). Pub. L. No. 109-364 incorporated our recommendations by requiring DOD to 

issue guidance to ensure that award fees are linked to acquisition outcomes. In addition, Pub. 

L. No. 110-28 required all DHS award fees to be linked to successful acquisition outcomes.

Nonfinancial Benefits

Source: See Image Sources.
GAO Performance and Accountability Report 2007

30 PART I Management’s Discussion and Analysis GAO-08-1SP

Postal Accountability 

and Enhancement 

Act, Pub. L. No. 109-

435

In April 2001, we designated USPS’s transformation and long-term outlook as a high-risk area 

because its financial outlook had deteriorated significantly and it had no comprehensive plan to 

address its financial, operational, or human capital challenges. We concluded that the need for a 

comprehensive transformation of USPS was more urgent than ever and called for the Congress 

to act on comprehensive postal reform legislation. Since then, USPS developed a transformation plan to guide its ongoing efforts related to implementing initiatives included in its plan 

and improved its financial outlook. Further, in December 2006, the Congress enacted comprehensive postal reform legislation to provide a framework for modernizing USPS’s rate-setting 

processes and strengthening regulatory oversight and financial transparency. Thus, in January 

2007, we removed USPS transformation and long-term outlook from our high-risk list.

Foreign Investment 

and National 

Security Act of 2007, 

Pub. L. No. 110-49

The Exon-Florio amendment to the Defense Production Act authorizes the President to conduct 

investigations and to suspend or prohibit foreign acquisitions, mergers, or takeovers of U.S. 

companies that threaten to impair national security. The President delegated the authority to 

investigate transactions to an interagency committee, the Committee on Foreign Investment in 

the United States. In our September 2005 report, we found that some members of the committee have narrowly defined what constitutes a threat to national security, despite the broad 

coverage of the factors listed in Exon-Florio that may be considered in determining a threat to 

national security. In one case, this narrow view resulted in the weakening of enforcement provisions in an agreement to mitigate national security concerns. In our report, we suggested that 

the Congress consider amending Exon-Florio to more clearly emphasize factors that should be 

considered in determining the potential harm to national security. In response to our report and 

subsequent events, in 2007 the Congress amended Exon-Florio adding additional factors to be 

considered in determining the effect of a transaction on national security.

Implementing 

Recommendations of 

the 9/11 Commission 

Act of 2007, Pub. L. 

No. 110-53

Our work is reflected in this law in different ways.

Reexamining inspection exemptions for inbound cargo. During our review of the Transportation Security Administration’s (TSA) inbound air cargo (i.e., cargo bound for the United 

States from a foreign country) security procedures, we briefed congressional staff on several 

occasions regarding the status of inbound air cargo security and the challenges that TSA faces 

to reducing the vulnerability of the air cargo system to terrorist attack. Based on a subsequent 

report, we recommended that TSA establish a time frame for completing an assessment of 

whether existing random inspection exemptions for inbound air cargo pose an unacceptable 

vulnerability to the security of air cargo, and take steps, if necessary, to address identified vulnerabilities. The Congress included a provision in the 9/11 Commission Act consistent with our 

recommendation which requires DHS to conduct an assessment of inspection exemptions for 

cargo transported on passenger aircraft and an analysis to assess the risk of maintaining such 

exemptions no later than 120 days from the enactment of the act.

Reexamining inspection exemptions for domestic air cargo. During our review of TSA’s 

domestic air cargo (i.e., cargo that is transported within the United States) security procedures, 

we briefed congressional staff regarding the status of domestic air cargo security and the challenges that TSA faces to reduce the vulnerability of the air cargo system to terrorist attack. 

Based on a subsequent report, we recommended that TSA reexamine the rationale for existing air cargo inspection exemptions, determine whether such exemptions leave the air cargo 

system unacceptably vulnerable to terrorist attack, and make any needed adjustments to the 

exemptions. The Congress included a provision in the 9/11 Commission Act consistent with 

this recommendation, by requiring DHS to conduct an assessment of inspection exemptions for 

cargo transported on passenger aircraft and an analysis to assess the risk of maintaining such 

exemptions no later than 120 days from the enactment of the act.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 31

Nonfinancial benefits that helped to improve services to the public

Strengthened 

screening procedures 

for all VA health care 

practitioners

We identified key screening requirements that VA uses to verify the professional credentials and personal backgrounds of its health care practitioners. We found adequate screening 

requirements for certain practitioners, such as physicians, for whom all licenses are verified 

by contacting state licensing boards. However, screening requirements for others, such as 

currently employed nurses and respiratory therapists, are less stringent because they do not require verification of all licenses and national certificates. Moreover, they require only physical 

inspection of the credential rather than contacting state licensing boards and national certifying organizations. Physical inspection alone can be misleading; not all credentials indicate 

whether they are restricted, and credentials can be forged. We recommended that VA expand 

the verification requirement that facility officials contact state licensing boards and national 

certifying organizations to include all state licenses and national certificates held by applicants and employed practitioners. In response to our recommendation, VA directed its medical 

facilities to document the verification of all state licenses and national certificates (held by all 

practitioners applying for VA positions) with the issuing state licensing board or national certifying organization. In December 2006, VA required facility officials to credential all health 

care practitioners who claim licensure, registration, or certification through its electronic 

credentialing system. In addition, VA required its facility officials to establish a mechanism to 

ensure that multiple licenses, registrations, and/or certifications were held in good standing by 

contacting the state boards or issuing organization. VA’s actions will better ensure the safety of 

veterans receiving health care at VA medical facilities.

Tightened 

monitoring criteria 

in the Environmental 

Protection Agency’s 

(EPA) rule on lead in 

drinking water

In a January 2006 report, we recommended that EPA should reassess existing regulations 

and guidance to ensure the circumstances in which states approve water systems for reduced 

monitoring are appropriate and that systems resume standard monitoring following a major 

treatment change. We reported that lead rule implementation experiences to date have revealed 

weaknesses in the regulatory framework. In some cases, corrosion control can be impaired by 

changes to other water treatment processes, and controls that would help avoid such impacts 

may not be adequate. In July 2006, EPA proposed to change the federal regulations and disallow water systems that exceed the lead action level from initiating or remaining on a reduced 

lead and copper monitoring schedule based solely on the results of their water quality parameter monitoring (see Federal Register, 71, FR 40828 (July 18, 2006)). EPA noted that this change 

would ensure that reduced monitoring would only be permitted in instances in which it has 

been demonstrated that corrosion control treatment is both effective and reliable. Compliance 

with water quality parameters alone may not always indicate that corrosion control is effective.

Encouraged 

reporting of nursing 

home fire safety 

deficiencies

As part of our review of nursing home fire safety, we found that federal oversight of state fire 

safety activities is inadequate to ensure that existing standards are being enforced. Specifically, we found that despite the availability of information on oversight of nursing home quality 

through the Center for Medicare and Medicaid Services’ (CMS) Nursing Home Compare Web 

site, no comparable information on fire safety was available. Therefore, consumers lack a 

complete picture of a nursing home’s compliance with federal health and safety requirements 

when selecting a facility. To provide the public with important information about the fire safety 

status of nursing homes, we recommended that the Administrator of CMS make fire safety 

deficiency data available via the Nursing Home Compare Web site, including information on 

whether the facility has automatic sprinklers. CMS concurred with our recommendation and 

began posting this information on the Web site in October 2006.

Improved 

information security 

at the Securities 

and Exchange 

Commission (SEC)

In our past work we reported that a publicly accessible workstation connected to the internal 

SEC network was not securely configured. We recommended that SEC develop and implement 

procedures to ensure that all publicly-accessible workstations were adequately secured and 

configured with the minimum amount of services necessary to accomplish their purpose. In 

response to our recommendation, SEC removed the unsecured workstation and developed procedures to ensure that publicly located workstations are secure. As a result, SEC has reduced 

the risk that network services can be compromised, disrupted, or disabled via publicly accessible workstations.
GAO Performance and Accountability Report 2007

32 PART I Management’s Discussion and Analysis GAO-08-1SP

Improved 

coordination to 

enhance security of 

nuclear warhead 

sites in Russia

We reported in past work that DOD and the Department of Energy (DOE) pursued different 

approaches to securing nuclear warhead sites in Russia. We found that DOD and DOE did not 

know how many additional sites they planned to help secure, had not determined which department would improve security at sites they both had in their plans, and had not worked together 

to standardize the types of security equipment provided to Russia. As a result, we recommended that DOD and DOE work more closely together and develop an integrated plan to help 

secure Russia’s warhead sites. In response, DOD and DOE improved their coordination mechanisms for sharing information and avoiding duplication of effort. Under the aegis of National 

Security Council (NSC) guidance, the departments agreed on what sites to upgrade and which 

department would install the upgrade. They have also developed common design standards 

to ensure consistency in the assistance provided to Russia warhead storage sites. DOD and 

DOE have also adopted similar approaches in how they manage the contracts for installing the 

security upgrades.

Nonfinancial benefits that helped to promote sound agency and governmentwide management

FEMA establishes 

control to help 

limit disaster 

assistance payments 

to individuals 

with invalid Social 

Security numbers

As part of our audit of FEMA’s Individuals and Households Program (IHP) to assist the victims of hurricanes Katrina and Rita, we found that FEMA did not adequately validate the identity of registrants applying for disaster assistance. We identified payments to thousands of IHP 

registrants who provided Social Security numbers that were never issued or which belonged 

to deceased individuals. We recommended that FEMA improve internal controls over identity 

confirmation to provide reasonable assurance that disaster assistance payments are made only 

to qualified IHP applicants. FEMA subsequently implemented new edit controls intended to 

ensure that Social Security numbers and names submitted by IHP disaster assistance registrants are both appropriately matched and valid. FEMA’s improved control procedures in this 

area should improve up-front controls over the registration process to better ensure that only 

valid applicants receive IHP payments, thereby helping to reduce fraudulent IHP payments 

based on invalid registration data.

NASA establishes 

policies for 

reimbursement by 

nonofficial travelers 

on passenger aircraft

In previous work we found that while NASA used its passenger aircraft to transport numerous 

nonofficial travelers to various events, it did not have effective procedures in place for collecting reimbursements from these travelers as required by OMB Circular No. A-126. We recommended that NASA establish procedures for identifying and recovering applicable costs associated with transporting these nonofficial travelers. In response to our recommendations, in fiscal 

year 2006, NASA revised its aircraft use policy to include specific instructions for identifying 

and obtaining reimbursements from nonofficial travelers. This policy change establishes necessary procedures for recovering the applicable costs of providing air transportation services to 

nonofficial travelers, and may result in savings to NASA and the federal government for the 

cost of transporting these passengers.

Army requires 

credit card vendors 

to conduct credit 

checks before issuing 

individually billed 

travel cards

During our audits of the Army’s controls over individually billed travel cards, we found substantial problems with controls over travel card accounts, including issuing cards to individuals without conducting credit checks. Credit checks could have revealed travel card applicants 

with poor prior credit histories and helped prevent the substantial delinquencies and amounts 

charged-off identified in our audits. GAO recommended that the Army establish policies and 

procedures governing the issuance of individual travel cards to military and civilian employees, including evaluating the feasibility of extended use of credit checks for all travel card 

applicants. In response to our recommendation, pursuant to a revision to DOD’s Financial 

Management Regulation, the Army now requires its travel card contractor to perform a credit 

check on each new card applicant. Under this policy, (1) applicants who refuse to permit a 

credit checks may be asked to self-certify to their creditworthiness in order to obtain restricted 

travel cards, and (2) applicants who are denied government travel cards due to poor credit 

scores, or inability to meet self-certification requirements, will be exempt from mandatory use 

of the individually billed account travel cards. By implementing these requirements, Army 

strengthened management oversight and internal controls over the individually billed travel 

card program and reduced the chance that travel cards will be issued to individuals at high risk 

of not making payments or not making payments timely, thus reducing fees and eliminating 

substantial resources spent pursuing and collecting past due accounts.

Source: GAO.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 33

Past Recommendations Implemented

One way we measure our effect on improving 

the government’s accountability, operations, 

and services is by tracking the percentage 

of recommendations that we made 4 years 

ago that have since been implemented. At 

the end of fiscal year 2007, 82 percent of the 

recommendations we made in fiscal year 

2003 had been implemented (see fig. 12), 

primarily by executive branch agencies. 

Putting these recommendations into practice 

generates tangible benefits for the nation.

Figure 12: Percentage of Past 

Recommendations Implemented in Fiscal 

Year 2007

Four-year implementation rate

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

70

80

90

2003 2004 2005 2006 2007 2007

82% 83% 85% 82% 80% 82%

The 82 percent implementation rate for 

fiscal year 2007 exceeded our target for 

the year by 2 percentage points, matching 

our performance in fiscal years 2003 and 

2006, respectively. Our performance on 

this measure declined from 85 percent in 

fiscal year 2005 to 82 percent in fiscal years 

2006 and 2007 because, in some cases, we 

were unable to obtain the agency data that 

would allow us to fully document that our 

recommendations had been implemented. 

As figure 13 indicates, agencies need time 

to act on recommendations. Therefore, we 

assess recommendations implemented after 

4 years, the point at which experience has 

shown that if a recommendation has not been 

implemented, it is not likely to be.

Figure 13: Cumulative Implementation Rate 

for Recommendations Made in Fiscal Year 

2003

Percentage

Source: GAO.

0

10

20

30

40

50

60

70

80

90

After

4 years

After

3 years

After

2 years

After

1 year

82%

43%

32%

18%

New Products Containing 

Recommendations

In fiscal year 2007, about 66 percent of the 

647 written products we issued (excluding 

testimonies) contained recommendations. 

(See fig. 14.) We track the percentage of new 

products with recommendations because 

we want to encourage staff to develop 

recommendations that when implemented 

by the Congress and agencies, produce 

financial and nonfinancial benefits for the 

nation. We exceeded our target of 60 percent 

by 6 percentage points because our audit 

teams are emphasizing the need to identify 

possible recommendations as they plan and 

carry out their work. However, we set our 

target again in fiscal year 2008 at 60 percent 

because we recognize that our products do 

not always include recommendations and 

that the Congress and agencies often find 

such informational reports just as useful 

as those that contain recommendations. 

Our informational reports have the same 
GAO Performance and Accountability Report 2007

34 PART I Management’s Discussion and Analysis GAO-08-1SP

analytical rigor and meet the same quality 

standards as those with recommendations 

and, similarly, can help to bring about 

significant financial and nonfinancial 

benefits. Hence, this measure allows us 

ample leeway to respond to requests that 

result in reports without recommendations.

Figure 14: Percentage of New Products with 

Recommendations in Fiscal Year 2007

Percentage

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2007

66%

60% 63% 63% 65%

55%

Focusing on Our Client

To fulfill the Congress’s information needs, 

we strive to deliver the results of our work 

orally as well as in writing at a time agreed 

upon with our client. Our performance 

this year indicates that we assisted our 

client—the Congress—well, by significantly 

exceeding our target on the number of 

hearings we participated in and delivering 

many of our products on time based on the 

feedback from our client.

Testimonies

Our clients often invite us to testify on our 

current and past work when it addresses 

issues that congressional committees are 

examining through the hearing process. 

During fiscal year 2007, experts from our 

staff testified at 276 congressional hearings 

covering a wide range of complex issues 

(see fig. 15). (See fig. 16 for a summary of 

issues we testified on by strategic goal in 

fiscal year 2007.) Over 90 of our testimonies 

were related to high-risk areas and programs, 

which are discussed on page 40.

In fiscal year 2007, we significantly exceeded 

our target for testimonies at 185 hearings 

and surpassed our performance on this 

measure over the last 4 years. In fact, only 

three times in the last 25 fiscal years have 

we delivered testimonies at more hearings. 

The new Congress that took office in January 

2007 was extremely interested in our past 

and current work on a variety of issues and 

asked us to testify at 91 more hearings than 

we anticipated even though this was during a 

year following an election when historically 

our testimonies are lower. The Congress 

asked our executives to testify more than 

10 times this fiscal year on Hurricane Katrina 

issues and about 20 times on issues related 

to both terrorism and the Iraq conflict. 

Though lower than our actual performance 

on this measure in 2007, we believe that our 

fiscal year 2008 target of testimonies at 220 

hearings is challenging and reflects a more 

typical estimate of the number of hearings 

we are likely to attend after a very busy first 

year for this Congress.

Figure 15: Testimonies

0

50

100

150

200

250

300

2003 2004 2005 2006 2007 2007

Hearings at which GAO testified

Source: GAO.

Actual Target Actual

276

185

240

179

217

189
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 35

Selected Testimony Issues

Fiscal Year 2007

Figure 16: GAO’s Selected Testimony Issues in Fiscal Year 2007

Goal 1:

Address Challenges to the WellBeing and Financial Security of 

the American People

Federal oversight of food 

safety

Capacity and service gaps 

among homeless veterans 

programs

Reauthorizing the State 

Children’s Health Insurance 

Program

Claims processing challenges 

for veterans’ disability 

benefits

FEMA payments on 

hurricane-damaged 

properties

Nursing home oversight

Private pension fees

Small Business 

Administration’s disaster 

preparedness efforts

Improved safety for coal 

miners

Federal actions to improve 

child welfare services

Oil and gas royalties

Medicare physician 

payments

Effects of seller-funded down 

payments on home loans

Status of the future air traffic 

control system

USPS reform efforts

Federal real property issues

Emergency management 

plans for schools



































Goal 2:

Respond to Changing Security 

Threats and the Challenges of 

Globalization

Status of benchmarks for 

Iraqi government

DOD’s management of 

systems and assets

Improving the military’s 

supply chain

Linking defense strategy 

with military personnel 

requirements

Navy shipbuilding

Using best practices for 

space acquisitions

Vulnerabilities in U.S. export 

control systems

Combating nuclear 

smuggling

Securing radiological sources 

in foreign countries

Improving the efficiency of 

U.S. food aid procedures

National strategy to enforce 

intellectual property rights

DHS’s major mission and 

management functions

Risk-management principles 

and homeland security

Secure border initiative

Bankruptcy reform and 

credit counseling

National strategy to improve 

financial literacy

VA’s information security 

management



































Goal 3:

Help Transform the Federal 

Government’s Role and How It 

Does Business

Contracting and security 

challenges in Iraq

Federal acquisitions and 

contracting challenges

Acquisition challenges at 

DHS

Security vulnerabilities 

at unmonitored border 

locations

Incomplete reporting of 

federal improper payments

Fiscal stewardship challenges 

facing the United States

Tax abuses by Medicare Part 

B providers

Transforming DHS’s financial 

management systems

Challenges facing the polar 

satellite program

Electronic voting

Balancing individual privacy 

with homeland security 

needs

Health information 

technology and privacy

Long-term fiscal challenges

Tax compliance

Human capital challenges 

facing the federal 

government

Rebuilding the Gulf Coast

Preparations for the 2010 

Census



































Source: See Image Sources.
GAO Performance and Accountability Report 2007

36 PART I Management’s Discussion and Analysis GAO-08-1SP

Timeliness

To be useful to the Congress, our products 

must be available when our client needs 

them. We used the results of our client 

feedback survey as a barometer for how 

well we are getting our products to our 

congressional clients when they need 

the information. We used this survey as 

the primary data source for our external 

timeliness measure because the responses 

come directly from our clients. We tally 

responses from the surveys we send to 

key congressional staff working for the 

requesters of our testimony statements 

and more significant written products 

(e.g., engagements assigned an interest level 

of “high” by our senior management4 and 

those requiring an investment of 500 staff 

days or more), which represented 95 percent 

of the written products we issued in fiscal 

year 2007. Because our products usually 

have multiple requesters, we often survey 

more than one congressional staff person 

per testimony or product. Each survey asks 

the client whether the product was provided 

or delivered on time. In fiscal year 2007, we 

had a 28 percent response rate from the 

congressional staff surveyed, which provided 

us with feedback on 54 percent of the 

products for which we sent surveys.

As shown in figure 17, in fiscal year 2007 we 

missed our timeliness target by 1 percentage 

point. We have always set our target for 

timeliness high because it is important for 

us to meet congressional needs when they 

occur, but we have yet to achieve this target. 

We will continue to emphasize to our audit 

teams the importance of communicating 

with our clients about when they will need 

testimony statements and products and 

delivering these statements and products 

4

As part of our risk-based engagement management process, 

we identify a new engagement as high interest if the work 

we need to perform will likely require a large investment of 

our resources, involve a complex methodology, or examine 

controversial or sensitive issues.

when agreed to allow them enough time to 

prepare for hearings and other congressional 

activities. We anticipate these actions will 

enable us to meet our fiscal year 2008 target 

of 95 percent.

Figure 17: Timeliness

0

20

40

60

80

100

2003 2004 2005 2006 2007 2007

Percentage of products on time

Source: GAO.

Actual Target Actual

92% 95% 94% 90%

N/A

89%

Note: We pilot tested our client feedback survey beginning in 

March 2002 and collected actual data on our clients’ satisfaction 

with the timeliness of our products beginning in fiscal year 2004.

Focusing on Our People

Our highly professional, multidisciplinary 

staff were critical to the level of performance 

we demonstrated in fiscal year 2007. Our 

ability to hire, develop, retain, and lead 

staff is a key factor to fulfilling our mission 

of serving the Congress and the American 

people.

Over the last 5 fiscal years, we have refined 

our processes for measuring how well we 

manage our human capital. In fiscal year 

2007, we met or exceeded our targets for 

five of our eight people measure. All eight 

measures are directly linked to our goal 4 

strategic objective of becoming a professional 

services employer of choice. For more 

information about our people measures, see 

Verifying and Validating Performance Data

on page 78 of this report.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 37

Retention Rate

We continuously strive to make GAO a place 

where people want to work. Once we have 

made an investment in hiring and training 

people, we would like them to stay with us. 

This measure is one indicator of whether we 

are attaining this objective. We calculate this 

measure by taking 100 percent minus the 

attrition rate, where attrition rate is defined 

as the number of separations divided by the 

average on-board strength. We calculate 

this measure with and without retirements. 

Table 4 shows that both of our retention rate 

targets have declined 2 percentage points 

since fiscal year 2003, but have remained 

relatively flat during the intervening years.

New Hire Rate and Acceptance Rate

Our new hire rate is the ratio of the number 

of people hired to the number we planned 

to hire. Annually, we develop a workforce 

plan that takes into account strategic goals, 

projected workload changes, and other 

changes such as retirements, attrition, 

promotions, and skill gaps. The workforce 

plan for the upcoming year specifies the 

number of planned hires and, for each 

new hire, specifies the pay plan, skill type, 

and level. The plan is conveyed to each 

of our units to guide hiring throughout 

the year. Progress toward achieving the 

workforce plan is monitored monthly by 

the Chief Operating Officer and the Chief 

Administrative Officer. Adjustments to the 

workforce plan are made throughout the year, 

if necessary, to reflect changing needs and 

conditions. In fiscal year 2007, our adjusted 

plan was to hire 198 staff. However, we were 

only able to bring on board 187 staff by yearend. Of the 198 staff positions, 3 positions 

were carried over to fiscal year 2008 because 

the applicants could not start until the new 

fiscal year. Our acceptance rate measure is a 

proxy for our attractiveness as an employer 

and an indicator of our competitiveness in 

bringing in new talent. It is the ratio of the 

number of applicants accepting offers to 

the number of offers made. Table 3 shows 

that we exceeded by 1 percentage point the 

targets we set for our new hire rate and met 

our acceptance rate target of 72 percent. 

Our calculations for each of these measures 

do not include offers extended to applicants 

for fiscal year 2007 vacancies who accepted 

but will not report on duty until the first 

quarter of fiscal year 2008. (For more about 

our recruitment strategy and performance in 

fiscal year 2007, see app. 1, p. 182.)

Table 3: Actual Performance and Targets Related to Our New Hire Rate and Acceptance Rate 

Measures

Performance 

measures 

2003

actual 

2004

actual 

2005

actual 

2006

actual

2007

target 

2007

actual

People

New hire rate 98% 98% 94% 94% 95% 96%

Acceptance rate 72% 72% 71% 70% 72% 72%

Source: GAO.
GAO Performance and Accountability Report 2007

38 PART I Management’s Discussion and Analysis GAO-08-1SP

Staff Development and Utilization, 

Leadership, and Organizational 

Climate

One way that we measure how well we 

are supporting our staff and providing an 

environment for professional growth and 

improvement is through our annual employee 

feedback survey. This Web-based survey, 

which is conducted by an outside contractor 

to ensure the confidentiality of every 

respondent, is administered to all of our 

employees once a year. Through the survey, 

we encourage our staff to indicate what they 

think about our overall operations, work 

environment, and organizational culture and 

how they rate our managers—from their 

immediate supervisors to the Executive 

Committee—on key aspects of their 

leadership styles. The survey consists of over 

100 questions.

In fiscal year 2007, about 72 percent of our 

employees completed the survey, and we met 

our target for staff development but missed 

the remaining three targets (see table 5). 

Though we did not meet our targets for 

leadership or organizational climate in fiscal 

year 2007, the favorable responses were equal 

to or slightly better than those in fiscal year 

2006. We revised our fiscal year 2008 targets 

slightly for leadership and organizational 

climate and set them at 80 percent and 

75 percent, respectively, to be more realistic, 

but still challenging. We anticipate continued 

improvement on these measures. Since 

fiscal year 2003, favorable responses to our 

staff utilization measure (see p. 90 for more 

information on this measure) have generally 

increased, but declined in fiscal year 2007. 

We also adjusted this target slightly and set 

it at 75 percent for fiscal year 2008 to ensure 

that it is realistic and challenging, and we 

plan to perform a comprehensive analysis of 

the factors associated with staff utilization 

during the fiscal year. 

Data from our employee feedback survey 

are also used by by the Partnership for 

Public Service to determine our standing 

in the annual Best Places to Work in the 

Federal Government rankings. We were 

cited as second on the list of large federal 

agencies according to rankings released in 

April 2007 by this organization. We were 

also selected by Washingtonian magazine in 

September 2007 as a “Great Place to Work” 

from more than 225 candidates because of 

our interesting work, good pay and benefits, 

collegial staff, employee development, and 

flexibility.

Table 4: Actual Performance and Targets Related to Our Retention Rate Including and 

Excluding Retirements

Performance

measures 

2003

actual 

2004

actual 

2005

actual 

2006

actual

2007

target 

2007

actual

People

Retention rate

With retirements 92% 90% 90% 90% 90% 90%

Without retirements 96% 95% 94% 94% 94% 94%

Source: GAO.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 39

Table 5: Actual Performance and Targets Related to Our Measures of Employee Satisfaction 

with Staff Development, Staff Utilization, Leadership, and Organizational Climate

Performance

measures 

2003

actual 

2004

actual 

2005

actual 

2006

actual

2007

target 

2007

actual

People

Staff development 67% 70% 72% 76% 75% 76%

Staff utilization 71% 72% 75% 75% 78% 73%

Leadership 78% 79% 80% 79% 80% 79%

Organizational 

climate 71% 74% 76% 73% 76% 74%

Source: GAO.

Focusing on Our Internal 

Operations

Our mission and people are supported 

by our internal administrative services, 

including information management, facility 

management, knowledge services, human 

capital, financial management, and other 

services. To assess our performance related 

to how well our internal administrative 

services help employees get their jobs done 

or improve employees’ quality of work 

life, we use information from our annual 

customer satisfaction survey to set targets 

and assess our performance for both of 

these measures, which are shown in table 6

along with baseline data that we recorded for 

them in fiscal year 2003 and fiscal year 2004. 

We asked staff to rank 31 internal services 

available to them and to indicate on a scale 

from 1 to 5 their satisfaction with each 

service. Our internal operations measures 

are directly related to our goal 4 strategic 

objectives of continuously enhancing our 

business and management processes and 

becoming a professional services employer 

of choice. The first measure encompasses 

21 services that help employees get their 

jobs done, such as Internet access, desktop 

computer equipment, voice and video 

communication systems, shared service 

centers for copying and courier assistance, 

travel services, and report production. The 

second measure encompasses another 10 

services that affect quality of work life, such 

as assistance related to pay and benefits, 

building security and maintenance, and 

workplace safety and health. Using survey 

responses, we calculate a composite score for 

each service category that reflects employee 

ratings for (1) satisfaction with the service 

and (2) importance of the service.
GAO Performance and Accountability Report 2007

40 PART I Management’s Discussion and Analysis GAO-08-1SP

Building and Sustaining 

Partnerships

The various societal, economic, and other 

challenges facing our nation are becoming 

increasingly difficult for public agencies to 

address, in part because these issues tend 

to cut across different organizations and 

sectors. At the same time, public agencies 

are being called upon to address these 

complex problems in an era of tighter 

resources, smaller workforce levels, and 

other constraints. As a result of these trends, 

it will be difficult, if not impossible, for any 

one agency to address these challenges on 

its own. Moreover, evidence suggests that 

the most effective solutions arise when 

organizations join forces to apply their 

experience, knowledge, and resources to 

address common challenges.

We have long recognized the importance of 

working collaboratively, and teams and units 

supporting all four of our strategic goals have 

continued their partnerships with a number 

of organizations, such as the National Academies of Sciences, the Council for Excellence in Government, and the International 

Organization of Supreme Audit Institutions 

(INTOSAI). Indeed, our collaborative relationships with “good government” and other 

domestic and international organizations 

enhance our ability to manage risk, address 

common challenges, improve government operations, provide better service to the public, 

make meaningful changes to the accountability process, and leverage available resources, 

all while maintaining our professional independence. Simply put, our relationships with 

our partners and other affiliates help us and 

them to carry out our respective missions.

In fiscal year 2006, we began a formal effort to identify indicators that could help us 

measure the quality of our collaborative relationships. This initiative continued in fiscal 

year 2007, when a special team was created 

and tasked with developing a methodology 

that would enable us to (1) assess the extent 

and nature of our collaborative activities, 

(2) quantitatively measure the effectiveness 

of our collaborative activities, and (3) identify options for improving those relationships.

Among other actions, the team reviewed 

available literature for leading practices on 

partnering, interviewed our senior executives 

and partner organization officials on their 

collaborative activities, and developed and 

pretested a survey of partner organizations 

designed to elicit information on how well 

our collaborative relationships were working.

Moving forward, we expect to finalize the 

survey and other aspects of the methodology 

and survey these organizations in fiscal year 

2008.

Table 6: Actual Performance and Targets Related to Our Internal Operations Measures

Performance 

measures 

2003

actual 

2004

actual 

2005

actual 

2006

actual

2007

target 

2007

actual

Internal operations

Help get job done 3. 98 4. 01 4.1 4.1 4.0 N/A

Quality of work life 3. 86 3. 96 3.98 4.0 4.0 N/A

Source: GAO.

Note: We will report actual data for fiscal year 2007 once the data from our November 2007 internal operations survey have been 

analyzed. N/A indicates that the data are not available yet.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 41

GAO’s High-Risk Program

Since 1990, our high-risk program has highlighted long-standing challenges facing the 

federal government. Increasingly, the program 

has focused on those major programs and 

operations that are in urgent need of broadbased transformation and congressional as 

well as executive branch action, to ensure that 

our national government functions in the most 

economical, efficient, and effective manner 

possible. Our latest regular update, released 

in January 2007, highlights 27 troubled areas 

across government. Many of these areas involve critical public service providers, such as 

USDA, IRS, and CMS, which provides services 

to Medicare and Medicaid recipients.

Issued to coincide with the start of each new 

Congress, our high-risk updates have helped 

sustain attention from Members of the Congress who are responsible for oversight and 

from executive branch officials who are accountable for performance. Our focus on highrisk problems contributed to the Congress 

enacting a series of governmentwide reforms 

to address critical human capital challenges, 

strengthen financial management, improve IT 

practices, and instill a more results-oriented 

government. Overall, our high-risk program 

has served to identify and help resolve serious 

weaknesses in areas that involve substantial 

resources and provide critical services to the 

public.

In fiscal year 2007, we determined that sufficient progress was made to merit removing 

the high-risk designation from two areas—the 

USPS transformation efforts and long-term 

outlook and HUD’s single-family mortgage 

insurance and rental housing assistance programs. We also designated three new areas as 

high risk: financing the nation’s transportation 

system, ensuring the effective protection of 

technologies critical to U.S. national security 

interests, and transforming federal oversight 

of food safety.

Since our program began, the government has 

taken high-risk problems seriously and has 

made progress toward correcting them. The 

original high-risk list included 14 areas, but 

over the next 17 years, 33 areas were added, 18 

areas were removed, and 2 were consolidated 

to reach the current 27 areas. DOD continues 

to dominate the list with 8 high-risk areas of 

its own and shared responsibility for 7 more. 

Table 7 lists each current high-risk area and 

the year it was placed on the high-risk list.

Our high-risk list work in fiscal

year 2007:

221 reports

96 testimonies

$13.55 billion in financial benefits

■

■

■

In fiscal year 2007, we issued 221 reports and 

delivered 96 testimonies related to our highrisk areas and documented financial benefits 

totaling approximately $13.55 billion. These 

results included, for example, reviews we completed in evaluating DOD’s weapon system acquisition process. Some of our significant work 

in this area includes reviewing DOD’s progress 

in meeting cost, schedule, and performance 

goals for the Joint Strike Fighter—DOD’s most 

expensive aircraft acquisition program—and 

assessing the challenges to building a new 

type of aircraft carrier, the USS Gerald R. Ford, 

within budget. Our work in the DOD’s weapons 

system acquisition area resulted in $2.6 billion 

in financial benefits. In addition, we examined 

how IRS could better enforce tax laws. For 

example, we made recommendations on how 

to increase the tax compliance of sole proprietors and improve the efficiency in the appeals 

process used by taxpayers facing liens or levies. We documented approximately $1.3 billion 

in financial benefits from our past work in the 

enforcement of tax laws area. To learn more 

about our work on the high-risk areas or to 

download our January 2007 high-risk update 

in full, go to www.gao.gov/docsearch/featured/highrisk.html.
GAO Performance and Accountability Report 2007

42 PART I Management’s Discussion and Analysis GAO-08-1SP

Table 7: GAO’s 2007 High-Risk List

High-risk area

Year 

designated 

high risk 

Addressing Challenges In Broad-Based Transformations 

Strategic Human Capital Managementa ■ 2001

Managing Federal Real Propertya ■ 2003

Protecting the Federal Government’s Information Systems and the Nation’s Critical 

Infrastructures

■

1997

■ Implementing and Transforming the Department of Homeland Security 2003

Establishing Appropriate and Effective Information-Sharing Mechanisms to Improve 

Homeland Security

■

2005

DOD Approach to Business Transformationa ■ 2005

■ DOD Business Systems Modernization 1995

■ DOD Personnel Security Clearance Program 2005

■ DOD Support Infrastructure Management 1997

■ DOD Financial Management 1995

■ DOD Supply Chain Management (formerly Inventory Management) 1990

■ DOD Weapon Systems Acquisition 1990

■ FAA Air Traffic Control Modernization 1995

Financing the Nation’s Transportation Systema ■ (New) 2007

Ensuring the Effective Protection of Technologies Critical to U.S. National Security 

Interestsa (New)

■

2007

Transforming Federal Oversight of Food Safetya ■ (New) 2007

Managing federal contracting more effectively

■ DOD Contract Management 1992

■ DOE Contract Management 1990

■ National Aeronautics and Space Administration Contract Management 1990

■ Management of Interagency Contracting 2005

Assessing the efficiency and effectiveness of tax law administration

Enforcement of Tax Lawsa ■ 1990

■ IRS Business Systems Modernization 1995

Modernizing and safeguarding insurance and benefit programs

Modernizing Federal Disability Programsa ■ 2003

Pension Benefit Guaranty Corporation Single-Employer Insurance Programa ■ 2003

Medicare Programa ■ 1990

Medicaid Programa ■ 2003

National Flood Insurance Programa ■ 2006

Source: GAO.

a

Legislation is likely to be necessary, as a supplement to actions by the executive branch, to effectively address this high-risk area.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 43

General Counsel Decisions 

and Other Legal Work

In addition to our audit and evaluation work, 

the Congress and the public also benefited 

from some of our other activities in fiscal 

year 2007 in the following ways:

We handled more than 1,000 protests 

filed by parties who challenged the way 

individual federal procurements were 

conducted or how federal contracts were 

awarded, and we issued merit decisions on 

more than 450 protests addressing a wide 

range of issues involving compliance with, 

and the interpretation of, procurement 

statutes and regulations. In fiscal year 

2007, we handled numerous protests 

associated with areas of significant 

current interest. For example, we issued 

decisions concerning the contract for 

interpreters and translators for U.S. armed 

forces in Iraq as well as the acquisition 

of major systems, such as the Air Force’s 

replacement combat search and rescue 

vehicle.

We issued appropriations law decisions 

and opinions on, among other things, the 

purposes for which appropriated funds 

may be used, the proper disposition 

of funds received by the government, 

potential Antideficiency Act violations, 

and accountability for the use of 

government purchase cards. Three 

decisions stand out. They addressed 

interagency transactions between the 

DOD and the Department of the Interior 

and the agencies’ failure to prevent the 

misuse of expired appropriations. These 

three decisions more fully defined the 

criteria for valid interagency agreements, 

enhancing uniformity and consistency 

within government.

■

■

For fiscal year 2007, we received 25 

Antideficiency Act reports for our 

repository and made selected information 

from these reports publicly available on 

our web site. Since the Congress amended 

the Antideficiency Act in December 2004 

requiring agencies to send us a copy of 

reports of Antideficiency Act violations, 

we have received a total of 68 reports, 

of which 20 were for 2005 and 23 were 

for 2006. This year’s reports, which also 

report overobligations from earlier fiscal 

years, include an overobligation of the 

TSA appropriation by $195 million because 

purchase orders were not properly 

recorded and a $126 million violation 

because of an inaccurate estimation 

of carryover appropriations by the 

Employment and Training Administration.

In 2007 we issued a report on Presidential 

Signing Statements to the Senate 

Appropriations Committee and the 

House Judiciary Committee. This 

report consisted of a detailed analysis 

and history of signing statements, an 

examination of their use by federal 

courts, and an explanation of the grounds 

on which the President has objected 

to various laws in signing statements. 

The report also included the results of 

our investigation into whether agencies 

were executing as written 19 provisions 

of law appearing in the fiscal year 

2006 appropriations acts. We found 

that agencies were not executing the 

provisions as written in 6 of the 19 cases.

Several of our attorneys served on the 

Contract Appeals Board to resolve appeals 

on claims by contractors under contract 

with the Government Printing Office as 

well as with the Architect of the Capitol 

involving the Capitol Visitor Center, the 

West Refrigeration Plant Expansion, the 

Longworth House Office Building, and the 

Supreme Court.

■

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■
GAO Performance and Accountability Report 2007

44 PART I Management’s Discussion and Analysis GAO-08-1SP

In 2007 we issued our annual update of 

volumes 1 and 2 of the Third Edition of 

Principles of Federal Appropriations 

Law, commonly known as the Red Book. 

The Red Book is available to the public 

on our web site and is considered the 

primary resource for appropriations 

law guidance in the federal financial 

community. Volumes 1 and 2 of the 

Red Book each average more than 

15,000 inquiries per week on our web site 

as attorneys, budget analysts, financial 

managers, project managers, contracting 

officers, and accountable officers from 

all three branches of the government 

access it to research questions about 

budget and appropriations law. The third 

edition will be complete with publication 

of volume 3 in 2008. In addition, General 

Counsel taught a 2 1⁄2 day course on 

appropriations law 25 times this fiscal 

year to 12 agencies. The course provides 

an analytical framework for analyzing 

appropriations law issues to ensure that 

funds are available for obligation with 

regard to purpose, amount and time. To 

further communication across agencies, 

General Counsel hosted its third annual 

appropriations law forum in March, with 

an analysis of significant decisions and 

opinions of 2006 and interactive sessions 

on indemnification clauses and continuing 

resolutions.

■ Managing Our Resources

Resources Used to Achieve Our Fiscal 

Year 2007 Performance Goals

Our financial statements for fiscal year 

2007 received an unqualified opinion from 

an independent auditor. The auditor found 

our internal controls to be effective—which 

means that no material weaknesses were 

identified—and the auditor reported 

substantial compliance with the requirements 

for financial systems in the Federal 

Financial Management Improvement Act 

of 1996. In addition, the auditor also found 

no instances of noncompliance with the 

laws or regulations in the areas tested. The 

statements and their accompanying notes, 

along with the auditor’s report, appear later 

in this report. Table 8 summarizes key data. 

Compared with the statements of large and 

complex agencies in the executive branch, 

our statements present a relatively simple 

picture of a small yet very important agency 

in the legislative branch. We focus most of 

our financial activity on the execution of 

our congressionally approved budget with 

most of our resources devoted to the human 

capital needed for our mission of supporting 

the Congress with professional, objective, 

fact-based, nonpartisan, nonideological, fair, 

and balanced information and analysis.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 45

Our budget consists of an annual 

appropriation covering salaries and 

expenses, and revenue from reimbursable 

audit work and rental income. Our total 

assets were $106.5 million, consisting 

mostly of property and equipment (including 

the headquarters building, land and 

improvements, and computer equipment and 

software) and funds with the U.S. Treasury. 

Total liabilities of $94 million were composed 

largely of employees’ accrued annual leave, 

amounts owed to other government agencies, 

accounts payable, and employees’ salaries 

and benefits. The greatest change in the 

liabilities is a decrease of $6.1 million in 

intragovernmental accounts payable due 

to more timely billing from, and therefore 

payments to, other government entities. Also, 

$3.8 million in vendor financed equipment 

is recorded on the balance sheet as a note 

payable.

The net cost of operating GAO during 

fiscal year 2007 and fiscal year 2006 was 

approximately $500 million and $511 million, 

respectively. Expenses for salaries and 

related benefits accounted for 81 and 

79 percent of our net cost of operations in 

fiscal years 2007 and 2006, respectively. 

Figure 18 shows how our fiscal year 2007 

costs break down by category.

We report net cost of operations according 

to our four strategic goals, consistent with 

our strategic plan. Overall, our net costs of 

operations decreased by $11.8 million, due in 

part to the change in workers’ compensation 

methodology in fiscal year 2006, which 

increased liabilities and expenses by more 

than $5.5 million; there was no similar 

change in fiscal year 2007.

Our strategic Goal 1 showed a reduction in 

net costs of $14.5 million in fiscal year 2007 

compared to fiscal year 2006. This decline in 

Goal 1 costs reflects the continuing shift in 

Table 8: GAO’s Financial Highlights: Resource Information (Dollars in millions)

Fiscal Year 2007 Fiscal Year 2006

Total budgetary resourcesa $498.9 $497.2

Total outlaysa $490.5 $488.1

Net cost of operations

Goal 1: Well-being and financial security of 

the American people $177.4 $191.9

Goal 2: Changing security threats and 

challenges of globalization 157.5 154.7

Goal 3: Transforming the federal government’s 

role 146.6 146.8

Goal 4: Maximizing the value of GAO 23.9 23.7

Less reimbursable services not attributable to 

goals (5.7) (5.6)

Total net cost of operations $499.7 $511.5

Actual FTEs 3,152 3,194

Source: GAO.

a

The net cost of operations figures include nonbudgetary items, such as imputed pension and depreciation costs, which are not 

included in the figures for total budgetary resources or total outlays.
GAO Performance and Accountability Report 2007

46 PART I Management’s Discussion and Analysis GAO-08-1SP

our resources towards the areas of homeland 

security, national disaster preparedness, 

and immigration issues, which reside in our 

strategic Goal 2.

Figure 18: Use of Fiscal Year 2007 Funds by 

Category

Percentage of total net costs

Building and

hardware maintenance

services

Salaries

and benefits

10.3%

80.6%

Rent (space

and hardware) 2.3%

Depreciation

Other 4.1%

2.7%

Source: GAO.

Figures 19 and 20 show our net costs by 

goal for fiscal year 2004 through fiscal year 

2007. Figure 19 shows costs unadjusted for 

inflation, while figure 20 shows the same 

costs in 2007 dollars, that is, adjusted for 

inflation.

Figure 19: Net Cost by Goal, Unadjusted for 

Inflation

2004 194.7 131.7 145.8 23.4

2005 197.7 144.2 147.3 22.0

2006 191.9 154.7 146.8 23.7

2007 177.4 157.5 146.6 23.9

Dollars in millions

Source: GAO.

0

50

100

150

200

Goal 1 Goal 2 Goal 3 Goal 4

Figure 20: Net Cost by Goal, Adjusted for 

Inflation

2004 213.2 144.2 159.7 25.6

2005 209.8 153.0 156.3 23.3

2006 197.1 158.9 150.8 24.3

2007 177.4 157.5 146.6 23.9

Dollars in millions

Source: GAO.

0

50

100

150

200

Goal 1 Goal 2 Goal 3 Goal 4

Limitation on Financial Statements

Responsibility for the integrity and 

objectivity of the financial information 

presented in the financial statements in 

this report rests with our managers. The 

statements were prepared to report our 

financial position and results of operations, 

consistent with the requirements of the Chief 

Financial Officers Act, as amended (31 U.S.C. 

3515). The statements were prepared from 

our financial records in accordance with 

the formats prescribed in OMB Circular No. 

A-136, Financial Reporting Requirements. 

These financial statements differ from the 

financial reports used to monitor and control 

our budgetary resources. However, both were 

prepared from the same financial records.

Our financial statements should be read 

with the understanding that as an agency 

of a sovereign entity, the U.S. government, 

we cannot liquidate our liabilities (i.e., pay 

our bills) without legislation that provides 

resources to do so. Although future 

appropriations to fund these liabilities are 

likely and anticipated, they are not certain.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 47

Planned Resources to Achieve Our 

Fiscal Year 2008 Performance Goals

As we go to press on this report, the 

Congress has not completed action on our 

fiscal year 2008 budget request. We, as well 

as the rest of the federal government, are 

operating under a continuing resolution 

appropriation at near fiscal year 2006 

levels through November 16, 2007, 

pending enactment of the fiscal year 

2008 appropriations bills for the federal 

government.

Our fiscal year 2008 budget request to the 

Congress for about $530 million would 

allow us to continue to perform a range of 

oversight-, insight-, and foresight-related 

engagements to support the Congress in 

meeting the full range of its constitutional 

responsibilities and to meet the performance 

goals outlined in our Strategic Plan. The 

requested resources will allow us to rebuild 

our workforce to a level that will position 

us to better respond to increasing supply 

and demand imbalances in responding to 

congressional requests, cover mandatory 

pay and uncontrollable cost increases, 

continue to be regarded as an employer 

of choice, undertake critical investments 

in technology improvements and other 

transformational areas, and ensure that 

we can effectively support the Congress’s 

legislative agenda. Our request represents 

an increase of about 8.5 percent over our 

fiscal year 2007 funding level. At this time, 

the House of Representatives has approved a 

4.5 percent increase above 2007. The Senate 

Appropriations Committee has proposed 

a 6 percent increase above fiscal year 2007 

funding levels, but the full Senate has not 

yet acted on our request. Table 9 reflects 

our requested funding level and full-time 

equivalent (FTE) figures to support the 

Strategic Plan. We will update our fiscal year 

2008 funding and FTE numbers when the 

final appropriation has been approved by the 

Congress.

Table 9: Requested Fiscal Year 2008 Budgetary Resources by Strategic Goal

Strategic goal FTEs

Amount

(dollars in 

millions)

Goal 1

Provide timely, quality service to the Congress and the federal 

government to address current and emerging challenges to the wellbeing and financial security of the American people. 1,213 $193

Goal 2

Provide timely, quality service to the Congress and the federal 

government to respond to changing threats and the challenges of 

global interdependence. 1,000 160

Goal 3

Help transform the federal government’s role and how it does 

business to meet 21st century challenges. 860 137

Goal 4

Maximize the value of GAO by being a model federal agency and a 

world-class professional services organization. 144 40

Total 3,217 $530

Source: GAO.
GAO Performance and Accountability Report 2007

48 PART I Management’s Discussion and Analysis GAO-08-1SP

Our fiscal year 2008 budget request aligns 

the budget in support of three broad program 

areas, human capital, engagement support 

and infrastructure operations. These 

programs align to all four of our strategic 

goals in support of the Congress and the 

American people. Our budget request will 

support activities in the following areas:

Human capital. Provides resources to 

support our most important asset—our 

employees—and cover salaries and 

benefits, training and development, 

awards and recognition, and recruitment 

and retention programs, such as transit 

subsidy and student loan repayment 

programs. Human capital costs represent 

about 80 percent of our total budgetary 

resources. For fiscal year 2008, we are 

requesting funds to support an increase 

to achieve a staffing level of 3,217 

FTEs which will allow us to fill critical 

vacancies, meet succession-planning 

needs, rebuild our capacity, and address 

supply and demand imbalances in 

responding to congressional requests.

Engagement support. Provides resources 

for contractual services and staff travel 

needed to perform engagements to 

support the Congress’s legislative agenda, 

restore travel to more normal levels, and 

increase our oversight in the Middle East 

to provide more timely and responsible 

information on U.S. activities in the area.

Infrastructure operations. Includes 

resources activities, such as building 

maintenance, computer hardware 

maintenance and software, field office 

rent, financial management activities, and 

targeted initiatives. We plan to allocate 

20 percent of our total budget request 

for infrastructure operations and critical 

infrastructure initiatives previously 

deferred during budget shortfalls.

■

■

■

Our fiscal year 2008 budget request seeks 

necessary resources to rebuild and enhance 

our workforce, knowledge capacity, employee 

programs, and infrastructure. In the years 

ahead our support to the Congress will likely 

prove even more critical based on pressures 

created by our nation’s current and projected 

budget deficit and growing long-term fiscal 

imbalances.

Our budget request seeks to maximize our 

effectiveness and credibility while achieving 

three elements essential to increased 

value and mitigating risk—incentives, 

transparency, and accountability. With these 

elements in mind we use our resources 

to address major management challenges 

surrounding human capital, information 

security and physical security. We capitalized 

on opportunities that minimize related risks, 

while staying mindful of the big picture 

and the long-term view. Using long-term 

perspectives to transform our organization 

and operations to better meet today’s 

needs as well as future needs, we are in 

the business of helping government work 

better for and holding it accountable to the 

American people.

Strategies for Achieving Our 

Goals

The Government Performance and Results 

Act directs agencies to articulate not just 

goals, but also strategies for achieving those 

goals. As detailed in the following sections, 

we emphasize two overarching strategies 

for achieving our goals: (1) providing 

information from our work to the Congress 

and the public in a variety of forms and 

(2) continuing and strengthening our internal 

operations. Specifically, our strategies 

emphasize the importance of working with 

other organizations on crosscutting issues 

and effectively addressing the challenges to 

achieving our agency’s goals and recognizing 

the internal and external factors that could 
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 49

impair our performance. Through these 

strategies, which have proven successful for 

us for a number of years, we plan to achieve 

the level of performance that is needed to 

meet our annual performance measures as 

well as our multiyear performance goals. 

(For all four strategic goals, the multiyear 

performance goals included in our current 

strategic plan describe specific areas of work 

that we addressed in fiscal year 2007.) This 

level of performance, in turn, will allow us to 

achieve our strategic goals.

Attaining our three external strategic 

goals (goals 1, 2, and 3) and their related 

objectives rests, for the most part, on 

providing professional, objective, factbased, nonpartisan, nonideological, fair, 

and balanced information to support the 

Congress in carrying out its constitutional 

responsibilities. To implement the 

performance goals and key efforts related 

to these three goals, we develop and present 

information in a number of ways, including

evaluations of federal policies, programs, 

and the performance of agencies;

oversight of government operations 

through financial and other management 

audits to determine whether public funds 

are spent efficiently, effectively, and in 

accordance with applicable laws;

investigations to assess whether illegal or 

improper activities are occurring;

analyses of the financing for government 

activities;

constructive engagements in which we 

work proactively with agencies, when 

appropriate, to provide advice that may 

assist their efforts toward positive results;

legal opinions that determine whether 

agencies are in compliance with applicable 

laws and regulations;

■

■

■

■

■

■

policy analyses to assess needed actions 

and the implications of proposed actions; 

and

additional assistance to the Congress 

in support of its oversight and decisionmaking responsibilities.

We conduct specific engagements as a result 

of requests from congressional committees 

and mandates written into legislation, 

resolutions, and committee reports. In fiscal 

year 2007, we devoted 90 percent of our 

engagement resources to work requested 

or mandated by the Congress. We initiated 

the remaining 10 percent of the engagement 

work under the Comptroller General’s 

authority. Much of this work addressed 

various challenges that are of broad-based 

interest to the Congress, such as the global 

war on terrorism, the cost and status of 

the reconstruction efforts in Iraq, and 

our reviews related to the 2005 hurricane 

season.5 Also covered by this work were 

government programs and operations that 

we have identified as at high risk for fraud, 

waste, abuse, and mismanagement as well 

as reviews of agencies’ budget requests to 

help support congressional decision making. 

By making recommendations to improve 

the accountability, operations, and services 

of government agencies, we contribute 

to increasing the effectiveness of federal 

spending and enhancing the taxpayers’ trust 

and confidence in their government.

Our staff are responsible for following high 

standards for gathering, documenting, 

and supporting the information we collect 

and analyze. More often than not, this 

information is documented in a product 

that is made available to the public. In 

some cases, we develop products that 

contain classified or sensitive information 

that cannot be made available publicly. 

5

In fiscal years 2005 and 2006, the work performed under the 

Comptroller General’s authority represented 13 percent and 

15 percent, respectively, of our engagement efforts. 

■

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GAO Performance and Accountability Report 2007

50 PART I Management’s Discussion and Analysis GAO-08-1SP

We generally issue around 1,200 to 1,300 

products each year, electronically and in 

printed format. In addition, we publish about 

250 to 350 legal decisions and opinions each 

year. Our products include the following:

letter reports, chapter reports, and written 

correspondence;

testimonies and statements for the record, 

where the former are delivered orally by 

one or more of our senior executives at 

a hearing and the latter are provided for 

inclusion in the congressional record;

oral briefings, which are usually given 

directly to congressional staff members; 

and

legal decisions and opinions resolving 

bid protests and addressing issues of 

appropriations law, as well as opinions 

on the scope and exercise of authority of 

federal officers.

We also produce special publications on 

specific issues of general interest to all 

Americans, such as our report on fiscal 

stewardship and our series of issue papers 

to assist the Congress in developing its 

oversight agenda for the situation in Iraq.6

Our publication, Principles of Federal 

Appropriations Law, is viewed both within 

and outside of the government as the primary 

resource on federal case law related to the 

availability, use, and control of federal funds. 

In addition, we maintain the government’s 

repository of reports on Antideficiency Act 

violations and make available on our Web site 

various information extracted from those 

reports. Collectively, our products always 

contain information and often conclusions 

and recommendations that allow us to 

achieve our external strategic goals.

6

Fiscal Stewardship: A Critical Challenge Facing Our Nation (GAO-07-362SP, January 2007) and Securing, Stabilizing, and Rebuilding Iraq: Key Issues for Congressional 

Oversight (GAO-07-308SP, January 2007).

■

■

■

■

Another means of ensuring that we are 

achieving our goals is through examining 

the impact of our past work and using 

that information to shape our future work. 

Consequently, we evaluate actions taken 

by federal agencies and the Congress in 

response to our past recommendations. The 

results of these evaluations are reported 

in terms of the financial benefits and 

nonfinancial benefits that reflect the value 

of our work. We actively monitor the status 

of our open recommendations—those 

that remain valid but have not yet been 

implemented—and report our findings 

annually to the Congress and the public 

(http://www.gao.gov/openrecs.html).

Similarly, we use our biennial high-risk 

report, most recently issued in January 

2007, to provide a status report on major 

government operations that we consider high 

risk because they are vulnerable to fraud, 

waste, abuse, and mismanagement or are in 

need of broad-based transformation. We also 

use our report on 21st century challenges, 

which was issued in February 2005, to alert 

the nation’s leaders to current and emerging 

issues facing the nation, including the longrange budget challenge, the human capital 

crisis, postal reforms, and the federal 

government’s financial management efforts. 

These reports are valuable planning tools 

because they help us to identify those areas 

where our continued efforts are needed to 

maintain the focus on important policy and 

management issues that the nation faces.

To attain our fourth strategic goal—an 

internal goal—and its five related objectives, 

we conduct surveys of our congressional 

clients and internal customers to obtain 

feedback on our products, processes, 

and services, and performed studies and 

evaluations to identify ways in which to 

improve them.
GAO Performance and Accountability Report 2007

GAO-08-1SP Management’s Discussion and Analysis PART I 51

Because achieving our strategic goals 

and objectives also requires strategies for 

coordinating with other organizations with 

similar or complementary missions, we

use advisory panels and other bodies to 

inform our strategic and annual work 

planning and

maintain strategic working relationships 

with other national and international 

government accountability and 

professional organizations, including the 

federal inspectors general, state and local 

audit organizations, and other national 

audit offices.

These two types of strategic working 

relationships allow us to extend our 

institutional knowledge and experience; 

leverage our resources; and in turn, 

improve our service to the Congress and the 

American people. Our Strategic Planning 

and External Liaison office takes the lead 

and provides strategic focus for the work 

with external partner organizations, while 

our research, audit, and evaluation teams 

lead the work with most of the issue-specific 

organizations.

Strategic and Annual Work Planning

Through forums and a number of ongoing 

advisory boards and panels, we gather 

information and perspectives for our 

strategic and annual performance planning 

efforts. In fiscal year 2007, the Comptroller 

General convened various experts from 

the public, private, and nonprofit sectors in 

eight forums and panels intended to enhance 

our understanding of emerging issues and 

to identify opportunities for action. The 

forums included discussions on options for 

extending the working life of older workers, 

modernizing disability policies and programs, 

exploring the feasibility of the Chief 

Management Officer and Chief Operations 

Officer concepts, controlling health care 

■

■

costs, addressing 21st century transportation 

challenges, improving financial market 

regulation, addressing issues related to 

environmental accounting, and closing the 

tax gap. We also updated our Strategic Plan 

for 2007 through 2012. Our update included 

a significantly revamped themes section that 

outlined for the Congress and the public the 

forces that will shape our country’s future.

We continued our speakers’ series 

Conversations on 21st Century Challenges, 

wherein a prominent national leader spoke to 

our staff on issues affecting the United States 

and its place in the world. These speakers 

included General Anthony Zinni, USMC 

(retired); Norman Ornstein, Resident Scholar, 

American Enterprise Institute for Public 

Policy; Marian Wright Edelman, Founder, 

Children’s Defense Fund; and Norman 

Mineta, Vice-Chairman, Hill and Knowlton.

Advisory boards and panels also support 

our strategic and annual work planning by 

alerting us to issues, trends, and lessons 

learned across the national and international 

audit community that we should factor 

into our work. These groups include the 

Comptroller General’s Advisory Board, 

whose 40 members from the public and 

private sectors have broad expertise in 

areas related to our strategic objectives. 

Through the National Intergovernmental 

Audit Forum, chaired by the Comptroller 

General, and 10 regional intergovernmental 

audit forums, we consult 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, 

experiences, and best practices, and seek 

opportunities to collaborate. Internationally, 

the Global Working Group, comprising 

of the Comptroller General and 18 heads 

of national audit offices, serves the same 

purpose through its annual meeting. And 

our leadership role in INTOSAI provides 
GAO Performance and Accountability Report 2007

52 PART I Management’s Discussion and Analysis GAO-08-1SP

further opportunities for us to benefit 

from international perspectives, insights, 

and contacts, and to help strengthen 

accountability globally with a special 

focus on developing countries receiving 

development assistance from the United 

States.

We also work with a number of issue-specific 

and technical panels to improve our strategic 

and annual work planning, including the 

following:

The Advisory Council on Government 

Auditing Standards provides us guidance 

on promulgating auditing standards. 

These standards articulate auditors’ 

responsibilities when examining 

government organizations; programs; 

activities; functions; and government 

assistance received by contractors, 

nonprofits, and other nongovernmental 

organizations. The council’s work helped 

to ensure that the revised standards 

would be generally accepted and feasible. 

On July 27, 2007, we issued a revision of 

the standards. It includes updates of the 

quality control and peer review sections.

The Accountability Advisory Council, 

made up of experts in the financial 

management community, advises us 

on audits of the U.S. government’s 

consolidated financial statements and 

emerging issues involving financial 

management and accountability reporting 

in the public and private sectors.

The Executive Council on Information 

Management and Technology, whose 19 

members are experts from the public and 

private sectors and representatives of 

related professional organizations, helps 

us to identify high-risk and emerging 

issues in the IT arena.

■

■

■

The Comptroller General’s Educators 

Advisory Panel, composed of deans, 

professors, and other academics from 

prominent universities across the United 

States, advises us on recruiting, retaining, 

and developing staff and on strategic 

planning matters.

Internationally, we participate in INTOSAI—

the professional organization of the national 

audit offices of 186 countries. During the fall 

of 2004, the INTOSAI Congress unanimously 

adopted a 5-year strategic plan—the first 

in INTOSAI’s 50-year history—that was 

developed by a 10-nation task force chaired 

by the Comptroller General. The plan has 

provided the foundation for the Governing 

Board to engage member institutions in 

advancing professional audit standards 

and promoting knowledge sharing and 

best practices. In fiscal year 2007, we made 

significant contributions to implement the 

strategic plan and strengthen INTOSAI as a 

model international organization by serving 

as goal liaison for the organization’s capacitybuilding committee and as vice-chair of 

its finance and administration committee. 

Looking to the next 5-year period, the 

Comptroller General has been asked by 

INTOSAI to chair a task force to update the 

current strategic plan.

Collaborating with Others

By collaborating with others to implement 

the INTOSAI strategic plan, we have 

strengthened professional standards, 

provided technical assistance, leveraged 

resources, and developed best practices. 

In our work with INTOSAI, we chair the 

accounting and reporting subcommittee 

and are an active member of INTOSAI’s 

auditing standards, internal control, and 

other technical subcommittees. We publish 

INTOSAI’s quarterly International Journal 

of Government Auditing in five languages 

to foster global understanding of standards, 

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GAO-08-1SP Management’s Discussion and Analysis PART I 53

best practices, and technical issues. An 

expanded and more robust journal web 

presence this year has made the Journal 

more useful to INTOSAI members, more 

accessible to our global readership, and 

positioned the journal to take full advantage 

of technology.

To help ensure that the public sector 

perspectives are reflected in the International 

Federation of Accountants Standards 

Development project, we are working as a 

member of INTOSAI’s Professional Standards 

Committee as it collaborates closely with the 

International Auditing Assurance Standards 

Board and the World Bank to develop 

international auditing standards.

To build capacity in national audit 

offices around the world, we conduct an 

international auditor fellows program 

for mid- to senior-level staff from other 

countries. In 2007, 15 audit fellows from 

Asia, Africa, Europe, Latin America, the 

Caribbean, and the South Pacific spent 

about 4 months with us learning how we 

are organized to do our work, how we plan 

our work, and what methodologies we use, 

particularly for performance audits. As 

part of our strategy to promote continuous 

learning and sustainability once the fellows 

return to their countries, we are working 

with major donors—such as the World Bank, 

regional development banks, and the U.S. 

Agency for International Development—to 

identify or support relevant capacity-building 

projects in fellows’ institutions. Seven current 

and eight former auditors general as well as 

several deputy auditors general, including 

the current chair of INTOSAI, are graduates 

of this program. This year we forged an 

agreement with the World Bank (the Bank 

would pick up much of the costs, including 

transport, subsistence, and interpretation) 

and the INTOSAI Development Initiative 

(IDI) to collaborate on a pilot seminar 

in November 2007 involving the heads of 

30 national audit offices. The seminar would 

focus on knowledge sharing of best practices 

on organizational transformation.

Other collaborative activities undertaken by 

our staff during 2007 included the following:

Participating in two Domestic Working 

Group collaborative efforts of federal, 

state, and local audit officials to address 

issues regarding governance and pandemic 

preparedness. Collaborative efforts with 

the Domestic Working Group and the 

National Association of State Auditors, 

Comptrollers, and Treasurers facilitated 

our work involving the states by fostering 

cooperative working relationships with the 

state auditors on almost 20 engagements, 

including our work on Medicaid and 

FEMA’s process to estimate funds needed 

to respond to a disaster.

Implementing the National 

Intergovernmental Audit Forum strategic 

plan that was adopted in December 2004. 

This plan was developed by a task force 

composed of federal, state, and local 

auditors and an independent public 

accountant. The newly established 

committees continue organizing to 

implement the plan, which seeks to help 

maximize the forum’s effectiveness 

in promoting good government and 

accountability at all levels of government. 

In 2007, the forum advanced its strategic 

plan through the activities of its 

knowledge-sharing, communications, 

standards liaison, and emerging issues 

committees. In addition, 16 regional 

forum meetings were held, which brought 

together auditors at all government levels. 

These conferences helped advance the 

public sector accountability profession’s 

understanding of and ability to respond to 

the many challenges facing the nation in 

the 21st century.

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54 PART I Management’s Discussion and Analysis GAO-08-1SP

Facilitating collaboration between our 

teams and federal, state, local, and 

international auditors, which, among other 

things, helped us to minimize duplication 

of efforts, leverage resources, and gain 

access to people and information. We used 

our database and networks to help “push 

out” electronically the revised Yellow 

Book to the domestic and international 

accountability communities.

Supporting the Comptroller General as 

part of the Concord Coalition’s initiative to 

educate the public on America’s long-term 

fiscal challenges.

Hosting a series of meetings to “connect 

people to people” in an effort to improve 

our working relationships and better 

leverage our resources with our sister 

agencies and IGs. We participated in the 

second coordination meeting between 

the leadership and senior executives 

of the Congressional Research Service 

and our leadership and team managing 

directors. Also, we hosted the second 

ever meeting between our leadership and 

team managing directors with members 

of the President’s Council on Integrity and 

Efficiency and the Executive Council on 

Integrity and Efficiency, whose respective 

members are primarily inspectors general 

appointed by the President and by agency 

heads.

Receiving about 461 visitors from 

71 countries, including officials from our 

counterpart organizations, parliaments, 

and central government ministries.

Signing an interagency agreement with the 

Department of State to fund the translation 

of our audit standards (the Yellow Book) 

into Arabic in support of the professional 

development goals of the Iraqi national 

audit office and our other audit agency 

counterparts in the Arabic speaking world, 

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and to provide a bilateral capacity program 

for selected audit staff from our Iraqi 

counterpart institution.

Redesigning our external Web page for the 

auditing and accountability community to 

enhance access to information available 

from us and other sources. This effort 

updated both the content and the format of 

the Web page to facilitate accessing desired 

information based on user’s comments. 

The Web page now highlights what users 

believe is most important and provides 

expanded access to auditing guidance and 

methodology not previously available.

Bringing value to our agency by using 

various human capital exchange 

authorities. For example, we used our 

network and authority for the Executive 

Exchange Program to successfully 

recruit the first two participants for this 

program. It was a win-win situation for 

both KPMG, the home organization for the 

private sector participants, and us. The 

participants worked on a number of special 

projects in our Financial Management and 

Assurance Team that included updating 

financial audit guidance and developing 

agency protocols for financial audits. They 

were also involved in other leadership 

development opportunities. Positive 

articles on the candidates’ experiences 

while participating in this program were 

published by the Federal Times and the 

Association of Government Accountants. 

We also recruited our first ever 

Commerce Science Fellow who brought 

his engineering expertise to our Applied 

Research and Methods team.

Using Our Internal Experts

We coordinated extensively within our own 

organization on our strategic and annual performance planning efforts, as well as on the 

preparation of our performance and account-

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GAO-08-1SP Management’s Discussion and Analysis PART I 55

ability reports. Our efforts are completed 

under the overall direction of the Comptroller 

General and the Chief Operating Officer. We 

relied on our Chief Administrative Officer/

Chief Financial Officer and her staff to provide key information, such as the financial 

information that is included in part III of this 

report. Her staff also coordinated with others 

throughout the agency to provide the information on goal 4’s results, which appears in 

part II of this report, and provided input on 

other efforts dealing with issues that include 

financial management, budgetary resources, 

training, and security. We obtained input on 

all aspects of our strategic and annual performance planning and reporting efforts from 

each of our engagement teams and organizational units through their respective managing directors, as well as other staff responsible for planning or engagement activities 

in the teams. Staff from QCI prepared the 

report, ensuring, among other things, that the 

report was responsive to comments and suggestions received from AGA and other reviewers. In short, we involved virtually every part 

of our agency and used our internal expertise 

in our planning and reporting efforts.

Internal Management 

Challenges and Mitigating 

External Factors That Could 

Affect Our Performance

At GAO, management challenges are identified 

by the Comptroller General, the Executive 

Committee, and the agency’s senior executives 

through the agency’s strategic planning, 

management, and budgeting processes. Our 

progress in addressing the challenges is 

monitored through our annual performance 

and accountability process. Under strategic 

goal 4, we establish performance goals 

focused on each of our management 

challenges, track our progress in completing 

the key efforts for those performance goals 

quarterly, and report each year on our 

progress toward meeting the performance 

goals. Each year we ask our IG to examine 

management’s assessment of the challenges 

and the agency’s progress in addressing them. 

(See part IV for the IG’s assessment.)

For fiscal year 2007, we continued to address 

three management challenges—physical 

security, information security, and human 

capital. We anticipate that we will continue 

to need to address all three challenges in 

future years because they are evolving and 

will require us to continuously identify ways 

to adapt and improve. We will report any 

changes as we monitor and report on our 

progress in addressing the challenges through 

our annual performance and accountability 

process. The following sections describe our 

recent and planned efforts to address these 

challenges.

Physical Security Challenge

We continue to build on our previous efforts 

and pursue new initiatives to protect our 

people and assets and ensure continuity of 

operations. The domestic and international 

climate remains such that we must 

constantly assess our physical security 

profile and continuity of operations programs 

and identify and implement improvements to 

strengthen them.

During fiscal year 2007, we realigned 

the Office of Emergency Preparedness 

(OEP), first established in the third 

quarter of fiscal year 2006. OEP is now 

under the Chief Information Officer, who 

has taken the lead for our continuity of 

operations and emergency preparedness 

operations. Since the realignment, OEP has 

centralized and strengthened policies and 

operations, improved internal and external 

communication and information-sharing 

efforts, and upgraded and enhanced its 

technical capabilities.
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56 PART I Management’s Discussion and Analysis GAO-08-1SP

In its policy and oversight role for emergency 

planning OEP developed program policy 

and documents to help ensure that we 

can continue to carry out our functions in 

the face of natural or man-made disasters 

or other disruptions. In addition, OEP 

centralized all previously established 

planning efforts into the “Continuity Program 

Document” and “Continuity Program Support 

Documents” to ensure a more effective 

response to any event.

To ensure better communications and 

information-sharing between congressional 

agencies OEP meets regularly with both the 

Legislative Branch Continuity of Operations 

Plan Working Group and the Executive Branch 

Continuity of Operations Working Group. 

In addition, OEP continues to coordinate 

with sister agencies in the legislative branch, 

executive branch agencies, and local law 

enforcement for contingency planning 

efforts and information/intelligence-sharing 

purposes. In fiscal year 2007 we formalized 

program strategy and concepts of operations.

OEP enhanced our capability to communicate 

to staff during emergency situations by 

developing and refining the emergency 

notification system procured in fiscal year 

2006. Specific response groups have been 

identified and established in the system for 

alert when needed. This fiscal year OEP also 

further improved its visibility and access to 

emergency preparedness information with the 

launching of an emergency preparedness Web 

site on our intranet.

In the area of physical security, we constantly 

assess our physical security profile and seek 

ways to improve it. Our last independent 

security assessment was conducted following 

9-11 in what was a very different threat 

environment. Since that time we have 

deployed many physical and procedural 

security enhancements. Accordingly, we 

initiated a contract at the end of fiscal year 

2007 for an updated security assessment to 

review all security programs, assess recent 

enhancements against our current threat 

environment and revalidate our planned next 

steps.

We relocated and activated our Security 

Operations Center and the adjacent 

Emergency Operations Center. Subsequently, 

we have implemented incremental 

improvements to our Integrated Electronic 

Security System, including installation of 

intrusion detection systems and infrastructure 

enhancements necessary for continued system 

upgrades.

We believe that physical security will remain 

a management challenge in fiscal year 2008. 

Some of our planned initiatives will be subject 

to collective bargaining as they may affect 

the terms and conditions of bargaining unit 

employees. Some of the most significant 

efforts planned to address this challenge in 

fiscal year 2008 include the following:

Launching a formal test training and 

exercise program for continuity of 

operations in coordination with the 

legislative and executive branches and 

local law enforcement.

Refining the emergency notification system 

and the emergency preparedness Web site 

to enhance our internal communications.

Carrying out a security assessment 

of our current security programs and 

associated risks to personnel, property, 

and information.

Installing card readers that comply 

with Homeland Security Presidential 

Directive 12, which requires issuance of 

secure and reliable forms of identification 

to employees and contractors using U.S. 

government facilities and information 

services, allowing both physical access 

to facilities as well as logical access to 

information.

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GAO-08-1SP Management’s Discussion and Analysis PART I 57

The Information Security Challenge

Information system security continues to be 

a critical activity in ensuring our information 

system and assets are effectively protected 

and free from compromise. While we are 

not required by law to comply with the 

Federal Information Security Management 

Act (FISMA),7 we have adopted FISMA 

requirements to help us meet the challenges 

posed in ensuring information system 

security.

In fiscal year 2007, we established a wide 

range of goals and embarked on numerous 

initiatives to address information system 

security. For example, we:

Worked to improve the protection of data 

on workstations by identifying a desktop 

encryption product (which converts all 

the data on the hard drive to a form that 

cannot be read by unauthorized people) 

and conducting a limited deployment of 

it on workstations containing higher risk 

data. We expect to deploy this encryption 

technology on all workstations throughout 

the agency in the coming year.

Enhanced our enterprise Internet security 

by increasing our capability to screen 

Internet traffic against potential threats.

Improved our ability to effectively monitor 

and better secure our computing assets 

with an enterprise event correlation 

application (which allows us to collect and 

analyze the results of various monitoring 

tools) to enhance our centralized auditing 

of network servers and devices

7

FISMA was signed into law as part of the E-Government 

Act of 2002 (Pub. L. No. 107-347) and its goals include the 

development of a comprehensive framework to protect the 

federal government’s information, operations, and assets. To 

ensure the adequacy and effectiveness of information security controls, FISMA requires agency program officials, Chief 

Information Officers, and Inspectors General to conduct 

annual reviews of an agency’s information security program 

and report the results to OMB.

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Refined our procedures for information 

security in our security program plan to 

maintain compliance with new federal 

guidance on information security.

Improved our ability to respond and 

recover in the event of a disruption 

by enhancing communications and 

restoration capabilities at our disaster 

recovery operations to lessen our risks. 

These and other efforts are discussed 

in detail in our report on our FISMA 

activities in appendix 3.

While new challenges to information 

systems security can often be addressed 

with technology improvements, an overall 

information security program can only 

be effective when these systems security 

efforts are fully integrated with it and with 

an agency’s physical security program. In 

recognition of this need for integration, 

several of our units—Information Systems 

and Technology Services, the Office of 

Security, the Learning Center, and Knowledge 

Services—partnered together to develop an 

integrated information security awareness 

education and training program. In 2007, we 

produced a video of the Comptroller General 

emphasizing our employee’s responsibilities 

regarding information security and data 

protection. We also produced a new 

information security computer-based training 

program and required all personnel to 

complete it. Our goal has been to ensure that 

information protection requirements extend 

across the life cycle of documentation: from 

data collection, report production, data 

transmission and storage to the eventual 

archival and destruction of data.

Given the constantly evolving nature of 

threats to information systems and assets, 

information security will continue to be 

a management challenge for us and all 

government and private sector entities in 

the foreseeable future. Some of our planned 

initiatives may be subject to collective 

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58 PART I Management’s Discussion and Analysis GAO-08-1SP

bargaining as they may affect the terms and 

conditions of employment of bargaining unit 

employees. Some of the most significant 

efforts planned to address the information 

security challenge in fiscal year 2008 include:

focusing on data protection encryption 

and identity management to better control 

access to our internal network and 

information

increasing the centralized auditing and 

monitoring of network servers and devices 

to better secure our computing assets 

within the agency

enhancing our security awareness 

training for staff that includes recurring 

presentations by senior management and 

focused role-based instructions

responding to new and updated security 

guidance from the National Institute of 

Standards and Technology and OMB

refining our security processes and 

procedures, enhancing our contingency 

operations, and improving our overall 

ability to respond to the changing 

threats by implementing appropriate 

new technologies, such as smart card 

technology to reduce or manage risks.

Human Capital Challenge

Competition for talent among knowledgebased organizations is rising as the 

demographics of the workforce shift to a 

younger and less experienced workforce and 

knowledge and skill gaps occur—particularly 

at mid and more senior levels—as a result of 

retirements. The need to sustain a knowledge 

and skills-based workforce is critical as it 

is this workforce that makes it possible for 

us to deliver the results and performance 

expected by our clients and customers.

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Our ability to have the right mix of 

experienced and knowledgeable staff to 

carry out our engagements and meet our 

client’s needs is an ongoing challenge. We 

continue to face continuity and succession 

issues from downsizing and reduced hiring 

from the mid to late 1990s and as a result, 

are facing continuity and succession issues. 

At the beginning of fiscal year 2007, over 

42 percent of our analysts and related staff 

had fewer than 5 years of agency experience, 

making learning and development—as well 

as leadership—of this staff of paramount 

importance. This demographic change has 

also created some cultural challenges as our 

workforce evolves into a multi-generational 

workforce, with many diverse interests and 

needs and with differing attitudes toward the 

workplace and a career. This is an area that 

we are currently reviewing and plan to focus 

on as we move forward, given the potential 

for changing turnover dynamics and the 

likelihood of greater mobility among this 

workforce.

Not surprisingly, recruiting, rewarding and 

retaining a highly qualified, high performing, 

and diverse workforce also remains one of 

our most important challenges. Over the 

past year, we have begun implementing 

enhancements to our recruitment and 

hiring activities which were recommended 

after an extensive review in 2006 of both 

our recruiting programs and best practice 

research. These enhancements are chiefly 

focused on recruiting and communications 

strategies/tools to ensure consistent and 

effective approaches for talent acquisition—

from the first meeting on a college campus to 

the first day of employment. While we have 

focused these efforts primarily on our entry 

level hiring and student intern programs, 

we have also extended them to upper level 

hiring, as well. All efforts also include a focus 

on diversity to ensure that our programs and 

practices support a diverse workforce and 

reinforce our commitment to diversity.
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GAO-08-1SP Management’s Discussion and Analysis PART I 59

To address learning and development, we 

continue to offer more courses electronically 

and have adopted a blended learning 

approach mixing classroom training with 

web-based training to ensure that all staff 

members have access to learning. In fiscal 

year 2007, a team comprised of staff and 

managers from various mission teams 

and units completed an evaluation of our 

leadership development programs and made 

recommendations to our Learning Board and 

Executive Committee for a comprehensive 

program to enhance the ability of staff at 

all levels to prepare for leadership roles. We 

plan to implement these recommendations 

in fiscal year 2008. In addition, in fiscal year 

2007, we inaugurated a new agencywide 

mentoring program. We currently have 

155 participants in both individual and group 

mentoring activities and expect the program 

to expand over the coming year.

We have been a leader in the federal 

government in implementing competencybased performance management, 

performance-based compensation, and 

more recently a market-based pay system 

in which (1) pay ranges are set competitive 

with the labor markets in which we compete 

for talent; (2) staff are rewarded based 

on their performance; (3) staff have the 

opportunity to advance to the top of the 

pay range; (4) pay ranges provide some 

overlap to adequately reward expertise, 

leadership and performance; and (5) pay 

policies are grounded on the principle of 

equal pay for work of equal value. From 

a change management perspective, such 

major transformational efforts affecting 

staff performance and pay, however, can be 

quite difficult and require strong leadership 

and commitment. This was true with the 

decoupling of our pay system from the 

governmentwide annual across-the-board 

adjustments, our move to market-based pay, 

and changes in the analyst Band II pay band.

Our Office of Opportunity and Inclusiveness 

performs an annual review of our employees’ 

performance appraisal data to ensure that 

the ratings are fair and unbiased. In 2006, 

the trend showed that the most significant 

differences in performance rating averages 

were between African Americans and 

Caucasians at all mission analysts’ band 

levels, and that the gap was increasing. 

To address this challenge, in fiscal year 

2007 we awarded a contract to an external 

consultant to analyze the African American 

and Caucasian performance appraisal 

data from 2002 through 2006 and to assess 

and compare the skills, assignments, 

engagement roles, training, education, and 

recruiting practices for African Americans 

and Caucasians. In addition, the consultant 

will identify best practices internally 

and externally that might enhance our 

performance management systems and assist 

in reducing the gap.

An organizing campaign by the International 

Federation of Professional and Technical 

Engineers (IFPTE) took place over the last 

year. On September 19, 2007, our Band I and 

Band II analysts elected the IFPTE as their 

exclusive representative in dealing with our 

management on the terms and conditions 

of their employment. In accordance with 

labor relations law, we postponed work on 

several initiatives regarding our current 

performance and pay programs and also 

maintained absolute neutrality during the 

election period. With the outcome of the 

union vote, our management is committed to 

working constructively with employee union 

representatives to forge a positive labor 

management relationship and to establish 

our first collective bargaining agreement.

Finally, over the past year, the expectations 

of our clients and customers have risen as 

requests for our services have increased, 

creating an ever burgeoning workload, 

and resulting in some supply and demand 

imbalances. Our ability to meet expectations 
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60 PART I Management’s Discussion and Analysis GAO-08-1SP

and balance these workload demands is 

heavily dependent on our annual funding. 

Because our workforce costs comprise about 

80 percent of our annual appropriations, only 

20 percent of the budget is available to fund 

all other agency needs. Without funding to 

adequately staff the agency, invest in our 

people, and reward our top performers, our 

ability to deliver the requested services will 

ultimately to be negatively impacted.

While we have made much progress, we 

believe human capital will still present a 

management challenge next fiscal year. Some 

of our planned initiatives may be subject 

to collective bargaining as they may affect 

the terms and conditions of bargaining unit 

employees. Some of the most significant 

efforts planned in this area for fiscal year 

2008 include the following:

Working cooperatively and productively 

with the newly elected labor union to 

establish our first collective bargaining 

agreement

Completing the implementation of the 

recruitment task team recommendations

Implementing an aggressive hiring 

strategy to rebuild our workforce and 

acquire needed talents and skills

Implementing a structured leadership 

development program to prepare 

managerial talent

Providing more transparency and 

knowledge of our of market-based 

compensation approach

Focusing on the workforce impact of 

cultural issues created by generational 

issues as well as diversity in general

Instituting better, more comprehensive 

human capital metrics

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Developing an action plan for addressing 

the findings and recommendations 

identified in the African American 

performance appraisal study

Improving the efficiency and effectiveness 

of the Human Capital Office in support of 

these human capital initiatives.

Mitigating External Factors

Several external factors could affect the 

achievement of our performance goals, 

including the amount of resources we 

receive, shifts in the content and volume of 

our work, and national and international 

developments. Limitations imposed on our 

work by other organizations or limitations 

on the ability of other federal agencies to 

make the improvements we recommend 

are additional factors that could affect the 

achievement of our goals.

As the Congress focuses on unpredictable 

events—such as terrorism, natural disasters, 

and military conflicts and threats abroad—

the mix of work we are asked to undertake 

may change, diverting our resources from 

some strategic objectives and performance 

goals. We can and do mitigate the impact of 

these events on the achievement of our goals 

in various ways. For example in fiscal year 

2007, we

stayed abreast of current events (such as 

vulnerabilities in the nation’s food supply 

system, the quality of health facilities 

and services for soldiers returning from 

military conflicts abroad, and fraud 

and abuse plaguing disaster assistance 

programs) and communicated frequently 

with our congressional clients in order to 

be alert to possibilities that could shift 

the Congress’s priorities or trigger new 

priorities;

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GAO-08-1SP Management’s Discussion and Analysis PART I 61

quickly redirected our resources when 

appropriate (i.e., to respond to a record 

number of requests for our senior 

executives to testify on our current and 

past work covering a wide range of topics 

such as the Iraq war and the global war 

on terrorism) so that we could deal with 

major changes as they occurred;

maintained broad-based staff expertise 

(i.e., in our Social Security, health care 

financing, and homeland security areas) 

so that we could readily address emerging 

needs; and

initiated evaluations under the 

Comptroller General’s authority 

on a limited number of selected 

topics, including the status of Iraq’s 

reconstruction efforts and our 21st 

century challenges and high-risk work, 

and fiscal challenges discussions.

We are experiencing heavy demand from the 

Congress for work in a number of subject 

areas, including monitoring the progress 

of the global war on terrorism and the 

continuing challenges it presents; exploring 

economic issues facing U.S. financial 

markets and American consumers, such 

as concerns facing the subprime mortgage 

market; analyzing where funds are being 

spent through off-budget vehicles such as 

tax expenditures, and continuing our work 

on disaster relief issues, such as reviews 

of the installation of new pumps in New 

Orleans and the reconstruction of areas 

ravaged by hurricanes Katrina and Rita. Yet, 

our resources have declined: adjusted for 

inflation, our budget authority has declined 

by 3 percent in constant fiscal year 2006 

dollars since fiscal year 2003. Similarly, 

our FTE usage has declined by more than 

3 percent since fiscal year 2003—from 

3,269 to an estimated 3,152 FTEs. In fiscal 

year 2007, we worked with 42 fewer FTEs 

than last fiscal year. In short, both our 

budget authority and FTE usage are at 

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their lowest level since fiscal year 2001. Our 

ability to effectively manage this demand 

could have an impact on our ability to 

meet our performance targets and satisfy 

congressional requests for our work. We will 

continue to manage the Congress’s requests 

in order to minimize any negative impact on 

our ability to meet its needs. However, if the 

Congress continues to rely on us to provide 

assistance in these and other areas, the 

growing imbalance between our workload 

and our available resources must be 

addressed. Over time, the consistently high 

performance that the Congress expects of us 

will simply be unsustainable if our workload 

continues to grow while our resources 

continue to lag.

Given large current federal budget deficits 

and the nation’s long-range fiscal imbalance, 

the Congress is likely to place increasing 

emphasis on fiscal constraint. While it is 

unclear how we will ultimately be affected, 

it is reasonable to assume that any attempt 

to exercise additional budgetary discipline 

in the legislative branch will include our 

agency. As a result, while we believe that we 

submit reasonable and responsible budget 

requests and we know that the return on 

investment that we generate is unparalleled, 

we must plan and prepare for the possibility 

of significant and recurring constraints on 

the resources made available to the agency. 

In addition, as we stated previously, almost 

80 percent of our budget is composed of 

people-related costs, and any serious budget 

situation will have an impact on our human 

capital policies and practices. This, in turn, 

will have an impact on our ability to serve 

the Congress and meet our performance 

targets. While, as noted above, the nature 

and extent of any such budget constraints 

cannot be determined at the present time, 

our executive team is engaged in a range 

of related planning activities. It is both 

appropriate and prudent for us to engage 

in such planning. At the same time, we are 

hopeful that the Congress will recognize 
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62 PART I Management’s Discussion and Analysis GAO-08-1SP

that performance-based budgeting concepts 

would support providing additional resources 

to entities with prudent budget requests and 

proven performance results. If the Congress 

employs such an approach, we should be in 

a good position to continue to provide a high 

rate of return on the resources invested in 

the agency.

A growing area for us involves our work on 

bid protests. As required by law, our General 

Counsel’s office prepares Comptroller 

General procurement law decisions that 

resolve protests filed by disappointed bidders. 

These bidders challenge the way individual 

federal procurements are being conducted or 

how the contracts were awarded. In recent 

years, we have experienced an increase in the 

number of bid protests that have been filed. 

For example, the number of protest filings 

in fiscal year 2007 was 23 percent higher 

than the number filed in fiscal year 2001 

and 6 percent higher than the number filed 

in fiscal year 2006. In fiscal year 2005 the 

Congress enacted legislation that expanded 

our authority to allow certain representatives 

of affected government employees to protest 

when the private sector wins a private-public 

competition. We will continue to monitor our 

workload in this area to ensure that we meet 

our statutory responsibilities with minimal 

negative impact on our other work.

Another external factor is the extent to 

which we can obtain access to certain 

types of information. With concerns about 

operational security being unusually 

high at home and abroad, we may have 

more difficulty obtaining information and 

reporting on sensitive issues. Historically, our 

auditing and information gathering have been 

limited whenever the intelligence community 

is involved. In addition, we have not had the 

authority to access or 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 national and homeland security 

issues may be hampered. Also, we anticipate 

that more of our reports may be subject 

to classification reviews than in the past, 

which means that the public dissemination 

of these products may be limited. We plan 

to work with the Congress to identify both 

legislative and nonlegislative opportunities 

for strengthening our access authority as 

necessary and appropriate.
Serving the Congress and the Nation

Source: See Image Sources.

Part II

Performance 

Information
GAO Performance and Accountability Report 2007

64 PART II Performance Information GAO-08-1SP

Performance Information by

Strategic Goal

In the following sections, we discuss how 

each of our four strategic goals contributed 

to our fiscal year 2007 performance results. 

Specifically, for goals 1, 2, and 3—our 

external goals—we present performance 

results for the three annual measures that we 

assess at the goal level. Most teams and units 

also contributed toward meeting the targets 

for the agencywide measures that were 

discussed in the previous part of this report. 
GAO Performance and Accountability Report 2007

GAO-08-1SP Performance Information PART II 65

Our first strategic goal upholds our mission 

to support the Congress in carrying out its 

constitutional responsibilities by focusing 

on work that helps address the current and 

emerging challenges affecting the well-being 

and financial security of the American people 

and American communities. Our multiyear 

(fiscal years 2007-2012) strategic objectives 

under this goal are to provide information 

that will help address 

the health needs of an aging and diverse 

population;

lifelong learning to enhance U.S. 

competitiveness;

benefits and protections for workers, 

families, and children;

financial security for an aging population;

a responsive, fair, and effective system of 

justice;

the promotion of viable communities;

responsible stewardship of natural 

resources and the environment; and

a safe, secure, and effective national 

physical infrastructure. 

These objectives, along with the performance 

goals and key efforts that support them, 

are discussed fully in our strategic plan, 

which is available on our Web site at 

http://www.gao.gov. The work supporting 

these objectives was performed primarily 

by headquarters and field office staff in the 

following teams: Education, Workforce, 

■

■

■

■

■

■

■

■

and Income Security; Financial Markets 

and Community Investment; Health Care; 

Homeland Security and Justice; Natural 

Resources and Environment; and Physical 

Infrastructure. In line with our performance 

goals and key efforts, goal 1 staff reviewed 

a variety of programs affecting the nation’s 

students and schools, employees and 

workplaces, health providers and patients, 

and social service providers and recipients. In 

addition, goal 1 staff performed work for our 

congressional clients related to improving the 

nation’s law enforcement systems and federal 

agencies’ ability to prevent and respond to 

terrorism and other major crimes.

Source: See Image Sources.

Provide timely, quality service to the Congress and the federal 

government to address current and emerging challenges to the 

well-being and financial security of the American people

Goal 1 Overview

Selected Work under Goal 1

Improving care for veterans transitioning from military 

service: We identified the Departments of Defense’s 

(DOD) and Veteran Affairs’ (VA) inability to electronically 

share medical records for severely injured servicemembers 

transferred from DOD to VA polytrauma facilities. Real-time 

access to DOD’s medical records is needed to determine 

whether servicemembers are medically stable enough to 

participate in vigorous rehabilitation activities. In May 2007, 

VA reported that three of the four polytrauma facilities 

now have access to DOD’s electronic medical records. 

(See app. 1, item 1.06.C.)

Identifying financial risks to the federal government 

caused by a changing climate: Our work raised 

awareness that climate change poses extraordinary 

fiscal challenges to federal insurance programs. The 

Federal Emergency Management Agency (FEMA) and the 

Department of Agriculture (USDA), the key federal agencies 

with potentially multibillion-dollar insurance liabilities 

associated with future climate change impacts, stated 

that they will report to the Congress on potential climate 

change-related losses for FEMA’s National Flood Insurance 

Program and USDA’s Federal Crop Insurance Corporation 

and the mitigation options they may use to reduce their 

exposure to loss. (See app. 1, item 1.31.C.)
GAO Performance and Accountability Report 2007

66 PART II Performance Information GAO-08-1SP

To accomplish our work under these 

strategic objectives in fiscal year 2007, we 

conducted engagements, audits, analyses, 

and evaluations of programs at major 

federal agencies, such as the Departments 

of Education, Health and Human Services, 

Homeland Security, Transportation, Housing 

and Urban Development, and the Interior 

and developed reports and testimonies on 

the efficacy and soundness of programs they 

administer.

As shown in table 10, we did not meet our 

fiscal year 2007 performance targets for 

financial benefits and nonfinancial benefits 

but exceeded our testimonies target for 

goal 1.

Table 10: Strategic Goal 1’s Annual Performance Results and Targets

Performance 

measure

2003 

actual

2004 

actual

2005 

actual

2006 

actual

2007 

target

2007 

actual

Met/ 

not met

2008 

targeta

Financial benefits 

(dollars in billions) $23.7 $26.6 $15.6 $22.0 $20.2 $12.9 Not met $13.8

Nonfinancial benefits 217 252 277 268 256 238 Not met 238

Testimonies 80 85 88 97 78 125 Met 84

Source: GAO.

a

Our fiscal year 2008 targets for these three measures differ from the targets we reported in our fiscal year 2008 performance budget 

in January 2007. Specifically, we decreased our target for financial benefits from $21.2 billion and lowered the number of nonfinancial 

benefits and hearings at which we testify from 257 and 90, respectively, because we shifted some work previously performed under 

goal 1 to goal 2 in our new strategic plan for 2007-2012.

To help us examine trends for these 

measures over time, we look at their 4-year 

averages, which minimize the effect of an 

unusual level of performance in any single 

year. These averages are shown in table 11. 

This table indicates that goal 1 nonfinancial 

benefits have generally risen over time, while 

the number of hearings at which we testify 

has exhibited a more wave-like trend during 

the 5-year period since fiscal year 2003. 

Table 11: Four-Year Rolling Averages for Strategic Goal 1

Performance measure 2003 2004 2005 2006 2007

Financial benefits (dollars in billions) $17.7 $20.8 $22.5 $22.0 $19.3

Nonfinancial benefits 209 226 243 254 259

Testimonies 99 87 91 88 99

Source: GAO.
GAO Performance and Accountability Report 2007

GAO-08-1SP Performance Information PART II 67

The following sections describe our 

performance under goal 1 for each of these 

three quantitative performance measures and 

describe the targets for fiscal year 2008. 

Financial Benefits

Example of Goal 1’s

Financial Benefits

Our work influenced legislation requiring states to implement electronic benefit transfer in place of paper coupons 

to reduce fraud and abuse in the Food Stamp Program. 

This action resulted in an estimated $3.4 billion in cumulative financial benefits from fiscal years 2005 through 2009. 

(See app. 1, item 1.25.F.)

The financial benefits reported for this goal 

in fiscal year 2007 totaled $12.9 billion, which 

missed the target of $20.2 billion by about 

$7.3 billion. This was due in large part to the 

work in goal 1 supporting goals 2 and 3 and 

the evermore highlymatrixed nature of our 

work. For example, a financial benefit for 

$5.4 billion related to the United States Postal 

Service (USPS) payment of post-retirement 

health care costs, which is reported in goal 3 

(see p. 168), is the result of a joint effort by our 

Financial Management and Assurance team in 

goal 3 and the Physical Infrastructure team in 

goal 1. While reported in goal 3, this financial 

benefit could have just as well been reported 

in goal 1 given the joint nature of the teams’ 

work. We describe goal 1 accomplishments in 

the goal 1 section of appendix 1.

Because financial benefits often result from 

work completed in prior years, we set our 

fiscal year 2008 target on the basis of our 

assessment of the progress agencies are 

making in implementing our past recommendations. Our analysis indicates that financial 

benefits in the future for goal 1 are likely to 

increase only slightly. We, therefore, have set 

the target for fiscal year 2008 at $13.8 billion, 

rather than $21.2 billion as reported in our 

fiscal year 2008 performance plan.

Nonfinancial Benefits

Nonfinancial benefits reported for goal 

1 in fiscal year 2007 included 214 actions 

taken by federal agencies to improve their 

services and operations in response to our 

work and another 24 in which information 

we provided to the Congress resulted in 

statutory or regulatory changes. This total 

of 238 nonfinancial benefits did not meet our 

target of 256. We report some of our major 

nonfinancial accomplishments in detail in 

the goal 1 section of appendix 1. For fiscal 

year 2008, we have set a target of 238 for 

nonfinancial benefits. This target is the 

same as what we achieved this fiscal year 

and is consistent with our recognition that 

we are more likely to achieve these benefits 

under goals 2 and 3 in the next few years. We 

decreased this target by 19 compared with 

the nonfinancial benefits target we reported 

in our fiscal year 2008 performance plan.

Examples of Goal 1’s

Nonfinancial Benefits

Improving disclosure of pension plan information to 

plan participants: Our work identified ways to improve the 

transparency of pension plan information. For example, we 

recommended requiring that all plan participants receive 

information about plan investments and the minimum benefit amount that the Pension Benefit Guaranty Corporation 

guarantees if a plan is terminated. The Pension Protection 

Act of 2006 addressed these concerns by, among other 

things, allowing qualified advisers to offer investment advice 

to participants in defined contribution plans and adding new 

disclosure requirements. (See app. 1, item 1.18.N.)

Enacting comprehensive postal reform legislation: In 

2001, we designated the USPS transformation as a highrisk area because its financial outlook had significantly 

deteriorated and it lacked a comprehensive plan to address 

financial, operational, and human capital challenges. Since 

then, USPS developed a transformation plan, and the Congress enacted comprehensive postal reform legislation in 

the areas of rate setting, regulatory oversight, and financial 

transparency. In 2007, we removed the USPS’s transformation from our high-risk list. (See app.1, item 1.36.N.)
GAO Performance and Accountability Report 2007

68 PART II Performance Information GAO-08-1SP

Testimonies

Our witnesses testified at 125 congressional 

hearings related to this strategic goal, which 

exceeded the fiscal year 2007 target by 47 

testimonies, about 60 percent. Among the 

testimonies given were those related to FEMA 

payments on hurricane-damaged properties, 

safety enhancements for coal miners, federal 

actions to improve child welfare services, and 

USPS reform efforts. (See p. 35 for a list of 

testimony topics by goal.) On the basis of our 

assessment of the potential need to testify on 

issues under this goal, we have set a target of 

presenting testimony at 84 hearings during 

fiscal year 2008, which represents 6 fewer 

hearings than we reported as our target in 

our fiscal year 2008 performance plan.

Example of Goal 1’s

Testimonies

Evaluating the role and modernization of the Federal 

Housing Administration (FHA): In a series of testimonies, 

we examined trends in the use of FHA-insured mortgages, 

FHA’s risk management, and the implications of a legislative 

proposal to overhaul the agency’s products and processes. 

For example, while noting that FHA could be a vehicle to 

provide lower-cost and more sustainable mortgage options 

to some subprime borrowers, we also emphasized the need 

for improvements in risk management to ensure that FHA 

operates in a financially sound manner. Our work informed 

congressional debate on the benefits and risks of FHA modernization legislation under consideration. (GAO-07-615T)
GAO Performance and Accountability Report 2007

GAO-08-1SP Performance Information PART II 69

The federal government is working to 

promote foreign policy goals, sound trade 

policies, and other strategies to advance the 

interests of the United States and its allies 

while also seeking to anticipate and address 

changing threats to the nation’s security 

and economy. Given the importance of these 

efforts, our second strategic goal focuses 

on helping the Congress and the federal 

government respond to various types of 

threats to our nation and the challenges of 

global interdependency. Our multiyear (fiscal 

years 2007-2012) strategic objectives under 

this goal are to support the congressional 

and federal efforts to

protect and secure the homeland from 

threats and disasters,

ensure military capabilities and readiness,

advance and protect U.S. international 

interests, and

respond to the impact of global market 

forces on U.S. economic and security 

interests. 

These objectives, along with the performance 

goals and key efforts that support them, 

are discussed fully in our strategic plan, 

which is available on our Web site at 

http://www.gao.gov. The work supporting 

these objectives is performed primarily 

by headquarters and field staff in the 

following teams: Acquisition and Sourcing 

Management, Defense Capabilities and 

Management, and International Affairs and 

Trade. In addition, the work supporting 

some performance goals and key efforts is 

■

■

■

■ performed by headquarters and field staff 

from the Information Technology, Homeland 

Security and Justice, Financial Markets 

and Community Investment, and Natural 

Resources and Environment teams.

To accomplish our work in fiscal 

year 2007 under these strategic objectives, 

we conducted engagements and audits that 

involved fieldwork related to programs that 

took us across multiple continents, including 

Europe, Africa, Asia, South America, and 

North America. As in the past, we developed 

reports, testimonies, and briefings on our 

work.

Provide timely, quality service to the Congress and the federal 

government to respond to changing security threats and the 

challenges of global interdependence

Source: See Image Sources.

Goal 2 Overview

Selected Work under Goal 2

Improving tanker security: We identified the challenges 

facing the federal government in securing the transportation 

of energy commodities by tankers from terrorist attacks, 

including the challenges resulting from an increase in 

liquefied natural gas shipments to the United States. We 

recommended that the Secretary of Homeland Security 

direct the Coast Guard to develop a resource allocation 

plan to meet these new liquefied natural gas security 

requirements with other existing security responsibilities. 

The Department of Homeland Security (DHS) agreed with 

our recommendation. (See app. 1, item 2.06.C.)

Improving DOD’s management approach to major 

weapon systems acquisition: We reported that leading 

commercial companies achieve success in product 

development by using portfolio management, which 

addresses product investment collectively from an 

enterprise level. In contrast, DOD approves proposed 

programs with much less consideration of its overall 

portfolio. We recommended that DOD establish a portfolio 

management approach to ensure delivery of a balanced mix 

of weapon systems programs at the right time and cost and 

establish a single point for determining which programs are 

allowed in the portfolio. The Congress has required DOD to 

address our recommendations. (See app. 1, item 2.23.C.) 
GAO Performance and Accountability Report 2007

70 PART II Performance Information GAO-08-1SP

As shown in table 12, we exceeded our 

fiscal year 2007 performance targets for 

financial benefits, nonfinancial benefits, and 

testimonies for this goal. 

Table 12: Strategic Goal 2’s Annual Performance Results and Targets

Performance 

measure

2003 

actual

2004 

actual

2005 

actual

2006 

actual

2007 

target

2007 

actual

Met/ 

not met

2008 

targeta

Financial benefits 

(dollars in billions)

$7.1 $9.7 $12.9 $12.0 $9.8 $10.3 Met $11.3

Nonfinancial benefits 273 369 365 449 290 468 Met 322

Testimonies 48 70 42 68 52 73 Met 69

Source: GAO.

a

Our fiscal year 2008 targets for these three measures differ from the targets we reported in our fiscal year 2008 performance budget 

in January 2007. Specifically, we increased our target for financial benefits from $9.8 billion, nonfinancial benefits from 309, and the 

number of hearings at which we testify from 59 because we shifted some work previously performed under goal 1 to goal 2 in our new 

strategic plan for 2007-2012 and anticipate continued congressional interest in our work on homeland security issues and the Iraq war.

To help us examine trends for these 

measures over time, we look at their 4-year 

averages, which minimize the effect of an 

unusual level of performance in any single 

year and are shown in table 13. This table 

indicates that goal 2 financial benefits, 

nonfinancial benefits, and testimonies have 

steadily increased over the last 5 years. 

Table 13: Four-Year Rolling Averages for Strategic Goal 2

Performance measure 2003 2004 2005 2006 2007

Financial benefits (dollars in billions) $7.9 $8.9 $9.5 $10.4 $11.2

Nonfinancial benefits 202 262 306 364 413

Testimonies 44 48 50 57 63

Source: GAO.
GAO Performance and Accountability Report 2007

GAO-08-1SP Performance Information PART II 71

The following sections describe our 

performance under goal 2 for each of our 

quantitative performance measures and 

describe the targets for fiscal year 2008. 

Financial Benefits

Example of Goal 2’s

Financial Benefits

Our work highlighted the risks associated with developing 

and implementing the Army’s Future Combat System. Citing 

the risks we reported and preserving the ability for DOD 

to change course, the Congress cut the system’s budget 

request by $254 million. (See app. 1, item 2.17.F.)

The financial benefits reported for this goal 

in fiscal year 2007 totaled $10.3 billion, 

exceeding the target of $9.8 billion. Among 

other things, these accomplishments 

stemmed from engagements related to better 

allocating resources to fund new military 

capabilities, streamlining our embassy 

presence overseas, and reducing funding for 

the Millennium Challenge Corporation, which 

oversees a foreign assistance program. We 

describe these and other accomplishments in 

the goal 2 section of appendix 1.

Given the large portion of the U.S. budget 

that defense spending consumes, we expect 

our work under this goal to continue to 

produce economies and efficiencies that yield 

billions of dollars in financial benefits for 

the American people each year. We set our 

fiscal year 2008 target at $11.3 billion based 

on our assessment of the progress agencies 

are making in implementing our past 

recommendations that might yield financial 

benefits.

Nonfinancial Benefits

The nonfinancial benefits reported for goal 

2 in fiscal year 2007 included 432 actions 

taken by federal agencies to improve their 

services and operations in response to our 

work and another 36 in which information 

we provided to the Congress resulted in 

statutory or regulatory changes. This total 

of 468 nonfinancial benefits greatly exceeded 

our target of 290. Our success in this area 

arose from our increased emphasis on followup efforts and increased monitoring of our 

progress toward the targets throughout the 

year. Some of our major accomplishments 

are reported in detail in the goal 2 section of 

appendix 1.

Looking ahead, our assessments of the 

executive branch’s current efforts to 

implement our recommendations made 

under this goal led us to set our fiscal year 

2008 target at 322. This target is lower than 

our fiscal year 2007 actual performance and 

4-year average for this measure because we 

want to encourage staff to identify significant 

and meaningful nonfinancial benefits rather 

than numerous, narrowly focused ones that 

would easily ensure that we meet a higher 

target. However, we set this target higher 

than the one we reported in our fiscal year 

2008 performance plan of 309.

Example of Goal 2’s

Nonfinancial Benefits

Improving oversight of contractors on the battlefield:

Among the challenges DOD faced in overseeing contractors 

on the battlefield was the lack of visibility over the number 

of contractors supporting deployed forces and the services 

that the contractors provide. In response to our work, DOD 

implemented a system designed to provide commanders 

with this information and appointed a DOD focal point to improve the agency’s management and oversight of contractors assisting the troops. (See app. 1, item 2.21.N.)

Testimonies

Our witnesses testified at 73 congressional 

hearings related to this strategic goal in fiscal 

year 2007, exceeding our target of presenting 

testimony at 52 hearings. Among other things, 
GAO Performance and Accountability Report 2007

72 PART II Performance Information GAO-08-1SP

we testified on transforming DOD’s business 

practices, combating nuclear smuggling, 

and DHS’s Secure Border Initiative as well 

as credit counseling and financial literacy. 

(See p. 35 for a list of testimony topics by 

goal.) We have set our target for presenting 

testimony at hearings to 69 for fiscal year 

2008, 10 hearings higher than the target we 

reported in our fiscal year 2008 performance 

plan.

Examples of Goal 2’s

Testimonies

Creating a chief management officer at DOD to guide 

business transformation efforts: We supported establishing a senior-level position at DOD with significant 

authority and a sufficient term to provide focused and 

sustained leadership over the department’s business transformation efforts. At a time of increasing military operations 

and growing fiscal constraints, billions of dollars have been 

wasted annually because of the lack of adequate transparency and appropriate accountability across DOD’s business 

areas. (GAO-07-229T).

Identifying key issues for oversight of U.S. efforts to 

stabilize and rebuild Iraq: Our September 2007 benchmark report and related testimonies found that the Iraqi 

government had not met most of its 18 key legislative, 

security, and economic benchmarks. The Departments of 

State and Defense agreed with our recommendations to 

improve the quality of information provided to the Congress 

on the progress being made in meeting these benchmarks. 

(GAO-07-1230T)
GAO Performance and Accountability Report 2007

GAO-08-1SP Performance Information PART II 73

Our third strategic goal focuses on the 

collaborative and integrated elements needed 

for the federal government to achieve results. 

The work under this goal highlights the 

intergovernmental relationships that are 

necessary to achieve national goals. Our 

multiyear (fiscal years 2007-2012) strategic 

objectives under this goal are to

reexamine the federal government’s role 

in achieving evolving national objectives;

support the transformation to resultsoriented, high-performing government;

support congressional oversight of key 

management challenges and program 

risks to improve federal operations and 

ensure accountability; and

analyze the government’s fiscal position 

and strengthen approaches for addressing 

the current and projected fiscal gap. 

These objectives, along with the performance 

goals and key efforts that support them, 

are discussed fully in our strategic plan, 

which is available on our Web site at 

http://www.gao.gov. The work supporting 

these objectives is performed primarily 

by headquarters and field staff from the 

Applied Research and Methods, Financial 

Management and Assurance, Information 

Technology, and Strategic Issues teams. 

In addition, the work supporting some 

performance goals and key efforts is 

■

■

■

■

performed by headquarters and field 

staff from the Acquisition and Sourcing 

Management and Natural Resources and 

Environment teams. This goal also includes 

our bid protest and appropriations law work, 

which is performed by staff in General 

Counsel, and our vulnerability assessments 

and fraud investigations, which are 

conducted by staff from our Forensic Audits 

and Special Investigations unit within the 

Financial Management and Assurance team.

Selected Work under Goal 3

Ensuring personal privacy in the face of increasing 

threat: Our work found that individuals’ personal 

information could be inadequately protected by DHS 

and other federal agencies, which may compromise 

individuals’ privacy rights or expose their information 

to misuse. For example, we reported that DHS had not 

taken sufficient action to assess privacy risks before 

developing a sophisticated data mining tool. Further, we 

analyzed the lessons learned from a data breach at VA 

in making a recommendation regarding assistance to 

individuals affected by data breaches at federal agencies. 

(See app. 1, item 3.12.C.)

Revising Government Auditing Standards: We issued 

a major revision to the Government Auditing Standards 

that organizes, clarifies, and strengthens the principles 

for audits of government programs and entities. The 

2007 revision updates and clarifies chapters on financial 

audits, performance audits, and attestation engagements. 

Auditors at every level of government as well as certified 

public accountant firms conducting audits of government 

programs are currently implementing the revised standards. 

(See app. 1, item 3.19.C.)

Help transform the federal government’s role and how it does 

business to meet 21st century challenges

Source: See Image Sources.

Goal 3 Overview
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74 PART II Performance Information GAO-08-1SP

To accomplish our work under these four 

objectives, we plan to conduct audits, 

evaluations, and analyses in response to 

congressional requests and to carry out work 

initiatives under the Comptroller General’s 

authority. As in the past, we will develop 

reports, testimonies, and briefings on our 

work. 

As shown in table 14, we significantly 

exceeded our fiscal year 2007 performance 

targets for financial benefits, nonfinancial 

benefits, and testimonies for this goal.

Table 14: Strategic Goal 3’s Annual Performance Results and Targets

Performance 

measure

2003 

actual

2004 

actual

2005 

actual

2006 

actual

2007 

target

2007 

actual

Met/ 

not met

2008 

targeta

Financial benefits 

(dollars in billions)

$4.7 $7.6 $11.0 $17.0 $10.0 $22.8 Met $14.9

Nonfinancial benefits 553 576 767 625 554 648 Met 590

Testimonies 56 60 47 73 55 74 Met 67

Source: GAO.

a

Our fiscal year 2008 targets for these three measures differ from the targets we reported in our fiscal year 2008 performance budget 

in January 2007. Specifically, we increased our targets for financial and nonfinancial benefits from $10.5 billion and 584, respectively, 

because we believe our past work on issues such as improper payments and IT will allow us to achieve these more challenging targets. 

However, we anticipate that though the Congress will continue its interest in our work on issues such as military contractors and 

acquisitions, the number of hearings at which we will be asked to testify will likely decline slightly.

To help us examine trends for these 

measures over time, we look at their 4-year 

averages—shown in table 15—which 

minimize the effect of an unusual level of 

performance in any single year. This table 

indicates that documentation of financial 

and nonfinancial benefits derived from our 

work under this goal has generally risen 

during the 5-year period shown, with a large 

increase in nonfinancial benefits recorded in 

2006 compared with the previous year. The 

number of hearings during which our senior 

executives testified on goal 3 issues was 

relatively flat from fiscal years 2004 to 2006, 

but increased in fiscal year 2007. 

Table 15: Four-Year Rolling Averages for Strategic Goal 3 

Performance measure 2003 2004 2005 2006 2007

Financial benefits (dollars in billions) $5.5 $6.1 $7.1 $10.1 $14.6

Nonfinancial benefits 480 498 590 630 654

Testimonies 67 56 57 59 64

Source: GAO.
GAO Performance and Accountability Report 2007

GAO-08-1SP Performance Information PART II 75

The following sections describe our 

performance under goal 3 for each of our 

quantitative performance measures and 

describe the targets for fiscal year 2008.

Financial Benefits

Example of Goal 3’s

Financial Benefits

In response to our work, agencies such as DOD, the 

Department of Transportation (DOT), and USDA have 

improved their oversight of information technology (IT) 

investments resulting in a reduction in their planned IT 

expenditures of more than $1.3 billion. For example, USDA 

coordinated its various IT investment boards and narrowed 

the scope of information system projects to reduce risk and 

increase efficiency. (See app.1, item 3.05.F.) 

The financial benefits reported for this goal 

in fiscal 2007 totaled $22.8 billion, more 

than double our target of $10.0 billion. These 

efforts included work that led to reductions 

in planned IT expenditures at several federal 

agencies, the termination of the National 

Aeronautic and Space Administration (NASA) 

space launch initiative (SLI), FEMA taking 

action to recoup and collect millions of 

dollars in improper or fraudulent assistance 

payments it made following hurricanes 

Katrina and Rita, and improved collections 

of federal nontax and criminal debts. We 

describe these and other accomplishments in 

the goal 3 section of appendix 1.

Under goal 3, we typically work on core 

government business processes and 

governmentwide management reforms. Our 

assessments of the executive branch’s current 

efforts to implement the recommendations 

we made in our work under this goal indicate 

that financial benefits related to this goal are 

likely to be in line with our 4-year average. 

Consequently, we set the target for financial 

benefits at $14.9 billion for fiscal 2008, which is 

$4.4 billion higher than the target we reported 

in our fiscal year 2008 performance plan.

Nonfinancial Benefits

Examples of Goal 3’s

Nonfinancial Benefits

Strengthening the link between contract incentives and 

outcomes across government: We reported that DOD 

and NASA structured monetary incentives in ways that led 

to significant disconnects between the award fees paid to 

contractors and program outcomes. For example, DOD paid 

an estimated $8 billion in award fees on contracts regardless of program outcomes. The Congress enacted legislation incorporating most of our recommendations directed 

at DOD, which strengthened the link between award fee 

criteria and acquisition outcomes. Moving toward more 

outcome-based award-fee criteria will give contractors an 

increased stake in helping agencies develop more realistic 

targets up front or risk receiving fewer award fees when 

cost, schedule, and performance targets are not met. (See 

app. 1, item 3.07.N.)

Improving research and setting goals to reduce the tax 

gap: We made several recommendations to the Internal 

Revenue Service (IRS) to improve its efforts to reduce 

the tax gap. For example, we recommended that IRS set 

a long-term voluntary compliance goal to help measure 

the success of its compliance efforts. In its 2007 budget 

justification, IRS established a goal of 85 percent voluntary 

compliance by 2009. (See app. 1, item 3.28.N.)

Nonfinancial benefits reported for goal 3 in 

fiscal year 2007 included 634 instances in 

which agencies’ core business processes were 

improved or governmentwide management 

reforms were advanced because of our work. 

In addition, there were 14 instances in which 

information we provided to the Congress 

resulted in statutory or regulatory changes. 

This total of 648 nonfinancial benefits 

exceeded our target of 554. The larger 

number of nonfinancial benefits occurred 

mainly in our financial management and 

information technology areas where we tend 

to make multiple, specific recommendations 

for change to more than one entity. We 

describe some of our major accomplishments 

in the goal 3 section of appendix 1.

Looking ahead, our assessments of the 

executive branch’s current efforts to 

implement our recommendations made under 
GAO Performance and Accountability Report 2007

76 PART II Performance Information GAO-08-1SP

this goal led us to set a fiscal year 2008 target 

of 590 nonfinancial benefits for goal 3. We 

recognize that this target is lower than our 

fiscal year 2007 actual performance, but 

we set it at this level because we want to 

encourage staff to identify significant and 

meaningful nonfinancial benefits and limit 

the number of narrowly focused ones that 

would easily ensure that we meet a higher 

target.

Testimonies

Our witnesses testified at 74 congressional 

hearings related to this strategic goal in 

fiscal year 2007, exceeding the target of 55 

by about 35 percent. Among the testimonies 

presented were those related to contracting 

and security challenges in Iraq, security 

vulnerabilities at unmonitored borders, 

electronic voting, tax abuses by Medicare 

providers, and challenges facing the polar 

satellite program. (See p. 35 for a list of 

testimony topics by goal.) For fiscal year 

2008, we have set a target of presenting 

testimony at 67 hearings because we expect 

the level of hearings to be lower than it was 

in fiscal year 2007.

Example of Goal 3’s

Testimonies

Identifying fraud, waste, and abuse in Katrina and 

Rita financial assistance payments: Our work related to 

FEMA’s Individual and Households Program identified from 

$600 million to $1.4 billion in improper or potentially fraudulent financial assistance payments made by FEMA following hurricanes Katrina and Rita. We referred thousands of 

cases we considered potentially improper and fraudulent 

to the Katrina Fraud Task Force for appropriate criminal 

investigation. (See GAO-07-418T) 
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GAO-08-1SP Performance Information PART II 77

The focus of our fourth strategic goal is to 

make us a model organization. This means 

that our work is driven by our external 

clients and internal customers, our managers 

exhibit the characteristics of leadership 

and management excellence, our employees 

are devoted to ensuring quality in our work 

process and products through continuous 

improvement, and our agency is regarded 

by current and potential employees as an 

excellent place to work. Our multiyear (fiscal 

years 2007-2012) strategic objectives under 

this goal are to

improve client and customer satisfaction 

and stakeholder relationships,

lead strategically to achieve enhanced 

results,

leverage our institutional knowledge and 

experience,

enhance our business and management 

processes, and

become a professional services employer 

of choice.

These objectives, along with the performance 

goals and key efforts that support them, 

are discussed fully in our strategic plan, 

which is available on our Web site at 

http://www.gao.gov. The work supporting 

these objectives is performed under the 

direction of the Chief Administrative Officer 

with assistance on specific key efforts being 

provided by staff from the Applied Research 

and Methods team and from offices such as 

Strategic Planning and External Liaison, 

■

■

■

■

■

Congressional Relations, Opportunity and 

Inclusiveness, Quality and Continuous 

Improvement, and Public Affairs.

To accomplish our work under these five 

objectives, we performed internal studies and 

completed projects that further the strategic 

goal.

Selected Work under Goal 4

Enhancing client service: We completed a pilot of 

e-dissemination of products to our congressional clients to 

enhance the quality and timeliness of service. During fiscal 

year 2007, we avoided approximately $48,800 in costs for 

the 51 reports issued. Based on the cost-effectiveness 

of e-dissemination and the positive client feedback we 

recently fully implemented e-dissemination for the majority 

of our products. (See app. 1, item 4.01.C.)

Converting to a new financial management system:

We completed preparations and testing for conversion as 

of the new fiscal year to our new financial management 

system, GAO Delphi. We are able to take advantage of 

DOT’s Enterprise Service Center expertise and economies 

of scale for select accounting functions, allowing our staff 

to transition to a greater focus on analysis and customer 

service. (See app. 1, item 4.07.C.)

Improving work life programs: We increased our support 

for several of our work life programs and services that 

help our employees to balance work and personal life. 

These initiatives included increasing the capacity of the 

headquarters day care center through expansion of the 

physical facility, enhancing the Student Loan Repayment 

Program to support more applicants, and increasing 

our approval of telework applications by 200 percent. 

(See app. 1, item 4.16.C.)

Updating our external Web site: We launched a new and 

improved version of www.gao.gov, implementing numerous 

recommendations resulting from an independent review. 

We improved our navigation and searching capabilities, and 

incorporated the reviewer’s principles and methodology into 

our standards and processes. (See app. 1, item 4.09.C.)

Goal 4 Overview

Maximize the value of GAO by being a model federal agency and 

a world-class professional services organization

Source: See Image Sources.
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78 PART II Performance Information GAO-08-1SP

Data Quality and Program

Evaluation

Verifying and Validating 

Performance Data

Each year, we measure our performance 

by evaluating our annual performance on 

measures that cover the outcomes and 

outputs related to our work results, client 

service, and management of our people. 

To assess our performance, we used 

performance data that were complete and 

actual (rather than projected) for almost all 

of our performance measures. We believe 

the data to be reliable because we followed 

the verification and validation procedures 

described here to ensure the data’s quality.

The specific sources of the data for our 

annual performance measures and multiyear 

qualitative performance goals, procedures for 

independently verifying and validating these 

data, and the limitations of these data are 

described in table 16.
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GAO-08-1SP Performance Information PART II 79

Table 16: How We Ensure Data Quality for Our Annual Performance Measures and Multiyear 

Performance Goals

Results measures

Financial benefits

Definition and 

background

Our work—including our findings and recommendations—may produce benefits to 

the federal government that can be estimated in dollar terms. These benefits can result 

in better services to the public, changes to statutes or regulations, or improved government business operations. A financial benefit is an estimate of the federal monetary effect of agency or congressional actions. These financial benefits generally result 

from work that we completed over the past several years. The funds made available 

as a result of the actions taken in response to our work may be used to reduce government expenditures, increase revenues, or reallocate funds to other areas. Financial 

benefits included in our performance measures are net benefits—that is, estimates of 

financial benefits that have been reduced by the costs associated with taking the action that we recommended. We convert all estimates involving past and future years 

to their net present value and use actual dollars to represent estimates involving only 

the current year. Financial benefit amounts vary depending on the nature of the benefit, and we can claim financial benefits over multiple years based on a single agency 

or congressional action.

Financial benefits are linked to specific recommendations or other work. To claim that 

financial benefits have been achieved, our staff must file an accomplishment report 

documenting that (1) the actions taken as a result of our work have been completed 

or substantially completed, (2) the actions generally were taken within 2 fiscal years 

prior to the filing of the accomplishment report, (3) a cause-and-effect relationship 

exists between the benefits reported and our recommendation or work performed, and 

(4) estimates of financial benefits were based on information obtained from non-GAO 

sources. Prior to fiscal year 2002, we limited the period over which the benefits from 

an accomplishment could be accrued to no more than 2 years. Beginning in fiscal 

year 2002, we extended the period to 5 years for certain types of accomplishments 

known to have multiyear effects, such as those associated with multiyear reductions 

in longer-term projects, changes embodied in law, program terminations, or sales 

of government assets yielding multiyear financial benefits. Financial benefits can be 

claimed for past or future years. For financial benefits involving events that occur on 

a regular but infrequent basis—such as the decennial census—we may extend the 

measurement period until the event occurs in order to compute the associated financial benefits using our present value calculator.

Managing directors decide when their staff can claim financial benefits. A managing 

director may choose to claim a financial benefit all in 1 year or decide to claim it over 

several years, especially if the benefit spans future years and the managing director 

wants greater precision as to the amount of the benefit.
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Data sources Our Accomplishment Reporting System provides the data for this measure. Teams 

use this Web-based data system to prepare, review, and approve accomplishments and 

forward them to our Quality and Continuous Improvement office (QCI) for its review. 

Once accomplishment reports are approved, they are compiled by QCI, which annually tabulates total financial benefits agencywide and by goal. 

Verification and 

validation

Our policies and procedures require us to use the Accomplishment Reporting System 

to record the financial benefits that result from our work. They also provide guidance 

on estimating those financial benefits. The team identifies when a financial benefit 

has occurred as a result of our work. The team develops estimates based on non-GAO 

sources, such as the agency that acted on our work, a congressional committee, or 

the Congressional Budget Office, and files accomplishment reports based on those 

estimates. When non-GAO estimates are not readily available, teams may use GAO 

estimates—developed in consultation with our experts, such as the Chief Economist, 

Chief Actuary, or Chief Statistician, and corroborated with a knowledgeable program 

official from the executive agency involved. The estimates are reduced by significant 

identifiable offsetting costs. The team develops workpapers to support accomplishments with evidence that meets our evidence standard, supervisors review the workpapers, and an independent person within GAO reviews the accomplishment report. 

The team’s managing director or director is authorized to approve financial accomplishment reports with benefits of less than $100 million.

The team forwards the report to QCI, which reviews all accomplishment reports and 

approves accomplishment reports claiming benefits of $100 million or more. QCI 

provides summary data on approved financial benefits to team managers, who check 

the data on a regular basis to make sure that approved accomplishments submitted 

by their staff have been accurately recorded. Our Engagement Reporting System also 

contains accomplishment data for the fiscal year. In fiscal year 2007, QCI approved 

accomplishment reports covering 94 percent of the dollar value of financial benefits 

we reported.

Every year, our Office of Inspector General (IG) reviews accomplishment reports 

that claim benefits of $500 million or more. For fiscal year 2007, the IG reviewed accomplishment reports covering 74 percent of the dollar value of financial benefits we 

reported. In addition, on a periodic basis, the IG independently tests compliance with 

our process for claiming financial benefits of less than $500 million. For example, 

the IG reviewed fiscal year 2006 financial benefits of $100 million or more and found 

our reporting process to be sound overall. However, the IG recommended improvements to the clarity of certain policies related to reporting financial accomplishments 

and the documentation supporting selected accomplishment reports. We clarified our 

guidance and updated our policy manual in fiscal year 2007.

Data limitations Not every financial benefit from our work can be readily estimated or documented as 

attributable to our work. As a result, the amount of financial benefits is a conservative 

estimate. Estimates are based on information from non-GAO sources and are based 

on both objective and subjective data, and as a result, professional judgment is required in reviewing accomplishment reports. We feel that the verification and validation steps that we take minimize any adverse impact from this limitation.
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Nonfinancial benefits

Definition and 

background

Our work—including our findings and recommendations—may produce benefits to 

the federal government that cannot be estimated in dollar terms. These nonfinancial 

benefits can result in better services to the public, changes to statutes or regulations, 

or improved government business operations. Nonfinancial benefits generally result 

from work that we completed over the past several years.

Nonfinancial benefits are linked to specific recommendations or other work that we 

completed over several years. To claim that nonfinancial benefits have been achieved, 

staff must file an accomplishment report that documents that (1) the actions taken 

as a result of our work have been completed or substantially completed, (2) the actions generally were taken within the past 2 fiscal years of filing the accomplishment 

report, and (3) a cause-and-effect relationship exists between the benefits reported and 

our recommendation or work performed.

Data sources Our Accomplishment Reporting System provides the data for this measure. Teams 

use this automated system to prepare, review, and approve accomplishments and forward them to QCI for its review. Once accomplishment reports are approved, they are 

compiled by QCI, which annually tabulates total other (nonfinancial) benefits agencywide and by goal.

Verification and 

validation

Our policies and procedures require us to use the Accomplishment Reporting System to record the nonfinancial benefits that result from our findings and recommendations. Staff in the teams file accomplishment reports to claim that benefits have 

resulted from their work. The team develops workpapers to support accomplishments 

with evidence that meets our evidence standard. Supervisors review the workpapers; 

an independent person within GAO reviews the accomplishment report; and the 

team’s managing director or director approves the accomplishment report to ensure 

the appropriateness of the claimed accomplishment, including attribution to our work.

The team forwards the report to QCI, where it is reviewed for appropriateness. QCI 

provides summary data on nonfinancial benefits to team managers, who check the 

data on a regular basis to make sure that approved accomplishments from their staff 

have been accurately recorded. Additionally, on a periodic basis, the IG independently 

tests compliance with our process for claiming nonfinancial benefits. For example, the 

IG tested this process in fiscal year 2005 and found it to be reasonable. The IG also 

recommended actions to strengthen documentation of our nonfinancial benefits and to 

encourage the timely processing of the supporting accomplishment reports. 

Data limitations The data may be underreported because we cannot always document a direct causeand-effect relationship between our work and benefits it produced. However, we feel 

that this is not a significant limitation on the data because the data represent a conservative measure of our overall contribution toward improving government.
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82 PART II Performance Information GAO-08-1SP

Percentage of products with recommendations

Definition and 

background

We measure the percentage of our written products (chapter and letter reports and 

numbered correspondence) issued in the fiscal year that included at least one recommendation. We make recommendations that specify actions that can be taken to 

improve federal operations or programs. We strive for recommendations that are directed at resolving the cause of identified problems; that are addressed to parties who 

have the authority to act; and that are specific, feasible, and cost-effective. Some products we issue contain no recommendations and are strictly informational in nature.

We track the percentage of our written products that are issued during the fiscal 

year and contain recommendations. This indicator recognizes that our products do 

not always include recommendations and that the Congress and agencies often find 

such informational reports just as useful as those that contain recommendations. For 

example, informational reports, which do not contain recommendations, can help to 

bring about significant financial and nonfinancial benefits. 

Data sources Our Documents Database records recommendations as they are issued. The database 

is updated daily. As our staff monitor implementation of recommendations, they submit updated information to the database.

Verification and 

validation

Through a formal process, each team identifies the number of recommendations 

included in each product and an external contractor enters them into a database. We 

provide our managers with reports on the recommendations being tracked to help 

ensure that all recommendations have been captured and that each recommendation 

has been completely and accurately stated. Additionally, on a periodic basis, the IG 

independently tests the teams’ compliance with our policies and procedures related 

to this performance measure. For example, during fiscal year 2006, the IG tested and 

determined that our process for determining the percentage of written products with 

recommendations was reasonable. The IG also recommended actions to improve the 

process for developing, compiling, and reporting these statistics. We have implemented the IG’s recommendations for fiscal year 2007. Since then, we have used the same 

procedures to compute and report this measure.

Data limitations This measure is a conservative estimate of the extent to which we assist the Congress 

and federal agencies because not all products and services we provide lead to recommendations. For example, the Congress may request information on federal programs 

that is purely descriptive or analytical and does not lend itself to recommendations.
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GAO-08-1SP Performance Information PART II 83

Past recommendations implemented

Definition and 

background

We make recommendations designed to improve the operations of the federal government. For our work to produce financial or nonfinancial benefits, the Congress or 

federal agencies must implement these recommendations. As part of our audit responsibilities under generally accepted government auditing standards, we follow up on 

recommendations we have made and report to the Congress on their status. Experience has shown that it takes time for some recommendations to be implemented. For 

this reason, this measure is the percentage rate of implementation of recommendations made 4 years prior to a given fiscal year (e.g., the fiscal year 2007 implementation rate is the percentage of recommendations made in fiscal year 2003 products 

that were implemented by the end of fiscal year 2007). Experience has shown that 

if a recommendation has not been implemented within 4 years, it is not likely to be 

implemented.

This measure assesses action on recommendations made 4 years previously, rather 

than the results of our activities during the fiscal year in which the data are reported. 

For example, the cumulative percentage of recommendations made in fiscal year 2003 

that were implemented in the ensuing years is as follows: 18 percent by the end of 

the first year (fiscal year 2004), 32 percent by the end of the second year (fiscal year 

2005), 43 percent by the end of the third year (fiscal year 2006), and 82 percent by the 

end of the fourth year (fiscal year 2007).

Data sources Our Documents Database records recommendations as they are issued. The database 

is updated daily. As our staff monitor implementation of recommendations, they submit updated information to the database.
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84 PART II Performance Information GAO-08-1SP

Verification and 

validation

Through a formal process, each team identifies the number of recommendations included in each product, and an external contractor enters them into a database.

Policies and procedures specify that our staff must verify, with sufficient supporting 

documentation, that an agency’s reported actions are adequately being implemented. 

Staff update the status of the recommendations on a periodic basis. To accomplish 

this, our staff may interview agency officials, obtain agency documents, access 

agency databases, or obtain information from an agency’s inspector general. Recommendations that are reported as implemented are reviewed by a senior executive in 

the unit and by QCI.

Summary data are provided to the units that issued the recommendations. The units 

check the data regularly to make sure that the recommendations they have reported 

as implemented have been accurately recorded. We also provide to the Congress a 

database with the status of recommendations that have not been implemented, and we 

maintain a publicly available database of open recommendations that is updated daily.

Additionally, on a periodic basis, the IG independently tests our process for calculating the percentage of recommendations implemented for a given fiscal year. 

For example, the IG determined that our process was reasonable for calculating the 

percentage of recommendations that had been made in our fiscal year 2002 products 

and implemented by the end of fiscal year 2006. The IG also recommended actions 

to improve the process for developing, compiling, and reporting this statistic. In fiscal 

year 2007, we implemented the IG’s recommendation for calculating the percentage of 

recommendations that had been made in fiscal year 2003 products and implemented 

by the end of fiscal year 2007.

Data limitations The data may be underreported because sometimes a recommendation may require 

more than 4 years to implement. We also may not count cases in which a recommendation is partially implemented. However, we feel that this is not a significant 

limitation to the data because the data represent a conservative measure of our overall 

contribution toward improving government.

Client measures

Testimonies

Definition and 

background

The Congress may ask us to testify at hearings on various issues, and these hearings 

are the basis for this measure. Participation in hearings is one of our most important 

forms of communication with the Congress, and the number of hearings at which we 

testify reflects the importance and value of our institutional knowledge in assisting 

congressional decision making. When multiple GAO witnesses with separate testimonies appear at a single hearing, we count this as a single testimony. We do not count 

statements submitted for the record when a GAO witness does not appear.

Data sources The data on hearings at which we testified are compiled in our congressional hearing 

system managed by staff in Congressional Relations.
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GAO-08-1SP Performance Information PART II 85

Verification and 

validation

The units responding to requests for testimony are responsible for entering data in 

the Congressional Hearing System. After a GAO witness has testified at a hearing, 

Congressional Relations verifies that the data in the system are correct and records 

the hearing as one at which we testified. Congressional Relations provides weekly status reports to unit managers, who check to make sure that the data are complete and 

accurate. Additionally, on a periodic basis, the IG independently examines the process 

for recording the number of hearings at which we testified. For example, the IG determined that our process for recording hearings during fiscal year 2006 was reasonable. 

In fiscal year 2007, we followed the same process for recording hearings.

Data limitations This measure does not include statements for the record that we prepare for congressional hearings. Also, this measure may be influenced by factors other than the quality of our performance in any specific year. The number of hearings held each year 

depends on the Congress’s agenda, and the number of times we are asked to testify 

may reflect congressional interest in work in progress as well as work completed that 

year or the previous year. To mitigate this limitation, we try to adjust our target to 

reflect cyclical changes in the congressional schedule. We also outreach to our clients 

on a continuing basis to increase their awareness of our readiness to participate in 

hearings.

Timeliness

Definition and 

background

The likelihood that our products will be used is enhanced if they are delivered when 

needed to support congressional and agency decision making. To determine whether 

our products are timely, we compute the proportion of favorable responses to questions related to timeliness from our electronic client feedback survey. Because our 

products often have multiple requesters, we often survey more than one congressional staff person per product. Thus, we base our timeliness result on the number of 

surveys sent out during the fiscal year. We send a survey to key staff working for the 

requesters of our testimony statements and a survey to requesters of our more significant written products—specifically, engagements assigned an interest level of “high” 

by our senior management and those requiring an investment of 500 GAO staff days 

or more. One question on each survey asks the respondent whether the product was 

delivered on time. When a product that meets our survey criteria is released to the 

public, we electronically send relevant congressional staff an e-mail message containing a link to a survey. When this link is accessed, the survey recipient is asked 

to respond to the questions using a five-point scale—strongly agree, generally agree, 

neither agree nor disagree, generally disagree, strongly disagree—or choose “not 

applicable/no answer.” For this measure, favorable responses are “strongly agree” and 

“generally agree.” 
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Data sources To identify the products that meet our survey criteria (all testimonies and other 

products that are high interest or involve 500 staff days or more), we run a query 

against GAO’s Documents Database maintained by a contractor. To identify appropriate recipients of the survey for products meeting our criteria, we ask the engagement teams to provide in GAO’s Product Numbering Database e-mail addresses for 

congressional staff serving as contacts on a product. Relevant information from both 

of these databases is fed into our Product by Product Survey Approval Database that 

is managed by QCI. This database then combines product, survey recipient, and data 

from our Congressional Relations staff and creates an e-mail message with a Web 

link to a survey. (Congressional Relations staff serve as the GAO contacts for survey recipients.) The e-mail message also contains an embedded client password and 

unique client identifier to ensure that a recipient is linked with the appropriate survey. 

Our Congressional Feedback Database creates a survey record with the product title 

and number and captures the responses to every survey sent back to us electronically. 

Verification and 

validation

QCI staff review a hard copy of a released GAO product or access its electronic version to check the accuracy of the addressee information in the Product by Product 

Survey Approval Database. QCI staff also check the congressional staff directory 

to ensure that survey recipients listed in the Product by Product Survey Approval 

Database appear there. In addition, our Congressional Relations staff review the list 

of survey recipients entered by the engagement teams and identify the most appropriate congressional staff person to receive a survey for each requester. Survey e-mail 

messages that are inadvertently sent with incorrect e-mail addresses automatically 

reappear in the survey approval system. When this happens, QCI staff correct any obvious typing errors and resend the e-mail message or contact the congressional staff 

person directly for the correct e-mail address and then resend the message. The IG 

also periodically reviews the timeliness performance measure and last reviewed it in 

fiscal year 2005—the last year before we began to use the independent feedback from 

the survey as a basis for determining our timeliness. 

Data limitations We do not measure the timeliness of all of our external products because we do not 

wish to place too much burden on busy congressional staff. Testimonies and written 

products that meet our criteria for this measure represent more than 50 percent of the 

congressionally requested products we issued during fiscal year 2007. We exclude 

from our timeliness measure low and medium interest reports requiring fewer than 

500 staff days to complete, reports addressed to agency heads or commissions, some 

reports mandated by the Congress, classified reports, and reports completed under the 

Comptroller General’s authority. Also, if a requester indicates that he or she does not 

want to complete any surveys, we will not send a survey to this person again, even 

though a product subsequently requested meets our criteria. The response rate for our 

client feedback survey is about 28 percent. We received comments from one or more 

people for about 54 percent of the products for which we sent surveys in fiscal year 

2007.
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People measures

New hire rate

Definition and 

background

This performance measure is the ratio of the number of people hired to the number 

we planned to hire. Annually, we develop a workforce plan that takes into account 

projected workload changes, as well as other changes, such as retirements, other attrition, promotions, and skill gaps. The workforce plan for the upcoming year specifies 

the number of planned hires and, for each new hire, specifies the skill type and level. 

The plan is conveyed to each of our units to guide hiring throughout the year. Progress toward achieving the workforce plan is monitored monthly by the Chief Operating Officer and the Chief Administrative Officer. Adjustments to the workforce plan 

are made throughout the year, if necessary, to reflect changing needs and conditions.

Data sources The Executive Committee approves the workforce plan. The workforce plan is coordinated and maintained by the Chief Administrative Office. Data on accessions—that 

is, new hires coming on board—is taken from a database that contains employee data 

from USDA’s National Finance Center (NFC) database, which handles payroll and 

personnel data for GAO and other agencies.

Verification and 

validation

The Chief Administrative Office maintains a database that monitors and tracks all our 

hiring offers, declinations, and accessions. In coordination with our Human Capital 

Office, our Chief Administrative Office staff input workforce information supporting this measure into the Chief Administrative Office database. While the database is 

updated on a daily basis, monthly reports are provided to the Chief Operating Officer 

and the Chief Administrative Officer so that they can monitor progress by GAO units 

in achieving workforce plan hiring targets. The Chief Administrative Office continuously monitors and reviews accessions maintained in the NFC database against its 

database to ensure consistency and to resolve discrepancies. The office follows up on 

any discrepancies. In addition, on a periodic basis, the IG examines our process for 

calculating the new hire rate. During fiscal year 2004, the IG independently reviewed 

this process and found it to be reasonable. The IG also recommended actions to 

improve the documentation of the process used to calculate this measure. We have 

implemented the IG’s recommendations.

Data limitations There is a lag of one to two pay periods (up to 4 weeks) before the NFC database 

reflects actual data. We generally allow sufficient time before requesting data for this 

measure to ensure that we get accurate results.
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Acceptance rate

Definition and 

background

This measure is the ratio of the number of applicants accepting offers to the number 

of offers made. Acceptance rate is a proxy for GAO’s attractiveness as an employer 

and an indicator of our competitiveness in bringing in new talent.

Data sources The information required is the number of job offers made (excluding interns, experts/consultants, and reemployed annuitants), the number of offers declined, and the 

number of individuals who come on board. Our Chief Administrative Office staff 

maintains a database that contains the job offers made and accepted or declined. Data 

on accessions—that is, new hires coming on board—are taken from a database that 

contains employee data from USDA’s NFC database, which handles payroll and personnel data for GAO and other agencies.

Verification and 

validation

Human capital managers in the Human Capital Office work with the Chief Administrative Office staff to ensure that each job offer made and its outcome (declination or 

acceptance) is noted in the database that is maintained by Chief Administrative Office 

staff; periodic checking is performed to review the accuracy of the database. In addition, on a periodic basis, the IG examines our process for calculating the acceptance 

rate. During fiscal year 2004, the IG independently reviewed this process and found it 

to be reasonable. The IG also recommended actions to improve the documentation of 

the process used to calculate this measure and the reporting of this measure. We have 

implemented the IG’s recommendations.

Data limitations See New hire rate, Data limitations.

Retention rate

Definition and 

background

We continuously strive to make GAO a place where people want to work. Once we 

have made an investment in hiring and training people, we would like to retain them. 

This measure is one indicator that we are attaining that objective and is the inverse 

of attrition. We calculate this measure by taking 100 percent of the onboard strength 

minus the attrition rate, where attrition rate is defined as the number of separations 

divided by the average onboard strength. We calculate this measure with and without 

retirements.

Data sources Data on retention—that is, people who are on board at the beginning of the fiscal year 

and are still here at the end of the fiscal year as well as the average number of people 

on board during the year—are taken from a Chief Administrative Office database 

that contains some data from the NFC database, which handles payroll and personnel 

data for GAO and other agencies.

Verification and 

validation

Chief Administrative Office staff continuously monitor and review accessions and 

attritions against the contents of their database that has NFC data and they follow up 

on any discrepancies. In addition, on a periodic basis, the IG examines our process 

for calculating the retention rate. During fiscal year 2004, the IG reviewed this process and found it to be reasonable. The IG also recommended actions to improve the 

documentation of the process used to calculate this measure. We have implemented 

the IG’s recommendations.

Data limitations See New hire rate, Data limitations.
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GAO-08-1SP Performance Information PART II 89

Staff development

Definition and 

background

One way that we measure how well we are doing and identify areas for improvement 

is through our annual employee feedback survey. This Web-based survey, which is 

conducted by an outside contractor to ensure the confidentiality of every respondent, 

is administered to all of our employees once a year. Through the survey, we encourage our staff to indicate what they think about GAO’s overall operations, work environment, and organizational culture and how they rate our managers—from the immediate supervisor to the Executive Committee—on key aspects of their leadership 

styles. The survey consists of over 100 questions.

This measure is based on staff’s favorable responses to three of the six questions 

related to staff development on our annual employee survey. This subset of questions 

was selected on the basis of senior management’s judgment about the questions’ relevance to the measure and specialists’ knowledge about the development of indexes. 

Staff were asked to respond to three questions on a five-point scale or choose “no 

basis to judge/not applicable” or “no answer.”

Data sources These data come from our staff’s responses to an annual Web-based survey. The 

survey questions we used for this measure ask staff how much positive or negative 

impact (1) external training and conferences and (2) on-the-job training had on their 

ability to do their jobs during the last 12 months. From the staff who expressed an 

opinion, we calculated the percentage of staff selecting the two categories that indicate satisfaction with or a favorable response to the question. For this measure, the 

favorable responses were either “very positive impact” or “generally positive impact.” 

In addition, the survey question asked how useful and relevant to your work did you 

find internal (Learning Center) training courses. From staff who expressed an opinion, we calculated the percentage of staff selecting the three categories that indicate 

satisfaction with or a favorable response to the question. For this measure, the favorable responses were “very greatly useful and relevant,” “greatly useful and relevant,” 

and “moderately useful and relevant.”

Verification and 

validation

The employee feedback survey gathers staff opinions on a variety of topics. The survey is password protected, and only the outside contractor has access to passwords. 

In addition, when the survey instrument was developed, extensive focus groups and 

pretests were undertaken to refine the questions and provide definitions as needed. In 

fiscal year 2007, our response rate to this survey was about 74 percent, which indicates that its results are largely representative of the GAO population. In addition, 

many teams and work units conduct follow-on work to gain a better understanding of 

the information from the survey.

In addition, on a periodic basis, the IG independently examines our process for calculating the percentage of favorable responses for staff development. The IG examined 

this process during fiscal year 2004 and found it to be reasonable. The IG also recommended actions to improve the documentation of the process used to calculate this 

measure. We have implemented the IG’s recommendations.
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90 PART II Performance Information GAO-08-1SP

Data limitations The information contained in the survey is the self-reported opinions of staff expressed under conditions of confidentiality. Accordingly, there is no way to further 

validate those expressions of opinion.

The practical difficulties of conducting any survey may introduce errors, commonly 

referred to as nonsampling errors. These errors could result from, for example, respondents misinterpreting a question or data entry staff incorrectly entering data into 

a database used to analyze the survey responses. Such errors can introduce unwanted 

variability into the survey results. We took steps in the development of the survey to 

minimize nonsampling errors. Specifically, when we developed the survey instrument 

we held extensive focus groups and pretests to refine the questions and define terms 

used to decrease the chances that respondents would misunderstand the questions. We 

also limited the chances of introducing nonsampling errors by creating a Web-based 

survey for which respondents entered their answers directly into an electronic questionnaire. This approach eliminated the need to have the data keyed into a database 

by someone other than the respondent, thus removing an additional source of error.

Staff utilization

Definition and 

background

This measure is based on staff’s favorable responses to three of the six questions related to staff utilization on our annual employee survey. This subset of questions was 

selected on the basis of senior management’s judgment about the questions’ relevance 

to the measure and specialists’ knowledge about the development of indexes. Staff 

were asked to respond to these three questions on a five-point scale or choose “no 

basis to judge/not applicable” or “no answer.” (For background information about our 

entire employee feedback survey, see Staff development.)

Data sources These data come from our staff’s responses to an annual Web-based survey. The survey questions we used for this measure ask staff how often the following occurred in 

the last 12 months: (1) my job made good use of my skills; (2) GAO provided me with 

opportunities to do challenging work; and (3) in general, I was utilized effectively. 

From the staff who expressed an opinion, we calculated the percentage of staff selecting the two categories that indicate satisfaction with or a favorable response to the 

question. For this measure, the favorable responses were either “very positive impact” 

or “generally positive impact.”

Verification and 

validation

See Staff development, Verification and validation.

Data limitations See Staff development, Data limitations.
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GAO-08-1SP Performance Information PART II 91

Leadership

Definition and 

background

This measure is based on staff’s favorable responses to 10 of 20 questions related to 

six areas of leadership on our annual employee survey. This subset of questions was 

selected on the basis of senior management’s judgment about the questions’ relevance 

to the measure and specialists’ knowledge about the development of indexes. Specifically, our calculation included responses to 1 of 4 questions related to empowerment, 

2 of 4 questions related to trust, all 3 questions related to recognition, 1 of 3 questions related to decisiveness, 2 of 3 questions related to leading by example, and 1 of 

3 questions related to work life. Staff were asked to respond to these 10 questions on 

a five-point scale or choose “no basis to judge/not applicable” or “no answer.” (For 

background information about our entire employee feedback survey, see Staff development, Definition and background.)

Data sources These data come from our staff’s responses to an annual Web-based survey. The 

survey questions we used for this measure ask staff about empowerment, trust, 

recognition, decisiveness, leading by example, and work life as they pertain to the 

respondent’s immediate supervisor. Specifically the survey asked staff the following 

questions about their immediate supervisor during the last 12 months: (1) gave me 

the opportunity to do what I do best; (2) treated me fairly; (3) acted with honesty and 

integrity toward me; (4) ensured that there was a clear link between my performance 

and recognition of it; (5) gave me the sense that my work is valued; (6) provided me 

meaningful incentives for high performance; (7) made decisions in a timely manner; (8) demonstrated GAO’s core values of accountability, integrity, and reliability; 

(9) implemented change effectively; and (10) dealt effectively with equal employment 

opportunity and discrimination issues. From the staff who expressed an opinion, we 

calculated the percentage of staff selecting the two categories that indicate satisfaction 

with or a favorable response to the question. For this measure, the favorable responses 

were either “always or almost always” or “most of the time.”

Verification and 

validation

See Staff development, Verification and validation.

Data limitations See Staff development, Data limitations.

Organizational climate

Definition and 

background

This measure is based on staff’s favorable responses to 5 of the 13 questions related to 

organizational climate on our annual employee survey. This subset of questions was 

selected on the basis of senior management’s judgment about the questions’ relevance 

to the measure and specialists’ knowledge about the development of indexes. Staff 

were asked to respond to these 5 questions on a five-point scale or choose “no basis 

to judge” or “no answer.” (For background information about our entire employee 

feedback survey, see Staff development.)
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92 PART II Performance Information GAO-08-1SP

Data sources These data come from our staff’s responses to an annual Web-based survey. The 

survey questions we used for this measure ask staff to think back over the last 12 

months and indicate how strongly they agree or disagree with each of the following 

statements: (1) a spirit of cooperation and teamwork exists in my work unit; (2) I am 

treated fairly and with respect in my work unit; (3) my morale is good; (4) sufficient 

effort is made in my work unit to get the opinions and thinking of people who work 

here; and (5) overall, I am satisfied with my job at GAO. From the staff who expressed 

an opinion, we calculated the percentage of staff selecting the two categories that 

indicate satisfaction with or a favorable response to the question. For this measure, the 

favorable responses were either “strongly agree” or “generally agree.”

Verification and 

validation

See Staff development, Verification and validation.

Data limitations See Staff development, Data limitations.

Internal operations measures

Help get job done and quality of work life

Definition and 

background

To measure how well we are doing at delivering internal administrative services to 

our employees and identify areas for improvement, we conduct an annual Web-based 

survey in November. The customer satisfaction survey on administrative services, 

conducted by an outside contractor to ensure the confidentiality of every respondent, 

is administered to all of our employees once a year. Through the survey we encourage 

our staff to indicate how satisfied they are with 19 services that help them get their 

jobs done and another 10 services that affect their quality of work life. 

As part of the survey, employees are asked to rate, on a scale of 1 (low) to 5 (high), 

those services that are important to them and that they have experience with or used 

recently. Then, for each selected service, employees are asked to indicate their level 

of satisfaction from 1 (low) to 5 (high), and provide a written reason for their rating 

and recommendations for improvement if desired. Based on employees’ responses to 

these questions, we calculate a composite score. 

Data sources These data come from our staff’s responses to an annual Web-based survey. To 

determine how satisfied GAO employees are with internal administrative services, 

we calculate composite scores for two measures. One measure reflects the satisfaction with the 19 services that help employees get their jobs done. These services 

include Internet and intranet services, IT customer support, mail services, and voice 

communication services. The second measure reflects satisfaction with another 10 

services that affect quality of work life. These services include assistance related to 

pay and benefits, building maintenance and security, and workplace safety and health. 

The composite score represents how employees rated their satisfaction with services 

in each of these areas relative to how they rated the importance of those services to 

them. The importance scores and satisfaction levels are both rated on a scale of 1 

(low) to 5 (high).
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GAO-08-1SP Performance Information PART II 93

Verification and 

validation

The satisfaction survey on administrative services is housed on a Web site maintained 

by an outside contractor, and only the contractor has the ability to link the survey 

results with individual staff. Our survey response rate was 48 percent in 2006. To 

ensure that the results are largely representative of the GAO population, we analyze 

the results by demographic representation (unit, tenure, location, band level, and job 

type). Each GAO unit responsible for administrative services conducts follow-on 

work, including analyzing written comments to gain a better understanding of the 

information from the survey.

In addition, on a periodic basis, the IG independently assesses the internal operations 

performance measures. The IG examined the measures during fiscal year 2007 and 

found the measures reasonable. The IG also recommended actions to improve the 

measures’ reliability and objectivity. We are in the process of implementing the IG’s 

recommendations. 

Data limitations The information contained in the survey is the self-reported opinion of staff expressed 

under conditions of confidentiality. Accordingly, there is no way to further validate 

those expressions of opinion. We do not plan any actions to remedy this limitation 

because we feel it would violate the pledge of confidentiality that we make to our staff 

regarding the survey responses.

The practical difficulties of conducting any survey may introduce errors, commonly 

referred to as nonsampling errors. These errors could result from, for example, respondents misinterpreting a question or entering their data incorrectly. Such errors 

can introduce unwanted variability into the survey results. We limit the chances of 

introducing nonsampling errors by using a Web-based survey for which respondents’ 

enter their answers directly into an electronic questionnaire. This eliminates the need 

to have the data keyed into a database by someone other than the respondent. 

Source: GAO.

Program Evaluation

To assess our progress toward our first 

three strategic goals and their objectives 

and to update them for our strategic plan, 

we evaluate actions taken by federal 

agencies and the Congress in response to 

our recommendations. The results of these 

evaluations are conveyed in this performance 

and accountability report as financial 

benefits and nonfinancial benefits that reflect 

the value of our work.

In addition, we actively monitor the status 

of our open recommendations—those 

that remain valid but have not yet been 

implemented—and report our findings 

annually to the Congress and the public 

(http://www.gao.gov/openrecs.html). We use 

the results of that analysis to determine the 

need for further work in particular areas. For 

example, if an agency has not implemented a 

recommended action that we consider to be 

worthwhile, we may decide to pursue further 

action with agency officials or congressional 

committees, or we may decide to undertake 

additional work on the matter.

We also use our biennial high-risk update 

report to provide a status report on those 

major government operations considered 

high risk because of their vulnerabilities to 

fraud, waste, abuse, and mismanagement 

or the need for broad-based transformation. 
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94 PART II Performance Information GAO-08-1SP

The report is a valuable evaluation and 

planning tool because it helps us to identify 

those areas where our continued efforts are 

needed to maintain the focus on important 

policy and management issues that the nation 

faces. (See www.gao.gov/docsearch/featured/

highrisk.html.)

To continuously improve the quality of our 

work supporting strategic goals 1, 2, and 3 

in fiscal year 2007, we performed our annual 

inspection of our quality control system for 

audits completed during calendar year 2006. 

The inspection team concluded that our 

quality control system was suitably designed 

and operating effectively to provide us with 

reasonable assurance that we (1) conformed 

in all material respects with Government 

Auditing Standards and (2) provided the 

Congress and other users of our products 

with independent, objective, and reliable 

information during the year ended 

December 31, 2006.

The inspection team found that our 

quality assurance framework includes 

the key controls necessary to ensure 

quality products. The team also found that 

engagement teams followed these controls in 

all material aspects. The inspection team did 

not identify any instances where our work 

was not reliable or contained material errors. 

Further, the inspection team identified 

a number of noteworthy developments 

with respect to our quality control system 

during this year’s inspection. Many of these 

developments have broad applicability to our 

analyst staff and some represent practices 

that mission teams may consider adopting. 

For example, one team enhanced its review 

of official workpapers developed and 

maintained for each engagement known as 

Engagement Management and Product Files 

to ensure their correct and timely completion 

and another team developed a template to 

ensure process control in instances where 

multiple staff are used to check the facts in a 

product resulting from an engagement.

We also completed a number of studies 

and evaluations related to goal 4’s strategic 

objectives. These studies resulted in internal 

products or briefings in fiscal year 2007 that 

are not available publicly.

Financial management practices

and processes. We conducted internal 

control reviews as set forth in 31 U.S.C. 

3512 (commonly referred to as the 

Federal Managers’ Financial Integrity 

Act); Office of Management and Budget 

(OMB) Circular No. A-127, Financial 

Management Systems; and OMB Circular 

No. A-123, Management’s Responsibility 

for Internal Control, Appendix A. 

Under the Federal Managers’ Financial 

Integrity Act requirements, we reviewed 

quarterly payroll transactions and under 

A-127, we reviewed three modules—

Financial Reporting Requirements; 

Preparation, Execution, and Reporting 

of GAO’s Budget in Accordance With 

Requirements; and Training and User 

Support. We assessed our internal control 

over financial reporting consistent with 

A-123 by testing key cycles, specifically 

those that represent large-dollar flows or 

have high-risk factors, and conducting 

limited testing on cycles with low risk or 

that had few or no remediation actions 

from last year. On the basis of the results 

of these assessments, we concluded 

that we had reasonable assurance 

that internal control over financial 

reporting as of September 30, 2007, 

was operating effectively and that no 

material weaknesses exist in the design 

or operation of the internal controls over 

financial reporting.

Cost-benefit analysis of legislative

history digitization project. To ensure 

that staff can easily access our legislative 

histories electronically, we began an 

initiative to “digitize” or scan all our 

legislative histories into a Web-based 

database that will allow full-text searches 

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GAO-08-1SP Performance Information PART II 95

of the PDF format of this information. We 

conducted a digitization pilot and found 

that the cost of using in-house services 

for digitization would far outweigh the 

benefits. We awarded a no-cost contract 

to digitize over the next 4 years all the 

documents that constitute the legislative 

histories of 21,000 public laws from 1921 

to 1995 that we have collected in exchange 

for the contractor’s exclusive right to 

market and sell access to the digitized 

versions of these histories.

Automated background check system.

We piloted the Office of Personnel 

Management’s automated personnel 

security background investigation system 

known as eQIP. The pilot demonstrated 

that we could reduce the processing time 

for these investigations by an estimated 

50 percent at no additional cost to us. As 

a result of this successful pilot, we fully 

implemented eQIP on October 1, 2007.

■

Interest in our in-house mentoring

program. We conducted a Web-based 

survey to measure the level of staff 

interest in having a mentor or being a 

mentor and to gain an understanding 

of what staff expect to gain from a 

mentoring relationship. Among the 

831 employees who responded to 

the survey, 637 indicated a desire to 

participate in the mentoring program as a 

mentor or mentee. Both groups expressed 

an interest in learning about or helping 

others to enhance leadership skills, 

supervise others, work through difficult 

situations, plan and manage a career, and 

manage work relationships.

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96 PART II Performance Information GAO-08-1SP
Serving the Congress and the Nation

Source: See Image Sources.

Part III

Financial 

Information
GAO Performance and Accountability Report 2007

98 PART III Financial Information GAO-08-1SP

Source: GAO.

Chief Financial Officer, Sallyanne Harper

November 15, 2007

I am pleased to report that during fiscal year 2007 the U.S. Government 

Accountability Office continued to lead by example in government financial 

management. For the 21st consecutive year, independent auditors gave our 

financial statements an unqualified opinion with no material weaknesses 

and no major compliance problems. The financial statements that follow 

were prepared, audited, and made publicly available as an integral part of 

this performance and accountability report 45 days after the end of the 

fiscal year. Our fiscal year 2006 report received a certificate of excellence in 

accountability reporting from the Association of Government Accountants 

(AGA). Our annual reports have received this AGA honor each year since we 

first applied with our fiscal year 2001 performance and accountability report.

In fiscal year 2007 we institutionalized the rigorous process of documenting, 

updating, and reviewing internal controls after successfully implementing 

the Office of Management and Budget’s (OMB) revised Circular No. A-123, 

Appendix A last fiscal year. As a result of these efforts we have been able to 

improve on and strengthen the design and implementation of our internal 

control practices throughout the financial management process. This year we 

continued to address those minor weaknesses identified in fiscal year 2006 

testing that remained outstanding by fiscal year end. We instituted a rotating 

testing schedule of the major cycles so that our A-123 testing team reviews, 

updates, and tests the designated cycles at least once every 3 years.

This fiscal year we also focused many of our resources on preparing 

for our new financial management system. The software solution is 

the Department of Transportation Enterprise Service Center’s (ESC) 

Delphi, Oracle Federal Financials. Implementation of our new financial 

management system, GAO Delphi, followed widely accepted best industry 

practices for project management including independent verification and 

validation of our interfaces, test approach, and cutover and contingency 

plans. In addition to the normal testing prior to implementation, we built 

in a 2-month parallel processing phase to further validate our production 

readiness and ensure that GAO Delphi would meet agency business needs 

and internal and external reporting requirements. We plan to take advantage 

of ESC’s expertise and economies of scale as our service provider for 

select accounting functions, particularly those involving transaction data 

entry, while our staff will maintain appropriate control and oversight of 

From the 

Chief Financial Officer
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 99

the cross-serviced processes. Reducing the amount of data entry done inhouse will allow our financial management staff to focus more on analysis 

and customer service. As fiscal year 2008 began, we successfully converted 

to the new system. Future phases include implementation of an integrated 

workforce planning and budget formulation solution and an E-Gov travel 

solution.

In addition to our extensive efforts on our financial systems, we have 

enhanced our product, business, and management processes to streamline 

operations and save the taxpayer money. During fiscal year 2007 we 

successfully completed our extended pilot of the electronic dissemination 

of our print engagement-related products avoiding $48,800 in costs, and 

we project future annual savings of about $300,000 annually in printingrelated costs. The pilot showed that we can provide products more quickly 

to our client in electronic format while maintaining a high level of customer 

satisfaction. In tandem with this e-dissemination effort we have implemented 

a new digital printing contract which will provide the option to print only 

the quantity of the product needed for distribution to the requester and key 

recipients instead of the 150-copy minimum requested by outside contract 

print companies. To further improve our analysts’ business processes, we 

have enhanced our internal electronic audit system, the Financial Audit 

System (FAS), which enables our staff to more comprehensively and 

accurately audit the financial statements of executive branch agencies. 

In addition to enabling us to provide an improved consolidated financial 

statement to our clients, we expect the improvements we have implemented 

will allow us to: reduce travel costs by increasing remote access capability; 

increase the efficiency of our audit work through enhanced automated 

analysis capabilities and project management tools; and minimize the effort 

required for audit start-ups through automated planning, staffing, and audit 

documentation tools.

The coming fiscal year promises many challenges including institutionalizing 

the day-to-day use of the new financial management system. We expect to see 

our hard work pay off with a smooth transition as we begin providing more 

meaningful management reporting throughout the organization and by taking 

advantage of our service provider’s services in entering accounting data. As 

always, we remain focused on our role in the legislative branch to support the 

Congress in meeting its constitutional responsibilities, to help improve the 

performance and ensure the accountability of the government for the benefit 

of the American people, and to continue to focus on and enhance our internal 

operations and services to better achieve our strategic goal of being a model 

federal agency.

Sallyanne Harper

Chief Financial Officer
GAO Performance and Accountability Report 2007

100 PART III Financial Information GAO-08-1SP

Overview of Financial Management

and Controls

Our financial statements and accompanying 

notes begin on page 108.

8

 Our financial 

statements for the fiscal years ended 

September 30, 2007 and 2006, were audited by 

an independent auditor, Clifton Gunderson, 

LLP. Clifton Gunderson, LLP, rendered 

an unqualified opinion on our financial 

statements and an unqualified opinion on the 

effectiveness of our internal controls over 

financial reporting and compliance with laws 

and regulations. The auditor also reported 

that we have substantially complied with 

the applicable requirements of the Federal 

Financial Management Improvement Act 

of 1996 (Improvement Act) and found no 

reportable instances of noncompliance with 

selected provisions of laws and regulations. 

In the opinion of the independent auditor, the 

financial statements are presented fairly in all 

material respects and are in conformity with 

generally accepted accounting principles.

Financial Systems and Internal 

Controls

We recognize 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.

We complied with the spirit and intent 

of Appendix A, OMB Circular No. A-123, 

Management’s Responsibility for Internal 

Control, which provides guidance for 

8

Note 14 to the financial statements describes our 

Davis-Bacon Act trust function. For more detailed 

Davis-Bacon Act financial information, contact our 

General Counsel.

agencies’ assessments of internal control 

over financial reporting. We performed this 

assessment by identifying, analyzing, and 

testing internal controls for key business 

processes. Based on the results of the 

assessment, we have reasonable assurance 

that internal control over financial reporting, 

as of September 30, 2007, was operating 

effectively and that no material control 

weaknesses exist in the design or operation 

of the internal controls over financial 

reporting. Additionally, our independent 

auditor found that we maintained effective 

internal controls over financial reporting 

and compliance with laws and regulations. 

Consistent with our assessment, the 

auditor found no material internal control 

weaknesses.

We are also committed to fulfilling the 

internal control objectives of 31 U.S.C. 

3512, commonly referred to as the Federal 

Managers’ Financial Integrity Act (Integrity 

Act). Although we are not subject to the act, 

we comply voluntarily with its requirements. 

Our internal controls are designed to provide 

reasonable assurance that obligations and 

costs are in compliance with applicable laws 

and regulations; funds, property, and other 

assets are safeguarded against loss from 

unauthorized acquisition, use, or disposition; 

and revenues and expenditures applicable 

to our operations are properly recorded 

and accounted for to enable our agency 

to prepare reliable financial reports and 

maintain accountability over our assets.

In addition, we are committed to fulfilling the 

objectives of the Improvement Act, which is 

also covered within 31 U.S.C. 3512. Although 

not subject to the act, we voluntarily 
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 101

comply with its requirements. We believe 

that we have implemented and maintained 

financial systems that comply substantially 

with federal financial management 

systems requirements, applicable federal 

accounting standards, and the United States 

Government Standard General Ledger at the 

transaction level as of September 30, 2007. 

We made this assessment based on criteria 

established under the Improvement Act and 

guidance issued by OMB. Also, our auditor 

reported that we had substantially complied 

with the applicable requirements of the 

Improvement Act as of September 30, 2007.

GAO’s Inspector General (IG) also conducts 

audits and investigations that are internally 

focused, functions as an independent factgathering adviser to the Comptroller General, 

and reviews all accomplishment reports 

totaling $500 million or more. During fiscal 

year 2007, the IG examined compliance 

with our policy and procedures for conflictof-interest determinations and conducted 

reviews of the Comptroller General’s 

vouchers for the official representation 

account, the compensatory time for travel 

program, and our information security 

program. In addition, the IG implemented 

and managed an internal hotline for use by 

our employees and contractors to report 

potential fraud, waste, and abuse in our 

operations. Finally, the IG independently 

tests our compliance with procedures related 

to our performance data on a rotating basis 

over a 3-year period; these actions are 

specifically identified in the table that begins 

on page 79. No material weaknesses were 

reported by the IG. During fiscal year 2007, 

we completed actions related to seven IG 

recommendations, none of which affected the 

financial statements. There are no unresolved 

issues.

Our Audit Advisory Committee assists 

the Comptroller General in overseeing the 

effectiveness of our financial reporting 

and audit processes, internal controls over 

financial operations, and processes that 

ensure compliance with laws and regulations 

relevant to our financial operations. The 

committee is composed of individuals 

who are independent of GAO and have 

outstanding reputations in public service or 

business with financial or legal expertise. 

The current members of the committee are 

as follows:

Sheldon S. Cohen (Chairman), a certified 

public accountant and practicing 

attorney in Washington, D.C.; a former 

Commissioner and Chief Counsel of the 

Internal Revenue Service; and a Senior 

Fellow of the National Academy of Public 

Administration.

Edward J. Mazur, CPA; Senior Advisor 

for Governmental Financial Management 

at Cherry, Bekaert & Holland, LLP; 

past member of the Governmental 

Accounting Standards Board; former 

State Comptroller of Virginia; and a 

former Controller of the Office of Federal 

Financial Management in the Office of 

Management and Budget.

Charles O. Rossotti, senior advisor at The 

Carlyle Group; former Commissioner of 

the Internal Revenue Service; and founder 

and former Chief Executive Officer and 

Chairman of American Management 

Systems, Inc., an international business 

and information technology consulting 

firm.

The committee’s report and that of our 

independent auditors are included on the 

following pages.

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102 PART III Financial Information GAO-08-1SP

Audit Advisory Committee’s

Report

The Audit Advisory Committee (the Committee) assists the Comptroller 

General in overseeing the U.S. Government Accountability Office’s (GAO) 

financial operations. As part of that responsibility, the Committee meets 

with agency management and its internal and external auditors to review 

and discuss GAO’s external financial audit coverage, the effectiveness of 

GAO’s internal controls over its financial operations, and its compliance 

with certain laws and regulations that could materially impact GAO’s 

financial statements. GAO’s external auditors are responsible for 

expressing an opinion on the conformity of GAO’s audited financial 

statements with the U.S. generally accepted accounting principles. The 

Committee reviews the findings of the internal and external auditors, and 

GAO’s responses to those findings, to ensure that GAO’s plan for corrective 

action includes appropriate and timely follow-up measures. In addition, 

the Committee reviews the draft Performance and Accountability Report, 

including its financial statements, and provides comments to management 

who have primary responsibility for the Performance and Accountability 

Report. The Committee met twice with respect to its responsibilities as 

described above. During these sessions, the Committee met with the 

internal and external auditors without GAO management being present 

and discussed with the external auditors the matters that are required 

to be discussed by generally accepted auditing standards. Based on 

procedures performed as outlined above, we recommend that GAO’s 

audited statements and footnotes be included in the 2007 Performance and 

Accountability Report.

Sheldon S. Cohen

Chairman

Audit Advisory Committee
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 103

Independent Auditor’s Report
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104 PART III Financial Information GAO-08-1SP
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 105
GAO Performance and Accountability Report 2007

106 PART III Financial Information GAO-08-1SP
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GAO-08-1SP Financial Information PART III 107

Purpose of Each Financial Statement

The financial statements on the next four 

pages present the following information:

The balance sheet presents the combined 

amounts we had available to use (assets) 

versus the amounts we owed (liabilities) 

and the residual amounts after liabilities 

were subtracted from assets (net 

position).

The statement of net cost presents the 

annual cost of our operations. The gross 

cost less any offsetting revenue earned 

from our activities is used to arrive at the 

net cost of work performed under our four 

strategic goals.

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The statement of changes in net position 

presents the accounting items that caused 

the net position section of the balance 

sheet to change from the beginning to the 

end of the fiscal year.

The statement of budgetary resources 

presents how budgetary resources were 

made available to us during the fiscal year 

and the status of those resources at the 

end of the fiscal year.

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108 PART III Financial Information GAO-08-1SP

Financial Statements

U.S. Government Accountability Office

Balance Sheets

As of September 30, 2007 and 2006

(Dollars in thousands)

2007 2006

Assets

Intragovernmental

 Funds with the U.S. Treasury and cash (Note 3) $63,626 $63,919 

 Accounts receivable 977 1,022 

Total Intragovernmental 64,603 64,941 

Property and equipment, net (Note 4) 41,566 40,293 

Other 372 358 

Total Assets $106,541 $105,592 

Liabilities

Intragovernmental 

 Accounts payable $6,232 $12,068 

	 	 Employee benefits (Note 6) 2,968 2,379 

 Workers’ compensation (Note 7) 2,364 2,337 

Total Intragovernmental 11,564 16,784 

Accounts payable 11,280 10,815 

	 Salaries and benefits 16,827 16,852 

Accrued annual leave and other (Note 5) 29,572 30,299 

Workers’ compensation (Note 7) 16,368 15,910 

Capital leases (Note 9) 4,542 6,872 

Note Payable (Note 5) 3,779 - 

Total Liabilities 93,932 97,532 

Net Position

Unexpended appropriations 30,562 25,951 

Cumulative results of operations (17,953) (17,891)

Total Net Position (Note 13) 12,609 8,060 

Total Liabilities and Net Position $106,541 $105,592 

The accompanying notes are an integral part of these statements.
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 109

Financial Statements

U.S. Government Accountability Office

Statements of Net Cost

For Fiscal Years Ended September 30, 2007 and 2006

(Dollars in thousands)

2007 2006 

Net Costs by Goal (Note 2)

Goal 1: Well-Being/Financial Security of American People $177,376 $191,880 

 Less: reimbursable services - - 

 Net goal costs 177,376 191,880 

Goal 2: Changing Security Threats/Challenges of Global 

 Interdependence 157,568 154,727 

 Less: reimbursable services - - 

 Net goal costs 157,568 154,727 

Goal 3: Transforming the Federal Government’s Role 148,959 149,913 

 Less: reimbursable services (2,391) (3,144)

 Net goal costs 146,568 146,769 

Goal 4: Maximize the Value of GAO 23,924 23,664 

 Less: reimbursable services - - 

 Net goal costs 23,924 23,664 

Less: reimbursable services not attributable to goals (5,730) (5,561)

Net Cost of Operations (Note 10) $499,706 $511,479 

The accompanying notes are an integral part of these statements.
GAO Performance and Accountability Report 2007

110 PART III Financial Information GAO-08-1SP

Financial Statements

U.S. Government Accountability Office

Statements of Changes in Net Position

For Fiscal Years Ended September 30, 2007 and 2006

(Dollars in thousands)

2007 2006

Cumulative Results of Operations, Beginning of fiscal year ($17,891) ($7,556)

Budgetary Financing Sources - Appropriations used 474,925 476,081 

Other Financing Sources

Intragovernmental transfer of property and equipment (27) (61)

	 Federal employee retirement benefit costs paid by OPM and

 imputed to GAO (Note 6) 24,746 25,124 

Total Financing Sources 499,644 501,144 

Net Cost of Operations (499,706) (511,479)

Net Change (62) (10,335)

Cumulative Results of Operations, End of fiscal year (17,953) (17,891)

Unexpended Appropriations, Beginning of fiscal year 25,951 27,003 

Budgetary Financing Sources and Uses

Current year appropriations 485,894 482,395 

Appropriations transferred in - 250 

Permanently not available (6,358) (7,616)

Appropriations used (474,925) (476,081)

Total Unexpended Appropriations, End of fiscal year 30,562 25,951 

Net Position $12,609 $8,060 

The accompanying notes are an integral part of these statements.
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 111

Financial Statements

U.S. Government Accountability Office

Statements of Budgetary Resources

For Fiscal Years Ended September 30, 2007 and 2006

(Dollars in thousands)

2007 2006 

Budgetary Resources (Note 11)

	 Unobligated balance, beginning of fiscal year $8,492 $11,080 

Budget authority

 Appropriations 485,894 482,395 

 Spending authority from offsetting collections

 Earned and collected 10,698 10,930 

	 	 Changes in unfilled customer orders - advance received 136 189 

 Subtotal 496,728 493,514 

Nonexpenditure transfers, net and actual - 250 

Permanently not available (6,358) (7,616)

Total Budgetary Resources $498,862 $497,228 

Status of Budgetary Resources

Obligations incurred

 Direct $480,731 $479,842 

 Reimbursable 8,121 8,705 

 Subtotal 488,852 488,547 

Unobligated balance - Apportioned 3,170 1,089 

Unobligated balance not available 6,840 7,592 

Total Status of Budgetary Resources $498,862 $497,228 

Change in Unpaid Obligated Balance

	 Unpaid Obligated balance, beginning of fiscal year $55,238 $54,798 

Obligations incurred 488,852 488,547 

Less: Gross Outlays (490,474) (488,107)

	 Unpaid Obligated balance, end of fiscal year $53,616 $55,238 

Net Outlays

Gross outlays $490,474 $488,107 

Less: Offsetting collections (10,645) (11,119)

Net Outlays $479,829 $476,988 

The accompanying notes are an integral part of these statements.
GAO Performance and Accountability Report 2007

112 PART III Financial Information GAO-08-1SP

Notes to Financial Statements

Note 1. Summary of Significant Accounting Policies

Reporting Entity

The accompanying financial statements present the financial position, net cost of operations, 

changes in net position, and budgetary resources of the United States Government 

Accountability Office (GAO). GAO, an agency in the legislative branch of the federal 

government, supports the Congress in carrying out its constitutional responsibilities. GAO 

carries out its mission primarily by conducting audits, evaluations, analyses, research, and 

investigations and providing the information from that work to the Congress and the public 

in a variety of forms. The financial activity presented relates primarily to the execution of 

GAO’s congressionally approved budget. GAO’s budget consists of an annual appropriation 

covering salaries and expenses and revenue from reimbursable audit work and rental income. 

The revenue from audit services and rental income is included on the Statement of Budgetary 

Resources as “reimbursable services.” The financial statements, except for federal employee 

benefit costs paid by OPM and imputed to GAO, do not include the effects of centrally 

administered assets and liabilities related to the federal government as a whole, such as 

interest on the federal debt, which may in part be attributable to GAO; they also do not include 

activity related to GAO’s trust function described in Note 14.

Basis of Accounting 

GAO’s financial statements have been prepared on the accrual basis of accounting in 

conformity with generally accepted accounting principles for the federal government. 

Accordingly, revenues are recognized when earned and expenses are recognized when 

incurred, without regard to the receipt or payment of cash. These principles differ from 

budgetary reporting principles. The differences relate primarily to the capitalization and 

depreciation of property and equipment, as well as the recognition of other long-term assets 

and liabilities. The statements were also prepared in conformity with OMB Circular No. A-136, 

Financial Reporting Requirements.

Assets

Intragovernmental assets are those assets that arise from transactions with other federal 

entities. Funds with the U.S. Treasury comprise the majority of intragovernmental assets on 

GAO’s balance sheet.
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 113

Funds with the U.S. Treasury

The U.S. Treasury processes GAO’s receipts and disbursements. Funds with the U.S. Treasury 

represent appropriated funds Treasury will provide to pay liabilities and to finance authorized 

purchase commitments.

Accounts Receivable

GAO’s accounts receivable are due principally from federal agencies for reimbursable services; 

therefore, GAO has not established an allowance for doubtful accounts. 

Property and Equipment

The GAO headquarters building qualifies as a multiuse heritage asset, is GAO’s only heritage 

asset, and is reported with property and equipment on the balance sheet. The designation of 

multiuse heritage asset is a result of both being listed in the National Register of Historic Places 

and being used in general government operations. Statement of Federal Financial Accounting 

Standards No. 29 requires accounting for multiuse heritage assets as general property, plant, 

and equipment to be included in the balance sheet and depreciated. Maintenance of the building 

has been kept on a current basis. The building is depreciated on a straight-line basis over 

25 years.

Generally, property and equipment individually costing more than $15,000 are capitalized at 

cost. Building improvements and leasehold improvements are capitalized when the cost is 

$25,000 or greater. Bulk purchases of lesser-value items that aggregate more than $150,000 

are also capitalized at cost. Assets are depreciated on a straight-line basis over the estimated 

useful life of the property as follows: building improvements, 10 years; computer equipment, 

software, and capital lease assets, ranging from 3 to 6 years; leasehold improvements, 5 years; 

and other equipment, ranging from 5 to 20 years. GAO’s property and equipment have no 

restrictions as to use or convertibility except for the restrictions related to the GAO building’s 

classification as a multiuse heritage asset. 

Liabilities

Liabilities represent amounts that are likely to be paid by GAO as a result of transactions that 

have already occurred.

Accounts Payable

Accounts payable consists of amounts owed to federal agencies and commercial vendors for 

goods and services received.
GAO Performance and Accountability Report 2007

114 PART III Financial Information GAO-08-1SP

Federal Employee Benefits

GAO recognizes its share of the cost of providing future pension benefits to eligible employees 

over the period of time that they render services to GAO. The pension expense recognized in 

the financial statements equals the current service cost for GAO’s employees for the accounting 

period less the amount contributed by the employees. OPM, the administrator of the plan, 

supplies GAO with factors to apply in the calculation of the service cost. These factors are 

derived through actuarial cost methods and assumptions. The excess of the recognized pension 

expense over the amount contributed by GAO and employees represents the amount being 

financed directly through the Civil Service Retirement and Disability Fund administered by 

OPM. This amount is considered imputed financing to GAO (see Note 6).

FECA provides income and medical cost protection to covered federal civilian employees 

injured on the job, employees who have incurred a work-related occupational disease, and 

beneficiaries of employees whose deaths are attributable to job-related injuries or occupational 

diseases. Claims incurred for benefits for GAO employees under FECA are administered by the 

Department of Labor (Labor) and are paid, ultimately, by GAO (see Note 7).

GAO recognizes a current-period expense for the future cost of post retirement health benefits 

and life insurance for its employees while they are still working. GAO accounts for and reports 

this expense in its financial statements in a manner similar to that used for pensions, with the 

exception that employees and GAO do not make current contributions to fund these future 

benefits.

Federal employee benefit costs paid by OPM and imputed to GAO are reported on the Statement 

of Changes in Net Position and are also included as a component of net cost by goal on the 

Statement of Net Cost.

Annual, Sick, and Other Leave

Annual leave is recognized as an expense and a liability as it is earned; the liability is reduced 

as leave is taken. The accrued leave liability is principally long-term in nature. Sick leave and 

other types of leave are expensed as leave is taken. All leave is funded when expensed. 

Contingencies

GAO has certain claims and lawsuits pending against it. Provision is included in GAO’s financial 

statements for any losses considered probable and estimable. Management believes that losses 

from certain other claims and lawsuits are reasonably possible but are not material to the fair 

presentation of GAO’s financial statements, and provision for these losses is not included in the 

financial statements. 

Estimates

Management has made certain estimates and assumptions when reporting assets, liabilities, 

revenue, expenses, and in the note disclosures. Actual results could differ from these estimates.
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 115

Note 2. Intragovernmental Costs and Exchange Revenue

Intragovernmental costs arise from exchange transactions made between two reporting 

entities within the federal government in contrast with public costs which arise from exchange 

transactions made with a nonfederal entity. Intragovernmental costs and exchange revenue for 

the years ended September 30, 2007 and 2006, are as follows:

Dollars in thousands

2007 2006

Goal 1:

Intragovernmental costs $16,930 $19,857

Public costs 160,446 172,023

 Total goal 1 costs 177,376 191,880

Goal 2:

Intragovernmental costs 15,040 16,012

Public costs 142,528 138,715

 Total goal 2 costs 157,568 154,727

Goal 3:

Intragovernmental costs 14,218 15,513

Public costs 134,741 134,400

 Total goal 3 costs 148,959 149,913

Goal 3 intragovernmental earned revenue (2,391) (3,144)

 Net goal 3 costs 146,568 146,769

Goal 4:

Intragovernmental costs 2,284 2,449

Public costs 21,640 21,215

 Total goal 4 costs 23,924 23,664

Earned revenue not attributable to goals

Intragovernmental (5,640) (5,492)

Public (90) (69)

 Total earned revenue not attributable to goals ($5,730) ($5,561)

Goals 1, 2, and 4 have no associated intragovernmental revenue and all public earned revenue 

collected is not attributable to goals. GAO’s pricing policy for reimbursable services is to seek 

reimbursement for actual costs incurred, including overhead costs where allowed by law. 

Therefore, revenues, as listed above, and costs that generated those revenues are equivalent.

Note 3. Funds with the U.S. Treasury and Cash

GAO’s funds with the U.S. Treasury consist of only appropriated funds. GAO also 

maintains cash imprest funds for use in daily operations. The status of these funds as of 

September 30, 2007 and 2006, is as follows:
GAO Performance and Accountability Report 2007

116 PART III Financial Information GAO-08-1SP

Dollars in thousands

2007 2006

Unobligated balance

Available $3,168 $1,087

Unavailable 6,840 7,592

Obligated balances not yet disbursed 53,616 55,238 

Total funds with U.S. Treasury 63,624 63,917 

Cash 2 2 

Total funds with U.S. Treasury and cash $63,626 $63,919 

Note 4. Property and Equipment, Net

The composition of property and equipment as of September 30, 2007, is as follows:

Dollars in thousands

Classes of property and equipment Acquisition value Accumulated depreciation Book value

Building $15,664 $11,905 $3,759

Land 1,191 – 1,191

Building improvements 106,565 90,152 16,413

Computer and other equipment and 

software 40,575 27,032 13,543

Leasehold improvements 6,125 5,540 585

Assets under capital lease 23,762 17,687 6,075

Total property and equipment $193,882 $152,316 $41,566

The composition of property and equipment as of September 30, 2006, is as follows:

Dollars in thousands

Classes of property and equipment Acquisition value Accumulated depreciation Book value

Building $15,664 $11,278 $4,386

Land 1,191 – 1,191

Building improvements 115,048 98,246 16,802

Computer and other equipment and 

software 34,791 24,502 10,289

Leasehold improvements 6,237 5,432 805

Assets under capital lease 23,014 16,194 6,820

Total property and equipment $195,945 $155,652 $40,293
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 117

Note 5. Liabilities Not Covered by Budgetary Resources

The liabilities on GAO’s Balance Sheets as of September 30, 2007 and 2006 include liabilities 

not covered by budgetary resources, which are liabilities for which congressional action is 

needed before budgetary resources can be provided. Although future appropriations to fund 

these liabilities are likely and anticipated, it is not certain that appropriations will be enacted 

to fund these liabilities. The composition of liabilities not covered by budgetary resources as of 

September 30, 2007 and 2006, is as follows:

Dollars in thousands

2007 2006

Intragovernmental liabilities—Workers’ compensation $2,364 $2,337 

Salaries and benefits—Comptrollers’ General retirement plan 3,113 2,982

Accrued annual leave and other 29,572 30,299

Workers’ compensation 16,368 15,910

Capital leases 4,542 6,872

Note payable 3,779 –

Total liabilities not covered by budgetary resources $59,738 $58,400

The majority of the note payable represents financing for telecommunications equipment 

purchased in fiscal year 2007 with an interest rate of 8.75 percent and future principle payments 

as follows: fiscal year 2008, $786,000; fiscal year 2009, $858,000; fiscal year 2010, $936,000; fiscal 

year 2011, $1,021,000.

Note 6. Federal Employee Benefits

All permanent employees participate in the contributory Civil Service Retirement System 

(CSRS) or the Federal Employees Retirement System (FERS). Temporary employees and 

employees participating in FERS are covered under the Federal Insurance Contributions 

Act (FICA). To the extent that employees are covered by FICA, the taxes they pay to the 

program and the benefits they will eventually receive are not recognized in GAO’s financial 

statements. GAO makes contributions to CSRS, FERS, and FICA and matches certain employee 

contributions to the thrift savings component of FERS. All of these payments are recognized as 

operating expenses.

In addition, all permanent employees are eligible to participate in the contributory Federal 

Employees Health Benefit Program (FEHBP) and Federal Employees Group Life Insurance 

Program (FEGLIP) and may continue to participate after retirement. GAO makes contributions 

through OPM to FEHBP and FEGLIP for active employees to pay for their current benefits. 

GAO’s contributions for active employees are recognized as operating expenses. Using the cost 

factors supplied by OPM, GAO has also recognized an expense in its financial statements for 

the estimated future cost of postretirement health benefits and life insurance for its employees. 

These costs are financed by OPM and imputed to GAO.
GAO Performance and Accountability Report 2007

118 PART III Financial Information GAO-08-1SP

Amounts owed to OPM and Treasury as of September 30, 2007 and 2006, are $2,968,000 and 

$2,379,000, respectively, for FEHBP, FEGLIP, FICA, FERS, and CSRS contributions and are 

shown on the Balance Sheet as an employee benefits liability.

Details of the major components of GAO’s federal employee benefit costs for the years ended 

September 30, 2007 and 2006, are as follows:

Dollars in thousands

Federal Employee Benefits Costs 2007 2006

Federal employee retirement benefit costs paid by OPM and imputed to GAO:

Estimated future pension costs (CSRS/FERS) $9,115 $10,369

Estimated future postretirement health and life insurance (FEHBP/FEGLIP) 15,631 14,755

 Total $24,746 $25,124

Pension expenses (CSRS/FERS) $29,895 $29,145

Health and life insurance expenses (FEHBP/FEGLIP) $16,100 $15,765

FICA payment made by GAO $16,581 $15,882

Thrift Savings Plan – matching contribution by GAO $9,596 $8,836

Comptrollers General and their surviving beneficiaries who qualify and so elect to participate 

are paid retirement benefits by GAO under a separate retirement plan. These benefits are paid 

from current year appropriations. Because GAO is responsible for future payments under this 

plan, the estimated present value of accumulated plan benefits of $3,113,000 as of September 30, 

2007, and $2,982,000 as of September 30, 2006, is included as a component of salary and benefit 

liabilities on GAO’s Balance Sheet.

Note 7. Workers’ Compensation

GAO utilizes the services of an independent actuarial firm to calculate its FECA liability. GAO 

recorded an estimated liability for claims incurred but not reported as of September 30, 2007 

and 2006, which is expected to be paid in future periods. This estimated liability of $16,368,000 

and $15,910,000 as of September 30, 2007 and 2006, respectively, is reported on GAO’s Balance 

Sheet. GAO also recorded a liability for amounts paid to claimants by Labor as of September 30, 

2007 and 2006, of $2,364,000 and $2,337,000, respectively, but not yet reimbursed to Labor by 

GAO. The amount owed to Labor is reported on GAO’s Balance Sheet as an intragovernmental 

liability.

Note 8. Building Lease Revenue 

In fiscal year 2000 the U.S. Army Corps of Engineers (USACE) entered into an agreement with 

GAO to lease the entire third floor of the GAO building. USACE provided all funding for the 

third floor renovation. Occupancy began August 3, 2000, for an initial period of 3 years, with 

options to renew on an annual basis for 7 additional years. Total rental revenue to GAO includes 

a base rent, which remains constant for the entire 10-year period, plus operating expense 
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 119

reimbursements at a fixed amount for the first 3 years, with escalation clauses from year 4 

through year 10 if the option years are exercised. Beginning in fiscal year 2002, USACE leased 

additional space on the sixth floor with occupancy lasting through the original lease term.

Rent received by GAO for fiscal year 2007 and 2006 was $4,978,000 and $4,916,000, respectively. 

These amounts are included in reimbursable services shown on the Statement of Net Costs. 

Total rental revenue for the remaining period of the 10-year lease is as follows:

Dollars in thousands

Fiscal year ending September 30 Total rental revenue*

2008 $5,045 

2009 5,111

2010 5,179

Total $15,335

* If option years are exercised.

Note 9. Leases

Capital Leases

GAO has entered into capital leases for office equipment and computer equipment under 

which the ownership of the equipment covered under the leases transfers to GAO when 

the leases expire. When GAO enters into these leases, the present value of the future lease 

payments is capitalized, net of imputed interest, and recorded as a liability. The acquisition 

value and accumulated depreciation of GAO’s capital leases are shown in Note 4, Property and 

Equipment, Net. As of September 30, 2007 and 2006, the capital lease liability was $4,542,000 

and $6,872,000, respectively.

These lease agreements are written as contracts with a base year and option years. The option 

years are subject to the availability of funds. Early termination of the leases for reasons 

other than default is subject to a negotiation between the parties. These leases are lease-toownership agreements. GAO’s leases are short term in nature and no liability exists beyond the 

years shown in the table below. GAO’s estimated future minimum lease payments under the 

terms of the leases are as follows:
GAO Performance and Accountability Report 2007

120 PART III Financial Information GAO-08-1SP

Dollars in thousands

Fiscal year ending September 30 Total

2008 $2,755 

2009 1,361

2010 776

2011 186

2012 2

Total estimated future lease payments 5,080

Less: imputed interest (538)

Net capital lease liability $4,542

Operating Leases

GAO leases office space, predominately for field offices, from the General Services 

Administration and has entered into various other operating leases for office communication 

and computer equipment. Lease costs for office space and equipment for fiscal year 2007 and 

fiscal year 2006 amounted to approximately $13,629,000 and $11,477,000, respectively. Leases 

for equipment under operating leases are generally less than 1 year, therefore there are no 

associated future minimum lease payments. Estimated future minimum lease payments for 

field office space under the terms of the leases are as follows:

Dollars in thousands

Fiscal year ending September 30 Total

2008 $6,073 

2009 3,818

2010 3,819

2011 3,176

2012 2,916

2013 and thereafter 4,787

Total estimated future lease payments $24,589

Leased property and equipment must be capitalized if certain criteria are met (see Capital 

Leases description). Because property and equipment covered under GAO’s operating leases 

do not satisfy these criteria, GAO’s operating leases are not reflected on the Balance Sheet. 

However, annual lease costs under the operating leases are included as components of net cost 

by goal in the Statement of Net Cost.
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 121

Note 10. Net Cost of Operations

Expenses for salaries and related benefits for fiscal year 2007 and fiscal year 2006 amounted 

to $402,772,000 and $405,199,000, respectively, which were about 81 percent of GAO’s annual 

net cost of operations in fiscal year 2007 and 79 percent in fiscal year 2006. Included in the 

net cost of operations are federal employee benefit costs paid by OPM and imputed to GAO of 

$24,746,000 in fiscal year 2007 and $25,124,000 in fiscal year 2006.

Revenues from reimbursable services are shown as an offset against the full cost of the goal 

to arrive at its net cost. Earned revenues that are insignificant or cannot be associated with a 

major goal are shown in total, the largest component of which is rental revenue from the lease 

of space in the GAO building. Revenues from reimbursable services for fiscal year 2007 and 

fiscal year 2006 amounted to $8,121,000 and $8,705,000, respectively. Further details of the 

intragovernmental components are provided in Note 2.

The net cost of operations represents GAO’s operating costs that must be funded by financing 

sources other than revenues earned from reimbursable services. These financing sources are 

presented in the Statement of Changes in Net Position.

Note 11. Budgetary Resources

Budgetary resources made available to GAO include current appropriations, spending authority 

from budget transfers, prior years’ unobligated appropriations, and reimbursements arising 

from both revenues earned by GAO from providing goods and services to other federal entities 

for a price (reimbursable services) and cost-sharing and pass-through contract arrangements 

with other federal entities. Reimbursements from cost-sharing and pass-through contract 

arrangements consisted primarily of collections from other federal entities 1) for the support 

of Federal Accounting Standards Advisory Board and 2) to utilize GAO contracts to obtain 

services. The costs and reimbursements for these activities are not included in the Statement of 

Net Cost.

For fiscal year 2006, budget transfer consisted of budget authority transferred from USAID for 

the analysis of U.S.-funded international basics education programs. There were no transfers of 

budgetary authority for fiscal year 2007.

Comparison of GAO’s fiscal year 2006 Statement of Budgetary Resources with the corresponding 

information presented in the 2008 President’s Budget is as follows:
GAO Performance and Accountability Report 2007

122 PART III Financial Information GAO-08-1SP

Dollars in thousands

Budgetary Resources Obligations Incurred

Fiscal year 2006 Statement of Budgetary Resources $497,228 $488,547

Expired unobligated balances (5,489) –

Unobligated balances apportioned for future periods (1,627) –

Rounding differences (112) (547)

2008 President’s Budget – Fiscal year 2006 Actual $490,000 $488,000

As the fiscal year 2009 President’s Budget will not be published until February 2008, a 

comparison between the fiscal year 2007 data reflected on the Statement of Budgetary 

Resources and fiscal year 2007 data in the President’s Budget cannot be performed, though we 

expect similar differences will exist. The fiscal year 2009 President’s Budget will be available 

on OMB’s Web site and directly from the Government Printing Office.

Budgetary resources obligated for undelivered orders at the end of fiscal years 2007 and 2006 

totaled $20,550,000 and $17,459,000, respectively. GAO’s apportionments fall under Category A, 

quarterly apportionment. Apportionment categories of obligations incurred for fiscal years 2007 

and 2006 are as follows:

Dollars in thousands

Fiscal year ending September 30 2007 2006

Direct – Category A $480,731 $479,842

Reimbursable – Category A 8,121 8,705 

Total obligations incurred $488,852 $488,547 

Note 12. Reconciliation of Net Costs of Operations to Budget

In fiscal year 2006 this reconciliation was presented as a fifth statement, the statement of 

financing. In accordance with OMB Circular A-136, revised June 2007, presentation requirement 

for this information is now a footnote disclosure. Details of the relationship between budgetary 

resources obligated and the net costs of operations for the fiscal years ending September 30 are 

as follows:
GAO Performance and Accountability Report 2007

GAO-08-1SP Financial Information PART III 123

Dollars in thousands

Fiscal year ending September 30 2007 2006

Resources Used to Finance Activities

Budgetary Resources Obligated 

Obligation incurred $488,852 $488,547

Less: Reimbursable services (8,121) (8,705)

 Cost Sharing and pass-through contract reimbursements (2,577) (2,225)

Net obligations 478,154 477,617

Non-budgetary Resources

Intragovernmental transfer of property and equipment (27) (61)

	 Federal employee retirement benefit costs paid by OPM imputed to GAO 24,746 25,124

	 Net non-budgetary resources used to finance activities 24,719 25,063

	 Total resources used to finance activities	 502,873 502,680

Resources used that do not fund Net Cost of Operations 

Net increase in unliquidated obligations (3,091) (1,536)

Assets capitalized (14,631) (8,939)

Total resources that do not fund Net Cost of Operations (17,722) (10,475)

	 Total resources used to finance Net Cost of Operations 485,151 492,205

Components of Net Costs that Require Resources in Future Periods

Increase in workers’ compensation 485 5,770

(Decrease)/Increase in accrued annual leave (340) 119

Increase/(Decrease) in other liabilities 101 (125)

Total Components of Net Cost that require budgetary 

 resources in future periods 246 5,764

Costs that do not Require Resources

Depreciation 14,309 13,510

 Net Cost of Operations $499,706 $511,479

Note 13. Net Position

Net position on the Balance Sheets comprises unexpended appropriations and cumulative 

results of operations. Unexpended appropriations is the sum of the total unobligated 

appropriations and undelivered goods and services. Cumulative results of operations represent 

the excess of financing sources over expenses since inception. Details of the components of 

GAO’s cumulative results of operations for the years ended September 30, 2007 and 2006, are as 

follows:
GAO Performance and Accountability Report 2007

124 PART III Financial Information GAO-08-1SP

Dollars in thousands

2007 2006

Investment in property and equipment, net $41,566 $40,293

Other – supplies inventory 219 216

Liabilities not covered by budgetary resources (59,738) (58,400) 

Cumulative results of operations ($17,953) ($17,891) 

Liabilities not covered by budgetary resources are liabilities for which congressional action is 

needed before budgetary resources can be provided. See Note 5 for components.

Note 14. Davis-Bacon Act Trust Function

GAO is responsible for administering for the federal government the trust function of the DavisBacon Act receipts and payments and publishes separate, audited financial statements for this 

fund. GAO maintains this fund to pay claims relating to violations of the Davis-Bacon Act and 

Contract Work Hours and Safety Standards Act. Under these acts, Labor investigates violation 

allegations to determine if federal contractors owe additional wages to covered employees. 

If Labor concludes that a violation has occurred, GAO collects the amount owed from the 

contracting federal agency, deposits the funds into an account with the U.S. Treasury, and 

remits payment to the employee. GAO is accountable to the Congress and to the public for the 

proper administration of the assets held in the trust. Trust assets under GAO’s administration 

as of September 30, 2007 and 2006, totaled approximately $4,151,000 and $4,485,000, 

respectively. These assets are not the assets of GAO nor the federal government and are held for 

distribution to appropriate claimants. During fiscal years 2007 and 2006, receipts in the trust 

amounted to $373,000 and $774,000 and disbursements amounted to $708,000 and $954,000, 

respectively. Because the trust assets and related liabilities are not assets and liabilities of 

GAO, they are not included in the accompanying financial statements.
Serving the Congress and the Nation

Source: See Image Sources.

Part IV

From the 

Inspector General
GAO Performance and Accountability Report 2007

126 PART IV From the Inspector General GAO-08-1SP

From the Inspector General

Memorandum	

Date: October 26, 2007

To: Comptroller General

From: Inspector General – Frances Garcia

Subject: GAO Management Challenges and Performance Measures

We have examined management’s assessment of the management challenges. Based 

on our work and institutional knowledge, we agree that physical security, information 

security, and human capital continue to be management challenges that may affect 

GAO’s performance. We also agree with management’s assessment of progress made 

in addressing these challenges.

During fiscal year 2007, we reviewed all accomplishment reports of $500 million 

or more, which totaled 74 percent of the total dollar value reported. Based on our 

reviews, we believe that GAO had a reasonable basis for claiming these benefits. In 

addition, we assessed GAO’s fiscal year 2006 performance measures for how well 

its internal administrative services help employees get their jobs done and improve 

the quality of their work life. Overall, we found that these measures were reasonable 

and that methods used to measure performance were appropriate, but we also made 

recommendations to help improve their objectivity and reliability.
Serving the Congress and the Nation

Source: See Image Sources.

Part V

Appendixes
GAO Performance and Accountability Report 2007

128 PART V Appendixes GAO-08-1SP

1. Accomplishments and

Contributions

In pursuing our strategic goals during 

fiscal year 2007, we recorded hundreds of 

accomplishments and made numerous other 

contributions. This appendix provides details 

on the most significant of these. In reporting 

financial benefits, nonfinancial benefits, and 

contributions (designated by an F, N, or C 

in the item number below), we are holding 

ourselves accountable for the resources we 

received to implement our strategic plan.

Typically, the accomplishments describe 

work we completed in prior fiscal years 

because it takes time to implement 

recommendations, realize benefits, and 

record them. The other contributions, which 

often refer to work completed in fiscal 

year 2007, describe instances in which we 

provided information or recommendations 

that aided congressional decision making or 

informed the public debate to a significant 

degree. At the end of each accomplishment 

and contribution summary, we list the 

reference numbers for products associated 

with the work discussed. In the online 

PDF version of this document, readers can 

link directly to these products if they want 

additional information.
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 129

The health needs of an aging 

and diverse population

1.01.F. Avoiding an Increase in Medicare

Payment for Skilled Nursing Facilities

(SNF): In 2000, the Congress increased 

the nursing portion of Medicare’s daily 

rate for SNFs by 16.66 percent for 2 years, 

and also directed us to assess the impact 

of the increase on nursing staff ratios and 

recommend whether it should continue. 

Our analysis of available data showed that, 

in aggregate, SNFs’ nurse staffing ratios 

changed little after the payment increase 

took effect. We suggested in November 2002 

that the Congress consider our finding that 

the payment increase was not effective in 

raising nurse staffing when determining 

whether the increase should continue. 

Our work influenced the Congress in its 

2003 decision not to include an increase 

in subsequent legislation, despite strong 

opposition from the nursing facility industry. 

In 2007, Medicare reduced its costs by an 

estimated $1 billion by avoiding this increase 

in the SNF payment rate. (GAO-03-176)

1.02.F. Avoiding Making a Permanent

Add-on to Medicare Payment for SNFs:

The Congress required the Centers for 

Medicare & Medicaid Services (CMS) to 

temporarily raise Medicare payment rates 

for SNFs by 4 percent from October 1, 2000, 

through September 30, 2002. Prior to and 

after the expiration of this add-on, provider 

representatives argued that it should be 

made permanent, citing payment shortfalls 

from other payers. However, our 2002 

report on payment adequacy found that 

most freestanding SNFs had payments that 

exceeded their costs of caring for Medicare 

beneficiaries, leaving them with a Medicare 

margin of almost 19 percent in 2000. Our 

work contributed to the congressional 

decision in 2003 not to make the 4 percent 

payment increase permanent. This allowed 

Medicare to reduce its costs by an estimated 

$600 million in 2007. (GAO-03-183)

1.03.F. Limiting States Claiming

of Medicaid Matching Funds for

Targeted Case Management: In 2005, we 

reported that there were risks associated 

with Medicaid’s provision of targeted 

case management—a service to help 

beneficiaries gain access to needed medical, 

social, educational, and other services. 

We highlighted instances where states 

were using targeted case management 

services to inappropriately increase federal 

reimbursement by claiming services that 

should not be paid by Medicaid funds and 

made a recommendation to establish and 

clarify federal policy on payment for these 

services. Based in part on information we 

provided, the Deficit Reduction Act of 2005 

clarified the definition of targeted case 

management services and specified when 

federal funding could be used for them. 

Based on a Congressional Budget Office 

(CBO) estimate, these provisions will result 

in financial benefits of $768.6 million in the 

first 5 years of implementation. (GAO-05-748, 

GAO-05-836T)

1.04.C. Identifying Options for Changes

in Medicare Physician Payment Methods:

Since 2002, we have conducted a substantial 

body of work to identify options for the 

Source: See Image Sources.

Provide timely, quality service to the Congress and the federal 

government to address current and emerging challenges to the 

well-being and financial security of the American people

Strategic Goal 1
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130 PART V Appendixes GAO-08-1SP

Congress to consider in improving Medicare’s 

fee-for-service physician payment system. 

Some of our work has focused on technical 

issues, such as adjusting payments for 

geographic variations in the cost of running 

a medical practice and the amounts paid 

for specific types of care, such as therapy 

and imaging services. We have also focused 

more broadly on Medicare’s system of 

updating payments for physician services 

and on Medicare beneficiary access to, and 

utilization of, such services. Most recently, 

our report and testimonies on profiling 

physician practices to improve the efficiency 

of Medicare have received considerable 

attention by the Congress and may become 

a part of legislated changes currently being 

debated by the committees with jurisdiction 

over Medicare. (GAO-07-862T, GAO-07-307, 

GAO-06-1008T, GAO-05-119, GAO-05-326T)

1.05.C. Assisting the Congress with

Information to Reauthorize the Food and

Drug Administration (FDA) Legislation:

We conducted a body of work, including 

reports and testimonies, that assisted the 

Congress in developing a bill to reauthorize 

industry user fees for FDA and reform many 

FDA activities. For example, our reports 

identified deficiencies in FDA’s oversight of 

marketed drugs and in FDA’s monitoring 

of direct-to-consumer advertising of 

prescription drugs, discussed barriers to 

the development of new drugs, reported that 

the Best Pharmaceuticals for Children Act 

has led to improved labeling for pediatric 

drugs, and found that there are barriers to 

the use of accredited organizations outside 

of FDA to conduct inspections of medical 

device manufacturing facilities. The Food 

and Drug Administration Amendments Act 

of 2007 (Pub. L. No. 110-85), which became 

law on September 27, 2007, addresses many 

of the concerns we raised. For example, 

the law gives FDA the authority to require 

pharmaceutical firms to conduct studies of 

their marketed drugs when FDA identifies 

the need for information about a possible 

safety issue. The law also directs that 

funds from user fees be used to improve 

the monitoring of drug advertisements, 

requires establishment of a foundation 

to help modernize the development of 

new drugs, and reauthorizes the act. 

(GAO-06-402, GAO-07-54, GAO-07-49, 

GAO-07-157, GAO-07-557)

1.06.C. Improving Care for Veterans

Transitioning from Military Service:

We rapidly responded to congressional 

concerns about unsanitary living conditions 

at Walter Reed Medical Center by testifying 

twice on a body of work showing that 

servicemembers injured in combat face an 

array of significant medical and financial 

challenges as they begin their recovery 

process in the Departments of Defense’s 

(DOD) and Veterans Affairs’ (VA) care 

systems. For example, we identified DOD’s 

and VA’s inability to electronically share 

medical records for severely injured 

servicemembers—those with traumatic 

brain injuries or other complex trauma, such 

as missing limbs—that were transferred 

from DOD to one of four VA polytrauma 

facilities. We found during visits to 

polytrauma facilities in 2005 that none of the 

facilities had real-time access to the injured 

servicemembers’ DOD electronic medical 

records, which is needed to determine 

whether servicemembers are medically 

stable enough to participate in vigorous 

rehabilitation activities. Subsequent to 

that report, in May 2007, VA reported that 

three of the four polytrauma facilities now 

have access to DOD’s electronic medical 

records. Our January 2005 report found 

that servicemembers whose disabilities 

are definitely or likely to result in military 

separation may not be able to benefit from 

early intervention for rehabilitation by VA 

health care because DOD and VA sometimes 

worked at cross purposes. For example, DOD 

was concerned that VA’s outreach to provide 

early intervention rehabilitation services to 

wounded servicemembers who had not yet 
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 131

been discharged conflicted with the military’s 

retention goals. Finally, we reported in 

May 2006 that despite DOD’s efforts, it 

cannot provide reasonable assurance that 

servicemembers who need referrals for 

mental health examinations receive them. 

(GAO-07-589T, GAO-07-606T, GAO-06-794R, 

GAO-05-167, GAO-06-397)

1.07.C. Enrolling Dual-Eligible Beneficiaries in Medicare Prescription Drug

Plans: In a series of reports and testimonies, we identified shortcomings in CMS’s 

process and policy for enrolling dual-eligible 

beneficiaries before and since the implementation of the Medicare drug benefit on 

January 1, 2006. Our 2005 report cautioned 

that potential problems may leave some 

dual-eligible beneficiaries facing difficulties 

in immediately obtaining necessary drugs. 

We noted that some individuals may not be 

identified for automatic enrollment in a drug 

plan due to potential inaccuracies in state or 

federal data, and that beneficiaries’ prescription drugs may not be on their assigned drug 

plan’s formulary. We alerted CMS that its contingency plans to address potential transition 

problems may not be effective. In our 2007 

report, we reported that CMS’s enrollment 

procedures and implementation of its Part D 

coverage policy generate challenges for some 

dual-eligible beneficiaries, pharmacies, and 

the Medicare program. Medicare pays drug 

plans to provide these beneficiaries with several months of retroactive coverage, but until 

March 2007, CMS did not inform beneficiaries 

of their right to be reimbursed for drug costs 

incurred during these periods. We estimated 

that Medicare paid plans millions of dollars 

in 2006 for coverage during periods for which 

dual-eligible beneficiaries may not have 

sought reimbursement for their drug costs. In 

response to our recommendation, CMS has 

added language to enrollment notices indicating that beneficiaries may be eligible for reimbursement of some drug costs. (GAO-07-272, 

GAO-07-1022T, GAO-07-824T, GAO-06-278R)

1.08.C. Reauthorizing the State

Children’s Health Insurance Program

(SCHIP): In November and December 

of 2006, we conducted discussions with 

staff members of the Senate Committee on 

Finance regarding the reauthorization of 

SCHIP. In particular, the committee was 

interested in having us conduct a review of 

SCHIP over its 10-year period and testify on 

issues facing the Congress as it considers 

reauthorization. We delivered testimony 

before the Senate Committee on Finance and 

then subsequently before the Subcommittee 

on Health, Committee on Energy and 

Commerce. Our testimony focused on the 

growth in enrollment and program spending, 

the current design of states’ programs, and 

issues identified for consideration during 

SCHIP reauthorization. Both testimonies 

helped set the stage for the reauthorization 

debate and raised key issues that required 

resolution among Members of the Congress. 

In particular, our work on adult coverage, 

states’ eligibility levels for children, and 

spending trends raised issues that were 

important to provide an informed basis 

for the debate and final SCHIP legislation. 

(GAO-07-447T, GAO-07-501T, GAO-07-558T)

Lifelong learning to enhance 

U.S. competitiveness

1.09.N. Enhancing Oversight of Head

Start Grantees: We found weaknesses in 

the Program Review Instrument for Systems 

Monitoring (PRISM) system for assessing 

Head Start grantees, which is administered 

by the Department of Health and Human 

Services’ Administration for Children and 

Families (ACF). ACF had no process in place 

to ensure that its reviewers consistently 

followed on-site review standards, so we 

recommended that it develop a way to 

assess the results of PRISM reviews and 

ensure consistent treatment of grantees with 

similar problems. ACF corroborated our 

findings and implemented a standardized 
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132 PART V Appendixes GAO-08-1SP

set of performance indicators and a uniform 

review protocol. Although ACF began 

training staff for PRISM reviews, we found 

that it was unclear whether training on the 

PRISM process alone would adequately 

equip reviewers to assess the management of 

Head Start grantees and recommended that 

ACF ensure that training and certification 

is provided for all PRISM reviewers. ACF 

subsequently offered additional training 

for its PRISM reviewers and implemented a 

certification process to verify credentials and 

ensure the quality of reviewers. Finally, we 

identified concerns with the independence 

and credibility of PRISM review team leaders 

who reviewed grantees within their home 

regions. ACF changed its process to ensure 

that leaders only review grantees outside of 

their home regions. (GAO-06-167)

1.10.N. Improving Services to Students

with Limited English Proficiency: In 

a review of services for students with 

limited English proficiency (LEP), we found 

that state academic assessments may not 

produce valid and reliable results for these 

students and that some states may need more 

technical assistance to develop valid tests for 

them. We recommended that the Department 

of Education (Education) determine what 

additional technical assistance states need 

to assess the academic knowledge of LEP 

students in a valid manner and provide the 

identified additional assistance. We also 

determined that while most states offer 

some accommodations to LEP students to 

improve assessment results in elementary 

and secondary grades, there was a lack of 

research on what specific accommodations 

are appropriate for LEP students and their 

effectiveness in improving the validity of 

assessment results. We recommended that 

the agency support additional research in 

this area and disseminate the results to 

states. Addressing these concerns, Education 

announced an LEP Partnership initiative to 

provide technical assistance to help states 

develop more valid and reliable assessments 

for these students. The agency and the 

partnership launched several technical 

assistance projects, such as developing 

guides for simplified assessments and 

conducting translations of them. They are 

also preparing a handbook on appropriate 

accommodations for LEP students. In 

addition, an Education-funded study on 

accommodations for LEP students was 

published in October 2006, which is available 

as a resource on Education’s Web site. 

(GAO-06-815)

1.11.N. Increasing Supplemental

Education Services to Students: The No 

Child Left Behind Act requires districts with 

Title I-funded schools that have not met state 

performance goals for 3 consecutive years to 

offer their low-income students supplemental 

educational services, such as tutoring. 

States and districts share responsibility for 

providing these services through a stateapproved provider. In August 2006, we 

reported that states and districts sought the 

flexibility to use Education’s pilot program 

that allowed districts in need of improvement 

to act as providers of these services. Having 

districts serve as providers could increase 

access to students in rural districts and 

increase participation by lowering costs. 

We recommended that Education consider 

expanding this pilot. After we provided our 

findings and recommendations to Education, 

the agency announced the expansion of the 

pilot to include additional districts and the 

continuation of the pilot for other districts. 

As a result, more students are likely to 

receive supplemental education services. 

(GAO-06-758)

Benefits and protections for 

workers, families, and children

1.12.F. Denying Benefits to Fugitive

Felons: We determined the scope of the 

Social Security Administration’s (SSA) 

authority to deny benefits to fugitive felons 
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GAO-08-1SP Appendixes PART V 133

and to release information about Old Age and 

Survivors Insurance (OASI) and Disability 

Insurance (DI) beneficiaries who are fugitive 

felons. Although fugitive felons are ineligible 

for Supplemental Security Income (SSI) 

benefits, it was not clear whether SSA also 

had the authority to deny other benefits. SSA 

will, upon request, provide law enforcement 

agencies with the current addresses and 

Social Security numbers (SSN) of fugitive 

felons who are SSI recipients. We concluded 

that SSA did not have the authority to deny 

OASI and DI benefits to fugitive felons and 

that the Congress would have to amend Title 

II of the Social Security Act to explicitly 

disqualify fugitive felons from receiving these 

benefits. In the Social Security Protection Act 

of 2004 (Public Law 108-203), the Congress 

subsequently amended the Social Security 

Act to deny these benefits to fugitive felons. 

Payment of these benefits was prohibited 

as of January 1, 2005, resulting in a savings 

over the fiscal year 2005-2007 period of over 

$180 million. (GAO-02-459R)

1.13.N. Meeting the Needs of Reserves

and National Guard Members: We found 

that members of the Reserves and National 

Guard returning from active duty got less 

help with transitioning to new jobs than other 

separating military personnel due to the 

time constraints of demobilization. Though 

many reservists and guard members have 

jobs before they leave for active duty, their 

employers may not hold their jobs for them 

until they return as regulated by law or their 

companies may have gone out of business or 

into bankruptcy in their absence. Moreover, 

other reservists and guard members who 

are self-employed or desire better jobs when 

they return to civilian life may also need job 

assistance. We recommended that the DOD 

work with its partners to explore options to 

enhance their participation in the transition 

assistance program (TAP). DOD reported 

to the Congress in May 2006 that it would 

address these issues. In 2007, DOD launched 

a new Web site, accessible even after 

demobilization, that provides information 

covered by TAP and allows members 

to create individualized plans that are 

accessible for their lifetimes, translate their 

military skills into civilian language, develop 

résumés, and conduct job searches in their 

local areas. In addition, we found that VA had 

no data on the participation of separating 

military personnel in its disabled transition 

assistance program and TAP briefings and 

no data on the number and location of the 

program sessions it provided. After we 

recommended that VA develop a tracking 

system, VA implemented a new reporting 

system to provide such data, including 

participation by military service and by 

status as full-time active duty personnel or 

by Reserves or National Guard members on 

active duty. (GAO-05-544)

1.14.N. Improving Disability Programs:

Our many reports and testimonies on 

disability programs had a significant impact 

on congressional policy making, helped 

frame the current debate surrounding 

disability services and benefits for veterans 

and injured servicemembers, and prompted 

agencies to take action. In the Congress, 

members relied on our many VA testimonies, 

citing our recommendations for improving 

VA and DOD disability systems in support 

of future appropriations and proposed 

legislation. We briefed congressional 

committees and participated in a national 

roundtable on disability issues, including 

VA’s inability to process veterans’ claims 

for disability benefits in a timely, accurate, 

and consistent manner. The President’s 

Commission on Care for America’s Returning 

Wounded Warriors took our briefing and 

recommendations into account when 

developing its own plan for improving DOD 

and VA disability systems. In addition, in 

response to our recommendations, SSA 

improved its disability review and evaluation 

processes and took steps to enhance the 

cost-effectiveness and integrity of continuing 

disability reviews. Finally, we convened a 
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134 PART V Appendixes GAO-08-1SP

Comptroller General’s forum to address some 

of the key issues related to modernizing 

federal disability policy. Forum participants, 

including federal officials, researchers, 

employers, and advocate groups, suggested 

a number of steps that could be taken by 

stakeholders to inform the debate and to 

help move current policy toward achieving a 

21st century disability policy. (GAO-07-906R, 

GAO-07-98, GAO-07-562T, GAO-07-934SP, 

GAO-07-512T)

1.15.N. Establishing a Child Locator

Center for Disasters: After hurricanes 

Katrina and Rita, we found that the National 

Center for Missing and Exploited Children 

(NCMEC) faced problems getting access to 

American Red Cross and Federal Emergency 

Management Agency (FEMA) data because 

of these organizations’ concerns about 

privacy. We determined that agreements 

for data sharing between NCMEC and the 

American Red Cross and FEMA can help 

locate missing persons more quickly in 

disasters. We expressed our concerns and as 

a result legislation was introduced and later 

enacted in 2006 as part of the Department 

of Homeland Security Appropriations Act of 

2007 (Pub. L. No. 109-295). This legislation 

provides for a National Emergency Child 

Locator Center to be established within 

NCMEC. According to the act, the FEMA 

Administrator will establish procedures to 

make all relevant information available to 

the center in a timely manner to facilitate the 

expeditious identification and reunification 

of children with their families. The law 

also requires that the center enter into 

cooperative agreements with federal and 

state agencies and organizations, such as 

the American Red Cross, to implement its 

mission. (GAO-06-680R)

Financial security for an aging 

population

1.16.F. Reforming the Pension System:

Our reports and testimonies on pension 

reform had an impact on pension reform 

legislation and saved billions of dollars. We 

recommended that the Congress consider 

pension reform as a way to improve the financial viability of the Pension Benefit Guaranty Corporation’s (PBGC) single-employer 

program—a program that we designated as 

high risk in 2003. Specifically, we suggested 

that PBGC’s premium structure should be 

reexamined to see whether premiums could 

better reflect the risk posed by various plans 

to the pension system. We also suggested 

increasing the flat-rate premium—the perparticipant premium paid by sponsors of 

PBGC-insured plans—and restructuring the 

variable rate premium—the premium paid 

by sponsors of certain underfunded plans. 

The Deficit Reduction Act, enacted in 2006 

(Pub. L. No. 109-171), included provisions to 

increase the flat-rate premium and index it to 

wage growth starting in 2007. CBO estimated 

that this would increase premium payments 

by $5.8 billion from 2006 to 2015. The Pension Protection Act of 2006 (PPA) (Pub. L. No. 

109-280) changed the variable rate premium 

structure so that PBGC’s variable rate premiums are now paid on 100 percent of a plan’s 

underfunding. Previously, certain plans that 

were 90 percent funded could be exempted 

from variable rate premiums. PPA also 

changed the variable rate premium for small 

employers with plan underfunding. The combined effects of these variable rate premium 

changes, as estimated by CBO, will increase 

PBGC’s premium collections by $5 billion 

over the 2007-2016 period. We estimate that 

the federal government will realize a financial 

benefit of $756 million for fiscal years 2006 

and 2007 as a result of our work on these 

two pension reform laws. (GAO-07-794T, 

GAO-06-429, GAO-05-578SP, GAO-05-360T, 

GAO-04-90)
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1.17.N. Enhancing the Security of the

Thrift Savings Plan (TSP) Web Site:

During a review of customer service 

provided by TSP, including service provided 

through its Web site, we identified a lack 

of key security features typically used by 

financial services firms. For example, the 

Web site included the use of SSNs as account 

numbers, four-character numeric personal 

identification numbers (PIN), and no lockout feature to lock participants’ accounts 

after a certain number of unsuccessful login 

attempts. After we reported this to TSP 

officials, a lock-out feature was added, a 

longer alphanumeric PIN was implemented, 

and TSP switched to non-SSN-based user 

names. SSNs are no longer used on the TSP 

Web site. (GAO-05-38)

1.18.N. Improving Disclosure of

Pension Plan Information to Plan

Participants: Our reports and testimonies 

on pensions identified ways to improve the 

transparency of pension plan information. 

We recommended requiring that all plan 

participants receive information about plan 

investments and the minimum benefit amount 

that PBGC guarantees, if their plans are 

terminated. We also recommended that the 

Congress consider proposals to restructure 

program guarantees for shutdown benefits. 

PPA (Pub. L. No. 109-280) addressed these 

concerns. It provides for qualified advisers 

to offer investment advice to participants in 

defined contribution plans and added new 

disclosure requirements. For instance, the 

act expanded the annual funding notice 

requirement to include multiemployer 

plans, not just single-employer plans, and 

required single-employer plans to include a 

summary of the PBGC rules governing plan 

termination. More plan information must be 

provided by both multiemployer and singleemployer plans, such as information on the 

plan’s funding and asset allocation policy, any 

plan amendment, and how to obtain a copy 

of the plan’s annual report. The act speeds 

up the time when notices must be provided. 

It limits the ability of certain plans to make 

lump-sum payments or to increase benefits, 

requires certain plans to freeze normal 

benefit increases, and prohibits plans from 

paying benefits for unpredictable contingent 

events, such as shutdown benefits to 

workers in facilities that are closed. Further, 

shutdown benefits must now be treated like 

other plan amendments with phase-in 5 years 

before termination. (GAO-06-285, GAO-04-90)

A responsive, fair, and effective 

system of justice

1.19.N. Addressing Federal Law

Enforcement Coordination and

Management: In 2007 we reported on 

several federal law enforcement coordination 

and management issues. We reported that 

the Departments of Homeland Security, 

Justice, Commerce, and State were not 

effectively coordinating with each other to 

enforce export control laws and regulations. 

In response to our recommendation, the 

Department of Justice (Justice) began 

providing the Departments of Commerce 

(Commerce) and State (State) quarterly 

reports on the outcomes of criminal cases for 

export control violations. We also reported 

that to combat human trafficking crimes, 

the Department of Homeland Security 

(DHS) and Justice needed to expand 

collaboration and develop and implement 

a strategic framework to coordinate 

efforts to investigate and prosecute these 

crimes. In addition, in response to our 

recommendations regarding management 

concerns, the Director of the Federal Bureau 

of Investigation (FBI) announced the 

creation of the Associate Deputy Director 

position to oversee key management 

functions, which is comparable to the Chief 

Operating Officer/Chief Management Officer 

position we recommended in 2002, and began 

addressing strategic human capital needs for 

managing the FBI’s information technology 
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136 PART V Appendixes GAO-08-1SP

programs, particularly the FBI’s Sentinel 

intelligence analysis and investigative 

support modernization program. (GAO-07-19, 

GAO-07-265, GAO-07-915)

1.20.N. Addressing Federal Law

Enforcement Training Needs: In 2007, we 

reported the results of our surveys of 105 

federal civilian law enforcement agencies 

on their specific authorities to carry out 

certain functions and on their mandatory 

basic training programs; 81 agencies 

reported using the Federal Law Enforcement 

Training Center. We had reported in 

2003 that the center faced an increasing 

demand for its facilities in the post-9/11 

security environment and recommended it 

address capacity constraints and planning 

challenges. By 2007 the center had developed 

contingency planning, an approach for 

estimating future construction needs, and an 

automated scheduling system. (GAO-07-121, 

GAO-07-815)

The promotion of viable 

communities

1.21.C. Improving the Small Business

Administration’s (SBA) Capacity to

Provide Timely Disaster Assistance:

In a February 2007 report, we found that 

SBA engaged in limited disaster planning 

prior to the Gulf Coast hurricanes, such as 

Hurricane Katrina, which likely contributed 

to the initial challenges that the agency faced 

in processing the related surge in disaster 

loan applications on a timely basis. We 

recommended that SBA take several steps 

to enhance its disaster planning process, 

such as assessing whether the use of disaster 

simulations or catastrophe models would 

enhance its disaster planning process. We 

also recommended that SBA establish time 

frames for completing key elements of its 

disaster plan, such as cross training agency 

staff not typically involved in disaster relief 

efforts to provide backup support and a 

long-term strategy for acquiring adequate 

office space in case of an emergency. SBA 

agreed to implement these recommendations, 

which should enhance the agency’s capacity 

to provide critical disaster assistance on a 

timely basis in a future disaster. (GAO-07-114)

1.22.C. Evaluating the Role and

Modernization of the Federal Housing

Administration (FHA): In two June 2007 

reports and a series of testimonies, we 

examined trends in the use of FHA-insured 

mortgages, FHA’s risk management, and 

the implications of a legislative proposal 

to overhaul the agency’s products and 

processes. Our analysis showed that FHA’s 

share of the market for home purchase 

mortgages dropped sharply from 1996 

through 2005, most significantly among 

minority borrowers who accounted for a 

growing share of subprime loans in that 

period. While noting that FHA could be 

a vehicle to provide lower-cost and more 

sustainable mortgage options to some 

subprime borrowers, we also emphasized 

the need for continued improvements 

in risk management to ensure that FHA 

operates in a financially sound manner 

in the face of potential program changes. 

Additionally, we analyzed how the proposed 

changes could affect the demand for FHAinsured loans, the cost and availability 

of insurance to borrowers, and the 

budgetary costs of the insurance program. 

Our reports and testimonies informed 

congressional debate on the benefits and 

risks of FHA modernization legislation under 

consideration by this Congress. (GAO-07-645, 

GAO-07-708, GAO-07-1109T, GAO-07-1033T, 

GAO-07-615T)

1.23.C. Improving the Preservation

of Affordable Housing: In light of the 

pressing need for rental housing affordable 

to low-income households and concerns 

that the Department of Housing and Urban 

Development (HUD) may not be committed 

to maintaining its housing stock, in April 
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GAO-08-1SP Appendixes PART V 137

2007 we recommended that HUD modify its 

one-for-one replacement policy for projectbased Section 8 units and address property 

owners’ concerns about operating cost 

reimbursements in high-cost areas. We found 

that although the majority of owners leave 

the program for economic or market reasons, 

growing owner frustration could upset the 

balance, causing more owners to consider 

opting out even when economic conditions 

could be overcome or mitigated. HUD 

generally agreed with our recommendations 

and stated that it would be considering a 

more flexible policy to better accommodate 

market demand and would be working with 

the industry to improve its preservation 

efforts. In addition, the 2008 House 

Appropriations Committee Report stated that 

it encouraged HUD to implement the reforms 

we suggested and that the committee was 

looking forward to discussing the reforms 

with HUD. (GAO-07-290)

1.24.C. Assessing the Housing Needs of

Low-Income Veterans: Through a firstever analysis of combined data from the U.S. 

Census Bureau, VA, and HUD, we provided 

comprehensive data on low-income military 

veterans who rent. Our analysis showed 

that over half of veteran renter households, 

representing an estimated 2.3 million 

such households, were low income in 2005 

(their household incomes were 80 percent 

or less of their areas’ median household 

incomes). Further, an estimated 1.3 million 

of these low-income veteran households 

had housing affordability problems—that 

is, their rental costs exceeded 30 percent of 

their incomes—but only a small percentage 

lived in overcrowded or inadequate housing. 

By some measures better off than their 

nonveteran counterparts, veteran lowincome households were less likely to receive 

HUD rental assistance. Factors potentially 

contributing to this low level of assistance 

included differences in the extent of housing 

needs among veteran and other households 

and preferences that are used by public 

housing authorities and property owners that 

administer the programs. Our work provided 

important data to inform debate on proposed 

legislation to provide additional rental 

housing benefits to veterans. (GAO-07-1012)

Responsible stewardship of 

natural resources and the 

environment

1.25.F. Reducing Food Stamp Fraud

and Abuse: Since 1994, we repeatedly 

reported and testified on reducing fraud and 

abuse in the Department of Agriculture’s 

(USDA) Food Stamp Program by reducing 

the trafficking of benefits. In our 1994 and 

1995 reports, we found that USDA’s reliance 

on paper coupons to provide food stamp 

benefits had resulted in fraud and abuse 

through trafficking, counterfeiting, and 

mail theft. To reduce this fraud and abuse, 

we supported the use of electronic benefit 

transfer (EBT) systems to replace the 

coupon-based system that states were using. 

EBT cards require users to enter PINs to 

authorize transactions. This makes it more 

difficult to traffic in food stamp coupons 

and provides a wealth of electronic data that 

helps USDA’s Food and Nutrition Service 

detect suspicious patterns of transactions 

by users and retailers. In response, the 

Congress passed legislation that required 

that each state implement EBT for the 

Food Stamp Program’s by October 1, 2002, 

unless the Secretary of Agriculture granted 

a waiver. USDA reported in December 2006 

that the Food Stamp Program’ integrity 

had substantially improved, estimating 

that trafficking had diverted only about 

$241 million per year from 2002 to 2005—or 

about 1 cent of each food stamp dollar—

compared with an estimated $660 million 

per year—or about 3-1/2 cents of each 

food stamp dollar—diverted from 1996 to 

1998. USDA found that the decline in Food 
GAO Performance and Accountability Report 2007

138 PART V Appendixes GAO-08-1SP

Stamp trafficking corresponded with the 

increased use of EBT. This will result in an 

estimated $3.4 billion in cumulative financial 

benefits from fiscal years 2005 to 2009. Also, 

in fiscal year 2007 we recommended that 

USDA use its electronic data to perform 

risk assessments of retailers most likely to 

traffic in food stamp benefits and develop a 

strategy to increase penalties for this offense. 

USDA responded by proposing new penalties 

and expedited processes. (GAO-07-422T, 

GAO-07-53, GAO-02-332, GAO/RCED-00-61, 

GAO/OGC-95-1, GAO/T-RCED-94-125)

1.26.N. Restoring the Chesapeake Bay: In 

response to concerns about the deterioration 

of the Chesapeake Bay, the nation’s largest 

estuary, in 1983 the Congress established 

the Chesapeake Bay Program (bay program) 

within the Environmental Protection Agency 

(EPA) to direct and conduct the restoration 

of the bay. In October 2005, we reported that 

deficiencies in the bay program’s strategies 

for assessing, reporting, and managing 

restoration progress were undermining the 

success of the restoration effort. Acting on 

our findings, in its reports on the Department 

of the Interior, Environment, and Related 

Agencies for fiscal year 2007 and 2008, the 

Senate Appropriations Committee directed 

the Bay Program to immediately implement 

all of the recommendations contained in our 

report. In response to our recommendations, 

the bay program (1) has adopted an initial 

integrated approach for assessing bay health 

and management actions taken to restore 

the bay, (2) has developed a new reporting 

format that describes the bay’s current health 

and the progress made in implementing 

management actions, (3) has instituted an 

independent review process to ensure the 

scientific integrity of its reports, (4) has 

adopted a funding priority framework, and 

(5) is developing a strategic implementation 

plan that will integrate and unify all its 

various planning documents and work plans. 

When complete, the bay program will be 

better able to move the restoration forward 

in a more strategic and well-coordinated 

manner. (GAO-06-96)

1.27.C. Improving Management of

Federal Oil and Natural Gas Royalty

Revenue: In response to congressional 

concerns about the amount of oil and 

natural gas royalties collected by the federal 

government during a period of high energy 

prices and industry profits, we reported and 

testified on royalties management, the costs 

of royalty relief, and the share of revenue 

received by the federal government for oil 

and natural gas production. We testified 

regarding the Minerals Management Service’s 

inadequacies in negotiating price thresholds 

with lessees, implementing internal controls 

for the royalty in-kind program, and 

accurately collecting royalty data. We also 

updated previous work on the provisions 

for royalty relief for leases issued under the 

Outer Continental Shelf Deep Water Royalty 

Relief Act of 1995, concluding that these 

provisions could cost the government over 

$10 billion. Further, because the final costs 

have yet to be determined, we recommended 

that the service report future forgone 

royalties to the Congress. The Congress 

is now actively considering changing and 

clarifying those royalty relief provisions 

so that these significant royalty revenues 

are collected in the future. In addition, we 

provided the Congress with information 

indicating that the total revenue received 

by the federal government from industry for 

the rights to develop oil and gas on federal 

lands and within federal waters is among 

the lowest in the world. The Congress is 

also using information from this report as 

it considers new oil and gas tax legislation. 

(GAO-07-369T, GAO-07-590R, GAO-07-682T)

1.28.C. Bringing Needed Attention to the

Federal Oversight of Food Safety: While 

this nation enjoys a plentiful and varied 

food supply that is generally considered to 

be safe, we have found over the past decade 
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 139

that the federal oversight of food safety is 

fragmented, with 15 agencies collectively 

administering at least 30 laws related to 

food safety. Recent outbreaks of E. coli in 

spinach and salmonella in peanut butter, 

along with contamination in pet food, have 

highlighted the risks posed by accidental 

food contamination. In January 2007, we 

designated the federal oversight of food 

safety as a high-risk area because of the 

need to transform this system to reduce 

risks to public health as well as the economy. 

In addition, in February 2007 and April 

2007, we testified on the fragmented federal 

food safety system and on the limitations 

in the government’s food recall programs, 

respectively. In our testimonies, we reported 

that USDA and FDA could do a better job 

carrying out their food recall programs so 

that they can quickly remove potentially 

unsafe food from the marketplace. As a result 

of our work, the Office of Management and 

Budget (OMB) has recently asked us to help 

it, USDA, and FDA develop action plans that 

will address shortcomings in the federal 

oversight of food safety. (GAO-07-785T, 

GAO-07-449T, GAO-07-310)

1.29.C. Informing Congressional

Oversight of Federal Wildland Fire

Management Activities: Since 1999, 

we have reported on the need for federal 

agencies to develop a cohesive, longterm strategy to address costly and 

destructive wildland fires. In response to 

our past recommendations, in 2006 the 

Subcommittee on Interior, House Committee 

on Appropriations, directed the Forest 

Service and Department of the Interior to 

develop such a cohesive, long-term strategy. 

Congressional interest and involvement 

in this issue remained strong and, during 

fiscal year 2007, we reported and testified 

on this and other issues before a number 

of congressional committees associated 

with federal agencies’ management of 

wildland fires, such as cost containment 

and prioritizing hazardous fuel reduction 

funds. In its fiscal year 2008 report, the 

Subcommittee on Interior, House Committee 

on Appropriations, citing preliminary 

findings from our review of the agencies’ 

allocation of hazardous fuel reduction funds 

and selection of fuel reduction projects, 

directed federal agencies to take actions to 

improve their processes for allocating their 

hazardous fuel reduction funds. (GAO-07-

427T, GAO-07-655, GAO-07-1017T, GAO-06-

671R, GAO-05-147)

1.30.C. Improving Planning and Financial

Management Practices at the U.S.

Army Corps of Engineers (the Corps):

The Corps has traditionally managed its 

nearly $4 billion civil works budget using 

a “just-in-time” strategy where it allocated 

and moved funds among projects based 

on perceived need rather than on a set of 

formal, standardized criteria and priorities. 

As a result, we found that the Corps was 

moving billions of dollars among hundreds of 

projects each year, sometimes unnecessarily. 

This approach for managing its civil works 

appropriations had become the Corps’ 

substitute for an effective and fiscally prudent 

planning and financial management system. 

Also, the way that the Corps categorized the 

movement of funds among projects limited 

congressional oversight of some projects. In 

September 2005, we recommended that the 

Corps place greater emphasis on the use of 

financial planning approaches and prioritysetting mechanisms for managing its civil 

works projects. We also recommended that 

the Corps establish guidance on what actions 

would be subject to congressional oversight, 

change the way that it allocates funds from 

an annual basis to a more frequent basis 

to reflect actual project needs, periodically 

review project schedules and performance 

and revise project allocations as needed, and 

establish priorities for when the movement 

of funds among projects is warranted. Based 

on our work, the Congress provided new 

guidance to the Corps on when and how it 

could move funds among civil works projects 
GAO Performance and Accountability Report 2007

140 PART V Appendixes GAO-08-1SP

and, in December 2005, the Corps issued a 

new engineering circular for managing its 

civil works program that incorporated the 

congressional direction and implemented our 

recommendations. (GAO-05-946)

1.31.C. Identifying Financial Risks

to the Federal Government Caused

by a Changing Climate: Our March 

2007 report, Climate Change: Financial 

Risks to Federal and Private Insurers 

in Coming Decades Are Potentially 

Significant, raised awareness among the 

Congress and the administration that while 

climate change is now widely accepted as a 

serious environmental threat, it also poses 

extraordinary fiscal challenges to federal 

insurance programs and the insurance 

industry. After our testimony before key 

congressional committees and discussions 

with FEMA and USDA—the key federal 

agencies with potentially multibillion-dollar 

insurance liabilities associated with future 

climate change impacts—the two agencies 

provided assurances that they will implement 

our recommendation that they analyze 

and report to the Congress on (1) potential 

climate change-related losses to their key 

insurance programs (FEMA’s National Flood 

Insurance Program and USDA’s Federal Crop 

Insurance Corporation) and (2) alternative 

mitigation options they may use to reduce 

their exposure to loss. (GAO-07-285, 

GAO-07-760T)

1.32.C. Reducing Risks Posed by Toxic

Substances: In response to congressional 

concerns about EPA’s ability to identify 

and control risks to human health and the 

environment from chemicals, we provided 

a series of reports to the Congress over the 

past several years that identified potential 

revisions to the Toxic Substances Control 

Act (TSCA) in order to make the act more 

effective. EPA is currently acting on a series 

of recommendations we made to improve 

the agency’s ability to protect human 

health and the environment from chemical 

risks through its efforts to (1) prioritize 

chemicals produced at high volumes for 

further review, (2) initiate actions to require 

chemical companies to more fully justify 

their claims of confidentiality concerning 

information on the chemicals they produce, 

and (3) evaluate and improve regulatory 

environmental models used to identify 

harmful health and environmental effects of 

chemicals used in commerce. In addition, our 

most recent report on chemical regulation 

provides congressional leaders, who are 

currently considering potential changes to 

TSCA, with a comparative analysis of TSCA 

and the European Union’s recently enacted 

chemical control legislation—highlighting 

areas in which the European approach would 

address some of the long-term problems that 

we have identified in implementing TSCA. 

(GAO-07-825, GAO-06-217R, GAO-06-1032T, 

GAO-05-458)

1.33.C. Reducing Improper Farm

Program Payments: Farmers receive about 

$20 billion annually in federal farm program 

payments for crop subsidies, conservation 

practices, and disasters. In July 2007, we 

reported that USDA is not conducting annual 

eligibility determinations of estates of 

deceased individuals receiving farm program 

payments, as required by its regulations. The 

determinations are either not done or not 

done thoroughly. As a result, USDA cannot 

be assured that the payments made to these 

estates are proper. In addition, we reported 

that USDA made $1.1 billion in farm program 

payments to 172,801 deceased individuals 

from 1999 through 2005. Of this $1.1 billion, 

40 percent was made to individuals deceased 

for 3 or more years and 19 percent to 

individuals deceased for 7 or more years. 

Because USDA lacks adequate management 

controls, such as cross-matching its payment 

data with SSA’s Death Master File, USDA 

was unaware that it was making payments to 

deceased individuals. We testified on these 

issues in July 2007. We recommended that 

USDA conduct all required annual eligibility 
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 141

determinations, cross-match its data with the 

Death Master File, and if improper payments 

were made, recover the appropriate amounts. 

In response, USDA directed its field offices to 

review all estates open for more than 2 years 

that will receive 2007 program payments. It 

also is working with SSA to obtain access to 

its Death Master File. USDA plans to crossmatch its data with this file annually. (GAO07-818, GAO-07-1137T)

A safe, secure, and 

effective national physical 

infrastructure

1.34.N. Identifying Weaknesses in

Telecommunications Data: In a series 

of reports issued in 2006, we identified 

weaknesses in data-gathering efforts at 

the Federal Communications Commission 

(FCC). These data-gathering weaknesses 

hinder the ability of the government to 

adequately assess the impact of federal 

policies and programs and to target federal 

assistance. We found these weaknesses in 

a variety of commission efforts, including 

deployment of broadband service, 

competition for dedicated-access services, 

and telecommunications services for Native 

Americans on tribal lands. As a result, 

we recommended that FCC determine 

what data are necessary and the costs 

and burdens associated with gathering 

those data. In February 2007, FCC adopted 

a Notice of Proposed Rule-making that 

invoked our report and recommendation 

that it assess its efforts at gathering data 

on broadband deployment. In the notice, 

which sought comments about how it could 

acquire the data that it needs to assess 

broadband service, the commission noted 

that broadband service is critical to the 

nation’s present and future prosperity 

and acknowledged that broadband data 

are essential for it to assess the success 

of its policies. (GAO-07-80, GAO-06-189, 

GAO-06-426)

1.35.N. Helping People Make More

Informed Decisions When They Move

Their Household Goods: In 2001, we 

found that the Federal Motor Carrier Safety 

Administration—the federal regulator for 

the interstate household goods moving 

industry—had done little to stem the growth 

of consumer problems in the industry. 

Among other things, we recommended that 

the agency make general information on 

the number and the nature of consumer 

complaints against individual moving 

companies available to the public so that the 

public could better protect itself, particularly 

against unscrupulous moving companies. In 

July 2007, the Federal Motor Carrier Safety 

Administration included on its Web site 

complaint data about individual household 

goods movers that are prominent, easily 

accessible, and searchable by consumers. 

This action, as a result of our work, directly 

touches Americans who are looking 

to safeguard their cherished personal 

possessions and improves their chances of 

doing so. (GAO-01-318)

1.36.N. Enacting Comprehensive Postal

Reform Legislation: In April 2001, we 

designated the U.S. Postal Service’s (USPS) 

transformation and long-term outlook as a 

high-risk area because the Service’s financial 

outlook had deteriorated significantly and 

it had no comprehensive plan to address 

its financial, operational, or human capital 

challenges. We concluded that the need for 

a comprehensive transformation of USPS 

was more urgent than ever and called for 

the Congress to act on comprehensive 

postal reform legislation. Since then, 

USPS has developed a transformation 

plan to guide its ongoing efforts related 

to implementing initiatives included in 

its plan. Further, in December 2006, the 

Congress enacted comprehensive postal 

reform legislation to provide a framework for 

modernizing USPS’s rate-setting processes 

and strengthening regulatory oversight and 

financial transparency. Thus, in January 2007, 
GAO Performance and Accountability Report 2007

142 PART V Appendixes GAO-08-1SP

we removed USPS’s transformation and 

long-term outlook from our high-risk list. 

(GAO-07-684T, GAO-07-685T, GAO-04-108T, 

GAO-01-598T)

1.37.C. Addressing Congestion in the

National Airspace System: According to 

the Federal Aviation Administration (FAA), 

by 2015 the national airspace system will 

need to accommodate 1 billion passengers 

per year—260 million more than in 2006. 

FAA also predicts that 10,000 traditional 

business jets, turboprops, and very light 

jets will be added to the fleet by 2017. In a 

series of testimonies, we reported on FAA’s 

efforts to plan and begin implementing the 

Next Generation Air Transportation System 

(NextGen), which is intended to make use 

of new technologies and procedures to 

meet these increasing demands for system 

capacity. We informed the Congress that 

although much progress has been made in 

planning NextGen, a number of important 

issues remain unresolved. For example, we 

recommended that FAA explore the extent 

to which its staff possesses the necessary 

technical and contract management 

expertise to implement NextGen. In 

response to our recommendation, FAA 

has contracted with the National Academy 

of Public Administration to conduct an 

independent assessment of FAA’s skill sets. 

Other unresolved issues include identifying 

the precise content and associated costs of 

NextGen infrastructure and determining 

which entities will fund and conduct some 

of the necessary research, development, 

demonstration projects, and training that 

will be needed to achieve certain NextGen 

capabilities. (GAO-07-25, GAO-07-693T, 

GAO-07-784T)

1.38.C. Improving the Effectiveness of

the Emergency Alert System (EAS):

Effective emergency warnings via various 

telecommunications modes allow people to 

take actions that save lives, reduce damage, 

and reduce human suffering. Hurricane 

Katrina and the terrorist attacks of 

September 11, 2001, highlighted the need for 

timely, accurate emergency information and 

underscored the vulnerability of America’s 

emergency response infrastructure. While 

a wide-reaching public alert system is 

critical to the public safety, in March 

2007, we reported that the current EAS 

faces a range of technical, cultural, and 

other challenges, such as interfacing 

with newer communications technologies 

and issuing alerts in multiple languages. 

Further, we identified a lack of ongoing 

testing of the distribution system used to 

disseminate national-level emergency alerts. 

Additionally, we found challenges to the 

development of an integrated alert system, 

including gaining collaboration among EAS 

stakeholders to ensure that all elements of 

the system can work together and providing 

adequate training for EAS participants. 

We recommended that FEMA and FCC 

develop and implement a plan to verify 

the dependability and effectiveness of the 

distribution system and establish a forum to 

discuss emerging and other issues related to 

the implementation of an integrated public 

alert and warning system. DHS concurred 

with the intent of our recommendations, 

and FCC is taking steps to improve EAS 

capabilities and coordination. These actions 

will help ensure that EAS is capable of 

operating as intended and that coordination 

with a variety of stakeholders on the 

implementation of an integrated public alert 

and warning system exists. (GAO-07-411)

1.39.C. Improving Access to

Transportation for Disadvantaged

Communities: We identified needed 

improvements to federal efforts to provide 

access to transportation for disadvantaged 

communities. For example, we testified that 

the Department of Transportation (DOT) 

should examine the results of its grants to 

increase air service to small communities 

to improve aviation programs’ ability to 

connect small communities to the national 
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 143

air system. In other work we found that 

gaps in federal evacuation assistance to 

state and local governments hindered many 

local governments’ ability to evacuate 

transportation-disadvantaged populations in 

the face of disasters like Hurricane Katrina. 

As we recommended, DHS is updating its 

National Response Plan to clarify the roles 

and responsibilities of cognizant agencies and 

taking other steps give greater consideration 

to the needs of transportation-disadvantaged 

populations. Finally, we reviewed the 

Federal Transit Administration’s (FTA) Job 

Access and Reverse Commute program that 

improves mobility of low-income persons 

seeking work and recommended that FTA 

update its oversight processes to help it 

evaluate and oversee the program. By the 

time we completed our work, FTA officials 

indicated that they were already taking steps 

to incorporate the program in their existing 

review processes. (GAO-07-793T, GAO-07-44, 

GAO-07-43)

1.40.C. Improving Transportation

Efficiency: We continue to study ways 

to improve the efficiency of our nation’s 

transportation system. Intermodal 

transportation, which enables freight and 

passengers to cross different modes of 

transportation, can improve mobility, reduce 

congestion, and cut costs. We identified 

actions DOT could take to address barriers 

to intermodal transportation—including 

increasing collaboration between operating 

administrations. DOT officials stated 

that our work provided a starting point 

for constructive discussions between 

the executive branch and the Congress 

on innovative solutions to intermodal 

challenges. We also identified techniques 

to efficiently use existing infrastructure—

such as improving operations—and ways 

to fund infrastructure refinements and 

monitor efficiency, such as user fees and 

performance measures, respectively. Finally, 

we identified ways to reduce fuel use. For 

example, we found that raising current 

fuel economy standards for cars and light 

trucks, reforming the program, or both 

could increase fuel savings. This work is 

informing the current national debate about 

how to reduce fuel use. Based on work done 

by the Transportation Research Board, 

the Department of Energy estimated that 

underinflated tires negatively affect safety 

and increase fuel use—about 1.2 billion 

gallons by cars and light trucks in 2005. We 

reviewed federal policies on tire inflation 

and identified a number of technologies used 

to reduce tire underinflation that have the 

potential to increase safety and fuel economy 

when used properly. The federal government 

is addressing this inefficiency by providing 

information for both the public and federal 

fleet managers. (GAO-07-921, GAO-07-246R, 

GAO-07-718, GAO-07-920)

1.41.C. Improving Knowledge Sharing on

Older Driver Safety Issues Among States:

Older drivers are more likely to suffer injuries 

or die in crashes than drivers in most other 

age groups. Older driver safety will become 

an increasingly significant safety issue as 

our population ages—by 2030 the number 

of licensed drivers aged 65 and older is 

expected to nearly double to about 57 million. 

In April 2007, we reported that (1) states 

have, to varying degrees, adopted federally 

recommended road design and construction 

practices to make roadways easier for older 

drivers to navigate; (2) while more than half 

of the states have implemented licensing 

requirements for older drivers that are more 

stringent than requirements for younger 

drivers, states’ assessment practices are not 

comprehensive; and (3) although some states 

have implemented key practices to improve 

older driver safety, knowledge sharing 

among states is limited. Consequently, 

we recommended that DOT establish 

a communication mechanism to share 

information that would help states improve 

older driver safety, including information 

on the effectiveness of road design and 

construction practices to improve the driving 
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144 PART V Appendixes GAO-08-1SP

environment, comprehensive practices to 

assess driver fitness, and leading practices 

implemented by states. In response, the 

department is enhancing existing Web sites 

and communication methods to provide more 

comprehensive and up-to-date information 

on both federal and state efforts to improve 

older driver safety. (GAO-07-413)

1.42.C. Influencing Legislation to

Reauthorize the Funding Structure for

FAA: The administration proposed sweeping 

change to FAA’s funding structure that would 

change it from one based largely on excise 

taxes and a General Fund contribution to one 

based on user fees. We testified that although 

the viability of the funding structure 

would be influenced by such factors as the 

availability of the General Fund contribution, 

structural changes in the aviation industry, 

and certain policy choices, the current 

funding structure could potentially fund 

planned FAA operations. Our testimonies 

were major factors in the decisions of the 

Senate and House authorizing committees 

to propose legislation to largely maintain 

the current funding structure for FAA. 

(GAO-07-25, GAO-07-885, GAO-07-625T, 

GAO-07-636T, GAO-07-1163T)

1.43.C. Improving Motor Carrier Safety:

About 5,500 people are killed and another 

160,000 are injured each year in crashes 

involving large commercial trucks and buses. 

While the Federal Motor Carrier Safety 

Administration does a good job in identifying 

interstate commercial carriers that pose 

high crash risks, we identified ways that it 

can improve. The agency employs a decision 

model that uses its expert judgment to 

weight carriers’ crashes and safety violations 

for the purposes of identifying high-risk 

carriers. We found that the agency could 

easily improve the identification by 9 percent 

(identifying carriers that experienced about 

twice as many crashes) if it employed a 

statistical regression model approach. We 

also found that the agency could identify 

more high-risk crashes using its current 

model if it gives more attention to carriers 

that experienced crashes because our work 

showed that the incidence of past crashes is 

the strongest predictor of whether a carrier 

will have crashes in the future. In response 

to these reports, the Federal Motor Carrier 

Safety Administration noted that our report 

provided useful insights and offered a 

potential avenue for further improving the 

effectiveness of its efforts to reduce crashes 

involving motor carriers. Adopting either of 

these approaches should allow the Federal 

Motor Carrier Safety Administration to better 

target its enforcement efforts to improve 

safety and reduce crashes that can lead 

to deaths and injuries, which is especially 

important because it can only review about 

2 percent of the nation’s motor carriers each 

year. (GAO-07-585, GAO-07-584)
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 145

Protect and secure the 

homeland from threats and 

disasters

2.01.N. Assessing Security

Vulnerabilities in the Nuclear Regulatory

Commission’s (NRC) Nuclear Materials

Licensing Program: In 2003, we reported 

that weaknesses in the NRC licensing 

program could allow terrorists to obtain 

radioactive materials that could be used in 

“dirty bombs.” NRC issued new licensing 

guidance in December 2006. However, our 

2007 covert investigation demonstrated 

that the new guidance was ineffective. 

Specifically, our investigators were able 

to obtain a license to obtain radioactive 

materials from NRC by using a bogus 

company whose address was a rented post 

office box. Once we received the NRC license, 

we sought to purchase radioactive material 

and could have acquired enough to reach a 

level that NRC considers to be dangerous. 

When notified of our operation, NRC 

immediately suspended its licensing program 

and within days issued supplemental interim 

licensing guidance. The new guidance 

generally requires that NRC conduct a site 

visit or face-to-face meeting prior to issuing 

a new license—making it more difficult 

for someone with malevolent intentions to 

obtain an NRC radioactive materials license. 

We also recommended additional actions 

to further strengthen controls in this area 

in our July 2007 testimony. (GAO-07-1038T, 

GAO-03-804)

2.02.N. Improving Homeland Defense:

As a result of prior work, we are seeing 

improvements in homeland defense, 

particularly in the protection of U.S. airspace. 

Our 2005 testimony and classified report on 

the interagency management of violations 

to restricted airspace prompted the June 

2006 requirement in national security and 

homeland security presidential directives—

NSPD-47 and HSPD-16—for a national 

strategy for aviation security. The national 

strategy was issued on March 26, 2007, 

and called for interagency collaboration to 

develop several supporting plans to address 

specific threats and challenges identified 

in the presidential directives. Since our 

testimony and report were issued, the 

agencies have also implemented most of our 

recommendations, resulting in significant 

changes in how the interagency community 

manages the protection of restricted 

airspace and leading to improvements 

in interagency information sharing and 

national- level planning for protection of all 

U.S. restricted airspace. For example, FAA is 

now sharing vital information from its pilot 

deviations database with DOD, and common 

definitions between the several agencies 

that participate in the protection of U.S. 

airspace are facilitating the coordination 

and communication vital to protecting 

U.S. airspace. The interagency participants 

have also established information-sharing 

requirements and protocols, addressed 

security clearance issues, and reviewed 

interagency command and control processes 

that are followed during a violation of 

restricted airspace. (GAO-05-928T)

Provide timely, quality service to the Congress and the federal 

government to respond to changing security threats and the 

challenges of global interdependence

Source: See Image Sources.

Strategic Goal 2
GAO Performance and Accountability Report 2007

146 PART V Appendixes GAO-08-1SP

2.03.N. Reducing Risks Associated with

a Component of the Secure Border

Initiative (SBI): DHS’s SBI is a multiyear, 

multibillion-dollar program to secure U.S. 

borders. One element of SBI is SBInet—the 

U.S. Customs and Border Protection program 

responsible for developing a comprehensive 

border protection system through a mix of 

technology, infrastructure, and personnel. In 

fiscal year 2007, the Congress appropriated 

$1.2 billion for the program and asked us 

to review the SBInet expenditure plan. As 

part of our review, we identified a significant 

risk to the program’s schedule and costs 

because of its reliance on concurrent and 

interdependent tasks. We found that DHS 

planned to install SBInet technology in 

multiple sectors along the southwest border 

before lessons could be learned from the pilot 

deployment project. We pointed out that the 

greater the degree of concurrency, the greater 

a program’s exposure to cost, schedule, and 

performance risks. Among other things, we 

recommended that DHS reexamine the level 

of concurrency and appropriately adjust the 

acquisition strategy. In March 2007, DHS 

submitted a revised SBInet expenditure 

plan for fiscal year 2007 to the Congress. In 

response to our recommendation, the new 

plan delayed some technology deployment 

and, in its place, accelerated tactical 

infrastructure construction, thus reducing 

the risk of program inefficiencies and 

consequent cost escalation and schedule 

delays. (GAO-07-309)

2.04.C. Enhancing Federal Homeland

Security Information Sharing with

States and Localities: In an April 

2007 report and a May 2007 testimony, 

we highlighted information-sharing and 

duplication of effort risks that DHS faced in 

developing its primary information-sharing 

information technology (IT) application, 

the Homeland Security Information 

Network. Our work showed that DHS had 

not worked effectively with a key state 

and local information-sharing program 

that is operated and managed by state and 

local officials nationwide with the goal of 

providing homeland security and related 

information services to law enforcement, 

emergency responders, and other public 

safety officials. In particular, we found 

that DHS had not coordinated with this 

program to fully develop joint strategies 

and policies, procedures, and other means 

to operate across agency boundaries, which 

are key practices for effective coordination 

and collaboration and a means to enhance 

information sharing and avoid duplication of 

effort. One major consequence of DHS not 

fully adhering to these practices has been 

that the network and the state and local 

program are duplicative in that they target 

similar user groups, such as emergency 

management agencies, and have similar 

features, such as electronic bulletin boards, 

collaboration tools, and document libraries. 

We made several recommendations to help 

DHS ensure that the network is effectively 

coordinated with all key state and local 

information-sharing initiatives and that 

duplicative efforts are avoided. DHS agreed 

with all of our recommendations and has 

actions planned and under way to implement 

them. (GAO-07-455, GAO-07-822T)

2.05.C. Promoting Government Efforts

to Secure Sensitive Systems and

Information: Our continued work in fiscal 

year 2007 helped agencies identify needed 

information security (IS) improvements and 

helped to inform the public debate on the 

need for the federal government to effectively 

protect personally identifiable information. 

We testified that despite agencies’ reported 

progress in implementing IS requirements, 

recently reported incidents involving data 

loss or theft, computer intrusions, and 

privacy breaches underscore the need for 

further improvements. Our work highlighted 

the need to effectively implement IS at 

numerous agencies—including DHS, the 

FBI, the Internal Revenue Service (IRS), the 

Securities and Exchange Commission (SEC), 
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GAO-08-1SP Appendixes PART V 147

and VA—and offered recommendations to 

improve security over government programs, 

such as correcting security weaknesses 

at DHS that affect the program to manage 

the entry and exit of foreign nationals and 

at the FBI that affect critical networks 

transmitting sensitive law enforcement 

information. We also emphasized the need 

to strengthen governmentwide guidance 

and reporting on agencies’ periodic testing 

of security controls, so that agencies are 

aware of weaknesses in their systems. Based 

on our prior recommendations, agencies—

including IRS, SEC, the Federal Reserve, and 

USDA—took action to strengthen security 

that included improvements to agencies’ IS 

programs that aid in understanding risks and 

selecting and properly implementing needed 

controls, access controls that limit access 

to information to authorized individuals 

only, and service continuity controls that 

protect computer-dependent operations 

from disruptions. (GAO-07-65, GAO-07-368, 

GAO-07-870, GAO-07-751T, GAO-07-1264T)

2.06.C. Improving Tanker Security: In 

fiscal year 2007, we identified challenges 

the federal government faced in securing 

the transportation of energy commodities 

by tankers from terrorist attacks. These 

challenges exist throughout the supply 

chain, from where the tankers load their 

cargo, through their ocean voyages, and into 

the ports where they unload. Because the 

government has its greatest ability to reduce 

risks to tankers in U.S. waters and ports, we 

paid particular attention to governmental 

activity in these locations. We found that 

to meet these challenges federal agencies, 

and particularly the U.S. Coast Guard, had 

taken significant actions. For example, the 

Coast Guard had set security standards to 

guide local Coast Guard units and enlisted 

the help of state and local governments 

in its efforts. However, given the Coast 

Guard’s inability to meet its own security 

requirements in some locations, increases in 

liquified natural gas shipments to the United 

States, and the potential consequences of 

a terrorists attack on liquified natural gas 

tankers, we recommended that the Secretary 

of Homeland Security direct the Coast Guard 

to develop a resource allocation plan that 

balances the need to meet new liquified 

natural gas security responsibilities with 

other existing security responsibilities and 

other Coast Guard missions. DHS agreed 

with our recommendation, and since the 

report was issued DHS has continued to 

recognize the need to identify the resources 

necessary to manage risk in the maritime 

environment. (GAO-07-316, GAO-07-840T, and 

a sensitive but unclassified report also issued 

in fiscal year 2007. The public version of this 

document will be available shortly.)

2.07.C. Strengthening Security at Airport

Passenger Screening Checkpoints:

In a series of reports, testimonies, and 

briefings to the Congress, we reported on 

the Transportation Security Administration’s 

(TSA) passenger checkpoint screening 

procedures, which have been scrutinized 

and questioned by the traveling public and 

the Congress in recent years. For example, 

in December 2005, TSA allowed passengers 

to carry small scissors and small tools 

onto aircraft, resulting in concern among 

Members of the Congressional and industry 

representatives. In addition, following 

the alleged August 2006 liquid explosives 

terrorist plot, TSA modified passenger 

screening procedures several times in 

an effort to defend against the threat of 

terrorists’ use of liquid explosives onboard 

commercial aircraft. We determined that 

TSA implemented a reasonable approach to 

modifying passenger checkpoint screening 

procedures, in part by making efforts to 

balance security, efficiency, and customer 

concerns. We made recommendations for 

improving documentation and evaluation of 

proposed changes to passenger screening 

procedures. TSA officials generally agreed 

with our recommendations and have taken 

actions to improve the documentation for 
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148 PART V Appendixes GAO-08-1SP

substantive proposed procedural changes 

and to strengthen the agency’s evaluation of 

proposed procedures. These actions, when 

fully implemented will enable TSA to better 

justify its passenger screening procedure 

modifications to the Congress and the 

traveling public. (GAO-07-634, GAO-07-623R, 

GAO-07-448T, GAO-07-375, GAO-06-371T)

2.08.C. Assessing Federal and Private

Sector Efforts to Develop Infrastructure

Protection Plans: Through a series of 

reports, testimonies, and member briefings, 

we provided the Congress with a look at 

collaboration efforts between DHS and 

other federal agencies with private sector 

infrastructure owners and operators 

to ensure that the nation’s most critical 

infrastructure assets and key resources 

are protected from terrorists and natural 

disasters. We called attention to the disparity 

in the progress infrastructure sectors 

had made in developing plans designed to 

protect key infrastructure, as well as the 

comprehensiveness of the plans. As a result, 

the Congress has asked us to launch several 

engagements to further explore these issues. 

(GAO-07-1075T, GAO-07-706R, GAO-07-626T, 

GAO-07-39)

2.09.C. Assessing DHS’s Methodology

for Using Risk Assessments to Allocate

Homeland Security Grant Funds: For 

the second successive year, in response 

to a congressional mandate, we analyzed 

DHS’s methodology for considering and 

applying risk assessments in allocating 

over $1.7 billion in fiscal 2007 homeland 

security grant funds. We provided multiple 

briefings to Members of the Congress and 

congressional staff on the methodology, the 

changes in the methodology from 2006 to 

2007, and the potential impact of changes 

in specific variables used to assess the risk 

from terrorism for potential grant applicants, 

such as urban areas within the United States. 

Our work was also the focus of a House 

Appropriations Committee hearing, and 

the Senate-passed version of the fiscal year 

2008 appropriations bill for DHS includes a 

mandate for us to assess the methodology to 

be used for the 2008 grant allocation process. 

Our work has enhanced congressional 

oversight by providing clear, objective 

information on and analysis of DHS’s 

methodology for 2006 and 2007 and provided 

information DHS could use to maximize 

the efficiency and effectiveness of the grant 

program and make the most of increasingly 

limited homeland security funds. Partly as 

the result of our work, DHS is undertaking 

a more detailed analysis of the impact of 

changes in the use of specific variables. 

(GAO-07-381R)

2.10.C. Identifying Shortcomings in

DHS’s Operation of the United States

Visitor and Immigrant Status Indicator

Technology (US-VISIT) at Land Ports of

Entry: We identified continuing challenges 

to the effective implementation of the 

US-VISIT program at land ports of entry, for 

both incoming and exiting persons required 

to participate in US-VISIT, which involves 

biometric identification of foreign visitors 

using digital fingerprints and photographs. 

Although intended to record both the entry 

and subsequent exit of foreign visitors—and 

to highlight those who overstayed their 

visas—we found that there was no current 

technology that would provide a timely and 

reliable method by which to record the exit of 

all visitors at land ports of entry. In response, 

DHS subsequently suspended its plans to 

implement an exit component until a viable 

capability can be deployed at land ports of 

entry. However, DHS has yet to explain how 

US-VISIT is to (1) establish a comprehensive 

biometric identification system to record 

individuals’ arrival and departure at land 

ports and identify those who have overstayed 

their visas and (2) strategically align with 

other border security initiatives that are 

intended to enhance border security and 

prevent illegal immigration. Also, with regard 

to entry, our work showed that US-VISIT had 
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GAO-08-1SP Appendixes PART V 149

improved DHS’s ability to process visitors 

and verify identities, but management 

controls in place to identify computer 

processing problems and evaluate operations 

were insufficient and inconsistently 

administered. As a result, DHS was not in 

the best position to identify and quantify 

problems, evaluate alternatives, allocate 

resources, track progress, and learn from 

any mistakes that may have been made while 

deploying and operating US-VISIT at land 

ports of entry. (GAO-07-248, GAO-07-378T)

2.11.C. Analyzing DHS Budget

Justifications for Fiscal Year 2007:

We provided technical assistance to the 

Congress in reviewing the President’s 

justification for requests for funds. This 

work was done to provide the Congress with 

information to evaluate the support for and 

adequacy of the President’s justification for 

requests. For example, our prior work had 

shown that within the aviation security area, 

programs such as Secure Flight—which 

is to match passenger information against 

terrorist watch lists—had experienced 

implementation challenges that raised 

questions about the program future funding 

needs. We suggested that the committees 

consider restricting the Secure Flight 

budget request until TSA provides an 

expenditure plan that includes detailed 

descriptions of key goals, objectives, 

requirements, and milestones. We also 

suggested that funds be restricted for the 

Science & Technology Directorate because 

of serious financial management deficiencies, 

among other things. The Congress, in the 

DHS appropriations bill for fiscal year 

2007 and the accompanying conference 

report, adopted a number of our suggested 

budget actions resulting in reductions and 

restrictions of about $1 billion to help ensure 

that homeland security investments are 

appropriately focused. (No product issued.)

2.12.C. Improving the Deepwater

Program: In a series of testimonies and 

a report, we identified the key challenges 

affecting (1) new Deepwater asset 

deployment and (2) management of the 

Deepwater program and the Coast Guard’s 

efforts to address these challenges. We 

reported that while the Coast Guard has 

made progress with the design, acquisition, 

and delivery of some Deepwater assets, 

ongoing problems with other assets raise 

questions about the Coast Guard’s ability 

to maintain a system-of-systems approach 

in which the retirement of legacy assets is 

to be synchronized with the introduction 

of new Deepwater assets. We also noted 

that as problems are encountered and 

delivery dates for new Deepwater assets 

slip, the overall operational capabilities of 

Deepwater assets and the system-of-systems 

could be reduced, especially in the short 

term. Further, we reported that because 

of problems with program management, 

contractor accountability, and cost controls, 

the Coast Guard has taken on more direct 

responsibility for the acquisition management 

and support for key Deepwater assets. 

However, we noted that until the Coast Guard 

has sufficient staff with the requisite skills 

and abilities to carry out these expanding 

responsibilities, the Deepwater program 

will remain at risk in terms of getting what 

is needed on time and at a fair price. Our 

work provided the Congress with timely 

information on the status of the program at 

a time when it was increasing its oversight 

of the cost, schedule, and performance of 

the program. (GAO-07-874, GAO-07-575T, 

GAO-07-460T, GAO-07-446T, GAO-07-453T)

2.13.C. Assessing the Federal Response

to In-flight Security Threats: We reported 

on the procedures that more than 15 federal 

agencies and entities follow to coordinate 

their responses to security threats that 

occur onboard commercial aircraft in 

flight. We identified the nature and extent 

of each agency’s involvement in addressing 
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150 PART V Appendixes GAO-08-1SP

different types of threats (i.e., high-risk or 

suspicious passengers, etc.), the tools they 

use to communicate about the threats, and 

a four-stage process that they follow to 

resolve incidents, including identifying the 

threat, sharing pertinent information to 

collaboratively assess its severity, deciding 

on and implementing the appropriate in-flight 

response, and if necessary, completing the 

law enforcement response. No comprehensive 

summary or assessment of these procedures 

existed prior to the completion of our 

work, and articulating these procedures 

has allowed agencies to better understand 

each others’ roles and responsibilities 

and coordinate their responses to 

identified threats. We recommended that 

(1) the involved agencies develop a concept 

of operations plan that outlines the general 

interagency coordination strategy and 

delineates lines of communication among 

them, (2) each involved agency document 

its internal standard operating procedures 

and establish mechanisms for sharing 

these procedures with other agencies, and 

(3) key agencies involved in interagency 

exercises fully document and disseminate the 

results of the exercises to ensure that followup action items are addressed as appropriate. 

(GAO-07-891R)

2.14.C. Assessing DHS’s Mission and

Management Progress Its First 4 Years:

In response to a bipartisan and bicameral 

request, we assessed DHS’s progress by 

identifying a total of 171 performance 

expectations within 14 mission and 

management areas (e.g., border security and 

immigration enforcement or financial and 

acquisition management). Analyzing our and 

the DHS Office of Inspector General’s prior 

work and updated information provided by 

DHS, we determined the extent to which 

DHS has taken actions to generally achieve 

each performance expectation. Using 

these analyses, we then assessed whether 

DHS has made limited, modest, moderate, 

or substantial progress in each area. We 

found that after 4 years, DHS has attained 

some level of progress in all of its major 

mission and management areas but the rate 

of progress among these areas varies. For 

example, progress in surface and aviation 

transportation security has been moderate 

while IT and human capital management 

progress has been limited. Our work shows 

that it will be essential for the department 

to address how key underlying themes have 

affected DHS’s implementation efforts—

agency transformation, strategic planning 

and results management, risk management, 

information sharing, and partnerships and 

coordination—as it moves forward. By 

comprehensively summarizing and updating 

4 years of our work, our report provides 

congressional and other stakeholders with a 

broad view of DHS’s progress, and highlights 

areas for future oversight and review. 

(GAO-07-454)

Ensure military capabilities 

and readiness

2.15.F. Transforming Defense Forces by

Better Allocating Resources to Fund

New Capabilities: In a November 2002 

report, we asked the Congress to consider 

extending the deadline for the submission of 

DOD’s Quadrennial Defense Review (QDR) 

in order to provide additional time for DOD 

to align its upcoming budget request with 

its newest strategic thinking as reflected 

in the QDR. In our view, this extra time 

would allow DOD to take full advantage 

of QDR results and shift resources where 

they would be needed most, that is, provide 

for a better allocation of resources, and 

avoid unnecessary costs of lower priority 

programs. The Congress adopted our 

suggestion, and DOD’s 2006 QDR is the first 

to benefit from the extended deadline and 

better allocation of defense resources to 

implement DOD’s new strategic plan. As a 

result, DOD’s fiscal year 2007 budget shifts 

resources into new programs advocated 
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GAO-08-1SP Appendixes PART V 151

by the QDR, to include a $1 billion special 

operations initiative to help fight the war on 

terrorism, rather than having to wait until the 

fiscal year 2008 budget cycle. To pay for these 

initiatives, OMB stated that DOD had shaved 

billions of dollars from other lower priority 

programs. The DOD Comptroller’s office has 

confirmed that final congressional action on 

DOD’s proposal was to provide a $1.2 billion 

increase in funding for Special Operations 

Forces in fiscal year 2007. (GAO-03-13)

2.16.F. Contributing to Properly Funding

the Military’s Needs: We reviewed the 

reasonableness of DOD’s fiscal year 2007 

budget request and identified billions 

of dollars in potential costs that could 

be avoided and opportunities for DOD 

to improve its internal oversight of the 

use and tracking of funds. Overall, our 

work contributed to multiple actions that 

resulted in total financial benefits of about 

$3.2 billion. The Congress used our analyses 

of unobligated balances; operations and 

maintenance execution trends; and active, 

reserve, and civilian personnel expenditures 

for fiscal year 2006 to reduce the fiscal year 

2007 budget. We also reported on ways 

for DOD to improve its cost reporting for 

the global war on terrorism. As a result 

of our report and briefings, DOD adjusted 

its cost reports, revised cost reporting 

procedures to expand reporting categories, 

and implemented steps intended to improve 

reliability. (GAO-07-76)

2.17.F. Reducing Cost, Schedule, and

Performance Risks for the Army’s Future

Combat System (FCS): The Army’s FCS 

is a program characterized by bold goals 

and innovative concepts—transformational 

capabilities, a system-of-systems approach, 

new technologies, a first-of-a-kind 

information network, and a total investment 

cost of more than $200 billion. As such, 

the program is considered high risk and in 

need of special oversight and review. Since 

2004, we have pointed out that the Army 

has far less knowledge about FCS and its 

potential for success than is needed to fulfill 

the basic elements of a business case. For 

example, the Army has yet to fully define 

FCS requirements, mature key technologies, 

and fully estimate costs. In response to our 

recommendations, the Congress has acted 

to reduce risk and increase oversight for 

FCS. For example, the Congress has directed 

DOD to conduct and report on the results 

of a milestone “go/no-go” review of the FCS 

program, following its preliminary design 

review with the aim of ensuring that there is 

a business case for continuing the program. 

In addition, citing risks that we reported 

and the need for DOD to preserve its ability 

to change course, the House Committee 

on Armed Services recommended a budget 

cut of $325.8 million in fiscal year 2007. 

Ultimately, the conference committee cut 

the FCS budget request by $254 million. 

In response to our recommendations, the 

Army has also made several adjustments to 

the program, including revising production 

rates to more affordable levels. (GAO-06-367, 

GAO-06-478T, GAO-06-564T)

2.18.N. Strengthening Security of Forces

and Military Presence Restructuring:

Our evaluations of DOD’s antiterrorism 

program and global posture strategy 

have resulted in actions that can lead 

to more a more effective application of 

force protection resources at military 

installations and facilitate congressional 

oversight responsibilities. We reported that 

service headquarters and commands did 

not use a comprehensive results-oriented 

management framework to guide their 

efforts to improve the security of forces at 

military installations. Therefore, DOD and 

the Congress would not be able to determine 

if the billions being invested to improve 

force protection at installations were being 

applied efficiently and effectively. In 2005, 

each military service responded to our 

recommendations and developed strategic 

planning and program implementation tools 
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152 PART V Appendixes GAO-08-1SP

to guide their efforts and prioritize funding 

requirements. In September 2006, we also 

reported on DOD’s strategy to restructure 

the size and location of U.S. military forces 

overseas, and identified several challenges 

DOD faces in implementing this strategy 

that add to the uncertainty of the costs and 

potential outcomes of DOD’s efforts. We 

concluded that Congress may not have a 

clear understanding of the extent to which 

objectives are being achieved or whether 

resources are being efficiently and effectively 

applied, and recommended that the Congress 

require DOD to periodically report on its 

progress. As a result of the issues raised 

in our work, the Senate Committee on 

Appropriations directed DOD to provide 

an updated report on the Global Posture 

Initiative to better inform the Congress of its 

efforts. (GAO-06-852, GAO-03-14)

2.19.N. Improving Transparency over

Military Compensation Costs: Our work 

has shed light on how rapidly military 

compensation costs have been growing, 

providing decision makers better information 

about the total costs of personnel and the 

implications of adding deferred benefits. 

Active duty and reserve compensation costs 

grew 32 percent and 47 percent, respectively, 

from fiscal years 2000 to 2006. However, 

we found that military compensation costs 

were scattered across multiple federal 

agencies, so a true picture of total costs 

was not available. Consistent with our 

recommendations, the President’s budget 

request for fiscal 2007 contained an exhibit 

that depicted total active duty compensation 

costs and their allocation to cash, noncash, 

and deferred benefits—an important first 

step in improving transparency. (GAO-07-828, 

GAO-05-798)

2.20.N. Enhancing DOD’s Evaluation of

Its National Security Personnel System

(NSPS): In June 2005, we evaluated DOD’s 

efforts to design and implement its new 

civilian personnel management system—

NSPS. We determined that evaluating 

the impact of NSPS would be an ongoing 

challenge for DOD. We recommended that 

the NSPS Program Executive Office (PEO) 

develop procedures for evaluating NSPS 

that contain results-oriented performance 

measures and reporting requirements. These 

evaluation procedures could be broadly 

modeled on the evaluation requirements of 

the Office of Personnel Management (OPM) 

demonstration projects. In response to our 

recommendation, the NSPS PEO developed 

an NSPS evaluation plan that provides 

documentation of the nature, rigor, and intent 

of the evaluation. The plan also includes 

measurable goals or objectives; expected 

results or outcomes; a description of the 

procedures, methods, and techniques that 

will be used to show whether the objectives 

have been achieved; and a description of the 

data collection and analysis procedures to 

be used to assess the program’s success or 

failure from a qualitative and quantitative 

standpoint. This action will improve the 

department’s visibility and oversight needed 

to benchmark progress, make system 

improvements, and provide the Congress 

with the assessments needed to determine 

whether NSPS is truly the model for 

governmentwide transformation in human 

capital management. (GAO-07-851)

2.21.N. Improving Oversight of

Contractors on the Battlefield: We 

have issued a series of reports focused on 

contract management and the oversight 

challenges faced by DOD as it increases 

its dependence on contractors on the 

battlefield. Among the challenges DOD faced 

was the lack of visibility over the number 

of contractors supporting deployed forces 

and the services the contractors provide 

and a lack of senior leadership to resolve 

the challenges. Our December 2006 report 

made recommendations to address these 

challenges and DOD has implemented 

them. For example, in January 2007, DOD 

implemented a system designed to provide 
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GAO-08-1SP Appendixes PART V 153

commanders with greater visibility over the 

number of contractors supporting deployed 

forces and the services being provided by 

the contractors. Additionally, in response to 

our recommendation that the Secretary of 

Defense appoint a focal point dedicated to 

leading DOD’s efforts to improve contract 

management and oversight, the Office of the 

Assistant Secretary of Defense (Program 

Support) was established to act as the focal 

point. The Congress has also used our work 

to direct the department to make managing 

contractors who support deployed forces 

a higher priority at DOD. For example, the 

House Appropriations Committee withheld 

15 percent of the fiscal year 2007 DOD 

supplemental operation and maintenance 

appropriations until DOD was able to provide 

information on the number and types of 

contractors in Iraq and Afghanistan. This 

provision was included in the legislation after 

we testified before the House Appropriations 

Committee’s Subcommittee on Defense that 

DOD did not know the number of contractors 

in Iraq. (GAO-07-145, GAO-07-525T)

2.22.C. Supporting the Congress in

Oversight of Intelligence Acquisitions:

Our support to the Congress this past year 

helped to expand and strengthen its oversight 

of intelligence acquisitions. For example, 

we briefed committees on findings related 

to the development of a new satellite system 

equipped with radar sensors. We found that 

while the program was attempting to adopt 

best practices for technology development, 

important agreements on requirements, 

funding, and system usage had not been 

worked out, and it was questionable whether 

the system—which is projected to be one 

of the most expensive satellite development 

efforts ever—was affordable. Our work 

supported the decisions made by the Senate 

Select Committees on Intelligence and 

the Senate Committee on Armed Services 

to make dramatic cuts to the program so 

that investments could be more focused on 

necessary technology development. Our work 

was also used by the Senate Intelligence 

Committees in drafting legislation aimed 

at reforming acquisition processes and 

requiring the intelligence community to 

institute more disciplined management and 

oversight controls. In addition, we were 

requested to brief committees on the results 

of our work on the use of risky contracting 

techniques by intelligence agencies. 

(GAO-07-273, GAO-07-559, GAO-07-1029R)

2.23.C. Improving DOD’s Management

Approach to Major Weapon Systems

Acquisitions: Over the next several 

years, DOD plans to invest $1.4 trillion 

in major weapons programs. Although 

DOD produces the best weapons in the 

world, it fails to deliver weapon systems 

on time, within budget, and with desired 

capabilities. This year, we reported that 

leading commercial companies achieve 

success in product development by using an 

integrated portfolio management approach 

to prioritize market needs and allocate 

resources through a strong governance 

structure. Through portfolio management, 

all of a company’s product investments are 

addressed collectively from an enterprise 

level, rather than as independent and 

unrelated initiatives. In contrast, DOD 

approves proposed programs with much 

less consideration of its overall portfolio 

and commits to them earlier and with less 

knowledge of cost and feasibility. While 

DOD has taken steps to identify warfighting 

needs through a joint requirements process, 

its service-centric structure and fragmented 

decision-making processes do not allow for 

the portfolio management approach used 

by successful commercial companies. We 

recommended that DOD establish such an 

approach to ensure delivery of a balanced 

mix of weapon system programs at the 

right time and right cost and establish 

a single point of accountability for 

determining which acquisition programs 

are allowed in the portfolio. As a result, 

the Congress has required DOD to address 
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154 PART V Appendixes GAO-08-1SP

our recommendations for improvements in 

its portfolio management process and has 

urged DOD to expand its use of portfolio 

management initiatives already under way to 

include additional portfolios. (GAO-07-388)

2.24.C. Improving Transparency,

Accountability, and Oversight of Ballistic

Missile Defense: Over the next 5 years, 

DOD plans to invest an additional $49 billion, 

or 13 percent of its research and development 

budget, to develop and field the Ballistic 

Missile Defense System (BMDS). The Missile 

Defense Agency (MDA) began developing 

the BMDS in 2002 in 2-year blocks, with 

each block increasing the number of fielded 

assets and enhancing the existing system. To 

field the BMDS quickly, DOD granted MDA 

authority to defer entry of the BMDS into 

DOD’s acquisition cycle until management 

of the system is handed over to a military 

service. Therefore, the BMDS never formally 

entered the acquisition phase that triggers 

compliance with certain acquisition laws 

that provide transparency into program 

progress and decisions. In annual missile 

defense reports, we have pointed out 

that because MDA is not required to seek 

higher-level approval of its program goals 

or have program cost or system operational 

effectiveness and suitability independently 

verified, the agency has operated with 

considerable autonomy to change goals 

and plans. This has made it difficult to 

reconcile program outcomes with original 

expectations and to determine the actual 

cost of each block of individual BMDS assets. 

Based on our reporting of these issues, MDA 

is implementing a new acquisition strategy 

that includes setting firm program goals 

for each block, reporting variances against 

those goals, and accounting for cost in a 

manner that ensures each block’s full cost is 

transparent to decision makers. (GAO-07-387, 

GAO-06-327)

2.25.C. Transforming Defense Forces

by Improving Reserves’ Mission

Capabilities: Our work on the changing 

roles and missions of the National Guard 

supported the work of the Commission on 

the National Guard and Reserves as well as 

congressional oversight. We reported on the 

changing roles of the reserves, the negative 

effects of the heavy use of the reserve 

components for their future missions, and 

the lack of validated requirements for the 

National Guard’s civil support missions. The 

Congress created the commission in 2005 

to conduct a comprehensive examination 

of roles of the Guard and Reserves and to 

recommend any needed changes in laws 

and policies governing the National Guard 

and Reserves. We testified twice before 

the commission, highlighting the need to 

align the Reserves’ business model with 

their 21st century roles and other issues, 

including reserve component equipment 

and personnel readiness, DOD’s initiatives 

to improve reserve readiness, recruiting 

and retention challenges, and reserve 

pay and compensation. The commission 

based several key recommendations to the 

Congress in its March 2007 report on our 

reports and testimonies. In addition, the 

House Armed Services Committee included a 

requirement in its 2008 defense authorization 

bill that would require DOD to report on 

National Guard readiness for its civil support 

missions. (GAO-07-397T, GAO-07-709, 

GAO-07-984)

2.26.C. Creating a Chief Management

Officer at DOD to Guide Business

Transformation Efforts: During fiscal 

year 2007, we recommended that DOD 

develop a planning process that results in a 

comprehensive, integrated, enterprisewide 

plan or set of plans to guide DOD’s business 

transformation efforts. We also suggested 

that the Congress consider enacting 

legislation to establish a separate, full-time 

Chief Management Officer position at DOD 

with significant authority, experience, and 
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GAO-08-1SP Appendixes PART V 155

a sufficient term to provide focused and 

sustained leadership over the department’s 

business transformation efforts. At a time of 

increasing military operations and growing 

fiscal constraints, billions of dollars have 

been wasted annually because of the lack 

of adequate transparency and appropriate 

accountability across DOD’s business 

areas. DOD’s lack of a comprehensive 

enterprisewide business transformation plan 

linked with performance goals, objectives, 

and rewards for all key business areas has 

been a continuing weakness. DOD also 

continues to lack the sustained leadership 

at the right level to achieve successful and 

lasting transformation. In addition, as of 

October 2007, both the House and Senate 

Armed Services Committees had proposed 

language in their respective versions of the 

National Defense Authorization Act for Fiscal 

Year 2008 that calls for the Secretary of 

Defense to either assign responsibilities to 

a high-level official to address management 

issues within the department (House 

version) or to establish a Chief Management 

Officer (Senate version). As a result of our 

work, DOD is taking steps to improve its 

planning process. (GAO-07-1072, GAO-07-310, 

GAO-07-229T)

2.27.C. Providing Oversight of Military

Operations in Iraq and Afghanistan:

Our continued work in evaluating U.S. 

military operations in Iraq and Afghanistan 

has led to key congressional actions to 

provide enhanced oversight and helped 

frame significant issues for congressional 

and public debate. Our work has included 

numerous reports and testimonies on such 

topics as DOD’s ability to provide trained 

and ready forces for ongoing operations and 

timely force protection solutions to support 

deployed troops, to secure Iraqi munitions 

storage sites, and to help train and develop 

the logistics capabilities of Iraq’s security 

forces. Specifically, the Congress has used 

our ongoing work reviewing the department’s 

efforts to defeat improvised explosive 

devices (IED) in directing actions, through 

legislation, to improve strategic planning 

and operations at the newly established Joint 

IED Defeat Organization. Our work and 

testimony examining logistics capabilities 

of Iraq’s security forces has also enhanced 

congressional oversight and, along with 

work on U.S. military trainers, supported 

the House Armed Services Committee’s 

efforts to prepare its own public report 

on the status of Iraq’s security forces. Our 

work on the department’s efforts to repair 

and replace equipment used in current 

operations raised the Congress’s awareness 

that its oversight of reset programs may 

be limited because the Army and Marine 

Corps are not fully capturing and reporting 

how they are investing reset funds, totaling 

about $49 billion since fiscal year 2002. Our 

work has also prompted the Congress to 

take legislative action to require DOD to 

address readiness issues. (GAO-07-503R, 

GAO-07-582T, GAO-07-439T)

2.28.C. Improving the Army’s

Management of Its Pre-Positioned

Equipment: Our work in evaluating the 

status, readiness, and employment of the 

Army’s pre-positioned equipment sets around 

the world has identified significant prepositioned equipment shortages, readiness 

concerns, management challenges, and 

maintenance problems. Our work has also 

identified significant corrosion issues that 

have adversely affected the readiness and 

usability of pre-positioned equipment assets 

in storage. More recently, our ongoing work 

has identified that the Army has downloaded 

and issued to units much of its afloat and 

ground-based pre-positioned equipment, 

which has resulted in low fill rates among 

the pre-positioned equipment sets and 

concerns within the Congress and DOD 

regarding the lack of availability of prepositioned equipment for potential future 

contingencies. As a result of our work in 

this area, the Congress has enacted several 

pieces of legislation designed to improve the 
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management, readiness, employment, and 

future accessibility of Army pre-positioned 

equipment. (GAO-07-144, GAO-06-709)

Advance and protect U.S. 

international interests

2.29.F. Streamlining the U.S. Overseas

Presence through Embassy Rightsizing:

In June 2002, we developed a rightsizing 

methodology for linking overseas staffing 

needs to the security, mission, and operating 

costs of U.S. embassies and consulates. In 

April 2003, we reported that the size and 

construction costs for embassy and consulate 

construction projects are directly related 

to the number of staff who would use those 

facilities and that the process for developing 

such staffing projections lacked a systematic 

approach or comprehensive rightsizing 

analysis; thus, the U.S. government 

risks building new embassy compounds 

designed for the wrong number of staff. We 

recommended that State develop a formal, 

standard, and comprehensive process for 

establishing staffing projections for new 

embassy compounds. In June 2003, State 

implemented a new process for projecting 

long-term staffing needs when planning and 

designing new embassy compounds, which 

included a mandatory rightsizing analysis, 

along with procedures for documenting, 

vetting, and approving the projections. From 

June 2006 through February 2007, State 

reported that comprehensive rightsizing 

reviews significantly reduced the project 

scopes and construction costs of 25 new 

facilities, resulting, overall, in the reduction 

of more than 1,300 positions, as well as a 

$93.8 million savings in capital construction 

costs, $170.4 million savings in annual 

operating costs, $1.3 million annual savings 

from reduced maintenance requirements, and 

$21 million in other annual savings derived 

from a reduction in Capital Security Cost 

Sharing fees for State and other agencies. 

(GAO-03-411, GAO-02-780)

2.30.F. Reducing the Fiscal Year 2007

Appropriation for the Millennium

Challenge Corporation (MCC): Our work 

contributed to the Congress’s appropriating 

$1.77 billion for MCC for fiscal year 

2007—$1.23 billion less than the President 

requested. MCC oversees a foreign assistance 

program intended to provide economic 

assistance to countries demonstrating a 

commitment to ruling justly, investing in 

people, and encouraging economic freedom. 

MCC is authorized to provide assistance to 

countries that enter into public compacts 

with the United States. In February 2006, 

to assist in the fiscal year 2007 budget 

deliberations, we published correspondence 

providing estimates of future MCC 

obligations under two illustrative scenarios. 

In a constrained budget environment, our 

work provided a framework for identifying 

the trade-offs between different funding 

levels and the numbers and sizes of compacts 

that MCC could support, and showed that 

MCC could operate with a smaller fiscal year 

2007 appropriation than requested because 

it would most likely not obligate the balance 

of its prior years’ appropriations until late 

in fiscal year 2007. Our work informed and 

supported the appropriations, budget, and 

authorizing committees’ decisions about MCC 

funding for fiscal year 2007. For example, the 

House and Senate authorizing committees 

cited our report in their views and estimates 

to the House and Senate budget committees 

for the fiscal year 2007 budget request for 

foreign operations. In addition, MCC officials 

said our analysis was used by corporation 

officials and congressional appropriators to 

frame key discussions about the potential 

impact of various appropriations levels on 

compact assistance. (GAO-06-466R)

2.31.N. Improving Strategic Planning

of U.S. Public Diplomacy Efforts: Since 

2003, we have issued a series of reports on 

U.S. public diplomacy efforts that are led by 

State and supported by the communication 

activities of other key agencies such as the 
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U.S. Agency for International Development 

(USAID), DOD, and the Broadcasting Board 

of Governors. We have reported, among other 

things, that government communication 

efforts are not supported by an interagency 

strategy and face a number of practical 

challenges, including insufficient resources 

and staff, shortfalls in foreign language 

capabilities, burdensome administrative 

requirements, security concerns that limit 

embassy staff’s ability to interact with 

local populations, and a general absence 

of in-depth research. We have made 

recommendations in each of these areas and 

actions have been taken. Most notably, in 

June 2007, an interagency policy coordinating 

committee, headed by State, released a U.S. 

National Strategy for Public Diplomacy and 

Communication. The release of this strategy 

addresses our concern that the lack of an 

interagency strategy complicated the task of 

conveying consistent messages, increased 

the risk of communication mistakes, and 

lessened the likelihood that the United 

States would achieve mutually reinforcing 

benefits from the communication activities of 

involved agencies. (GAO-07-904, GAO-05-323, 

GAO-03-951)

2.32.N. Depositing Antidumping and

Countervailing Duties in the U.S.

Treasury: In 2005, we reported on the 

Continued Dumping and Subsidy Offset Act 

(the Byrd Amendment), which provided 

funding from import duties to U.S. companies 

deemed injured by unfair trade. In the 

program’s first 4 years, Customs and Border 

Protection (CBP) disbursed about $1 billion 

to U.S. producers injured by unfairly traded 

(dumped or subsidized) imports, with just 

five of these producers receiving about half 

the total amount. After an active debate 

in which our report figured prominently 

in congressional remarks, the Congress 

passed and the President signed legislation 

in early 2006 to phase out the amendment so 

that antidumping and countervailing duties 

collected would go to the U.S. Treasury. The 

phaseout began on September 30, 2007. Also, 

following our report’s recommendations, 

CBP has taken steps to improve program 

management and accountability for 

disbursements. (GAO-05-979)

2.33.C. Improving the Efficiency and

Effectiveness of U.S. Food Aid: Our work 

contributed significantly to the Congress’s 

dialogue on its reauthorization of the food 

aid provisions of the 2007 Farm Bill. Since 

2002, the Congress has appropriated an 

average of $2 billion per year for U.S. food 

aid programs to needy countries, which 

delivered an average of 4 million metric tons 

of agricultural commodities per year. Despite 

growing demand for food aid, delivery 

requires an average of 4 to 6 months, and 

rising business and transportation costs have 

contributed to a 43 percent decline in average 

tonnages delivered over the last 5 years. For 

the largest U.S. food aid program, these costs 

represent approximately 65 percent of total 

food aid expenditures. We found that multiple 

challenges hinder the efficiency and effective 

use of U.S. food aid, and U.S. agencies do 

not adequately monitor food aid programs. 

As a result, the programs are vulnerable to 

not getting the right food to the right people 

at the right time. To improve efficiency 

of food aid delivery, we made several 

recommendations in areas such as logistical 

planning, transportation contracting, 

food quality, and monetization. The 

Administrator of USAID and the Secretary 

of Transportation generally agreed with our 

recommendations and are addressing our 

concerns. We also recommended improving 

the effective use food aid by enhancing the 

monitoring of programs, the reliability and 

use of needs assessments, the use of nonfood 

resources, and interagency coordination in 

updating food products and specifications. 

The Administrator of USAID generally agreed 

with our recommendations and is working 

to address them. (GAO-07-560, GAO-07-616T, 

GAO-07-905T)
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2.34.C. Identifying Key Issues for

Oversight of U.S. Efforts to Stabilize

and Rebuild Iraq: Our work informed 

the Congress about the challenges faced 

in stabilizing and rebuilding Iraq. Our 

January 2007 compendium identified 

oversight issues and recommendations 

from our recent reports. We recommended 

that the United States develop a national 

strategy to address the political, security, 

and economic challenges it faces in Iraq 

and to identify U.S. costs. We found that 

DOD does not provide the Congress with 

information on the readiness of each Iraqi 

unit, which hinders congressional oversight. 

Our May 2007 report described challenges 

faced in rebuilding Iraq’s oil and electricity 

sectors and recommended that the United 

States work with those ministries to craft 

a strategic plan to restore the sectors. 

We recommended installing a metering 

system to improve accountability in Iraq’s 

oil sector and developing comprehensive 

hydrocarbon legislation to improve Iraq’s 

legal environment and attract investment. 

We also reported that DOD could not 

account for thousands of weapons 

provided to the Iraqi security forces. 

DOD endorsed our recommendations to 

determine what accountability procedures 

apply to the equipment distributed and 

to ensure that staff and resources meet 

the new requirements. Our September 

2007 benchmark report found that the 

Iraqi government had not met most of its 

18 key legislative, security, and economic 

benchmarks. State and DOD agreed with 

our recommendations to improve the quality 

of information provided to the Congress on 

the progress being made in meeting these 

benchmarks. (GAO-07-426T, GAO-07-612T, 

GAO-07-637T, GAO-07-677, GAO-07-711)

2.35.C. Reforming Procurement and

Oversight at the United Nations (UN):

In 2006 and 2007 we issued several reports 

and testified before the Congress on the UN’s 

vulnerability to fraud, waste, abuse, and 

mismanagement due to weaknesses in oversight and procurement practices. We found 

that UN funding arrangements constrained 

the ability of the Secretariat’s internal oversight unit to operate independently and direct 

resources toward high-risk areas as needed. 

The UN Secretariat has taken actions that 

address some of our recommendations on 

oversight and have been reported to the 

General Assembly, including establishing an 

Independent Audit Advisory Committee that 

is expected to be operational in early 2008. 

We also reviewed the internal oversight functions at six other UN organizations and found 

that their internal audit and evaluation offices had not fully implemented international 

auditing or UN evaluation standards. Three 

of the six UN organizations we reviewed have 

endorsed our recommendations to improve 

oversight and consider establishing independent audit committees accountable to their 

governing bodies. For procurement, we found 

serious weaknesses in internal controls. 

Specifically, the UN lacks an effective organizational structure for managing procurement, 

has not demonstrated a commitment to improving its procurement workforce, and has 

not adopted specific ethics guidance. State 

endorsed our recommendation that it work 

with member states to address UN procurement weaknesses, and the UN subsequently 

announced actions to address some of these 

weaknesses, including efforts to ensure proper accountability and training of all involved 

in procurement. (GAO-07-597, GAO-07-14, 

GAO-06-577, GAO-06-575, GAO-06-226T)

2.36.C. Strengthening Anti-Human

Trafficking Interventions: Our first 

report on human trafficking drew attention 

to several key concerns, including that 

(1) the estimates of the number of trafficking 

victims are questionable and (2) State’s 

annual report assessing foreign governments’ 

compliance with minimum standards to 

eliminate human trafficking has incomplete 

explanations about its ranking decisions 

and is not used consistently to develop 
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antitrafficking programs. Baseline estimates 

of the number of trafficking victims provide 

benchmarks for measuring the impact of 

certain antitrafficking interventions. The 

lack of such reliable baseline estimates has 

made it difficult to ensure that organizations 

fund antitrafficking interventions with 

the greatest impact. Our follow-up 

review on human trafficking found that 

governments, international organizations, 

and nongovernmental organizations must 

overcome challenges that have impeded 

collaboration in the past for their efforts 

to be successful. It also found that U.S. 

government-funded antitrafficking projects 

often lack important elements that allow 

projects to be monitored, and little is known 

about project impact due to difficulties in 

conducting evaluations. In addition, we 

convened a panel of experts who identified 

and discussed ways to address the factors 

that make it difficult to monitor and evaluate 

antitrafficking projects; their suggestions 

included improving information on the 

nature and severity of human trafficking 

and addressing monitoring and evaluation 

weaknesses in the design of antitrafficking 

projects. (GAO-07-1034)

2.37.C. Highlighting Afghanistan

Oversight Issues for the Congress: In 

2007 the United States accelerated its efforts 

to secure, stabilize, and rebuild Afghanistan. 

In May 2007 we provided to the Congress a 

compendium of key oversight issues. This 

product was based on our continuing and 

prior work on Afghanistan, which, since 

2003, has addressed food and agricultural 

assistance, reconstruction assistance, efforts 

to establish Afghan national security forces, 

and drug control programs. Through this 

work we identified needed programmatic 

improvements and obstacles that have 

limited success. For most U.S. efforts, we 

identified the need for improved planning, 

including the development of strategic plans 

that have measurable goals, specific time 

frames, cost estimates, and identification 

of external factors that could significantly 

affect efforts. Some additional needed 

improvements we identified included better 

coordination among the United States and 

other donor nations, more flexible options for 

program implementation, and timelier project 

implementation. We also concluded that 

several obstacles, especially deteriorating 

security and the limited institutional capacity 

of the Afghan government, challenged 

the effectiveness of U.S. efforts. In this 

compendium, we suggested that the Congress 

review a number of issues. (GAO-07-801SP)

Respond to the impact of 

global market forces on 

U.S. economic and security 

interests

2.38.C. Preventing Identify Theft: In 

a June 2007 report on data breaches and 

identity theft, we provided the Congress 

with information to help assess the need 

for a federal statutory requirement to notify 

individuals whose personal information has 

been breached. We found that according to 

information from government agencies, trade 

associations, and news media, breaches 

of sensitive personal data by companies, 

government agencies, and a wide variety of 

other organizations have occurred frequently 

in recent years. Additionally, we found that it 

is not well known how often such breaches 

have led to identity theft, but available data 

indicated that most breaches had not resulted 

in detected incidents of identity theft. We 

reported that requiring affected consumers 

to be notified of a data breach may encourage 

better security practices and help prevent or 

mitigate identity theft, but would also pose 

certain costs and challenges, such as expenses 

to develop incident response plans and 

identify and notify affected individuals. We 

concluded that should the Congress choose 

to enact a federal notification requirement, a 

risk-based notification standard—designed 
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160 PART V Appendixes GAO-08-1SP

to alert consumers only when a risk of 

harm exists—could avoid undue burden 

on organizations and unnecessary and 

counterproductive notifications of breaches 

that present little risk. (GAO-07-737)

2.39.C. Raising Awareness of

Vulnerabilities in the Export Control

System: For over a decade, we have 

identified weaknesses in the effectiveness 

and efficiency of the export control system 

and other government programs designed 

to protect technologies critical to national 

security—prompting us to designate this as 

a new high-risk area. In 2006, our reports 

revealed newly identified shortcomings 

in the export control system’s ability to 

protect the export of controlled information. 

Specifically, we determined that State and 

Commerce, which regulate defense-related 

exports, had less oversight of exports 

of controlled information than they did 

of controlled goods. Our work further 

determined that the departments had not 

fully assessed the risks associated with the 

variety of means, such as e-mails and foreign 

participation in research efforts, used to 

transfer controlled information to foreign 

nationals at both companies and universities. 

This vulnerability is exacerbated in an 

era of rapid advances in communication 

and increased globalization. Our past and 

ongoing work has laid out a framework for 

addressing weaknesses and reexamining the 

fundamentals of the export control system. 

Recently, this work formed the basis for a 

congressional hearing in July 2007, attracted 

international press coverage, and prompted 

calls for fundamental reform of the system. 

(GAO-07-1135T, GAO-07-69, GAO-07-70)

2.40.C. Improving Americans’ Financial

Literacy: In a December 2006 report, we 

found that the federal National Strategy 

for Financial Literacy lacked certain 

key elements needed for it to play a 

meaningful role in guiding federal efforts 

to improve Americans’ financial literacy. 

We recommended that the Financial 

Literacy and Education Commission 

modify this strategy to, among other things, 

incorporate specific goals and benchmarks 

and concretely define financial literacy. We 

also identified opportunities for ensuring 

that the commission’s Web site best served 

consumers, as well as for ensuring that the 

commission’s reviews of federal financial 

literacy activities were meaningful and 

independent. In response to our work, 

the commission’s April 2007 report to the 

Congress provided a concrete definition 

of financial literacy to guide its work. The 

commission also said that by 2009 it would 

follow our recommendations to conduct 

usability testing and measure customer 

satisfaction with its Web site. Further, 

the commission began taking measures 

recommended in our report to ensure that its 

reviews of federal financial literacy activities 

are conducted by an independent third party. 

(GAO-07-100, GAO-07-777T)

2.41.C. Improving Financial Supervision

of Holding Companies: Responding 

to the dramatic changes in the financial 

services industry, the Federal Reserve, 

the Office of Thrift Supervision, and SEC 

oversee the risk management practices of 

holding companies on a consolidated basis. 

Consolidated supervision recognizes the 

increased importance of enterprise risk 

management by large, complex financial 

services firms, and enables supervisors to 

oversee the risks of financial services firms 

on the same level that the firms manage 

those risks. In response to our report, SEC 

restructured its consolidated supervision 

program to strengthen the prudential goals 

of the program. SEC is also implementing 

our recommendation that it develop and 

make publicly available a description of 

the program in order to foster greater 

transparency. Also following our report, the 

office proposed changes in its consolidated 

supervision framework to more explicitly and 

transparently focus its supervision of holding 
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GAO-08-1SP Appendixes PART V 161

company risk-management strategies. We 

had recommended such changes to facilitate 

consistency with other supervisory agencies 

as well as consistent treatment of the office 

diverse population of holding companies. 

(GAO-07-154)

2.42.C. Improving the Transparency of

the Regulatory Process for the Basel II

Framework: In a February 2007 report, 

we identified numerous challenges that 

banking regulators and banks were facing in 

moving to implement the new Basel II capital 

framework. We determined that increased 

transparency going forward could help 

reduce ambiguity and respond to questions 

and concerns among banks and industry 

stakeholders about how the rules will be 

applied, their ultimate impact on capital, 

and the regulators’ ability to oversee their 

implementation. We concluded that with 

safeguards in place, it was appropriate for 

U.S. banking regulators to proceed with 

finalizing Basel II and begin the transition 

period, but we identified ways to help 

reduce the uncertainty about the impact 

of Basel II on required levels of regulatory 

capital, improve the transparency of the 

process, and address the impediments 

regulators were facing. Consistent with 

our recommendations, the regulators 

have developed a process to assess the 

performance of proposed rules, which they 

believe will provide a structured and prudent 

framework for managing the implementation 

of Basel II in the United States. (GAO-07-253)

2.43.C. Improving Consumer Protections

When Purchasing Title Insurance:

In an April 2007 report, we identified 

characteristics of the current title insurance 

market—including weaknesses in state and 

federal regulatory efforts and alleged illegal 

kickbacks paid by title agents to realtors, 

builders, and mortgage brokers—that 

raised questions about the prices paid by 

consumers for title insurance, which is a 

required part of almost all home purchases 

or mortgage refinancings. We reported that 

in order to better protect consumers and 

increase their ability to comparison shop 

for title insurance, HUD and state insurance 

regulators should strengthen their oversight 

of title agents, especially those owned by 

realtors or mortgage brokers that have a 

financial interest in referring consumers 

to a particular title agent. In response to 

the issues identified by our work, HUD 

has made plans to improve its consumer 

education efforts, and state insurance 

regulators and title industry officials have 

begun planning ways to better detect and 

deter illegal kickbacks as well as to promote 

price competition beneficial to consumers. 

(GAO-07-401)

2.44.C. Improving SEC Enforcement Operations: We found that while SEC’s Division 

of Enforcement (Enforcement) is planning 

improvements to its investigation management processes and information systems, 

these planned changes may not address all 

existing limitations. For example, Enforcement has not established written processes 

and criteria for its new centralized approach 

for reviewing and approving new investigations, which could limit the effectiveness of 

this new approach. Additionally, Enforcement 

has not taken sufficient steps to ensure the 

reliability of data that will be entered into a 

new investigation management system. We 

also found that Enforcement’s decentralized approach to managing the Fair Fund 

program, under which funds are returned to 

investors who suffered losses due to violations of securities laws or regulations, had 

contributed to distribution delays. We recommended that SEC and Enforcement take 

several actions to improve Enforcement’s 

capacity to manage the investigative process 

and the Fair Fund program, which SEC has 

agreed to implement. As a result, Enforcement should be better positioned to identify 

and punish violations of the securities laws 

and regulations and compensate investors for 

their losses. (GAO-07-830)
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Reexamine the federal 

government’s role in achieving 

evolving national objectives

3.01.F. Developing Common CrossAgency Grant Reporting Systems: In our 

2005 report, we found that efforts toward 

common electronic systems for reporting 

financial and performance information for 

financial assistance (primarily grants) had 

not been developed, although they were 

required under Pub. L. No. 106-107, the 

Federal Financial Assistance Management 

Improvement Act. The report concluded 

that the lack of continuity toward meeting 

Pub. L. No. 106-107’s requirement to develop 

a common reporting system for similar 

programs could prevent agencies from 

reaching the act’s goals. We recommended 

that OMB ensure that efforts to develop 

common grant-reporting systems are 

undertaken on a schedule that would result 

in significant progress by the time Pub. L. 

No. 106-107 sunsets in November 2007. The 

co-chair of the cross-agency team established 

by OMB to oversee the reforms said that the 

report raised the issue to the team’s attention 

and helped it focus on what needed to be 

done and make faster progress. Following 

the report’s release, it was discussed in 

several forums, and those working on the 

initiative drafted a detailed business case 

that included plans for implementation. The 

updated 2007 business plan estimated the 

net present value of cumulative financial 

benefits after deducting the system costs 

through fiscal year 2008 to be $127.4 million 

from eliminating or reducing the costs 

associated with multiple agencies developing 

and maintaining grants management systems 

and financial benefits through fiscal year 2015 

of $3.4 billion (with a net present value of 

$1.5 billion). (GAO-06-566, GAO-05-335)

3.02.C. Rebuilding the Gulf Coast in the

Aftermath of Hurricanes Katrina and

Rita: Our work on Gulf Coast rebuilding 

has informed the Congress on the status of 

recovery and rebuilding efforts in the wake of 

hurricanes Katrina and Rita, and has helped 

to provide a framework for congressional 

oversight in this area. We have testified 

on challenges facing the rebuilding effort, 

as well as potential financial implications 

for the federal government. Our work has 

also focused on identifying good practices 

and potential reforms to assist the nation 

in responding to, and rebuilding from, 

future catastrophic disasters. For example, 

we reported on the use of state-to-state 

emergency management compacts and 

developed several recommendations to 

help federal agencies better leverage state 

and local resources in the future. The 

Congress, the media, policy and research 

institutions, community planning groups, 

and the senior leadership of DHS’s Office 

of the Federal Coordinator for Gulf Coast 

Rebuilding have all made use of our work to 

better understand the scope of the resources 

needed and to improve coordination and 

cooperation between the government and 

nongovernmental organizations involved in 

the ongoing rebuilding effort. (GAO-07-1079T, 

GAO-07-809R, GAO-07-854, GAO-07-574T)

Help transform the federal government’s role and how it does 

business to meet 21st century challenges

Source: See Image Sources.

Strategic Goal 3
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164 PART V Appendixes GAO-08-1SP

3.03.C. Enhancing National Preparedness

for a Potential Influenza Pandemic:

Our work helped inform the Congress and 

highlighted opportunities for federal agencies 

to improve the nation’s preparedness 

for and response to a potential influenza 

pandemic. Agencies have agreed to follow 

our recommendations in several areas. 

DHS and the Department of Health and 

Human Services agreed to develop rigorous 

testing, training, and exercises for pandemic 

influenza to ensure that federal leadership 

roles and responsibilities are clearly 

defined, understood, and work effectively. 

FEMA plans to work with OPM to formally 

define the role of federal executive boards 

(which are interagency coordinating groups 

designed to strengthen management and 

intergovernmental relations) in emergency 

planning and response. USDA agreed to 

develop a response plan that identifies 

critical tasks and related capabilities, 

develop standard criteria for state response 

plans; work with states on how to overcome 

potential problems, and determine the 

amount of antiviral medications needed and 

how to supply them to workers responding 

to an outbreak of highly pathogenic 

avian influenza among poultry. DHS and 

USDA agreed that further clarification 

of the roles during certain emergencies 

is needed. DOD agreed to take steps to 

clarify roles and responsibilities within 

the department and with the combatant 

commands, better communicate with its own 

personnel, improve planning, link funding 

and performance measures with goals, 

and identify the resources that combatant 

commands need. Financial market regulators 

have set dates by which organizations critical 

to the operation of the securities markets 

should complete their pandemic response 

plans. (GAO-07-781, GAO-07-696, GAO-07-652, 

GAO-07-604, GAO-07-515)

Support the transformation 

to results-oriented, highperforming government

3.04.F. Monitoring the Development

and Operation of the 2010 Census:

Through a series of testimonies and 

reports, we have continued to monitor 

the development and operation of the 

2010 Census for our congressional clients. 

Specifically, we recommended that the U.S. 

Census Bureau (Bureau) thoroughly test 

the second or replacement questionnaire 

mailing to recipients who did not return 

the initial census form. The second mailing 

would boost the mail-back response rate 

by several percentage points, which in turn 

would reduce the number of costly personal 

visits enumerators would need to make to 

collect the information in person from each 

nonresponding household. Bureau officials 

agreed, tested the replacement mailing in 

2006, and have told us that they are firmly 

committed to including the replacement 

mailing in the 2010 Census. On a net present 

value basis, the use of a replacement mailing 

should reduce the cost of the decennial 

census by about $436 million. (GAO-05-9, 

GAO-07-1132T, GAO-07-1106T, GAO-07-1063T, 

GAO-07-361)

3.05.F. Realizing Financial Benefits from

Implementing IT Management Practices:

In response to our recommendations and 

best practices guides, federal agencies such 

as DOD, DOT, the National Aeronautics 

and Space Administration (NASA), VA, and 

USDA have taken steps to enhance their 

capability to oversee IT investments and 

improve IT investment decision making. 

For example, USDA has improved its 

capability to (1) align and coordinate the 

responsibilities of the department’s various 

IT investment management boards for 

decision making related to IT investments, 

including crosscutting investments; 

(2) ensure that proposed IT investments 
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GAO-08-1SP Appendixes PART V 165

support work processes that have been 

simplified or redesigned to reduce costs and 

improve effectiveness, and make maximum 

use of commercial-off-the-shelf software; 

and (3) structure information systems 

investments into manageable projects as 

narrow in scope and brief in duration as 

practicable to reduce risk, promote flexibility 

and interoperability, increase accountability, 

and better correlate mission need with 

current technology and market conditions. 

Taking these and similar steps to implement 

a more robust IT investment management 

process and more effective IT investment 

decision making helped to enable USDA and 

the other agencies to reduce a total of more 

than $1.3 billion in planned IT expenditures 

from their annual IT portfolios. (GAO-04-49, 

GAO/AIMD-10.1.13)

3.06.F. Improving Federal Agency

Modernization Blueprints: Over the 

last several years, we have reported on 

efforts across the federal government 

to advance the state of department and 

agency modernization blueprints, or 

enterprise architectures, and have made 

a range of recommendations. This work 

has continued to result in improvements to 

both enterprise architecture content and 

use in federal department’s and agencies. 

Specifically, in 2007, we reported that DOD’s 

departments corporate Business Enterprise 

Architecture (BEA) had addressed the core 

elements in our Enterprise Architecture 

Management Maturity Framework, better 

positioning the department to realize the 

transformational value of its BEA, and that 

DHS had continued to evolve its enterprise 

architecture, including making progress in 

addressing our recommendations. Among 

other things, DHS’s efforts have resulted in 

a cost avoidance of $93.1 million from using 

its enterprise architecture to consolidate 

multiple existing geospatial programs. 

(GAO-07-564, GAO-07-733, GAO-06-831, 

GAO-04-777)

3.07.N. Strengthening the Link between

Contract Incentives and Outcomes

across Government: In December 2005 

and January 2007, we reported that DOD 

and NASA structured monetary incentives 

in ways that led to significant disconnects 

between the fees paid to contractors and 

program outcomes. For instance, DOD paid 

an estimated $8 billion in award fees on 

contracts regardless of outcomes. In both 

reports, we made recommendations aimed 

at strengthening the link between incentives 

and outcomes. The Comptroller General 

testified on this issue in April 2006 and we 

briefed multiple congressional committees. 

The result has been changes to award and 

incentive fee policies across several agencies, 

including DOD, NASA, and DHS. DOD and 

NASA have emphasized the need to link 

award fee criteria to acquisition outcomes. 

The Congress also enacted legislation 

incorporating most of our recommendations 

directed at DOD, and the emergency 

supplemental appropriation law for 2007 

required all DHS award fees to be linked to 

successful acquisition outcomes. Further, 

legislation encouraging the Director of 

National Intelligence to make similar changes 

has been introduced in the Congress. Moving 

toward more outcome-based award fee 

criteria will give contractors an increased 

stake in helping agencies develop more 

realistic targets up front or risk receiving 

less fee when unrealistic cost, schedule, and 

performance targets are not met. Once these 

steps are implemented, the agencies have the 

potential to realize significant cost savings 

as a result of better acquisition outcomes 

or lower fee payments to contractors. 

(GAO-07-58, GAO-06-66, GAO-06-409T)

3.08.C. Providing a Road Map for

Fundamental Procurement Reform in the

District of Columbia: The District’s history 

of procurement problems—which include 

poor planning, excessive use of sole-source 

contracts, and unauthorized personnel 

committing government resources—is 
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166 PART V Appendixes GAO-08-1SP

well documented. Our January 2007 report 

compared the District’s procurement law, 

processes, and management and oversight 

practices to guiding principles of public 

procurement and to reform efforts of other 

cities faced with similar challenges. We found 

that the District’s procurement contained 

numerous exceptions to its uniform 

procurement law and did not provide the 

right structure and authority to manage 

and oversee the entire acquisition function 

across all entities. To better ensure that 

every dollar of its more than $1.8 billion 

procurement investment is well spent, we 

outlined a comprehensive road map with a 

number of recommendations to the Mayor 

and Chief Financial Officer (CFO) that 

included submitting a plan to the Congress 

to reform the procurement law and system to 

better promote transparency, accountability, 

and competition, and minimize fraud, waste, 

and abuse. We were called to testify before 

the City Council and, citing our report 

as the impetus for change, the Council 

committed to moving the District forward 

with procurement reform in line with our 

numerous recommendations. The Mayor 

has since submitted a plan to the Congress 

that reflects our recommendations, and has 

recently nominated a Chief Procurement 

Officer with extensive public procurement 

experience. The CFO is also revising a 

financial order to address our concerns about 

unauthorized commitments. (GAO-07-159)

3.09.C. Strengthening Oversight of

Costly Yet Critical Environmental

Satellite Programs: In recent years, we 

have provided assistance to the Congress 

by helping oversee the government’s 

acquisition of major satellite programs: 

the $12.5 billion National Polar-orbiting 

Operational Environmental Satellite System 

(NPOESS) program, which is to replace 

two existing polar-orbiting systems, and 

the planned $7 billion Geostationary 

Operational Environmental Satellite-R series 

(GOES-R) program, which is to replace the 

current series that will reach the end of its 

useful life in approximately 2014. Both are 

considered critical to the United States’ 

ability to maintain the continuity of data 

required for weather forecasting and global 

climate monitoring through the years 2026 

and 2028, respectively. Since 2002, we have 

issued multiple reports and testimonies 

identifying risks facing NPOESS and, more 

recently, GOES-R. Most recently, we reported 

on the NPOESS program’s serious technical 

challenges and actions required for program 

success, and on the lessons the GOES-R 

program would have to learn to ensure its 

success—and recommended increasing 

and improving program management and 

mitigating serious risks on both programs. 

We testified in September 2006 on GOES-R, 

in June 2007 on NPOESS, and in July 2007 on 

both programs. Our work has helped focus 

congressional, agency, and public attention 

on these important programs and has led 

to ongoing changes in the management 

structure of the satellite program offices, 

more active oversight by high-level agency 

officials, and more awareness of the technical 

and managerial issues facing the programs 

by the Congress. (GAO-07-498, GAO-07-910T, 

GAO-07-1099T, GAO-06-993, GAO-06-1129T)

3.10.C. Strengthening DOD Business

Systems Modernization Management:

For decades, DOD has been challenged in 

modernizing its timeworn business systems. 

In 1995, we designated DOD’s business 

systems modernization program as high risk, 

and we continue to designate it as such today. 

From May 2001 through May 2007, our body 

of work on DOD’s institutional approach to 

modernizing its business systems, coupled 

with our reviews of specific business system 

investments, has produced recommendations 

that provide an impetus and framework 

for modernization success. The Congress 

has embraced these recommendations in 

legislative mandates to DOD, such as those 

in the Ronald W. Reagan National Defense 

Authorization Act for Fiscal Year 2005, and 
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 167

the department has largely agreed and taken 

actions to implement them. To its credit, 

the department continues to make progress 

in establishing corporate management 

controls, such as its BEA, corporate 

investment structures and processes, and 

increased oversight and life management 

discipline on its largest business system 

investments. Key to success in going forward 

will be ensuring that these approaches 

and abilities are extended to and employed 

on component organizations’ (military 

departments and defense agencies) business 

system modernization efforts. As in the 

past, our continued efforts to monitor DOD’s 

progress on establishing and implementing 

the full range of system modernization and 

maintenance controls will be beneficial in 

helping the department make further positive 

strides on this highly important initiative. 

(GAO-07-229T, GAO-07-538, GAO-07-733, 

GAO-06-171, GAO-06-215)

3.11.C. Improving the Government’s

Approach to Interoperable

Communications: In reviewing a key 

e-government initiative intended to improve 

communications interoperability among first 

responders, we reported on progress with the 

over $2 billion in federal grants awarded to 

states and localities and highlighted the need 

for DHS to take a more strategic approach 

to improving interoperable communications 

among federal, state, and local first 

responders. More recently, as mandated 

by the Congress, DHS has been working to 

develop a new office that is responsible for 

making such improvements across all levels 

of government. In addition, as a result of our 

report, the Senate Committee on Homeland 

Security and Governmental Affairs sent a 

letter to the Secretary of the Department 

of Homeland Security reinforcing the 

importance of the issues identified in our 

report and encouraging DHS to implement 

our recommendations. (GAO-07-301)

3.12.C. Ensuring Personal Privacy in the

Face of Increasing Threats: We helped 

the Congress address increasing concerns 

that individuals’ personal information could 

be inadequately protected by DHS and other 

federal agencies, potentially compromising 

individuals privacy rights or exposing their 

information to misuse, such as through 

identity theft. For example, in February 

2007, we reported that DHS had not taken 

sufficient action to assess privacy risks 

before developing a sophisticated datamining tool. Because of the prominence of 

our findings, a hearing was held to discuss 

the report, which also received significant 

media coverage. We also reported on the 

progress and accomplishments of the DHS 

Chief Privacy Officer, citing several areas 

for improvement that were subsequently 

discussed at a separate hearing. Beyond 

DHS, we analyzed lessons learned from the 

well-publicized data breaches at VA and other 

agencies to develop a key recommendation 

regarding assistance to individuals affected 

by data breaches at federal agencies. 

(GAO-07-293, GAO-07-630T, GAO-07-522, 

GAO-07-1024T, GAO-07-657)

3.13.C. Helping to Gauge Agency

Progress in Implementing the Freedom

of Information Act (FOIA): We assisted 

the Congress by analyzing FOIA request 

processing at major agencies and describing 

trends, which include a small but steady 

rise in reported requests pending at the end 

of each fiscal year. We also analyzed the 

FOIA improvement plans that these agencies 

developed in response to an executive order, 

comparing them with the major areas of 

focus in the order. We presented these results 

at a hearing in February 2007 and in a March 

report. As a result of our FOIA work, we 

were consulted on the development of several 

bills intended to strengthen FOIA, and our 

analysis provided a basis of discussion 

and debate for congressional decision 

makers. This work is part of our ongoing 

body of work on FOIA implementation and 
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168 PART V Appendixes GAO-08-1SP

improvement, on which both the Congress 

and the press have come to rely in gauging 

agencies’ progress in this area. (GAO-07-441, 

GAO-07-491T)

Support congressional 

oversight of key management 

challenges and program 

risks to improving federal 

operations and ensuring 

accountability

3.14.F. Informing the Termination of the

Space Launch Initiative: In a September 

2002 report, we questioned NASA’s 

overall acquisition strategy to develop a 

new generation of space transportation 

vehicles—the Space Launch Initiative (SLI). 

We reported that NASA faced considerable 

challenges defining basic requirements for 

SLI. We also noted that most of the key 

technologies under consideration by SLI were 

very immature and that management controls 

necessary to estimate cost and gauge 

progress were not in place. We concluded 

that NASA’s goal of defining SLI requirements 

by the November 2002 time frame may not be 

realistic and that the agency must determine 

whether developing a second generation 

vehicle was still worthwhile given plans 

to extend the life of the Space Shuttle and 

reduce the capabilities of the International 

Space Station. We recommended that the 

NASA Administrator take several steps, 

including completing the reassessment of 

NASA’s Integrated Space Transportation 

Plan, before moving forward with SLI. 

NASA concurred and, in November 2002, 

took action to delay decisions regarding 

future launch vehicles and refocused SLI 

on conducting basic research on advanced 

launch technologies and developing a vehicle 

to serve the International Space Station. 

Two years later, NASA finalized its decisions 

regarding new launch vehicles and adopted 

a new overarching strategy for all space 

transportation, known as the Vision for 

Space Exploration. In 2005, NASA terminated 

the entire SLI program and redirected 

$3.7 billion in funding originally programmed 

for SLI toward future exploration activities. 

(GAO-02-1020)

3.15.F. Identifying Improper or

Potentially Fraudulent Hurricane

Disaster Assistance Payments: Our audit 

and investigative work related to FEMA’s 

Individual and Households Program (IHP) 

estimated that it made from $600 million 

to $1.4 billion in improper or potentially 

fraudulent financial assistance payments 

following hurricanes Katrina and Rita. We 

referred over 22,000 potential fraud cases to 

the Katrina Fraud Task Force for appropriate 

criminal investigation. These cases included 

(1) duplicate payments to individuals who 

registered and received assistance twice 

using the same SSN and address of damaged 

property, (2) individuals who obtained IHP 

assistance using invalid SSNs (e.g., those 

belonging to deceased or other individuals), 

(3) individuals who received multiple 

emergency assistance payments (in violation 

of the Stafford Act), and (4) rental assistance 

payments to federal and state prisoners 

incarcerated at the time of the hurricanes. 

As of May 2007, FEMA reported that it had 

begun actions to recoup $700 million—and 

collected $16 million—in improper financial 

assistance payments. (GAO-07-252T, 

GAO-07-300, GAO-07-418T, GAO-06-655)

3.16.F. Funding USPS Postretirement

Health Care Obligations: OPM analyzed 

the funding of USPS’s retirement plans and 

reported in 2002 that the current level of 

pension fund contributions would result in a 

surplus of funds and that this surplus would 

adequately cover future pension benefit 

obligations. At the request of the Congress, 

we reviewed OPM’s analysis and a proposal 

by the administration to change the funding 

formula. We emphasized to the Congress that 

even though USPS had a projected pension 
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surplus, at the time we conducted our 

review USPS had not yet funded $40 billion 

to $50 billion in postretirement health care 

benefits. In response, the Congress passed 

Pub. L. No. 108-18, the Postal Civil Service 

Retirement System Funding Reform Act of 

2003, which, among other things, required 

that any savings accruing to USPS after 

fiscal year 2005 as a result of the enactment 

of the act be held in an escrow account until 

further legislation was enacted that would 

resolve the disposition of these funds. The 

Congress wanted the funds made available 

from any pension payment reductions to 

be used to address, among other things, 

USPS’s unfunded postretirement health 

care obligations. USPS responded by 

raising postal rates effective January 2006 

solely to fund the escrow requirement. 

In December 2006, the Congress passed 

Pub. L. No. 109-435, the Postal Accountability 

and Enhancement Act, that required USPS 

to make a series of 10 annual payments into 

the newly created Postal Service Retiree 

Health Benefits Fund for fiscal years 2007 

through 2016 to help fund USPS’s unfunded 

retiree health care obligations. The first 

of these payments totaled $5.4 billion—a 

financial benefit to the federal government 

resulting from our work. (GAO-04-238, GAO03-448R, GAO-02-170)

3.17.F. Reducing Federal Improper

Payments: Since fiscal year 2000, our 

recommendations have been aimed at 

raising the level of attention given to 

improper payments and contributed 

to the Congress passing the Improper 

Payments Information Act of 2002. The 

provisions of this legislation coincide with 

our recommendations that agencies take 

actions to estimate, reduce, and publicly 

report improper payments. Fiscal year 2006 

marked the third year that federal agencies 

governmentwide were required to report 

improper payment information under the 

act in their performance and accountability 

reports. For fiscal year 2006, 19 agencies 

consisting of 60 programs reported improper 

payment estimates totaling about $42 billion, 

including 15 newly reported programs or 

activities. Agencies also have made progress 

in reducing their improper payments. In fiscal 

year 2007, we estimated that our improper 

payments work resulted in a reduction 

of improper payments of about $1 billion 

(present value) during fiscal year 2006. 

(GAO-07-635T, GAO-07-92, GAO-06-581T, 

GAO-05-245, GAO-02-749)

3.18.C. Exposing the Risks Posed by

the Government’s Increasing Reliance

on Contractors: Commercial firms are 

playing an increasing role in performing 

Government work. For example, contractors 

are performing as system integrators for 

major development projects, like weapons 

and ships. In this role, a commercial firm 

performs a broader range of activities than 

a traditional contractor, including activities 

once performed by the government. Also, 

commercial services are being substituted 

for government labor. In DOD alone, 

contracts for such services have increased 

over 70 percent in the last 10 years. In the 

last year, we have reported and testified 

several times on the oversight risks posed 

by this increased reliance on contractors. 

Specifically, we reported that the large 

growth in service acquisitions by DOD had 

not been a managed outcome and that the 

department did not have a sense of where 

it wanted such acquisitions to be in the 

future. We reported concerns over the Coast 

Guard’s management and oversight of its 

largest acquisition, the $24 billion Deepwater 

program, in part due to its inability to 

effectively oversee and hold the system 

integrator accountable. We also reported that 

the Army’s relationship with the contractor 

serving as system integrator for its $200 

billion FCS program posed risks for the 

Army’s ability to provide oversight over the 

long term. As a result, H.R. 2722 contains 

restrictions on DHS’s use of lead system 

integrators and H.R. 1585 prohibits DOD’s 
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170 PART V Appendixes GAO-08-1SP

use of lead system integrators after October 

1, 2011. (GAO-07-20, GAO-07-380, GAO-07-874, 

GAO-07-672T, GAO-07-359T)

3.19.C. Revising Government Auditing 

Standards: In 2007, we issued a major 

revision to the Government Auditing 

Standards that organizes, clarifies, and 

strengthens the standards for audits of 

government programs and entities. The 

2007 revision achieves increased harmony 

of Government Auditing Standards with 

other U.S. and international standards, 

sets out fundamental ethical principles, 

strengthens the emphasis on audit quality, 

and highlights the importance of auditing 

in promoting public sector accountability 

and providing information for improving 

government operations. The 2007 revision 

also updates and clarifies chapters on 

financial audits, performance audits, and 

attestation engagements. Overall, our 2007 

revision is aimed at helping government 

accountability professionals rise to the 

challenge of producing high-quality audits 

that lead to better government. Auditors in 

federal, state, and local governments, as well 

as certified public accountant (CPA) firms 

conducting audits of government programs, 

are currently implementing our revised 

standards. (GAO-07-731G)

3.20.C. Transforming the Accountability

Profession: Throughout 2007, we joined 

with standard setters both domestically 

and internationally to promote a 

coordinated approach to transformation 

of the accountability profession to meet 

the rapid pace of technological advance 

and globalization, and the widespread 

influence of the Sarbanes-Oxley Act. With 

executives, managers, auditors, investigators, 

and others in the accountability process 

eager to stay up-to-date on Government 

Auditing Standards revisions and current 

accountability issues, we gave dozens 

of presentations across the country and 

abroad to help educate and train a body 

of professionals who are informed on the 

issues and able to apply current standards 

effectively. We continued to work for stronger 

and more congruent standards through 

letters of comment to other standard setters 

and coordination with the three other 

principal standard setters that make up the 

Auditing Standards Coordinating Forum. 

We helped shape the accountability agenda 

through our participation in an advisory 

group for the Public Companies Accounting 

Oversight Board, presented our views on 

Sarbanes-Oxley guidance to SEC, and 

worked with the International Organization 

of Supreme Audit Institutions (INTOSAI) to 

draft international guidance to help public 

sector auditors ensure the accountability 

of government programs and financial 

management to the people they serve. (Based 

on presentations)

3.21.C. Identifying Potential Fraud in the

Federal Transit Benefits Program: We 

conducted forensic audit and investigative 

work concerning the largest portion of the 

federal transit benefits program, the National 

Capital Region’s $140 million program. As a 

result of our work, we estimated that federal 

employees in the National Capital Region 

claimed at least $17 million in potentially 

fraudulent transit benefits during 2006. We 

found instances in which National Capital 

Region federal employees improperly sold 

transit benefits on the Internet auction site 

eBay and the community Web site Craigslist 

and claimed benefits they did not need. 

Based on the potentially fraudulent activities 

uncovered by our work, on May 14, 2007, 

OMB issued a memorandum to the heads 

of departments and agencies requiring 

them to implement specific additional 

internal controls to better ensure that only 

qualified applicants receive federal transit 

benefits. In addition, we referred the cases 

we identified of potential federal employee 

fraud to the inspectors general for potential 
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GAO-08-1SP Appendixes PART V 171

criminal prosecution or other appropriate 

administrative disciplinary action. 

(GAO-07-724T)

Analyze the government’s 

fiscal position and strengthen 

approaches for addressing the 

current and projected fiscal gap

3.22.F. Improving Collection of Federal

Nontax and Criminal Debts: Over the past 

several years, we have rigorously promoted 

federal agencies’ use of key debt collection 

processes and procedures to improve 

collections of delinquent federal nontax civil 

debts (most of which were over 6 months 

delinquent) and criminal debts owed to the 

federal government and victims of crime. In 

fiscal year 2006, reported delinquent federal 

nontax civil debts totaled about $65 billion, 

and criminal debts totaled about $35 billion. 

Education, Justice, and the Department of 

the Treasury (Treasury) have continued to 

take steps to improve collection of these 

debts based largely on our recommendations. 

In fiscal year 2007, we estimated that 

improved collections have added $2.2 billion 

to a steady stream of debt recoveries. 

(GAO-04-338, GAO-02-313, GAO-01-664)

3.23.F. Improving IRS Methodology for

Pursuing Delinquent Taxes: Our previous 

financial audit work determined that IRS did 

not have systems or procedures in place to 

allow it to identify and actively pursue cases 

with collection potential. We recommended 

that IRS improve its capacity to assess the 

collectibility of delinquent taxes as a way to 

better target debt collection resources. In 

2004, IRS began implementing sophisticated 

modeling technology to differentiate between 

more and less productive cases in order to 

make better resource allocation decisions. 

In 2007, we reported that IRS’s actions in 

response to our previous recommendations 

increased its collections of delinquent 

taxes using approximately the same level 

of resources by about $4.2 billion or almost 

20 percent in fiscal year 2006 from fiscal year 

2003 levels. (GAO-01-42)

3.24.F. Modifying Collection Due Process

Appeals: The Congress twice modified 

the Collection Due Process (CDP) program 

based on our October 2006 report. First, 

we found that on average businesses that 

requested a CDP appeal for failure to pay 

employment taxes were delinquent for nearly 

1-1/2 years and had a median tax liability 

of more than $30,000. Citing our report, 

the Senate Finance Committee proposed 

modifying CDP procedures for employment 

tax cases to deny a prelevy CDP hearing, 

authorize IRS to continue collection activity, 

and provide for a postlevy CDP hearing. The 

change was enacted in the Small Business 

and Work Opportunity Tax Act of 2007. The 

Joint Committee on Taxation estimated 

that the change will increase tax collections 

by about $146.3 million (net present value) 

over a 5-year period. Second, we estimated 

that 5 percent of taxpayers who requested 

a CDP hearing raised frivolous arguments 

(arguments without a legal basis). IRS had 

repeatedly submitted proposals to increase 

the frivolous submissions penalty from $500 

to $5,000. The increase was enacted in the 

Tax Relief and Health Care Act of 2006. 

Committee staff said our work confirmed the 

need for legislative action. The committee 

estimated that collections will increase by 

about $13.7 million (net present value) over 

5 years due to this change. (GAO-07-112)

3.25.F. Collecting Delinquent Taxes by

Contracting with Private Collection

Agencies (PCA): We reviewed IRS’s 

preparations to implement a proposal being 

considered by the Congress to authorize IRS 

to contract with PCAs to collect delinquent 

tax debts. Committee and conference reports 

on the proposed law referred to our report 

conclusion that “If Congress does authorize 

PCA use, IRS’s planning and preparations 

to address the critical success factors for 
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172 PART V Appendixes GAO-08-1SP

PCA contracting provide greater assurance 

that the PCA program is heading in the 

right direction to meet its goals and achieve 

desired results.” The Congress subsequently 

enacted the law authorizing IRS to implement 

the program which, in fiscal years 2007 

through 2011, is expected to yield about 

$408 million ($365 million in present value) 

in net revenue to the federal government. 

(GAO-04-492)

3.26.F. Increasing Tax Collections by

Revising IRS’s Withholding Compliance

Program: In November 2003, we 

recommended that IRS assess the value of 

its Questionable Form W-4 program and 

determine whether the program should 

continue in its current form. An IRS task 

force acted on our recommendation and 

concluded that the program was not 

operating effectively. Subsequently, IRS 

eliminated the Questionable Form W-4 

program and said it would enhance its 

withholding compliance program by making 

more effective use of information reported 

on the Form W-2 wage and tax statements to 

ensure that employees have enough federal 

income taxes withheld from their wages. The 

enhanced withholding compliance program 

has better ensured proper withholding from 

employees’ wages. Based on IRS’s data and 

assumptions, we conservatively estimated 

that the new program has resulted in the 

collection of $423 million (net present value) 

in additional income taxes for fiscal years 

2005 and 2006. (GAO-04-79R, GAO-03-913R)

3.27.N. Improving Federal Financial

Reporting: For the 10th consecutive year, we 

were unable to express an opinion on the U.S. 

government’s fiscal year 2006 consolidated 

financial statements because of ongoing 

material weaknesses in internal control 

and financial reporting issues. Nonetheless, 

through our continuing efforts as the 

principal auditor of the U.S. government’s 

consolidated financial statements, we 

were able to effect a number of significant 

improvements to the understandability 

and utility of federal financial reporting 

during 2007. For example, because of our 

recommendations, Treasury took action to 

increase the understandability and utility 

of these statements by adding important 

contextual information in the Management’s 

Discussion and Analysis section of the U.S. 

government’s fiscal year 2006 financial 

report. In addition, Treasury improved 

compliance with generally accepted 

accounting principles and disclosure of 

required information in several areas, 

including the federal employee and veteran 

benefits payable; earmarked funds; and 

property, plant, and equipment. Further, 

our January 2007 special product, Fiscal 

Stewardship: A Critical Challenge Facing 

Our Nation, used the results of our financial 

statement audit work as a foundation for a 

high-level summary of the nation’s current 

financial condition, long-term fiscal outlook, 

and possible ways forward. (GAO-07-362SP)

3.28.N. Improving Research and Setting

Goals to Reduce the Tax Gap: In July 

2005, we made various recommendations 

to IRS to improve its efforts to reduce the 

tax gap. One recommendation was that 

IRS develop plans to periodically measure 

tax compliance for areas of the tax gap 

that have been previously measured (e.g., 

individual taxpayers) and study ways to cost 

effectively measure compliance for other 

parts of the tax gap. IRS agreed with our 

recommendation and in June 2007 announced 

its plans to launch a new compliance study 

of individual taxpayers that will be part of a 

series of annual studies of such taxpayers. 

Another recommendation was that IRS set a 

long-term voluntary compliance goal to help 

measure the success of its compliance efforts 

and focus on achieving results. In its 2007 

budget justification, IRS established a goal 

of 85 percent voluntary compliance by 2009. 

(GAO-05-753)
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GAO-08-1SP Appendixes PART V 173

3.29.C. Addressing Our Nation’s Longterm Fiscal Challenge: We continued our 

effort in fiscal year 2007 to help members 

of the Congress and the public better 

understand the implications of current 

policies and the long-term fiscal challenges 

facing our nation. In particular, the 

Comptroller General continued and expanded 

GAO’s participation in the Fiscal Wake-Up 

Tour sponsored by the Concord Coalition. In 

this effort—which grew out of our forum on 

the long-term fiscal challenge—analysts from 

the Brookings Institution and the Heritage 

Foundation join the Concord Coalition 

and the Comptroller General in town hall 

meetings and forums around the nation. 

The focus of our education effort is simple: 

long-term simulations show ever-larger 

deficits resulting in a federal debt burden that 

ultimately spirals out of control—continuing 

on our current unsustainable fiscal path 

will gradually erode, if not suddenly 

damage, our economy, our standard of 

living, and ultimately our national security. 

This message has also been reinforced 

in the Comptroller General’s testimonies, 

speeches, and presentations. Another 

contribution to the effort was publication of 

Fiscal Stewardship: A Critical Challenge 

Facing Our Nation in late January 2007; 

this publication was designed to present 

selected financial statement and budget 

information together in a manner accessible 

to the general public. The success of this 

public education effort in increasing public 

awareness of the nation’s fiscal challenges 

is evidenced by (1) increased media 

coverage, including a 60 Minutes segment, 

an appearance by the Comptroller General 

on The Colbert Report television show, and 

editorials calling attention to this problem 

and the need for action, and (2) a large 

increase in requests for Fiscal Wake-Up 

Tour town hall meetings by members of 

the Congress and local community leaders. 

(GAO-07-1144T, GAO-07-1261R, GAO-07-389T, 

GAO-07-362SP, GAO-07-1164CG)
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174 PART V Appendixes GAO-08-1SP

Improve client and customer 

satisfaction and stakeholder 

relationships

4.01.C. Strengthening Communication

with Our Congressional Clients and

Measuring Congressional Satisfaction

with Our Work: We explored and 

implemented technology solutions in several 

areas that facilitate our staff’s ability to 

meet the clients’ needs and enhance the 

quality and timeliness of client service. We 

continued our pilot of e-dissemination of 

our products to congressional clients to 

more fully understand the nuances involved 

in implementation on a larger scale. We 

avoided approximately $48,800 in costs 

for the 51 reports issued during fiscal year 

2007. Based on the cost-effectiveness of 

e-dissemination and the positive response 

from our clients, we recently have fully 

implemented E-dissemination for the vast 

majority of our products, both for our client 

and internally. The advantages include the 

following:

Almost instant availability of a completed 

product to our client.

Capability to search, excerpt, and forward 

the product to others electronically.

Streamlining of our publication process 

due to elimination of printing time.

Estimated annual savings of about 

$300,000 in printing costs.

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Possibility for future electronic 

enhancements in information presentation 

such as color and multimedia elements 

and Internet-only presentation of 

Web-based survey results and tables that 

summarize information from databases.

To maximize our ability to gauge client 

satisfaction with our products and determine 

improvements needed, we implemented 

several strategies including the development 

of electronic surveys that can be responded 

to via Blackberry devices, alerting recipients 

of upcoming surveys by e-mail or telephone, 

and following up with nonrespondents by 

e-mail or telephone.

4.02.C. Assessing Internal Customer

Satisfaction with Our Services and

Processes and Implementing and

Measuring Improvement Efforts: The 

4th annual GAO Customer Satisfaction 

Survey was conducted in November 2006 

where 1,500 of our staff provided input on 

their satisfaction with our administrative 

services. We measured (1) 19 services 

that help employees get their jobs done 

(e.g., IT, report production, and travel) and 

(2) 10 services that improve employees’ 

quality of work life (e.g., benefits and 

transit subsidies). For the first time we 

met or exceeded our target of 4.0 for both 

measures. The score for services that help 

employees get their jobs done remained 

the same at 4.1, and the score for services 

that affect quality of work life increased 

from 3.98 to 4.0. Chief Administrative Office 

units reviewed the results, developed action 

plans to address customer issues and 

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Strategic Goal 4

Maximize the value of GAO by being a model federal agency and 

a world-class professional services organization

Source: See Image Sources.
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 175

recommendations, and implemented several 

improvements. Examples include launching 

the Information Systems and Technology 

Services (ISTS) Solutions Center (described 

below); automating the distribution of 

transit benefits; upgrading Internet Protocol 

Television, a technology that allows video 

to be viewed over the Web, to provide 

direct broadcasts to all our field locations; 

redesigning the GAO Library Services Web 

site; and assigning office move responsibility 

to our Commercial Facilities Management 

contractor for better coordination and 

service to our customers.

In the IT services area—which was 

identified by our customers as the most 

important service in getting their jobs 

done and considered “Best-In-Class” in 

comparison to other professional services 

peer organizations—we developed and 

launched the ISTS Solutions Center, a 

searchable knowledge base for guidance, 

instruction, and tips regarding our computing 

environment; and an IT Service Metrics 

Dashboard to provide monthly update 

information on the status of our IT systems 

and service, such as outages, support 

calls, hardware/software security, remote 

access, and videoconferencing. As a result, 

we are providing more readily accessible, 

comprehensive information to our customer, 

saving time and increasing productivity for 

our customer and our ISTS staff; increasing 

transparency with our customers; and 

providing additional opportunity for 

customer feedback.

To supplement the GAO Customer 

Satisfaction Survey, we gathered additional 

customer feedback on our knowledge 

services through the Product Assistance 

Group Customer Satisfaction Survey, Shared 

Services Centers comment boxes, and 

Library Research Survey. We began and 

completed several initiatives to improve 

services and enhance customer knowledge, 

including

increasing library training efforts on 

authenticating Internet resources, 

advanced Internet searching, and using 

various online databases;

developing a new brochure to better 

explain the revised publishing process;

improving customer service procedures 

and notification processes; and

improving copier/printer availability for 

customers.

4.03.C. Strengthening Relationships

with our Stakeholders: We leveraged our 

resources to improve institutional capacity 

building and transform the accounting 

profession internationally through 

negotiations with State, the World Bank, 

and INTOSAI. An interagency agreement 

with State was signed to fund translation 

of the Government Auditing Standards

into Arabic and provide training for our 

Iraqi counterparts. We also negotiated a 

memorandum of understanding with the 

World Bank and the INTOSAI Development 

Initiative to jointly sponsor the first Supreme 

Audit Institution Transformation Seminar.

Domestically, we held the second annual 

meeting with the inspectors general that 

brought together GAO, the President’s 

Council on Integrity and Efficiency, and the 

Executive Council on Integrity Efficiency and 

resulted in a consensus to meet annually as 

well as a proposal to improve collaboration, 

coordination, and communication between 

GAO and the inspectors general. We also 

developed an operations manual to guide 

teams in convening and reporting on the 

results of Comptroller General forums and 

roundtables.

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176 PART V Appendixes GAO-08-1SP

Lead strategically to achieve 

enhanced results

To achieve our strategic goal of being a 

model federal agency, we must ensure 

that our strategic leadership is focused on 

achieving results. We continued to strengthen 

and further integrate our strategic planning 

and our performance, financial, and IT 

management to maximize results, manage 

risks, enhance responsiveness, and ensure 

exemplary practices and procedures. To 

accomplish this, we built on our established 

base of strong strategic planning, workforce 

and succession planning, sound financial 

management, and targeted performance 

measures.

4.04.C. Ensuring a Seamless Strategic

Planning, Workforce Planning, and

Budget Process to Maximize Results

and Manage Risks with Current and

Expected Resources: This fiscal year 

we issued an update to our Strategic Plan 

for 2007-2012. To facilitate the update, we 

engaged with our client, the Congress, and 

leveraged the Comptroller General’s Advisory 

Board, the Domestic Working Group, and 

the Global Working Group to help determine 

global and national forces and trends shaping 

our work for the next 5 years, resulting in a 

substantially revised themes document.

During a very difficult budget year, we 

successfully demonstrated enhancements to 

our overall resources planning and decision 

making through continued integration of 

our budget, workforce planning, and human 

capital programs. Through integrated 

planning and sophisticated analysis and 

modeling, we identified budgetary options to 

maximize results and manage risks within 

current and expected resources, providing 

the Comptroller General and the Executive 

Committee with viable options to make 

informed, complex, and timely decisions in 

the best interest of the organization and its 

people.

To better align staff learning and 

development with succession planning, 

we created a new feature in the workforce 

planning call for managing directors to 

indicate their interest and needs for unitdedicated services from the Learning Center 

for their teams and offices in the upcoming 

year. These services include workshops 

on performance management issues, 

team-building activities, group facilitation 

assistance, assistance in creating Webbased tutorials or e-learning products, 

assistance in creating instructor-led learning 

or knowledge-sharing programs, assistance 

in identifying training resources for staff, 

supervisory training, and 360-degree and 

upward feedback assessments.

4.05.C. Achieving External Recognition:

We received several notable external 

recognitions this year:

For the sixth time, the Association of 

Government Accountants awarded our 

performance and accountability report the 

Certificate of Excellence in Accountability 

Reporting.

The Federal Section of the International 

Public Management Association for 

Human Relations selected GAO to receive 

one of the two Leading Edge Awards it 

bestows each year, recognizing small 

and large federal organizations that 

have demonstrated progress toward 

effective alignment of their human 

capital strategies with agency mission 

and goals. Our award was in the small 

agency category and recognizes our work 

in addressing human capital challenges in 

our overall transformation efforts.

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GAO-08-1SP Appendixes PART V 177

We received a 2007 second place ranking 

among large agencies in the Best Places 

to Work Survey conducted by the 

Partnership for Public Service and the 

Institute for the Study of Public Policy 

Implementation at American University.

We are again included in CIO Magazine’s

“CIO 100” list in recognition of our 

effective use of information technology 

innovation to meet critical business needs.

Two of our products—the 2006 

Performance and Accountability 

Highlights (GAO-07-3SP, January 2007) and 

Fiscal Stewardship: A Critical Challenge 

Facing the Nation (GAO-07-362SP, 

January 2007)—were among the 800 

documents selected from more than 4,000 

national and international entries from the 

public and private sectors that received 

American Inhouse Design Awards.

We received the 2007 Archivist’s Award 

in Records Management this year for our 

Electronic Records Management System 

(ERMS), a system designed to enable us to 

use electronic records to conduct agency 

business and to comply with the Federal 

Records Act and records management 

regulations.

4.06.C. Strengthening Our Strategic

Human Capital Management to Achieve

Enhanced Results: Building on the work 

of a 2006 recruiting and hiring task team, we 

made great progress in our efforts to further 

enhance our recruiting and hiring processes. 

We implemented recommendations that 

resulted in

enhanced communication and 

coordination with our service 

management team on hiring and staffing 

issues;

a fully revised, competency-driven 

application form and process;

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an aggressive and diversified hiring 

strategy focused on year-round hiring;

a more user-friendly and informative Web 

presence; 

a more coordinated and focused diversity 

outreach effort; and

better coordination and understanding of 

Human Capital Office (HCO) services.

In performing its annual analysis of our 

performance appraisal data, our Office of 

Opportunity and Inclusiveness discovered 

a growing gap between performance 

rating averages for African American and 

Caucasian analysts. To address this gap we 

contracted with an external consultant to 

analyze African American and Caucasian 

performance appraisal data from 2002 

through 2006 and make recommendations for 

reversing this trend.

We successfully implemented our Executive 

Exchange Program this year. As a result, 

we were able to leverage our resources 

and promote understanding of agencylevel auditors’ work and use of consistent 

approaches, enabling auditors to use the 

work of other CPAs. We hosted two private 

sector accounting firm executives for 4 

months, having them work on projects 

relating to federal agency audits and 

agency financial statement issues and 

developing protocols for staff working on the 

consolidated financial audit. The participants 

were able to make a major contribution to 

our organization by developing protocols 

that will assist our staff in understanding the 

work of agency-level auditors and promote 

the use of consistent approaches so that 

auditors can use the work of other CPAs. 

Our management, the two executives, and 

their employer all felt this was a valuable 

experience and a way to gain perspectives on 

how GAO and the private sector operate.

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178 PART V Appendixes GAO-08-1SP

Our market- and performance-based 

compensation system (PBC), which was 

fully implemented in 2006, was refined based 

on analysis and feedback from the fiscal 

year 2006 pay adjustments, and a series 

of fact sheets explaining all aspects of the 

system were developed and disseminated. 

The following modifications were made and 

implemented as of January 2007:

All staff receive 100 percent of their PBC 

amount.

The distribution of the PBC amount 

between a base pay increase and bonus 

requires that a minimum of 50 percent be 

provided as base pay up to the applicable 

competitive compensation limit of the 

Band with the actual percentage to be 

determined annually by the Comptroller 

General.

The Band III speed bump was eliminated.

A minimum bonus amount of $100 was 

established.

A communications analyst pay process 

was established that parallels the 

Professional Development Program 

and provides for appraisals and pay 

adjustments for Band I CAs every 26 

weeks for the first 2 years of service.

4.07.C. Ensuring Sound Financial

Practices and Robust Systems in Our

Fiscal Operations: We had a very active, 

productive, and challenging year as we 

converted to a new financial management 

system. The new system will ensure that 

(1) our people and processes are enabled 

through technology and sound fiscal 

operations practices and systems and (2) our 

decision-making capabilities are enhanced. 

For a more in-depth discussion of the system, 

see “From the Chief Financial Officer” in part 

III, Financial Information.

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We successfully completed our fiscal year 

2007 OMB Circular No. A-123 and No. A-127 

reviews, which resulted in no finding of 

material nonconformance. As a result, we 

reported an assurance statement on our 

internal control over financial reporting as of 

September 30, 2007.

We provided leadership in legislative 

branch agencies’ collaborative efforts on 

crosscutting technology and policy matters 

to improve the efficiency and effectiveness 

of government. Our efforts helped define 

standard budget formulation practices 

and processes, identify economy of scale 

opportunities through cross-servicing 

financial and business services in the 

legislative branch, and share internal control 

best practices.

We built on our successful launching last 

year of the Financial Audit System (FAS) 

by implementing several enhancements to 

integrate FAS with our ERMS. This enabled 

us to upload over 3,500 documents to ERMS 

in less than 15 minutes, eliminating the 

need for staff to inventory, pack, and ship 

to storage hard copy documents; saving 

the cost of off-site storage and retrieval; 

and freeing up physical storage space in 

headquarters used for storage of prior year 

audit documents.

Leverage our institutional 

knowledge and experience

4.08.C. Maximizing the Collection,

Use, and Retention of Essential

Organizational Knowledge: We further 

enhanced ERMS, a vital system for enabling 

our staff to use electronic records to 

conduct agency business and to comply 

with the Federal Records Act and records 

management regulations. We developed 

and disseminated protocols and guidance 

for organizing documents more easily, and 
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 179

briefed and trained our staff, thus improving 

our staff’s abilities to appropriately share 

documents through ERMS and increasing our 

knowledge-sharing capabilities.

We implemented several improvements to our 

primary internal communications process, 

the Notices weekly e-mail and archival and 

searchable Web site, thereby enhancing 

staff’s ability to easily access accurate 

and complete information in a timely 

manner. We added capability to highlight 

communications from the Comptroller 

General, and to distinguish between notices 

geared to all staff or for headquarters staff 

only. We also reorganized the listing of 

notices on the intranet homepage to mirror 

the organization by category of the weekly 

Notices e-mail, and added a link at the end of 

each Notice to link users to related notices.

To further enhance our communications 

and address a need not covered by Notices, 

we developed a desktop electronic bulletin 

board for sharing information agencywide 

on a variety of activities or events not related 

to the official business of the agency but of 

interest and importance to our employees. 

We are currently testing and will be 

launching it early next fiscal year.

4.09.C. Increasing Our KnowledgeSharing Capability: We redesigned the 

GAO Libraries Web site and portal this fiscal 

year to enhance information sharing and 

accessibility. We made available to all our 

staff an information portal that provides an 

access point for more than 200 databases, 

including Lexis.com. The portal more 

prominently features our libraries’ catalog, 

making it easier to determine what books the 

libraries own and what journals, magazines, 

and newspapers our staff can access 

electronically and in print.

We launched a new intranet site for our 

Office of Opportunity and Inclusiveness that 

provides our employees convenient access 

to information about the office’s services 

and policies. The site provides information 

and resources on diversity efforts, conflict 

resolution and mediation, the discrimination 

complaint process, sexual harassment, 

and interpreting services, as well as a link 

to the No FEAR Act that requires federal 

agencies, among other things, to inform their 

current, past, and prospective employees 

about their rights and protections under 

federal antidiscrimination and whistleblower 

protection laws.

Acting on recommendations from an 

independent review of our external Web 

site by the Nielsen Norman Group, we 

launched a new and improved version of 

the site, www.gao.gov, during the fourth 

quarter. This new version implements 40 of 

the 51 recommendations from the group, 

including improved navigation and searching, 

and incorporates the group’s principles 

and methodology into our standards and 

processes. We will address the remaining 

11 recommendations in the upcoming year.

4.10.C. Enhancing Knowledge Sharing

with National and International

Accountability and Professional

Organizations: To enhance knowledge 

sharing and capacity building among 

the members of INTOSAI and the wider 

accountability community, we launched a 

new Web site for the INTOSAI International 

Journal of Government Auditing. The 

Web site is user-friendly and provides 

ready access to more readers worldwide. In 

addition, it provides the platform for the next 

transformation phase, which will focus on 

best practices and benchmarking studies, 

and facilitate interaction among supreme 

audit institutions through discussion groups 

and communities of practice.
GAO Performance and Accountability Report 2007

180 PART V Appendixes GAO-08-1SP

Enhance our business and 

management processes

4.11.C. Streamlining the Engagement

Process and Improving Engagement

Services: To enhance our engagement 

services, we instituted clarifications to our 

quality assurance policies and procedures. 

These clarifications should better prepare us 

for an upcoming external peer review of our 

quality assurance policies and procedures 

related to government auditing standards 

and our compliance with these standards 

in conducting our work. Some of the 

clarifications included:

updating our policy manual and clarifying 

other existing policies;

assessing the needs of new hires and 

providing them with quality assurance and 

peer review training;

implementing early critical sections of the 

revised Yellow Book; and

developing and communicating a 

preparation strategy to leadership and 

assigned staff.

We also implemented several improvements 

to the annual inspection program that 

resulted in increased efficiency of the 

process, improved process documentation, 

and greater understanding across the GAO 

audit community. These changes included 

revising inspection terminology and doctrine 

to reflect audit community practice, refining 

the deliberative and analytic processes, and 

reducing the number of forms and required 

signatures.

We continued to advance our strategy 

enhancements in the economy and efficiency 

of our publishing and printing processes by 

implementing several changes, including

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negotiating and implementing a new 

digital printing contract, which enhances 

our move to e-dissemination and the 

capability to print only the quantity of our 

product needed for planned distribution to 

the requester and key recipients instead of 

the 150-copy minimum required when sent 

to an outside contract printer;

implementing preflight and quality reviews 

earlier in the publication process to ensure 

file correctness and functionality far in 

advance of final processing, allow earlier 

quality assurance staff involvement, and 

reduce errors in products;

revising our quality checklist forms 

used before the product goes to final 

production;

successfully establishing a contract 

vehicle to utilize off-site contract editing 

support for peak periods, enabling the 

production department to meet critical 

editing needs when production levels 

are greater than existing resources can 

handle; and

more clearly defining the publishing 

process by creating and posting on our 

intranet a publishing process chart, 

Product Assistance Group brochure, 

and standardized guidance for the use of 

management-tracking information.

We also implemented improvements for 

e-supplements and technical appendixes 

to our products that make them easier for 

staff to find and use. We issued guidance 

in the Electronic Assistance Guide for 

Leading Engagements so that staff have a 

single official location to obtain guidance on 

when and how to create e-supplements and 

technical appendixes. In addition, we created 

an efficient technology solution to make the 

results of non-Web-based surveys available 

as e-supplements, so that the presentation of 

results is consistent and clearer to the reader.

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GAO-08-1SP Appendixes PART V 181

4.12.C. Improving our Administrative

and Management Processes and Using

Enabling Technology to Improve

Crosscutting Processes: We improved 

our administrative and management 

processes by streamlining, applying enabling 

technology, and implementing cost and 

program efficiencies. These efforts increased 

the efficiency, timeliness, and effectiveness 

of our services to our customers. These 

improvements included upgrades to 

Web-based applications and sites, a number 

of cost-saving measures, and enhancements 

to our performance management system and 

our suggestion program.

Through upgrades and additions to our 

Web-based applications and Web sites, we 

increased the efficiency and effectiveness 

of several mission support operations. 

Examples of these improvements include

providing automatic self-certification for 

the Learning Center course evaluation;

automatic routing of telework application 

e-mails to decision makers;

developing a GAO-wide Honor Awards 

site for managers and staff to enter 

nominations and the honor awards 

screening committee to enter the 

committee’s recommendations to the 

Executive Committee, and a site for 

GAO-wide Honor Award recipients to 

schedule photography appointments;

creating new Web sites for 

(1) the mentoring program, 

(2) the staff and contractor exit system, 

(3) external GAO Web site usability 

testing, (4) staff applications to “Dine with 

Dave,” (5) a location to address requests 

or inquiries from the general public as a 

security measure for our mission work site, 

(6) the financial disclosure information 

and process, and (7) the Program and 

Technical Development Program; and

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upgrading 100 Web sites with the latest 

versions of PHP, a scripting language 

that converts a static Web site into a 

dynamic one, and MySQL, an open source 

database, to support our Web surveys.

We instituted several cost-saving procedures/

systems this fiscal year to improve the 

efficiency of our administrative systems:

Installed a toll-free ISTS Help Desk 

telephone number, eliminating longdistance charges for staff teleworking or 

traveling outside the D.C. Metro area who 

need IT assistance.

Modified the procedures for shipping supplies and IT equipment to the field offices, 

including direct shipment of ink cartridges, and use of UPS Next Day Air Saver 

services for shipment of IT equipment, for 

a 20 percent cost saving per shipment.

Automated the van scheduling system, 

reducing the human resources required 

for the function and providing automatic 

verification and confirmation information 

to the requester.

Awarded a no-cost contract to digitize the 

documents that constitute the legislative 

histories of 21,000 public laws from 1921 

to 1995 in exchange for the contractor’s 

exclusive right to market and sell access 

to the digitized versions of these histories, 

thus preserving the integrity of these files 

and improving the searchability of this 

valuable information resource.

To enhance our performance management 

system, we upgraded and enhanced the 

automated Individual Development Plan 

(IDP) based on feedback we received 

during the pilot. These changes reinforce 

our professional development requirement; 

facilitate all levels of IDP review; 

establish the capability to capture, review, 

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182 PART V Appendixes GAO-08-1SP

communicate, update an IDP throughout the 

appraisal cycle; link IDPs with appraisals; 

and provide reports to managers and HCO.

Become a Professional 

Services Employer of Choice

4.13.C. Promoting an Environment That

Is Fair and Unbiased and That Values

Opportunity and Inclusiveness: We 

inaugurated our first agencywide mentoring 

program in fiscal year 2007. The program 

crosses all bands and career tracks to 

provide facilitated career discussion, online 

learning resources, group mentoring, and 

one-to-one mentoring for staff. We have 

75 individuals currently participating in 

the one-to-one mentoring, and another 80 

participating in the seven mentoring groups 

that have been formed.

We significantly strengthened our summer 

intern program this year to ensure that 

interns experience a more structured 

and consistent program in terms of their 

team experience, training, and feedback. 

Specifically, we improved the program’s 

operating guidance, enhanced training and 

responsibility for intern coordinators, revised 

the intern evaluation form, and implemented 

a structure for independent review of the 

interns’ work experience and conversion 

process. Feedback from the interns has been 

very positive; the program changes will be 

fully evaluated after intern conversion offers 

are considered for fiscal year 2008 entry-level 

hiring, and additional improvements will be 

identified for the fiscal year 2008 intern cycle.

4.14.C. Providing Tools, Technology, and

a World-class Working Environment:

To provide an attractive and productive 

environment in our Atlanta, Denver, and 

Seattle field offices, we contracted for 

additional space. The space was used 

to accommodate new staff, and provide 

additional conference and team rooms, 

secure rooms, and video conferencing rooms.

We successfully awarded a consolidated facilities management contract to ensure effective and efficient operations and maintenance 

of our headquarters building and provide 

support services to the legislative branch. 

We were able to consolidate other contracts 

into the consolidated facilities management 

contract to eliminate duplicative costs for 

administration and management of the contracts.

We completed the installation and 

configuration of a storage area network 

(SAN) in the GAO headquarters LAN 

Operations Center. Installation of the SAN 

has allowed us to reduce backup time, reduce 

the time it takes to put a file server into 

production, and improve system availability 

through less intrusive backup methods 

and storage availability, and has improved 

the speed of response to requests for data 

restores. In addition, the SAN upgrade 

has improved our disaster recovery and 

continuity capabilities and positioned us to 

support future infrastructure enhancements.

4.15.C. Providing a Safe and Secure

Workplace: We piloted the OPM automated 

system for personnel security background 

investigations, eQIP, and implemented the 

system on October 1, 2007, at no cost to the 

agency, based on the pilot results showing an 

estimated 50 percent reduction in processing 

time. eQIP allows personnel security 

background investigation forms to be 

completed, encrypted, and transmitted to the 

OPM servers over the Internet. In addition, 

we began scanning field office fingerprint 

charts, reducing the number of rejections by 

OPM by an estimated 30 percent.
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GAO-08-1SP Appendixes PART V 183

We made substantial progress in upgrading 

our security systems, and hence, our security 

posture. With our completion of Phase I of 

our Integrated Electronic Security System 

(IESS), we also established contingency 

planning alternatives in case of emergency 

and laid the groundwork for implementation 

of an agencywide automated entry control 

system and the integration of the field office 

security systems. Specific accomplishments 

include

relocating the Security Operations Center 

to a more secure location,

constructing a new Emergency Operations 

Center,

upgrading the access control system,

creating a GAO Security Local Area 

Network, and

converting to an upgraded IESS server, 

database, and software.

To increase our employees’ awareness of IS 

issues, we aggressively pursued initiatives 

to improve and better coordinate the IS 

awareness program, completing the following 

actions:

developed an awareness briefing delivered 

to all staff by the Comptroller General,

developed and offered computer-based 

training that consolidates information and 

IS awareness training requirements, and

delivered customized security awareness 

briefings to nearly 1,800 employees 

directly involved in external engagements.

4.16.C. Enhancing Employee Views about

GAO: Results from our Employee Feedback 

Survey show that our staff’s satisfaction 

with the support supervisors provide for 

programs to balance work and personal 

life has continued to increase year after 

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year. This year, 87.2 percent of respondents 

strongly or generally agreed that their current 

supervisor supported these programs, up 

from 86.8 percent in fiscal year 2006.

We enhanced several of our work life 

programs and services to better meet the 

needs of our employees. Two noteworthy 

examples are

increasing the capacity of the 

headquarters daycare center through 

expansion and

providing more supportive and private 

accommodations for nursing mothers in 

field offices.

Our student loan repayment program, 

under which we will repay a portion of an 

eligible employee’s student loan debt, is 

intended to help us retain highly qualified 

individuals with critical knowledge and 

skills, especially those recently hired. An 

employee or a candidate for employment 

must sign a service agreement under which 

the individual agrees to a specified period of 

employment with us of not less than 3 years 

in return for repayments toward a student 

loan previously obtained by the candidate 

or employee. The program continued to be 

an important and popular one for our staff. 

From fiscal year 2006 to fiscal year 2007 the 

number of applicants increased from 324 to 

363, we increased our program budget from 

$1.4 million to $1.7 million, and the number 

of recipients increased from 285 to 320. The 

amounts provided were $4,500 per employee 

for general category recipients and $7,500 for 

special category recipients.

Our telework program also continues to 

be a valuable tool for both managers and 

employees in balancing work requirements 

and personal needs. In fiscal year 2007 there 

were 1,718 more telework agreements than 

in the previous year, a 200 percent increase. 

We had 2,370 employees participating in the 

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GAO Performance and Accountability Report 2007

184 PART V Appendixes GAO-08-1SP

telework program on short-term, episodic, 

or continuing agreements. Currently more 

than 75 percent of our staff are enrolled in 

the telework program, far exceeding the 

estimated 39 percent enrollment for the 

entire federal government. In addition, we 

improved our telework program application 

process with implementation of a web-based 

application and approval system. We also 

conducted a survey on the telework program 

to determine customer satisfaction and 

possible improvement opportunities, and 

will identify opportunities for improvement 

in fiscal year 2008. The survey also showed 

that 97 percent of our employees consider 

telework to be extremely important or very 

important, and 98 percent of our employees 

would recommend it to other employees.

4.17.C. Improving the Development

and Experiences of Newly Hired

Staff: We successfully launched a new 

professional development program for 

our entry-level program and technical 

specialists. The program was developed 

to maximize productivity, enhance job 

satisfaction, increase staff retention, and 

serve as an effective recruitment tool. 

This 2-year program helps newly hired or 

assigned specialists acquire or enhance job 

competencies and gain work experiences to 

help them succeed in our organization. This 

is particularly important from a succession 

planning perspective since 60 percent of 

our administrative professional and support 

staff managers and leaders are currently 

eligible or are within 5 years of being eligible 

to retire. The program, which is modeled 

after the analyst professional development 

program, provides orientation, targeted job 

experiences and assignments, enhanced 

guidance and supervision, almost 100 hours 

of required training, and progress and salary 

reviews every 26 weeks.

We also implemented a new approach to 

ensure that 100 percent of newly hired staff 

receive all their mandatory training in a 

timely and organized fashion. Under the 

learning hub concept, introduced last fall, 

cohorts of field-based Band I analysts travel 

to a specified field office where they receive 

their mandatory training during a series of 

2-1/2- to-3-day “bundles.”
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 185

2. GAO’s Report on Personnel

Flexibilities

As required by section 11 of the GAO Human 

Capital Reform Act of 2004 (Pub. L. No. 

108-271), GAO is reporting actions that have 

been taken in fiscal year 2007 under sections 

2, 3, 4, 6, 7, 9, and 10.

Section 2 of this act made permanent GAO’s 

authority to offer voluntary early retirement 

and voluntary separation incentive payments. 

During fiscal year 2007, 16 employees applied 

for voluntary early retirement, 13 of these 

applications were approved and 12 employees 

ultimately separated during the reporting 

period. Thirteen of the 16 applicants applied 

for voluntary early retirement during 

an agencywide opportunity, which was 

open for 36 days, from October 17, 2006, 

through November 22, 2006. Applicants 

were required to retire between November 

28 and December 10, 2006. Of the 

13 applications submitted during this 

agencywide opportunity, 10 were approved 

and 3 were denied; subsequently, 9 of 

the approved applicants separated. The 

additional 3 applicants retired under the 

provision in our implementing regulations 

allowing employees to request a voluntary 

early retirement outside of an announced 

opportunity. The use of this authority in 

this fiscal year and over the past several 

years has supported GAO’s overall efforts 

to reshape our workforce to ensure that we 

have the appropriate numbers and levels of 

staff with those skills and knowledge that 

will allow us to accomplish our mission to 

support the Congress and to help improve the 

performance and ensure the accountability of 

the federal government for the benefit of the 

American people.

As noted in prior reports, GAO has not 

authorized any voluntary separation 

incentive payments because of the high cost 

associated with the required contribution 

to the retirement fund. For each separation, 

GAO must pay the retirement fund at least 

45 percent of the employee’s final basic 

pay. This is simply too costly. GAO recently 

submitted draft legislation to the Congress 

that would eliminate this payment, which 

is not applicable to most executive branch 

agencies that have voluntary separation 

incentive authority.

Section 3 of the act authorizes the 

Comptroller General to determine the 

amount of annual pay adjustments for 

employees of GAO who are performing 

at a satisfactory level, and prescribes the 

factors to be considered in making those 

determinations. In fiscal year 2007, the 

Comptroller General authorized a 2.4 percent 

base pay increase effective February 18, 2007, 

for all employees covered by GAO’s 

banded performance-based compensation 

(PBC) systems who were performing at a 

satisfactory level and who were paid within 

competitive compensation limits. In addition 

to this adjustment, employees were eligible 

for PBC using a budget factor of 2.15 percent.

For purposes of the annual adjustment, 

employees (with the exception of Band IIB 

analysts with salaries above the “speed 

bump”) were considered to be performing 

at a satisfactory level if they were rated 

at meets expectations or higher on all 

competencies. Thirteen employees were 

rated below expectations on one or more 
GAO Performance and Accountability Report 2007

186 PART V Appendixes GAO-08-1SP

competencies and did not receive the annual 

adjustment. In the case of Band IIB analysts, 

in addition to meeting expectations on all 

competencies, Band IIB analysts were also 

required to have an appraisal average in the 

top 50 percent of their comparison groups if 

their salaries exceeded the Band IIB “speed 

bump” (i.e., $121,600 in Washington, D.C.). 

Two Band IIB employees did not receive the 

annual adjustment because their appraisal 

averages were not in the top 50 percent, and 

another 4 received a partial adjustment.

Finally, 30 Band I employees and 106 Band 

IIA employees in the “transition range” 

had salaries in excess of competitive 

compensation limits and therefore did not 

receive annual adjustments.

As noted above, GAO employees were also 

eligible for PBC using a budget factor of 

2.15 percent. GAO’s compensation regulations 

for the fiscal year 2006 appraisal cycle (paid 

in 2007) were modified from the prior year’s 

after notice and comment. Among other 

changes, the revised regulations allowed 

all employees, regardless of whether they 

were over the competitive compensation 

limit, to receive 100 percent of their PBC as 

an adjustment to their base pay up to the 

applicable cap with any remaining amounts 

provided as lump-sum bonuses. The Band III 

“speed bump” was also eliminated in fiscal 

year 2007.

Consistent with section 31 U.S.C. 732 (c)(3), 

the Comptroller General considered various 

data to determine the amount of GAO’s 

compensation adjustments, including

salary planning data reported by 

the professional services, public 

administration and general industry 

organizations,

the General Schedule adjustment,

purchasing power indices,

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additional PBC amounts and the 

appropriate distribution of funds between 

these two components, and

GAO’s funding levels.

As to GAO’s funding levels, GAO submitted 

its fiscal year 2007 budget request on 

January 13, 2006. In recognition of the 

fiscal constraints facing the federal 

government, GAO held its requested increase 

to 5 percent over fiscal year 2006. GAO 

requested funds to support an increase of 

50 full time equivalents to help meet supply 

and demand imbalances in supporting 

congressional requests. The Comptroller 

General, in his oral remarks before the House 

Appropriations Committee in March 2006, 

requested the committee’s support for our 

request, considering our track record of 

accomplishments.

Our budget request estimated the January 

2007 annual adjustment at 2.7 percent 

based on guidance from the Appropriations 

Committee and the Legislative Branch 

Financial Managers’ Council and assumed 

that pay parity between the military and 

civilian work-forces would be maintained. 

Our estimate for performance-based merit 

increases included a 1.65 percent budget 

factor and assumed a 65/35 split between 

base pay increases and cash bonuses, though 

not specifically stated in our budget request.

From October 2006 to February 2007, 

GAO and other agencies operated under 

a series of continuing resolutions, which 

provided funding at fiscal year 2006 levels. 

Language contained in the continuing 

resolutions, precluded agencies from using 

furloughs as an option to help manage 

funding constraints. On February 15, 2007, 

the Congress enacted a joint resolution, 

which provided funding for the balance 

of the fiscal year. The joint resolution 

provided GAO funding at a level slightly 

above fiscal year 2006 levels, that is, the 

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GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 187

rescission-reduced fiscal year 2006 level 

plus 50 percent of the estimated cost of the 

January 2007 annual pay adjustment. GAO 

submitted its operating plan to the House 

and Senate Appropriations Committees on 

March 16, 2007, and estimated the annual pay 

adjustment at 2.4 percent and PBC increases, 

which GAO calculated using a budget factor 

of 2.15 percent, with 100 percent base pay 

increases up to the maximum.

During the period leading up to the 

enactment of the joint resolution, GAO 

prepared several impact statements for 

the House and Senate Appropriations 

Committees indicating the adverse 

consequences if GAO were required to 

operate in fiscal year 2007 at or near the 

rescission-reduced fiscal year 2006 funding 

level. In the fiscal year 2008 budget submitted 

on January 26, 2007, and related testimony, 

the Comptroller General reiterated the 

negative consequences of operating at these 

levels.

Thus, while most GAO employees received 

both an annual adjustment and PBC, budget 

considerations necessitated some action 

on the part of the Comptroller General, 

including deferring the increases for three 

pay periods until February 18, 2007. Although 

the 2.4 percent increase was less than the 

2.64 percent provided to Washington, D.C., 

employees paid under the General Schedule, 

virtually all GAO employees were eligible for 

additional PBC that could greatly increase 

the amount of permanent pay provided them. 

By contrast, in the executive branch, while 

all employees receive an annual adjustment, 

many employees receive step increases only 

every 2 or 3 years and may in fact be capped 

with no opportunity for lump-sum bonuses. 

The average pay adjustment in February 2007 

for analyst and attorney staff who were 

covered by the annual PBC process was 

slightly over 4 percent.

GAO’s Senior Executive Service and senior 

level staff received the same 1.7 percent 

increase authorized for Senior Executive 

Service positions in the executive branch, 

although the date was deferred to February 

18, 2007, as it was for other GAO staff. GAO, 

however, did not increase the maximum pay 

rate for Senior Executives and senior level 

staff in order not to have them paid in excess 

of the pay of a member of the Congress.

GAO’s Personnel Appeals Board and student 

employees are paid by reference to the 

General Schedule (GS), and GAO’s wage 

grade employees are paid by reference to 

the Federal Wage System (FWS) salary 

rates. These employees received the same 

percentage across-the-board adjustment 

on the same effective date as the increases 

authorized for GS and FWS employees. 

Likewise, the pay ranges for these employees 

incorporated the changes made to the 

comparable executive branch pay ranges.

There is one Administrative Professional 

and Support Staff (APSS) employee who 

is on pay retention under the GAO pay 

retention regulations established in January 

2006 under the authority of section 4 of the 

act. This employee has been subject to pay 

retention provisions continuously since prior 

to passage of Pub L. No. 108-271.

Under section 6, certain key employees with 

less than 3 years service for purposes of 

leave accrual may be treated as if they had 

3 years of federal service. Therefore, they 

would earn 160 hours on an annual basis 

instead of 104 hours. These key employees 

must be occupying positions that are 

difficult to fill or have unique or unusually 

high qualifications and would be difficult to 

recruit without additional incentives. Four 

employees received this benefit during fiscal 

year 2007.
GAO Performance and Accountability Report 2007

188 PART V Appendixes GAO-08-1SP

Section 7 authorized GAO to establish an 

Executive Exchange Program. During fiscal 

year 2007, this authority was used to bring 

in two executives from private industry, 

each for a period of 4 months. At GAO, the 

executives worked on several special projects 

related to federal agency audits and agency 

financial statement issues. In addition to 

helping revise the GAO/PCIE Financial 

Audit Manual, they used their experience 

as auditors of agency financial statements to 

help develop protocols to help GAO interact 

with the agency-level auditors (inspectors 

general as well as public accounting firms) 

during GAO’s audit of the U.S. government’s 

consolidated financial statement. This 

program was considered a success from 

GAO’s standpoint and it met the expectation 

of the private industry employer that was 

involved. It is anticipated that this authority 

will continue to be used on a sporadic basis.

Section 9 relates to GAO’s performance 

management system and, among other 

things, requires a link between the 

performance management system and the 

agency’s strategic plan, adequate training 

on the implementation and operation of the 

system, and a process for ensuring ongoing 

performance feedback. Even before the 

imposition of these requirements, GAO’s 

performance management system was in 

conformity with the statutory requirements 

of section 9. GAO continues to comply with 

these requirements and conducts ongoing 

reviews and analysis of the performance 

appraisal system. An evaluation of the 

fiscal year 2006 appraisal and pay cycle was 

deferred pending the outcome of the then 

ongoing union election.

Section 10 requires the Comptroller General 

to consult with any interested groups or 

associations representing officers and 

employees of GAO before implementing any 

changes under the act. During this reporting 

period, changes to GAO’s compensation 

regulations were issued for notice and 

comment. However, even prior to the 

passage of the act, the Comptroller General 

and other relevant agency officials were 

meeting periodically with the Employee 

Advisory Council (EAC) to discuss current 

and emerging issues of mutual interest and 

concern, especially those in the human 

capital area. GAO also uses employee forums 

focus groups, and other mechanisms to 

obtain employee input on major proposals. 

GAO provides all employees with advance 

copies of draft orders concerning proposed 

policies and regulations for their comments 

prior to publication in final form. These steps 

were taken in regard to the promulgation of 

all policies and regulations implementing 

the provisions of the Human Capital Reform 

Act of 2004. The Executive Committee 

considered all input from EAC members and 

other GAO employees before implementing 

any changes.

In regard to human capital management 

at GAO, sections 2, 3, 4, 6, 7, 9, and 10 have 

provided GAO with valuable tools to reshape 

its workforce and acquire and retain the 

necessary talent to carry out its mission, 

meet its performance goals, and fulfill its 

strategic plan. These sections collectively 

are an important component of GAO’s overall 

human capital management. These and other 

human capital tools and flexibilities support 

the achievement of GAO’s strategic objective 

to be a world-class professional services 

organization and model federal agency. 

Without these provisions, GAO would have 

difficulty attracting and retaining top-flight 

talent in adequate numbers to properly 

support the Congress and serve the American 

people within current and expected resource 

levels.
GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 189

A significant effort for GAO is the protection 

of data and access to information. Although 

not obligated by law to comply with the 

Federal Information Security Management 

Act (FISMA) under the EGovernment 

Act of 2002, we have adopted FISMA 

requirements to strengthen our information 

security program and demonstrate our 

ongoing commitment to lead by example. 

The intentional and inadvertent threats to 

the security of IT systems and information 

assets have steadily increased requiring 

constant vigilance over the GAO network. 

In addition, the federal IT security policies 

and practices, as defined by the National 

Institute of Standards and Technology 

(NIST) 800 series guidance and in Federal 

Information Processing Standards (FIPS) 

publications, continue to evolve in response 

to this changing landscape of IT security. As 

existing NIST guidance has been updated 

and new guidance disseminated, we have 

adjusted our internal IT security policies and 

procedures, as well as expanded our efforts 

to effectively integrate these governmentwide policies and practices into our IT 

processes.

During the past year, we continued our 

efforts to improve our information security 

program by implementing key requirements 

set forth in the recently published NIST 

Special Publication 800-53, Recommended 

Security Controls for Federal Information 

Systems. We have instituted a wide range of 

programs and processes to assess the status 

of our information security program on a 

recurring basis. These efforts include using 

the results of internal reviews by program 

offices, the GAO Inspector General, and 

security staff. For example, our Inspector 

General independently evaluates our 

information security program annually, 

consistent with FISMA requirements, 

and identifies any weaknesses in our 

implementation of FISMA while offering 

additional recommendations to further 

strengthen our IT security program. As 

a consequence, we follow the standard 

practice of using a public accounting firm, 

as well as other external sources, to provide 

independent external evaluations and testing 

of IT controls on our major applications. 

And, in the last quarter of fiscal year 2007, 

we contracted for the system test of a select 

group of our information systems to further 

assess the effectiveness of our security 

policies and practices.

By putting into practice security 

requirements consistent with FISMA, we 

have substantially elevated information 

systems security consciousness at GAO 

through our efforts to:

implement and refine an enterprisewide, 

risk-based security program;

develop and update essential policies, 

procedures, and reporting mechanisms 

to ensure that our security program is 

integrated into every aspect of IT system 

life cycle planning and maintenance;

provide recurring security training and 

awareness to all of our staff;

integrate security into our Capital 

Planning and Investment Control and 

project management processes; and

implement and refine an enterprise 

disaster recovery solution.

We have also defined security initiatives 

that focus on changes in our technology 

infrastructure, as well as on new security 

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3. GAO’s FISMA Efforts
GAO Performance and Accountability Report 2007

190 PART V Appendixes GAO-08-1SP

tools and appliances. Among the projects 

undertaken during fiscal year 2007 that 

have significantly improved our information 

security program are the following:

Security Program Plan. The dynamic 

nature of security threats requires that 

our Information Systems Security Group 

constantly monitor activities and adjust 

to thwart these challenges and meet the 

needs of GAO. Therefore, we have refined 

our Security Program Plan that provides 

the road map of activities over the next 

few years to improve both the program 

and technical components of our network 

security and to reflect new IT security 

requirements and challenges. We have 

conducted monthly IT security working 

group, users group, and remediation group 

sessions to effectively support security 

education and remediation activities. We 

established and held our third annual 

FISMA Month in August 2007 to focus 

staff on the annual FISMA assessment. 

And we continue to excel in our robust 

security awareness training program with 

over 98 percent completion for all GAO 

staff.

Enterprise FISMA support. We have 

completed the upgrade of our automated 

tool to support our FISMA tracking 

efforts to reflect the controls required by 

NIST Special Publication 800-53. Using 

this tool, we now have an integrated 

source for managing audit findings and 

remediation efforts, for documenting 

annual assessments, and for tracking 

certification and accreditation progress. 

By integrating these tracking methods 

into a single program, the tool allows 

us to achieve consistency in monitoring 

risks and remediation efforts and 

improving security within and across our 

information systems.

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Certification and accreditation 

of information systems. We have 

implemented two key updates to our 

certification and accreditation process 

which include a comprehensive initial 

security assessment and a continuous 

monitoring process. The initial security 

assessment documents key aspects of an 

information system with respect to data 

classification, system boundaries and 

network interactions, privacy information, 

and associated risk to GAO. The initial 

security assessment is an integrated 

component of our IT project management 

process, serving as a check and balance 

for project advancement, and establishes 

the foundation for our processes to certify 

and accredit information systems that 

we support. In addition, we have updated 

the system security plan template to 

reflect the 17 families of security controls 

for information systems in NIST Special 

Publication 800-53. In implementing a 

continuous monitoring process, we have 

updated the annual reviews performed 

under NIST Special Publication 800-26, 

Guide for Information Security Program 

Assessments to meet the requirements 

of the NIST 800-53 system controls. 

Finally, we have updated our existing 

risk assessments and system security 

plans, accomplished system tests and 

evaluations to ensure that the appropriate 

security controls have been implemented, 

documented the continuous monitoring of 

each system and ensured that the system 

documentation is up-to-date supporting 

annual financial assessments.

Enterprise event correlation application. 

A core component of our capability to 

monitor our diverse network traffic is the 

implementation of an event correlation 

engine. We have increased that vast 

amount of data being monitored with 

the upgrade to our internal network 

intrusion detection systems. This upgrade 

provides additional insight of the traffic 

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GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 191

between our servers and applications 

by establishing a baseline of system 

communications. Integrating this tool 

with the event correlation engine provides 

an integration of security events that 

identify potential threats to our network 

environment. The event correlation engine 

enables the integration and automation 

of security event auditing, which in 

turn affords the effective use of limited 

resources, minimizing risk to GAO while 

vigilantly monitoring network activities.

Enterprise workstation security. To 

enhance our enterprise workstation 

security solution, we have started adding 

desktop encryption as a means to protect 

data at the desktop and mobile media 

devices. Our previous solution standard 

included two-factor authentication, 

anti-spyware, anti-virus, and a personal 

firewall application as part of the 

standard desktop image. These enterprise 

applications provide the controls for 

access and remediation of security 

threats to the workstation while providing 

centralized policy management and 

control. They automatically monitor and 

remediate various types of threats to the 

workstation by preventing intrusion and 

monitoring programs, such as Adware and 

Trojan viruses, to prevent desktops from 

becoming infected with malware, and 

protect data from unauthorized access. 

The implementation of this integrated 

solution has significantly reduced risk to 

GAO.

Enterprise Internet screening. Our 

requirements for access to information 

on the Internet are vast. Our pilot 

implementation of an Internet screening 

tool provides antivirus and antispyware 

protection to our Web-based services. 

This tool is capable of implementing 

GAO’s Internet access policy by blocking 

non-business-related sites. It has already 

provided added security for our Internet 

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access to Web sites and applications by 

improving the overall security posture for 

GAO’s network.

Vulnerability assessment. Consistent 

with the requirements cited in FISMA, we 

continue with a standard process using 

an enterprise assessment tool of scanning 

all network systems, devices, and 

workstations for vulnerabilities in order 

to ensure secure services and system 

standardization and to meet our updated 

network security guidelines. Weekly scans 

are conducted to verify weaknesses in 

our information systems and validate that 

security patches for known vulnerabilities 

have been applied to these systems and 

devices. The ISTS leadership is briefed 

on scan results with corrective actions 

identified and tracked.

Application vulnerability assessment. As 

a standard process, we have integrated 

a vulnerability assessment tool into our 

Web application development process. 

This tool complements our overall 

network vulnerability process and ensures 

a process to validate potential risks in 

commercial off-the-shelf packages and 

in-house-developed applications. This 

application assessment process assists in 

validating the code and coding practices 

used in our applications and allows 

for remediation prior to deploying an 

application. Moreover, since implementing 

this security process into our current 

coding methodology, it has reduced 

the time needed to develop in-house 

applications by the development of secure 

coding practices that are reusable.

Wired network protocol implementation. 

In an effort to limit access to the GAO 

network, we have implemented the 

Institute of Electrical and Electronics 

Engineers 802.1x protocol to restrict 

network access in our team and 

conference rooms to GAO notebooks only. 

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GAO Performance and Accountability Report 2007

192 PART V Appendixes GAO-08-1SP

The validation process ensures computer 

equipment that connects to our network 

is, in fact, GAO equipment, removing the 

potential risk for non-GAO equipment to 

have uncontrolled access to our network 

resources. As the network infrastructure 

is updated, we will examine how to 

expand the use of this technology beyond 

conference rooms in fiscal year 2008.

Classified processing upgrade. We 

completed the expansion of our Secret 

Internet Protocol Router Network, 

known as SIPRNet to 10 GAO field office 

sites, providing each site with a secure 

computing facility and new equipment 

and communications links to process 

classified information. This network 

allows our staff to obtain specific 

classified data directly from agency 

officials via secure e-mail, improves 

efficiency of our research through direct 

access to classified information, posts 

our classified reports for review and 

dissemination, electronically transmits 

our classified reports to agencies for 

comments, and reduces the necessity 

of using certified mail for classified 

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data. We completed the upgrades to the 

communications links to all field offices 

and headquarters, improving transmission 

capabilities to meet the increased demand 

for classified information.

Disaster recovery. The successful 

implementation of our alternative 

computing facility hosted by the legislative 

branch is complete. The move has both 

improved our security posture and aligned 

our activities with those of our legislative 

branch counterparts, while reducing 

the cost of our operations. Last year, we 

enhanced our emergency notification 

system to improve communications 

support to GAO staff. This year, we 

continued to expand our capabilities at 

the facility by implementing a high speed 

connection between GAO headquarters 

and the facility to better enable us 

to provide critical IT services in the 

event of a disaster. The high speed link 

provides for failover connections between 

headquarters, field offices and the facility.

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GAO Performance and Accountability Report 2007

GAO-08-1SP Appendixes PART V 193

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GAO Performance and Accountability Report 2007

194 PART V Appendixes GAO-08-1SP

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