United States Government Accountability Office

PERFORMANCE & ACCOUNTABILITY

Accountability Integrity Reliability

Report

Fiscal Year

2008

Serving the Congress and the Nation
Source: See Image Sources.

SERVING THE CONGRESS

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.
GAO-09-1SP i

GAO Performance and Accountability Report 2008

Contents

Source: See Image Sources.

Contents

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

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

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

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

Financial Reporting Assurance Statements............................................................................................... 5

About GAO........................................................................................................................................................ 7

Mission....................................................................................................................................................... 7

Strategic Planning and Management Process ................................................................................. 8

Organizational Structure ..................................................................................................................... 12

Strategies for Achieving Our Goals.................................................................................................. 16

How We Measure Our Performance................................................................................................. 18

Part I: Management’s Discussion and Analysis...............................................................................................21

Implementing Our Strategies for Serving the Congress and the Nation ........................................ 22

Focusing on Results.............................................................................................................................. 24

Focusing on Our Client........................................................................................................................ 33

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

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

GAO’s High-Risk Program.................................................................................................................39

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

Assisting with the Upcoming Transition........................................................................................44

Managing Our Resources....................................................................................................................45

Strategic and Annual Work Planning .............................................................................................. 50

Internal Management Challenges and Mitigating External Factors That 

Could Affect Our Performance ........................................................................................................ 52

Part II: Performance Information ....................................................................................................................... 61

Performance Information by Strategic Goal ........................................................................................... 62

Goal 1 Overview: 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 ............................................................................................ 63

Financial Benefits.................................................................................................................................. 65

Nonfinancial Benefits............................................................................................................................ 65

Testimonies.............................................................................................................................................66
ii GAO-09-1SP

GAO Performance and Accountability Report 2008

Contents 

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: Provide timely, quality service to the Congress and the federal 

government to respond to changing security threats and the challenges of global

interdependence...........................................................................................................................................67

Financial Benefits..................................................................................................................................69

Nonfinancial Benefits............................................................................................................................69

Testimonies............................................................................................................................................. 70

Goal 3 Overview: Help transform the federal government’s role and how it does 

business to meet 21st century challenges............................................................................................. 71

Financial Benefits.................................................................................................................................. 73

Nonfinancial Benefits............................................................................................................................ 73

Testimonies............................................................................................................................................. 74

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

and a world-class professional services organization......................................................................... 75

Data Quality and Program Evaluation ..................................................................................................... 76

Verifying and Validating Performance Data ................................................................................... 76

Program Evaluation.............................................................................................................................. 88

Part III: Financial Information..............................................................................................................................91

From the Chief Financial Officer...............................................................................................................92

Overview of Financial Management and Controls...............................................................................94

Financial Systems and Internal Controls........................................................................................94

Audit Advisory Committee’s Report.........................................................................................................96

Independent Auditor’s Report..................................................................................................................... 97

Purpose of Each Financial Statement.....................................................................................................100

Financial Statements ................................................................................................................................... 101

Notes to Financial Statements..................................................................................................................105

Part IV: From the Inspector General................................................................................................................119

From the Inspector General......................................................................................................................120

Part V: Appendixes.................................................................................................................................................. 121

1. Accomplishments and Contributions..................................................................................................122

2. GAO’s Report on Personnel Flexibilities.......................................................................................... 167

3. GAO’s FISMA Efforts.............................................................................................................................171

Image Sources ...........................................................................................................................................................174

Providing Comments on This Report...............................................................................................................175

Obtaining Copies of GAO Documents ............................................................................................................175
GAO-09-1SP iii

GAO Performance and Accountability Report 2008

Abbreviations

Abbreviations

A&O administrative and operating

AGA Association of Government 

Accountants

BRAC Base Realignment and Closure

BSA Iraqi Board of Supreme Audit

CAO Chief Administrative Officer and 

Chief Administrative Office 

CBP U.S. Customs and Border Protection 

CFO Chief Financial Officer 

CFTC Commodity Futures Trading 

Commission

CMO chief management officer

CMS Centers for Medicare & Medicaid 

Services 

CSRS Civil Service Retirement System

DHS Department of Homeland Security 

DOD Department of Defense 

DOE Department of Energy 

DOT Department of Transportation 

DTV digital television 

EAC Employee Advisory Council 

EHS environmental, health, and safety

EPA Environmental Protection Agency 

ERMS Electronic Records Management 

System 

ESC Enterprise Service Center

ESRD end-stage renal disease

FAA Federal Aviation Administration 

FCC Federal Communications 

Commission 

FDA Food and Drug Administration 

FEGLIP Federal Employees Group Life 

Insurance Program

FEHBP Federal Employees Health Benefits 

Program

FEMA Federal Emergency Management 

Agency 

FERS Federal Employees Retirement 

System

FFELP Federal Family Education Loan 

Program

FFMIA Federal Financial Management 

Improvement Act 

FFS fee-for-service 

FHL Federal Home Loan system

FICA Federal Insurance Contributions Act 

FISMA Federal Information Security 

Management Act 

FMFIA Federal Managers’ Financial 

Integrity act 

FNS Food and Nutrition Service

FPS Federal Protective Service

FSI Forensic Audits and Special 

Investigations 

FTE full-time equivalent 

FWS Federal Wage System 

GAO Government Accountability Office

GS General Schedule 

GSA General Services Administration

GSE government-sponsored enterprise

GWOT Global War on Terrorism

HAI health-care-associated infection

HHS Department of Health and Human 

Services 

HSPD-12 Homeland Security Presidential 

Directive 12

HUBZone historically underutilized business 

zone

ICWG Internal Control Working Group 

IFPTE International Federation of 

Professional and Technical 

Engineers 

IG Inspector General 

INTOSAI International Organization of 

Supreme Audit Institutions 

IRS Internal Revenue Service 

IS information security 

ISTS Information Systems and 

Technology Services 
iv GAO-09-1SP

GAO Performance and Accountability Report 2008

Abbreviations 

IT information technology 

JCT Joint Committee on Taxation 

MA Medicare Advantage

MCC Millennium Challenge Corporation 

MHz megahertz

MMS Minerals Management Service

MOU memorandum of understanding

MOX mixed oxide

MSHA Mine Safety and Health 

Administration

NASA National Aeronautics and Space 

Administration 

NFC National Finance Center 

NFIP National Flood Insurance Program

NFPA National Fire Protection Association

NIAF National Intergovernmental Audit 

Forum

NIST National Institute of Standards and 

Technology 

NNI National Nanotechnology Initiative

NNSA National Nuclear Security 

Administration

NORTHCOM

U.S. Northern Command 

OIG Office of Inspector General

OMB Office of Management and Budget 

OPM Office of Personnel Management 

PAR performance and accountability 

report

PBC performance-based compensation 

PBGC Pension Benefit Guaranty 

Corporation 

PRISM Program Review Instrument for 

Systems Monitoring 

QCI Quality and Continuous 

Improvement

SAI supreme audit institution

SAT Senior Assessment Team

SBA Small Business Administration 

SBI Secure Border Initiative

SEC Securities and Exchange 

Commission 

SES Senior Executive Service

SIP Shelter in Place

SL senior level

SPR Strategic Petroleum Reserve

TARP Troubled Asset Relief Program

TBI traumatic brain injury

TPI Total Positive Income

TSA Transportation Security 

Administration 

TVA Tennessee Valley Authority

USACE U.S. Army Corps of Engineers 

USDA United States Department of 

Agriculture 

USERRA Uniformed Services Employment 

and Reemployment Rights Act of 

1994

USPS United States Postal Service 

VA Department of Veterans Affairs 
GAO-09-1SP v

GAO Performance and Accountability Report 2008

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 2008. 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 

Acting 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 2008. 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 2008 and the targets we are 

aiming for in fiscal year 2009. 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 2008, 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 2008 

and information on certain human capital 

management flexibilities and on information 

security management efforts. 
vi GAO-09-1SP

GAO Performance and Accountability Report 2008

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Serving the Congress and the Nation

Source: GAO.

Introduction
2 From the Acting Comptroller General GAO-09-1SP 

GAO Performance and Accountability Report 2008

November 14, 2008

It is my pleasure to present GAO’s performance and accountability report 

for fiscal year 2008. This report conveys the outstanding achievements 

of the GAO team in serving the Congress and helping to improve 

government as well as summarizes actions to address the challenges 

facing our organization. I am confident that the financial and performance 

information included in this report is complete and reliable and meets our 

high standards for accuracy and transparency. Once again we received an 

unqualified or “clean” opinion from independent auditors on our financial 

statements for fiscal year 2008. Also, two separate independent peer review 

teams gave us unqualified opinions on the quality assurance systems used 

to produce our products and testimonies that examine the performance and 

ensure the accountability of a broad range of federal programs, policies, and 

activities. 

We experienced heavy demand from the Congress for our work during 

fiscal year 2008 and issued over 1,200 products on a variety of topics, 

including the progress on U.S. counterterrorism measures and efforts in 

Iraq, Afghanistan, and Pakistan; the need for stronger regulation over 

FannieMae and FreddieMac; aviation emissions and noise issues; health 

reassessments for veterans; federal actions needed to help some youth 

reconnect with education and employment; and disaster preparedness, 

response, and reconstruction. Our products also focused on federal 

programs and areas that we consider at high risk for fraud, waste, 

abuse, mismanagement, or transformation, such as the Department of 

Defense’s weapon systems acquisition processes and contract management, 

the Medicare and National Flood Insurance Programs, the federal 

government’s oversight of food safety, and the 2010 Census. GAO senior 

executives and I testified at over 300 hearings before the Congress—our 

second highest performance in over 25 years. Our clients who responded 

to our survey indicated that 95 percent of the products we prepared for 

them were received or delivered on time, allowing us to solidly achieve the 

timeliness target we set. 

Source: GAO

From the

Acting Comptroller General
GAO-09-1SP 3

GAO Performance and Accountability Report 2008

From the Acting Comptroller General

It has been my privilege to lead GAO since becoming Acting Comptroller 

General in March 2008 when former Comptroller General David M. Walker 

resigned. I want to express my pride in GAO’s many accomplishments and 

underscore the dedication and commitment of our workforce. We met or 

exceeded all of our mission-related targets. Specifically, in fiscal year 2008 

we documented $58.1 billion in financial benefits—a return of $114 for every 

dollar we spent—and nearly 1,400 nonfinancial benefits. The work we did 

to produce these benefits helped to shape important legislation, such as the 

Housing and Economic Recovery Act of 2008 (Pub. L. No. 110-289) and the 

Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 

No. 110-275), and increase the efficiency and effectiveness of various federal 

programs thus improving the lives of millions of Americans. Also, the rate 

at which our recommendations were implemented by federal agencies or 

the Congress rose to 83 percent in fiscal year 2008, and over two-thirds of 

the products we issued contained recommendations. These two “pipeline” 

measures are very important; when entities act on our recommendations their 

actions often lead to financial and nonfinancial benefits that change laws, 

improve services for citizens, save money, and promote better management 

throughout government.

In addition, we planned how we will support the 111th Congress and the 

next administration with their transition after the presidential election 

and assist the Congress with overseeing the new Troubled Asset Relief 

Program (TARP). While we have traditionally served as a resource for new 

Congresses by providing insight into the issues upon which we focused our 

work, the 2000 amendments to the Presidential Transition Act specifically 

identified GAO as a source for information concerning key management 

challenges and risks to help new presidential appointees make the leap 

from campaigning to governing. We synthesized the hundreds of reports 

and testimonies we issue every year so we could help as new policymakers 

quickly zero in on critical issues during the first days of the new Congress 

and administration. Concerning our responsibilities related to TARP—the 

centerpiece of the Emergency Stabilization Act of 2008 enacted by the 

Congress in response to the ongoing financial and credit crisis—we began 

to plan how we will monitor its implementation in the coming months in 

accordance with the law.

To continue to achieve this level of performance and fulfill our mission of 

serving the Congress and the public, it is critical that we invest in every one 

of our employees and provide the developmental and leadership experiences 

that they need to grow professionally. We measure how well we do this by 

using eight people measures—new hire rate, acceptance rate, retention rate 

with retirements, retention rate without retirements, staff development, staff 

utilization, leadership, and organizational climate. We exceeded the fiscal 

year 2008 targets we set for all but one of these measures, and the results 

for organizational climate, staff development, staff utilization, and leadership 
4 GAO-09-1SP

GAO Performance and Accountability Report 2008

From the Acting Comptroller General 

were the highest in the last 6 years. Because we lost more staff than expected 

for reasons other than retirement, we were slightly under the target we set 

for retention rate without retirements. 

We also reached a tentative agreement on the first-ever interim collective 

bargaining agreement between GAO management and the new employees 

union—the GAO Employees Organization, International Federation of 

Professional and Technical Engineers (IFPTE). I am very pleased that we 

were able to quickly reach a good agreement that covers such matters as 

official time and grievance procedures. We will continue to work hard to 

build and maintain open, constructive union and management relations 

as we address other issues affecting our employees. We also reconstituted 

the Employee Advisory Council to ensure that the views of nonbargaining 

unit employees are represented and took steps to implement several key 

recommendations resulting from an independent study of our employees’ 

performance appraisals over time that addressed the issues related to certain 

ratings disparities for African American analysts. These first steps included 

developing a Workforce Diversity Plan; convening an agencywide Diversity 

Committee, which includes representatives from the interim council of 

the IFPTE, other employee interest organizations, and management; and 

issuing interim guidelines for reviewing performance ratings to be used for 

the 2008 performance appraisal cycle. These actions are a good start, but 

I am committed to doing more to ensure that every person is treated fairly 

and equitably. In addition, the GAO Act of 2008 was signed into law on 

September 22, 2008. The law (Pub. L. No. 110-323) includes, among other 

things, provisions designed to benefit our employees’ pay; help continue 

to attract, retain, and reward a top-flight workforce; and replace our 

administrative Inspector General with a statutory one. We will implement 

this act expeditiously and continue to address other human capital challenges 

along with our physical and information security challenges consistent with 

our bargaining obligations with the IFPTE. 

In closing, the GAO team remains committed to achieving its mission to 

provide accurate, objective, nonpartisan, and constructive information to the 

Congress to help it confront difficult challenges facing our nation and to help 

improve government for the benefit of the American people. 

Gene L. Dodaro

Acting Comptroller General 

of the United States
GAO-09-1SP 5

GAO Performance and Accountability Report 2008

Financial Reporting Assurance Statements

Financial Reporting Assurance 

Statements

November 14, 2008

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, 2008, 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.
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GAO Performance and Accountability Report 2008

Financial Reporting Assurance 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.

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 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.

Gene L. Dodaro

Acting Comptroller General

of the United States

Sallyanne Harper Gary L. Kepplinger

Chief Financial Officer General Counsel
GAO-09-1SP 7

GAO Performance and Accountability Report 2008

About GAO

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 2008 provides 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 objective and 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.
8 GAO-09-1SP

GAO Performance and Accountability Report 2008

About GAO 

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

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).

Figure 1: GAO’s Strategic Planning 

Hierarchy 

Source: GAO.

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: Lifelong Learning to Enhance U.S. 

Competitiveness

Performance Goal: Identify Opportunities to Improve 

Programs that Target Federal Resources to Activities that 

Support Lifelong Learning

Key Efforts:

 Evaluate the cost, coordination, and availability of child 

care and early childhood education

 Assess whether federal resources provided under the 

No Child Left Behind Act are appropriately targeted to 

designated beneficiaries in K-12 education programs

 Assess the efficiency and effectiveness of programs 

designed to promote access to and affordability of 

postsecondary education

The fourth goal is our only internal one and 

is aimed at maximizing our productivity 

through such efforts as investing steadily 

in information technology to support our 

work; ensuring the safety and security of 

our people, information, and assets; pursuing 

human capital transformation; and leveraging 
GAO-09-1SP 9

GAO Performance and Accountability Report 2008

About GAO

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

 identify shortcomings in processes for providing health care to servicemembers and veterans 

 reduce food stamp payment errors 

 highlight challenges in the Food and Drug Administration’s inspection programs for drugs 

made overseas for the U.S. market 

 strengthen higher education access and affordability 

 identify information gaps for 401(k) participants related to their fund allocations and fees 

 focus attention on challenges transportation systems face as demand and congestion grow 

 outline progress made as the nation transitions to digital television 

 recommend ways to improve safety on U.S. highways and airport runways 

 highlight oversight deficiencies in the Small Business Administration’s Historically 

Underutilized Business Zone program

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

 assess military readiness and operations in Iraq and Afghanistan 

 oversee U.S. efforts to fight terrorism in Pakistan and secure and rebuild Iraq and Afghanistan 

 realign funds for a U.S. program that helps Russia dispose of nuclear materials 

 improve the monitoring and assessment of nonemergency food aid programs 

 enhance the Department of Defense’s (DOD) preparedness for homeland security missions 

 identify ways to improve DOD’s acquisition management process 

 identify implementation challenges with the U.S. Secure Border Initiative 

 define the federal role in sustaining centers that promote homeland security information 

sharing 

 improve the National Flood Insurance Program’s data and analyses 

 reform the federal housing government sponsored enterprises regulatory structure

 bring attention to the need for governmentwide action to better protect personally identifiable 

information 

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 private contractors for defense and homeland security 

functions 

 improve accountability for excess DOD parts and equipment that can be improperly sold to 

the public

 refer for prosecution individuals who fraudulently accepted federal disaster assistance 

payments 

 identify border security vulnerabilities through undercover investigations

 strengthen DOD business systems modernization management 

 improve the cost-effectiveness of filling the Strategic Petroleum Reserve 

 identify incremental approaches for reducing the tax gap 

 monitor the development of the 2010 Census 

 improve federal human capital management practices 

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

Strategic 

Goal 4

Maximize the value of 

GAO by being a model 

federal agency and a 

world-class professional 

services organization

 increase understanding between the United States and the Iraqi Supreme Audit Institution 

(SAI) through our assistance with building the Iraqi Board of Supreme Audit’s capacity to 

improve accountability for Iraq’s expenditures

 enhance communications with and service to our external clients through refinements to our 

external Web site 

 strengthen public sector financial management and accountability at the global level through 

GAO’s partnership with the World Bank and the International Organization of Supreme Audit 

Institutions Development Initiative to design, develop, and deliver the SAI Transformation 

Seminar

How GAO Assisted the Nation • Fiscal Year 2008

Figure 2:
10 GAO-09-1SP

GAO Performance and Accountability Report 2008

About GAO 

our knowledge and experience. We revisit 

the focus and appropriateness of these four 

strategic goals each time that we update 

our strategic plan. We last updated our 

strategic plan in March 2007. These four 

broad outcome goals are an outgrowth of 

our mission statement and explain our major 

focus areas and the long-term results they 

are intended to achieve. Each of our strategic 

goals is supported by four to eight strategic 

objectives that elaborate on each strategic 

goal. We list the strategic goals and strategic 

objectives under each one in figure 3, our 

strategic planning framework for serving 

the Congress. Several multiyear performance 

goals define a specific level of achievement 

for each strategic objective, and at the base of 

our strategic planning hierarchy, key efforts 

describe a body of work that operationalizes 

each performance goal. 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).

We revised our strategic plan in fiscal year 

2007 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 natural disasters account 

for some modification in emphasis. Seven 

broad issues or “themes” provide the context 

for our strategic plan (see fig. 3), 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 our 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 seventh consecutive year its Certificate 

of Excellence in Accountability Reporting 

for our fiscal year 2007 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 
GAO-09-1SP 11

GAO Performance and Accountability Report 2008

About GAO

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

Figure 3: GAO’s Strategic Plan Framework
12 GAO-09-1SP

GAO Performance and Accountability Report 2008

About GAO 

from Graphic Design USA for the Highlights 

version of our fiscal year 2007 performance 

and accountability report. (See fig. 4.)

Organizational Structure

As the Acting Comptroller General of the 

United States, Gene L. Dodaro is the head 

of GAO. On March 13, 2008, he succeeded 

David L. Walker who resigned before the 

end of his 15-year term that began in 1998. 

Mr. Dodaro previously served as GAO’s Chief 

Operating Officer for 9 years, and he retained 

this position after assuming the top post. 

Two other executives join Acting Comptroller 

General Dodaro to form our Executive 

Committee: Chief Administrative Officer/

Chief Financial Officer Sallyanne Harper 

and General Counsel Gary Kepplinger. Mr. 

Dodaro will serve as Acting Comptroller 

General until the President nominates and 

the Senate confirms a successor from a list of 

candidates proposed by the Congress. 

To achieve our strategic goals, our staff is 

organized as shown in figure 6. 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, analysts, auditors 

who have experience with forensic audits, 

and staff in General Counsel who work with 

FraudNet—our online system designed to 

facilitate follow-up on 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 that flows 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 

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 
GAO-09-1SP 13

GAO Performance and Accountability Report 2008

About GAO

Figure 4: GAO’s Performance and Accountability Report Awards

Source: GAO.
14 GAO-09-1SP

GAO Performance and Accountability Report 2008

About GAO 

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 3,100 employees are 

based at our headquarters in Washington, 

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

across the country (see fig. 5). Staff in these 

field offices are aligned with our research, 

audit, investigative, and evaluation teams 

and perform work in tandem with our 

headquarters staff in support of our external 

strategic goals.

Figure 5: GAO’s Office Locations

Chicago

Dayton

Los Angeles

San Francisco

Huntsville

Seattle

Norfolk

Dallas

Denver

Boston

Atlanta

Washington D. C.

Source: See Image Sources.
GAO-09-1SP 15

GAO Performance and Accountability Report 2008

About GAO

Figure 6: Organizational Structure

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

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. 
16 GAO-09-1SP

GAO Performance and Accountability Report 2008

About GAO 

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 part I of this report, 

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 human capital and 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 

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 performance measures and goals. 

This level of performance, in turn, will allow 

us to achieve our four, broad 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 2008, we devoted 94 percent of our 

engagement resources to work requested or 

mandated by the Congress. We initiated the 

remaining 6 percent of the engagement work 

under the Comptroller General’s authority 

to self-initiate engagements. Much of this 

work addressed various challenges that are 

of broad-based interest to the Congress, 

such as the Global War on Terrorism 

and the cost and status of both security 

stabilization and reconstruction efforts 

in Iraq.2 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 

2

In fiscal years 2006 and 2007, the work performed under the 

Comptroller General’s authority represented 15 percent and 

10 percent, respectively, of our engagement efforts. 
GAO-09-1SP 17

GAO Performance and Accountability Report 2008

About GAO

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. We generally issue around 

1,200 to 1,300 products each year, primarily 

in an electronic format. In addition, we 

publish about 250 to 350 legal decisions and 

opinions each year. Our products include the 

following:

■ 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;

■ 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 key issues 

requiring greater stewardship by the federal 

government and highlights of a forum on the 

sustainability of our natural resources.3 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.

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 

3

GAO, A Call for Stewardship: Enhancing the Federal Government’s 

Ability to Address Key Fiscal and Other 21st Century Challenges, GAO08-93SP, (Washington, D.C.: December 2007), and Measuring 

Our Nation’s Natural Resources and Environmental Sustainability: 

Highlights of a Forum Jointly Convened by the Comptroller General 

of the United States and the National Academy of Sciences, GAO-08-

127SP, (Washington, D.C.: October 2007).
18 GAO-09-1SP

GAO Performance and Accountability Report 2008

About GAO 

issues facing the nation, including the 

long-range budget challenge, the human 

capital crisis, postal reform, 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 perform studies and evaluations 

to identify ways in which to improve them.

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. 

How We Measure Our 

Performance

To help us determine how well we are 

meeting the needs of the Congress and 

maximizing our value as a world-class 

organization, we assess our performance 

annually using a balanced set of quantitative 

performance measures that focus on four key 

areas—results, client, people, and internal 

operations.4 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, 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 

4

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 

Strategies for Achieving Our Goals provides additional information 

about the partnerships we established or continued in fiscal year 

2008.
GAO-09-1SP 19

GAO Performance and Accountability Report 2008

About GAO

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 for improvement.

■ Client. To judge how well we are serving 

our client, 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, goals 

1, 2, and 3—based on each goal’s 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 an agencywide target for timeliness 

because we want our performance on this 

measure 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 2008 is the 

third 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. 24) and the 

external factors that influence our work (see 

p. 58). 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.
20 GAO-09-1SP

GAO Performance and Accountability Report 2008

About GAO

Once approved by the Comptroller General, 

the targets become final and are presented 

in our annual performance plan and budget.5

We may adjust these targets after they are 

initially published when our expected future 

work or level of funding provided warrants 

doing so. If we make changes, we include the 

changed targets in later documents, such as 

this performance and accountability report, 

and indicate 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.

On the pages that follow, we assess our 

performance for fiscal year 2008 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.

5

Our most recent performance plan is available on our Web site at 

http://www.gao.gov/cgi-bin/getrpt?rptno=GAO-08-507SP. 
Serving the Congress and the Nation

Source: GAO.

Management’s

Discussion and Analysis

Part I
22 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Implementing Our Strategies for Serving the 

Congress and the Nation 

We achieve our strategic goals and objectives 

by providing to the Congress and the public 

objective, fact-based, nonpartisan information 

based on our reviews and analyses and by 

continually striving to strengthen our human 

capital programs and internal operations. 

In fiscal year 2008, we monitored our 

performance using 16 annual performance 

measures, and they indicate that we had an 

impressive year—we met or exceeded our 

performance targets for all but one of our 16 

measures (see table 1). We accomplished real 

results for the nation, surpassing our financial 

benefits target for the year by 45 percent and 

exceeding our annual target for nonfinancial 

benefits by 248. Our financial benefits of 

$58.1 billion represents a $114 return on 

every dollar invested in us, and nearly 

1,400 benefits resulting from our work helped 

to improve the efficiency and effectiveness 

of federal government programs that serve 

the public. In addition, we also exceeded 

our targets for past recommendations 

implemented and new products with 

recommendations by 3 percentage points and 

6 percentage points, respectively. In addition, 

we exceeded by about 38 percent our target 

of 220 hearings at which we were asked to 

testify and met the target for delivering our 

products and testimonies to our clients in a 

timely manner. 

We also met or exceeded our annual targets 

for seven of our eight people measures. We 

did not meet our target for retention rate 

without retirements because we lost more 

staff than expected for reasons other than 

retirement. Successfully meeting or exceeding 

our targets in this area indicates that our 

efforts under goal 4 to attract, retain, and 

develop staff paid off. We discuss these 

actions in appendix 1 of this report. 

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 2008 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 2007, we exceeded our 

target of 4.0 (a composite score based on 

employees’ responses from an internal survey) 

for help get job done and slightly missed our 

target for our quality of work life measure. 

These scores indicate that our employees were 

very satisfied with the internal administrative 

services they used during their workday. 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.
GAO-09-1SP 23

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Table 1: Agencywide Summary of Annual Measures and Targets 

Performance 

measure

2004

actual

2005

actual

2006

actual

2007

actual

2008

target actual

Met/

Not met

2009

target

Results

Financial benefits

(dollars in billions) $44.0 $39.6 $51.0 $45.9 $40.0 $58.1 Met $42.0

Nonfinancial benefits 1,197 1,409 1,342 1,354 1,150 1,398 Met 1,200

Past recommendations implemented 83% 85% 82% 82% 80% 83% Met 80%

New products with 

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

Client

Testimonies 217 179 240 276 220 304 Met 200

Timelinessa 92% 92% 93% 95% 95% 95% Met 95%

People

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

Acceptance rate 72% 71% 70% 72% 72% 77% Met b

Retention rate

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

Without 

retirements

95% 94% 94% 94% 94% 93% Not met 94%

Staff developmentc 76% 76% 76% 77% Met 76%

70% 72%

Staff utilizationd 72% 75% 75% 73% 75% 75% Met 75%

Leadership 79% 80% 79% 79% 80% 81% Met 80%

Organizational 

climate

74% 76% 73% 74% 75% 77% Met 75%

Internal operationse

Help get job done 4.01 4.10 4.10 4.05 4.00 N/A N/A 4.00

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

Source: GAO.

Note: 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.

a

In our timeliness calculations for fiscal years 2004 through 2007, we inadvertently included nonresponses to the timeliness questions 

in our client feedback survey—the data source for our timeliness measure. We therefore recalculated the survey results for these fiscal 

years and fiscal year 2008. The numbers shown reflect the correct calculation.

b

Considering the challenging hiring environment due to uncertain budgets and high competition for talent, measuring our acceptance 

rate is less meaningful to us. Therefore, we will eliminate this measure beginning in fiscal year 2009.

c

Beginning in FY 2006 we changed the way that the staff development people measure was calculated. Specifically, we dropped 

one question regarding computer-based training because we felt such training was a significant part of (and therefore included in) 
24 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

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 2004 

through fiscal year 2008 financial benefits, 

nonfinancial benefits, and new products with 

recommendations have increased steadily. 

The average number of hearings at which 

we testified has climbed since 2004 with a 

significant increase from fiscal year 2006 to 

2008. 

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 because 

the congressional members are reorganizing 

during the months after the election. This 

situation provides fewer opportunities for us 

to be invited to testify. However, in fiscal year 

2008—the year after an election—the new 

Congress held many more hearings than we 

anticipated and seemed especially interested 

in our work.

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

Performance measure 2004 2005 2006 2007 2008

Results

Financial benefits (billions) $35.9 $39.2 $43.0 $45.1 $48.7

Nonfinancial benefits 986 1,139 1,248 1,325 1,376

New products with recommendations 54% 58% 61% 64% 65%

Client

Testimonies 193 200 206 228 250

Source: GAO.

the other questions the survey asked regarding training. We also modified a question on internal training and changed the scale of 

possible responses to that question. We show the FY 2004 and 2005 data on a separate line so as to indicate that those data are not 

comparable to the data beginning in FY 2006.

d

Our 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

For our internal operations measures, we will report actual data for fiscal year 2008 once data from our November 2008 internal 

customer satisfaction survey have been analyzed. N/A indicates that the data are not available yet.

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.
GAO-09-1SP 25

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

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 

2008 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 restructuring of federal programs; or

■ modifications to entitlements, taxes, or 

user fees.

Financial benefits result if, for example, 

the Congress reduces the annual cost of 

operating a federal program or lessens 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 2008, our work generated 

$58.1 billion in financial benefits (see fig. 7), 

exceeding our target by $18.1 billion or 45 

percent. We exceeded the target primarily 

as a result of a few unexpected and large 

financial accomplishments along with several 

large-dollar accomplishments with multiyear 

effects. Of the total amount documented 

in fiscal year 2008, about $31.6 billion (or 

approximately 54 percent) resulted from 

changes in laws or regulations (see fig. 8).

Our fiscal year 2009 target for financial 

benefits is higher than the target we 

reported for this measure in our fiscal year 

2009 performance plan in January 2008. 

Specifically, we increased our financial 

benefits target by $2 billion to $42.0 billion 

based on our current assessment of our 

past recommendations that are likely to be 

implemented by federal agencies and the 

Congress in the coming fiscal year. We did 

not increase our financial benefits target 

for 2009 above our fiscal year 2008 actual 

because our historical data indicate that our 

financial benefits have declined the year after 

the installation of the last three Congresses. 

Also, in fiscal year 2008, two of our large 

accomplishments (related to the spectrum 

auction and the strategic petroleum reserve) 

were unanticipated and accounted for much 

of the amount above our target. Moreover, 

many of the resources we use to follow up on 

congressional and agency actions in response 

to our recommendations will be focused on a 

variety of mandates, including the Troubled 

Asset Relief Program (TARP), that are 

unlikely to yield financial benefits. Thus, we 

believe our target of $42 billion for fiscal 

year 2009 (shown on p. 23) is reasonable and 

achievable. 
26 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Figure 7: Financial Benefits GAO 

Recorded 

Dollars in billions

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

2004 2005 2006 2007 2008 2008

$58.1

$40.0

$45.9

$51.0

$39.6

$44.0

Figure 8: Types of Financial Benefits 

Recorded in Fiscal Year 2008 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 $58.1 billion

$14.8 billion

(26%)

$11.7 billion

(20%)

$31.6 billion

(54%)

Financial benefits included in our performance 

measures are net benefits—that is, estimates 

of financial benefits that have been reduced 

by the estimated 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 

help 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 longterm projects, changes in tax laws, program 

terminations, or sales of government assets 

are limited to 5 years. Estimates used to 

calculate our financial benefits 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 recommendations or actions. Each 

accomplishment reports for financial benefits 

is 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 96 percent of the total dollar value of 

benefits recorded in fiscal year 2008. The 

GAO Inspector General (IG) also performed 

an independent review of all accomplishment 

reports claiming benefits of $500 million or 

more in fiscal year 2008.

Figure 9 lists several of our major financial 

benefits for fiscal year 2008 and briefly 

describes some of our work contributing to 

each financial benefit.
GAO-09-1SP 27

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part1: Management’s Discussion and Analysis

Figure 9: GAO’s Selected Major Financial Benefits Reported in Fiscal Year 2008

Description Amount

Improved spectrum management by extending auction authority. Since 1993, the Federal Communications Commission has conducted auctions to assign spectrum licenses to commercial users; these licenses 

permit companies to use a portion of the spectrum to provide various wireless communications services, 

such as mobile voice and data services. Some parties have raised concerns about the use of auctions, contending that the auctions raise consumer prices. In December 2005, we reported that auctions appeared to 

have little or no impact on end-user prices, infrastructure deployment, and competition, and that they mitigated the problems associated with comparative hearings and lotteries, which the commission previously 

used to assign licenses. We therefore recommended that the Congress extend the commission’s auction authority beyond the scheduled expiration date of September 30, 2007. In the Deficit Reduction Act of 2005, 

the Congress extended the commission’s auction authority and in March 2008, the commission completed 

the auction of the 700 megahertz (MHz) spectrum. The 700 MHz auction generated $19.1 billion, greatly 

exceeding previous estimates, and a portion of the proceeds will be used to support public safety and 

digital television transition initiatives. The net present value of the financial benefits associated with the 

legislation and the associated 700 MHz auction is $8.6 billion. (Goal 1) $8.6

Encouraged the Department of Defense (DOD) to reexamine cost estimates for a new military 

concept. We issued a report discussing our analysis of joint seabasing—one of DOD’s evolving concepts 

for projecting and sustaining forces for joint military operations without relying on immediate access to 

nearby land bases. The military services are either considering or actively pursuing new ships and weapon 

systems to support seabasing. For example, the Navy and Marines planned to acquire the Maritime Prepositioning Force (Future)—a squadron of ships to transport and deliver the personnel, combat power, and 

logistic support of the Marine Expeditionary Brigade—along with several supporting sealift vessels and 

aircraft. We recommended, among other things, that DOD conduct additional experimentation and evaluation of joint seabasing options and synchronize cost estimates for joint seabasing options so that decision 

makers have sufficient information to use in making investment decisions on seabasing initiatives. DOD 

stated that it would develop cost estimates as part of the DOD Planning, Programming, Budgeting and 

Execution and acquisition processes. Since the issuance of our report, DOD has reduced the number of 

Maritime Prepositioning Force (Future) ships that it plans to procure from eight ships to two ships during 

fiscal years 2009 through 2011. The claimed financial benefit—$2.0 billion—represents the net present 

value of the reductions for fiscal years 2009, 2010 and 2011. (Goal 2) $2.0

Financial Benefits

(Dollars in billions)

Source: See Image Sources.
28 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Realized savings from suspending the royalty-in-kind oil program. We testified that since the Strategic 

Petroleum Reserve (SPR) had reached sufficient size to address near-term supply disruptions that suspending the fill of the SPR would also have a dampening effect on gasoline prices because more supply would be 

available. At the time of our testimony the SPR was being filled with oil obtained from the royalty-in-kind 

program operated by the Department of Interior’s Minerals Management Service (MMS). (Through the royalty-in-kind program, MMS receives oil as payments of royalties from companies that lease federal property 

for oil development.) Subsequently, DOE decided to suspend the SPR fill through the remainder of calendar 

year 2008 and sell the oil obtained from the royalty-in-kind program. Congress passed legislation halting the 

fill with royalty-in-kind oil until crude oil fell to $75 a barrel, on average, for a 90-day period. In May 2008, 

MMS estimated the value of 16.1 million barrels of royalty-in-kind oil at about $1.89 billion. According to the 

Program Director, this represents MMS’s best estimate of the Treasury revenue gain stemming from DOE’s 

decision to suspend the SPR fill and selling the royalty-in-kind oil through the rest of calendar year 2008. In 

net present value terms, the $1.89 billion revenue gain is $1.86 billion. (Goal 1) $1.9

Encouraged DOD to scale back a costly satellite program. We examined the adequacy of DOD’s decision to proceed with the Alternative Infrared Satellite System as an alternative to the Space Based Infrared 

System program and whether DOD is attaining the knowledge it needs to position the program for success. 

We reported that the program was pursuing a higher risk effort in order to advance capability and recommended that DOD reassess its investment in the Alternative Infrared Satellite System and alternative ways 

of reducing risk. DOD agreed and, consistent with the report’s recommendation, reexamined the Alternative Infrared Satellite System to clarify program objectives. As a result, DOD realigned the program and 

renamed it the Third Generation Infrared Surveillance program. In DOD’s 2009 budget request DOD redirected the Alternative Infrared Satellite System resources to pursue risk reduction, system definition, and 

ground tests under the Third Generation Infrared Surveillance program resulting in a reduction in funding 

from fiscal years 2008 to 2012 of about $1.6 billion. The net present value is about $1.5 billion. (Goal 2) $1.5

Analyzed the fiscal year 2008 appropriation for the Millennium Challenge Corporation (MCC). We 

concluded that MCC could operate with a smaller-than-requested fiscal year 2008 appropriation because, 

based on historical experience, the corporation would not obligate the balance of its prior years’ appropriations until the fourth quarter of fiscal year 2008. Specifically, our work showed that MCC had disbursed 

only about $68 million of the $2.1 billion obligated for compact assistance and could have significant 

undisbursed balances when compacts expired. We reported that MCC’s portrayal of projected compact impact did not reflect underlying data and identified five key risks that could affect project impact. Our work 

supported and informed appropriations and authorizing committees’ decisions about MCC funding for 

fiscal year 2008, and contributed to a congressional appropriation of about $1.6 billion for MCC for fiscal 

year 2008, a reduction of about $1.4 billion from the President’s $3 billion request. (Goal 2) $1.4

Source: GAO.

Nonfinancial Benefits

Many of the benefits that result from our 

work cannot be measured in dollar terms. 

During fiscal year 2008, we recorded a total 

of 1,398 nonfinancial benefits (see fig. 10). 

We significantly exceeded our target by 

almost 22 percent because of actions taken 

as a result of our bid protest work and by 

agencies in response to our recommendations 

dealing with governmentwide information 

technology (IT) and accounting issues. Our 

fiscal year 2009 target for nonfinancial 

benefits differs from the target we reported 

for this measure in January 2008 in our fiscal 

year 2009 performance budget. Specifically, 

we increased our nonfinancial benefits target 

from 1,150 to 1,200 (see p. 23) in anticipation 

of additional nonfinancial benefits resulting 

from our increasing bid protest work. 
GAO-09-1SP 29

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Figure 10: Nonfinancial Benefits GAO 

Recorded 

0

300

600

900

1200

1500

2004 2005 2006 2007 2008 2008

Number

Source: GAO.

Actual Target Actual

1,398

1,150

1,342 1,354 1,409

1,197

In fiscal year 2008 we documented 628 

instances where federal agencies used our 

information to improve services to the 

public, 77 instances where the information 

we provided to the Congress resulted in 

statutory or regulatory changes enacted in 

fiscal year 2008, and 693 instances where 

agencies improved core business processes 

or governmentwide reforms as a result 

of our work. (See fig. 11.) These actions 

covered a variety of issues such as ensuring 

that banks uniformly disclose to consumers 

fees for checking and savings accounts, 

improving the Mine Safety and Health 

Administration’s process for approving 

emergency response plans for underground 

coal mines, and mitigating risks in the U.S. 

visa waiver program. In figure 12, we provide 

examples of some of the nonfinancial benefits 

we claimed as accomplishments in fiscal 

year 2008.

Figure 11: Types of Nonfinancial Benefits 

Documented in Fiscal Year 2008 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 1,398

693

(49.6%) 628

(44.9%)

77

(5.5%)
30 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis 

Figure 12: GAO’s Selected Nonfinancial Benefits Reported in Fiscal Year 2008

Nonfinancial benefits that helped to change laws

The Consolidated 

Appropriations Act, 

2008, Pub. L. No. 

110-161

Prohibited tax debtors from receiving large federal contracts. Several of our reviews identified federal tax debtors that also received contractor payments from the DOD, the General 

Services Administration, and several other civilian federal agencies. Specifically, we found 

that thousands of contractors had not paid federal income, Social Security, and Medicare taxes 

withheld from their own employees. In our reports and testimonies, we stated that federal law 

does not preclude contractors that do not pay their taxes from receiving federal contracts. This 

law requires prospective contractors for federal contracts greater than $5 million (using appropriated funds under provisions of this act) to certify in writing that they have filed all federal 

tax returns required during the 3 years preceding the certification; have not been convicted of 

a criminal offense under the Internal Revenue Code of 1986; and have not, more than 90 days 

prior to the certification, been notified of any unpaid federal tax assessment for which the liability remains unsatisfied.

Food, Conservation 

and Energy Act of 

2008, Pub. L. No. 

110-246

Increased penalties to deter food stamp fraud. We found that the Food Stamp Program, 

administered by the Department of Agriculture’s (USDA) Food and Nutrition Service (FNS), 

remains vulnerable because retailers can enter the program intending to traffic without fear 

of severe penalties, and current penalties may not be sufficient to deter traffickers. Generally 

the most severe penalty most traffickers face is disqualification from the program eventually. 

We recommended that FNS develop a strategy to increase the penalties for trafficking, working with the Office of Inspector General (OIG) as needed. We also recommended that if these 

penalties entail additional authority, the agency should consider developing legislative proposals for program reauthorization in 2007. This law includes a provision that raises civil penalties from $10,000 to $100,000 and a provision to allow USDA, in consultation with its OIG, to 

immediately suspend flagrant retailers from the program pending administrative action. 

Medicare 

Improvements 

for Patients and 

Providers Act of 

2008, Pub. L. No. 

110-275

Eliminated incentives to misuse Medicare funds. The Centers for Medicare and Medicaid 

Services (CMS) in the Department of Health and Human Services (HHS) divides Medicare 

payment for end-stage renal disease (ESRD) items and services into two groups: (1) dialysis 

and associated routine services which are paid under a single rate and (2) injectable drugs and 

certain laboratory tests which are paid for separately on a per-service basis. We reported that 

dialysis facilities have been relying on Medicare’s generous payments for the first payment 

group of items/services and that payments for one drug in the second payment group had created an incentive for facilities to potentially use more of it than necessary. We recommended 

that the Congress consider establishing one payment system for all ESRD services as soon as 

possible. This law includes a provision that requires the Secretary of HHS to implement a fully 

bundled payment method for all ESRD items and services beginning January 1, 2011. 

Nonfinancial Benefits

Source: See Image Sources.

Part I: Management’s Discussion and Analysis
GAO-09-1SP 31

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Housing and 

Economic Recovery 

Act of 2008, Pub. L. 

No. 110-289

Identified need for a single regulator for the federal housing finance system. We reported 

that while government-sponsored enterprises (GSE) such as FannieMae, FreddieMac, and the 

Federal Home Loan Bank System play a critical role in the U.S. housing finance system—by 

buying mortgages from and making loans to lenders—they also pose potentially significant 

risks to taxpayers. We also reported that the fragmented federal regulatory oversight structure 

for GSEs was inadequate to monitor these large, complex financial institutions and lacked key 

regulatory authorities, such as the ability to take enforcement actions when GSE capital levels 

declined or to place insolvent institutions into receivership. We recommended that the Congress establish a single regulator to ensure the safety, soundness, and oversight of the housing 

GSEs with sufficient legal authority to carry out its responsibilities. Among its other provisions, this law establishes a single GSE regulator whose responsibilities are consistent with our 

recommendation. 

Nonfinancial benefits that helped to improve services to the public

Increased 

requirements for 

water sprinklers in 

nursing homes

Our review of nursing homes found weaknesses in federal fire safety standards for nursing homes, how the standards are applied in facilities without sprinklers, and in federal and 

state oversight. We recommended that the Administrator of CMS work with the National Fire 

Protection Association (NFPA) to strengthen fire safety standards for nursing homes without 

sprinklers and to explore the feasibility of requiring sprinklers in all nursing homes. Subsequently, the NFPA adopted an automatic sprinkler requirement for all nursing homes in its Life 

Safety Code, and CMS published a final rule adopting this NFPA requirement. All nursing 

homes participating in the Medicare and Medicaid programs must install and maintain automatic sprinkler systems by August 13, 2013. 

Improved mail 

delivery standards

We assessed the U.S. Post Service’s (USPS) standards for the timely delivery of mail. Our 

work found that USPS had delivery standards for its major types of mail, but some standards 

had not been updated in a number of years to reflect changes in how mail is currently prepared 

and delivered. These outdated standards were unsuitable as benchmarks for setting realistic 

expectations for timely mail delivery; measuring delivery performance; or improving service, 

oversight, and accountability. We recommended that USPS modernize delivery standards for 

all major types of mail. Subsequently, USPS updated all of its delivery performance standards, 

including those for Standard Mail, Periodicals, and Package Services.

Encouraged EPA to 

clarify definition of 

mercury debris

We reported that the Environmental Protection Agency (EPA), states, and industry do not share 

a common understanding of the types of mercury-containing wastes that can be treated and 

disposed of as debris. Consequently, businesses may be treating and disposing of mercurycontaminated waste (e.g., intact containers) as debris, even though these items may contain 

high levels of mercury and should be disposed of as hazardous waste. We recommended that 

EPA clarify and better describe the types of waste that can and cannot be reported under the 

“debris” reporting category and include the definition of debris in the instructions for the 

Hazardous Waste Report. Based upon our work, EPA clarified the definition for contaminated 

debris in the Hazardous Waste Report instructions for the reporting cycle that followed the 

issuance of our report. 

Improved screening 

of the Army’s 

contract security 

guards 

We reported that the Army’s procedures did not provide assurance that contract security 

guards at U.S. military installations were adequately screened, putting the Army at risk of 

staffing its gates with contract security guards who were not qualified for the job. For example, 

we found that contract security guard applicants with criminal histories, including felons, had 

been employed as guards. We recommended that DOD’s revised antiterrorism standards be implemented into Army policy for screening of contract security guards as deemed suitable. DOD 

revised the antiterrorism standards, and the Army subsequently incorporated the language into 

the Army Civilian Police and Security Guard Program.
32 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Nonfinancial benefits that helped to promote sound agency and governmentwide management

Identified individuals 

who fraudulently 

accepted disaster 

assistance payments

During our work related to the Federal Emergency Management Agency’s (FEMA) response to 

hurricanes Katrina and Rita, we found evidence indicating that thousands of individuals may 

have fraudulently registered for and received FEMA disaster assistance payments. We referred 

this information to appropriate federal agencies for further review and prosecution. As a result, 

over 50 individuals were found guilty of crimes, such as defrauding the United States or theft 

of government property. 

Assisted taxpayers 

and preparers

In April 2006, GAO testified about the serious problems that taxpayers can face if they use 

commercial tax preparation chains. In a limited study that included an undercover investigation, we found that paid tax preparers employed by national tax preparation chains made 

mistakes in all 19 of our undercover visits. Some of the mistakes were substantial, resulting 

in refund claims that were thousands of dollars higher than they should have been and exposing taxpayers to Internal Revenue Service (IRS) enforcement action. Other mistakes reduced 

taxpayers’ refunds below what they should have been, sometimes by large amounts. Dissemination of our research results to the paid preparer community led to the major chains adding to 

their training programs discussions of the issues GAO identified, according to the IRS office 

responsible for oversight and liaison with the paid preparer community.

Enhanced U.S. 

border security

We identified border security vulnerabilities both at U.S. ports of entry and at unmanned and 

unmonitored land border locations between ports of entry. In particular, we successfully used 

fraudulent documents to enter the United States at several U.S. Customs and Border Protection 

(CBP) checkpoints on both the northern and southern borders. CBP recently reported that it 

took actions to address a number of the vulnerabilities highlighted by our work, including enhanced training for its agents and the installation of additional fraudulent document detection 

equipment at U.S. ports of entry. Further, to address vulnerabilities in areas between border 

ports of entry, CBP has installed new sensor equipment technologies. These actions should enable CBP to more effectively identify attempts to illegally penetrate our nation’s borders. 

Source: GAO.

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 2008, 83 percent of the 

recommendations we made in fiscal year 2004 

had been implemented (see fig. 13), primarily 

by executive branch agencies. Putting these 

recommendations into practice generates 

tangible benefits for the nation.

Figure 13: Percentage of Past 

Recommendations Implemented 

Four-year implementation rate

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

70

80

90

2004 2005 2006 2007 2008 2008

83% 85% 82% 82% 80% 83%
GAO-09-1SP 33

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

The 83 percent implementation rate for 

fiscal year 2008 exceeded our target for the 

year by 3 percentage points and exceeded 

our performance in the 2 preceding fiscal 

years. However, over the last 3 fiscal 

years we have not been able to achieve 

the level of performance we did in fiscal 

year 2005 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 14 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 14: Cumulative Implementation 

Rate for Recommendations Made in Fiscal 

Year 2004

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

83%

42%

25%

13%

New Products Containing 

Recommendations

In fiscal year 2008, about 66 percent of the 

629 written products we issued (excluding 

testimonies) contained recommendations. 

(See fig. 15.) 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 better emphasizing the need to identify 

possible recommendations as they plan and 

carry out their work. However, we set our 

target again in fiscal year 2009 at 60 percent 

because we recognize that our products 

do not always include recommendations 

and that the Congress and agencies often 

find informational reports just as useful 

as those that contain recommendations. 

Our informational reports have the same 

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 15: Percentage of New Products 

with Recommendations 

Percentage

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2008

66%

60%

65% 66% 63% 63%

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 the Congress 

extremely well, by significantly exceeding 

our target on the number of hearings we 
34 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

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 2008, experts from our 

staff testified at 304 congressional hearings 

covering a wide range of complex issues, 

and we significantly exceeded our target of 

220 hearings at which we testify (see fig. 16). 

(See fig. 17 for a summary of issues we 

testified on by strategic goal in fiscal year 

2008.) Over 100 of our testimonies were 

related to high-risk areas and programs, 

which are listed on page 42.

In fiscal year 2008, we surpassed our 

performance on this measure over the last 

4 years. In fact, only one time in the last 25 

fiscal years have we delivered testimonies at 

more hearings. The Congress was extremely 

interested in our past and current work on 

a variety of issues and asked us to testify at 

84 more hearings than we anticipated. The 

Congress asked our executives to testify 

in fiscal year 2008 more than 40 times on 

homeland security issues, more than 10 times 

on the Iraq conflict and Afghanistan, and 8 

times on military and veterans’ health care 

and disability benefits. Though lower than 

our actual performance on this measure in 

2008, we believe that our fiscal year 2009 

target of testimonies at 200 hearings is 

challenging and reflects a more typical 

estimate of the number of hearings we are 

likely to attend after a presidential election.

Figure 16: Testimonies 

0

50

100

150

200

250

300

350

2004 2005 2006 2007 2008 2008

Hearings at which GAO testified

Source: GAO.

Actual Target Actual

304

220

276

240

179

217

Timeliness 

To be useful to the Congress, our products 

must be available when our clients need 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 management6 and those 

requiring an investment of 500 staff days or 

more), which represented about 65 percent 

of the congressionally requested written 

products we issued in fiscal year 2008. 

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 

6

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.
GAO-09-1SP 35

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

 Rebuilding readiness of the 

military’s ground forces

 Accountability in DOD’s 

acquisition environment 

 Challenges facing the National 

Flood Insurance Program 

 Weaknesses in traveler inspections 

at U.S. ports of entry 

 Department of Homeland 

Security’s biosurveillance initiatives 

 Oversight of Pakistan 

reimbursement claims 

 U.S. food aid challenges 

 Rebuilding the capacity of the 

Iraqi ministries 

 Protecting personally 

identifiable information 

 Transforming the nuclear 

weapons complex 

 Defense business 

transformation

 A single regulator for housing 

GSEs

 Oversight of youth residential 

facilities 

 Improving compliance with the 

Fair Labor Standards Act 

 DOD and VA care 

management for 

servicemembers 

 Small Business Administration’s 

(SBA) monitoring of 

HUBZone businesses 

 Progress made in DTV 

transition 

 Drug-testing for commercial 

truck drivers 

 Aviation runway and ramp 

safety 

 Federal oversight of food safety 

 Cost effectiveness of filling the 

Strategic Petroleum Reserve 

 Risk assessment and oversight of 

contractors used for homeland 

security 

 VA and DOD electronic medical 

records 

 Long-term fiscal outlook 

 Status of the 2010 Census 

 Diversity issues and the federal 

workforce 

 Impact of multiple higher 

education tax incentives 

 Automation program problems 

increase risks for 2010 Census 

 Federal improper payments 

 Vulnerabilities in TSA’s airline 

passenger screening process 

 Tax compliance by U.S. 

businesses

Goal 1: Address Challenges to the Well-Being and Financial 

Security of the American People

Goal 2: Respond to Changing Security Threats and the 

Challenges of Globalization 

Goal 3: Help Transform the Federal Government’s Role and 

How It Does Business

Selected Testimony Issues • Fiscal Year 2008

Source: GAO.

Figure 17: 
36 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

time. In fiscal year 2008, we had a 25 percent 

response rate from the congressional staff 

surveyed, which provided us with feedback 

on 56 percent of the products for which we 

sent surveys. In our timeliness calculations 

for fiscal years 2004 through 2007, we 

inadvertently included nonresponses to the 

timeliness question in our client feedback 

survey. We therefore recalculated the survey 

results for these fiscal years and for fiscal year 

2008. The numbers shown in figure 18 reflect 

the corrected calculations.

In fiscal year 2008 we met our timeliness target 

of 95 percent. We have always set our target for 

timeliness high because it is important for us 

to meet congressional needs when they occur. 

Therefore, we will continue to emphasize to our 

audit teams the importance of communicating 

with the requesters of our work to determine 

when they will need testimony statements and 

products and delivering these statements and 

products when agreed to allow the requesters 

enough time to prepare for hearings and other 

congressional activities. We anticipate that 

these actions will enable us to meet our fiscal 

year 2009 target of 95 percent. To increase the 

response rate to our client feedback survey, we 

will continue to send electronic surveys that 

can be responded to via Blackberry devices and 

follow up with nonrespondents to our surveys 

by e-mail and telephone and in meetings.

Figure 18: Timeliness 

0

20

40

60

80

100

2004 2005 2006 2007 2008 2008

Percentage of products on time

Source: GAO.

Actual Target Actual

92% 92% 93% 95% 95% 95%

Note: In our timeliness calculations for fiscal years 2004 through 

2007, we inadvertently included nonresponses to the timeliness 

questions in our client feedback survey—the data source for our 

timeliness measure. We therefore recalculated the survey results 

for these fiscal years and for fiscal year 2008. The numbers 

shown reflect the corrected calculations.

Focusing on Our People

Our highly professional, multidisciplinary 

staff were critical to the level of performance 

we demonstrated in fiscal year 2008. 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 2008, we met 

or exceeded all but one 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 76 of this report.

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, other attrition, promotions, 

and skill gaps. The workforce plan for the 

upcoming year specifies the number of planned 

hires. The plan is conveyed to each of our units 

to guide hiring throughout the year. The Chief 

Operating Officer, the Chief Administrative 

Officer, the Deputy Chief Administrative 

Officer, the Chief Human Capital Officer, 

and the Controller meet monthly to monitor 

progress toward achieving the workforce plan. 
GAO-09-1SP 37

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Adjustments to the workforce plan are made 

throughout the year, if necessary, to reflect 

changing needs and conditions. In fiscal year 

2008, our adjusted plan was to hire 356 staff. 

We were able to bring on board 343 staff by 

year-end. 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 target 

we set for our new hire rate and exceeded 

our acceptance rate target by 5 percentage 

points. Due to the challenging hiring 

environment caused by uncertain budgets 

and high competition for talent, measuring 

our acceptance rate is less meaningful to us. 

Therefore, we will eliminate this measure 

beginning in fiscal year 2009.

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 onboard strength. We calculate 

this measure with and without retirements. 

Table 4 shows that we have consistently 

performed at the 90 percent level for retention 

rate with retirements for the last 5 fiscal 

years, and that in fiscal year 2008 we missed 

our target for retention without retirements 

by 1 percentage point because we lost 

employees for reasons other than retirements.

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

Rate Measures

Performance 

measures 

2004

actual 

2005

actual 

2006

actual 

2007

actual

2008

target 

2008

actual

People

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

Acceptance rate 72% 71% 70% 72% 72% 77%

Source: GAO.

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

Excluding Retirements

Performance

measures 

2004

actual 

2005

actual 

2006

actual 

2007

actual

2008

target 

2008

actual

People

Retention rate

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

Without retirements 95% 94% 94% 94% 94% 93%

Source: GAO.
38 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

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 2008, to better 

ensure confidentiality of individual responses, 

we used the same outside contractor that 

administered the survey to also analyze the 

data.

This fiscal year about 76 percent of our 

employees completed the survey—a 4 

percentage point increase over last year’s 

response rate—and we met or exceeded all 

four targets (see table 5). The organizational 

climate measure showed the greatest increase 

among these measures, exceeding the fiscal 

year 2008 target by 2 percentage points and 

beating our fiscal year 2007 performance 

by 3 percentage points. Staff development, 

staff utilization, and leadership also increased 

1 or 2 percentage points over last fiscal 

year’s results. Given our less-than-steady 

performance on these measures over the last 

5 years, we decided to retain our fiscal year 

2008 targets for fiscal year 2009. 

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

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

Climate

Performance

measuresa

2004

actual 

2005

actual 

2006

actual 

2007

actual

2008

target 

2008

actual

People

Staff developmentb 76% 76% 76% 77%

70% 72%

Staff utilization 72% 75% 75% 73% 75% 75%

Leadership 79% 80% 79% 79% 80% 81%

Organizational 

climate 74% 76% 73% 74% 75% 77%

Source: GAO.

a

 Certain portions of a Web-based survey are used to develop these four measures. For example, the leadership measure is based on 

staff’s responses to questions about their immediate supervisors’ leadership.

b

 Beginning in fiscal year 2006 we changed the way that the staff development people measure was calculated. Specifically, we 

dropped one question regarding computer-based training because we felt such training was a significant part of (and therefore 

included in) the other questions the survey asked regarding training. We also modified a question on internal training and changed the 

scale of possible responses to that question. We show the fiscal year 2004 and 2005 data on a separate line so as to indicate that those 

data are not comparable to the data beginning in fiscal year 2006.
GAO-09-1SP 39

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

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 2004. We asked staff to 

rank 29 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 18 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 11 

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’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 broad-based 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. 

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

Performance 

measures 

2004

actual 

2005

actual 

2006

actual 

2007

actual

2008

target 

2008

actual

Internal operations

Help get job done 4. 01 4.10 4.10 4.05 4.00 N/A

Quality of work life 3. 96 3.98 4.00 3.98 4.00 N/A

Source: GAO.

Note: We will report actual data for fiscal year 2008 once the data from our November 2008 internal operations survey have been 

analyzed. N/A indicates that the data are not available yet.
40 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

In March 2008 we added the 2010 Census 

to the list because of the survey’s impact 

on everything from the apportionment of 

congressional seats to the distribution of 

billions of dollars of federal funds.

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 high-risk 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 U.S. Postal Service 

transformation efforts and long-term outlook 

and the Department of Housing and Urban 

Development’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. We added 

the upcoming census to the high-risk list in 

fiscal year 2008 because of a combination 

of long-standing deficiencies and emerging 

challenges, including shortcomings in the 

U.S. Census Bureau’s (Bureau) management of 

information technology, weak performances 

by technology that the Bureau plans to use for 

data collection, uncertainty of cost estimates, 

and the elimination of several dress rehearsals 

activities.

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 past 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 2008:

 227 reports

 128 testimonies

 $26.1 billion in financial benefits

In fiscal year 2008, we issued 227 reports, 

delivered 128 testimonies to the Congress, 

and documented financial benefits totaling 

approximately $26.1 billion related to our 

high-risk areas. Included in these results are 

reviews we completed that examined how 

the IRS could better enforce tax laws. For 

example, we made recommendations on how 

to increase IRS’s ability to collect outstanding 

amounts owed by taxpayers, to improve the 

accuracy of taxpayer accounts, to reduce 

the potential for a taxpayer burden, and to 

reduce the cost associated with interest IRS 

must pay on refunds issued to taxpayers. Our 

work analyzing the enforcement of tax laws 

has resulted in approximately $5.8 billion in 

financial benefits. Additionally, we evaluated 

the implementation and transformation 

of the Department of Homeland Security 

(DHS). Some of our significant work in 
GAO-09-1SP 41

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

this area includes reviewing the amount 

of passenger and property screening costs 

incurred by airports, air carriers, and private 

contractors in 2000, and evaluating DHS’s 

progress in implementing requirements to 

reduce improper over payments to agencies 

within DHS. Our work in evaluating the 

implementation and transformation of DHS 

resulted in nearly $1 billion in financial 

benefits. To learn more about our work on the 

high-risk areas or to download our January 

2007 high-risk update in full, go to http://

www.gao.gov/docsearch/featured/highrisk.

html.
42 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Table 7: GAO’s High-Risk List as of September 2008

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 1990

■ DOD Weapon Systems Acquisition 1990

■ FAA Air Traffic Control Modernization 1995

■ Financing the Nation’s Transportation Systema 2007

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

Interestsa 2007

■ Transforming Federal Oversight of Food Safetya 2007

■ The 2010 Census 2008

Managing Federal Contracting More Effectively

■ DOD Contract Management 1992

■ DOE Contract Management 1990

■ NASA 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-09-1SP 43

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

General Counsel Decisions 

and Other Legal Work

In addition to benefiting from our audit 

and evaluation work, the Congress and the 

public also benefited from some of our other 

activities in fiscal year 2008 in the following 

ways:

■ We handled more than 1,500 protests 

filed by parties who challenged the way 

individual federal procurements and 

contracts were handled, and we issued 

decisions on more than 250 protests 

addressing a wide range of issues 

involving compliance with, and the 

interpretation of, procurement statutes 

and regulations. For example, we issued 

decisions concerning the Air Force’s 

contract for aerial refueling tankers7 and 

the Army’s $150 billion Logistics Civil 

Augmentation Program acquisition8 and a 

number of decisions concerning the Navy’s 

acquisition of shipyard services.9

■ We issued appropriations law and other 

legal decisions on, among other things, 

the purposes for which appropriated funds 

may be used, potential Antideficiency 

Act violations, statutory construction 

of provisions in appropriation acts, and 

accountability for the use of public funds. 

Three decisions and opinions stand out. 

One decision cleared the way for federal 

agencies to enter into contracts with 

vendors who provide services at no cost to 

the government and laid out the necessary 

provisions for and considerations 

in using such contracts.10 Another 

decision addressed the Antideficiency 

Act’s apportionment requirement and 

7

B-3111344 et. al., June 18, 2008. 

8

B-309752 et. al., Oct. 5, 2007; B-309752.8, Dec. 20, 2007.

9

B-309996, B-309996.4, Nov. 5, 2007; B-311245.2, B-311245.4, 

May 16, 2008; B-311245.5, Aug. 4, 2008.

10B-308968, Nov. 27, 2007. 

reminded federal agencies of the need to 

maintain sound administrative systems 

of funds control to ensure compliance 

with apportionment.11 The third 

opinion addressed the Federal Aviation 

Administration’s (FAA) plan to auction 

off airport takeoff and landing slots. We 

found that FAA lacked auction authority 

under its property disposition, user fee, 

and other authority, and that if FAA goes 

forward and uses auction proceeds, this 

will violate the Antideficiency Act.12

■ For fiscal year 2008, we received 

20 Antideficiency Act reports for our 

repository and made selected information 

from these reports publicly available on 

our Web site. Since Congress amended 

the Antideficiency Act in December 2004 

requiring agencies to send us a copy of 

reports of Antideficiency Act violations, 

we have maintained the official repository 

of Antideficiency Act reports. This year’s 

reports, which also report violations from 

earlier fiscal years, include a violation 

reported by the DOE that was first 

identified in a GAO opinion.13

■ We continued to report under the 

Congressional Review Act to the standing 

committees of jurisdiction of both Houses 

of Congress on major rules proposed by 

federal agencies. In addition, in April 

2008, we opined that an August 2007 

letter issued by CMS, the agency that 

administers the State Children’s Health 

Insurance Program, was a rule under the 

Congressional Review Act and could not 

take effect until it was submitted to the 

Congress and GAO in accordance with 

the act’s provisions.14 In May 2008, we 

testified about the legal opinion before 

11B-310108, Feb. 6, 2008.

12B-316796, Sept. 30, 2008.

13B-308715, Nov. 13, 2007.

14B-316048, April 17, 2008.
44 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

the House Committee on Energy and 

the Subcommittee on Health, House 

Committee on Commerce.

■ In fiscal year 2008 we issued our 

second report on presidential signing 

statements to the Senate Committee on 

Appropriations and the House Committee 

on the Judiciary.15 The report examined 

10 provisions of law identified by the 

committees to which the President took 

exception in signing statements. The 

President’s objections related to the Fifth 

Amendment and the Appointments Clause 

of the U.S. Constitution, the President’s 

theory of the unitary executive, and 

powers of the Commander in Chief. 

We found that except in two instances, 

agencies had either executed, or were 

planning to execute, the provisions as 

written; in two instances, the provisions 

were not triggered. In March 2008, 

the General Counsel testified on our 

signing statement reports at a hearing 

of the Subcommittee on Oversight and 

Investigations, House Committee on 

Armed Services.

■ In 2008, the Congress established a 

permanent Contract Appeals Board to 

resolve appeals on claims by contractors 

under contracts with legislative branch 

agencies, such as the Government Printing 

Office and the Architect of the Capitol. 

The board is staffed by GAO attorneys, 

has published and finalized its rules of 

procedures, and is fully operational. 

In 2008 we issued our annual update of 

volumes I and II 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 GAO’s Web 

site and is considered the primary resource 

for appropriations law guidance in the 

15B-309928, Dec. 20, 2007.

federal financial community. Volumes I and 

II of the Red Book each average more than 

30,000 inquiries per week on the GAO 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 III at the 

end of 2008. In addition, General Counsel 

taught a 2-1⁄2-day course on appropriations 

law 24 times this fiscal year to 12 agencies 

and a number of congressional staff. The 

course explains the 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 within the 

appropriations law community across all 

agencies and within the three branches of 

government, we hosted our fourth annual 

appropriations law forum in March 2008, 

with an analysis of significant decisions and 

opinions of 2007 and interactive sessions 

on no-cost contracts and interagency 

transactions.

■ We were also instrumental in drafting 

the provisions of the Government 

Accountability Office Act of 2008, which 

contains important provisions that will 

help GAO with a variety of human capital 

and administrative matters. We worked 

with congressional staff in refining 

various provisions of the act and detailed 

explanatory materials for the legislative 

history.

Assisting with the Upcoming 

Transition

While we, as a legislative branch agency, 

have extensive experience helping each 

new Congress, the Presidential Transition 
GAO-09-1SP 45

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Act points to us as a resource to incoming 

administrations as well. The act specifically 

identifies GAO as a source of briefings 

and other materials to help presidential 

appointees make the leap from campaigning 

to governing by informing them of the major 

management issues, risks, and challenges they 

will face. 

The goal of our transition planning, begun in 

fiscal year 2008, is to look across the work we 

have done and across the scope and breadth 

of the federal government’s responsibilities to 

offer insights into areas needing immediate 

attention. We therefore plan to highlight 

issues that the new President, his appointees, 

and the Congress will confront from day one. 

These include immediate challenges ranging 

from national and homeland security to 

oversight of financial institutions and markets 

to a range of public health and safety issues. 

Our analysis, incorporating our institutional 

memory across numerous administrations, 

will be ready by the time the election results 

are in and transition teams begin to move 

out.

By the close of the fiscal year, our 

transition planning efforts focused on 

providing congressional and executive 

branch policymakers with a comprehensive 

snapshot of how things are working across 

government and emphasizing the need to 

update some federal activities to better 

align them with 21st century realities and 

bring about government transformation. 

In keeping with our mission, we will be 

providing the Congress and the executive 

branch with clear facts and constructive 

options and suggestions that elected officials 

can use to make policy choices in this pivotal 

transition year. We believe the nation’s 

new and returning leaders will be able to 

use such information to help meet both the 

nation’s urgent issues as well as its long-term 

challenges so that our nation stays strong and 

secure now and for the next generations to 

follow. 

Objectives for GAO’s Transition 

Efforts

 Provide insight into pressing national issues. 

 Highlight the growing need for innovative, integrated 

approaches to solve national and global challenges. 

 Document targeted opportunities to conserve resources 

that can be applied to new initiatives. 

 Underscore critical capacity-building needs in individual 

agencies that will affect implementation of whatever new 

priorities are pursued. 

 Help inform the management improvement agendas of 

the Congress and the new administration. 

 Monitor the implementation of the Presidential Transition 

Act provisions and identify potential improvements for 

future transitions. 

Managing Our Resources

Resources Used to Achieve Our Fiscal 

Year 2008 Performance Goals

Our financial statements for fiscal year 

2008 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. 
46 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Our budget consists of an annual 

appropriation covering salaries and expenses 

and revenue from reimbursable audit work 

and rental income. Our total assets were 

$111.3 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. Our annual 

appropriation for fiscal year 2008 of 

$501 million was $15 million greater 

than fiscal year 2007. Total liabilities of 

$108.4 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 our liabilities is an 

increase of $5 million in intragovernmental 

accounts payable as a result of timing 

differences of billings from government 

entities. Also, our capital leases increased 

by $2.5 million due to new lease purchases, 

including updated laptop computers.

The net cost of operating GAO during 

fiscal year 2008 and fiscal year 2007 was 

approximately $530 million and $500 million, 

respectively. Expenses for salaries and related 

benefits accounted for 78 and 81 percent of 

our net cost of operations in fiscal years 2008 

and 2007, respectively. Figure 19 shows how 

our fiscal year 2008 costs break down by 

category.

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.

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

Fiscal year 2008 Fiscal year 2007

Total budgetary resourcesa $519.0 $498.9

Total outlaysa $500.4 $490.5

Net cost of operations

Goal 1: Well-being and financial security of 

the American people $201.2 $177.4

Goal 2: Changing security threats and 

challenges of globalization 161.1 157.5

Goal 3: Transforming the federal government’s 

role 150.6 146.6

Goal 4: Maximizing the value of GAO 22.6 23.9

Less reimbursable services not attributable to 

goals (5.9) (5.7)

Total net cost of operationsa $529.6 $499.7

Actual FTEs 3,081 3,152

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-09-1SP 47

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

We report net cost of operations according to 

our four strategic goals, consistent with our 

strategic plan. Overall, our net costs of operations 

increased by $30 million, due primarily to 

increases in salaries and benefits as well as IT 

services and maintenance contract activity.

Our strategic goal 1 (the well-being and 

financial security of the American people) 

showed an increase in net costs of $24 million 

in fiscal year 2008 compared to fiscal year 

2007. This increase in goal 1 net costs 

reflects additional goal 1 efforts by the 

following teams: Natural Resources & 

Environment; Physical Infrastructure; Health 

Care; and, Education, Workforce, & Income 

Security.

Figure 19: Use of Fiscal Year 2008 Funds 

by Category

Percentage of total net costs

Building and

hardware maintenance

services

Salaries

and benefits

12.5%

78.2%

Rent (space

and hardware) 2.3%

Depreciation

Other 4.9%

2.1%

Source: GAO.

Figures 20 and 21 show our net costs by 

goal for fiscal year 2005 through fiscal year 

2008. Figure 20 shows costs unadjusted for 

inflation, while figure 21 shows the same 

costs in 2008 dollars, that is, adjusted for 

inflation.

Figure 20: Net Cost by Goal, Unadjusted 

for Inflation

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

2008 201.2 161.1 150.6 22.6

Dollars in millions

Source: GAO.

0

50

100

150

200

Goal 1 Goal 2 Goal 3 Goal 4

Figure 21: Net Cost by Goal, Adjusted for 

Inflation

2005 214.8 156.7 160.1 23.9

2006 201.7 162.6 154.3 24.9

2007 181.5 161.1 150.0 24.4

2008 201.2 161.1 150.6 22.6

Dollars in millions

Source: GAO.

0

50

100

150

200

Goal 1 Goal 2 Goal 3 Goal 4
48 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

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 

Office of Management and Budget (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.

Planned Resources to Achieve Our 

Fiscal Year 2009 Performance Goals

As we go to press on this report, the 

Congress has not completed action on our 

fiscal year 2009 budget request. We, as 

well as most of the federal government, are 

operating under a continuing resolution 

appropriation at fiscal year 2008 levels 

through March 6, 2009, pending enactment of 

the remaining fiscal year 2009 appropriations 

bills for the federal government.

Our fiscal year 2009 budget request to the 

Congress for $546 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 7.5 percent over our fiscal 

year 2008 funding level. Table 9 reflects 

our requested funding level and full-time 

equivalent (FTE) figures to support the 

Strategic Plan. We will update our fiscal year 

2009 funding and FTE numbers when the 

final appropriation has been approved by the 

Congress.
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GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Our fiscal year 2009 budget request aligns 

the budget in support of three broad program 

areas: human capital, engagement support 

and infrastructure operations. These program 

areas align with 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 2009, we are 

requesting funds to support an increase 

to achieve a staffing level of 3,251 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 resulting 

from requests from congressional 

committees, mandates written into 

legislation, and work initiated under 

the Comptroller General’s authority 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 responsive 

information on U.S. activities in the area.

■ Infrastructure operations. Provides 

resources to support operational 

services, such as network and Web 

support, telecommunications, building 

management, space lease costs, library and 

research services, and payroll processing. 

We plan to allocate 18 percent of our 

total budget request for infrastructure 

operations and critical infrastructure 

initiatives.

Our fiscal year 2009 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.

Table 9: Requested Fiscal Year 2009 Budgetary Resources by Strategic Goal

Strategic goal FTEs

Amount

(dollars in 

millions)

Goal 1: Address challenges to the well-being and financial 

security of all Americans 1,148 $195 

Goal 2: Respond to changing security threats of globalization 1,073 162

Goal 3: Help transform the federal government’s role 898 139

Goal 4: Maximize the value of GAO 132 50

Total 3,251 $546

Source: GAO.
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Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

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 2008, the Comptroller 

General convened various experts from 

the public, private, and nonprofit sectors 

in forums and panels intended to enhance 

our understanding of emerging issues and 

to identify opportunities for action. The 

forums included discussions on strategies for 

improving federal financial management, the 

use of risk management in homeland security, 

and future prospects for our nation’s children.

In addition to the forums, our Conversations 

on 21st Century Challenges speaker series 

continued to provide us with information 

from distinguished leaders on issues affecting 

the United States and its place in the world. 

Topics covered by the 2008 speakers series 

included discussion on how demographic, 

social, and economic forces are bringing 

America to important crossroads.

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, and the 

National Intergovernmental Audit Forum 

(NIAF). Through the NIAF, chaired by the 

Comptroller General, and partnering with 

10 regional intergovernmental audit forums, 

we consult regularly with federal inspectors 

general and state and local auditors. In May 

2008, GAO, through the NIAF, collaborated 

with the Mid-Atlantic Forum to cohost the 

Biennial Forum of Government Auditors that 

promoted discussion of challenges facing the 

domestic audit and accountability community 

and served to enhance capacity within that 

community. Furthermore, 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 the Comptroller General and 

18 heads of national audit offices, serves the 

same purpose as the Domestic Working 

Group through its annual meeting. 

In addition, our leadership role in the 

International Organization of Supreme Audit 

Institutions (INTOSAI)—the professional 

organization of the national audit offices in 

186 countries—provides further opportunities 

for us to benefit from international 

perspectives, insights, and contacts. 

To prepare ourselves for the development 

of GAO’s upcoming 2010 through 2015 

Strategic Plan, our Strategic Planning and 

External Liaison office will work closely with 

our Information Systems and Technology 

Services team, audit teams, and staff offices 

to develop and incorporate new approaches 

into our strategic planning process. Building 

on our existing strategic planning approach, 

the target results of these changes will help 

us:

■ increase awareness and shared ownership 

of the Strategic Plan throughout GAO;

■ increase utilization of the Strategic Plan as 

a management tool within audit teams and 

with clients;

■ enhance resource utilization through 

shared commitment and implementation 

across GAO;
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GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

■ enhance coordination, communication, and 

collaboration across teams on targeted 

cross cutting issues;

■ enhance links between the Strategic Plan, 

performance measures, and performance 

management systems; and

■ improve alignment with the Government 

Performance and Results Act.

Collaborating with Others

By collaborating with others, 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. In addition, we publish 

INTOSAI’s quarterly International Journal 

of Government Auditing in five languages to 

foster global understanding of standards, best 

practices, and technical issues. In fiscal year 

2008, the journal’s expanded Web presence 

continues to make the publication more useful 

to INTOSAI members and more accessible to 

our global readership.

To build capacity in national audit offices 

around the world, we conduct an annual 

International Auditor Fellowship Program 

for mid- to senior-level staff from other 

countries. The program is in its 29th year, 

and is designed to strengthen the ability 

of national audit offices to fulfill their 

missions and to enhance accountability and 

governance worldwide. The fellows spend 

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. Through 

this program, GAO instructors, mentors, and 

sponsors become part of a global network 

that helps support GAO engagements. Also 

the goodwill engendered by the program 

supports public diplomacy. Since the 

program’s inception, over 400 mid- to seniorlevel officials from counterpart offices of more 

than 101 countries have graduated. Many of 

them have become auditors general, deputy 

auditors general, or government ministers.

Other collaborative activities undertaken by 

our staff this year are as follows:

■ We partnered with the World Bank and 

the INTOSAI Development Initiative to 

design, develop, and deliver the Supreme 

Audit Institution (SAI) Transformation 

Seminar in November 2007. The seminar 

brought together auditors general from 

over 29 developing countries to share 

knowledge, experience, and best practices 

on how they can lead transformation 

efforts to strategically position their 

institutions to meet evolving challenges. 

This successful partnership provided 

us with an opportunity to strengthen 

public sector financial management and 

accountability at the global level and 

provided a prototype seminar that will be 

replicated regionally by the initiative.

■ Under a memorandum of understanding 

(MOU) with the State Department’s 

(State) Bureau for International Narcotics 

and Law Enforcement Affairs, we assisted 

in building the Iraqi Board of Supreme 

Audit’s capacity by sponsoring a modified 

version of the course of study offered to 

auditors from around the world through 

the International Auditor Fellowship 

Program. In addition, the MOU with 

State resulted in an Arabic translation 

of the latest edition of the Yellow Book 

and related forms and templates used by 

GAO to assist the Board of Supreme Audit 

in its efforts to carry out financial and 

performance audits and fight corruption. 
52 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

Translated documents will also be used 

by the 19 member SAIs of the Arabic 

speaking Arab Office of Supreme Audit 

Institutions. This program resulted in 

increased understanding between the 

U.S. and Iraq’s SAI, and opened doors to 

positive relations between the two as they 

work to increase accountability for public 

funds spent in Iraq. Furthermore, this 

strategic partnership with State provides 

the foundation for future partnerships with 

the agency.

■ Working in collaboration with the 

Institute of Internal Auditors, we 

participated in an IIA-sponsored webcast 

on professional audit standards. In doing 

so, we were able to educate a much broader 

audience domestically and internationally 

on GAO’s revised Yellow Book standards 

than we otherwise could have using our 

existing resources. 

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 accountability 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 Quality and Continuous 

Improvement office prepared the report, 

ensuring, among other things, that the report 

responded to comments and suggestions 

received from the Association of Government 

Accountants 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 2008, 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 
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GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

and will require us to continually 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

The impact of domestic and international 

events, both ongoing and anticipated, 

continues to present us with a physical 

security challenge, including emergency 

preparedness issues, now and in the 

foreseeable future. To strengthen our ability 

to protect our people and our assets, we must 

constantly assess our physical security profile 

and continuity of operations programs visà-vis the domestic and international climate. 

Our Office of Emergency Preparedness and 

our Office of Security have built and will 

continue to build on our previous efforts, 

identifying and implementing improvements 

and pursuing new initiatives to protect our 

workers and assets and ensure continuity of 

operations. During fiscal year 2008, we 

■ strengthened our continuity of operations 

program by documenting policy and 

program requirements;

■ staffed a number of new continuity 

components, including a command and 

control team, an evacuation/Shelter in 

Place (SIP) Team, and an Information 

Systems and Technology Services (ISTS) 

contingency team to handle information 

technology failures;

■ conducted a security assessment (through 

an independent contractor) on a full 

range of security disciplines to examine 

the effectiveness of recent improvements 

and provide recommendations for future 

enhancements;

■ strengthened our emergency readiness in 

headquarters through training, exercises, 

and drills (e.g., evacuations, SIP drills, and 

tests of the Web Emergency Operation 

Center administration);

■ enhanced security in our field offices 

through training for staff on continuity 

and the GAO automated phone notification 

system;

■ enhanced communications with our 

workforce (e.g., updated/revised 

information on posters, reference guides, 

Web sites, and labels designating SIP 

areas; sponsored the national preparedness 

month fair; and implemented emergency 

e-mail and automated phone notification 

capabilities);

■ coordinated emergency preparedness 

activities with a number of federal and 

local entities;

■ completed a multiyear project with the 

General Services Administration’s Federal 

Systems Integration and Management 

Center involving Integrated Electronic 

Security System upgrades (e.g., installing 

upgraded cameras, card readers, and 

electronic turnstiles); and

■ launched a new building access card 

system as our first step toward Homeland 

Security Presidential Directive 12 

(HSPD-12) compliance.

To continue to improve our physical security 

profile, strengthen our efforts to become 

a model security agency, and address the 

continuing and future issues that will 

challenge us in upcoming years, in fiscal year 

2009 we will
54 GAO-09-1SP

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

■ assess the results of the independent 

security assessment, vet the 

recommendations, and implement changes 

as necessary;

■ assess the results of the field office 

security survey and plan for the logical 

integration of physical security systems 

from the field offices to headquarters’ 

integrated electronic security system; and 

■ continue our incremental implementation 

of HSPD-12 with the completion of 

contractor and employee personnel 

security investigations.

Information Security Challenge

Given the constantly evolving nature of 

threats to information and information 

system assets, information security will 

continue to be a management challenge for 

us and all government and private sector 

entities in the foreseeable future. While we 

are not required by law to comply with the 

Federal Information Security Management 

Act (FISMA), we have adopted FISMA 

requirements to help us meet the challenges 

posed in ensuring information system 

security. 

Our overall goal is to ensure that information 

protection requirements extend across the life 

cycle of documentation: from data collection, 

report production, and data transmission 

and storage to the eventual archiving and 

disposal of data. In support of this goal, 

Information Security in the Office of Security 

and Information Systems Security in ISTS 

manage the Information Security Program 

and the Information Systems Security 

Program, respectively. These programs 

work together to address the full range 

of requirements associated with securely 

accessing, handling, storing, and disposing 

of classified and sensitive national security 

information stored electronically and 

on paper. They also work hand-in-hand 

to educate staff on handling sensitive 

information and raise awareness of the need 

to maintain appropriate security to reduce the 

risk of compromise of such information. 

In fiscal year 2008, we strengthened our 

information security by

■ partnering several of our units to develop 

and deliver an integrated information 

security awareness education and training 

program to staff;

■ establishing a dedicated Information 

Security Branch responsible for general 

information security support, security 

education, security inspections, and the 

newly certified Sensitive Compartmented 

Information Facility, and a formal 

agencywide Security Manager Program 

intended to focus and improve security 

education and awareness at the team level;

■ enhancing our inventory controls over 

physical IT assets and improving our 

processes and procedures to manage 

receipt, storage, and issuance of equipment;

■ improving our assessment of systems 

operated on behalf of GAO by third 

parties by developing guidance and 

testing our procedures for conducting 

site visits and validating the protection of 

GAO information based upon established 

standards from OMB, the National 

Institute of Standards and Technology, 

and the Federal Information Security and 

Management Act;

■ reinforcing oversight, review, and 

remediation of potential weaknesses 

identified during audits and the 

certification of information systems;
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GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

■ implementing encryption in the images of 

our new workstations to protect data on 

our laptops and on mobile media, such as 

USB flash drives;

■ consolidating disparate workstation 

security applications with an integrated 

software suite to improve standards and 

provide for more effective enterprisewide 

systems security management;

■ increasing our capability to screen 

Internet traffic for potential threats and 

remove those threats before they infect our 

workstations; and

■ improving our network monitoring 

capability to detect unauthorized 

intrusions and our ability to effectively 

monitor information system assets by 

upgrading our enterprise event correlation 

application.

We will further strengthen our information 

security programs in fiscal year 2009 to 

ensure our capability to address continuing 

and future issues by

■ enhancing the security education and 

awareness programs by adding security 

awareness training for staff that includes 

recurring presentations by senior 

management and focused role-based 

instructions;

■ identifying additional data protection 

encryption and identity management 

options to provide better control of access 

to the GAO network and information;

■ providing increased vigilance in the 

centralized auditing of network servers 

and devices through additional auditing 

staff resources, automated tools, and 

notebook computer security controls;

■ implementing 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 identifying and 

implementing appropriate new 

technologies to improve our ability to 

respond to changing threats;

■ integrating our privacy program privacy 

assessments into the systems security 

assessment process; and

■ refining the information systems inventory 

based upon the requirements from multiple 

programs, such as security, privacy, and 

enterprise architecture to facilitate the 

varied perspectives of our information 

system protection requirements.

Human Capital Challenge

As a leader in human capital management 

in the federal government, GAO’s human 

capital programs are scrutinized by others 

seeking to learn from our experience and 

expertise. We strive to ensure that the 

design and implementation of our programs 

are consistent with four key elements we 

have identified as critical to human capital 

management—leadership; strategic human 

capital planning; acquiring, developing 

and retaining talent; and results-oriented 

organizational culture—and that we follow 

our own advice and guidance. It is a high bar 

for success and presents added challenges and 

opportunities in developing, implementing 

and managing human capital programs 

and initiatives, particularly those involving 

significant change management such as pay 

and performance. We expect that human 

capital will remain a management challenge 

for 2009 and into the foreseeable future. 
56 GAO-09-1SP

GAO Performance and Accountability Report 2008

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Part I: Management’s Discussion and Analysis

We depend on a talented and diverse, highperforming, knowledge-based workforce 

to accomplish our work and carry out 

our mission in support of the Congress. 

Attracting and retaining the best is a top 

priority and a key challenge as we look for 

opportunities to improve our strategies and 

leverage what works well during this period 

of steadily rising competition for talent 

among knowledge-based organizations. 

While we continue to be highly successful 

in attracting talent and our attrition rates 

remain steady, we are beginning to see 

the impact of changing demographics and 

workplace expectations. Younger staff 

appear to be less likely to make a longterm workplace commitment, while at the 

same time mid- and senior-level staff with 

great institutional knowledge are becoming 

retirement eligible in greater numbers. We 

recognize that one of our current and future 

challenges is to continue to reexamine our 

recruitment and retention strategies and 

flexibilities. 

 This past year we contracted with the Ivy 

Planning Group to examine the differences 

in average performance appraisals between 

African American and Caucasian analysts. 

The Ivy Planning Group delivered its 

report in April 2008; the report included 

over 25 recommendations and many helpful 

insights. The Acting Comptroller General 

expressed his commitment to addressing 

each of the recommendations, with immediate 

attention to creating a more inclusive work 

environment for all staff, reassessing how we 

evaluate performance, and refining recruiting 

and hiring practices. Specific actions that we 

have taken in 2008 and plan to take in 2009 

are described later in this section.

This past year was our first in a labor 

relations environment. Upon the 

establishment of the GAO Employee 

Organization, International Federation 

of Professional and Technical Engineers 

(IFPTE), we committed to bargain in good 

faith and establish and maintain a positive 

working relationship with the union. Our first 

challenge was to successfully negotiate the 

first pay agreement affecting 2008 salaries 

with the union’s Interim Council and to reach 

an interim collective bargaining agreement. 

Our demonstrated commitment to a mutually 

cooperative working relationship has 

positioned us well as we begin negotiations 

on the first formal collective bargaining 

agreement. 

Also this year, we have worked closely with 

our congressional oversight committee 

on compensation issues and other agency 

management issues. The GAO Act of 2008, 

which passed in September 2008, contains 

important provisions that will help GAO with 

a variety of human capital and administrative 

matters. We are currently working to 

implement the provisions, several of which 

specifically deal with pay issues from prior 

years. For example, the Act establishes a floor 

guarantee for all staff (except those in the 

developmental pay plans and Senior Executive 

Service/Senior Level (SES/SL)) that provides 

that staff will, at a minimum, receive the 

General Schedule (GS) pay increase for 

the locality in which their office is located; 

provides for certain of our employees to 

receive retroactive lump sum payments and 

pay adjustments if they did not receive at 

least 2.6 percent and 2.4 percent base pay 

increases in 2006 and 2007, respectively; and 

authorizes us to increase the highest basic pay 

rate paid to our employees—other than those 

in the SES/SL cadre—from GS-15, step 10, 

to Executive Level III for certain positions.

To further address these and other human 

capital issues, we continued to strengthen our 

human capital programs and processes this 

fiscal year, by:
GAO-09-1SP 57

GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

■ Conducting an analysis of the agency’s 

diversity profile and programs and issuing 

the 2008 Workforce Diversity Plan. The 

plan recognizes that our workforce is 

diverse, and we have made gains in many 

areas, such as in the number of women and 

African Americans at senior levels which 

exceeded the civilian labor force levels 

and among our predominant occupations, 

where diversity exceeded the relevant 

civilian labor force levels. The plan also 

identifies a number of priority action steps 

for 2008 and 2009 grouped around three 

goals: recruiting more Hispanics, African 

Americans, and staff with disabilities; 

enhancing staff development opportunities 

that prepare staff for upper level positions; 

and creating a more inclusive environment.

■ Initiating a full, systematic, and inclusive 

review of the performance appraisal 

system. In looking to identify what works, 

what does not, and what could be done 

better, the assessment addresses concerns 

raised by the Ivy Planning Group and 

will look for both long- and short-term 

improvements. As an interim measure 

for the fiscal year 2008 performance 

appraisal cycle, we implemented a number 

of improvements that the Ivy Planning 

Group had recommended, including 

developing standard guidelines for team/

unit performance appraisal reviews and 

requiring training for all our designated 

performance managers. 

■ Developing a framework for 

management improvement initiatives 

identified to address the Ivy Planning 

Group recommendations, as well as 

recommendations we received from our 

partners and managers for creating a 

more inclusive work environment. We 

established a coordinating committee of 

GAO executives to oversee the efforts to 

reassess how we evaluate performance, 

refine our recruiting and hiring practices, 

manage workload, streamline processes, 

enhance staffing practices, and develop the 

workforce. 

■ Establishing the GAO Diversity 

Committee, in conjunction with the GAO 

Employee Organization, IFPTE, and the 

Employee Advisory Committee, to provide 

a forum for raising and addressing the 

diversity issues and concerns of the staff.

■ Implementing a new integrated leadership 

program for managers that provides a 

systematic process for developing critical 

dimensions of leadership identified in an 

internal 2007 study. 

■ Developing feedback tools for all levels 

of management and linking feedback to 

specific developmental programs designed 

to improve performance in critical 

dimensions of leadership.

■ Initiating a study to identify the cost of 

new staff turnover and any systemic issues 

that could impact our ability to balance 

a growing workload with our staffing 

resources. 

Significant efforts planned for continuing 

to meet this challenge in fiscal year 2009 

include

■ implementing initiatives identified in our 

framework for management improvement 

in the areas of recognizing and valuing 

diversity, addressing workload demands 

and staffing practices, and strengthening 

our recruitment and retention programs;

■ enhancing leadership, supervisory, 

coaching, and development skills of staff;

■ implementing the provisions of the GAO 

Act of 2008;
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GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

■ implementing the action items identified 

in GAO’s Workforce Diversity Plan and 

updating the plan for 2009;

■ completing an agencywide review of 

our performance appraisal system and 

developing and implementing an action 

plan for additional short- and long-term 

improvements;

■ reviewing our compensation programs 

including performance-based 

compensation approaches and marketbased pay;

■ working cooperatively and productively 

with the GAO Employee Organization, 

IFPTE, to negotiate the first collective 

bargaining agreement; and

■ improving the efficiency and effectiveness 

of the Human Capital Office to support 

our 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 unusual events, 

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 

2008, we

■ continued to track current events (such as 

vulnerabilities in the nation’s food supply 

system, gas and oil price increases, and the 

quality of health facilities and services for 

soldiers returning from military conflicts 

abroad) 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;

■ 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 Global War on Terrorism) so 

that we could deal with major changes as 

they occurred;

■ maintained broad-based staff expertise 

(i.e., in our financial markets, accounting, 

economics, 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 to selfinitiate engagements on a limited number 

of selected topics, including the status of 

Iraq’s reconstruction efforts and high-risk 

list update work.

However, congressional demand for our 

analysis and advice is strong and will likely 

increase. The total number of requests in 

fiscal year 2007 was up 14 percent from the 

preceding year, and this increase remained 

about the same from fiscal year 2007 through 

fiscal year 2008. As an indicator of future 

congressional demand, potential mandates 

for our work being included in proposed 

legislation as of September 30, 2008, totaled 

over 800, a 40 percent increase from a similar 

period in the 109th Congress. For example:
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Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

■ Over 160 new mandates for our reviews 

were imbedded in law, including the 

Consolidated Appropriations Act of 2008 

and the Defense Appropriations Act of 

2008.

■ New recurring responsibilities were given 

to us under the Honest Leadership and 

Open Government Act of 2007 to report 

annually on lobbyists’ compliance with 

registration and reporting requirements. 

Also, the Emergency Economic 

Stabilization Act directs us to report 

to the Congress every 60 days findings 

from our oversight of the activities and 

performance of TARP and to conduct an 

annual financial audit of the program. The 

act also mandates a one-time report to 

the Congress on the role that leveraging 

and sudden deleveraging of financial 

institutions played in the nation’s financial 

crisis spurred by subprime home loans. 

■ Expanded bid protest provisions applied 

to us that (1) allow federal employees 

to file protests concerning competitive 

sourcing decisions (A-76), (2) establish 

exclusive bid protest jurisdiction at GAO 

over issuance of task and delivery orders 

valued at over $10 million, and (3) provide 

GAO bid protest jurisdiction over contracts 

awarded by the Transportation Security 

Administration. Further evidence of our 

help in providing important advice to the 

Congress is found in the increased numbers 

of GAO appearances at hearings on topics 

of national significance and keen interest.

Our staff are stretched in striving to 

meet Congress’s increasing needs. Given 

the difficult federal budget decisions that 

lie ahead, 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 us. 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. 

Another external factor that affects our 

ability to serve the Congress is the extent to 

which we can obtain access to information 

that plays an essential role in our ability 

to report on issues of importance to 

the Congress and the American people. 

Most departments and agencies are very 

cooperative with our requests for information. 

However, our experience with some agencies, 

such as the Department of Homeland 

Security (DHS), CMS, and the Department 

of Justice, has proven more challenging. For 

instance, unlike our interactions with many 

other agencies, most of our interactions 

with DHS are layered and time-consuming. 

DHS’s processes for working with us include 

extensive coordination among program 

officials, liaisons, and attorneys at the 

departmental and component levels and 

centralized control for all incoming GAO 

requests for information and outgoing 

documents.16 In response to a fiscal year 

16See, GAO, Department of Homeland Security: Observations on GAO 

Access to Information on Programs and Activities, GAO-07-700T 

(Washington, D.C.: Apr 25. 2007).
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GAO Performance and Accountability Report 2008

Management’s Discussion and Analysis

Part I: Management’s Discussion and Analysis

2008 appropriations restriction17 directing 

DHS to revise its departmental guidance to 

include expedited time frames, providing us 

timely and complete access to records and 

interviews, DHS revised its departmental 

guidance concerning relations with us in July 

2008. While GAO does not view the revised 

procedures as constituting a “significant 

streamlining” of the process, we will closely 

monitor how the revised procedures are 

implemented. We appreciate the interest 

of the Congress in helping to ensure that 

we obtain access to information and the 

efforts by agencies to cooperate with our 

requests. We will continue to work to identify 

opportunities for strengthening our access to 

information as necessary and appropriate. 

17The Department of Homeland Security Appropriations Act, 

2008 (Pub. L. No. 110-161, 121 Stat. 1884, 2042-43 (2007)) 

made $15,000,000 unavailable for obligation until the Secretary 

certifies and reports that DHS has revised departmental guidance 

concerning relations with GAO. The object of the statutory provision 

is to provide expedited time frames for providing GAO timely 

and complete access to records and interviews and a “significant 

streamlining” of the review process for document and interview 

requests. 
Serving the Congress and the Nation

Source: GAO.

Performance

Information

Part II
62 GAO-09-1SP

GAO Performance and Accountability Report 2008

Performance Information

Part II: Performance Information

Performance Information by Strategic Goal 

In the following sections, we discuss how 

each of our four strategic goals contributed 

to our fiscal year 2008 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 part I of this report. 
GAO-09-1SP 63

GAO Performance and Accountability Report 2008

Performance Information

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/sp.html. 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.

Selected Work under Goal 1 

In our May 2008 report, we found that state nursing home 

surveys often missed serious care problems that caused 

harm to vulnerable nursing home residents. In about 

15 percent of the state surveys that federal surveyors 

reviewed, they identified serious care problems that were 

missed by state surveyors. CMS agreed to implement our 

recommendations to identify and track all understatement 

identified by federal surveys. The report also was used by 

congressional requesters to support legislation to strengthen 

enforcement for poorly performing nursing homes. (See 

app. 1, item 1.08.C.)

To accomplish our work under these 

strategic objectives in fiscal year 2008, we 

conducted engagements, audits, analyses, 

and evaluations of programs at major 

federal agencies, such as the Departments 

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

Source: See Image Sources.

Part II: Performance Information
64 GAO-09-1SP

GAO Performance and Accountability Report 2008

Performance Information

Part II: Performance Information

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 exceeded the goal 1 performance targets we set in fiscal year 2008 for 

financial benefits and testimonies but did not meet our nonfinancial benefits target.

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

Performance 

measure

2004 

actual

2005 

actual

2006 

actual

2007 

actual

2008 

target

2008 

actual

Met/ 

not met

2009 

targeta

Financial benefits 

(dollars in billions) $26.6 $15.6 $22.0 $12.9 $13.8 $19.3 Met $13.4

Nonfinancial benefits 252 277 268 238 238 226 Not met 231

Testimonies 85 88 97 125 84 124 Met 77

Source: GAO.

a

Our fiscal year 2009 targets for financial and nonfinancial benefits differ from the targets we reported in our fiscal year 2009 

performance budget in January 2008. Specifically, we increased our target for financial benefits from $12.7 billion and lowered the 

number of nonfinancial benefits from 238 to 231. 

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 with a moderate decline in fiscal year 2008, while the number of hearings at which we 

testify has exhibited a more wavelike trend during the 5-year period since fiscal year 2004. 

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

Performance measure 2004 2005 2006 2007 2008

Financial benefits (dollars in billions) $20.8 $22.5 $22.0 $19.3 $17.5

Nonfinancial benefits 226 243 254 259 252

Testimonies 87 91 88 99 109

Source: GAO.

The following sections describe our performance under goal 1 for each of these three 

quantitative performance measures and describe the targets for fiscal year 2009. 
GAO-09-1SP 65

GAO Performance and Accountability Report 2008

Performance Information

Part II: Performance Information

Financial Benefits

Example of Goal 1’s

Financial Benefits 

We recommended that the U.S. Department of Agriculture 

(USDA) develop and analyze options for simplifying 

requirements for determining Food Stamp Program eligibility 

and benefits in order to help ease program administration 

and reduce payment errors. The Congress adopted our 

suggestion in the Farm Security and Rural Investment Act of 

2002 by providing the states with the option to use simplified 

reporting requirements for verifying the accuracy of food 

stamp recipients’ income information. In addition to financial 

benefits resulting from a substantial decline in USDA’s 

overpayments of food stamp benefits, USDA has found that 

its share of the states’ administrative costs for certifying 

benefits for food stamp households has dropped by about 

$200 million annually, or about $1 billion, from fiscal years 

2003 to 2006. (See app. 1, item 1.12.F.)

The financial benefits reported for this goal 

in fiscal year 2008 totaled $19.3 billion, which 

exceeded the target of $13.8 billion by about 

$5.5 billion. This was due in large part to the 

unanticipated financial benefits that accrued 

from our work pertaining to spectrum 

auctions. We describe this and other 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 2009 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 decrease from fiscal year 

2008. However, we have set the target for 

fiscal year 2009 at $13.4 billion, rather than 

at $12.7 billion as reported in our fiscal 

year 2009 performance plan as a result of 

multiyear financial benefits that may accrue 

from certain work in this area.

Nonfinancial Benefits

Nonfinancial benefits reported for goal 1 in 

fiscal year 2008 included 209 actions taken by 

federal agencies to improve their services and 

operations in response to our work and another 

17 in which information we provided to the 

Congress resulted in statutory or regulatory 

changes. This total of 226 nonfinancial benefits 

did not meet our target of 238. We report some 

of our major nonfinancial accomplishments in 

detail in the goal 1 section of appendix 1. 

Example of Goal 1’s 

Nonfinancial Benefits

We found that the Department of Education did not have 

an effective system for monitoring and preventing abusive 

student loan practices within the Federal Family Education 

Loan Program (FFELP). Specifically, we identified 

weaknesses in the Department of Education’s enforcement 

of prohibitions on gifts from student loan companies to 

schools in exchange for companies being placed on 

schools’ “preferred lender” lists. In 2008, the Congress 

amended the Higher Education Act which includes 

provisions that define a prohibited gift and require schools 

to annually report on their preferred lender arrangements 

and to post a statement on their Web sites noting that the 

school is required to process loan documents from any 

eligible lender in FFELP that the student selects. (See 

app. 1, 1.09.N.)

For fiscal year 2009, we have set a target of 

231 for nonfinancial benefits. This target is 

higher than what goal 1 achieved in fiscal 

year 2008, but it is consistent with our 

recognition that we are more likely to achieve 

more nonfinancial benefits under goals 2 and 

3 over the next few years. We decreased this 

target by 7 compared with the nonfinancial 

benefits target we reported in our fiscal year 

2009 performance plan.
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GAO Performance and Accountability Report 2008

Performance Information

Part II: Performance Information

Testimonies

Our witnesses testified at 124 congressional 

hearings related to this strategic goal, which 

exceeded the fiscal year 2008 target by 

40 testimonies, about 48 percent. Among 

the testimonies given were those related 

to weaknesses in the Food and Drug 

Administration’s inspections of foreign 

manufacturers of medical devices sold in 

the United States, pension plan fees and 

the limited information about them, and 

challenges the Environmental Protection 

Agency faces in regulating chemicals. 

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

goal.) We set our fiscal year 2009 target at 

77 hearings at which we testify on goal 1 

issues because we anticipate a gradual decline 

in requests for testimony during the year 

on several topics, such as the Capitol Visitor 

Center and the nation’s transition to digital 

television. 

Example of Goal 1’s Testimonies

Our testimony on youth residential facilities highlighted 

state and federal oversight gaps in residential facilities for 

more than 200,000 youth seeking help with behavioral or 

emotional challenges. Based on ongoing work, we focused 

on systems for monitoring these facilities and the reporting 

of incidents of maltreatment, as well as facility licensing 

requirements and standards. State agencies reported 

an inability to conduct yearly on-site visits to facilities 

because of fluctuating levels of staff resources dedicated 

by states, and infrequently sharing negative findings from 

their oversight results. Federal agencies, including the 

Departments of Health and Human Services, Justice, and 

Education, hold states accountable for youth well-being, but 

we found that federal efforts are hindered by the scope of 

the agencies’ oversight authority and practices. (GAO-08-

696T)
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GAO Performance and Accountability Report 2008

Performance Information

Part II: Performance Information

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 congressional and 

agency 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/sp.html. 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.

Selected Work under Goal 2 

Our June 2008 report found that overall violence, as 

measured by enemy-initiated attacks, had fallen, but that 

key legislation had not been enacted and Iraqi spending for 

reconstruction was still low. We recommended that DOD 

and the Department of State (State) develop an updated 

strategy for Iraq that would build on recent gains and 

address unmet goals. The Congress used our work as part 

of its oversight on whether U.S. surge forces were achieving 

their intended outcome—that is, a reduction in violence 

throughout Iraq that would provide the time and space 

needed for reconciliation among Iraq’s Shi’a, Sunni, and 

Kurdish peoples. (See app. 1, item 2.24.C.) 

To accomplish our work in fiscal year 

2008 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.

As shown in table 12, we significantly 

exceeded our fiscal year 2008 performance 

targets for financial benefits, nonfinancial 

benefits, and testimonies for this goal. 

Goal 2 Overview 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.
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Performance Information

Part II: Performance Information

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

Performance 

measure

2004 

actual

2005 

actual

2006 

actual

2007 

actual

2008 

target

2008 

actual

Met/ 

not met

2009 

targeta

Financial benefits 

(dollars in billions)

$9.7 $12.9 $12.0 $10.3 $11.3 $15.4 Met $12.7 

Nonfinancial benefits 369 365 449 468 322 468 Met 344

Testimonies 70 42 68 73 69 96 Met 64

Source: GAO.

a

Our fiscal year 2009 targets for these three measures differ from the targets we reported in our fiscal year 2009 performance budget 

in January 2008. Specifically, we increased our target for financial benefits from $11.3 billion, nonfinancial benefits from 322, and the 

number of hearings at which we testify from 62. 

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 2004 2005 2006 2007 2008

Financial benefits (dollars in billions) $8.9 $9.5 $10.4 $11.2 $12.7 

Nonfinancial benefits 262 306 364 413 438

Testimonies 48 50 57 63 70

Source: GAO.

The following sections describe our performance under goal 2 for each of our quantitative 

performance measures and describe the targets for fiscal year 2009. 
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GAO Performance and Accountability Report 2008

Performance Information

Part II: Performance Information

Financial Benefits

Example of Goal 2’s

Financial Benefits 

Analyzing both the fiscal year 2008 base budget as well 

as the Global War on Terrorism budget, we provided the 

Congress with information identifying activities where 

funding reductions were appropriate. For example, our 

analysis revealed that the Army’s request for tactical 

radios exceeded approved objectives. Our work supported 

reductions of about $1.4 billion in the base budget and 

nearly $4 billion in the Global War on Terrorism budget. 

(See app. 1, item 2.12.F.)

The financial benefits reported for this goal 

in fiscal year 2008 totaled $15.4 billion, 

exceeding the target by $4.1 billion. Among 

other things, these accomplishments stemmed 

from engagements related to agency actions 

to reduce overpricing in federal contracts 

for goods and services and our assessment 

of the reasonableness of the Department of 

Defense’s (DOD) fiscal year 2008 budget 

request. 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 2009 target at $12.7 billion based 

on our assessment of the progress agencies 

are making in implementing our past 

recommendations that might yield financial 

benefits and our 4-year rolling average.

Nonfinancial Benefits

The nonfinancial benefits reported for goal 

2 in fiscal year 2008 included 419 actions 

taken by federal agencies to improve their 

services and operations in response to our 

recommendations and another 49 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 322. Our 

success in this area arose from our increased 

emphasis on follow-up 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.

Example of Goal 2’s 

Nonfinancial Benefits

During fiscal year 2008, we reported that DOD has yet to 

establish (1) a strategic planning process that results in a 

comprehensive, integrated, enterprisewide plan or set of 

plans to guide transformation and (2) a senior official who 

can provide full-time attention and sustained leadership 

to transformation. The Congress recognized the need 

for executive-level attention to business transformation 

matters and, in the National Defense Authorization Act 

for Fiscal Year 2008, assigned Chief Management Officer 

(CMO) responsibilities to the Deputy Secretary of Defense, 

established a full-time Deputy CMO position, and assigned 

CMO responsibilities within the military departments. Also, 

DOD has taken steps to improve its planning process and to 

implement the CMO legislation. (See app. 1, item 2.17.N.)

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 2009 

target at 344. While we increased this target 

by 22 over the target we reported for goal 

2 in our fiscal year 2009 performance plan, 

we also recognize that this target is lower 

than our fiscal year 2008 actual performance 

and 4-year average for this measure. We 

believe that this target will best enable 

staff to stretch to capture the full range of 

nonfinancial benefits resulting from our 

goal 2 work without encouraging staff to 

document benefits of a more narrow scope or 

significance.
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Performance Information

Part II: Performance Information

Testimonies

Our witnesses testified at 96 congressional 

hearings related to this strategic goal in fiscal 

year 2008, exceeding our target of presenting 

testimony at 69 hearings. Among other 

things, we testified on the lack of sufficient 

oversight over billions of U.S. coalition 

support fund dollars provided to Pakistan 

and DOD’s oversight and management of 

contractors supporting military forces in 

the future. (See p. 35 for a list of testimony 

topics by goal.) We have set our target at 64 

for presenting testimony at hearings in fiscal 

year 2009, less than the fiscal year 2008 

actual performance, because we anticipate 

fewer hearings during the first session of 

the next Congress. However, we anticipate 

2 hearings more than the target we reported 

in our fiscal year 2009 performance plan 

because of continued congressional interest 

in our work on homeland security issues 

and U.S. efforts to stabilize and rebuild 

Afghanistan, Iraq, and Pakistan.

Example of Goal 2’s Testimonies

Extended operations in Iraq and elsewhere have had 

significant consequences for military readiness, such 

as increased length of deployments and frequency of 

mobilizations, which may affect recruiting and retention 

as well as the availability of equipment to nondeployed 

troops to met other needs. A common theme in our work 

has been the need for DOD to take a strategic approach to 

decision making that promotes transparency and ensures 

that programs and investments are based on sound plans 

with measurable goals, validated requirements, prioritized 

needs, and performance measures to gauge progress 

against goals. As a result, we recommended that DOD 

develop near-term plans for improving readiness by among 

other things creating an investment strategy linking needs 

to funding requests. Congress has taken specific actions to 

give greater attention to readiness, including requiring DOD 

to develop a plan for rebuilding readiness. (GAO-08-497T)
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Performance Information

Part II: Performance Information

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/sp.html. 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 

In our March 2008 testimony, we placed the 2010 Census 

on GAO’s list of high-risk federal programs because of the 

following problems—long-standing weaknesses in the U.S 

Census Bureau (Bureau) information technology acquisition 

and contract management function, risks associated with 

the performance of the handheld computers to collect 

data, and uncertainty over the cost of the census. Our 

work has helped the Bureau identify risks and improve 

the performance of key census-taking activities. We have 

recommended numerous actions, and the Bureau is 

addressing some of these issues. Among other examples, 

on April 3, 2008, the Bureau announced a major redesign of 

the 2010 Census. (See app. 1, item 3.06.C.)

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 to self-initiate engagements. As in 

the past, we will develop reports, testimonies, 

and briefings on our work. 

Help transform the federal 

government’s role and how it does 

business to meet 21st century 

challenges

Goal 3 Overview

Source: See Image Sources.
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Performance Information

Part II: Performance Information

As shown in table 14, we significantly exceeded our fiscal year 2008 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

2004 

actual

2005 

actual

2006 

actual

2007 

actual

2008 

target

2008 

actual

Met/ 

not met

2009 

targeta

Financial benefits 

(dollars in billions)

$7.6 $11.0 $17.0 $22.8 $14.9 $23.4 Met $15.9

Nonfinancial benefits 576 767 625 648 590 704 Met 625

Testimonies 60 47 73 74 67 77 Met 56

Source: GAO.

a

Our fiscal year 2009 targets for these three measures differ from the targets we reported in our fiscal year 2009 performance budget in 

January 2008. Specifically, we slightly decreased our targets for financial benefits and hearings at which we testify from $16 billion and 

61, respectively. We also increased our target for nonfinancial benefits from 590. 

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 trend 

in the number of hearings during which our senior executives testified on goal 3 issues is also in 

an upward direction and indicates a significant increase in testimonies between fiscal year 2006 

and 2008. 

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

Performance measure 2004 2005 2006 2007 2008

Financial benefits (dollars in billions) $6.1 $7.1 $10.1 $14.6 $18.6

Nonfinancial benefits 498 590 630 654 686

Testimonies 56 57 59 64 68

Source: GAO.

The following sections describe our performance under goal 3 for each of our quantitative 

performance measures and describe the targets for fiscal year 2009.
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Performance Information

Part II: Performance Information

Financial Benefits

Example of Goal 3’s

Financial Benefits 

Since fiscal year 2000, our recommendations have been 

aimed at raising the level of attention given to improper 

payments—any federal payment that should not have been 

made or that was made in an incorrect amount (including 

overpayments and underpayments) under statutory, 

contractual, administrative, or other legally applicable 

requirements. For fiscal year 2007, 21 agencies reported 

improper payments totaling about $55 billion associated with 

78 programs, including 19 programs or activities reporting 

for the first time. (See app. 1, item 3.12.F.)

The financial benefits reported for this goal 

in fiscal 2008 totaled $23.4 billion, exceeding 

our target of $14.9 billion by over 55 percent. 

These efforts resulted in increased tax 

collections based on our review of the Internal 

Revenue Service’s withholding compliance 

program, reduced appropriations for the 

construction of a nuclear fuel fabrication 

facility, and a reduction in improper federal 

payments governmentwide. We describe 

these and other accomplishments in the 

goal 3 section of appendix 1.

We significantly exceeded the financial benefit 

target we set for this goal in fiscal year 2008 

because we documented several unanticipated, 

large-dollar accomplishments. The federal 

government realized these financial benefits 

as a result of our work that examined, among 

other issues, DOD’s working capital fund and 

excess property programs and the Capitol 

Police’s asset management project. 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 $15.9 billion for fiscal 2009, which is 

only slightly lower than the target we reported 

in our fiscal year 2009 performance plan.

Nonfinancial Benefits

Example of Goal 3’s 

Nonfinancial Benefits

Beginning in 2005, we have performed investigative 

work and made recommendations on excess parts and 

equipment at DOD. For example, we identified instances in 

which DOD improperly sold F-14 parts to the general public 

through its excess property system. Iran is the only nation 

in the world with operable F-14 fighter aircraft and is known 

to be seeking F-14 parts. The Congress cited our work in 

introducing legislation prohibiting DOD from selling parts 

that could be used on the F-14 fighter aircraft. The language 

was included in the 2008 Defense Authorization Act. These 

actions have served to improve accountability over sensitive 

military parts and equipment. (See app. 1, item 3.15.N.)

Nonfinancial benefits reported for goal 3 in 

fiscal year 2008 included 693 instances in which 

agencies’ core business processes were improved 

or governmentwide management reforms were 

advanced because of our work. In addition, 

there were 11 instances in which information 

we provided to the Congress resulted in 

statutory or regulatory changes. This total of 

704 nonfinancial benefits exceeded our target of 

590. 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.

Our forward-looking assessments of the 

executive branch’s current efforts to implement 

our recommendations made under this goal led 

us to set our fiscal year 2009 target at 625. While 

we recognize that this target is lower than our 

fiscal year 2008 actual performance and 4-year 

average for this measure, we believe that this 

target will best enable staff to stretch to capture 

the full range of nonfinancial benefits resulting 

from our goal 3 work without encouraging staff 

to document benefits of a more narrow scope or 

significance. 
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Performance Information

Part II: Performance Information

Testimonies

Our witnesses testified at 77 congressional 

hearings related to this strategic goal in 

fiscal year 2008, exceeding the target 

of 67 by about 15 percent. Among the 

testimonies presented were those related to 

mismanagement of property at the Indian 

Health Service, electronic voting systems, 

and information security at the Department 

of Veterans Affairs. (See p. 35 for a list of 

testimony topics by goal.) For fiscal year 

2009, we have set a target of presenting 

testimony at 56 hearings because we expect 

the level of hearings to be lower than it was 

in fiscal year 2008.

Example of Goal 3’s Testimonies

We testified on our work examining vulnerabilities in the 

Transportation Security Administration’s (TSA) passenger 

screening process. We conducted covert testing to uncover 

security gaps in the airline passenger screening process 

and succeeded in passing through TSA security screening 

checkpoints undetected with components for several 

improvised explosive devices and an improvised incendiary 

device concealed in carry-on luggage and on our persons. 

We briefed TSA to help it take corrective action to improve 

its passenger screening program, including aspects of 

human capital, processes, and technology. (GAO-08-48T)
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Performance Information

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/sp.html. The work supporting these 

objectives is performed under the direction 

of the Chief Administrative Officer with 

assistance on specific key efforts 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 

We assisted in building the Iraqi Board of Supreme Audit’s 

capacity through a memorandum of understanding (MOU) 

with the State Department. Under the MOU we sponsored 

a modified version of our International Auditor Fellowship 

program, to enhance the relations between the United 

States and Iraq as we work to increase accountability for 

public funds spent in Iraq. (See app. 1, item 4.03.C.)

We fully implemented our new accounting system, Delphi, 

enhancing our ability to produce auditable financial 

statements, supporting A-123 compliance, and improving 

our financial management processes, reporting, and internal 

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

We initiated an enterprise project to conceptualize, procure, 

and deploy a single, integrated, enterprise-wide automated 

system to capture, manage, store, preserve, protect, and 

deliver information consistent with our quality assurance 

framework throughout the life cycle of an engagement. (See 

app. 1, item 4.09.C.)

We requested an independent review of our quality 

assurance system processes and began implementation of 

suggested improvements made by an international team of 

reviewers. (See app. 1, item 4.10.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.

Part II: Performance Information
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Performance Information

Part II: Performance Information

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, 

management of our people, and internal 

operations. 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, procedures for 

independently verifying and validating these 

data, and the limitations of these data are 

described in table 16.
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Performance Information

Part II: Performance Information

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

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.

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. 
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Performance Information

Part II: Performance Information

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 nonGAO 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 2008, QCI approved accomplishment 

reports covering 96 percent of the dollar value of financial benefits we reported.

Every year, our Inspector General (IG) reviews accomplishment reports that claim benefits of 

$500 million or more. For fiscal year 2008, the IG reviewed accomplishment reports covering 

75 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.

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 past work that 

we completed.

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-andeffect 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.
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Performance Information

Part II: Performance Information

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 our 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 cause-andeffect 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.

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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Performance Information

Part II: Performance Information

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 2008 implementation rate is the percentage of recommendations made in fiscal 

year 2004 products that were implemented by the end of fiscal year 2008). 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 2004 that were 

implemented in the ensuing years is as follows: 13 percent by the end of the first year (fiscal 

year 2005), 25 percent by the end of the second year (fiscal year 2006), 42 percent by the 

end of the third year (fiscal year 2007), and 83 percent by the end of the fourth year (fiscal 

year 2008).

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.

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, based 

on the IG’s last review of this measure, 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. We continue to use this approved process in fiscal year 2008.

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.
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Performance Information

Part II: Performance Information

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.

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 2008, 

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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Part II: Performance Information

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 met our criteria for this measure represented about 65 percent of the congressionally 

requested written products we issued during fiscal year 2008. 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 

25 percent. We received comments from one or more people for about 56 percent of the 

products for which we sent surveys in fiscal year 2008. In our timeliness calculations for 

fiscal years 2004 through 2007, we inadvertently included nonresponses to the timeliness 

question in our client feedback survey. We therefore recalculated the survey results for these 

fiscal years and for fiscal year 2008.

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 our strategic 

goals, projected workload changes, and other changes such as retirements, other attrition, 

promotions, and skill gaps. The workforce plan for the upcoming year specifies the number 

of planned hires. The Chief Operating Officer, the Chief Administrative Officer, the Deputy 

Chief Administrative Officer, the Chief Human Capital Officer, and the Controller meet 

monthly to monitor progress toward achieving the workforce plan. Adjustments to the 

workforce plan are made throughout the year, if necessary, to reflect changing needs and 

conditions.
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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 the Department of Agriculture’s (USDA) 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, CAO staff 

provide monthly reports to the Chief Operating Officer and the Chief Administrative Officer 

to monitor progress by GAO units in achieving workforce plan hiring targets. The Chief 

Administrative Office continually monitors and reviews accessions maintained in the NFC 

database against its database to ensure consistency and to resolve discrepancies. In addition, 

on a periodic basis, the IG examines our process for calculating the new hire rate. During fiscal 

year 2008, the IG independently reviewed this process and recommended actions to improve 

the documentation of the process used to calculate this measure. We have begun developing 

standard operating procedures to document how we calculate and ensure quality control over 

data relevant to this measure.

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.

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 unpaid 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 those 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 2008, the IG independently reviewed this 

process and recommended actions to improve the documentation of the process used to calculate 

this measure. We have begun developing standard operating procedures to document how we 

calculate and ensure quality control over data relevant to this measure.

Data 

limitations

In addition to the data limitations shown under New hire rate, this measure does not include 

potential offers to paid interns who informally expressed their preference not to work for 

GAO and others prospective employees who informally declined job offers. Thus, this may 

overstate the acceptance rate for our offers of employment.

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 complement of attrition. 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 onboard strength. We calculate 

this measure with and without retirements.
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Data sources Data on retention—that is, people who are on board at the beginning of the fiscal year and 

people on board at the end of the fiscal 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 continually 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 2008, the IG reviewed this process and recommended 

actions to improve the documentation of the process used to calculate this measure. We 

have begun developing standard operating procedures to document how we calculate and 

ensure quality control over data relevant to this measure.

Data 

limitations

See New hire rate, Data limitations.

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. To further ensure confidentiality, in fiscal year 

2008 the contractor also analyzed the data. 

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.”

Beginning in FY 2006 we changed the way that the staff development people measure was 

calculated. Specifically, we dropped one question regarding computer-based training because we 

felt such training was a significant part of (and therefore included in) the other questions the survey 

asked regarding training. We also modified a question on internal training and changed the scale of 

possible responses to that question. We show the FY 2004 and 2005 data on a separate line so as 

to indicate that those data are not comparable to the data beginning in FY 2006.
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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 2008, our response rate to this survey was about 76 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. The IG examined this process 

during fiscal year 2008, but the results of this review are not final at this time.

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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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.)

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.
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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 18 services that 

help them get their jobs done and another 11 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 18 services that help employees 

get their jobs done. These services include Internet and intranet services, information technology 

(IT) customer support, mail services, and voice communication services. The second measure 

reflects satisfaction with another 11 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).

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 43 percent in 2007. 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, for example, from 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.
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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. 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.)

The following evaluations helped us to 

continuously improve the quality of our work 

supporting strategic goals 1, 2, and 3 in fiscal 

year 2008.

■ Annual inspection. We completed our 

annual inspection of our quality control 

system for our performance audit practice 

during the year ended December 31, 2007. 

The inspection included reviews of audit 

documentation from a random sample of 

performance audit engagements completed 

in 2007; tests of selected functional areas, 

such as independence documentation 

and recruiting and hiring procedures; 

and interviews with key staff on each 

select engagement. The inspection team 

concluded that our quality control system 

was suitably designed and operating 

effectively during 2007 to provide us with 

reasonable assurance that we (1) conformed 

with Government Auditing Standards in 

conducting our performance audits and 

(2) provided the Congress and other users 

of our products with independent, objective, 

and reliable information. The inspection 

team did not identify instances where our 

work was not reliable or contained material 

errors. However, it did identify a number 

of areas where compliance with established 

quality controls could be enhanced, such as 

improved documentation of contacts with 

congressional requesters of our work.

■ Peer review of performance audit 

practices. An international team with 

representation from the supreme audit 

institutions of Canada, Australia, the 

Netherlands, and the United Kingdom 

reviewed the quality assurance system 

that we established for managing our 

performance audit practice. Our quality 

assurance system encompasses our 

organizational structure and the policies 

and procedures established to provide us 

with reasonable assurance that we comply 

with government auditing standards. The 

peer review team conducted the review in 

accordance with the peer review standards 

in Government Auditing Standards 2003

and early adopted portions of the 2007 
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revision. They examined our documented 

policies and procedures relative to 

applicable professional standards; reviewed 

documentation for a representative sample of 

2007 audits selected from the first 8 months 

of the year ended December 31, 2007, and 

interviewed professional and administrative 

staff. The team also examined the 

performance of our own inspection process. 

The peer review team found that our quality 

assurance system was suitably designed 

and operating effectively during the year 

ended December 31, 2007, to provide 

us with reasonable assurance that our 

performance auditing practices conform to 

the government auditing standards used as 

criteria. The team completed its review over 

a 7-month period. 

■ Peer review of financial audit practices.

An independent accounting firm reviewed 

our system of quality control for the 

accounting and auditing practices we 

use to perform our financial audit work 

and attestation engagements that was in 

effect for the year ended December 31, 

2007. The firm conducted its review in 

accordance with standards established by 

the Peer Review Board of the American 

Institute of Certified Public Accountants 

and government auditing standards. The 

firm reviewed relevant documentation, 

policies, and procedures pertaining to 

our financial audits and interviewed 

our staff who perform and manage our 

financial audits. The firm also selected a 

sample of financial audit engagement and 

administrative files to test for conformity 

with professional standards and compliance 

with our own systems of quality control. 

The engagements selected represented a 

reasonable cross section of our accounting 

and auditing practice with emphasis on 

high-risk engagements. The accounting 

firm found that our system of quality 

control for the financial accounting and 

auditing practice ended December 31, 2007, 

was designed to meet the requirements of 

the applicable quality control standards used 

as criteria for its review. The independent 

audit firm completed its review in 4 months. 

We also completed two key evaluations related 

to goal 4’s strategic objectives. These studies 

resulted in internal products or briefings in 

fiscal year 2008 that are not available publicly.

■ Financial management practices and 

processes. We have a comprehensive 

management control program to meet 

the objectives of the Federal Managers’ 

Financial Integrity Act, even though, as 

part of the legislative branch of the federal 

government, we are not legally required to 

do so. The program includes an integration 

of management controls into our financial 

processes18 and financial management 

systems; review of management controls 

and financial management systems 

controls on a regularly recurring basis; and 

development of corrective action plans for 

any control issues found and monitoring of 

those plans until the issues are resolved or 

corrected. Our Senior Assessment Team 

(SAT), consisting of senior managers and 

chaired by the Chief Financial Officer, 

ensures our commitment to an appropriate 

system of internal control; actively 

oversees the process of assessing internal 

controls, and provides input for the level 

and priority of resource needs to correct 

any control issue identified. In addition to 

the SAT, our Internal Control Working 

Group (ICWG) planned, conducted, and 

managed the assessment in accordance 

with OMB Circular A-123 guidelines. 

The ICWG was composed of individuals 

designated as business unit managers, 

18In fiscal year 2008, GAO operations were segmented into 10 

business cycles: Entity-Wide Controls, IT Controls, Facilities and 

Property Management, Travel, Procurement, Disbursements, Budget, 

Fund Balance with Treasury, Financial Reporting, and Payroll.
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the project management team, technical 

consultants, and field office representatives. 

Also, our quality assurance framework 

provides 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. We monitor 

management controls through internal 

control reviews that included identification 

of key controls over financial reporting; 

performance of interviews, walkthroughs, 

and observations to determine whether 

those controls were in operation; 

documentation of key controls; testing and 

evaluation of the operating effectiveness of 

the key controls; and reporting the results 

to our ICWG and SAT. The review of 

our financial management systems was 

performed consistent with OMB Circular 

A-127, and included analyzing the SAS 70 

audit reports of our shared service providers. 

Our review of financial management 

systems to determine that they were in 

substantial compliance with the Federal 

Financial Management Improvement Act 

included consideration of all information 

available, including the results of financial 

management systems reviews and the 

auditor’s opinions on GAO’s financial 

statements and on internal controls over 

financial reporting and the auditor’s report 

on compliance with laws and regulations. 

■ African American performance 

assessment. We requested that a 

contractor conduct an independent study 

of the differences in average performance 

appraisals between our African American 

and Caucasian analysts. The framework 

for the study consisted of three tasks: 

determining whether differences exist and, 

if so, to what extent; determining when, 

how, and why these differences appear; and 

providing conclusions and recommendations 

for addressing the study findings. To 

perform these tasks, the contractor validated 

and expanded our own prior analysis to 

confirm that there is a difference between 

appraisal results for African American 

and Caucasian analysts, and conducted 

regression analysis to test the effect of 

specific variables (i.e., race, education, years 

of experience, location, team, competency, 

pay band, and participation in the GAO 

intern program) on performance ratings. 

The contractor evaluated key characteristics, 

such as education and years of experience 

outside of GAO, to assess comparability of 

African American and Caucasian analysts 

when hired; controlled statistically for 

differences in education, gender, years 

of experience, risk level of projects, and 

rater demographics; and interviewed 21 

process owners and subject matter experts 

to understand how key human capital 

processes that influence performance 

ratings (i.e., workforce planning, 

recruiting, Professional Development 

Program, training and development, 

engagement assignment, feedback, and 

performance review) are supposed to work. 

The contractor also reviewed related 

GAO documentation pertaining to the 

work analysts perform and how their 

performance is assessed. In addition, the 

contractor conducted 17 focus groups and 

analyzed eight pairs of closely matched 

analysts to learn how the processes really 

work based on individual experiences 

at the agency. Based on the results and 

research on performance management 

best practices, the contractor synthesized 

the findings and developed conclusions 

and recommendations. We have already 

made solid progress on many of the over 

25 recommendations. (For additional 

information about GAO’s human capital 

activities in fiscal year 2008, see appendix 2

in this report.)
Serving the Congress and the Nation

Source: GAO.

Financial

Information

Part III
92 GAO-09-1SP

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Part III: Financial Information

From the Chief Financial Officer 

Source: GAO.

November 14, 2008 

I am pleased to report that during fiscal year 2008 the U.S. Government 

Accountability Office continued to honor its commitment to lead by 

example in government financial management. For the 22nd consecutive 

year, independent auditors gave us an unqualified opinion on our financial 

statements 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 (PAR) 45 days after the end of the fiscal year. Our fiscal year 2007 

PAR 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 PAR.

We are especially pleased with these results given that this was our 

first year operating under a new financial management system, Delphi. 

We implemented Delphi on time and on budget and our financial 

services continued seamlessly throughout this first year of operations. 

A key element in our success was the close working relationship forged 

between our executive leadership and the leadership of the Department of 

Transportation (DOT) and DOT’s Enterprise Service Center (ESC), our 

financial system and accounting service provider, throughout the year to 

refine operations of the new system for GAO. 

This fiscal year, we expanded our internal controls review program. The 

financial system implementation presented unique challenges, requiring 

all business cycles to be retested as financial system processes evolved. As 

a further check, we monitored the progress of the independent auditor’s 

assessment (commonly known as a SAS 70 audit) of the internal controls of 

services provided by ESC, focusing on those systems and services directly 

affecting GAO, to ensure that we would not have any surprises. All of these 

efforts contributed to GAO’s independent auditors providing a positive 

opinion on the effectiveness of our internal controls again this year.

From the Chief Financial Officer

Source: GAO

Chief Financial Officer, Sallyanne Harper
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From the Chief Financial Officer

We also completed a number of efforts resulting in increased efficiencies, 

including reducing energy costs and water consumption through installation 

of a new cooling tower and a water heater, providing greatly expanded 

leadership training for our Band III employees at no greater cost than our 

former program, saving training costs through the use of our three learning 

hubs in the field for leadership training, achieving an estimated $163,000 

annual savings through elimination of a duplicative remote access dial-up 

service, and reducing paper usage by 76 percent and achieving cost savings of 

over $350,000 through full implementation of an agencywide e-dissemination 

process for GAO products. 

Moving forward, our goal is to continue our progress toward more efficient 

and effective financial operations and overall agency operations. We also face 

challenges in our next implementation phases of the Delphi system, including 

completing the interface with Prism, the acquisition system; updating to a 

new E-Gov travel system; and working with DOT’s Financial Management 

Business Council on enhancements to the Delphi system as part of a 

governmentwide initiative to further standardize financial processes for all 

federal agencies.

Always, we strive to support the Congress in meeting its constitutional 

responsibilities, to help improve government performance and ensure its 

accountability 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
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Financial Information 

Our financial statements and accompanying 

notes begin on page 101.

19 Our financial 

statements for the fiscal years ended 

September 30, 2008 and 2007, 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 agencies’ 

assessments of internal control over financial 

19Note 14 to the financial statements describes our Davis-Bacon 

Act trust function. For more detailed Davis-Bacon Act financial 

information, contact our General Counsel.

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, 2008, 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 comply 

with its requirements. We believe that we 

have implemented and maintained financial 

Overview of Financial Management and 

Controls
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Financial Information

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, 2008. 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, 2008.

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 2008, the IG examined compliance 

with our policy and procedures for conflictof-interest determinations and conducted 

reviews of our information security program, 

travel by Senior Executive Service members, 

transit benefit program, reemployed 

annuitants program, certain procedures for 

removal of accountable property, access to 

employee e-mail and computers, and diversity 

among GAO’s top leaders and managers. In 

addition, the IG 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 

2008, we completed actions related to 48 IG 

recommendations, none of which affected the 

financial statements. IG’s September 10, 2008, 

report on diversity among GAO’s top leaders 

and managers has 4 open recommendations, 

which we are working to implement.

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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Financial Information 

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 2008 Performance and Accountability Report.

Sheldon S. Cohen

Chairman

Audit Advisory Committee

Audit Advisory Committee’s Report
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Financial Information

Independent Auditor’s Report

1

 

11710 Beltsville Drive, Suite 300 

Calverton, Maryland 20705-3106

tel: 301-931-2050 

fax: 301-931-1710 

www.cliftoncpa.com Offices in 17 states and Washington, DC

Independent Auditor’s Report 

Acting Comptroller General of the United States 

In our audits of the Government Accountability Office (GAO) for fiscal years 2008 and 2007, we 

found:

• The financial statements are presented fairly, in all material respects, in conformity with 

accounting principles generally accepted in the United States of America. 

• GAO had effective internal control over financial reporting (including safeguarding assets) 

and compliance with laws and regulations. 

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

requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA). 

• No reportable noncompliance with laws and regulations we tested. 

The following sections discuss in more detail (1) these conclusions, (2) our conclusions on 

Management’s Discussion and Analysis (MD&A) and other supplementary information, and (3) 

our objectives, scope and methodology. 

Opinion on Financial Statements 

In our opinion, the financial statements including the accompanying notes present fairly, in all 

material respects, in conformity with accounting principles generally accepted in the United 

States of America, GAO’s assets, liabilities and net position as of September 30, 2008 and 

2007, and net costs; changes in net position; and budgetary resources for the years then ended. 

Opinion on Internal Control 

In our opinion, GAO maintained, in all material respects, effective internal control over financial 

reporting (including safeguarding assets) and compliance as of September 30, 2008 that 

provided reasonable assurance that misstatements, losses, or noncompliance material in 

relation to the financial statements would be prevented or detected on a timely basis. Our 

opinion is based on criteria established under 31 U.S.C. 3512 (c), (d), the Federal Managers’ 

Financial Integrity Act (FMFIA), and the Office of Management and Budget (OMB) Circular A123, Management’s Responsibility for Internal Control.

We noted other nonreportable matters involving internal control and its operation that we will 

communicate in a separate management letter. 
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Financial Information 

2

Opinion on FFMIA Compliance 

In our opinion, GAO’s financial management systems, as of September 30, 2008, substantially 

complied with the following requirements of FFMIA: (1) federal financial management systems 

requirements, (2) federal accounting standards, and (3) the United States Government Standard 

General Ledger (SGL) at the transaction level. Our opinion is based on criteria established 

under FFMIA, OMB Circular No. A-127, Financial Management Systems (which includes the 

Joint Financial Management Improvement Program/Office of Federal Financial Management 

series of system requirements documents), accounting principles generally accepted in the 

United States of America, and the SGL. 

Compliance with Laws and Regulations 

Our tests for compliance with selected provisions of laws and regulations disclosed no instances 

of noncompliance that would be reportable under Government Auditing Standards or OMB audit 

guidance. However, the objective of our audit was not to provide an opinion on overall 

compliance with laws and regulations. Accordingly, we do not express such an opinion. 

This conclusion is intended solely for the use of the management of GAO, OMB, and Congress 

and is not intended to be, and should not be, used by anyone other that these specified parties. 

Consistency of Other Information 

The MD&A included as Part I is not a required part of the financial statements but is 

supplementary information required by accounting principles generally accepted in the United 

States of America. We have applied certain limited procedures, which consisted principally of 

inquiries of management regarding the methods of measurement and presentation of the 

required supplementary information. However, we did not audit the information and express no 

opinion on it. 

The introductory information, performance information and appendixes listed in the table of 

contents are presented for additional analysis and are not a required part of the financial 

statements. Such information has not been subjected to the auditing procedures applied in the 

audit of the financial statements and, accordingly, we express no opinion on them. 

Objectives, Scope, and Methodology 

Management is responsible for (1) preparing the financial statements in conformity with 

accounting principles generally accepted in the United States of America, (2) establishing, 

maintaining, and assessing internal control to provide reasonable assurance that the broad 

control objectives of FMFIA are met, (3) ensuring that GAO’s financial management systems 

substantially comply with FFMIA requirements, and (4) complying with applicable laws and 

regulations. 

We are responsible for planning and performing our audits to obtain reasonable assurance 

about whether the financial statements are free of material misstatement. An audit includes 

examining, on a test basis, evidence supporting the amounts and disclosures in the financial 

statements. An audit also includes assessing the accounting principles used and significant 

estimates made by management, as well as evaluating the overall financial statement 

presentation. 
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Financial Information

3

We are responsible for planning and performing our examination to obtain reasonable 

assurance about whether management maintained effective internal control over financial 

reporting (including safeguarding of assets) and compliance with applicable laws and 

regulations based on criteria established under 31 U.S.C. 3512 (c), (d), the Federal Managers’ 

Financial Integrity Act, and OMB Circular A-123, Management’s Responsibility for Internal 

Control. Our examination included obtaining an understanding of internal control related to 

financial reporting (including safeguarding assets) and compliance with laws and regulations 

(including execution of transactions in accordance with budget authority); testing relevant 

internal controls over financial reporting (including safeguarding assets) and compliance, 

evaluating the design and operating effectiveness of internal control; and performing such other 

procedures as we considered necessary in the circumstances. We did not test all internal 

controls relevant to operating objectives as broadly defined by the Federal Managers’ Financial 

Integrity Act. 

Because of inherent limitations in any internal control, misstatements due to error or fraud may 

occur and not be detected. Also, projections of any evaluation of the internal control to future 

periods are subject to the risk that the internal control may become inadequate because of 

changes in conditions, or that the degree of compliance with the policies or procedures may 

deteriorate. 

We are responsible for planning and performing our examination to obtain reasonable 

assurance about whether GAO’s financial management systems substantially complied with the 

three FFMIA requirements. We examined, on a test basis, evidence about GAO’s substantial 

compliance with those requirements, and performed such other procedures as we considered 

necessary in the circumstances. 

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

that have a direct and material effect on the financial statements. We did not test compliance 

with all laws and regulations applicable to GAO. We limited our tests of compliance to those 

laws and regulations required by OMB audit guidance that we deemed applicable to the 

financial statements for the fiscal year ended September 30, 2008. We caution that 

noncompliance may occur and not be detected by these tests and that such testing may not be 

sufficient for other purposes. 

We conducted our audits and examinations in accordance with auditing standards generally 

accepted in the United States of America; Government Auditing Standards, issued by the 

Comptroller General of the United States; attestation standards established by the American 

Institute of Certified Public Accountants; and OMB audit guidance. We believe that our audits 

and examinations provide a reasonable basis for our opinions. 

Calverton, Maryland 

November 10, 2008 
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Financial Information 

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.

■ 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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Financial Information

Financial Statements

U.S. Government Accountability Office

Balance Sheets

As of September 30, 2008 and 2007

(Dollars in thousands)

2008 2007

Assets

Intragovernmental

 Funds with the U.S. Treasury (Note 3) $70,472 $63,624 

 Accounts receivable 602 977 

Total Intragovernmental 71,074 64,601 

Property and equipment, net (Note 4) 39,964 41,566 

Other 284 374 

Total Assets $111,322 $106,541 

Liabilities

Intragovernmental 

 Accounts payable $11,252 $6,232 

	 	 Employee benefits (Note 6) 2,965 2,968 

 Workers' compensation (Note 7) 2,514 2,364 

Total Intragovernmental 16,731 11,564 

Accounts payable and other 15,711 11,280 

	 Salaries and benefits (Note 6) 21,304 16,827 

Accrued annual leave (Note 5) 30,953 29,572 

Workers' compensation (Note 7) 16,687 16,368 

Capital leases (Note 9) 7,018 4,542 

Note Payable (Note 5) – 3,779 

Total Liabilities 108,404 93,932 

Net Position

Unexpended appropriations 24,064 30,562 

Cumulative results of operations (21,146) (17,953)

Total Net Position (Note 13) 2,918 12,609 

Total Liabilities and Net Position $111,322 $106,541 

The accompanying notes are an integral part of these statements.
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Financial Information 

Financial Statements

U.S. Government Accountability Office

Statements of Net Cost

For Fiscal Years Ended September 30, 2008 and 2007

(Dollars in thousands)

2008 2007 

Net Costs by Goal (Note 2)

Goal 1: Well-Being/Financial Security of American People $201,159 $177,376 

 Less: reimbursable services – – 

 Net goal costs 201,159 177,376 

Goal 2: Changing Security Threats/Challenges of Global 

 Interdependence 161,144 157,568 

 Less: reimbursable services – – 

 Net goal costs 161,144 157,568 

Goal 3: Transforming the Federal Government’s Role 153,719 148,959 

 Less: reimbursable services (3,145) (2,391)

 Net goal costs 150,574 146,568 

Goal 4: Maximize the Value of GAO 22,706 23,924 

 Less: reimbursable services (91) – 

 Net goal costs 22,615 23,924 

Less: reimbursable services not attributable to goals (5,890) (5,730)

Net Cost of Operations (Note 10) $529,602 $499,706 

The accompanying notes are an integral part of these statements.
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Financial Information

Financial Statements

U.S. Government Accountability Office

Statements of Changes in Net Position

For Fiscal Years Ended September 30, 2008 and 2007

(Dollars in thousands)

2008 2007

Cumulative Results of Operations, Beginning of fiscal year ($17,953) ($17,891)

Budgetary Financing Sources - Appropriations used 503,368 474,925 

Other Financing Sources

Intragovernmental transfer of property and equipment (3) (27)

	 Federal employee retirement benefit costs paid by OPM and

 imputed to GAO (Note 6) 23,044 24,746 

Total Financing Sources 526,409 499,644 

Net Cost of Operations (529,602) (499,706)

Net Change (3,193) (62)

Cumulative Results of Operations, End of fiscal year (21,146) (17,953)

Unexpended Appropriations, Beginning of fiscal year 30,562 25,951 

Budgetary Financing Sources and Uses

Current year appropriations 501,000 485,894 

Appropriations transferred in 250 – 

Permanently not available (4,380) (6,358)

Appropriations used (503,368) (474,925)

Total Unexpended Appropriations, End of fiscal year 24,064 30,562 

Net Position $2,918 $12,609 

The accompanying notes are an integral part of these statements.
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Financial Information 

Financial Statements

U.S. Government Accountability Office

Statements of Budgetary Resources

For Fiscal Years Ended September 30, 2008 and 2007

(Dollars in thousands)

2008 2007 

Budgetary Resources (Note 11)

Unobligated balance, brought forward October 1 $10,010 $8,492 

Recoveries of prior year unpaid obligations 2,014 – 

Budget authority

 Appropriations 501,000 485,894 

 Spending authority from offsetting collections

 Earned and collected 10,462 10,698 

 Change in receivable from Federal sources (385) – 

	 	 Change in unfilled customer orders - advance received (91) 136

	 	 Change in unfilled customer orders - without advance 125 – 

 Subtotal 511,111 496,728 

Nonexpenditure transfers, net and actual 250 – 

Permanently not available (4,380) (6,358)

Total Budgetary Resources $519,005 $498,862 

Status of Budgetary Resources

Obligations incurred

 Direct $500,362 $480,731 

 Reimbursable 11,887 8,121 

 Subtotal 512,249 488,852 

Unobligated balance - Apportioned 2,588 3,170 

Unobligated balance not available 4,168 6,840 

Total Status of Budgetary Resources $519,005 $498,862 

Change in Obligated Balances

Obligated balance, net: 

Unpaid Obligated balance, brought forward October 1 $54,606 $55,238 

Uncollected customer payments from Federal sources, 

 brought forward October 1 (990) – 

 Total, Unpaid Obligation, net, brought forward October 1 53,616 55,238 

Obligations incurred 512,249 488,852 

Less: Gross Outlays (500,393) (490,474)

Recoveries of prior-year unpaid obligations, actual (2,014) – 

Change in uncollected customer payments from Federal sources 260 – 

Obligated balance, net, end of period:

Unpaid Obligations 64,448 54,606 

Uncollected customer payments from Federal sources (730) (990)

 Total, Unpaid obligations, net, end of period $63,718 $53,616 

Net Outlays

Gross outlays $500,393 $490,474 

Less: Offsetting collections (10,372) (10,645)

Net Outlays $490,021 $479,829 

The accompanying notes are an integral part of these statements.
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Financial Information

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 and the budgetary 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 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.

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.
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Financial Information 

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. 

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 
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Financial Information

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).

The Federal Employees’ Compensation Act (FECA) provides income and medical cost protection 

to covered federal civilian employees injured on the job, employees who have incurred a workrelated occupational disease, and beneficiaries of employees whose death is attributable to a jobrelated injury or occupational disease. 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 

Statements 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. 
108 GAO-09-1SP

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Financial Information 

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 non-federal entity. Intragovernmental costs and exchange revenue for 

the periods ended September 30, 2008 and September 30, 2007, are as follows: 

Dollars in thousands

2008 2007

Goal 1:

Intragovernmental costs $52,132 $39,484 

Public costs 149,027 137,892

 Net goal 1 costs 201,159 177,376

Goal 2:

Intragovernmental costs 41,409 35,075

Public costs 119,735 122,493

 Net goal 2 costs 161,144 157,568

Goal 3:

Intragovernmental costs 39,680 33,158

Public costs 114,039 115,801

 Total goal 3 costs 153,719 148,959

Goal 3 intragovernmental earned revenue (3,145) (2,391)

 Net goal 3 costs 150,574 146,568

Goal 4:

Intragovernmental costs 12,160 5,326

Public costs 10,546 18,598

 Total goal 4 costs 22,706 23,924

Goal 4 intragovernmental earned revenue (91) –

 Net goal 4 costs 22,615 23,924

Earned revenue not attributable to goals

Intragovernmental (5,757) (5,640)

Public (133) (90)

 Total earned revenue not attributable to goals ($5,890) ($5,730)

Goals 1 and 2 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.
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Note 3. Funds with the U.S. Treasury

GAO’s funds with the U.S. Treasury consist of only appropriated funds. The status of these 

funds as of September 30, 2008 and September 30, 2007 is as follows:

Dollars in thousands

2008 2007

Unobligated balance

Available $2,586 $3,168 

Unavailable 4,168 6,840

Obligated balances not yet disbursed 63,718 53,616

Total funds with U.S. Treasury $70,472 $63,624 

Note 4. Property and Equipment, Net

The composition of property and equipment as of September 30, 2008, is as follows:

Dollars in thousands

Classes of property and equipment Acquisition value Accumulated depreciation Book value

Building $15,664 $12,531 $3,133 

Land 1,191 – 1,191

Building improvements 108,652 93,367 15,285

Computer and other equipment and 

software 38,579 27,689 10,890

Leasehold improvements 6,242 5,803 439

Assets under capital lease 27,237 18,211 9,026

Total property and equipment $197,565 $157,601 $39,964 
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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 

Note 5. Liabilities Not Covered by Budgetary Resources

The liabilities on GAO’s Balance Sheets as of September 30, 2008 and September 30, 

2007 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, 2008 and September 30, 2007, is as follows:

Dollars in thousands

2008 2007

Intragovernmental liabilities—Workers’ compensation $2,514 $2,364 

Salaries and benefits—Comptrollers’ General retirement plan* 1,975 3,113

Accrued annual leave 30,953 29,572

Workers’ compensation** 16,687 16,368

Capital leases 7,018 4,542

Note payable*** – 3,779

Total liabilities not covered by budgetary resources $59,147 $59,738 

* See Note 6 for further discussion of the Comptrollers’ General retirement plan.

** See Note 7 for further discussion of workers’ compensation.

***The majority of the note payable represents financing for telecommunications equipment purchased in fiscal year 2007 with an 

interest rate of 8.75%. In fiscal year 2008 the balance of the note was paid off.
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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 Benefits 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.

Amounts owed to OPM and Treasury as of September 30, 2008 and September 30, 2007 

are $2,965,000 and $2,968,000, 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 periods ended 

September 30, 2008 and September 30, 2007, are as follows:

Dollars in thousands

Federal Employee Benefits Costs 2008 2007

Federal employee retirement benefit costs paid by OPM and imputed to GAO:

Estimated future pension costs (CSRS/FERS) $8,584 $9,115 

Estimated future postretirement health and life insurance (FEHBP/FEGLIP) 14,460 15,631

 Total $23,044 $24,746 

Pension expenses (CSRS/FERS) $31,070 $29,895 

Health and life insurance expenses (FEHBP/FEGLIP) $16,098 $16,100 

FICA payment made by GAO $17,578 $16,581 

Thrift Savings Plan – matching contribution by GAO $10,391 $9,596 

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. Due to the departure of Comptroller General Walker during 

fiscal year 2008 he is no longer eligible to participate in the retirement plan. Because GAO is 

responsible for future payments under this plan, the estimated present value of accumulated plan 
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Financial Information 

benefits of $1,975,000 as of September 30, 2008, and $3,113,000 as of September 30, 2007, is 

included as a component of salary and benefit liabilities on GAO’s Balance Sheet. This decrease 

is due to the departure of Comptroller General Walker.

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, 2008 

and 2007, which is expected to be paid in future periods. This estimated liability of $16,687,000 

and $16,368,000 as of September 30, 2008 and 2007, respectively, is reported on GAO’s Balance 

Sheet. GAO also recorded a liability for amounts paid to claimants by Labor as of September 

30, 2008 and September 30, 2007, of $2,514,000 and $2,364,000, 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 

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 2008 and 2007 was $5,194,000 and $5,123,000, 

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*

2009 $5,111 

2010 5,179

Total $10,290 

* If option years are exercised.
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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, 2008 and September 30, 2007, the capital lease liability was $7,018,000 

and $4,542,000, respectively. This increase is due in part to new computer laptop leases 

executed during fiscal year 2008.

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-to-ownership 

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:

Dollars in thousands

Fiscal year ending September 30 Total

2009 $3,101

2010 2,535 

2011 2,170

2012 26

2013 2

Total estimated future lease payments 7,834

Less: imputed interest (816)

Net capital lease liability $7,018

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 2008 and 

fiscal year 2007 amounted to approximately $12,040,000 and $13,629,000, 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: 
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Financial Information 

Dollars in thousands

Fiscal year ending September 30 Total

2009 $7,486

2010 6,593

2011 6,598

2012 6,543

2013 5,232

2014 and thereafter 18,412

Total estimated future lease payments $50,864

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 Sheets. However, 

annual lease costs under the operating leases are included as components of net cost by goal in 

the Statements of Net Cost.

Note 10. Net Cost of Operations

Expenses for salaries and related benefits for fiscal year 2008 and fiscal year 2007 amounted 

to $414,406,000 and $402,772,000, respectively, which were about 78 percent of GAO’s annual 

net cost of operations in fiscal year 2008 and 81 percent in fiscal year 2007. Included in the 

net cost of operations are federal employee benefit costs paid by OPM and imputed to GAO of 

$23,044,000 in fiscal year 2008 and $24,746,000 in fiscal year 2007. 

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 2008 and 

fiscal year 2007 amounted to $9,126,000 and $8,121,000, 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 
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Financial Information

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 Statements of 

Net Cost.

There were no transfers of budgetary authority for fiscal year 2007. For fiscal year 2008, budget 

transfer consisted of budget authority transferred for the assessment of programs and activities 

funded under the heading “Millennium Challenge Corporation” to include a review of financial 

controls and procurement practices. 

Comparison of GAO’s fiscal year 2007 Statement of Budgetary Resources with the 

corresponding information presented in the 2009 President’s Budget is as follows:

Dollars in thousands

Budgetary Resources Obligations Incurred

Fiscal year 2007 Statement of Budgetary Resources $498,862 $488,852

Unobligated balances, beginning of year – 

 (prior year funds activity) (6,492) –

Permanently not available –(prior year funds activity) 1,358 –

Other – rounding in President’s Budget 272 1,148

2009 President’s Budget – fiscal year 2007, actual $494,000 $490,000

As the fiscal year 2010 President’s Budget will not be published until February 2009, a 

comparison between the fiscal year 2008 data reflected on the Statement of Budgetary 

Resources and fiscal year 2008 data in the President’s Budget cannot be performed, though we 

expect similar differences will exist. The fiscal year 2010 President’s Budget will be available on 

the OMB’s Web site and directly from the Government Printing Office.

Budgetary resources obligated for undelivered orders at the end of fiscal year 2008 and the end 

of fiscal year 2007 totaled $15,237,000 and $20,550,000, respectively. GAO’s apportionments fall 

under Category A, quarterly apportionment. Apportionment categories of obligations incurred 

for fiscal years 2008 and 2007 are as follows: 

Dollars in thousands

Fiscal year ending September 30 2008 2007

Direct – Category A $500,362 $480,731

Reimbursable – Category A 11,887 8,121

Total obligations incurred $512,249 $488,852
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Financial Information 

Note 12. Reconciliation of Net Costs of Operations to Budget

Details of the relationship between budgetary resources obligated and the net costs of operations 

for the fiscal years ending September 30 are as follows:

Dollars in thousands

Fiscal year ending September 30 2008 2007

Resources used to finance activities

Budgetary resources obligated

Obligations incurred $512,249 $488,852 

Less: spending authority from offsetting collections and recoveries (12,126) (10,698)

Obligations net of offsetting collections and recoveries 500,123 478,154

Other resources

Intragovernmental transfer of property and equipment (3) (27)

	 Federal employee retirement benefit costs paid by OPM imputed to GAO 23,044 24,746

	 Net other resources used to finance activities 23,041 24,719

	 Total resources used to finance activities	 523,164 502,873

Resources used to finance items not part of the net cost of operations 

Change in unliquidated obligations 5,338 (3,091)

Reduction in lease liability and other (1,303) –

Assets capitalized (9,514) (14,631)

Net decrease in receivables not generating resources until collected and 

 other adjustments

17 –

Total resources used to fund items not part of the net cost of operations (5,462) (17,722)

	 Total resources used to finance Net Cost of Operations 517,702 485,151

Components of net costs that will not require or generate resources in 

the current period

(Decrease)/Increase in workers’ compensation and actuarial pension liability (670) 485

Increase/(Decrease) in accrued annual leave 1,381 (340)

Increase in other liabilities – 101

Total components of net costs that will not require or generate resources 

 in the current period 711 246

Costs that do not require resources

Depreciation and other 11,189 14,309

Net cost of operations $529,602 $499,706 
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Financial Information

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 year ended September 30, 2008 and 2007, are as follows:

Dollars in thousands

2008 2007

Investment in property and equipment, net $39,964 $41,566

Rent related reimbursable funds expended in current year (2,116) –

Other – supplies inventory 153 219

Liabilities not covered by budgetary resources (59,147) (59,738)

Cumulative results of operations ($21,146) ($17,953)

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, 2008 and 2007 totaled approximately $4,807,000 and $4,151,000, respectively. 

These assets are not the assets of GAO nor the federal government and are held for distribution 

to appropriate claimants. During fiscal years 2008 and 2007, receipts in the trust amounted to 

$1,573,000 and $373,000 and disbursements amounted to $916,000 and $708,000, respectively. 

Because the trust assets and related liabilities are not assets and liabilities of GAO, they are not 

included in the accompanying financial statements. 
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Serving the Congress and the Nation

Source: GAO.

From the Inspector General

Part IV
120 GAO-09-1SP

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Part IV: From the Inspector General

Part IV: From the Inspector General

From the Inspector General

Memorandum

Date: October 30, 2008

To: Acting Comptroller General – Gene L. Dodaro

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 2008, we reviewed all accomplishment reports of $500 million or

more, which totaled approximately 75 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 2007 people performance

measures—new hire rate, acceptance rate, and retention rate. We made

recommendations to help enhance these measures and also made a recommendation

for consideration of alternative measures for assessing agency human capital

management. We are also reviewing the four other people performance measures—

staff development, staff utilization, leadership, and organizational climate.
Serving the Congress and the Nation

Source: GAO.

Appendixes

Part V
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Part V: Appendixes

Appendixes 

1. Accomplishments and Contributions

In pursuing our strategic goals during 

fiscal year 2008, we recorded hundreds of 

accomplishments and made numerous other 

contributions. This appendix provides details 

on the most significant of these. In reporting 

accomplishments (i.e., financial benefits and 

nonfinancial benefits) and contributions 

(designated by an F, N, or C in each entry 

numbered 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. Contributions, which refer to 

work completed in fiscal year 2008, 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 number of products 

associated with the work discussed. In the 

online PDF version of this document, readers 

can find direct links to these products if they 

want additional information.
GAO-09-1SP 123

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Appendixes

The health needs of an aging 

and diverse population

1.01.F. Enhancing Fiscal and 

Management Oversight of Medicaid: 

We testified on our past work that identified 

shortcomings in the federal government’s 

fiscal and management oversight of the 

joint federal and state Medicaid program 

and the lack of transparency in the Center 

for Medicare and Medicaid Services’ (CMS) 

oversight efforts. Specifically, we reported:

■ Problems with states’ inappropriately 

obtaining billions of dollars in federal 

funds through use of Medicaid 

supplemental payment arrangements. 

Under such arrangements, some states 

made large supplemental payments to 

providers in order to generate excessive 

federal matching payments. 

■ The Department of Health and Human 

Services (HHS) had approved states’ 

Medicaid demonstrations without assuring 

that they would be budget neutral to 

the federal government. HHS allowed 

spending limits that could increase federal 

costs by billions of dollars, and approved 

demonstrations with implications for 

beneficiaries without providing for a public 

input process at the federal level. 

Impact: Our work encouraged CMS to 

end some inappropriate state supplemental 

payments, which will save an estimated 

$973 million in fiscal years 2008 and 2009. 

Our work was cited in congressional debates 

about the administration’s planned reforms 

for the Medicaid program. In fiscal year 

2008, the Congress also used our work to 

seek improvements in HHS’s process for 

reviewing and approving states’ Medicaid 

demonstration proposals. (GAO-08-614, 

GAO-08-650T, GAO-08-87, GAO-08-255T, 

GAO-04-228)

1.02.N. Contributing to Passage of the 

Medicare Improvements for Patients 

and Providers Act: The Medicare 

Advantage (MA) program provides health 

care coverage to Medicare beneficiaries 

through private health plans. In 2008, 

Medicare is projected to pay about 13 percent 

more for beneficiaries in MA plans than it 

would if they were in the original Medicare 

fee-for-service (FFS) program. Our work 

examining MA plan data for 2007 showed 

that the increased spending would not benefit 

all MA beneficiaries, with some beneficiaries 

likely experiencing higher cost sharing in 

MA plans than they would in Medicare FFS, 

and that MA plans had higher-than-projected 

profits of about $1.14 billion. 

Impact: Our work contributed to the passage 

of the Medicare Improvements for Patients 

and Providers Act of 2008, which, among 

other things, reduced payments to MA plans. 

(GAO-08-522T, GAO-08-827R, GAO-08-

359) 

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

Source: See Image Sources.
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Appendixes 

1.03.N. Improving the Payment Method 

for Medicare End-Stage Renal Disease 

Care: CMS in HHS divides Medicare 

payment for end-stage renal disease (ESRD) 

items and services into two groups. The 

first group—dialysis and associated routine 

services—is paid under single composite 

rate for a defined set of services. The second 

group is primarily injectable drugs and 

certain laboratory tests that were either 

not routine or not available in 1983 when 

Medicare implemented the composite rate 

and are paid for separately on a per-service 

basis. In 2007, we reported that dialysis 

facilities have been relying on Medicare’s 

generous payments for separately billable 

drugs to subsidize the composite rate and that 

the payments for one drug in particular had 

created an incentive for facilities to potentially 

use more of the drug than necessary. CMS 

had been exploring the creation of a bundled 

payment system for all ESRD services, 

including separately billable drugs, but its 

timeline for testing a bundled payment rate 

for ESRD services was uncertain. Therefore, 

we recommended that the Congress consider 

establishing a bundled payment system for all 

ESRD services as soon as possible. 

Impact: Our work helped to encourage 

the Congress to include a provision in the 

Medicare Improvements for Patients and 

Providers Act of 2008 that requires the 

Secretary of Health and Human Services to 

implement a fully bundled payment method 

for all ESRD items and services beginning 

January 1, 2011. (GAO-07-77)

1.04.N. Improving Nursing Home 

Fire Safety by Requiring Automatic 

Sprinkler Systems: In a 2004 report, we 

reported on two nursing home fires in 2003 

in which 31 residents died. Neither facility 

was equipped with an automatic sprinkler 

system. Our review revealed weaknesses 

in federal fire safety standards for nursing 

homes, in how they are applied in unsprinklered facilities, and in federal and state 

oversight. To better ensure the adequacy of 

fire safety standards, we recommended that 

the Administrator of CMS work with the 

National Fire Protection Association (NFPA) 

to strengthen fire safety standards for unsprinklered nursing homes and to explore 

the feasibility of requiring sprinklers in all 

nursing homes. Subsequently, NFPA adopted 

an automatic sprinkler requirement for all 

nursing homes in the 2006 edition of its Life 

Safety Code. 

Impact: In August 2008, in response to our 

recommendation, CMS published a final 

rule adopting this NFPA requirement. All 

nursing homes participating in the Medicare 

and Medicaid programs must install and 

maintain automatic sprinkler systems by 

August 13, 2013. Such systems are the single 

most effective fire safety method currently 

available, and their presence will help save 

both lives and property. (GAO-04-660)

1.05.C. Identifying Challenges in 

FDA’s Foreign Inspection Programs:

We responded rapidly to mounting concern 

about the safety of drugs and medical 

devices from overseas in four testimonies. 

We identified weaknesses in the Food and 

Drug Administration’s (FDA) programs 

for inspecting foreign establishments that 

market their products in the United States. 

For example, FDA inspects about 8 percent 

of foreign establishments each year. FDA 

investigators and laboratory analysts 

volunteer to conduct these inspections 

because the agency does not have a 

dedicated staff devoted to conducting foreign 

inspections. 

Impact: The Congress is using information 

from our products to develop legislation that 

would, among other things, require FDA 

to conduct more frequent inspections of 
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foreign establishments manufacturing drugs 

and medical devices for the U.S. market. 

FDA is exploring the creation of a cadre 

of investigators who would be dedicated 

to conducting foreign inspections and has 

proposed establishing foreign offices that 

would expand the agency’s capacity for 

regulating products such as drugs and 

medical devices. (GAO-08-970, GAO-08-

224T, GAO-08-428T, GAO-08-701T, GAO08-780T) 

1.06.C. Improving Health Care for 

Servicemembers and Veterans: In 

a series of products on health care for 

servicemembers and veterans returning 

from deployments in Operations Enduring 

Freedom and Iraqi Freedom, we 

■ testified that the Army continued to 

have staffing shortfalls in one-third of 

its Warrior Transition Units, which are 

designed to manage servicemembers’ 

outpatient recovery process;

■ reported shortcomings with the 

Department of Defense’s (DOD) oversight 

of the military services’ completion of 

postdeployment health reassessments—a 

screening tool for identifying 

servicemembers’ mental health concerns; 

and 

■ noted concerns with the Department of 

Veterans Affairs (VA) screening tool for 

identifying returning servicemembers who 

may have a mild traumatic brain injury 

(TBI).

Impact: We provided the Congress a 

real-time assessment and information to 

help it develop legislation to strengthen 

DOD’s oversight of postdeployment health 

reassessments. In addition, as a result of our 

work, VA agreed to fast-track its validation 

study of the TBI screening tool. (GAO-08-

514T, GAO-08-276, GAO-08-1025R) 

1.07.C. Highlighting the Need For HHS’ 

Leadership to Reduce Health-CareAssociated Infections: Health-careassociated infections (HAI)—infections that 

patients acquire while receiving treatment 

for other conditions—are estimated to be one 

of the top 10 causes of death in the United 

States. In March 2008, we reported that a 

lack of prioritization by HHS of the Centers 

for Disease Control and Prevention’s almost 

1,200 recommended practices for infection 

control and prevention hindered efforts to 

promote their implementation; and that HHS 

has not effectively used the HAI-related data 

it has collected through multiple databases 

across the department to provide a complete 

picture of the extent of the problem. 

Impact: HHS generally agreed with our 

recommendations. Our report was the 

centerpiece of an April 2008 hearing held by 

the Committee on Oversight and Government 

Reform. Subsequent congressional concerns 

are being addressed in follow-up work on 

HAI state reporting systems and HAIs in 

other settings, including ambulatory surgery 

centers. (GAO-08-283, GAO-08-673T) 

1.08.C. Reducing Understatement of 

Serious Care Problems in Nursing 

Homes: In our May 2008 report, we found 

that state nursing home surveys often missed 

serious care problems that caused harm to 

vulnerable nursing home residents. In about 

15 percent of the state surveys that federal 

surveyors reviewed, they identified serious 

care problems that were missed by state 

surveyors.

Impact: CMS agreed to implement our 

recommendations to identify and track all 

understatement identified by federal surveys. 

The report also was used by congressional 

requesters to support legislation to 

strengthen enforcement for poorly 

performing nursing homes. (GAO-08-517) 
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Lifelong learning to enhance 

U.S. competitiveness

1.09.N. Monitoring and Preventing 

Abusive Student Loan Practices: We 

found that the Department of Education 

(Education) did not have an effective system 

for monitoring and preventing abusive 

student loan practices within the Federal 

Family Education Loan Program (FFELP). 

Specifically, we found: 

■ weaknesses in Education’s enforcement 

of prohibitions on gifts from student 

loan companies to schools in exchange 

for companies being placed on schools’ 

“preferred lender” lists and

■ problems with the agency’s enforcement 

of a student’s right to choose a qualified 

lender and not have this choice limited by 

a school. 

Impact: In 2008, the Congress amended 

the Higher Education Act, which includes 

provisions that define a prohibited gift and 

require schools to annually report on their 

preferred lender arrangements and to post a 

statement on their Web sites noting that the 

school is required to process loan documents 

from any eligible lender in FFELP that the 

student selects. (GAO-07-750) 

1.10.N. Improving Information on 

School Choice Option under No Child 

Left Behind Act: Our report on school 

choice under the No Child Left Behind 

Act found that little was known about 

the academic performance of transferring 

students and required notification letters 

to parents about the school transfer option 

were not always clear or complete. We 

recommended that Education 

■ use a methodology with the potential 

to identify the effects of school choice 

on students’ academic achievement, 

comparing outcomes for students 

transferring and those not transferring 

over several years, taking into account 

differences in student demographics, and 

■ help states develop strategies to better 

inform parents about the option by 

collecting and disseminating promising 

practices, such as examples of well-written, 

informative letters to parents; and to 

ensure that the results of its survey of 

parents be made widely available.

Impact: Education issued a report on 

the effect on achievement for students 

participating in school choice comparing 

students transferring and not transferring; 

funded a Web site dedicated to 

implementing school choice with a tool kit 

on communication with parents, sample 

practices used by districts to inform parents, 

and sample letters to share through national 

meetings and monitoring visits; published a 

handbook identifying effective strategies for 

informing parents about school choice; and 

released the results of the parental survey. 

(GAO-05-7) 

1.11.C. Strengthening Higher Education 

Access and Affordability: We issued 

several reports on issues related to higher 

education access and affordability and we 

found that Education’s exceptional performer 

program for lenders in the FFELP had 

not achieved its goals of improving student 

loan servicing and reducing student loan 

defaults at a substantial cost to the federal 

government and that college textbook prices 

increased at twice the rate of inflation over 

the past 2 decades. 
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Impact: The Congress passed the College 

Cost Reduction Act, which eliminated the 

exceptional performer program. Also, in 

amendments to the Higher Education Act, the 

Congress increased transparency in college 

textbook pricing by ensuring that faculty, 

students, and bookstores have sufficient 

and relevant information to make informed 

choices before purchasing textbooks. (GAO08-245, GAO-07-1087, GAO-05-806) 

Benefits and Protections 

for Workers, Families, and 

Children

1.12.F. Reducing Food Stamp Payment 

Errors: In a January 2001 report and 

subsequent testimony, we recommended 

that the Department of Agriculture (USDA) 

develop and analyze options for simplifying 

requirements for determining Food Stamp 

Program eligibility and benefits in order 

to ease program administration and reduce 

payment errors. 

Impact: The Congress adopted our 

suggestion in the Farm Security and Rural 

Investment Act of 2002 by providing the 

states with the option to use simplified 

reporting requirements for verifying the 

accuracy of food stamp recipients’ income 

information. In addition to financial benefits 

resulting from a substantial decline in 

its overpayments of food stamp benefits, 

we found that USDA’s share of the states’ 

administrative costs for certifying benefits 

for food stamp households has dropped by 

more than $200 million annually, or about 

$1 billion, from fiscal years 2003 to 2006. 

(GAO-01-272, GAO-01-881T, GAO/AIMD00-10) 

1.13.N. Ensuring Program Integrity in 

the Food Stamp Program: Our work on 

the Food Stamp Program, administered by 

the Department of Agriculture’s Food and 

Nutrition Service (FNS), found that 

■ the Food Stamp Program remains 

vulnerable because retailers can enter the 

program intending to traffic; and 

■ current penalties may not be sufficient 

to deter traffickers because the most 

severe penalty most traffickers face 

is disqualification from the program 

and FNS must rely upon others for 

prosecution. 

We recommended that FNS develop a 

strategy to increase the penalties for 

trafficking.

Impact: USDA requested tough penalties, 

and the Congress enacted the Food, 

Conservation and Energy Act of 2008 (Pub. 

L. No. 110-246), which includes a provision 

that raises civil penalties from $10,000 to 

$100,000 and a provision to allow USDA to 

immediately suspend trafficking retailers 

from the program pending administrative 

action. (GAO-07-53, GAO-05-245) 

1.14.N. Improving Oversight of 

Underground Coal Mines: In reviewing 

the Mine Safety and Health Administration’s 

(MSHA) process for approving coal mines’ 

emergency response plans, we recommended 

that MSHA take steps to address the 

following findings: 

■ the process was hampered by several 

factors, including the lack of specificity of 

MSHA’s guidance;

■ some plans did not specify the protections 

to be provided, and information about 

these protections varied; 
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■ failure to evaluate citation data to identify 

potential problems with implementation or 

enforcement; and 

■ insufficient oversight of district offices to 

ensure that the levels of safety protection 

required by the plans are adequate across 

all district offices. 

Impact: MSHA issued (1) Guidance on the 

Use of Checklists for Emergency Response Plan 

Reviews for district offices in order to clarify 

what is required for key components of the 

emergency response plans; (2) requirements 

for national and district-level accountability 

reviews to include reviews of relevant 

emergency response plans to ensure 

consistency in plan provisions, operator 

implementation, and enforcement efforts; and 

(3) clarification of how inspectors should cite 

mines for violations in order to ensure that 

repeat violations are accurately captured in a 

mine’s violation history. (GAO-08-424) 

1.15.C. Strengthening Oversight of 

Residential Programs for Youth: In our 

investigations of specific fatalities and abuses 

of youth in residential facilities—including 

boarding schools and academies, boot camps, 

and wilderness camps to serve youth with 

behavioral and emotional challenges—and 

our national study of these facilities, we 

determined that the existing patchwork of 

state and federal oversight is not adequate to 

protect youth from maltreatment. We found

■ evidence of deceptive marketing, 

ineffective management, and reckless 

or negligent operating practices in case 

studies of abuse and fatalities in private 

facilities; 

■ data showing more than 1,500 reported 

instances of maltreatment of residents by 

staff in government and private facilities in 

2005; and 

■ gaps in state licensing of some government 

and private facilities, such as juvenile 

justice facilities and residential schools and 

academies, and in federal oversight of these 

facilities.

Impact: Our work was frequently cited 

during congressional deliberations on the 

oversight of residential facilities for youth. 

In June 2008, the House of Representatives 

approved legislation to address many of 

the weaknesses we found. In July 2008, the 

Federal Trade Commission issued a guide for 

consumers considering a private residential 

program for troubled teens. (GAO-08-346, 

GAO-08-696T, GAO-08-713T) 

Financial security for an aging 

population

1.16.N. Enhancing the Pension Benefit 

Guaranty Corporation’s Governing 

Structure: We reviewed the governance 

structure of the Pension Benefit Guaranty 

Corporation (PBGC), which insures the 

pensions of more than 44 million private 

sector workers and retirees, and made 

recommendations to address the following 

findings: 

■ PBGC had never established formal 

guidelines to articulate the administrative 

roles and responsibilities among the board 

of directors, the Secretary of Labor as the 

board chair, board member agencies, and 

the PBGC Director, which led, at times, to 

confusion and inefficiencies. 

■ PBGC’s board lacked mechanisms to 

monitor and review PBGC operations 

and programs and generally relied on 

PBGC’s Inspector General (IG) to provide 

oversight of PBGC’s operations; there were 

no formal protocols describing the IG’s 

interaction with the board.
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Impact: PBGC reviewed and revised 

the bylaws to help delineate roles and 

responsibilities. A final rule was issued in 

which the PGBC board of directors revised 

the corporation’s bylaws to specifically 

delineate the role and responsibilities of the 

board, the Secretary of Labor as the board 

chair, the board agencies, and the PBGC 

Director and the reporting relationship of 

PBGC’s IG. (GAO-07-808) 

1.17.C. Ensuring Retirement Security:

Our work on private pensions included 

reports and testimonies on limited 401(k) fee 

disclosure, which found that participants did 

not have the information they needed to make 

informed decisions about their investments. 

401(k) plans are private pension plans that 

allow workers to save for retirement by 

diverting a portion of their pretax income 

into investment accounts. Many participants 

are not aware that they pay any fees, and 

those who are may not know how much 

they are paying. In prior work, we also 

recommended that sponsors of participantdirected plans disclose fee information 

to participants in a way that facilitates 

comparison among the options and report a 

summary of fees. 

Impact: This work sparked several 

bills in the Congress that address these 

recommendations. For example, one bill 

would require detailed fee disclosures by 

plans to participants and another would 

amend the Internal Revenue Code to impose 

taxes on any defined contribution plan failing 

to provide plan participants with prescribed 

information about plan fees and expenses. 

In addition, the Department of Labor has 

proposed regulations designed to better 

disclose fees associated with 401(k) plans to 

participants. (GAO-08-222T, GAO-08-95T, 

GAO-07-21, GAO-08-774, GAO-07-530T) 

A responsive, fair, and 

effective system of justice

1.18.F. Reducing Funding for the Office 

of National Drug Control Policy’s 

Media Campaign: Pursuant to a mandate, 

we reviewed various aspects of the Office of 

National Drug Control Policy’s (ONDCP) 

National Youth Anti-Drug Media Campaign, 

including an evaluation by Westat, Inc. 

We determined that the Westat evaluation 

yielded no evidence of a positive outcome 

and suggested that the Congress consider 

limiting appropriations for the campaign. 

Subsequently, the Congress appropriated

■ $100 million dollars for the campaign for 

fiscal year 2007, a reduction of $20 million 

dollars from the requested $120 million 

dollars, and

■ $60 million dollars for the campaign for 

fiscal year 2008, a reduction of $70 million 

dollars from the requested $130 million 

dollars. 

Impact: These efforts resulted in about 

$91 million in federal funding being made 

available for other purposes. (GAO-06-818) 

1.19.N. Encouraging Agencies to 

Formally Agree to Participate in 

and Support the Watch List Redress 

Process: In September 2006, we reported 

on terrorist watch list screening. We noted 

the importance of having a process—often 

referred to as redress—for affected persons 

to express their concerns, seek correction of 

any inaccurate data, and request other actions 

to reduce or eliminate future inconveniences. 

Further, our report noted that an overarching 

factor regarding whether appropriate relief 

is being afforded to persons inadvertently 

and adversely affected by terrorist watch 

list-related screening was the absence of an 

interagency agreement to help ensure that, 
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among other matters, redress procedures 

and responsibilities are clearly documented 

and implemented effectively. Our report 

characterized the absence of such an 

agreement as a fundamental deficiency. 

Impact: An interagency agreement—a 

memorandum of understanding (MOU)— 

was concluded and signed in September 2007. 

The signatories to the MOU are the Attorney 

General; the Secretaries of Homeland 

Security, State, Defense, and the Treasury; 

and the Directors of National Intelligence, 

the Federal Bureau of Investigation, the 

Central Intelligence Agency, the National 

Counterterrorism Center, and the Terrorist 

Screening Center. Among other key 

commitments, the MOU requires each 

agency to provide appropriate staff and other 

resources to ensure that the redress process 

functions in a timely and efficient manner and 

to designate a senior official responsible for 

the agency’s full participation in the redress 

process and overall compliance with the 

MOU. (GAO-06-1031)

The promotion of viable 

communities

1.20.N. Transforming SBA to Improve 

Performance and Employee Morale:

In a 2003 report, we reviewed the Small 

Business Administration’s (SBA) initial 

implementation of its transformation efforts, 

which included centralizing loan functions 

and shifting the focus of district offices to 

marketing and outreach. We found a lack 

of transparency and communication with 

employees and other stakeholders, and we 

recommended that SBA adopt key practices 

that have helped other organizations succeed 

in transforming their organizations.

Impact: In a September 2008 report, 

we determined that SBA had made 

significant progress in addressing our 2003 

recommendations. We also recommended 

actions SBA could take to sustain its 

progress by developing a strategic training 

plan and measuring the effectiveness of its 

centralized operations. SBA agreed with our 

recommendations. (GAO-04-76, GAO-08-

995)

1.21.C. Improving SBA’s Oversight 

of the HUBZone Program: In a June 

2008 report and subsequent testimony, 

we highlighted several deficiencies in 

SBA’s oversight and administration of its 

historically underutilized business zone 

(HUBZone) program—which provides 

federal contracting assistance to small 

businesses located in economically distressed 

communities, or HUBZone areas. Among 

other things, we

■ found that the map that SBA uses to help 

firms interested in participating in the 

program determine if they are located in a 

HUBZone area is inaccurate;

■ reported that SBA verifies the information 

reported by firms on their applications 

or during recertification—its process for 

monitoring firms—in limited instances 

and does not follow its own policy of 

recertifying all firms every 3 years; and

■ recommended that SBA correct and 

update its HUBZone map, develop and 

implement guidance to ensure more 

routine verification of application data, and 

eliminate its backlog of recertifications.

Impact: SBA agreed to implement our 

recommendations, which should help ensure 

that only eligible firms receive federal 

contracting preferences. (GAO-08-643, GAO08-975T) 
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Responsible stewardship of 

natural resources and the 

environment

1.22.N. Improving the Federal 

Government’s Response to Climate 

Change: Experts believe that federal land 

and water resources are vulnerable to a wide 

range of effects from climate change, some 

of which are already occurring. These effects 

include (1) physical effects, such as droughts 

or floods; (2) biological effects, such as 

increases in insect and disease infestations; 

and (3) economic and social effects, 

such as adverse impacts on tourism and 

infrastructure. We held a workshop with the 

National Academies and issued a report with 

a recommendation for improving the federal 

government’s response to climate change. 

Impact: The Forest Service is responding to 

our recommendation by initiating a number 

of actions. For example, it has drafted a 

companion document to its 2007 Strategic 

Plan that explains how climate change is 

embedded in various parts of the plan. It has 

also issued a letter to resource managers 

naming 16 high priority climate-related 

actions they are expected to take in 2008, 

including development of guidance for the 

preparation of forest plans and National 

Environmental Policy Act documents that 

take climate change into account. (GAO-07-

863) 

1.23.C. Improving Management of 

Large-Scale Ecosystem Restoration 

Projects: Over the last 5 years, we have 

conducted several reviews of large scale 

ecosystem restoration projects such as in the 

Chesapeake Bay, Florida Everglades, and the 

Great Lakes. The Congress has also turned 

to us for assessments of the actions being 

taken in response to the recommendations 

made in our reports. For example, our 2008 

assessment of the progress made by the 

Chesapeake Bay Program in implementing 

the recommendations made in our October 

2005 report found that although recent 

actions taken by the program will enable the 

program to better manage the restoration 

effort, additional actions are still needed to 

ensure that the restoration effort is moving 

forward in the most cost-effective manner. 

Impact: As a result of our work, managers 

of these restoration projects are planning to 

take actions to improve management of these 

billion-dollar efforts. (GAO-08-1033T, GAO08-1131R, GAO-08-130, GAO-07-1250T, 

GAO-06-96) 

1.24.C. Increasing Research Funding 

for Environmental and Health Risks 

of Nanotechnology: Nanotechnology 

encompasses a wide range of innovations 

based on the understanding and control 

of matter at the scale of nanometers—the 

equivalent of one-billionth of a meter. 

Nanotechnology has a range of commercial 

uses and holds the promise for innovations 

in virtually every industry from aerospace 

and energy to health care and agriculture. 

The small size and unique properties of 

nanomaterials have raised questions about 

their potential environmental, health, 

and safety (EHS) risks. The National 

Nanotechnology Initiative (NNI) was 

established in 2001 to help coordinate 

the nanotechnology- related activities of 

25 participating federal agencies. Of the 

$1.3 billion that federal agencies allocated to 

nanotechnology research in fiscal year 2006, 

the NNI reported that about $37 million was 

devoted to research that primarily focused on 

studying the EHS risks of nanotechnology. 

However, we reported in March 2008 that 

about 20 percent of this amount cannot 

actually be attributed to this purpose.
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Impact: In response to our findings 

and recommendations, the Congress has 

emphasized EHS research in its proposed 

reauthorization of the NNI and participating 

agencies have requested $76 million for EHS 

research for 2009, which is more than double 

the level of actual funding in 2005. (GAO-08-

594) 

A safe, secure, and effective 

national physical infrastructure

1.25.F. Improving Spectrum 

Management by Extending Auction 

Authority: Since 1993, the Federal 

Communications Commission (FCC) has 

conducted auctions to assign spectrum 

licenses to commercial users; these licenses 

permit companies to use a portion of the 

spectrum to provide various wireless 

communications services, such as mobile 

voice and data services. Some parties have 

raised concerns about the use of auctions, 

contending that the auctions raise consumer 

prices. In December 2005, we reported 

that auctions appeared to have little or no 

impact on end-user prices, infrastructure 

deployment, and competition, and that they 

mitigated the problems associated with 

comparative hearings and lotteries, which the 

FCC previously used to assign licenses. We 

therefore recommended that the Congress 

extend the FCC’s auction authority beyond 

the scheduled expiration date of September 

30, 2007.

Impact: In the Deficit Reduction Act of 2005, 

the Congress extended the FCC’s auction 

authority and in March 2008, the commission 

completed the auction of the 700 megahertz 

(MHz) spectrum. The 700 MHz auction 

generated $19.1 billion, greatly exceeding 

previous estimates, and a portion of the 

proceeds will be used to support public safety 

and digital television transition initiatives. 

The net present value of the financial benefits 

associated with the legislation, and the 

associated 700 MHz auction, is $8.6 billion. 

(GAO-04-926T, GAO-05-258T, GAO-05-

623T, GAO-06-236, GAO-06-212R) 

1.26.N. Improving Postal Realignment 

Planning and Accountability: We issued 

two reports on the U.S. Postal Service’s 

(USPS) strategy for realigning its mail 

processing network, which discussed why 

realignment to improve efficiency and reduce 

costs is urgently needed due to declining 

mail volumes. Our reports identified several 

concerns we had related to USPS’s lack of 

clarity, criteria, evaluation process, and public 

communication about what it planned to do 

and why. On the basis of our reviews it was 

not clear whether USPS was identifying 

the best opportunities for realignment or 

what the expected and actual impacts have 

been. We recommended that USPS enhance 

the transparency and communication 

of its decisions related to realigning its 

infrastructure.

Impact: USPS has addressed our 

recommendations by (1) providing a 

Network Plan to the Congress that clarified 

how USPS makes realignment decisions; 

(2) establishing a process for evaluating 

results; and (3) enhancing communication 

with stakeholders by improving public notice, 

engagement, and transparency. (GAO-07-717, 

GAO-05-261, GAO-08-1022T) 

1.27.N. Improving Postal Delivery 

Performance Information: In a July 

2006 report, we found that USPS had 

delivery standards for the timely delivery 

of its major types of mail, but some had 

not been updated in a number of years to 

reflect changes in how mail is prepared 

and delivered. These outdated standards 

were unsuitable as benchmarks for setting 

realistic expectations for measuring delivery 
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performance or improving service, oversight, 

and accountability. We recommended that 

USPS modernize delivery standards and 

commit to developing a complete set of 

delivery performance measures for all major 

types of mail.

Impact: In December 2006, the Congress 

enacted the Postal Accountability and 

Enhancement Act (Pub. L. No. 109-435) that 

required USPS to modernize its delivery 

standards and develop delivery performance 

measures. In December 2007, USPS issued its 

modernized delivery standards. Then, in June 

2008, USPS developed a service performance 

measurement plan, in which it committed to 

measure and report on delivery performance 

for major types of mail starting in fiscal year 

2009. (GAO-06-733) 

1.28.C. Informing Efforts to 

Meet Growing Demands on the 

Transportation System: The economic 

implications of growing levels of 

transportation congestion are significant, 

ranging from wasted fuel as cars idle in 

gridlock to increased costs for businesses. 

In a series of reports and testimonies, we 

addressed these issues. For example:

■ We reported that many of the current 

surface transportation programs do not 

effectively address congestion and other 

transportation challenges because, in part, 

these programs lack a well-defined vision 

of the national interest and federal role. 

We called for the refocusing of the surface 

transportation programs.

■ We examined the Federal Aviation 

Administration’s efforts to redesign the 

airspace structure in the northeast—

which is intended to reduce delay—and 

made recommendations to improve the 

implementation of these efforts. 

Impact: Our work provided timely 

information as the Congress considers the 

reauthorization of aviation and surface 

transportation programs. (GAO-08-786, 

GAO-08-934T, GAO-08-743T, GAO-08-

763T, GAO-08-400) 

1.29.C. Improving Transportation 

Safety: As in past years, we highlighted the 

need to improve federal actions to reduce 

highway, aviation, and other transportation 

accidents that lead to the 45,000 people 

killed and 2.8 million injured annually. Most 

notably, we called for 

■ improved ways to detect commercial truck 

drivers who use drugs and keep them off 

the road, such as expediting rule making 

that would create a national database of 

positive test results;

■ more progress in reducing runway 

collision hazards by implementing runwayrelated safety technologies and addressing 

controller staffing issues; and

■ better oversight and accountability for 

results from the hundreds of millions 

of dollars provided to states to improve 

highway safety by identifying common 

state challenges to improving safety and 

by tying state performance to receipt of 

grants. 

Impact: The Congress is using information 

provided by our work as it conducts oversight 

of these transportation programs and 

considers legislation to reauthorize safety 

programs. (GAO-08-600, GAO-08-29, GAO08-477, GAO-08-788, GAO-08-398) 

1.30.C. Advising Policy Makers and 

Consumers on the Digital Television 

(DTV) Transition: In a series of reports 

and testimonies issued in fiscal year 2008, 
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we reviewed the progress of the nation’s 

transition from analog to DTV, and found 

that: 

■ no comprehensive plan existed that 

detailed goals and milestones that could be 

used to measure transition progress; 

■ some broadcasters still faced technical, 

coordination, or other issues that needed 

to be resolved before broadcasting only in 

digital;

■ 84 percent of people had heard of the 

transition, but 45 percent of those at risk 

of losing television service planned to take 

inadequate or no action to prepare for it; 

and

■ the government was effectively 

implementing a $1.5 billion subsidy 

program for converter boxes, but plans 

to address a likely increase in subsidy 

demand remained unclear. 

Impact: We provided timely information 

to the Congress as it conducted oversight 

of the DTV transition to help ensure that 

Americans do not lose television service. 

(GAO-08-191T, GAO-08-43, GAO-08-510, 

GAO-08-881T, GAO-08-1040) 

1.31.C. Improving Federal Real 

Property Management and Security:

The federal real property portfolio is vast 

and diverse, totaling over 3 billion square 

feet of space with an estimated gross value 

in the hundreds of billions of dollars. Our 

work highlighted the government’s continued 

reliance on costly leasing, challenges facing 

the Department of Homeland Security’s 

(DHS) Federal Protective Service (FPS) 

in protecting facilities, and threats to the 

collections of the Smithsonian Institution 

related to problems in its real property 

management and security.

Impact: Our reports and testimonies led to 

robust congressional oversight in these areas 

and several actions are planned to address 

the problems. Our work brought renewed 

focus on the leasing issue by the Office of 

Management and Budget (OMB). DHS has 

agreed to implement our recommendations 

to improve FPS’s ability to address its 

challenges and better protect federal facilities. 

The Smithsonian Institution agreed with our 

recommendations related to real property 

management and security and committed to 

making several improvements. (GAO-08-197, 

GAO-08-683, GAO-08-250T, GAO-08-

897T, GAO-08-914T) 

1.32.C. Overseeing 

Telecommunications: FCC is responsible 

for enforcing various telecommunications 

laws that are designed to protect consumers, 

ensure public safety, and encourage 

competition. We found that the extent to 

which FCC is effectively enforcing its rules 

and orders is difficult to assess because it 

lacks a robust data management system. 

From 2003 through 2006, FCC received 

nearly a half million complaints and opened 

about 46,000 investigations, but closed 

about 83 percent of its investigations with 

no enforcement action. We recommended 

that FCC develop a data system that, among 

other things, improves its data collection 

and analysis to help it better manage its 

enforcement efforts.

Impact: In response to our recommendation, 

FCC stated that it had taken several actions 

to address these issues, though we did not 

agree that these actions were fully responsive. 

Developing a data system as recommended 

would remedy FCC’s lack of critical 

information in this area, so that it is able 

to invest resources where they are needed, 

reduce costs, and fully oversee its programs. 

(GAO-08-125) 
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Protect and secure the 

homeland from threats and 

disasters

2.01.N. Strengthening Management 

and Risk Mitigation of Visa Waiver 

Program: The Departments of Homeland 

Security and State manage the Visa Waiver 

Program, which allows citizens from 27 

countries to travel to the United States 

visa free. Terrorism concerns involving 

citizens from program countries have led 

some to suggest eliminating or suspending 

the program, while the executive branch is 

considering adding programs to it. We found 

that changes to the program could bring 

about substantial increases in the demand 

for visas at embassies and consular offices 

abroad, severely disrupting visa operations 

at those locations. We also found that DHS 

had not fully developed tools to assess and 

mitigate program risks— including the 

risk that the program could be exploited 

by criminals to gain illegal entry into the 

country—and had not followed a transparent 

process to expand the program to additional 

countries.

Impact: Our reports, testimonies, and 

briefings have contributed to congressional 

oversight of the Visa Waiver Program, and 

our recommendations have served as the 

basis for preliminary agency actions. For 

example, DHS completed standard operating 

procedures to guide mandated security 

assessments of potential expansion and 

existing program countries. (GAO-08-458T, 

GAO-08-623, GAO-08-967, GAO-06-854) 

2.02.N. Improving Stakeholder 

Involvement in National Response 

Policy Making: The Federal Emergency 

Management Agency (FEMA) has 

emphasized the importance of partnering 

with stakeholders—state, local, and 

tribal governments; nongovernmental 

organizations; and the private sector—to 

effectively prepare for and respond to 

major and catastrophic disasters. Moreover, 

the Congress, through the Post-Katrina 

Emergency Management Reform Act, 

requires such partnership. Although DHS 

included nonfederal stakeholders in the 

initial and final stages of developing the 

National Response Framework in 2007, it 

did not collaborate with these stakeholders 

as fully as originally planned or as required 

by the Post-Katrina Act. We found that 

FEMA did not have policies or procedures 

in place to guide this process or to ensure a 

collaborative partnership with stakeholders. 

We recommended that FEMA develop 

policies and procedures that guide how future 

revision processes will occur, particularly for 

collaborating with nonfederal stakeholders. 

Impact: The Senate report for the fiscal year 

2009 DHS appropriations act directs FEMA to 

brief the Committee within 60 days of the date 

of enactment regarding its plan to implement 

our recommendations. (GAO-08-768) 

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

Source: See Image Sources.
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2.03.N. Strengthening Watch-List 

Matching for Commercial Aviation 

Passengers: In a series of reports 

and testimonies, we reported on the 

Transportation Security Administration’s 

(TSA) oversight of air carrier efforts to match 

passenger information against the terrorist 

watch list (watch list matching)—used 

to identify persons who should be denied 

boarding or who should undergo additional 

security scrutiny—and TSA’s progress in 

assuming the watch list matching function 

with development of the Secure Flight 

program. We found that due to TSA’s limited 

oversight, some air carriers did not perform 

critical aspects of watch-list matching, which 

has led to some actual matches not being 

identified, and that Secure Flight was at risk 

of exceeding cost and schedule estimates and 

not delivering needed functionality. 

Impact: As a result of our work, TSA has 

strengthened current watch-list matching 

requirements and also taken action to 

improve its development of the Secure Flight 

program. (GAO-08-456T, GAO-08-992) 

2.04.C. Improving Cargo and Port 

Security: In a series of reports and 

testimonies on maritime security, we 

summarized overall progress, but also 

identified weaknesses, limitations, and 

challenges in federal programs to secure our 

ports and the oceangoing cargos that they 

receive. In our October 2007 testimonies on 

the SAFE Port Act, we provided a detailed 

summary of federal efforts, and challenges 

ahead, to improve maritime security across 

a number of agencies and programs. In a 

reports and testimony on the U.S. Coast 

Guard, we raised concerns about the agency’s 

ability to adequately ensure maritime 

security—for energy tanker vessels, at 

domestic maritime facilities, and at foreign 

ports—as well as to conduct its traditional 

missions within current resource levels. 

In reports and testimony on U.S. Customs 

and Border Protection programs related 

to oceangoing cargo containers, we noted 

weaknesses in the agency’s ability to assess 

the security of private companies that are 

members of its security partnership, as well 

as its ability to assess the adequacy of foreign 

governments.

Impact: Our work aided the Congress in the 

decision to pass legislation to close some of 

the resource gaps and security limitations we 

noted. Further, agencies agreed to take several 

steps to implement our recommendations 

and improve their maritime security efforts. 

(GAO-08-126T, GAO-08-494T, GAO-08-

533T, GAO-08-187, GAO-08-12)

2.05.C. Improving National Flood 

Insurance Program Data and Analysis:

In an October 2007 testimony we concluded 

that FEMA faced a number of ongoing 

challenges with data collection and analysis 

in managing the National Flood Insurance 

Program (NFIP) that, if not addressed, would 

continue to threaten the program’s financial 

solvency. Subsequently, we identified specific 

data collection and analysis shortcoming, 

such as the inability of (1) NFIP’s data 

systems to consistently determine the extent 

to which winds and floods contribute to total 

property damages and the accuracy of flood 

claims and (2) FEMA’s grant management 

system to record acquisition data in real 

time, which would help to ensure the 

systematic review of performance by disaster 

mitigation contractors. We made several 

recommendations to help ensure systematic 

monitoring and review of contractor 

performance.

Impact: FEMA agreed with our 

recommendations to improve contractor 

oversight and has taken steps to address them. 

(GAO-08-118T, GAO-08-28, GAO-08-437) 
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2.06.C. Identifying Challenges 

Associated with Implementing the 

Secure Border Initiative: In October 

2007 and February 2008 we testified on 

DHS’s progress in implementing its CBP” 

Secure Border Initiative (SBI) program–a 

multibillion-dollar program to secure U.S. 

borders and reduce illegal immigration using 

technology, infrastructure, and personnel. We 

raised concerns regarding schedule delays 

and unmet expectations for a $20.6 million 

technology project and meeting a December 

2008 deadline to construct 670 miles of 

fencing along the southwest border. In 

addition, in spring 2008, we reviewed SBI’s 

planned fiscal year 2008 expenditures. 

We found that the plans submitted to the 

Congress did not include detailed justification 

for all planned SBI expenditures nor did 

they permit progress against program 

commitments to be adequately measured and 

disclosed. 

Impact: The Congress subsequently 

requested additional information from CBP 

before releasing $650 million of the agency’s 

2008 appropriation. (GAO-08-131T, GAO08-508T, GAO-08-739R) 

2.07.C. Defining and Articulating 

the Federal Government’s Role in 

Sustaining Fusion Centers: After 

2001, state and local governments began 

to establish fusion centers—collaborative 

efforts to detect, prevent, investigate, and 

respond to criminal or terrorist activity—to 

help address gaps in homeland security and 

law enforcement information sharing with 

the federal government and among levels of 

government. In an October 2007 report we 

found that despite DHS’s and the Federal 

bureau of Investigation’s efforts to deploy 

personnel to fusion centers and DHS’s grant 

funding, center officials were concerned about 

long-term sustainability—both the extent of 

federal support they could expect as well as 

the roles of their state or local jurisdictions. 

We reported that one specific funding 

challenge fusion center officials cited was 

time limits on the use of Urban Area Security 

Initiative and State Homeland Security Grant 

Program grant funds for personnel, including 

intelligence analysts. This limit made 

retaining personnel challenging because 

state and local entities may lack the resources 

to continue funding such positions, which 

could affect the centers’ ability to continue to 

operate. 

Impact: Legislation proposed in fiscal year 

2008 would, among other things, permit 

states and localities that receive these 

grant funds to use them for analyst salaries 

regardless of whether the analysts are current 

employees, new full-time employees, or 

contract employees and without limitations on 

the time period that these analysts can serve 

under the awarded grants. (GAO-08-636T, 

GAO-08-35, GAO-08-637T) 

2.08.C. Enhancing Security of Critical 

Infrastructure Control Systems:

GAO testified in October 2007 on the need 

to improve security over critical control 

systems—computer-based systems that 

monitor and control sensitive processes 

and physical functions—highlighting the 

increased threats to control systems that 

support the nation’s critical infrastructure, 

such as those for electric power generation, 

oil and gas refining, and water treatment. In 

May 2008, we reported that the Tennessee 

Valley Authority (TVA), a federal entity and 

the nation’s largest public power company, 

needed to implement an effective information 

security program to protect such systems. We 

made recommendations to TVA to improve the 

implementation of security programs activities 

for the control systems governing TVA’s 

critical infrastructures, such as assessing the 

risk of all control systems and developing and 

implementing remedial action plans. 
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Impact: TVA agreed with our 

recommendations and is taking steps to 

implement them. (GAO-08-119T, GAO-08-

526, GAO-08-775T) 

2.09.C. Improving Government Efforts 

to Protect Sensitive Information:

Information security (IS) requirements are 

designed to effectively protect sensitive 

information including personal, law 

enforcement, and proprietary information. 

We testified in February and March 2008 

that despite agencies’ reported progress in 

implementing IS requirements, incidents 

involving data loss or theft, computer 

intrusions, and privacy breaches reported 

by federal agencies underscore the need for 

further improvements. 

Impact: Our work called for governmentwide 

action and brought attention to the need for 

federal agencies to better protect sensitive 

information by improving information 

protection policies and effectively 

implementing encryption technologies. 

(GAO-08-343, GAO-08-525, GAO-08-496T, 

GAO-07-751T) 

Ensure military capabilities 

and readiness

2.10.F. Contributing to Properly 

Funding the Military’s Needs: In a 

number of reviews, we analyzed DOD’s 

base budget request for fiscal year 2008 and 

DOD’s approach for requesting the funds and 

reporting obligations for the Global War on 

Terrorism (GWOT).

■ In DOD’s fiscal year 2008 budget 

request, we 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. We analyzed 

unobligated balances (i.e., funding that 

has been approved or is available but not 

yet committed for a particular purpose); 

operations and maintenance execution 

trends; and active, reserve, and civilian 

personnel expenditures. 

■ In other work, we reported that expanded 

guidance allowed DOD to request GWOT 

funding for items, such as major weapon 

systems, that were also included in DOD’s 

base budget request, and we recommended 

that DOD build more of the GWOT 

funding requirement into the base budget 

request to provide greater transparency 

between base and GWOT needs. We also 

made recommendations to improve the 

reliability of GWOT cost reporting. 

Impact: Our budget work contributed 

to multiple actions that resulted in total 

financial benefits of about $3.062 billion and 

reductions in the fiscal year 2008 budget. In 

response to our GWOT funding work, DOD 

has taken steps to improve transparency in 

its base budget including revising procedures 

for analyzing variances in obligations, 

performing quality assurance, and providing 

clarification to guidance. (GAO-08-68) 

2.11.F. Assessing Joint Seabasing 

Results in $2.05 Billion Reduction in 

Ship Procurement: In January 2007, we 

issued a report on DOD’s joint seabasing 

initiative—an evolving concept for projecting 

and sustaining forces ashore that could cost 

billions of dollars. We recommended that 

DOD conduct additional experimentation 

and evaluation of joint seabasing options 

and synchronize associated cost estimates so 

that decision makers would have sufficient 

information for making investment decisions. 

We also concluded that if individual systems 

that support seabasing were procured before 

total ownership cost of seabasing options 

were developed and made transparent to 

DOD and the Congress, there was a risk that 
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DOD could make significant investments that 

might not be the most cost-effective means of 

projecting and sustaining U.S. forces. 

Impact: Since our report’s issuance, DOD 

has reduced the number of ships it plans to 

procure for joint seabasing from eight to 

two ships, reducing the Navy’s shipbuilding 

costs by $2.273 billion. The Navy stated in 

a report to the Congress on its fiscal year 

2009 shipbuilding plans that it delayed ship 

procurement for joint seabasing to resolve 

the concept of operations. This approach 

is consistent with our recommendations, 

which were partially agreed to by DOD. 

We estimate that the financial benefit 

realized from the Navy’s action totals about 

$2.05 billion—the difference between the 

net present value of the President’s requests 

for fiscal years 2009, 2010, and 2011 and 

the Navy’s fiscal year 2007 and 2009 

shipbuilding plans. (GAO-07-211) 

2.12.F. Analyzing DOD’s Investment 

Budget for Fiscal Year 2008: We reviewed 

the President’s request for procurement and 

research, development, test and evaluation 

funding for DOD and identified a number 

of activities for which funding reductions 

were appropriate. For example, our analysis 

revealed that the Army’s request for tactical 

radios exceeded approved objectives, 

and the Congress reduced the budget 

request by $1.7 billion. We also identified 

a miscalculation in the costs of expanding 

a communications network, resulting in a 

budget reduction of $812 million. We also 

questioned the appropriateness of buying a 

Joint Strike Fighter to replace a combat loss 

since the aircraft would not be a combatready aircraft. As a result, the Congress did 

not fund this $230 million request.

Impact: Our work supported reductions of 

about $1.4 billion in the base budget and 

nearly $4 billion in the GWOT budget. 

2.13.N. Improving the Management 

of Defense Infrastructure: In a 

series of reports and testimonies, we have 

recommended ways for DOD to improve the 

implementation of the Base Realignment and 

Closure (BRAC) process and the operation 

and sustainment of defense installations 

and facilities that support military missions, 

personnel, and readiness. In our BRAC 

series, we made recommendations to improve 

DOD’s reporting of BRAC implementation 

costs and savings and provide the Congress 

with greater transparency in projected 

implementation costs to aid in oversight. Our 

2008 report on sustainment, modernization, 

and restoration of DOD facilities and bases 

made several recommendations to help ensure 

that military forces have adequate facilities 

to fully support the missions and personnel 

at the levels desired. In another report, we 

recommended that DOD improve the process 

it uses to communicate with and provide 

assistance to local communities surrounding 

military bases that are growing due to the 

BRAC and various realignment and Army 

reorganization initiatives. 

Impact: DOD is in the process of 

implementing these recommendations 

which are critical to ensuring that military 

bases flagged for expansion can operate in 

a sustainable fashion. (GAO-08-315, GAO08-602R, GAO-08-244R, GAO-08-1010R, 

GAO-08-159) 

2.14.N. Enhancing DOD’s Preparedness 

for Homeland Security Missions:

DOD established U.S. Northern Command 

(NORTHCOM) to conduct homeland defense 

and civil support missions in and around the 

United States. NORTHCOM coordinates 

with the National Guard Bureau because 

the bureau has experience dealing with state 

and local authorities during incidents and 

functions as NORTHCOM’s formal link to 

the states. In a series of reports, we identified 
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shortcomings in DOD’s approach to its 

homeland security missions, specifically the 

National Guard Bureau’s management of 

weapons of mass destruction civil support 

teams. We also found that NORTHCOM did 

not adequately track supporting plans and 

that key challenges hindered NORTHCOM’s 

planning—including a gap in identifying 

requirements, a lack of regularly assigned 

forces to NORTHCOM, and difficulty 

monitoring the readiness of military units to 

accomplish civil support missions. 

Impact: To correct shortcomings in the 

National Guard Bureau’s management of 

civil support teams, the Army developed 

a plan to institutionalize the civil support 

team program—including management 

standardization and training efforts. In 

response to our NORTHCOM work, DOD 

agreed to address our recommendations and 

is in the process of establishing a means of 

tracking supporting plans, assigning key 

specialized forces to NORTHCOM, and 

revising guidance on roles and responsibilities 

for interagency coordination and interaction 

with the National Guard Bureau. (GAO-08-

252, GAO-08-251, GAO-06-498) 

2.15.N. Strengthening Defense Security:

A series of reports identified shortcomings 

in defense security related to the use of 

biometrics and securing DOD’s critical 

infrastructure. Our May 2008 report on 

improving DOD biometrics collection 

and sharing recommended that (1) DOD 

establish a minimum baseline standard 

set of biometrics data for collection during 

military operations so that biometrics 

data could be compared across multiple 

databases in different commands and 

across federal agencies as appropriate 

and in accordance with applicable laws, 

regulations, and international agreements and 

(2) the Secretaries of Defense and Homeland 

Security, in consultation with other federal 

agencies, determine if biometrics information 

sharing needs are being met and address any 

biometrics data-sharing gaps that may exist, 

in accordance with laws, regulations, and 

international agreements. 

Impact: DOD noted that it urgently 

implemented our recommendation and filled 

gaps we identified in routine sharing of 

certain biometrics data with DHS and others 

for border security purposes. In addition, 

the White House used our report to support 

its policy making on biometrics. (Classified 

product not publicly available)

2.16.N. Improving DOD Knowledge 

and Management of Servicemembers’ 

Employment Rights: In numerous 

products, we identified actions to address 

servicemember employment rights and 

discussed the Department of Labor and 

DOD’s implementation of the Uniformed 

Services Employment and Reemployment 

Rights Act of 1994 (USERRA), which 

protects employment and reemployment 

rights of federal and nonfederal employees 

who leave their civilian employment for 

military or other uniformed service. For 

example, we reported that the Congress 

did not have comprehensive information 

on reservists’ complaints because the 

Department of Labor’s annual USERRA 

report did not include informal complaints 

reservists made to DOD. 

Impact: In response to our work, both DOD 

and the Congress have taken several steps to 

protect employment and reemployment rights 

of federal and nonfederal employees who 

leave their civilian employment for military 

or other uniformed service. Specifically, the 

Congress amended the reporting requirement 

of title 38 U.S.C. § 4332 to require the 

Department of Labor to include informal 

complaint data from DOD in its annual 

USERRA report to the Congress. Also, in 

response to a congressional mandate, DOD 
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has also agreed to better define scholarship 

costs for students who receive a DOD-funded 

medical education and to better capture 

employment data of reservists who require 

certification or licenses in their civilian 

careers. (GAO-08-254T, GAO-08-370R, 

GAO-07-259) 

2.17.N. Creating a Chief Management 

Officer (CMO) at DOD to Guide 

Business Transformation: During fiscal 

year 2008, we reported that DOD has yet 

to establish (1) a strategic planning process 

that results in a comprehensive, integrated, 

enterprisewide plan or set of plans to guide 

transformation and (2) a senior official who 

can provide full-time attention and sustained 

leadership to transformation. At a time of 

increasing military operations and growing 

fiscal constraints, billions of dollars have been 

wasted annually because of a 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. 

Impact: The Congress recognized the need 

for executive-level attention to business 

transformation matters and, in the National 

Defense Authorization Act for Fiscal Year 

2008, assigned CMO responsibilities to the 

Deputy Secretary of Defense, established 

a full-time Deputy CMO position, and 

assigned CMO responsibilities within the 

military departments. Also, DOD has taken 

steps to improve its planning process and to 

implement the CMO legislation. (GAO-08-

462T, GAO-08-132T, GAO-08-322T) 

2.18.C. Assessing U.S. Military 

Readiness and Ongoing Operations in 

Iraq and Afghanistan: Our work on force 

readiness and military operations in Iraq 

and Afghanistan has included several reports 

and testimonies on such topics as DOD’s 

ability to provide trained and ready forces for 

ongoing operations and other contingencies, 

equipment reset, the training and use of Navy 

and Air Force personnel to fill ground force 

requirements, force protection solutions to 

support deployed troops, and oversight of 

support contractors. Our work identified 

key challenges facing DOD, prompting the 

Congress to take legislative action to require 

DOD to address several readiness and 

training issues. 

Impact: Our work has helped frame 

significant issues for congressional and public 

debate, and DOD and the Congress are 

taking actions to address some of these issues. 

For example, DOD is establishing policies to 

guide the training and use of selected forces, 

and the Congress and DOD are taking steps 

to improve management of the Commander’s 

Emergency Response Program in Iraq for 

meeting urgent needs. (GAO-08-264, GAO08-342, GAO-08-966, GAO-08-736R, GAO08-497T) 

2.19.C. Improving DOD’s Major Weapons 

Acquisition Management Process:

For a number of years we have reported on 

DOD’s history of major acquisitions costing 

more than estimated, delivering products 

later than originally promised, and providing 

less capability than desired. This year we 

reported on DOD’s actions to develop a 

congressionally mandated comprehensive 

strategy for improving the empowerment 

and accountability of program managers 

responsible for major DOD acquisitions. We 

also reviewed and made recommendations on 

how to improve DOD’s quality management 

practices by using best practices found at 

leading commercial companies, DOD’s 

management and oversight of programs with 

multiyear contracts, and DOD’s funding 

process and its impact on major acquisitions. 
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Impact: DOD agreed or partially agreed 

with the majority of our recommendations 

and intends to take actions accordingly. 

For example, in line with recommendations 

made as a result of our review of DOD’s 

management and oversight of programs 

using multiyear contracts, DOD intends 

to implement a database to track multiyear 

procurements and post- procurement 

assessments. The Congress also continued to 

make use of our work, citing the results of our 

review of multiyear procurements and a prior 

year’s examination of technology transition 

in suggesting DOD actions. (GAO-06-883, 

GAO-08-62R, GAO-08-294, GAO-08-619, 

GAO-08-298) 

Advance and protect U.S. 

international interests 

2.20.F. Realigning Funds for 

the National Nuclear Security 

Administration’s (NNSA) Surplus 

Russian Fissile Materials Disposition 

Program: In our review of NNSA’s fiscal 

year 2008 budget request, we found that $151 

million in funds appropriated in fiscal year 

1999 by the Congress for the Russian Surplus 

Fissile Materials Disposition program—which 

helps Russia dispose of weapons-grade 

plutonium—had never been allotted to the 

program for obligation, and thus remained 

unobligated. We also reported that the 

program had an additional $57.4 million in 

unobligated balances that were also potentially 

available for other uses. 

Impact: The Congress agreed with our 

assessment. Based in part on our review, 

the Congress acted in the Fiscal Year 2008 

Consolidated Appropriations Act to rescind the 

$151 million appropriated in fiscal year 1999 

as well as $57 million in unobligated program 

balances, resulting in $208 million available 

for use in other government programs. 

2.21.F. Analyzing the Fiscal Year 2008 

Appropriation for the Millennium 

Challenge Corporation (MCC): Our 

February 2007 work showed that MCC could 

operate with a smaller-than-requested fiscal 

year 2008 appropriation because, based on 

historical experience, the corporation would 

not obligate the balance of its prior years’ 

appropriations until the fourth quarter of fiscal 

year 2008. Our May 2007 correspondence to 

congressional committees showed that MCC 

had disbursed only about $68 million of the 

$2.1 billion obligated for compact assistance 

and could have significant undisbursed 

balances when compacts expired. Our July 

2007 report showed that MCC’s portrayal 

of projected compact impact did not reflect 

underlying data and identified five key risks 

that could affect project impact. 

Impact: Our work supported and informed 

appropriations and authorizing committees’ 

decisions about MCC funding for fiscal year 

2008, and contributed to a congressional 

appropriation of about $1.6 billion for MCC 

for fiscal year 2008, a reduction of about 

$1.4 billion from the President’s $3 billion 

request. MCC officials confirmed that 

our analysis was used by congressional 

appropriators to frame key discussions abut 

MCC funding and as a basis for reducing 

MCC’s request. (GAO-08-577R, GAO-07-909, 

GAO-05-455T) 

2.22.N. Improving International 

Food Assistance: We found that multiple 

challenges hinder the efficiency and 

effectiveness of U.S. food aid, and U.S. 

agencies lack data to adequately monitor 

food aid program costs. As a result, these 

programs may not get the right food to the 

right people at the right time. We also found 

that persistent food insecurity in sub-Saharan 

Africa demonstrated that the efforts of both 

host governments and donors have been 
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insufficient in meeting the commitment of 

the United States and more than 180 world 

leaders to halve hunger by 2015. 

Impact: A number of our recommendations 

have been enacted into law as part of the 

recent Farm Bill. Among other things, the 

Congress (1) authorized up to $22 million 

annually for a system of monitoring and 

assessment of nonemergency programs, 

(2) required the U.S. Agency for International 

Development to report on its oversight of 

nonemergency programs, and (3) directed 

GAO to review the agency’s efforts. (GAO08-680, GAO-07-560) 

2.23.C. Improving Oversight of U.S. 

Efforts in Afghanistan and Pakistan:

We examined U.S. efforts to combat 

terrorism in Pakistan’s border areas and to 

secure and reconstruct Afghanistan. The 

result was a series of reports, testimonies, and 

briefings in which we identified a number of 

ways in which oversight of these efforts could 

be improved, including better monitoring 

of Coalition Support Funds provided to 

Pakistan and of road reconstruction funds for 

Afghanistan. Spending for each of these has 

totaled in the billions of dollars. 

Impact: Our work contributed to various 

congressional oversight hearings and 

legislative actions, including a formal letter 

from a congressional committee chairman 

to the President on our findings related to 

Afghan National Security Forces. In addition, 

DOD has begun to take steps to enhance its 

oversight of Coalition Support Funds, and 

DOD and the U.S. Agency for International 

Development have begun taking steps to 

improve their ability to measure the impact 

of Afghan reconstruction projects. (GAO-08-

806, GAO-08-689, GAO-08-622, GAO-08-

820T, GAO-08-932T) 

2.24.C. Securing, Stabilizing, and 

Rebuilding Iraq: Our June 2008 report 

found that overall violence, as measured by 

enemy-initiated attacks, had fallen, but that 

key legislation had not been enacted and Iraqi 

spending for reconstruction was still low. We 

recommended that DOD and the Department 

of State (State) develop an updated strategy 

for Iraq that would build on recent gains and 

address unmet goals. 

Impact: The Congress used our work as part 

of its oversight on whether U.S. surge forces 

were achieving their intended outcome—that 

is, a reduction in violence throughout Iraq 

that would provide the time and space needed 

for reconciliation among Iraq’s Shi’a, Sunni, 

and Kurdish peoples. (GAO-08-837, GAO-08-

1031) 

Respond to the impact of 

global market forces on 

U.S. economic and security 

interests

2.25.N. Reforming the Federal Housing 

Government-Sponsored Enterprises 

(GSE) Regulatory Structure: In fiscal 

year 2008, we reported that the fragmented 

federal regulatory oversight structure for the 

housing government sponsored enterprises 

(GSE)—Fannie Mae, Freddie Mac, and the 

Federal Home Loan (FHL) bank system—

was inadequate to monitor these large and 

complex financial institutions and their 

mission activities. We noted that while the 

housing GSEs play a critical role in the U.S. 

housing finance system (in the case of Fannie 

Mae and Freddie Mac by buying mortgages 

from lenders or the FHL bank system by 

providing loans to lenders), their activities 

pose potentially significant risks to taxpayers. 
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Impact: In response to our findings and 

recommendations, Congress passed the 

Housing and Economic Recovery Act of 

2008 that established a single housing 

GSE regulatory agency to better ensure 

consistency of regulation among the GSEs. 

This agency is responsible for safe and 

sound operations, provides housing mission 

oversight, has sufficient legal authority to 

authorize regulatory actions as capital levels 

decline, and can place insolvent institutions 

into receivership. (GAO-08-563T)

2.26.N. Ensuring Compliance with 

Bank Fee Disclosure Requirements:

The Truth-in-Savings Act and its 

implementing regulations require that banks 

provide uniform disclosures about, among 

other things, fees associated with checking 

and savings accounts to enable consumers 

to comparison shop and allow them to make 

informed decisions before opening checking 

or savings accounts. 

■ In January 2008, we reported that GAO 

staff posing as customers were unable 

to obtain detailed fee information and 

account terms and conditions at more than 

one-fifth of the 185 bank branches visited. 

■ We recommended that the five federal 

banking regulators assess the extent 

to which consumers receive disclosures 

on fees and incorporate steps into their 

oversight to ensure that disclosures 

continue to be made available. 

Impact: Each of the banking regulators 

agreed with our recommendation and 

indicated that they planned to take various 

actions in response to our report, including 

working on an interagency basis to revise 

their Truth-in-Savings Act examination 

procedures. (GAO-08-281) 

2.27.N. Balancing Customs and Border 

Protection’s Trade and Security 

Responsibilities: Our work informed 

the Congress on Customs and Border 

Protection’s (CBP) performance of mandated 

trade functions since its move to DHS. We 

found that, although CBP was the second 

largest revenue CBP was the second largest 

revenue generator for the U.S. government, 

the staffing levels for its revenue functions 

had declined below congressionally mandated 

levels. Further, CBP had not publicly reported 

on its performance of revenue functions, and 

the DHS IG had not audited CBP’s efforts 

in this area. Also, despite a legal mandate to 

maintain staffing levels in revenue positions, 

the number of staff had declined. We also 

found that the enforcement of intellectual 

property rights among CBP ports was 

uneven and that several factors contributed 

to a $613 million shortfall in collecting 

antidumping and countervailing duties from 

fiscal year 2001 through fiscal year 2007.

Impact: CBP has taken several steps to 

improve its performance of trade functions 

including (1) increased oversight by the IG 

and (2) more strategic direction and analysis 

of intellectual property enforcement. Based 

on our work, the Congress has required 

additional CBP reporting on revenue 

collections, is considering ways to improve 

the antidumping and countervailing 

duty system, and has addressed our 

recommendations in a major piece of 

intellectual property enforcement legislation. 

(GAO-08-157, GAO-08-391, GAO-07-529, 

GAO-07-735) 

2.28.C. Assessing the Implications of 

Potential Systemic Risk from Hedge 

Fund and Leveraged Buyout Activities:

In two reports on hedge funds and private 

equity-sponsored leveraged buyouts, we 
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■ noted that even with the combined 

expertise of the relevant regulators, they 

still lack the data necessary to judge the 

full risks associated with hedge funds and 

leveraged buyouts and called attention to 

the potential for systemic risk that may 

stem from these activities;

■ reported that academic research suggests 

that leveraged buyouts generally have 

a positive impact on the financial 

performance of the target companies, but 

impact on employment is uncertain, and 

that our econometric analysis generally 

found no statistical indication that club 

deals, in aggregate, were associated with 

prices paid for the target companies; and

■ recommended that the regulators for 

financial institutions that provide 

leveraged financing give increased 

attention to ensuring that their oversight 

of financial institutions takes into 

consideration potential systemic risks 

raised by changes in the broader financial 

market.

Impact: Our work on hedge funds and 

private equity provided important insights 

into the growth and impact of an increasingly 

significant part of the global financial system. 

(GAO-08-200, GAO-08-885) 

2.29.C. Providing a Basis for Improving 

the Export Control System: The system 

is a key component of the government’s 

safety net of programs designed to protect 

technologies critical to national security, 

which we designated as a new high risk list 

area in 2007. We identified the underlying 

factors that contributed to inefficiencies in 

State’s processing of arms export licenses. 

Based on the results of our analyses and 

recommendations, State has begun analyzing 

its own licensing data and implementing 

actions that will allow it to better manage 

its workload and restructure its workforce. 

Separately, we reported that the multiple 

federal agencies responsible for enforcing 

export control laws faced several challenges. 

For example, they have had difficulty 

coordinating investigations and agreeing 

on how to proceed on cases. These findings 

prompted the Department of Justice along 

with other export enforcement agencies to 

form a task force to enhance coordination. 

Also based on our recommendation, 

enforcement agencies began providing 

State and the Department of Commerce, 

which regulate defense-related exports, 

information on criminal enforcement 

actions—information that is important for 

these departments to consider as they review 

export license applications.

Impact: We have continued to identify 

opportunities for improving the efficiency 

and effectiveness of the U.S. export control 

system. Our work has helped to inform 

legislative, administration, and industry 

proposals for reforming the export control 

system. (GAO-08-89, GAO-08-710T, GAO07-265) 

2.30.C. Improving Oversight of 

Commodity Futures Markets: We 

reported on how various changes in the 

energy futures markets have posed increased 

challenges for regulators. As prices for 

various oil and natural gas commodities have 

risen significantly, concerns arose that the 

increases were the result of increased trading 

outside of regulated futures markets and by 

new market participants, such as hedge funds. 

■ We found that the Commodity Futures 

Trading Commission (CFTC) was not 

maintaining documentation of the abusive 

trading practice allegations it received 

and lacked adequate measures of the 

effectiveness of its enforcement program.
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■ We recommended that CFTC improve its 

oversight program and asked the Congress 

to consider revising the scope of the 

agency’s authority over energy derivatives 

trading given the changes in the markets. 

Impact: In response, CFTC has begun 

collecting more information on the reporting 

and classification of energy traders, and 

developing summary records of futures 

contracts in the major energy markets. In 

addition, various congressional committees 

have begun to examine the issues on which 

we reported and are considering potential 

changes in CFTC’s oversight authority. 

(GAO-08-25, GAO-08-174T, GAO-07-1095T, 

GAO-06-742T) 
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Reexamine the federal 

government’s role in achieving 

evolving national objectives

3.01.N. Enhancing National 

Preparedness for an Influenza 

Pandemic: Our work in this area included 

a March 2007 report on financial market 

preparedness for an influenza pandemic and 

an October 2007 report on private sector 

coordinating councils that could help address 

challenges that will require coordination 

between the federal and private sectors 

involved with protecting the nation’s critical 

infrastructure in advance of, as well as 

during, an influenza pandemic. 

Impact: In response to our recommendations, 

the Federal Reserve and the Office of the 

Comptroller of the Currency, in conjunction 

with the Federal Financial Institutions 

Examination Council, provided guidance to 

financial institutions on actions they should 

take to minimize the potential adverse effects 

of a pandemic. (GAO-08-36, GAO-08-539, 

GAO-08-92) 

Support the transformation 

to results-oriented, highperforming government

3.02.N. Improving Federal Agencies’ 

Acquisition Functions: Federal agencies 

spent nearly $440 billion in fiscal year 2007 

on goods and services. For decades, however, 

we have reported on a number of systemic 

challenges in agencies’ acquisition of goods 

and services, which are so significant and 

wide ranging that we designated four areas of 

contract management across the government 

to be high risk. Such concerns led us in 

September 2005 to publish a framework to 

enable high-level, qualitative assessments 

of the strengths and weaknesses of the 

acquisition function at federal agencies. 

Impact: On May 21, 2008, the Administrator, 

Office of Federal Procurement Policy, issued 

guidelines and an associated template, which 

was largely based on our framework, for 

conducting reviews of agencies’ acquisition 

functions. The Administrator anticipated that 

using the template would contribute to a more 

holistic assessment of acquisition activities, 

minimize duplication of effort, and help chief 

acquisition officers fulfill their oversight 

responsibilities. (GAO-05-218G) 

3.03.C. Strengthening the Link between 

Contract Incentives and Outcomes 

across Government: In December 2005 

and January 2007, we reported that DOD 

and the National Aeronautics and Space 

Administration (NASA) structured monetary 

incentives in contracts 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 

Help transform the federal 

government’s role and how it does 

business to meet 21st century 

challenges

Strategic Goal 3

Source: See Image Sources.
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of outcomes. In both reports, we made 

recommendations aimed at strengthening the 

link between incentives and outcomes.

Impact: The result was changes to award 

and incentive fee policies across several 

agencies, including DOD, NASA, and DHS. 

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. In December 

2007, OMB, citing our work, made tying 

award fees more directly to desired outcomes 

governmentwide policy. 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 fees when 

unrealistic cost, schedule, and performance 

targets are not met. (GAO-07-58, GAO-06-

66, GAO-06-409T) 

3.04.C. Assessing Risks and 

Strengthening Integrity of Reliance 

on Contractors: Contractor employees 

are increasingly performing tasks 

affecting billions of dollars in federal 

spending and assisting some of the most 

sensitive and restricted operations. This 

reliance on contractors carries challenges 

in maintaining institutional capacity 

distinguishing the roles and responsibilities 

of contractors and government personnel, 

and ensuring appropriate oversight. At 

DHS, we highlighted the need to manage 

risk and ensure government control over 

and accountability for decisions resulting 

from contractor services closely supporting 

inherently governmental functions. At the 

Army’s Contracting Center of Excellence, 

we found that contractors worked side by 

side with government contract specialists 

and performed the same duties, blurring the 

line between contractor and government 

responsibilities. Contractors also are 

not subject to the same ethics rules as 

government employees. 

Impact: To address the concerns raised 

in our work, DHS implemented training 

and issued memos on the appropriate use 

of contractors. In response to our work on 

the risks of personal conflicts of interests 

created by different ethics rules, and a lack 

of controls to help shed light on potential 

problems, DOD established a high-level panel 

to develop new contracting integrity policy 

and procedures. The Federal Acquisition 

Regulation Council also initiated efforts to 

gain insight into contractor practices and 

establish ways to provide more safeguards 

against personal conflicts of interest. (GAO07-990, GAO-08-169, GAO-08-360, GAO08-485, GAO-08-572T) 

3.05.C. Highlighting Congressional 

Oversight Issues for the Coast Guard’s 

Deepwater Program: The Coast Guard’s 

Deepwater Program is the largest acquisition 

in Coast Guard history. It is intended to 

replace or modernize 15 major classes of 

Coast Guard assets, including vessels, 

aircraft, and computer systems. In reports 

and testimonies, we evaluated the Coast 

Guard’s actions to increase accountability as 

it moves away from reliance on a contractor 

as lead system integrator and assumes greater 

government control over the Deepwater 

Program. Despite the positive changes under 

way, we highlighted several issues that 

warrant continued oversight. For example, 

the Coast Guard lacks adequate numbers 

of government contract specialists, cost 

estimators, and system engineers, and is 

relying on support contractors to help fill 

these key positions. As a further example, the 

Coast Guard has paid for Deepwater assets, 

such as the National Security Cutter, without 

having determined whether the assets’ 

planned capabilities will meet mission needs.
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Impact: Our work provided the Congress 

with timely analysis as it continues oversight 

of this large and complex acquisition 

program. (GAO-08-745, GAO-08-270R, 

GAO-08-531T, GAO-08-494T) 

3.06.C. Monitoring the Development 

and Operation of the 2010 Census:

Because the decennial census faces 

uncertainty and substantial risk, enhanced 

oversight remains important to the success 

of this critical national effort. In our March 

2008 testimony, we placed the 2010 Census 

on GAO’s list of high-risk federal programs 

because of the following problems—longstanding weaknesses in the U.S. Census 

Bureau’s (Bureau) information technology 

(IT) acquisition and contract management 

function, risks associated with the 

performance of the handheld computers to 

collect data, and uncertainty over the cost of 

the census. 

Impact: Our work has helped the Bureau 

identify risks and improve the performance 

of key census-taking activities. We have 

recommended numerous actions, and the 

Bureau is addressing some of these issues. 

For example, on April 3, 2008, the Bureau 

announced a major redesign of the 2010 

Census. Specifically, the Bureau would 

no longer use handheld computers for 

nonresponse follow-up in which field-workers 

interview households that did not return 

census forms, but would still use them to 

verify and update addresses. (GAO-08-936, 

GAO-08-554, GAO-08-886T, GAO-08-

659T, GAO-08-550T) 

3.07.C. Protecting Personal Privacy 

in the Post-9/11 Environment: In June 

2008, we testified that the Privacy Act may 

not provide adequate controls over federal 

collection and use of personal information, 

and stated that the Congress should amend 

this law. In addition, we reported that agency 

senior privacy officials across government 

do not uniformly have oversight of all key 

privacy functions.

Impact: We continued to help the Congress 

address increasing concerns that individuals’ 

personal information could be inadequately 

protected by federal agencies, potentially 

compromising individuals’ privacy rights or 

exposing their information to misuse, such as 

through identity theft. (GAO-08-536, GAO08-603, GAO-08-795T) 

3.08.C. Improving IT Management 

over the 2010 Decennial Census: In 

2005, we recommended that the Bureau 

make improvements in managing IT 

investments and take steps to implement 

improved IT investment management, 

enterprise architecture, human capital, 

information security, and software/

acquisition management practices. In both 

2006 and 2007, we made project-specific 

recommendations to improve acquisition 

management capabilities for acquiring key IT 

2010 Census systems.

Impact: Our work has highlighted the 

need to correct weaknesses associated with 

the Census Bureau’s management of IT 

systems. Also, because of the concerns we 

raised regarding weaknesses in the Bureau’s 

IT acquisition management capabilities, 

operational planning, and other areas, the 

2010 Census has been designated as a GAO 

high-risk area. (GAO-08-79, GAO-08-259T

GAO-07-1106T, GAO-06-444T, GAO-05-

661) 

3.09.C. Strengthening DOD Business 

Systems Modernization Management:

For decades, DOD has been challenged 

in modernizing its timeworn business 

systems. We have designated DOD’s 

business systems modernization program 

as high risk since 1995. Since 2001, our 
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work on DOD’s institutional approach 

to modernizing its business systems has 

produced recommendations that provide a 

comprehensive framework for establishing 

and implementing the institutional 

management controls associated with 

successful modernization efforts. The 

Congress embraced these recommendations 

in legislative mandates to DOD, which has 

made progress on some fronts establishing 

key corporate management controls. 

Nevertheless, key to the success of its 

modernization program is ensuring that these 

controls are extended to DOD component 

organizations and every business system 

investment. Accordingly, we focused on the 

extent to which certain major DOD business 

system acquisitions are implementing these 

controls and have made recommendations to 

strengthen management of each. 

Impact: DOD largely agreed with these 

recommendations and as a result will be 

better positioned to deliver promised benefits 

and capabilities on time and within budget. 

(GAO-08-462T, GAO-07-538, GAO-07-733, 

GAO-06-215) 

3.10.C. Improving OPM’s Management 

of Retirement Systems Modernization:

Beginning in January 2008, our work raised 

the congressional and public awareness 

of problems the Office of Personnel 

Management (OPM) faced in modernizing 

the paper-intensive processes and antiquated 

information systems used to support the 

growing volume of civilian federal employee 

retirements. We recommended that the 

agency improve management of this program, 

including that OPM address weaknesses in its 

approaches to testing system components and 

managing system defects, and that the agency 

develop a reliable program cost estimate 

and a measurement baseline against which 

program progress can be determined. 

Impact: Our work led to increased 

congressional oversight, including a mandate 

requiring OPM to report on its actions in 

response to the concerns we raised. (GAO08-345, GAO-08-576R) 

3.11.C. Improving Strategic Human 

Capital Management: In a series of reports 

and testimonies on OPM’s leadership of 

governmentwide human capital reforms, 

employee performance management, 

and workforce diversity, we reported the 

following: 

■ While OPM has started to transform 

into a more effective leader of personnel 

reforms, we recommended that OPM build 

on that progress by addressing its own 

internal challenges, including improving 

its workforce planning efforts.

■ Performance management systems must 

have adequate safeguards in place, such as 

transparent processes to ensure fairness. 

We found that several federal agencies we 

reviewed could enhance the transparency 

of their performance management 

systems in part by improving how they 

communicate performance appraisal 

results to employees.

■ Agencies’ human capital planning efforts 

are critical to address demographic trends 

facing the government, including the 

diversity of the Senior Executive Service 

(SES) and the potential SES developmental 

pool (GS-15s and GS-14s).

Impact: In response to our findings 

and recommendations, OPM took steps 

to ensure that it has the skills it needs 

for its current and future requirements, 

and several agencies improved how they 

communicate performance appraisal results 

to all employees while protecting individual 

confidentiality. We also presented testimony 

that informed congressional decisionmaking 
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on governmentwide and selected agencies’ 

workforce diversity efforts. (GAO-08-630T, 

GAO-08-11, GAO-08-609T, GAO-08-725T, 

GAO-08-815T) 

Support congressional 

oversight of key management 

challenges and program 

risks to improving federal 

operations and ensuring 

accountability

3.12.F. Reducing Federal Improper 

Payments: Since fiscal year 2000, our 

recommendations have been aimed at raising 

the level of attention given to improper 

payments—any federal payment that should 

not have been made or that was made in an 

incorrect amount (including overpayments 

and underpayments) under statutory, 

contractual, administrative, or other legally 

applicable requirements. 

Impact: Our work contributed to the 

Congress passing the Improper Payments 

Information Act of 2002. Specifically, the 

provisions of the act coincide with our 

recommendations that federal agencies take 

actions to estimate, reduce, and publicly 

report improper payments. Fiscal year 2007 

marked the fourth year that federal agencies 

were required to include estimated improper 

payment information in their annual financial 

and related performance reporting. For fiscal 

year 2007, 21 agencies reported estimated 

improper payments totaling about $55 billion 

associated with 78 programs, including 19 

programs or activities reporting for the first 

time. Federal agencies have made progress 

in reducing their improper payments. 

We estimate that they reduced improper 

payments by about $1 billion (present value) 

during fiscal year 2007. (GAO-08-438T, 

GAO-07-92, GAO-06-347, GAO-04-99, 

GAO-02-749) 

3.13.F. Reducing Administrative 

Costs in the Federal Crop Insurance 

Program: USDA pays companies 

participating in the federal crop insurance 

program a percentage of the premium 

on policies sold, in order to cover the 

administrative and operating (A&O) expenses 

of selling and servicing these policies. At 

May and June 2007 congressional hearings, 

we stated that more than 40 cents of every 

dollar USDA spends on crop insurance goes 

to companies administering the federal crop 

insurance program while less than 60 cents 

goes to help farmers. Furthermore, we

■ pointed out that A&O payments since 

2002 have significantly increased and 

are expected to continue to rise because 

of high crop prices which will increases 

the value of policies and, ultimately, A&O 

payments; and 

■ stated that a reduced A&O payment rate 

for A&O expenses would potentially save 

hundreds of millions of dollars annually 

yet still provide sufficient funds for the 

companies to continue delivering highquality service.

Impact: The Food, Conservation, and Energy 

Act of 2008 directed USDA to reduce the 

A&O payment rate 2.3 percentage points 

starting in 2009 and continuing through 

2013. Based on premiums of $9.5 billion in 

the crop insurance program, USDA will 

reduce A&O payments $220 million per 

year to insurance companies participating in 

the program. In present value terms, these 

savings total $974 million through 2013. 

(GAO-07-819T, GAO-07-944T) 

3.14.F. Improving the Financial 

Accountability of a Major DOE 

Construction Project: The Department 

of Energy (DOE) is constructing the Mixed 

Oxide (MOX) Fuel Fabrication Facility at 

the Savannah River Site in South Carolina. 
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This facility will convert surplus weaponsgrade plutonium into MOX fuel that can be 

used in commercial nuclear power plants. 

The project faces significant delays and 

project management challenges, and as a 

result, the project has significant unobligated 

balances (appropriated funds that have 

not yet been obligated to a contract) and 

uncosted obligations (funds obligated to 

a contact but not yet spent). We reported 

that the MOX project had a $476 million 

carryover balance at the beginning of fiscal 

year 2008, nearly $230 million of which was 

unobligated, and that NNSA was requesting 

an additional $333.8 million in its fiscal year 

2008 appropriations request. We reported 

that the project’s carryover balance could be 

significantly reduced and that the fiscal year 

2008 budget request may not be needed. 

Impact: The Congress agreed with our 

assessment and in the Fiscal Year 2008 

Consolidated Appropriations Act rescinded 

$115 million of the project’s carryover 

balance. In addition, the Congress reduced 

DOE’s fiscal year 2008 appropriation for the 

MOX project by $52.5 million. 

3.15.N. Improving Accountability 

for Excess DOD Parts and 

Equipment: Beginning in 2005, we 

have performed investigative work and 

made recommendations on excess parts 

and equipment at DOD. For example, 

we identified instances in which DOD 

improperly sold F-14 parts to the general 

public through its excess property system. 

Iran is the only nation in the world with 

operable F-14 fighter aircraft and is known to 

be seeking F-14 parts. 

Impact: The Congress cited our work in 

introducing legislation prohibiting DOD from 

selling parts that could be used on the F-14 

fighter aircraft. The language was included 

in the 2008 Defense Authorization Act. These 

actions have served to improve accountability 

over sensitive military parts and equipment. 

(GAO-06-943, GAO-07-929R) 

3.16.N. Referring Individuals for 

Fraudulently Accepting Federal 

Disaster Assistance Payments: In the 

aftermath of hurricanes Katrina and Rita 

in 2005, we conducted forensic audit and 

investigative work related to FEMA’s disaster 

relief assistance payments to individuals. 

Our work found indications of widespread 

fraud. We referred thousands of individuals 

suspected of fraud to the appropriate federal 

agencies, such as DHS’s Office of Inspector 

General and the Katrina Fraud Task Force, 

for further review and possible prosecution. 

Impact: As a result of these referrals, over 

50 individuals have been sentenced to jail 

or placed on probation after being found 

(or pleading) guilty. These individuals were 

convicted of crimes such as conspiracy, false 

claims, theft of government funds, mail fraud, 

and wire fraud. (GAO-06-655) 

3.17.N. Enhancing U.S. Border Security:

Beginning in 2003, our investigators 

identified border security vulnerabilities both 

at U.S. ports of entry and at unmanned and 

unmonitored land border locations between 

ports of entry. In particular, undercover GAO 

investigators successfully used fraudulent 

documents to enter the United States 

at several CBP checkpoints on both the 

northern and southern borders.

Impact: CBP recently reported that it 

took action to address a number of the 

vulnerabilities highlighted by our work, 

including enhanced training for its agents 

and the installation of additional fraudulent 

document detection equipment at U.S. ports 

of entry. Further, to address vulnerabilities in 

areas between border ports of entry, CBP has 

installed new sensor equipment technologies. 
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These actions should enable CBP to more 

effectively identify attempts to illegally 

penetrate our nation’s borders. (GAO-06-

976T, GAO-07-884T, GAO-08-757) 

3.18.C. Improving Transparency and 

Accountability of NASA’s Budget: With 

more than two-thirds of its major programs 

significantly over budget or behind schedule, 

NASA continues to struggle to improve its 

contract and program management functions. 

Our review of selected NASA programs 

found that NASA lacked the disciplined 

cost-estimating processes and financial and 

performance management systems needed 

to establish priorities, quantify risks, and 

manage costs. In an effort to address some of 

these systemic problems, we worked closely 

with the Congress this year to restructure 

and realign NASA’s appropriation funding 

account structure from three broadly defined 

appropriation accounts to seven accounts 

directly aligned to agency functions. 

Impact: As a result of our work, the 

Congress directed NASA to prepare to 

convert to a seven account structure in order 

to improve transparency and accountability. 

In addition, NASA submitted its fiscal year 

2009 budget request using the new account 

structure. It is expected that this new 

structure will provide more transparency 

and clarity to agency spending and enhance 

the overall accountability of its expenditures. 

(GAO-08-51, GAO-06-817R) 

Analyze the government’s 

fiscal position and strengthen 

approaches for addressing the 

current and projected fiscal gap

3.19.F. Changing the Criteria for IRS’s 

Federal Payment Levy Program: IRS’s 

Federal Payment Levy Program allows IRS 

to levy up to 15 percent of certain federal 

payments made to delinquent taxpayers. Our 

2003 report on the program’s operations 

found that IRS’s usage of Total Positive 

Income (TPI), a measure derived from income 

information on income tax returns, as a 

criterion for determining taxpayers’ ability to 

pay their delinquent taxes had likely resulted 

in unequal treatment of similarly situated 

taxpayers, and thus was in conflict with 

IRS’s goal of treating all taxpayers fairly. We 

recommended that IRS discontinue using the 

TPI criterion, and IRS agreed.

Impact: With the elimination of the criterion, 

taxpayers could be treated more equally. Also, 

based on our analysis, which was reviewed by 

IRS, IRS collected an estimated $25 million 

in additional tax revenue in fiscal 2006. 

We further estimate that it will collect an 

additional $82 million over the fiscal year 

2008-2010 period, for a total of $107 million 

(net present value) from phasing out TPI 

usage. (GAO-03-356)

3.20.F. Reducing Tax Avoidance by 

Individuals Who Expatriate: In 2000 

we reported on IRS, State, and Immigration 

and Naturalization Service (now a part of 

DHS) procedures for enforcing laws limiting 

individuals’ ability to avoid U.S. tax by 

expatriating, that is, leaving the United States 

and giving up U.S. citizenship or long-term 

residency status. In several confidential 

briefings to the Joint Committee on Taxation 

(JCT), we provided information on individuals 

who had expatriated including net worth 

at expatriation, average tax paid before 

expatriation, tax paid after expatriation, 

citizenship obtained, resident country, 

expatriation date, and number of years tax 

returns filed since expatriation.

Impact: Subsequently, the Heroes Earnings 

Assistance and Relief Tax Act of 2008 (Pub. 

L. No. 110-245, June 17, 2008) was enacted, 

which tightens current rules to ensure that 
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certain high net-worth expatriates cannot 

avoid U.S. taxes. JCT estimated that the 

budget effect of the revised tax rules will 

be to increase revenues by $206 million 

(discounted) in the first 5 years after 

enactment. (GAO/GGD-00-110R)

3.21.F. Increasing Tax Collections 

by Revising IRS’s Withholding 

Compliance Program: IRS’s Questionable 

Form W-4 program looked at cases where 

taxpayers claim more than 10 withholding 

allowances and exemption from federal 

income tax withholding. In November 2003, 

we recommended that IRS assess the value 

of its program and determine whether the 

program should continue. Acting on our 

recommendation, an IRS task force concluded 

that the program was not operating 

effectively. 

Impact: IRS eliminated the Questionable 

Form W-4 program and said that 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. Using IRS’s data and 

assumptions, last year we estimated that the 

new program had resulted in the collection of 

$423 million (net present value) in additional 

income taxes for fiscal years 2005 and 

2006 and through part of fiscal year 2007. 

Using IRS’s data and assumptions, this year 

we estimated that the program generated 

additional tax revenues for the remainder of 

fiscal year 2007 and much of fiscal year 2008 

equal to a net present value of $309 million 

(GAO-04-79R). 

3.22.F. Improving the Costeffectiveness of Filling the Strategic 

Petroleum Reserve: In February and 

April 2008 we testified on shortcomings in 

DOE’s efforts to fill the Strategic Petroleum 

Reserve with royalty oil (oil produced from 

federal lands and waters) received from 

the Department of the Interior (Interior). 

Through the current royalty-in-kind 

program, Interior’s Minerals Management 

Service (MMS) receives oil instead of cash for 

payments of royalties from companies that 

lease federal property for oil development, 

then DOE takes possession of this royalty 

oil at market centers and may exchange this 

oil for Strategic Petroleum Reserve-quality 

oil. The royalty-in-kind program precludes 

the need for the Congress to make outlays 

to finance oil purchases, but the forgone 

revenues associated with using royalty oil 

imply an equivalent loss of revenue because 

MMS would otherwise sell the oil and 

deposit the revenues with the U.S. Treasury. 

We testified that suspending the fill of the 

Strategic Petroleum Reserve during the 

current period of high oil prices would have a 

dampening effect on gasoline prices because it 

would reduce oil prices. 

Impact: DOE subsequently decided to 

suspend the Strategic Petroleum Reserve fill 

through the remainder of calendar year 2008, 

and the Congress passed legislation halting 

the fill with royalty oil until crude oil fell 

to $75 per barrel, on average, for a 90-day 

period. In May 2008, MMS estimated the 

value of 16.1 million barrels of royalty-inkind oil at about $1.89 billion. According to 

the Program Director, this represents MMS’s 

best estimate of the Treasury revenue gain 

stemming from DOE’s decision to suspend 

the Strategic Petroleum Reserve fill through 

the rest of calendar year 2008. The Program 

Director recommended that the estimated 

revenue gain be divided evenly among the 

last 6 months of the calendar year. In net 

present value terms, the $1.89 billion revenue 

gain would be reduced to about $1.86 billion. 

(GAO-08-521T, GAO-08-726T, GAO-08-

893R, GAO-08-942R) 
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3.23.F. Improving Collections 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, and criminal debts owed to 

the federal government and victims of crime. 

In fiscal year 2007, delinquent federal nontax 

civil debts totaled about $65 billion; most of 

these debts were over 6 months delinquent. In 

addition, criminal debts exceeded $50 billion 

in fiscal year 2007, about $11 billion (or about 

20 percent) of these debts were owed to the 

federal government. 

Impact: Based largely on recommendations 

we made in a series of reports, the 

Department of Education, the Department 

of Justice, the Department of the Treasury, 

and other federal agencies have continued 

to improve collections of delinquent federal 

nontax civil debts and criminal debts 

owed to the federal government. Adding 

to a steady stream of recoveries, these 

improved collections resulted in an estimated 

$2.3 billion in additional federal collections 

identified during fiscal year 2008. (GAO-04-

338, GAO-02-313, GAO-01-664) 

3.24.F. Improving IRS’s Methodology 

for Pursuing Delinquent Taxes: Our 

report on IRS’s fiscal year 1999 financial 

statements disclosed that IRS did not have 

systems or procedures in place to allow it 

to identify and actively pursue cases that 

may have some collection potential. We 

recommended that IRS improve its capacity 

to assess the collectibility of delinquent taxes 

to focus collection resources on debts with the 

greatest potential for collection. 

Impact: In 2004, IRS began implementing 

more sophisticated modeling technology to 

better differentiate between more and less 

productive cases in order to make better 

resource allocation decisions. IRS’s records 

showed that its collections of delinquent 

taxes increased by about $4.8 billion or over 

20 percent in fiscal year 2007 from fiscal year 

2003 levels (using approximately the same 

level of resources). (GAO-01-42) 

3.25.F. Funding USPS Postretirement 

Health Obligations: For many years we 

have reported on USPS’s significant liabilities 

and obligations, including tens of billions of 

dollars in postretirement 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 

help fund its retiree health care obligations. 

In fiscal year 2007, USPS made the first 

of its annual payments into the fund. That 

$5.4 billion payment, funded through USPS 

rate increases, helped to avoid requiring the 

federal government to finance this substantial 

obligation. 

Impact: Each of these payments, including 

the $516 billion payment for fiscal year 2008, 

represents a financial benefit to the federal 

government resulting from our work. (GAO02-170, GAO-03-448R, GAO-04-238) 

3.26.N. Improving Federal Financial 

Reporting: In fiscal year 2007, for the first 

time, we were able to render an unqualified 

opinion on the U.S. government’s Statement 

of Social Insurance. This statement displays 

the present value of projected revenues and 

expenditures for scheduled benefits of federal 

social insurance benefit programs (e.g., Social 

Security and Medicare). In addition, through 

our continuing efforts as the principal 

auditor of the U.S. government’s consolidated 

financial statements, we were able to affect 
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a number of significant improvements to 

the understandability and utility of federal 

financial reporting during 2007. 

Impact: The Department of the Treasury 

(Treasury), in coordination with OMB, 

implemented 35 of our recommendations 

directed at improving the process used to 

prepare these statements. Further, for a 

number of years, we have urged the issuing of 

a high-level summary of the federal financial 

report aimed at assisting average citizens in 

better understanding the extent and nature 

of our nation’s long-term fiscal challenge. 

In 2007, we assisted OMB and Treasury in 

producing the first-ever high-level summary 

of federal financial reporting, The Federal 

Government’s Financial Health: A Citizen’s 

Guide to the 2007 Financial Report of the 

United States Government. This eight-page 

document summarizes key financial data 

needed to better understand our nation’s 

current financial condition and fiscal 

challenges today and over the long-term. 

(GAO-07-362SP, GAO-08-926T) 

3.27.C. Reducing the Tax Gap: In a forum 

on tax compliance that we sponsored jointly 

with the Congressional Budget Office and 

JCT, participants indicated that reducing the 

annual net tax gap—the difference between 

the tax amounts taxpayers pay voluntarily 

and on time and what they should pay under 

the law, most recently estimated as $290 

billion for 2001—would require a variety 

of approaches and incremental progress. 

In 2008, we focused on identifying such 

incremental improvements. For example, 

for one area we examined, to better pursue 

egregious payroll tax delinquents, we made 

six recommendations to prioritize IRS’s 

payroll tax enforcement efforts and take 

faster action against offenders. As another 

example, in reviewing IRS’s broader 

delinquent tax collection efforts, we noted 

that the large amount of outstanding tax 

debt, almost $300 billion in 2007, and IRS’s 

limited resources result in a very complex 

collection process with delays and significant 

write-offs. To improve resource allocation, 

we recommended that IRS increase its use of 

return on investment information. 

Impact: IRS agreed with most of our 

recommendations. As they are implemented, 

the tax gap should be reduced. (GAO-08-617, 

GAO-08-728, GAO-08-99, GAO-08-266, 

GAO-08-567) 

3.28.C. Addressing Our Nation’s Longterm Fiscal Challenge: We continued our 

efforts in fiscal year 2008 to help the Congress 

and the public better understand the future 

fiscal implications of the federal government’s 

policies and commitments. Specifically, our 

report, A Call for Stewardship: Enhancing the 

Federal Government’s Ability to Address Key 

Fiscal and Other 21st Century Challenges, 

laid out a number of tools and process 

improvements to help the Congress and the 

executive branch facilitate difficult discussions 

and decisions that will be necessary. With a 

fiscal model of the state and local sector, we 

demonstrated that healthcare is a fundamental 

fiscal challenge at all government levels 

and that solutions should be considered in a 

strategic and integrated manner. In addition, 

we contributed to the federal government’s 

first-ever summary annual report, The Federal 

Government’s Financial Health: A Citizens’ 

Guide to the 2007 Financial Report of the 

United States Government, which provides an 

overview of the federal government’s financial 

condition. 

Impact: Our work informed legislative 

proposals calling for commissions to address 

the country’s fiscal challenge and the Federal 

Accounting Standards Advisory Board’s 

drafting of a fiscal sustainability reporting 

requirement. (GAO-08-93SP, GAO-08-206, 

GAO-08-317, GAO-08-372, GAO-08-912T) 
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Improve client and customer 

satisfaction and stakeholder 

relationships

4.01.C. Strengthening Communication 

and Relationships with Our 

Congressional Clients and Our 

Stakeholders: We strengthened our 

communication and relationships with our 

congressional clients in several ways this 

fiscal year:

■ performed an extensive annual outreach 

to senior members of congressional 

committees to ensure a full and complete 

understanding of emerging issues;

■ worked closely and collaboratively with 

Congress in support of passage of the 

GAO Act, which contains important 

provisions that will help us with a variety 

of human capital and administrative 

matters (see app. 2 for a summary of 

our recent human capital legislation and 

activities);

■ proactively provided testimony at 

House and Senate hearings on new 

administration transition issues and 

began developing tools for use by the next 

President and Congress to help make the 

transition from campaigning to governing 

quickly; 

■ broadened our understanding of client 

feedback through follow-up meetings with 

nonrespondents to our client satisfaction 

survey and contacted clients to further 

clarify feedback submitted; and 

■ decreased the time required between 

report issuance date and delivery to our 

congressional clients and other recipients 

from 2 or more days to the same day.

We enhanced our ability to communicate our 

results more effectively and timely to our 

stakeholders and the American people by:

■ continuing to bring attention to the 

nation’s growing fiscal imbalance 

through a series of high-profile efforts 

including a CG speech at the National 

Press Club, participating in the I.O.U.S.A. 

documentary, preparing an op-ed for USA 

Today, and continuing the Fiscal Wake-Up 

Tour;

■ fostering greater public understanding of 

our role in contract award protests in the 

face of intense press interest in the release 

of GAO’s decision on the Air Force’s aerial 

refueling tanker contract. The resulting 

national and regional news coverage 

consistently portrayed the decision as 

professional, objective, and nonpartisan;

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.
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■ preparing articles that increased 

awareness of our efforts to lead on a range 

of “best practices,” including a piece on 

human capital reform that made the cover 

of The Federal Manager; and 

■ refining and expanding our external Web 

site, including enhancing the process for 

determining the standards for establishing 

topic collections and for posting items on 

“In the Spotlight”.

Impact: As a result of these efforts, we 

improved our timeliness in providing audit 

products; enhanced press coverage of our 

work and improved access to our products 

for external users, from congressional staff 

to reporters, on current and emerging policy 

issues; enhanced the public’s understanding 

of our role as a professional, objective, and 

nonpartisan entity; and highlighted our 

commitment to continuous improvement 

through timely and accurate regional and 

national news coverage.

4.02.C. Assessing Internal Customer 

Satisfaction with Our Services and 

Processes and Implementing and 

Measuring Improvement Efforts: The 

fifth annual GAO Customer Satisfaction 

Survey was conducted in November 2007, and 

1,350 (43 percent) of our staff provided input 

on their satisfaction with our administrative 

services. Through this internal customer 

satisfaction survey, we gather information 

on how well our internal operations help 

employees get their jobs done (18 services, 

such as IT tools, report production, and 

travel) and improve employees quality of work 

life (11 services, such as benefits and transit 

subsidies), asking our staff to rank each 

service on a scale from 1 to 5 for satisfaction 

with the service and from 1 to 5 for 

importance of the service. We use information 

from this survey to set targets and assess 

our performance for both of these measures, 

which are shown in table 1 in part I. 

Fiscal year 2008 is the third year in which 

we reported how well we performed against 

the targets we set for our internal operations 

measures. While both these scores decreased 

slightly in 2008, we met our target of “4” for 

services that help employees get their jobs 

done, and just missed our target of “4” for 

services that affect quality of work life with a 

score of 3.98.

The survey provides us rich information on 

our administrative services which we used to 

proactively identify areas to address customer 

issues and recommendations, and implement 

several improvements, including

■ increasing the promotion of services and 

resources available through our library,

■ improving the user interface to enhance 

the user-friendliness of our automated 

time and attendance system,

■ improving our travel Website by 

adding a Quick Reference Checklist that 

consolidates frequently used information 

onto a single page, 

■ instituting lunch and learn sessions and 

special briefings on the myriad federal 

benefits available to staff, 

■ communicating more proactively and 

frequently with our field offices to 

expeditiously resolve concerns about mail 

services,

■ enhancing our staff’s capability to work 

remotely through system upgrades and 

development of a user guide, 

■ providing training and support for our 

document management (DM) system 

through a “tips and tricks” tool, and
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■ improving knowledge and expertise for 

help desk and floor support staff on DM.

Impact: Our efforts and commitment to 

continuous improvement have resulted in 

improvements to GAO’s operations, processes, 

and services including greater efficiency 

for our staff, increased accessibility to and 

user friendliness of systems, and improved 

communication with our customers to provide 

information and guidance about our available 

services.

4.03.C. Strengthening Relationships 

with External National and 

International Audit Organizations: To 

strengthen our relationships with auditors 

general from over 29 developing countries, 

we partnered with the World Bank and 

the International Organization of Supreme 

Audit Institutions (INTOSAI) Development 

Initiative to design, develop, and deliver 

the Supreme Audit Institution (SAI) 

Transformation Seminar in November 2007.

Impact: This prototype seminar provided 

the opportunity to strengthen public sector 

financial management and accountability at 

the global level and demonstrated successful 

partnership that will be replicated regionally 

by the INTOSAI Development Initiative.

We assisted in building the Iraqi Board of 

Supreme Audit’s (BSA) capacity through 

an MOU with State. Under this MOU, we 

sponsored a modified version of the course 

of study we offer to auditors around the 

world through the International Auditor 

Fellowship program. We also produced an 

Arabic translation of the Yellow Book and 

related GAO forms and templates to assist 

the BSA in carrying out performance audits 

and fighting corruption. These documents 

will also be used by the 19 member SAIs of 

the Arab Organization of Supreme Audit 

Institutions.

Impact: The program resulted in increased 

understanding between the United States 

and Iraqi BSA, and opened doors to positive 

relations between the two as they work to 

increase accountability for public funds spent 

in Iraq. The strategic partnership with State 

provided a foundation for future partnerships.

We collaborated on the Institute of Internal 

Auditors webcast relating to professional 

standards, with a special focus on the revised 

Yellow Book. We provided the panelists and 

the public sector network while the institute 

provided the organization, funding, and 

infrastructure for the webcast.

Impact: This webcast increased outreach to a 

global audience on the revised Yellow Book.

We continued to strengthen the ability of 

SAIs around the globe to fulfill their missions 

and enhance accountability and governance 

worldwide through our International Auditor 

Fellowship program.

Impact: We enabled 18 fellows from 17 

countries to enhance their individual skills 

and knowledge and strengthen their SAI’s 

institutional capacity and allowed our 

instructors, mentors, and sponsors to become 

a part of a global professional network 

of SAIs, donors, and other accountability 

partners, which we leverage in support of our 

engagements.

Lead strategically to achieve 

enhanced results

4.04.C. Enhancing our Strategic 

Planning Process: We took proactive steps 

to build on our strategic planning process and 

ensure enhancements to our 2010 strategic 

plan by increasing our internal awareness 

of the process through process mapping the 

“as is” process, and identifying related pain 

points and opportunities for improvement. 
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Impact: We are entering the 2010 strategic 

planning cycle with identified opportunities 

for improvement which will result in a better 

plan. 

We shared our knowledge and experience in 

strategic planning by providing significant 

leadership to INTOSAI and the National 

Intergovernmental Audit Forum (NIAF) in 

implementing their strategic plans. We 

■ helped establish the Workgroup on 

National Performance Measures and the 

Task Force on Donor Funding;

■ served as vice-chair of the INTOSAI 

Board’s Finance and Administration 

Committee in developing a system for 

implementing, tracking progress on, and 

updating the INTOSAI Strategic Plan; 

and

■ provided widespread support to NIAF’s 

committees in implementing their 

strategic objectives.

Impact: Our assistance and leadership 

in these efforts has resulted in enhanced 

governance structure, a broader membership 

base, increased resources, better financial 

management systems, and accountability for 

INTOSAI and NIAF.

4.05.C. Achieving External 

Recognition: We received the following 

external recognition during fiscal year 2008:

■ Certificate of Excellence in Accountability 

Reporting from the Association of 

Government Accountants for the seventh 

year in a row;

■ American Inhouse Design Award for three 

of our products – the 2007 Performance 

and Accountability Highlights (GAO-08-

2SP, January 2008), the Office of General 

Counsel’s recruitment brochure, and 

A Call for Stewardship: Enhancing the 

Federal Government’s Ability to Address Key 

Fiscal and Other 21st Century Challenges 

(December 2007) – selected from more 

than 5,000 entries from the public and 

private sectors;

■ Tele-Vision Award for Excellence in 

Leadership in the Federal Government’s 

Telework Program;

■ 2008 Patriotic Employer from DOD’s 

National Committee for Employee Support 

of the Guard and Reserve “for contributing 

to national security and protecting liberty 

and freedom by supporting employee 

participation in America’s National Guard 

and Reserve Force”; and

■ Government Energy Leader by the 

Association of Energy Engineers and EPA 

Energy Star for participation in the World 

Energy Engineering Congress.

Impact: These accolades demonstrate 

that we continue to be recognized for our 

contributions and leadership in a wide variety 

of endeavors.

4.06.C. Strengthening Our Strategic 

Human Capital Management to Achieve 

Enhanced Results: We substantially 

improved our leadership development 

program by changing our contracting 

vehicle. For the same investment ($250,000) 

that previously provided for slots in only 

2 courses for a maximum of 42 participants, 

we can now deliver an integrated, 12-course 

leadership development program for up to 

499 Band III and equivalent level managers.

Impact: These efforts improved the content 

and availability of our leadership training for 

over 10 times the number of managers at the 

same cost as the previous contract.
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We identified a cost-saving way to deliver 

our leadership training using our 3 regional 

learning hubs in Seattle, Dallas, and Atlanta. 

After analyzing our travel, per diem, and 

audience distribution associated with the 

training, we determined that this approach 

would save significant travel funds.

Impact: We can provide timely access 

to leadership training for our field-based 

managers, while avoiding $396,000 in travel 

costs. 

We acquired “360 By Design,” a tool that 

gives us the ability to integrate 360-degree 

feedback at all levels of management and 

link it to specific, developmental programs 

designed to improve performance in six 

critical dimensions of leadership. This tool, 

which we plan to implement in fiscal year 

2009, will specifically address one of the Ivy 

Planning Group’s recommendations.

Impact: Implementation of this tool will 

move us forward in improving our ability to 

assess managerial effectiveness in supervision 

and development.

We initiated a full, systematic, and inclusive 

review of the performance appraisal system to 

address concerns raised by the Ivy Planning 

Group. We identified some short-term 

improvements, including developing standard 

guidelines for team/unit performance 

appraisal reviews and requiring training for 

all our designated performance managers.

Impact: This evaluation will identify changes 

that we need to implement to update our 

appraisal system in response to employee 

feedback and management concerns.

To enhance our Strategic Human Capital 

Plan, our human capital management team 

participated in a 2-day facilitated session on 

strategic planning and systems thinking, 

which laid the groundwork for a cohesive 

approach to internal strategic and change 

management issues and better alignment with 

our mission and goals.

Impact: These efforts will enhance 

our human capital plan and assist us in 

developing corollary operational plans to 

support implementation of initiatives and 

ensure accountability.

4.07.C. Ensuring Sound Financial 

Practices and Robust Systems in 

Our Fiscal Operations: In October 

2007, we went “live” with the Delphi 

financial management system, which is 

hosted and operated by the Department 

of Transportation’s Enterprise Service 

Center (ESC). Such use of a cross-service 

organization is a best practice, and allows the 

majority of our accounting transactions to 

be performed at ESC. Building on the new 

system we reengineered and improved our 

financial management processes, including

■ implementing a reengineered IT asset 

management process,

■ replacing our purchase card, and

■ developing a travel post audit system to 

support auditing of travel vouchers.

Impact: Implementation of the Delphi 

system enhances our ability to produce 

auditable financial statements, supports 

A-123 compliance, and improves our financial 

management processes and reporting and 

internal controls.

By applying emerging best practices in IT 

processes and management, we enhanced IT 

governance by 

■ creating a new IT strategic plan and 

operating report;

■ developing a GAO enterprise architecture;
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■ implementing a work management system 

for guidance in managing requirements 

and resources;

■ adopting the IT Infrastructure Library, 

a collection of best practices in IT 

governance, as our guiding methodology;

■ instituting a management framework 

linking strategic goals to individual 

performance; and

■ incorporating architecture and security 

reviews into all our projects.

Impact: These enhancements provide a 

firm business case for technology initiatives, 

ensure support of our strategic and business 

goals, enhance our ability to manage work, 

and provide a foundation for the future.

Leverage our institutional 

knowledge and experience

4.08.C. Maximizing the Collection, 

Use, and Retention of Essential 

Organizational Knowledge and 

Experience: We focused on training 

requirements for our newly implemented 

Electronic Records Management System 

(ERMS) in fiscal year 2008:

■ completing training of our mission teams 

in early 2008,

■ disseminating a Web-based training 

module to demonstrate document sharing, 

and the importance of limiting sharing of 

sensitive documents to those with a need 

to know, and

■ monitoring use of ERMS to assess the 

effectiveness of training.

Impact: The use and support of this 

system, which enhances our collection, use, 

and retention of organization knowledge, 

is growing and becoming the norm for 

document sharing.

We added new search capabilities to our 

external Web page, enabling users to search 

for our products by keyword in the title, 

summary, and subject fields, and providing 

more relevant search results.

Impact: Our online user survey demonstrates 

that these search enhancements have 

increased user satisfaction as we matched 

our highest score ever (74) on the American 

Customer Satisfaction Index.

4.09.C. Increasing Our KnowledgeSharing Capability: We increased our 

knowledge-sharing capability both internally 

and externally by

■ upgrading our videoconferencing rooms,

■ developing GAOTV to deliver live and 

prerecorded programs to staff at their 

desktops,

■ piloting technology tools on the Web that 

support virtual collaboration,

■ continuing to improve our Internet site, 

and

■ participating in the design of a 

redundant architecture for CAPNET, 

the legislative branch agencies’ private 

telecommunications network.

Impact: These efforts resulted in 

increased usefulness and availability of 

videoconferencing, which encourages 

collaboration; greater staff productivity with 

the integration of video content delivery; 

customer satisfaction with our Internet site 

matching our highest score ever (74); the 

ability to securely send electronic reports to 
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congressional committees; and the ability 

to share procurement information among 

legislative branch agencies.

We also initiated the Enterprise Project to 

conceptualize, procure, and deploy a single, 

integrated, enterprisewide automated system 

that will capture, manage, store, preserve, 

protect, and deliver information consistent 

with our quality assurance framework 

throughout the life cycle of an engagement.

Impact: Initial steps have been taken to move 

us in the direction of a seamless, single point 

of access to information, enhancing usability 

and customer satisfaction.

Enhance our business and 

management processes

4.10.C. Streamlining the Engagement 

Process and Improving Engagement 

Services: An international team of 

independent reviewers examined our 

audit policies and process controls 

and a representative sample of 2007 

audit engagement files and reports, 

and interviewed senior management 

and employees responsible for selected 

engagements. The team gave us a clean 

opinion and identified several good practices 

in our engagement process that other national 

audit offices may wish to emulate, such as our 

structured approach for collecting qualitative 

interview data and our use of accumulated 

knowledge to gain insights about the entities 

audited beyond what is needed for reaching 

sound audit conclusions. The team also had 

several suggestions for enhancing our process 

and we developed a plan to address all of the 

team’s suggestions and began implementing 

them in fiscal year 2008.

Impact: Adopting the suggestions of the 

peer review team will enhance our quality 

assurance system processes and assure the 

Congress and the American people that 

our quality assurance system is working as 

intended and that our work is independent, 

objective, and reliable.

We strengthened our audit policies and 

guidance by incorporating the July 2007 

revision of Generally Accepted Government 

Auditing Standards into our Policy Manual 

and our online Electronic Assistance 

Guide for Leading Engagements. We also 

implemented the recommendation of our 

streamlining task force to revamp our 

engagement management process from seven 

gates to five phases.

Impact: As a result of these enhancements, 

we provide auditors with current audit 

standards, a simplified engagement 

process that is more intuitive and easier to 

understand, and a basis for implementing a 

future integrated technology solution that 

will enable additional process simplification 

for conducting, documenting, and reporting 

on engagements.

4.11.C. Improving our Administrative 

and Management Processes and Using 

Enabling Technology to Improve 

Crosscutting Processes: We streamlined 

our human capital business processes and 

leveraged technology to improve customer 

service and operations, including

■ consolidating data entry of our payroll and 

time and attendance processing to enhance 

personnel processing function;

■ implementing an additional recruiting 

analytics module for our recruitment 

system, Hiring Management, to improve 

recruitment data analysis and reporting;
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■ implementing the fax imaging feature in 

Hiring Management to obtain a complete 

electronic file and record of all applications 

and actions on those applications; and

■ improving how we register and track 

Learning Center courses and course 

completion, produce reports, and 

coordinate the annual scheduling process 

through our automated learning systems.

Impact: These streamlining actions resulted 

in more efficient and customer-focused 

processes and provided improved information, 

analysis, and reporting.

We improved efficiency and effectiveness 

of several services or tools through the 

following efforts:

■ completing one year of e-dissemination of 

our audit products; 

■ consolidating four separate service 

desks into one, creating a “one-call” help 

capability for our IT services;

■ upgrading and replacing several hardware 

and software components of the IT 

infrastructure;

■ eliminating a duplicative remote access 

dial-up service;

■ enhancing the usability of automated 

performance and learning tools, such 

as the Web-based time and attendance 

system and the electronic individual 

development plan; and

■ implementing a new bid protest module 

to provide work flow automation and 

tracking for our procurement law group in 

General Counsel.

Impact: These initiatives led to a 76 percent 

reduction in paper usage and a printing 

cost savings of over $350,000 for our audit 

products, maintenance/improvement of 

network stability and performance and cell 

phone and Blackberry performance, improved 

network security, approximately $163,000 

annual savings for dial-up service, and a 

reduction in administrative burden and 

increase in productivity for our staff.

Become a professional 

services employer of choice

4.12.C. Promoting an Environment 

That Is Fair and Unbiased and That 

Values Opportunity and Inclusiveness:

We implemented several initiatives aimed at 

promoting a fair and unbiased environment 

where opportunity and inclusiveness are 

valued. The most important initiatives were

■ committing to addressing over 25 

recommendations of the Ivy Planning 

Group following their examination of 

performance appraisal differences between 

Caucasian and African American analysts 

(see p. 90 for a full discussion of the Ivy 

study);

■ conducting an analysis of the agency’s 

diversity profile and programs and issuing 

a Workforce Diversity Plan with strategies 

grouped around 3 goals: recruiting 

more Hispanics, African Americans, and 

staff with disabilities; enhancing staff 

development opportunities that prepare 

staff for upper level positions; and creating 

a more inclusive environment;

■ outreaching to our employees through 

2 panels and several working sessions 

to identify ways to improve the work 

environment; and

■ establishing the GAO Diversity 

Committee, in conjunction with our GAO 

Employee Organization, IFPTE, and 
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the Employee Advisory Committee, to 

provide a forum for raising and addressing 

diversity issues and concerns of staff.

Impact: Our efforts resulted in a staff better 

informed on the problems and recommended 

solutions associated with ratings disparities 

between our African American and Caucasian 

analysts; a clear framework to address 

underrepresentation of minorities and people 

with disabilities in our workforce; and clear 

and timely information and strategies to our 

staff and managers for resolving differences, 

improving communication, enhancing 

performance, and supporting a productive 

and inclusive work environment. 

4.13.C. Providing Tools, Technology, 

and a World-class Working 

Environment: We improved our work 

environment and energy efficiency by

■ replacing the outdated cooling tower with 

a new, more energy efficient one,

■ installing a more energy efficient gas-fired 

domestic water heater, and

■ completing a comprehensive energy audit 

and identifying additional energy use 

improvements to be implemented over the 

next 3 to 5 years.

Impact: These projects reduced energy costs 

and steam and water consumption, provided 

better temperature control, identified areas 

for additional energy use improvements, and 

helped to integrate energy management goals 

with asset management and customer-driven 

initiatives.

4.14.C. Providing a Safe and Secure 

Workplace: We strengthened our 

information technology security by

■ successfully completing our Federal 

Information Security Management Act 

compliance review, scoring an A+ using 

the OMB template;

■ providing agencywide security awareness 

training;

■ improving our network monitoring 

capability to detect unauthorized 

intrusions and potential threats;

■ operating an alternative computing facility, 

as a backup in case of disaster at the GAO 

building;

■ conducting disaster recovery and 

continuity of operations planning;

■ enhancing inventory controls over IT 

assets;

■ encrypting notebook computers; and

■ conducting comprehensive reviews of all 

IT projects.

Impact: These efforts enhanced our IT 

security and emergency preparedness and 

ensured that we were consistent with FISMA 

requirements.

We made several improvements to our 

physical security program, including

■ completing a multiyear Integrated 

Electronic Security Systems improvement 

program,

■ relocating our security operations center,

■ upgrading and modernizing the electronic 

security system,

■ installing new cameras and compliant card 

readers;

■ implementing smart card access to 

headquarters via turnstiles; and
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■ co-locating all receiving and mail 

functions in headquarters to a new 

mail center with blast mitigation and 

separate air exhaust, to minimize our 

risk of exposure to explosives and 

biocontaminants delivered via the mail, 

parcel post, or messenger.

Impact: These efforts improved physical 

security and emergency response services for 

our headquarters staff.

We also instituted several improvements to 

our information security program, including

■ providing information security briefings 

and training that emphasized the 

importance of protection of classified, 

sensitive, and personally identifiable 

information;

■ established a dedicated Information 

Security Branch in the Office of Security; 

and

■ appointed a Privacy Officer to begin 

inventorying and assessing electronic 

personally identifiable information 

holdings.

Impact: These improvements help ensure 

that sensitive/classified information is 

adequately protected through enhanced 

knowledge sharing, policies, and procedures.

4.15.C. Enhancing Employee Views 

about GAO: In our first year in a labor 

relations environment, we committed to 

bargain in good faith and establish and 

maintain a positive working relationship 

with our new union, the GAO Employees 

Organization, IFPTE. Specifically, we 

■ established a Workforce Relations Center 

to work with and negotiate with the union,

■ successfully negotiated the first pay 

agreement affecting 2008 salaries and the 

interim collective bargaining agreement,

■ drafted our first workplace violence order,

■ established a Diversity Committee (see 

4.12.C.),

■ established the notification procedure 

for formal discussions and changes in 

conditions of employment, and

■ revised/updated the GAO adverse actions/

discipline order.

Impact: Our demonstrated commitment to a 

mutually cooperative working relationship has 

positioned us well as we begin negotiations 

on the first formal collective bargaining 

agreement.
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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 

taken place in fiscal year 2008 under sections 

2, 3, 4, 6, 7, 9, and 10.20

Section 2 of the Human Capital Reform Act 

made permanent GAO’s authority to offer 

voluntary early retirements and separation 

incentive payments. During fiscal year 2008, 

GAO offered its employees an agencywide 

voluntary early retirement opportunity to 

assist in dealing with fiscal year 2008 budget 

constraints, as well as to better align its 

workforce to meet mission needs, correct 

selected skill imbalances, and reduce highgrade supervisory and managerial positions. 

Eleven GAO employees applied for this 

opportunity; 6 applicants were approved, 

1 applicant was ineligible, 1 applicant was 

denied, and 3 applicants withdrew their 

applications. GAO also permitted employees 

to apply for voluntary early retirement 

outside of an open season. The use of this 

authority supported efforts to ensure that 

we had the appropriate numbers and skill 

mix of employees to respond to the requests 

of our congressional clients. An additional 

4 employees applied for voluntary early 

retirement under this authority; 2 applicants 

were approved, 1 applicant was denied, and 

1 application is pending a decision. Because 

of high costs, GAO did not authorize any 

voluntary incentive payments, for the 

reasons indicated in prior performance and 

accountability reports.

20The Government Accountability Office Act of 2008, Pub. L. 

110-323, 111 Stat. 3539, enacted in September 2008 amended 

certain sections of the GAO Human Capital Reform Act of 2004, 

and will be addressed as appropriate in the next performance and 

accountability report.

Section 3 of the act authorizes the 

Comptroller General to determine the 

amount of the annual pay adjustments 

provided to GAO employees and prescribes 

the factors to be considered in making this 

determination. In determining the amount 

of the adjustments and consistent with 

section 31 U.S.C. 732 (c)(3), the Comptroller 

General considered various data, including 

salary planning data reported by professional 

services, public administration and general 

industry organizations; the General Schedule 

(GS) adjustment; various purchasing power 

indexes; overall budgetary resources; and the 

appropriate distribution of available funds 

between the annual adjustment and individual 

performance-based compensation (PBC).

After the Comptroller General made 

preliminary determinations regarding pay 

adjustments, GAO management negotiated 

with representatives of the GAO Employees 

Association, International Federation of 

Professional and Technical Engineers 

(IFPTE) to reach final agreement regarding 

salary adjustments. This first-time agreement 

was ratified by 97.8 percent of union voters 

and was then authorized by the Comptroller 

General for GAO’s nonbargaining unit staff 

as well. 

Pay adjustments for GAO staff were effective 

on January 6, 2008, and included an annual 

adjustment of 3.5 percent and PBC using a 

budget factor of 2.75 percent. Salary ranges 

were increased by 4.5 percent not to exceed 

the GS-15, step 10, statutory limit. 

The annual adjustment was provided to all 

banded employees who were performing at 

a satisfactory level and whose salaries were 

at or below the maximum salary rate for 

their pay ranges. One hundred seventy-one 

2. GAO’s Report on Personnel Flexibilities
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employees received no annual adjustment or 

a partial annual adjustment because their 

salaries were near or over the maximum rates 

for their bands or because their performance 

was not at a satisfactory level. 

In addition to the annual adjustment, GAO 

employees were eligible for PBC based on 

their performance appraisal ratings. All (100 

percent) of an employee’s PBC amount was 

provided as a base pay adjustment not to 

exceed the maximum rate of the employee’s 

pay range. Any PBC amount that could not be 

paid because of the salary cap was provided to 

staff as a lump sum bonus. 

GAO’s banded employees (other than 

developmental staff) were also eligible for 

a “floor guarantee” if the total increase 

from the annual adjustment and PBC did 

not equal at least 4.49 percent of salary. 

The floor guarantee ensured that all staff 

received a base pay increase of at least 4.49 

percent and was provided without regard 

to pay range maximums limited only by the 

GS-15, step 10, statutory maximum rate. In 

providing the floor guarantee to staff, the 

additional amount required to bring the base 

pay adjustment to 4.49 percent of salary was 

deducted from any PBC bonus. Overall, the 

average total dollar amount resulting from 

employees’ annual adjustments, PBC base pay 

increases and bonuses, and floor guarantees 

was approximately 6.12 percent of salary.

GAO employees participating in one of 

GAO’s development programs (Professional 

Development Program, Attorney 

Development Program, Communication 

Analysts Pay Process, Program and 

Technical Development Program, and 

Administrative Pay Process) received the 

3.5 percent annual adjustment, not to exceed 

the maximum rate of their bands. These 

employees were not eligible for the floor 

guarantee because they receive additional 

performance-based salary increases every 

6 months for the 2-year duration of the 

development program. 

GAO’s SES and senior level (SL) employees 

were provided the same 2.5 percent increase 

authorized for the executive branch, effective 

January 6, 2008. SES and SL members were 

also eligible for PBC using a budget factor 

of 2.25 percent. The PBC was provided to 

the SES and SL staff as a base pay increase 

not to exceed $169,300. At the Comptroller 

General’s discretion, remaining amounts 

were provided as bonuses to staff rated 

“Outstanding” or “Exceeds.” 

Employees of GAO’s Personnel Appeals Board 

and student employees are paid according to 

GS rates, and GAO’s wage grade employees 

are paid according to the Federal Wage 

System (FWS) salary rates. These employees 

received the same percentage across-theboard adjustment on the same effective date 

as the increases authorized for GS and FWS 

employees in the executive branch. The pay 

ranges for these employees incorporated the 

changes made to the comparable executive 

branch pay ranges.

Section 4 of the act authorizes the 

Comptroller General to place employees 

on pay retention. In fiscal year 2008, GAO 

had one Administrative Professional and 

Support Staff employee on pay retention. This 

employee has been subject to pay retention 

provisions continuously since prior to the act.

Section 6 of the act authorizes the 

Comptroller General to increase the annual 

leave accrual rate for officers and employees 

in high-grade, managerial or supervisory 

positions who have less than 3 years of federal 

service. In fiscal year 2008, GAO increased 

the annual leave accrual rate of eight 

employees as an incentive to retain them.
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Section 7 of the act authorized GAO to 

establish an Executive Exchange Program, 

to bring executives from private industry 

to work on special projects at GAO and to 

permit GAO officers and employees to be 

assigned to private sector organizations. This 

authority was not used in fiscal year 2008. 

GAO anticipates that this authority will be 

used in the future on a sporadic basis.

Section 9 of the act establishes requirements 

for GAO’s performance appraisal system. 

GAO’s performance appraisal system meets 

these requirements; however, GAO has 

undertaken various initiatives in the past 

year to ensure that the system meets its 

objectives and provides an even playing 

field for all employees. In response to 

continuing differences between African 

American and Caucasian analyst performance 

appraisal averages, the Ivy Planning Group 

was selected to conduct an independent 

assessment of the factors that may influence 

these differences. The Ivy Planning Group 

was also tasked with identifying what 

additional steps GAO can take to ensure fair, 

consistent and nondiscriminatory application 

of the appraisal system. A final report was 

issued on April 25, 2008, which contained 

over 25 major recommendations. GAO is 

committed to implementing the Ivy Planning 

Group’s recommendations and is developing a 

framework for moving forward. 

GAO has also initiated a systematic and 

comprehensive review of its competencybased appraisal systems to identify what 

works well, what does not, and what could be 

done better. The system is over 5 years old 

and employee feedback indicates a growing 

consensus that changes may be needed. 

Employee and management concerns have 

been documented from a variety of feedback 

sources, including the annual Customer 

Satisfaction and Employee Feedback surveys. 

The evaluation, which is ongoing, is utilizing 

a transparent and inclusive process to 

synthesize input received to date, obtain 

additional employee input, and develop 

proposals that lay out options for changes. 

To date, the study team has conducted focus 

groups and interviews and is developing an 

all-employee survey to collect input from 

GAO staff. Findings are expected in fiscal 

year 2009.

In response to another Ivy Planning Group 

recommendation, GAO assigned a team to 

develop an approach to the review of appraisal 

ratings to maximize consistent application 

of performance appraisal standards within 

the team. The process builds on the existing 

mechanisms that GAO uses to review ratings 

and will be used on an interim basis for the 

fiscal year 2008 rating cycle. A key element 

of the new process is the requirement for 

all designated performance managers to 

present their preliminary ratings to team 

review panels. The requirements for these 

presentations have been standardized across 

the agency and all staff have been trained on 

these elements. This practice is designed to 

support consistent application of performance 

standards by different supervisors and 

supplements existing reviews of preliminary 

ratings by a higher-level reviewer and by the 

Office of Opportunity and Inclusiveness and 

the Human Capital Office. 

GAO provides continuing training on the 

performance appraisal system and the roles 

and responsibilities of staff, supervisors, 

and managers. To ensure that all designated 

performance managers are knowledgeable 

about appraisal policies, procedures, and 

practices, GAO is requiring raters to take 

online training prior to preparing fiscal year 

2008 appraisals. 

Section 10 requires the Comptroller General 

to consult with any interested groups or 

associations representing officers and 
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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. With the election of the IFPTE 

as the exclusive representative for GAO 

bargaining unit employees, GAO consults, 

and negotiates where appropriate, with the 

IFATE with respect to those employees; the 

EAC now represents those GAO employees 

who are not included in the bargaining unit. 

In summary, GAO human capital 

management continues to use the value-added 

flexibilities provided under sections 2, 3, 4, 

6, 7, 9, and 10 to acquire and maintain the 

talent necessary to carry out and meet its 

strategic mission and goals. 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.
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GAO has implemented a strong Information 

Security Program that relies on protection, 

detection, and compliance. The Federal 

Information Security Management Act 

(FISMA) and related guidance are the 

cornerstone of our program, establishing 

the standards and practices that strengthen 

our protections. Even though we are not 

obligated by law to comply with 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. Our security standards are based 

on the federal guidance found in the National 

Institute of Standards and Technology 

(NIST) 800 series and Federal Information 

Processing Standards publications. 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 security 

processes. 

GAO’s Information Security Program 

seeks to continually improve the protection 

of data, strengthen access controls, and 

streamline security processes. Generally, 

GAO’s systemwide security controls meet 

or exceed key requirements set forth in 

NIST Special Publication 800-53, Revision 

2, Recommended Security Controls for Federal 

Information Systems. We monitor these 

requirements and work to ensure that our 

protections evolve as the environment 

changes. We also support recurring external 

assessments of our information security 

program, including internal reviews by 

GAO program offices, the IG, and security 

staff, to strengthen and streamline our 

security practices. For example, our IG 

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. In addition, 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. We have leveraged third-party 

audits to successfully validate our security 

controls through a rigorous certification 

and accreditation process. During this past 

year, we conducted a full certification and 

accreditation of our General Support System 

using a third party to conduct the system test 

and evaluation. The audit team noted that we 

implemented a greater percentage of controls 

than other agencies that the team inspected. 

A major improvement in our security 

program has been the recent implementation 

of recurring security assessments of our 

financial and human capital systems operated 

by third parties. These reviews provide 

assurance of the effectiveness of the security 

policies and practices of these service 

providers.

Compliance consistent with FISMA has 

enabled us to maintain excellent information 

systems security practices 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; 

3. GAO’s FISMA Efforts
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■ provide recurring security training and 

awareness to all of our staff through 

annual awareness training, security fairs, 

and focused security briefings; 

■ integrate security into our Capital 

Planning and Investment Control and 

project management processes; and

■ implement and refine an enterprise 

disaster recovery solution. 

The dynamic nature of security threats 

requires that our Information Systems 

Security Group constantly monitor activities 

and adjust our strategy to thwart these 

challenges and meet the needs of GAO. 

As we continue to evolve and improve our 

Information Security Program, our strategies 

will also evolve to reduce the risk to GAO, 

streamline processes through the use of 

technologies, and reduce costs through 

standardization.

Activities undertaken to improve our 

Information Security Program during fiscal 

year 2008 are listed below. 

■ Certification and accreditation 

of information systems. We have 

implemented security practices to cover 

the entire life cycle of our information 

systems. Our process starts with an 

initial security assessment, establishes 

requirements for a system security plan, 

provides an independent system test 

and evaluation, provides remediation 

of security risks, and implements a 

continuous monitoring process, until 

finally the system is retired. In addition, 

we have updated our existing risk 

assessments to include the evaluation of 

security controls for systems operated by 

third parties. We have established and 

implemented processes for visiting vendors 

operating systems on our behalf to validate 

security processes, practices, and system 

controls, for the purpose of providing 

assurance to GAO management that the 

risk to GAO information is minimized and 

vendor operations are within acceptable 

federal security guidance. 

■ Enterprise workstation security. We 

continue to upgrade our workstation 

images as our laptops are replaced to 

include full-disk encryption; mobile media 

encryption; an integrated antivirus, 

antispyware, and personal firewall 

application; and two-factor authentication. 

To enhance our enterprise workstation 

security solution, we have implemented a 

“least privilege” access for staff, limiting 

the ability to change the workstation 

configuration by installing software and 

preventing the unintentional downloading 

of malware and viruses. The enterprise 

end point security application continues 

to provide centralized policy management 

and control and automatic monitoring 

and remediation of security threats to the 

workstation, and events identified by the 

application flow to the event correlation 

engine.

■ Enterprise Internet screening. Following a 

successful pilot last year, we have now fully 

implemented an Internet screening tool 

that provides antivirus protection to our 

Web-based services and has successfully 

identified and removed numerous threats 

to our workstations. Screening nonbusiness-approved sites implements 

GAO’s Internet access policy. This tool 

has already provided added security for 

our Internet access to Web sites and 

applications by improving the overall 

security posture for GAO’s network. 

■ Business partner connections. We 

have secured our connections to our 

applications operated by third parties 

using virtual private networks. These 
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secure tunnels control direct access from 

GAO to these remote sites in a secure and 

encrypted manner. 

■ Classified processing upgrade. We 

enhanced our Secret Internet Protocol 

Router Network service with upgrades 

to the laptops, including a refreshed 

secured image. 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 

to appropriately cleared officials, 

electronically transmits our classified 

reports to agencies for comments, and 

reduces the necessity of using certified 

mail for classified data.
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