U.S. Government Accountability Office

Serving the Congress and the Nation 

Accountability Integrity Reliability

Performance and 

Accountability Report

Fiscal Year 2010
S E R V I N G T H E C O N G R E S S

Source: See Image Sources.

M i s s i o n 

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. 

A c c o u n t a b i l i t y

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.

I n t e g r i t y 

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. 

R e l i a b i l i t y 

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. 

S c o p e o f w o r k 

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-11-2SP i

GAO Performance and Accountability Report 2010

Contents

Contents

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

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

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

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

Financial Reporting Assurance Statements................................................................................................. 4

About GAO.......................................................................................................................................................... 6

Mission........................................................................................................................................................ 6

Strategic Planning and Management Process .................................................................................. 7

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

Strategies for Achieving Our Goals................................................................................................... 15

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

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

Assisting the Congress and the Nation During Changing and Challenging Times........................ 22

Focusing on Results............................................................................................................................... 25

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

Focusing on Our People........................................................................................................................ 35

Focusing on Our Internal Operations .............................................................................................. 38

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

Major Government Challenges........................................................................................................... 39

The Troubled Asset Relief Program................................................................................................ 41

The American Recovery and Reinvestment Act............................................................................. 41

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

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

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

Internal Management Challenges and External Factors That Could Affect

Our Performance.................................................................................................................................. 53

Part II: Performance Information........................................................................................................................ 59

Performance Information by Strategic Goal ............................................................................................60

Goal 1 Overview: Address Current and Emerging Challenges to the Well-Being

and Financial Security of the American People..................................................................................... 61

Financial Benefits...................................................................................................................................63

Nonfinancial Benefits.............................................................................................................................63

Testimonies..............................................................................................................................................64

Source: See Image Sources.
ii GAO-11-2SP

GAO Performance and Accountability Report 2010

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: Respond to Changing Security Threats and the Challenges of

Global Interdependence.............................................................................................................................. 65

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

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

Testimonies..............................................................................................................................................68

Goal 3 Overview: Help Transform the Federal Government to Address National

Challenges......................................................................................................................................................69

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

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

Testimonies.............................................................................................................................................. 72

Goal 4 Overview: Maximize the Value of GAO by Enabling Quality, Timely

Service to the Congress and by Being a Leading Practices Federal Agency.................................. 73

Data Quality and Program Evaluation....................................................................................................... 74

Verifying and Validating Performance Data.................................................................................... 74

Program Evaluation...............................................................................................................................86

Part III: Financial Information..............................................................................................................................89

From the Acting Chief Financial Officer................................................................................................... 90

Audit Advisory Committee’s Report........................................................................................................... 93

Independent Auditor’s Report....................................................................................................................... 94

Purpose of Each Financial Statement.......................................................................................................... 97

Financial Statements....................................................................................................................................... 98

Notes to Financial Statements....................................................................................................................102

Part IV: Inspector General’s View of GAO’s Management Challenges................................................117

Inspector General’s View of GAO’s Management Challenges..............................................................118

Part V: Appendixes....................................................................................................................................................119

1. Accomplishments and Other Contributions........................................................................................120

2. GAO’s Report on Personnel Flexibilities..............................................................................................141

Image Sources...........................................................................................................................................................142

Providing Comments on This Report...............................................................................................................143

Obtaining Copies of GAO Documents............................................................................................................143
GAO-11-2SP iii

GAO Performance and Accountability Report 2010

Abbreviations

ASC ambulatory surgical center

ATO Authorization to Operate

CAO Chief Administrative Office

CDL commercial driver’s license

CGAB Comptroller General’s Advisory

Board

CMS Centers for Medicare and Medicaid

Services

CRA Congressional Review Act

CSRS Civil Service Retirement System

DCAA Defense Contract Audit Agency

DEA Drug Enforcement Administration

DHS Department of Homeland Security

DOD Department of Defense

DOJ Department of Justice

DOL Department of Labor

DOT Department of Transportation

EPA Environmental Protection Agency

FAA Federal Aviation Administration

FCC Federal Communications

Commission

FECA Federal Employees’ Compensation

Act

FEGLI Federal Employees’ Group Life

Insurance

FEHBP Federal Employees’ Health Benefits

Program

FEMA Federal Emergency Management

Agency

FERS Federal Employees’ Retirement

System

FFETF Financial Fraud Enforcement Task

Force

FFMIA Federal Financial Management

Improvement Act of 1996

FHA Federal Housing Administration

FICA Federal Insurance Contributions Act

FISMA Federal Information Security

Management Act

FMAP Federal Medical Assistance

Percentage

FMFIA Federal Managers’ Financial

Integrity Act of 1982

FSI Forensic Audits and Special

Investigations

FTR Federal Transportation Regulations

GPRA Government Performance and

Results Act of 1993

GSA General Services Administration

HHA home health agency

HHS Department of Health and Human

Services

HUD Department of Housing and Urban

Development

IAFP International Auditor Fellowship

Program

ICE Immigration and Customs

Enforcement

IFPTE International Federation of

Professional and Technical

Engineers

IG inspector general

INTOSAI International Organization of

Supreme Audit Institutions

IP intellectual property

IRS Internal Revenue Service

IT information technology

LEP Stockpile Life Extension Program

MA Medicare Advantage

MAS Multiple Award Schedules

MDA Missile Defense Agency

NARA National Archives and Records

Administration

NASA National Aeronautics and Space

Administration

NextGen Next Generation Air Transportation

System

NFC National Finance Center

NIST National Institute of Standards and

Technology

NMTC New Markets Tax Credit

NNSA National Nuclear Security

Administration

Abbreviations
iv GAO-11-2SP

GAO Performance and Accountability Report 2010

Abbreviations 

NOAA National Oceanic and Atmospheric

Administration

NPOESS National Polar-orbiting Operational

Environmental Satellite System

OMB Office of Management and Budget

OPM Office of Personnel Management

PAR performance and accountability

report

QCI Quality and Continuous

Improvement

RAC recovery audit contractor

SAI supreme audit institution

SBA Small Business Administration

TAA Trade Adjustment Assistance

TARP Troubled Asset Relief Program

TSA Transportation Security

Administration

UI Unemployment Insurance

UN United Nations

USACE U.S. Army Corps of Engineers

USCIS U.S. Citizenship and Immigration

Service

USPS United States Postal Service

VA Department of Veterans Affairs
GAO-11-2SP v

GAO Performance and Accountability Report 2010

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 2010. 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, strategies we use to achieve

our goals, 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 2010. It also includes information

on our internal controls 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 2010 and the targets we are

aiming for in fiscal year 2011. 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 2010, including a letter from

our Acting Chief Financial Officer, audited

financial statements and notes, and the

reports from our external auditor and

Audit Advisory Committee. This section

also includes 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 summaries of our

most significant accomplishments and

contributions recorded in fiscal year 2010

and information on certain human capital

management flexibilities.
vi GAO-11-2SP

GAO Performance and Accountability Report 2010

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Serving The Congress And The Nation

Introduction
From the

Source: See Image Sources.

Acting Comptroller General

2 GAO-11-2SP

GAO Performance and Accountability Report 2010

From the Acting Comptroller General 

November 15, 2010

I am pleased to present GAO’s performance and accountability report for fiscal

year 2010. The year presented many opportunities for us to make meaningful

contributions to improving the way government works in support of the

Congress and the nation. Our products covered a wide spectrum of issues—from

national and homeland security to the environment and transportation, from

cybersecurity to health care, banking, and housing. We continue to highlight

high-risk areas and government challenges for the Congress and the executive

branch and call attention to opportunities for cost savings and improvements

in federal agency and program management. Throughout the year, we also

regularly provided the Congress with the results of our work in carrying out our

responsibilities related to the Troubled Asset Relief Program and the American

Recovery and Reinvestment Act of 2009. I am confident that the performance and

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

standards for accuracy and transparency.

We again received from independent auditors an unqualified or “clean” opinion

on our financial statements for fiscal year 2010. We documented $49.9 billion

in financial benefits—a return of $87 for every dollar invested in us. We also

recorded 1,361 nonfinancial benefits that helped to change laws, such as the

Improper Payments Elimination and Recovery Act of 2010; improve services to

the public; and promote sound management throughout government. The 111th

Congress continued to rely on us to inform its work on national and international

issues, with our senior officials testifying at 192 hearings. Getting our message

out is crucial; to better serve our clients and the public we developed a mobile

Web site for access to GAO’s work from smart phones and other small screen

devices. We have also piloted an “e-report” format for faster and easier access to

key aspects of our reports. The response from our readers has been very positive.

We could not have achieved this level of performance without the outstanding

efforts of our professional, diverse, and multidisciplinary staff. Through their

hard work and dedication, we met our clients’ needs with 95 percent on-time

delivery. Our people and internal operations measures for fiscal year 2010 indicate

that our employees feel they have the developmental and training opportunities,
GAO-11-2SP 3

GAO Performance and Accountability Report 2010

From the Acting Comptroller General

work experiences and work environment, and operational support they need to

continue producing high-quality products. We met or exceeded all of the targets

we set for our seven people measures—new hire rate, retention rate (with and

without retirements), staff development, staff utilization, effective leadership by

supervisors, and organizational climate. We ranked second among large agencies

according to the 2010 Best Places to Work in the federal government rankings of

the Partnership for Public Service and the Institute for the Study of Public Policy

Implementation at American University.

We have continued to focus on key internal management challenges—physical

security, information security, and human capital—and the external factors that

affect them. For example, in fiscal year 2010, we strengthened our recruitment

initiatives to reach a more diverse applicant pool, laid the groundwork for

revamping our performance management systems, and issued an annual

Workforce Diversity Plan. In addition, we strengthened our training on

compliance with the Americans with Disabilities Act. We also improved physical

security by beginning installation of upgraded electronic security systems in

our field offices and information security by supplementing our data protection

encryption.

We maintained our productive working relationship with the employees’ union,

GAO Employees Organization, International Federation of Professional and

Technical Engineers, Local 1921, and as of November 1, we finalized negotiations

toward completion of our first master collective bargaining agreement. We are

also working with the Employee Advisory Council and the Diversity Advisory

Council on a range of issues.

Fiscal year 2010 was one of our most busy and challenging years—yet we

succeeded at performing our mission, responding to mandates, and accomplishing

many of our goals. 2011 brings more challenges with additional responsibilities

to assess duplicative government programs and opportunities to improve

operations and carry out studies and activities related to the implementation of

new health care and financial regulatory reform legislation. Our new strategic

plan for serving the Congress through fiscal year 2015 provides the framework

for reporting on progress toward our institutional goals. We look forward to

continuing to serve the Congress and the public with these and other new efforts

in the coming year.

Gene L. Dodaro

Acting Comptroller General

of the United States
4 GAO-11-2SP

GAO Performance and Accountability Report 2010

Financial Reporting Assurance Statements 

Financial Reporting Assurance 

Statements

November 15, 2010

We, the executive committee, along with the Controller, 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 of 1982 (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, 2010, 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.
GAO-11-2SP 5

GAO Performance and Accountability Report 2010

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

Cheryl Whitaker

Acting Chief Financial Officer

Lynn H. Gibson

Acting General Counsel

Pamela LaRue

Controller
6 GAO-11-2SP

GAO Performance and Accountability Report 2010

About GAO 

Source: See Image Sources.

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 FMFIA, the

Government Performance and Results Act

of 1993 (GPRA), and the Federal Financial

Management Improvement Act of 1996

(FFMIA).1 Accordingly, this performance

and accountability report for fiscal year 2010

provides what we consider to be information

comparable to that reported by executive

branch agencies in their annual performance

and accountability reports. This report also

fulfills our requirement to report annually on

the work of the Comptroller General under 31

U.S.C. 719.

1 FMFIA requires ongoing evaluations and annual reports on the

adequacy of internal accounting and administrative control systems

of each agency. GPRA seeks to improve public confidence in federal

agency performance by requiring that federally funded agencies

develop and implement accountability systems based on performance

measurement that include goals and objectives and measure progress

toward them. FFMIA emphasizes the need to improve federal

financial management by requiring that federal agencies implement

and maintain 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. 

About GAO
GAO-11-2SP 7

GAO Performance and Accountability Report 2010

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 to Address National

Challenges

■ Strategic Goal 4: Maximize the Value of

GAO by Enabling Quality, Timely Service to

the Congress and Being a Leading Practices

Federal Agency

Our audit, evaluation, and investigative work is

primarily aligned under the first three strategic

goals, which span domestic and international

issues affecting the lives of all Americans and

influencing the extent to which the federal

government serves the nation’s current and

future interests.

Figure 2 provides examples of this work, which

is further described in Part II of this report.

The fourth goal is focused internally on

improving efficiency and effectiveness in

performing our work; maintaining and

enhancing a diverse workforce; expanding

collaboration to promote professional standards;

and being a responsible steward of our resources.

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: Financing and Programs to Serve the 

Health Needs of an Aging and Diverse Population

Performance Goal: Assess trends and issues in public and 

private health insurance coverage and reforms 

Key Efforts:

 Analyze implementation of mandated and potential 

reforms, such as modifications to federal tax policies 

and new insurance-purchasing arrangements, for their 

estimated impact on the numbers of uninsured, costs 

of health care services, the health insurance industry, 

and implementation challenges for federal and state 

agencies. 

 Evaluate trends and the distribution of health insurance 

coverage, including long-term care insurance and 

employer sponsorship of private health insurance for 

employees and retirees.

 Analyze the coverage and affordability of products 

available to consumers in the individual and small-group 

insurance markets. 

 Assess the impact of public and private agencies’ efforts 

to achieve compliance with federal and state health 

insurance standards.
8 About GAO GAO-11-2SP 

GAO Performance and Accountability Report 2010

Source: GAO. 

Additional information on accomplishments by goal is highlighted in Parts II and V of this report.

 Led FEMA to begin developing a strategic plan to improve the national public alert and warning system 

 Exposed weaknesses in TSA’s behavior-based identification of high-risk air passengers

 Recommended changes that FEMA implemented to better plan for national emergency response capabilities

 Informed DHS’s top-level review of weaknesses and risks in the multibillion dollar Secure Border Initiative 

 Contributed to a more robust missile defense acquisition policy

 Encouraged reforms in the United Nations’ procurement, internal oversight, and employment processes

 Provided insight to the Congress that led to expanding U.S. sanctions against Iran

 Informed development of a framework to reform the U.S. export control system

Goal 2: Respond to Changing Security Threats and the Challenges of Global Interdependence

 Informed IRS’s decision to extend regulation of paid tax preparers, including requiring them to obtain an identifying number 

and be tested for competency 

 Exposed Energy Star as a self-certification program by obtaining certification for bogus products which led DOE and EPA to 

adopt improvements in their approval process

 Led GSA to strengthen requirements due to improper spending on premium class government travel 

 Surfaced weaknesses in VA outpatient scheduling IT systems 

 Developed a methodology adopted by the Congress to efficiently target billions of dollars in Medicaid assistance through the 

Recovery Act 

 Assessed IT risks for the 2010 Census to ensure successful execution

 Profiled selected DHS investments in a 2-page format to provide the Congress with a new, easy reference on acquisition 

oversight, planning, and execution

Goal 3: Help Transform the Federal Government to Address National Challenges

Goal 4: Maximize the value of GAO by enabling quality, timely service to the Congress and 

Being a leading practices federal agency

 Implemented leading practices to attract a more diverse workforce and foster an inclusive work environment

 Leveraged technology to facilitate business process improvements in financial and administrative IT systems 

 Improved access to our products with a new mobile Web site for users of small screen devices and a new electronic product 

format

 Collaborated with international accountability organizations to enhance their audit guidelines by incorporating private sector 

international auditing standards 

 Led development of a strategic plan for the international accountability community

 Identified ways for HHS to strengthen inspections of ambulatory surgical centers leading to a fourfold increase in the 

proportion of centers found to have deficient practices

 Appointed 49 experts and stakeholders to 3 organizations created in new health care legislation

 Recommended food safety improvements that the Congress included in legislation for USDA’s school lunch program

 Facilitated expedited claims process for Labor’s black lung benefits program 

 Increased EPA focus on environmental threats to children’s health 

 Identified factors to consider in restructuring Fannie Mae and Freddie Mac

 Proposed changes to improve control of toxic chemicals in consumer products

 Identified hidden fees for air travel that should be disclosed to consumers

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

Security of the American People

Figure 2: How GAO Assisted the Nation • Fiscal Year 2010 
GAO-11-2SP 9

GAO Performance and Accountability Report 2010

About GAO

In July 2010, we updated and began the

transition to our strategic plan for fiscal years

2010-2015. The plan describes our goals and

strategies for supporting the Congress and the

nation and identifies eight trends that provide

context for the plan. These are highlighted in

our strategic planning framework for serving

the Congress (see fig. 3). We identified these

trends based on a review of external literature,

discussions with outside advisors and selected

experts, and input from our mission teams

based on their discussions with congressional

clients and their institutional knowledge.

The four strategic goals and the strategic

objectives that support them reflect these

broad trends. Several multiyear performance

goals define a specific level of achievement

for each strategic objective. At the base of

our strategic planning hierarchy, key efforts

describe a body of work that operationalizes

each performance goal. 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. A

description of the steps in our strategic

planning process is included in our strategic

plan, (see our complete strategic plan on

http://www.gao.gov/products/GAO-10-559SP).

This site also provides access to our annual

performance plans since fiscal year 1999 and

our performance and accountability reports

since fiscal year 2001.

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 incorporate 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 publicly

available—like our strategic plan—on our

Web site (http://www.gao.gov/sp.html).

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 ninth

consecutive year its Certificate of Excellence

in Accountability Reporting for our fiscal

year 2009 performance and accountability

report. According to the association, this

certificate means that we produced an

interesting and informative report that

achieved the goal of complete and fair

reporting. We also received an award from

Graphic Design USA for the full version

of our fiscal year 2009 performance and

accountability report, as well as for its

summary version known as the Citizens’

Report (see fig. 4).
10 GAO-11-2SP

GAO Performance and Accountability Report 2010

About GAO 

CORE VALUES

TRENDS

National 

Security 

Threats

Fiscal 

Sustainability 

Challenges

Economic 

Recovery 

and Growth

Global 

Interdependence

Science and 

Technology

Networks and 

Virtualization

Shifting Roles 

of Government

Demographic 

and Societal 

Change

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.

Goals Objectives

	 Accountability Integrity	 Reliability

Source: GAO. GAO Strategic Plan 2010–2015

● Health care needs

● Lifelong learning

● Benefits and 

protections for workers, 

families, and children

● Financial security

● Effective system of 

justice

● Viable communities

● Stable financial system and 

consumer protection

● Stewardship of natural 

resources and the 

environment

● Infrastructure

● Homeland security

● Military capabilities

and readiness

● U.S. foreign policy interests

● Global market forces

● Government’s fiscal 

position and options for 

closing gap

● Fraud, waste, and abuse

● Major management challenges 

and program risks

● Efficiency, effectiveness, 

and quality

● Diverse and inclusive 

work environment

● Professional networks and 

collaboration

● Institutional stewardship and 

resource management

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 relatedto...

...Respond to Changing Security 

Threats and the Challenges of Global 

Interdependence involving...

Help Transform the Federal Government to 

Address National Challenges byassessing...

Maximize the Value of GAO by Enabling 

Quality, Timely Service to the Congress and 

Being a Leading Practices Federal Agency in

theareasof...

Figure 3: GAO’s Strategic Plan Framework
 certificate of 

 excellence in 

accountability

 reporting®

presented to the

in recognition of your outstanding efforts 

preparing gao’s performance and 

accountability report for the fiscal 

year ended September 30, 2009.

A Certificate of Excellence in Accountability Reporting is presented

by AGA to federal government agencies whose annual 

Performance and Accountability Reports achieve the 

highest standards demonstrating accountability 

and communicating results.

U.S. Government 

Accountability 

Office

in Accountability Reporting Board

P E R F O R M A N C E & A C C O U N T A B I L I T Y R E P O R T G A O F i s c a l Y e a r 2 0 0 9

Accountability Integrity Reliability

U.S. Government Accountability Office

Serving The Congress And The Nation

Performance & 

 Accountability

 Report

Fiscal Year 2009

http://www.gao.gov/products/GAO-10-234SP

Accountability Integrity Reliability

U.S. Government Accountability Office

Serving The Congress And The Nation

Summary of 

GAO’s Performance 

and 

Financial Information 

Fiscal Year 2009 

2009P&A Awards

GAO-11-2SP About GAO 1113

GAO Performance and Accountability Report 2010

About GAO

Figure 4: GAO’s Performance and Accountability Report Awards

Source: GAO.
12 GAO-11-2SP

GAO Performance and Accountability Report 2010

About GAO 

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: Acting Chief Administrative

Officer/Chief Financial Officer Cheryl

Whitaker and Acting General Counsel Lynn

Gibson. Mr. Dodaro has been nominated by

the President to serve as the Comptroller

General.

To achieve our strategic goals, our staff are

organized as shown in figure 5. For the most

part, our 14 evaluation, audit, research, and

investigative 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. In addition to this work,

Forensic Audits and Special Investigations

(FSI) follows up on engagements and referrals

from our other teams when its special services

are required for specific fraud allegations or

for assistance in evaluating security matters.

Also, FSI manages Fraudnet, which is our

online system created for the public to report

to GAO allegations of fraud, waste, abuse, or

mismanagement of federal funds. FSI is an

integrated unit composed of investigators,

analysts, and auditors who have experience

with forensic auditing and data mining and

staff in the office of our General Counsel.

Senior executives in charge of the teams

manage a portfolio 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, our General Counsel’s

office 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 matrixed structure increases

our effectiveness, flexibility, and efficiency

in using our expertise and resources to meet

congressional needs on complex issues.
GAO-11-2SP 13

GAO Performance and Accountability Report 2010

About GAO

Figure 5: Organizational Structure

Inspector General Opportunity and

Inclusiveness

Congressional

Relations

Public

Affairs

Source: GAO.

Teams

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 

Well-being 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 to 

Address National 

Challenges

• Applied Research

and Methods

• Financial 

Management and 

Assurance

• Forensic Audits

and Special

Investigations

• Information 

Technology

• Strategic Issues

Maximize the Value of 

GAO by Enabling 

Quality, Timely Service 

to the Congress and 

Being a Leading 

Practices Federal 

Agency

• 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

• Field Operations

Note: The General Counsel’s office 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. 

The General Counsel’s office is structured

to facilitate the delivery of legal services

to the teams and staff offices that support

our four strategic goals. This structure

allows General Counsel to (1) provide

legal support to our staff offices and audit

teams concerning all matters related to

their work and (2) produce legal decisions

and opinions for the Comptroller General.

Specifically, the goal 1, goal 2, and goal

3 groups 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
14 GAO-11-2SP

GAO Performance and Accountability Report 2010

About GAO 

addition, these groups prepare advisory

opinions to committees and members of

the Congress on agency adherence to laws

applicable to their programs and activities.

The Legal Services group provides inhouse 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 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 the General

Counsel’s office, primarily in the Legal

Services group, provide legal support for goal

4 efforts.

We maintain a multidisciplinary workforce

with training in many disciplines, including

accounting, law, engineering, public and

business administration, economics, and

the social and physical sciences. About

three-quarters of our approximately 3,200

employees are based at our headquarters in

Washington, D.C.; the rest are deployed in

11 field offices across the country (see fig. 6).

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.

In September 2008, the Government

Accountability Office Act of 2008 was

enacted establishing the Office of the

Inspector General (IG) of GAO as an

independent statutory office within the

agency. Under the legislation, the IG is

responsible for conducting audits and

investigations relating to the administration

of the programs and operations of GAO and

for making recommendations to promote its

economy, efficiency, and effectiveness. The

IG also keeps the Comptroller General and

the Congress fully informed through its

semiannual reports that describe its findings.

In addition, the IG investigates allegations

Figure 6: 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-11-2SP 15

GAO Performance and Accountability Report 2010

About GAO

from GAO employees and other interested

parties concerning activities within GAO that

may constitute the violation of any law, rule,

or regulation; mismanagement; or a gross

waste of funds or other wrongdoing.

Strategies for Achieving Our 

Goals

GPRA 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 will allow us to

achieve our four broad strategic goals.

Attaining our three external strategic goals

(1, 2, and 3) and their related objectives rests,

for the most part, on providing professional,

objective, fact-based, 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 2010, we devoted 95 percent

of our engagement resources to work

requested or mandated by the Congress.

We devoted the remaining 5 percent of

the engagement resources to work we

initiated under the Comptroller General’s

authority. Much of this work addressed

various challenges that are of broad-based

interest to the Congress, such as the cost

and status of both security stabilization

and reconstruction efforts in Iraq and the

United States’ efforts to secure Afghanistan
16 GAO-11-2SP

GAO Performance and Accountability Report 2010

About GAO 

and combat terrorism in Pakistan.2 Also

covered by this work were reviews of

government programs and operations that

we have identified as at high risk for fraud,

waste, abuse, and mismanagement as well

as reviews of agencies’ budget requests to

help support congressional decision making.

By making recommendations to improve

the accountability, operations, and services

of government agencies, we contribute

to increasing the effectiveness of federal

spending and enhancing the taxpayers’ trust

and confidence in their government.

Our staff are responsible for following high

standards for gathering, documenting, and

supporting the information we collect and

analyze. This information is usually presented

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 1,000 products each

year, primarily in an electronic format.

In addition, we publish about 300 to 400

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

congressional hearing and the latter are

provided for inclusion in the congressional

record;

■ briefings, which are usually given directly

to congressional staff members; and

2

 In fiscal years 2008 and 2009, the work performed under the

Comptroller General’s authority represented 6 percent and 5 percent,

respectively, of our engagement efforts.

■ 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 many

Americans, such as our reports on the fiscal

future of the United States and our decisions

on federal bid protests.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 by 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).

3

 GAO, The Federal Government’s Long-Term Fiscal Outlook: Fall 

2009 Update, GAO-10-137SP (Washington, D.C.: October 2009);

GAO, Bid Protest Overview, GAO-10-534SP (Washington, D.C.:

December 2009); Principles of Federal Appropriations Law: Third

Edition GAO-09-576SP (Washington, D.C.: August 2009).
GAO-11-2SP 17

GAO Performance and Accountability Report 2010

About GAO

Similarly, we use our biennial high-risk

report, most recently issued in January

2009, 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. In fiscal

year 2010 we updated our high-risk and

government management challenges Web

site to draw attention to issues of national

importance, including preparedness for largescale public health emergencies; effective

representation of U.S. diplomatic interests;

and major cost saving opportunities; and the

products we issued that address them. These

products are valuable planning tools because

they help us to identify those areas where

our continued efforts are needed to maintain

focus on important policy and management

issues facing the nation.

To attain our fourth strategic goal—an

internal goal—and its four related objectives,

we implement projects to address the key

efforts in our strategic plan. We conduct

surveys of our congressional clients and

internal customers to obtain feedback on our

products, processes, and services and identify

ways to improve them. We also perform

internal management studies and evaluations.

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 leading practices

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. 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
18 GAO-11-2SP

GAO Performance and Accountability Report 2010

About GAO 

several years. The remaining measures

are intermediate outcomes in that they

often lead to achieving outcomes that

are ultimately captured in our financial

and nonfinancial benefits. For financial

benefits and nonfinancial benefits,

we first set targets for the agency as

a whole, and then we set targets for

each of the external goals (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.

■ Clients. To judge how well we are serving

our client, we measure the number of

congressional hearings where we are asked

to present expert testimony 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 electronic client feedback form 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 hearings and then

assign a portion of these hearings as a

target for each of the external goals (1,

2, and 3) based on each goal’s expected

contribution to the agencywide total.

We base this target on our assessment of

the congressional calendar and hearing

trend data. 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 secure

Internet access and voice communication

systems, performance management, and

benefits information and assistance. We

set targets for these measures at the

agencywide level.
GAO-11-2SP 19

GAO Performance and Accountability Report 2010

About GAO

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. 56).

The teams and offices that are directly

engaged in the work discuss their views of

what must be accomplished in the upcoming

fiscal year with our top executives, who

then establish targets for the performance

measures.

Once approved by the Comptroller General,

the targets become final and are presented

in our annual performance plan and budget.

4

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 2010 against our

previously established performance targets.

We also present our financial statements, the

independent auditor’s report, anda statement

from GAO’s Inspector General. 4

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

http://www.gao.gov/products/GAO-10-598SP.
20 GAO-11-2SP

GAO Performance and Accountability Report 2010

About GAO

This page intentionally left blank
Serving The Congress And The Nation

Part I

Management’s 

Discussion and Analysis
22 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Assisting the Congress and the Nation During 

Changing and Challenging Times

In fiscal year 2010, the challenges that

most urgently engaged the attention of the

Congress and the public helped to define our

priorities. Our work on nationwide funding

provided through the American Recovery

and Reinvestment Act of 2009 (Recovery

Act) and the Troubled Asset Relief Program

(TARP) in response to the economic crisis,

national security and wartime commitments,

expanded health care coverage for our

citizens, and environmental crises helped

inform congressional members, the

administration, and their staffs in developing

new federal policies and programs and

overseeing ongoing ones to address these and

other issues.

We monitored how well we performed our

work and supported our staff using 15 annual

performance measures. The results of our

efforts are reflected in our solid performance

in fiscal year 2010—we met or exceeded all

but one of the performance targets we set

for each of these measures (see table 1). We

exceeded our financial benefits target of $42

billion for the fiscal year by $7.9 billion. This

represents an $87 return on every dollar

the Congress invested in us. In addition, we

exceeded our target of 1,200 nonfinancial

benefits by 161 benefits. We also exceeded

our targets for past recommendations

implemented by 2 percentage points and for

new products with recommendations by 1

percentage point. We did not meet our target

of 220 hearings at which we were asked to

testify, due to fewer than anticipated hearings

in a range of subject areas. We did meet

the target for delivering our products and

testimonies to our clients in a timely manner.

We also met or exceeded our annual targets

for all seven of our people measures.

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 2010 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 2009, we exceeded our

targets of 4.0 (a composite score based on

employees’ responses from an internal survey)

for our measure to help get the job done and

for our quality of work life measure. These

scores indicate that our employees were

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,

with 5 being the highest score.
GAO-11-2SP 23

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Table 1: Agencywide Summary of Annual Measures and Targets 

Performance 

measure

2006

actual

2007

actual

2008

actual

2009

actual

2010

target actual

Met/

not met

2011

target

Results

Financial benefits

(dollars in billions) $51.0 $45.9 $58.1 $43.0 $42.0 $49.9 met $42.0

Nonfinancial benefits 1,342 1,354 1,398 1,315 1,200 1,361 met 1,200

Past recommendations implemented 82% 82% 83% 80% 80% 82% met 80%

New products with 

recommendations 65% 66% 66% 68% 60% 61% met 60%

Client

Testimonies 240 276 298 203 220 192 not met 200

Timelinessa 93% 95% 95% 95% 95% 95% met 95%

People

New hire rate 94% 96% 96% 99% 95% 95% met 95%

Retention rate

With retirements 90% 90% 90% 94% 90% 94% met 90%

Without 

retirements 94% 94% 93% 96% 94% 96% met 94%

Staff developmentb,c 76% 76% 77% 79% 76% 79% met 76%

Staff utilizationb,d 75% 73% 75% 78% 75% 77% met 75%

Effective leadership 

by supervisorsb,e 79% 79% 81% 83% 80% 83% met 80%

Organizational 

climateb 73% 74% 77% 79% 75% 79% met 75%

Internal operationsf

Help get job done 4.1 4.05 4.0 4.03 4.0 N/A N/A 4.0

Quality of work life 4.0 3.98 4.01 4.01 4.0 N/A N/A 4.0

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

The timeliness measure is based on one question on a form sent out to selected clients. The response rate for the form in fiscal year 

2010 is 29 percent, and 99 percent of the clients who responded answered this question. The percentage shown in the table represents 

the percentage of respondents who answered favorably to this question on the form.

b

This measure is derived from our annual agencywide employee feedback survey. From the staff who expressed an opinion, we 

calculated the percentage of those who selected favorable responses to the related survey questions. Responses of “no basis to judge/

not applicable” or “no answer” were excluded from the calculation. While including these responses in the calculation would result in 

a different percentage, our method of calculation is an acceptable survey practice, and we believe it produces a better and more valid 

measure because it represents only those employees who have an opinion on the questions. 

c

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. 

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.
24 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

e

In fiscal year 2009 we changed the name of this measure from “Leadership” to its current nomenclature to clarify that the measure reflects 

employee satisfaction with their immediate supervisors’ leadership. In fiscal year 2010, we changed one of the questions for this measure.

f

For our internal operations measures, we ask staff to rank 33 internal services available to them and to indicate on a scale from 1 to 5, 

with 5 being the highest, their satisfaction with each service. These measures are described in more detail on page 38 of this report. 

We will report actual data for fiscal year 2010 once data from our November 2010 internal customer satisfaction survey have been 

analyzed. N/A indicates that the data are not yet available.

Our fiscal year 2011 targets for 14 of 15 of our

performance measures are the same as those

targets we reported in our fiscal year 2010

performance plan in January 2010. We believe

that these targets are challenging yet realistic

for our staff. For example, we did not increase

our financial benefits target for 2011 above our

fiscal year 2010 actual because we cannot always

predict whether agencies or the Congress will

implement our recommendations or the benefits

that may accrue from these actions in a given

year. Thus, we believe our target of $42 billion

for financial benefits for fiscal year 2011 (shown

on p. 23) is an achievable, conservative estimate.

To help us examine trends over time, we look

at 4-year rolling averages for the following

performance measures: financial benefits,

nonfinancial benefits, new products with

recommendations, and testimonies. We calculate

4-year rolling averages because historically

our performance on these measures has

fluctuated from year to year, and this calculation

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

2006 through fiscal year 2010, our averages

for financial benefits and new products with

recommendations remained fairly stable during

this period. However, the average number of

nonfinancial benefits we recorded declined from

fiscal years 2008 to 2009 and increased again in

fiscal year 2010.

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,

in addition to our 4-year rolling averages and

our past performance. Our experience has

shown that during the fiscal year in which an

election occurs, the Congress generally holds

fewer hearings because the members usually

only meet for a short session at the end of the

calendar year, and then they reorganize in the

following months, providing fewer opportunities

for us to testify. In 2010, our experience was

different than expected due to a congressional

focus on a few key policy areas that did not

encompass as many hearings on our broad

scope of work as in recent years. We have

therefore set a lower target for congressional

testimonies in 2011 than in 2010.

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

Performance measure 2006 2007 2008 2009 2010

Results

Financial benefits (billions) $43.0 $45.10 $48.7 $49.5 $49.2

Nonfinancial benefits 1,248 1,325 1,376 1,352 1,357

New products with recommendations 61% 64% 65% 66% 65%

Client

Testimonies 206 228 248 254 242

Source: GAO.
GAO-11-2SP 25

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Focusing on Results

Focusing on outcomes and the efficiency

of the processes needed to achieve them is

fundamental to accomplishing our mission.

The following four annual measures—

financial benefits, nonfinancial benefits, past

recommendations implemented, and new

products containing recommendations—

indicate that we have fulfilled our mission and

delivered results that benefit the nation.

Financial Benefits and Nonfinancial 

Benefits

We describe many of the results produced by

our work as either financial or nonfinancial

benefits. Both types of benefits result from

our efforts to provide information to the

Congress that helped to (1) change laws

and regulations, (2) improve services to the

public, and (3) promote sound agency and

governmentwide management. In many cases,

the benefits we claimed in fiscal year 2010 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, lessens the cost

of a multiyear program or entitlement, or

reallocates funds to other areas. Financial

benefits could also result from increases in

federal revenues—due to changes in laws,

user fees, or asset sales—that our work helped

to produce.

In fiscal year 2010, our work generated

about $49.9 billion in financial benefits

(see fig. 7). We exceeded our target by

almost 19 percent due to several large

unanticipated accomplishments. Part II of

this report provides more information on

these accomplishments by goal. Of the total

amount documented in fiscal year 2010, about

$26.4 billion (or approximately 53 percent)

resulted from changes in laws or regulations

(see fig. 8).

Figure 7: Financial Benefits GAO Recorded

Dollars in billions

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

2006 2007 2008 2009 2010 2010

$43.0 $42.0

$49.9

$58.1

$45.9

$51.0
26 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Figure 8: Types of Financial Benefits Recorded 

in Fiscal Year 2010 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 $49.9 billion

$6.6 billion

(13%)

$16.9 billion

(34%)

$26.4 billion

(53%)

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. We limit the period

over which benefits from an accomplishment

can accrue to no more than 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 report 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 (QCI) office,

reviews all financial benefits and approves

benefits of $100 million or more, which

amounted to 95 percent of the total dollar

value of benefits recorded in fiscal year 2010.

In fiscal year 2010, financial accomplishments

of $100 million or more were also reviewed by

independent second and third reviewers with

knowledge of our accomplishment reporting

policies and procedures. (See the financial

benefits section in table 15 in part II of this

report for more details about our process for

reviewing accomplishment reports claiming

financial benefits.) Figure 9 describes several

examples of our major financial benefits

for fiscal year 2010. Additional examples of

financial benefits can be found in Part II:

Performance information by goal, and Part V,

appendix 1 of this report.
GAO-11-2SP 27

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Source: See Image Sources.

Description

Amount

(Dollars in 

billions)

Canceling the Manned Ground Vehicle Portion of the Army’s Future Combat 

System. Our body of work on the Army’s Future Combat System (FCS) has 

continuously identified concerns regarding the program’s technology maturity, 

requirements definition, and affordability, and that alternatives to the FCS program 

may need to be considered. In 2009, the Secretary of Defense effectively made a 

no-go decision regarding the program when he recommended canceling the manned 

ground vehicle portion of the program-8 of 14 systems-and directed the Army to 

pursue an alternative program. The President’s budget request for 2010 reflected this 

recommendation and, in explaining the rationale for this decision, OMB cited our work. 

The estimated financial benefit, even after a replacement program is initiated, is $3.742 

billion from 2010 through 2012. (GAO-09-288) $3.7

Eliminating Seller-Funded Assistance for Federal Housing Administration 

Mortgages. We previously reported that Federal Housing Administration (FHA)-

insured mortgages with seller-funded down payment assistance had relatively high 

delinquency and insurance claim rates and tended to inflate the sales prices of homes. 

We recommended that FHA take steps to mitigate the risks of this type of assistance. 

In 2007, we testified that loans with this assistance were contributing to FHA’s 

deteriorating financial condition. Citing our work, in 2008 Congress enacted legislation 

prohibiting seller-funded down payment assistance. The estimated financial benefit 

associated with reduced insurance claims from this provision is $3.53 billion in fiscal 

year 2010. (GAO-06-24) $3.5

Enhancing Tax Compliance Involving Foreign Accounts. Our work on international 

tax compliance supported Congress’s deliberations. The work included reviews of: the 

Internal Revenue Service’s qualified intermediary program, the civil statute of limitations 

for offshore transaction cases, the use of accounts and company subsidiaries in 

countries considered to be tax havens, and information on company ownership. The 

Joint Committee on Taxation estimated the provisions will increase revenue by about $3 

billion in net present value from 2010 to 2014. (GAO-08-99, GAO-08-778) $3.0

Figure 9: GAO’s Selected Major Financial Benefits Reported in Fiscal Year 2010

FINANCIAL BENEFITS
28 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Reducing Compensation to Federal Crop Insurance Providers. We found that 

administrative and operating allowances and underwriting gains paid to providers 

of federal crop insurance are excessive. As a result, Congress authorized the U.S. 

Department of Agriculture (USDA) to reexamine this compensation. At our urging, 

USDA used this authority to reduce compensation to the providers and better align it 

with profitability of comparable private property and casualty insurance. The reduced 

compensation is estimated to yield a financial benefit of $2.75 billion from 2011 through 

2015. USDA stated that our contributions were instrumental in achieving these savings. 

(GAO-09-445, GAO-07-944T, GAO-07-819T) $2.8

Improving Accountability Over U.S. Assistance to Pakistan. We have reported and 

testified on the need for greater accountability over Coalition Support Funds (CSF) that 

are provided to Pakistan. In 2008, we found that the Department of Defense (DOD) 

did not consistently apply existing CSF guidance to document that claimed costs 

were valid, actually incurred, or correctly calculated. We recommended that DOD 

consistently implement existing oversight criteria and implement additional controls, 

and in response, DOD revised its guidance for processing CSF claims. Under this 

revised guidance, DOD has thus far denied over $690 million worth of Pakistani claims 

for CSF reimbursements. (GAO-08-806) $0.7

Source: GAO. 

Note: Additional examples of fiscal year 2010 financial benefits can be found in Part II: Performance Information and Part V, appendix 1: 

Accomplishments and Other Contributions.
GAO-11-2SP 29

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Nonfinancial Benefits

Many of the benefits that result from our

work cannot be measured in dollar terms.

During fiscal year 2010, we recorded a total

of 1,361 nonfinancial benefits (see fig. 10).

We exceeded our target by over 13 percent

due largely to a number of accomplishments

we documented that related to the nation’s

defense and security, environmental, and

national infrastructure programs.

Figure 10: Nonfinancial Benefits GAO Recorded

0

300

600

900

1200

1500

2006 2007 2008 2009 2010 2010

Number

Source: GAO.

Actual Target Actual

1,361

1,200

1,315 1,398 1,342 1,354

In fiscal year 2010 we documented 645

instances where federal agencies used our

information to improve services to the public,

43 instances where the information we provided

to the Congress resulted in statutory or

regulatory changes enacted in fiscal year 2010,

and 673 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 improving oversight of nursing home

care, identifying fraud at the SBA’s business

development program, and improving foreign

service officers’ language skills. In figure 12, we

provide examples of nonfinancial benefits we

claimed as accomplishments in fiscal year 2010.

Additional examples of nonfinancial benefits can

be found in Part II: Performance information by

goal, and Part V, appendix 1 of this report.

Figure 11: Types of Nonfinancial Benefits 

Documented in Fiscal Year 2010 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 1,361

673

(49%) 645

(48%)

43

(3%)
30 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Figure 12: GAO’s Selected Nonfinancial Benefits Reported in Fiscal Year 2010

Source: See Image Sources.

Nonfinancial benefits that helped to change laws

Worker, 

Homeownership, 

and Business 

Assistance Act of 

2009 (Public Law 

111-92) 

Strengthening First-Time Homebuyer Credit Provisions. Since 2008, 

Congress enacted three versions of the First-time Homebuyer Credit (FTHBC) 

to assist the real estate market. Taxpayers claiming the 2008 credit (up to 

$7,500) must repay the credit over 15 years, but subsequent claimants (up to 

$8,000) generally do not have to repay the credit. Based on our work, Congress 

granted IRS the statutory authority to apply math error checks that allow IRS to 

automatically deny ineligible FTHBC claims. This includes allowing IRS to use 

the prior year return information to verify compliance with the 2008 payback 

provision and ensuring taxpayers do not claim the credit in multiple years. 

(GAO-09-1026)

Patient 

Protection and 

Affordable Care 

Act (Public Law 

111-148) 

Expediting Black Lung Benefits Claims. The Department of Labor’s Black 

Lung Benefits Program provides medical and income assistance to miners 

who suffer disability or death from lung disease caused by coal dust, and 

their survivors. We found that certain claims took a long time to process, and 

claimants had difficulty proving eligibility, finding legal representation and 

developing supporting evidence. Congress considered our recommendations 

and in 2010 enacted the Patient Protection and Affordable Care Act (P. L. 111-

148) to expedite the claims process and make eligibility easier for survivors and 

widows to prove. (GAO-10-7) 

Duncan Hunter 

National Defense 

Authorization 

Act for Fiscal 

Year 2009, P.L. 

110-417 

Standardizing governmentwide policy on contractor personal conflicts of 

interest. Congress enacted a provision directing the Office Federal Procurement 

Policy (OFPP) at OMB to establish a governmentwide policy to prevent 

personal conflicts of interest by contractor employees performing acquisition 

functions involving the development, award, and administration of federal 

agency contracts. In March 2008, we reported that contractor employees often 

perform critical acquisition functions, such as developing contract requirements, 

assisting on source selection, and making award-fee determinations. The OFPP 

policy, to apply governmentwide, expands upon our findings and will require 

all government contractors whose employees perform acquisition functions to 

screen their financial disclosures to prevent personal conflicts of interest, and will 

prohibit contractor employees from using non-public government information for 

personal gain. (GAO-08-169)

NONFINANCIAL BENEFITS
GAO-11-2SP 31

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Nonfinancial benefits that helped to improve services to the public 

Improved 

Oversight of 

Federal Oil and 

Gas Resources

Our reviews of Interior’s oversight of oil and gas resources led Interior to take 

action. Our finding that the U.S. government received less value than many 

other countries for oil and gas extracted from federal lands led Interior to 

launch a major study of revenue collection. Our finding that Interior does less 

to encourage development of federal oil and gas leases than other landowners 

led Interior to raise costs for nonproducing leases. Our finding that Interior was 

forgoing revenues for gas royalties contributed to Interior’s decision to end the 

royalties-in-kind program—potentially saving on receiving and reselling oil and 

gas. (GAO-09-744, GAO-09-74) 

Improved 

Oversight of 

Care in Nursing 

Homes

Over more than a decade, we have made numerous recommendations to 

improve oversight of care in nursing homes and other facilities where states 

conduct on-site inspection surveys. As a result, the Centers for Medicare & 

Medicaid (CMS) has taken a number of actions to improve oversight. For 

example, in 2009, we found that states had not surveyed 13 percent of facilities 

at the frequency required by CMS, which can increase the risk of not detecting 

quality problems. Subsequently, CMS required states failing to meet survey 

requirements to develop a plan of correction. (GAO-09-64) 

Strengthened 

Security of 

Networks and 

Information 

Systems at 

Federal Agencies

We identified numerous weaknesses in federal systems that make them 

vulnerable to a broad range of cyber threats and pinpointed technical and 

procedural improvements to better safeguard sensitive information and assets. 

We made over 330 recommendations to better protect the confidentiality, 

integrity, and availability of federal systems, including some of the most 

sensitive information possessed by the federal government. Based on our 

recommendations, key agencies, including OMB, Treasury, and IRS, bolstered 

their security programs and strengthened controls to prevent, limit, and detect 

unauthorized access to information resources. (GAO-09-546, GAO-10-355) 

Improved 

Foreign Service 

Officers’ 

Language Skills

We examined the foreign language proficiency of the Department of State’s 

(State) approximately 3,600 Foreign Service officers in positions requiring 

proficiency and found that 31 percent did not meet language requirements. We 

also found that State’s method for calculating the percentage of officers who 

meet foreign language requirements is potentially misleading. As a result of our 

work, State has begun enhancing its foreign language requirements process 

and expanding its language training efforts. (GAO-09-955)

Nonfinancial benefits that helped to promote sound agency and governmentwide 

management 

Improved 

Treasury’s Debt 

Management

Treasury’s borrowing needs have increased greatly in response to the financial 

crisis and the recession. We have recommended increasing transparency 

of auctions and expanding Treasury’s Inflation Protected Securities (TIPS) to 

diversify funding sources and reduce the cost of borrowing. As a result, Treasury 

increased from once to twice a month the publication of the types of investors 

who purchase securities at auction. Treasury also reaffirmed its commitment to 

the TIPS program by increasing issuance amounts and frequency of auctions, 

and replacing the 20-year TIPS with 30-year TIPS. (GAO-10-498, GAO-09-932) 
32 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Identified 

Vulnerabilities 

in the Energy 

Star Certification 

Process

By submitting fake products for certification, we showed that the Energy Star 

program is vulnerable to fraud and abuse. We obtained Energy Star certifications 

for 10 bogus products, including a gas-powered alarm clock. The Energy Star 

program is meant to identify and certify products that decrease greenhouse 

emissions and lower energy costs, and is promoted through tax credits, appliance 

rebates, and required federal purchasing. As a result of our investigation, DOE and 

EPA announced planned improvements to program controls that will revise the 

program that was vulnerable to fraud to a certification program. (GAO-10-470) 

Assessed the Cost 

and Progress of 

the 2010 Census

In March 2008, we designated the 2010 Census a high-risk area, in part, because 

of weaknesses in managing information technology (IT) and untested field 

operations. Our oversight of the 2010 Census helped the U.S. Census Bureau 

mitigate IT risks and improve the accuracy of census data. Consistent with our 

recommendations on the need to finalize test plans and schedules for key decennial 

systems and operations, the Bureau improved performance of a critical fielddata collection system. Based on our field observations, the Bureau also issued 

additional guidance to ensure housing units were properly counted. (GAO-10-324)

Source: GAO 

Note: Additional examples of fiscal year 2010 nonfinancial benefits can be found in Part II: Performance Information and Part V, 

Appendix 1: Accomplishments and Other Contributions.

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 2010, 82 percent of the

recommendations we made in fiscal year 2006

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

2006 2007 2008 2009 2010 2010

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

The 82 percent implementation rate for

fiscal year 2010 exceeded our target for

the year. As figure 14 indicates, agencies

need time to act on recommendations.

We assess recommendations implemented

after 4 years based on our experience that

recommendations remaining open after that

period of time are generally not implemented

in subsequent years.

Figure 14: Cumulative Implementation Rate for 

Recommendations Made in Fiscal Year 2006

Percentage

Source: GAO.

0

10

20

30

40

50

60

70

80

90

After

4 years

After

3 years

After

2 years

After

1 year

82%

42%

27%

12%
GAO-11-2SP 33

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

New Products Containing 

Recommendations

In fiscal year 2010, about 61 percent of the

601 written products we issued (excluding

testimonies) contained recommendations

(see fig. 15). We track the percentage of

new products with recommendations

because we want to focus on developing

recommendations that, when implemented by

the Congress and agencies, produce financial

and nonfinancial benefits for the nation. We

slightly exceeded our target of 60 percent

by 1 percentage point. However, we set our

target again in fiscal year 2011 at 60 percent

because we recognize that our products do

not always include recommendations and

that the Congress and agencies often find

informational reports 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 substantial financial and key

nonfinancial benefits. Hence, this measure

allows us some flexibility in responding

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

2006 2007 2008 2009 2010 2010

68%

60% 61% 65% 66% 66%

Focusing on Our Client

To fulfill the Congress’sinformation needs, we

strive to deliverthe results of our work orally

as well asin writing at a time agreed upon with

our client. Our performance this yearindicates

that we assisted the Congress extremely well, by

testifying about the same number of times we did

in 2009 and delivering most 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 as it relates to issues

that committees are examining through the

congressional hearing process. During fiscal

year 2010, experts from our staff testified at 192

congressional hearings covering a wide range

of complex issues. We did not meet our target

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

by 28 hearings. This measure is client-driven

based on their invitation to testify and we

cannot always anticipate their specific subject

area interests. The 192 hearings at which the

Congress asked our executives to testify in

fiscal year 2010 covered a broad range of issue

areas. (See fig. 17 for selected topics we testified

on by strategic goal in fiscal year 2010.) 67 of

the hearings at which our senior executives

testified were related to high-risk areas and

programs, which are listed on page 40.

Figure 16: Testimonies

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2010

Hearings at which GAO testified

Source: GAO.

Actual Target Actual

192

220 203

298

276

240
34 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

 Unemployment Insurance Trust Funds

 Social Security Disability

 Underfunded Pension Plans

 Proprietary Schools

 Medicare High-Cost Drugs

 Toxic Substance Abuses Disease Registry

 Concussions in High School Athletes

 Children’s Access to Medicaid Dental Services

 Corporate Crime

 DOJ’s Civil Rights Division Enforcement Efforts

 Community Emergency Preparedness

 Fannie Mae & Freddie Mac

 Interior’s Oversight of Oil & Gas

 Clean Water Act Enforcement Efforts

 U.S. Postal Service Financial Viability

 Federal Facilities Security

 High Speed Rail Projects

 Commercial Aviation Consumer Fees

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

Security of the American People

 Financial Markets Regulation

 National Flood Insurance Program

 Climate Change

 Alien Smuggling Along U.S. Southwest Border

 Aviation Security Advanced Imaging Technology

 Terrorist Watchlist Screening

 Combating Nuclear Smuggling

 Iran Sanctions

 Counternarcotics and Anticrime Efforts in

Mexico

 Global Food Security

 Intellectual Property Enforcement Efforts

 Afghanistan Security Force Capacity

 DOD Military and Civilian Employee

Compensation

 Warfighter Contract Support

 Joint Strike Fighter Challenges

Goal 2: Respond to Changing Security Threats and the Challenges of Global 

Interdependence 

 Defense Space Acquisitions

 Military Language Skills

 Interagency Collaboration for National Security

Interagency Contracting Strategies

 NASA Management and Program Challenges

 Balancing the Government-to-Contractor

Workforce

 Iraq and Afghanistan Contract and Grant

Management

 Recovery Act Oversight

 First Time Homebuyer Tax Credit

 Equal Employment Opportunity at DHS

 2010 Census Management Challenges

 U.S. Government Financial Statements

 DHS Financial Management Systems

Consolidation

 Protecting Federal Information Systems

 Environmental Satellites

 Debt Settlement Risks to Consumers

 Service Disabled Veteran-Owned Small Business

Program Fraud Prevention

 HEAD START Program Fraud

 Defense Contract Audit Agency Vulnerabilities

Goal 3: Help Transform the Federal Government to Address National Challenges

Source: GAO. 

Additional information on selected testimonies can be found in Part II of this report. 

Figure 17: Selected Testimony Topics • Fiscal Year 2010
GAO-11-2SP 35

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

We believe that our fiscal year 2011 target of

testimonies at 200 hearings is a reasonable

estimate given the Congress’s continuing

interest in U.S. financial and housing

markets, conflicts in Iraq and Afghanistan,

and antiterrorism efforts in Pakistan.

Timeliness 

To be useful to the Congress, our products

must be available when our clients need them.

We outreach directly to our clients through

several means, including an electronic

feedback form. We use the results of our

client feedback form as a primary source and

barometer for whether we are getting our

products to our congressional clients when

they need the information. To calculate this

result, we tally responses from the form 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 management5 and those

expected to reach 500 staff days or more),

which represented about 60 percent of the

congressionally requested written products

we issued in fiscal year 2010. Because our

products usually have multiple requesters,

we often send forms to more than one

congressional staff person per testimony or

product. One of the questions on each form

asks the client whether the product was

provided or delivered on time. In fiscal year

2010, of the forms returned to us, 99 percent

of the congressional staff responding

answered the question on timeliness. Overall,

the response rate to our entire form was

29 percent, though we received feedback on

58 percent of the products for which we sent

forms.

5

 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.

In fiscal year 2010, we met our timeliness

target of 95 percent. We have set a high

target for timeliness because it is important

for us to meet congressional needs when they

occur, and we set our fiscal year 2011 target

at the same 95 percent level.

Figure 18: Timeliness

Percentage of products on time

Source: GAO.

Actual Target Actual

93% 95% 95% 95% 95% 95%

0

20

40

60

80

100

2006 2007 2008 2009 2010 2010

Focusing on Our People

Our highly professional, multidisciplinary,

and diverse staff were critical to the level of

performance we demonstrated in fiscal year

2010. 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

2010, we met or exceeded all seven of our

people measures. These measures are directly

linked to our goal 4 strategic objective of

being a leading practices federal agency. For

more information about our people measures,

see Verifying and Validating Performance

Data on page 80 of this report.

New Hire Rate 

Our new hire rate is the ratio of the number

of people hired to the number we planned

to hire. We develop an annual workforce
36 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

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

Performance 

measure 

2006

actual 

2007

actual

2008

actual

2009

actual

2010

target 

2010

actual

People

New hire rate 94% 96% 96% 99% 95% 95%

Source: GAO.

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

Excluding Retirements

Performance 

measures 

2006

actual 

2007

actual

2008

actual

2009

actual

2010

target 

2010

actual

People

Retention rate 

With retirements 90% 90% 90% 94% 90% 94%

Without retirements 94% 94% 93% 96% 94% 96%

Source: GAO.

plan that takes into account strategic goals;

projected workload requirements; and other

changes, such as retirements, other attrition,

promotions, and skill gaps. The workforce

plan specifies the number of planned hires for

the upcoming year. 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, or more frequently if needed, to

monitor progress against the workforce plan.

Adjustments to the plan are made throughout

the year, if necessary, to reflect changing

needs and conditions. In fiscal year 2010, our

adjusted plan was to hire 260 staff. We were

able to bring on board 248 staff by year-end.

Table 3 shows that we met our target of 95

percent of our goal for new hires. Consistent

with fiscal year 2009, our success in achieving

a 95 percent new hire rate resulted from

a continuation of the focused recruiting

initiatives from last year to effectively address

workload requirements and succession

planning needs.

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. Our exit survey shows that

staff who retire do so for family, life, or health

considerations; whereas nonretirees leave for

new opportunities to work elsewhere, family

reasons, or to make better use of their skills.

Table 4 shows that prior to fiscal year 2009 and

2010, we consistently met the 90 percent target

rate for overall retention (with retirements),

and in fiscal year 2010 we exceeded that rate

for a second consecutive year by 4 percentage

points. As in fiscal year 2009, the slowdown

in the overall economy has caused some staff

to delay retirement and reduced other attrition

via resignations or transfers to other agencies.
GAO-11-2SP 37

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Similarly, for retention without retirements, in

fiscal year 2010 we again exceeded the target

by 2 percentage points. As with the overall

retention rate, we attribute this increase to

a slowdown in the overall economy, which

has also slowed attrition via resignations and

transfers.

Staff Development and Utilization, 

Effective Leadership by Supervisors, 

and Organizational Climate

One way that we measure how well we

are supporting our staff and providing

an environment for professional growth

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 their

immediate supervisors on key aspects of their

leadership styles. The survey consists of over

100 questions. From the staff who expressed

an opinion, we calculated the percentage of

those who selected favorable responses to the

related survey questions. Responses of “no

basis to judge/not applicable” or “no answer”

were excluded from the calculation. While

including these responses in the calculation

would result in a different percentage, our

method of calculation is an acceptable survey

practice, and we believe it produces a better and

more valid measure because it represents only

those employees who have an opinion on the

questions. In fiscal year 2010, to better ensure

confidentiality of individual responses, we used

the same outside contractor that administered

the survey to also analyze the data. (See

Part II of this report on pp. 82-85 for additional

information about these measures.) This

fiscal year, about 70 percent of our employees

completed the survey and we exceeded all

four targets (see table 5). Our fiscal year 2010

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

Staff Development, Staff Utilization, Effective Leadership by Supervisors, and Organizational Climate

Performance

measuresa

2006

actual 

2007

actual

2008

actual

2009

actual

2010

target 

2010

actual

People

Staff developmentb 76% 76% 77% 79% 76% 79%

Staff utilization 75% 73% 75% 78% 75% 77%

Effective leadership 

by supervisorsc 79% 79% 81% 83% 80% 83%

Organizational 

climate 73% 74% 77% 79% 75% 79%

Source: GAO.

a

Certain portions of our Web-based survey are used to develop these four measures. 

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. 

c

In fiscal year 2009 we changed the name of this measure from “Leadership” to its current nomenclature to clarify that the measure reflects 

employees’ satisfaction with their immediate supervisors’ leadership. In fiscal year 2010, we changed one of the questions for this measure.
38 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

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

Performance 

measures 

2006

actual 

2007

actual

2008

actual

2009

actual

2010

target 

2010

actual

Internal operations

Help get job done 4.10 4.05 4.00 4.03 4.0 N/A

Quality of work life 4.00 3.98 4.01 4.01 4.0 N/A

Source: GAO.

Note: We will report actual data for fiscal year 2010 once the data from our November 2010 internal operations survey have been 

analyzed. N/A indicates that the data are not available yet.

performance on all of these measures was very

consistent with our fiscal year 2009 results.

Our performance on the staff development,

leadership, and organizational climate measures

was the same as last year, and staff utilization

was lower by 1 percentage point. Given our

performance on these measures over the last 5

years, we decided to retain our fiscal year 2010

targets for fiscal year 2011 (see table 1).

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,

and to set targets, we use information from

our annual customer satisfaction survey,

the results of which are shown in table 6.

We asked staff to rank 33 internal services

available to them and to indicate on a scale

from 1 to 5, with 5 being the highest, 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 20 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 13

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-11-2SP 39

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

GAO’s High-Risk Program

In 1990, we began our high-risk program

to highlight long-standing challenges facing

the federal government. Historically, we

designated high-risk areas based on their

increased susceptibility to fraud, waste, abuse,

and mismanagement. As the program has

evolved, we have increasingly used the highrisk designation to draw attention to the need

for broad-based transformation to achieve

greater efficiency, effectiveness, accountability,

and sustainability of key government programs

and operations.

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. For

example, our focus on high-risk issues

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 focus.

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.

As of the end of fiscal year 2010, our highrisk list highlighted 31 troubled areas across

government. Table 7 lists each current highrisk area and the year it was added to the list.

Our 2010 high-risk area work:

 151 reports

 67 testimonies

 $27 billion in financial benefits

 522 nonfinancial benefits

In fiscal year 2010, we issued 151 reports,

delivered 67 testimonies to the Congress,

and prepared several other products, such as

briefings and presentations, related to our

high-risk work. In addition, we documented

nearly $27 billion in financial benefits and

522 nonfinancial benefits related to highrisk areas. These results are based on

reviews spanning a wide range of issues

such as implementing and transforming

the Department of Homeland Security,

revamping federal oversight of food safety,

executing the 2010 Census, and managing

federal real property. Our next biennial

high-risk update is planned for January 2011.

More information on the high-risk series is

available on our Web site at http://www.gao.

gov/highrisk.

Major Government Challenges

In addition to high-risk issues, we also identify

other major government challenges.

Other challenges of great national and

international concern are Strengthening

Preparedness for Large-Scale Public Health

Emergencies; Advancing U.S. Efforts in Iraq,

Afghanistan, and Pakistan; and Ensuring

Effective Representation of U.S. Diplomatic

Interests and Image.

Agency-by-Agency Issues focus on a range

of distinctive major challenges affecting

the mission, budget, and programs of 28

federal agencies. Increased demand for better

government performance and responsiveness

as well as greater accountability makes agency

challenges all the more important.

Major Cost-Saving Opportunities exist to

limit costs, reduce waste across agencies and

programs, and collect revenues already due the

government. We identify key areas where the

Congress and the administration could make

major strides in conserving fiscal resources
40 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Table 7: GAO’s High-Risk List as of September 30, 2010

High-risk area Year 

designated

Strengthening the Foundation for Efficiency and Effectiveness 

■ Modernizing the Outdated U.S. Financial Regulatory Systema 2009

■ Restructuring the U.S. Postal Service to Achieve Sustainable Financial Viability 2009

■ Funding the Nation’s Surface Transportation Systema 2007

■ 2010 Census 2008

■ Strategic Human Capital Managementa 2001

■ Managing Federal Real Propertya 2003

Transforming DOD Program Management

■ DOD Approach to Business Transformationa 2005

■ Business Systems Modernization 1995

■ Personnel Security Clearance Program 2005

■ Support Infrastructure Management 1997

■ Financial Management 1995

■ Supply Chain Management 1990

■ Weapon Systems Acquisition 1990

Ensuring Public Safety and Security

■ Implementing and Transforming the Department of Homeland Security 2003

■ Establishing Effective Mechanisms for Sharing Terrorism-Related Information to Protect the 

Homeland 2005

■ Protecting the Federal Government’s Information Systems and the Nation’s Critical Infrastructures 1997

■ Ensuring the Effective Protection of Technologies Critical to U.S. National Security Interestsa 2007

■ Revamping Federal Oversight of Food Safetya 2007

■ Protecting Public Health through Enhanced Oversight of Medical Products 2009

■ Transforming EPA’s Process for Assessing and Controlling Toxic Chemicalsa 2009

Managing Federal Contracting More Effectively

■ DOD Contract Management 1992

■ DOE’s Contract Management for the National Nuclear Security Administration and Office of 

Environmental Management 1990

■ NASA Acquisition 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

■ Improving and Modernizing Federal Disability Programsa 2003

■ Pension Benefit Guaranty Corporation Insurance Programsa 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-11-2SP 41

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

for high-priority programs and new initiatives

addressing fundamental long-term fiscal

imbalances.

Management Challenges Across the

Government include capacity building and

management capabilities to improve operational

efficiency and effectiveness and address current

and emerging demands. Although agencies have

made progress in improving their operations in

recent years, they often lack the management

capabilities needed to effectively and efficiently

implement new programs and policies. We

identify several key areas such as acquisition,

human capital, and financial management.

Our nation’s Long-Term Fiscal Outlook will

be shaped largely by rising health care costs

and the aging population. These trends will

result in an unsustainable imbalance between

expected spending and tax revenues over the

long term. We analyze and monitor the longterm fiscal outlook.

Our Web site includes our analysis and

recommendations for addressing these areas,

key reports for further research, video messages

from our experts, and contacts for specific

areas.

The Troubled Asset Relief 

Program

The Congress created the $700 billion

Troubled Asset Relief Program (TARP)

in October 2008, passing the Emergency

Economic Stabilization Act to restore liquidity

and stability in the financial system. The act

gave us a statutory oversight role with broad

monitoring and reporting responsibilities,

including a requirement to report at least

every 60 days. The Dodd-Frank Wall Street

Reform and Consumer Protection Act of July,

2010, set a new spending ceiling for TARP-in

effect, prohibiting Treasury from incurring any

additional obligations for programs that were

not initiated prior to June 25, 2010.

In fiscal year 2010, we issued 17 products

and made over 50 recommendations on

issues such as: (1) the nature and purpose of

activities that have been initiated under TARP

and ongoing challenges; (2) the process for

making decisions related to unwinding TARP

programs, and (3) indicators of credit conditions

in markets targeted by TARP programs.

Recommendations from these reviews have

generally followed three themes: monitoring

the use of funds to meet the Act’s objectives;

articulating a better communication strategy;

and ensuring effective Treasury management.

Specifically, we reviewed strategies for

monitoring and divesting financial interests in

Chrysler Group and General Motors Company

(GAO-10-151), government assistance to

AIG and the company’s financial condition

(GAO-10-475), implementation of foreclosure

mitigation programs (GAO-10-634), and

guiding principles for government assistance to

the private sector (GAO-10-719).

For the second consecutive year, we audited

the annual financial statements of the

entity established to implement TARP—

the Department of the Treasury’s Office

of Financial Stability within the Office of

Domestic Finance.

To perform this work in 2010, we continued to

make use of interdisciplinary teams to leverage

the wide range of technical skills of our staff,

including financial market and public policy

analysts, accountants, lawyers, and economists

who combined resources across the agency.

The American Recovery and 

Reinvestment Act

The Congress passed the Recovery Act in

February 2009 to address the nation’s most

serious economic crisis since the Great
42 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Depression. The act included 12 mandates for

GAO and required bimonthly reviews on the

uses of and accountability for Recovery Act

funds in selected states and localities. We have

conducted in-depth reviews in 16 states, selected

localities in those states, and the District of

Columbia—jurisdictions containing about 65

percent of the U.S. population and receiving an

estimated two-thirds of the intergovernmental

Recovery Act assistance. In addition, we have

commented quarterly on the required reports

from nonfederal recipients of Recovery Act

funds, including grants, contracts, and loans.

These reports are to include a list of each

project or activity for which Recovery Act funds

were expended or obligated and information

concerning the amount and use of funds and

jobs created or retained by these projects

and activities. In fiscal year 2010, we issued

reports fulfilling these ongoing mandates in

November 2009 (GAO-10-223), December 2009

(GAO-10-231), March 2010 (GAO-10-437),

May 2010 (GAO-10-604), and September 2010

(GAO-10-999).

Since our first bimonthly review in April

2009, we have made 63 recommendations

to improve management and strengthen

accountability over Recovery Act funds at

eight federal departments and agencies,

including the Departments of Transportation,

Housing and Urban Development, Labor,

Education, Health and Human Services, and

the Treasury; the Environmental Protection

Agency; and the Office of Management and

Budget (OMB). Our recommendations covered

several programs receiving Recovery Act

funds, such as highways, housing, job training,

education, clean and safe drinking water,

energy efficiency and weatherization, as well

as several recommendations to improve audit

and program management oversight processes.

In response, the agencies have implemented

nearly half of our recommendations to date,

such as providing additional guidance to

fulfilling reporting requirements, improving

the monitoring of recipients and subrecipients of

Recovery Act funds, and clarifying approaches

states can take to recover administrative costs

associated with the wide range of activities to

comply with the Recovery Act. Further, all of

the 13 recommendations we made on carrying

out the recipient reporting requirements have

been implemented. For example, OMB clarified

how to calculate jobs, issued frequently asked

questions, and improved notification of available

Recovery Act funds to recipients.

In addition, we have made a number of

suggestions to states and localities for

improvement in their use of Recovery Act funds.

Our presence in the selected states and localities

has further heightened the level of vigilance,

including influencing officials to make realtime improvements to head off problems before

they could occur. For example, suggestions our

audit team made in Texas were acted upon and

resulted in the Department of Energy providing

training to state and local officials responsible

for weatherization work at multifamily units.

Based on another suggestion, the state of

Mississippi now requires engineers to visit and

inspect federally funded projects, including those

funded by the Recovery Act, at least twice a

week during working hours if construction is in

progress and at least once a week if construction

is not ongoing. Our capacity to continue this

work has been enhanced by the strong and

productive working relationships established

with both state and local government leaders.

Our oversight of Recovery Act programs

has resulted in the issuance of more than

60 related products by several of our teams

for the Congress. This year, our reports

covered a wide spectrum of program and

policy areas, including opportunities to

strengthen oversight of the broadband stimulus

programs (GAO-10-823 and GAO-10-80),

lessons and oversight for high-speed rail

investment (GAO-10-625), improving the

public’s understanding of Recovery Act fund
GAO-11-2SP 43

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

use and expected outcomes in education and

other areas (GAO-10-807 and GAO-10-581),

improving contracting approaches and

oversight (GAO-10-809), use of highway and

transit funds (GAO-10-312T), the influence

of certain federal regulations on Recovery Act

project selection and starts (GAO-10-383),

officials’ views on impact of Davis-Bacon Act

prevailing wage provisions in the Recovery Act

(GAO-10-421), implications of the Recovery

Act in the Temporary Assistance for Needy

Families program (GAO-10-525), challenges

in evaluation compliance with maintenanceof-effort and similar provisions (GAO-10-247),

and ensuring adequate oversight for clean

water projects (GAO-10-761T).

For a second year, we have maintained a

separate page on our external Web site devoted

to our Recovery Act work. In one place

(http://www.gao.gov/recovery), the public can

find information and updates on Recovery Act

outlays such as our bimonthly reviews and

reports on each of the selected states and the

District of Columbia, related podcasts, and can

find out how to report allegations of abuse of

Recovery Act funds.

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 our legal work in fiscal year

2010 in the following ways:

■ The Procurement Law Division within

the Office of General Counsel received

nearly 2,300 bid protests during the

course of fiscal year 2010.6 A protest

challenges a federal agency’s handling

of an individual federal procurement.

Many of these protests were resolved

without a written decision because the

6

 In comparison, there were 1,900 bid protests filed in fiscal year

2009, and 1,600 in fiscal year 2008.

federal agency involved voluntarily took

corrective action to address the protest. The

remaining protests were either dismissed

for procedural deficiencies, resolved using

Alternative Dispute Resolution procedures,

or decided on the merits. In fiscal year

2010, we issued more than 440 decisions

on the merits, that addressed a wide range

of issues involving compliance with, and

the interpretation of, procurement statutes

and regulations. As a result of the detailed

insight we gain through our protest work,

we were asked to testify about lessons

learned and procurement trends in a

hearing before the House Appropriations

Committee’s Subcommittee on Defense.

In addition, bid protest attorneys are

involved in a significant outreach effort

to the contracting community, federal

government agencies, and the private bar.

In particular, we have provided briefings on

developments in federal procurement law,

and conducted training on federal contract

issues throughout the federal government,

including for such civilian agencies as

the Departments of Education and the

Treasury; various branches of the military;

and the Judge Advocate General School

in Charlottesville, Virginia, which trains

military attorneys.

■ Within the Procurement Law Division, six

attorneys appointed by the General Counsel

also serve on our Contract Appeals Board,

established by the Congress in 2007 to hear

appeals on contracting officer decisions with

respect to any contract entered into by a

legislative branch agency. Board members

are responsible for developing the record,

holding hearings where requested, and

preparing a decision where necessary to

resolve the wide range of contract disputes

presented. In addition to using alternative

dispute resolution procedures to resolve

appeals, the board published five decisions

in fiscal year 2010, which appear on our
44 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Web site. As of the end of the fiscal year

there were 19 appeals pending on the board’s

docket.

■ We issued appropriations law and other

legal decisions on, among other things, the

purposes for which appropriated funds may

be used, potential and actual Antideficiency

Act7 violations, and the obligational

consequences of various interagency

agreements. Some decisions and opinions

stand out. Two opinions, issued in response

to legislative mandates, concluded that

agencies had violated the Antideficiency

Act. One opinion found that the U.S. Secret

Service violated the act when it used funds

without properly notifying the House and

Senate Appropriations Committees of a

reprogramming.8 The other opinion found

that the U.S. Army violated the act by failing

to accurately record obligations for certain

personnel actions in its Military Personnel

appropriation.9 We issued two opinions to

Members of the Congress concluding that

NASA had not violated the Impoundment

Control Act, or statutory prohibitions against

creating or initiating a new program, project,

or activity, and barring it from terminating

or eliminating particular programs, projects,

or activities.10 We issued another opinion

to Members of the Congress concluding

that the Department of Health and Human

Services did not violate the antilobbying or

publicity or propaganda prohibitions when it

used its Web site (www.healthreform.gov) to

gauge public support for the administration’s

health reform initiatives.11

7

 The Antideficiency Act is a funds control statute that prohibits

the obligation and expenditure of funds in advance or excess of

appropriations or apportionment. It contains both administrative and

criminal penalties. Agencies must report all violations to the Congress

with a copy to GAO.

8

 B-319009, April 27, 2010.

9

 B-318724, June 22, 2010.

10 B-320091, July 23, 2010; B-319488, May, 21, 2010. 11 B-319075, April 23, 2010.

■ For fiscal year 2010, we received 10

Antideficiency Act reports for our repository

and made selected information from these

reports publicly available on our Web

site. Since the Congress amended the

Antideficiency Act in December 2004,

requiring agencies to send us a copy of

reports of Antideficiency Act violations, we

have maintained the official repository of

Antideficiency Act reports.

■ We continued to report under the

Congressional Review Act (CRA) to the

standing committees of jurisdiction of both

Houses of the Congress on major rules

proposed by federal agencies. For fiscal year

2010, we issued 103 reports. In addition,

we continued to track executive branch

regulations that were published in the

Federal Register but not submitted to us, and

subsequently notified OMB and the relevant

agencies in order to assist them in meeting

their CRA requirements.

■ The General Counsel’s Legal Services

group served on the negotiating team for the

agency’s first master Collective Bargaining

Agreement with the GAO Employees

Organization, International Federation

of Professional and Technical Engineers

(IFPTE), Local 1921. Legal Services also

served on the negotiating team for the

2010 analyst pay increases. The group also

participated in informal, weekly meetings

with IFPTE, at which a range of labor

management relations issues were discussed.

To enhance education on appropriations law

and promote a common understanding of

and compliance with legal requirements, we

published an electronic Index and Table of

Authorities for the third edition of Principles of 

Federal Appropriations Law, commonly known

as the Red Book. The Red Book is available to

the public on our Web site and is considered

the primary resource for appropriations law
GAO-11-2SP 45

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

guidance in the federal financial community.

The Red Book averages thousands of

downloads per week 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. We also issued our annual

update of the third edition of the Red Book.

Attorneys from the Office of the General

Counsel continued to teach a 2 1/2-day

course on appropriations law that explains the

framework for analyzing appropriations law

issues to ensure that funds are available for

obligation with regard to purpose, amount,

and time. This year we increased the number

of sessions to 25 and had participation from

staff at 11 agencies as well as a number of

congressional staff. In addition, appropriations

lawyers taught several 1-day seminars on

specialized appropriations law topics for 5

agencies, and spoke on our appropriations law

work at conferences and training hosted by

4 agencies. To further communication within

the appropriations law community across

all agencies and within the three branches

of government, we hosted our sixth annual

appropriations law forum in March 2010. This

included an analysis of significant decisions and

opinions from 2009 and interactive sessions

on personal versus official expenses and the

intersection of appropriations and contract law.

In addition, we taught our new course,

Appropriations Law for Analysts and Auditors,

which is designed primarily for senior analysts

and auditors to enable them to identify

appropriations law issues that may arise in their

audit work, and to ensure accurate use of budget

and appropriations law terminology in our

products. The course was offered 15 times this

fiscal year, including six classes at three field

offices.

Managing Our Resources

Resources Used to Achieve Our Fiscal 

Year 2010 Performance Goals

Our financial statements for the fiscal year

ending September 30, 2010, were audited by

an independent auditor, Clifton Gunderson,

LLP, and received an unqualified opinion. They

found our internal controls to be effective—

which means that no material weaknesses were

identified—and reported that we substantially

complied with the applicable requirements for

financial systems in FFMIA. In addition, they

found no instances of noncompliance with the

laws or regulations in the areas tested. In the

opinion of the independent auditor, our financial

statements are presented fairly in all material

respects and are in conformity with generally

accepted accounting principles. The auditor’s

report, along with the statements and their

accompanying notes, begin on page 94 in this

report.12 Table 8 summarizes key data.

Compared with the statements of large and

complex agencies in the executive branch,

our statements present a relatively simple

picture of a small yet very important agency

in the legislative branch. We focus most of

our financial activity on the execution of our

congressionally approved budget with most of

our resources devoted to the people needed for

our mission.

In fiscal year 2010, our budgetary resources

included new appropriations of $558 million as

well as $20.8 million available through fiscal

year 2010 to cover program reviews required

by the Recovery Act. We also received $7.5

million in reimbursement from the Treasury

to support activities related to monitoring the

implementation of TARP including bimonthly

reporting and conducting an annual audit of

12Note 14 to the financial statements describes our Davis-Bacon

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

information, contact our General Counsel’s Office.
46 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

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

Fiscal year 2010 Fiscal year 2009

Total budgetary resourcesa $613.0 $580.6

Total outlaysa $593.8 $539.9

Net cost of operations

Goal 1: Well-being/financial security of the 

American people $210.1 $191.3

Goal 2: Changing security threats/challenges 

of global interdependence 173.5 168.4

Goal 3: Transform the federal government to 

address national challenges 196.5 177.1

Goal 4: Maximizing the value of GAO 29.4 27.7

Less reimbursable services not attributable to 

goals (6.6) (5.7)

Total net cost of operationsa $602.9 $558.8

Actual FTEs 3,347 3,204

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.

the Office of Financial Stability’s financial

statements for TARP.

Our total assets were $122 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.

The balance in Funds with the U.S. Treasury

decreased by $13.5 million, a result of the

combination of fully expending the remaining

balance of the Recovery Act funds offset by an

increase in reimbursable funds collected. Total

liabilities of $111 million were composed largely

of employees’ accrued annual leave, employees’

salaries and benefits, amounts owed to other

government agencies, and nongovernmental

accounts payable. The greatest change in

our liabilities is an increase of $3.8 million

in nongovernmental accounts payable due

primarily to the timing of billings on service

contracts resulting in a larger accrual this

fiscal year as compared to last fiscal year. The

decrease in capital lease liability of $2.2 million

is a result of paying down the existing leases.

Our net cost of operating during fiscal year

2010 and fiscal year 2009 was approximately

$603 million and $559 million, respectively.

Expenses for salaries and related benefits

accounted for 79 percent of our net cost of

operations in both fiscal years 2010 and 2009.

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 $44 million, due

primarily to increases in salaries and benefits.

The increase in costs for goal 1 (Well-being

and financial security of the American

people) and goal 3 (Transforming the federal

government to address national challenges) can

be substantially attributed to the increase in

Recovery Act efforts this fiscal year. Figure 19

shows how our fiscal year 2010 costs break

down by category.
GAO-11-2SP 47

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Figure 19: Use of Fiscal Year 2010 Funds by 

Category

Percentage of total net costs

Building and

hardware maintenance

services

Salaries

and benefits

12.3%

78.9%

Rent (space

and hardware) 2.3%

Depreciation

Other 4.9%

1.6%

Source: GAO.

Figures 20 and 21 show our net costs by goal

for fiscal year 2007 through fiscal year 2010.

Figure 20 shows costs unadjusted for inflation,

while figure 21 shows the same costs in 2010

dollars, that is, adjusted for inflation.

Figure 20: Net Cost by Goal, Unadjusted for 

Inflation

2007 177.4 157.5 146.6 23.9

2008 201.2 161.1 150.6 22.6

2009 191.3 168.4 177.1 27.7

2010 210.1 173.5 196.5 29.4

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

2007 185.2 164.4 153.0 24.9

2008 205.3 164.4 153.7 23.1

2009 192.6 169.6 178.3 27.9

2010 210.1 173.5 196.5 29.4

Dollars in millions

Source: GAO.

0

50

100

150

200

Goal 1 Goal 2 Goal 3 Goal 4

Summary of Financial Systems 

Strategies and Financial 

Management System Framework

We migrated our financial management

system processing in October 2007 to an

OMB designated Shared Service Provider, the

Department of Transportation, Enterprise

Services Center (ESC). The major financial

system in use at ESC is Delphi/Oracle

Federal Financials (Delphi), supplemented by

a number of supporting systems.

Delphi is an off-the-shelf system that

meets OMB’s Office of Federal Financial

Management’s Federal Financial

Management System Requirements. We use

a number of other off the shelf systems for

specialized support of Delphi. These include

Compusearch’s PRISM, a contract and

procurement system, U.S. Bank’s purchase

card system for small purchases and 170

System’s Markview, a document work flow

system to process vendor invoices.

These off-the-shelf systems are continuously

updated by the respective system developers,

and by periodically upgrading to new
48 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

versions; therefore, our systems remain

current. Additionally, these systems ensure

we can produce timely, useful and reliable

financial information and strengthen internal

controls.

Going forward, we are planning to implement

a new Budget Formulation/Workforce

Planning system during the fiscal year 2011-

2013 time period. Oracle’s Hyperion system

and Pentaho data base will form the basis of

this project. In fiscal year 2011 we plan on

“standing up” the project’s phase 1, which will

be a limited access budget formulation module

and a repository for workforce planning data.

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 of OMB Circular

A-123, Management’s Responsibility for Internal 

Control, which provides guidance for agencies’

assessments of internal control over financial

reporting. We performed this assessment by

identifying, analyzing, and testing internal

controls for key business processes. Based

on the results of the assessment, we have

reasonable assurance that internal control over

financial reporting, as of September 30, 2010,

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 FMFIA.

Although we are not subject to the act, we

comply voluntarily with its requirements.

Our internal controls are designed to provide

reasonable assurance that transactions are

properly recorded, processed, and summarized

to permit the preparation of financial

statements, and that assets are safeguarded

against loss from unauthorized acquisition,

use, or disposition. Further, they are designed

to ensure that transactions are executed

in accordance with the laws governing the

use of budget authority and other laws and

regulations that could have a direct and

material effect on the financial statements.

In addition, we are committed to fulfilling

the objectives of FFMIA. We believe that

we have implemented and maintained

financial systems that comply substantially

with federal financial management systems

requirements, applicable federal accounting

standards, and the U.S. Government Standard 

General Ledger at the transaction level as of

September 30, 2010. We made this assessment

based on criteria established under FFMIA

and guidance issued by OMB.

Our Inspector General (IG) also conducts

audits and investigations that are internally

focused. During fiscal year 2010, the IG

examined compliance with our policy

and procedures for conflicts-of-interest

determinations and conducted reviews of our

information security program. In addition,

the IG managed an internal hotline for use

by our employees and contractors to report

potential fraud, waste, and abuse of GAO

government property, assets, and resources

and other potentially serious problems

in our operations, including the possible

violation of any law or regulation. Finally,

the IG reported on its work independently

testing our compliance with procedures

related to the fiscal year 2009 results for
GAO-11-2SP 49

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

two of our performance measures-financial

accomplishment reports of over $1 billion and

testimonies. No material weaknesses were

reported by the IG.

In addition, 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 (IRS); and a Senior Fellow of the

National Academy of Public Administration.

■ Judith H. O’Dell, CPA CVA, President of

O’Dell Valuation Consulting LLC, Chair

of the Financial Accounting Standards

Board’s Private Companies Financial

Reporting Committee; former trustee

of the Financial Accounting Foundation

which is responsible for overseeing,

funding, and appointing members of the

Financial Accounting Standards Board

and the Governmental Accounting

Standards Board; and former member of

the board of directors of the American

Institute of Certified Public Accountants.

■ Lawrence B. Gibbs, a practicing attorney and

member of Miller & Chevalier, Chartered,

and a former Commissioner of IRS.

■ Michael A. Nemeroff, a partner in Sidley

Austin LLP, and head of its Government

Contracting Practice, and a former member

of the GAO Legal Advisory Committee.

The committee’s report appears in Part III of

this report on page 93.

Limitation on Financial Statements

Responsibility for the integrity and

objectivity of the financial information

presented in the financial statements in

this report rests with our managers. The

statements were prepared to report our

financial position and results of operations,

consistent with the requirements of the Chief

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

3515). The statements were prepared from

our financial records in accordance with the

formats prescribed in OMB Circular 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 2011 Performance Goals

As with the rest of the federal government,

GAO is operating under a continuing

resolution appropriation—at fiscal year

2010 levels—through December 3, 2010,

pending enactment of the final fiscal year

2011 appropriations bills. Although final

congressional action on our request is still

pending, indications are that we will be

operating at or near our fiscal year 2010

appropriated level and additional funding

to support our Recovery Act oversight

responsibilities, previously funded by the
50 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

Recovery Act legislation, will not be provided

in fiscal year 2011. On July 1, 2010 the

Subcommittee on Legislative Branch, House

Committee on Appropriations approved direct

appropriations of $560.7 million, an increase

of $3.8 million (0.7 percent) over fiscal year

2010.13 On September 16, 2010 the Senate

Committee on Appropriations approved

$556.8 million—the same level as our fiscal

year 2010 appropriation. The Subcommittees

on Legislative Branch of both the House

and Senate Appropriations Committees have

emphasized that the legislative branch should

lead by example and serve as a model for

the executive branch by tightening its belt

wherever possible, employing best practices,

finding efficiencies, and improving business

practices. In keeping with this goal, we are

continuing best practices already in place,

such as guidelines to minimize administrative

costs, maximizing the use of travel dollars,

and using a hiring strategy that targets

succession planning needs to fill critical

positions. We are also assessing the impact of

anticipated funding levels to ensure that we

provide the appropriate balance of staff and

support to continue to assist the Congress

and meet our performance goals as outlined

in our strategic plan through fiscal year 2015.

13 Our fiscal year 2011 budget request totaled $601.1 million.

Strategic and Annual Work 

Planning

Achieving our strategic goals and objectives

requires us to coordinate with other

organizations with similar or complementary

missions. In particular, we

■ use advisory panels and other bodies to

inform our strategic and annual work

planning and

■ maintain strategic working relationships

with other domestic and international

government accountability and

professional organizations, including the

federal inspectors general, state and local

audit organizations, and other countries’

national audit offices.

Advisory boards and panels help us to identify

key trends, opportunities and challenges,

and lessons learned that we should factor

into our work and our internal operations.

During fiscal year 2010, the agendas of the

Comptroller General advisory entities (i.e.,

the Comptroller General’s Advisory Board

(CGAB), the Domestic Working Group,

the Global Working Group, the Educators

Advisory Panel, and the Accountability

Advisory Council) revolved around the theme

of economic recovery and accountability.

The CGAB, with over 40 members from

the public, private, and nonprofit sectors,

has broad expertise in areas related to our

strategic objectives. The CGAB 2010 meeting

was particularly helpful to us in updating our

strategic plan and planning work in response

to significant new congressional mandates

on health care, financial regulatory reform,

and overlap and duplication among federal

programs and activities.
GAO-11-2SP 51

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

Through the 18th Biennial Forum of

Government Auditors, jointly hosted by the

National Intergovernmental Audit Forum

and the Southwestern Intergovernmental

Audit Forum, we brought together the

accountability community in May 2010 to

discuss transparency, the changing economic

environment, and other topics, such as fiscal

sustainability. We further extended the

knowledge shared at the event by providing

the biennial forum’s programming via

online video to our staff and the wider

intergovernmental audit community. We

organized eight meetings and seminars in

the various Intergovernmental Audit Forum

regions where our staff serve as executive

directors to promote dialogue regarding

common issues, opportunities, and challenges.

We also convened a meeting with the leaders

and members of the Council of Inspectors

General for Integrity and Efficiency to

discuss emerging issues.

Typically, the Acting Comptroller General

also meets annually with the 18-member

Domestic Working Group. In 2010, based on

the fiscal condition across the country, we

instead convened a teleconference in April

with the Domestic Working Group members

to discuss key topics of interest and leverage

the knowledge of and network with the

heads of select federal, state, and local audit

institutions.

During the fiscal year 2010 annual meeting

of the Global Working Group, comprised

of the Acting Comptroller General and 18

heads of national audit offices, we gained

information and knowledge relating to the

experiences and lessons learned of national

audit offices and their respective countries in

past financial crises and the current global

financial crisis. We also gained insights

into emerging issues related to fraud and

corruption, changes in the role of national

audit offices, and environmental audits.

In fiscal year 2010, we updated our strategic

plan for 2010 through 2015. Our Strategic

Planning and External Liaison office worked

closely with all the teams and units across the

agency to update our four strategic goals and

identify eight key trends that affect the work

we do for the Congress. We also developed

and incorporated new approaches into our

strategic planning process. For example, we

■ implemented a Web-based survey to solicit

and track internal comments on the plan,

■ leveraged our networks with key

stakeholders and external advisory entities

to validate and fine tune the plan, and

■ improved the format and readability of the

plan

Networks, Collaborations, and 

Partnerships

By collaborating with our domestic

and global networks, we have acquired,

expanded, and shared our knowledge and

expertise, which continued to help to build

capacity within our agency and among our

collaborative partners. On the domestic

front, collaboration has become increasingly

important because monitoring Recovery

Act spending through the federal, state and

local levels required increased coordination

with federal inspectors general and state and

local audit offices. For example, we helped

coordinate and participated in monthly and

sometimes weekly teleconferences hosted by

the National Association of State Auditors,

Comptrollers, and Treasurers (NASACT) to

bring together representatives of the federal

Inspectors General, OMB, the Recovery

Accountability and Transparency Board, and

state and local auditors. The relationships

built through these channels, as well as

through the intergovernmental audit forums,

have proven particularly valuable for our staff
52 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

as they continue to conduct a wide range of 

audit work in the states. On the international 

front, coordination and collaboration has also 

been important since many of our domestic 

challenges require global interaction and 

our staff are engaged in work that requires 

them to obtain information from foreign 

governments and officials. 

Through the International Organization 

of Supreme Audit Institutions (INTOSAI), 

we are leaders and active members of 

international teams working on the strategic 

plan goals of enhancing professional 

standards, capacity building, knowledge 

sharing, and good governance. Through our 

participation in the Professional Standards 

Committee and subcommittees, we are able 

to stay abreast of changes in international 

accounting, auditing, and reporting 

standards. In participating in the knowledge 

sharing working groups (i.e., Public Debt, 

Information Technology, Environmental 

Auditing, Program Evaluation, Fight Against 

International Money Laundering and 

Corruption, and Key National Indicators) and 

task forces, we acquire knowledge and build a 

network of professionals and experts in other 

countries that we can access. In 2010, we 

organized meetings of GAO representatives 

to the INTOSAI working groups to facilitate 

knowledge sharing among our representatives 

in order to better disseminate knowledge 

gained through our INTOSAI working 

groups throughout GAO. 

We continued to advance and support 

implementation of the INTOSAI Donors 

Funding Initiative and Capacity Building 

Goal to expand capacity building in the 

international accountability community. The 

October 2009 signing of an international 

memorandum of understanding with 

INTOSAI and 15 donor organizations 

marked the willingness of all parties to 

work in a coordinated way to support 

Supreme Audit Institutions capacity 

building in developing countries. In 2010, 

the Acting Comptroller General was named 

as Vice Chair of the INTOSAI steering 

committee continuing his leadership role on 

this issue. 

We also continued to chair the Task Force 

on the Global Financial Crisis: Challenges to 

Supreme Audit Institutions. The task force 

met via teleconference in April, and in person 

in September 2010, and plans to submit a 

status report at the 20th INTOSAI Congress 

scheduled for November, 2010 to summarize 

its results. The task force has provided a 

forum to share information and knowledge 

about the effect of the financial crisis globally 

and helped expand our knowledge about the 

causes of the financial crisis, the stimulus 

initiatives that had been implemented, the 

impact on the real economy, and challenges to 

the national audit offices. 

We continued to publish INTOSAI’s 

quarterly International Journal of Government 

Auditing in five languages to foster global 

understanding of professional standards, best 

practices, and technical issues. In fiscal year 

2010, we enhanced the Journal Web site by 

developing an automated system to manage 

e-mail subscriptions, and we completed 

digitization of the Journal’s archives. 

As a contribution to building capacity in 

national audit offices around the world, we 

conduct an annual International Auditor 

Fellowship Program (IAFP) for mid- to 

senior-level staff from other countries. 

The IAFP is our flagship multilateral 

capacity building assistance initiative and 

has completed its 31st year. This program 

is designed to strengthen the ability of the 

national audit offices to fulfill their missions 

and to enhance accountability and governance 

worldwide. Since the program’s inception, 

over 463 mid- to senior-level officials 
GAO-11-2SP 53

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

from counterpart offices of more than 103

countries have graduated. Several of them

have become auditors general, deputy auditors

general, or government ministers. Through

this program, our instructors, mentors, and

sponsors become part of a global network that

helps support our engagements. In addition,

it has strengthened professional networks

among SAIs donors, and other accountability

partners providing an ongoing and growing

community of good government professionals

and experts across nations. The goodwill

engendered by this program supports our

country’s image abroad.

Internal Management 

Challenges and External 

Factors That Could Affect Our 

Performance

The Comptroller General, the Executive

Committee, and other senior executives

identify management challenges through the

agency’s strategic planning, management,

internal controls, and budgeting processes.

We monitor our progress in addressing the

challenges through our annual performance

and accountability process. Under strategic

goal 4, several performance goals and

underlying key efforts focus attention on

each of our management challenges. We use

a balanced scorecard approach for quarterly

monitoring of these and other critical

initiatives, and we report each year on our

progress toward our 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 of

this report for the IG’s assessment.)

In fiscal year 2010, we continued to address

three priority management challenges—

physical security, information security, and

human capital. Each of these areas is affected

by external factors that could impact our

performance and we need to continuously

identify ways to adapt and improve our

internal operations.

Physical Security Challenge

Domestic and international events, both

ongoing and anticipated, present challenges

in terms of physical security of our staff

and facilities, emergency preparedness, and

continuity of operations. To ensure our ability

to protect our people and our assets, we must

constantly assess our physical security profile

to identify and implement improvements. To

address this challenge in fiscal year 2010, we

■ awarded several contracts to obtain

upgraded technology for

– electronic security systems in our field

offices to provide the capability for 24/7

monitoring and visual verification of

incidents at any of our offices and

– encrypted mobile radios and radio

antennas and repeaters for our

contract security unit and emergency

preparedness staff to support

headquarters emergency operations;

■ replaced an antiquated electronic security

system at one of our field offices to avoid a

system failure;

■ strengthened our protective measures

for our hearing impaired employees in

headquarters by providing them with

mobile devices to alert them of evacuations

and adding procedures for ensuring their

safe evacuation from the building;

■ enhanced protection for our headquarters

building and employees through a revised

guard force contract;
54 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

■ enhanced our adherence to Homeland

Security Presidential Directive 12

standards for federal building access

by conducting about 630 minimum

background investigations of government

and contractor staff;

■ strengthened our emergency preparedness

through required annual continuity

awareness training; and

■ took steps to enhance visitor management

by reviewing our processes and identifying

ways to leverage technology to strengthen

controls and eliminate manual processes.

In fiscal year 2011, we plan to

■ continue replacement of electronic security

systems in field offices and begin to

integrate them with our headquarters’

system;

■ finalize and issue our Facility Security

Plan; and

■ conduct necessary background

investigations to comply with minimum

federal building access requirements.

Information Security Challenge

Our audit mission has moved from a

papercentric world to a global electronic

environment. This electronic evolution has

resulted in security challenges to information

and information systems. Through our

physical and electronic information security

programs, we continuously assess threats;

identify enhancements to policy, procedures,

and technology; and ensure that the steps we

take to address these threats limit risks to the

agency. We have implemented information

security programs consistent with current

guidance from the National Institute of

Standards and Technology (NIST), the

Federal Information Security Management

Act (FISMA), and other agencies’ information

security policies to protect data that they

share with us. While we are not required

by law to comply with FISMA or Executive

Branch information policies, we have

adopted them to help us ensure physical and

information system security.

Our overall goal is to ensure that information

protection requirements extend across the

life cycle of audit work from data collection,

report production, and data transmission

and storage, to the eventual archiving and

disposal of data. In support of this goal,

our Information Security and Information

Systems Security programs 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.14

To address this challenge in fiscal year 2010,

we

■ provided better access control to our

network and information through

additional data protection encryption and

identity management options;

■ increased our vigilance in the auditing of

network servers and devices through the

use of automated tools;

■ enhanced adherence to OMB, NIST, and

FISMA guidance by revising our policies

and procedures;

■ improved our ability to respond to

changing threats through refined security

processes and procedures, enhanced

14 We have implemented FISMA requirements and made them a

routine part of our business operations. We believe it is no longer

necessary to provide a separate appendix on our FISMA-related efforts.
GAO-11-2SP 55

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

incident response capability, and new

technologies;

■ enhanced our configuration and change

management capabilities by consolidating

our automated monitoring process across

all network systems;

■ enhanced initial security awareness

training to better prepare new staff to

properly handle and protect sensitive and

classified government information; and

■ began addressing best practices relating

to the mandatory declassification of

classified products by coordinating

with the National Archives and Records

Administration (NARA) on development

of a declassification program.

In fiscal year 2011, we plan to

■ consolidate information systems

monitoring to maintain the confidentiality

of information, the availability of

information systems, and the integrity of

our data network;

■ refine our security controls, enhance our

contingency operations, and identify and

implement appropriate new technologies to

improve our ability to respond to changing

threats;

■ implement new and updated security

guidance from NIST and OMB, and

monitor systems in accordance with OMB,

NIST, and FISMA guidance;

■ revise annual security awareness

training required for all staff handling

both classified and sensitive unclassified

information; and

■ formalize a memorandum of

understanding with NARA to initiate

systematic declassification of our reports

under mandatory guidelines

Human Capital Challenge

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. However,

like the rest of the federal government, we

face new and complex 21st century challenges

that affect our ability to attract and retain

such a high quality workforce, including

long-term fiscal constraints, changing

demographics, emerging civil service reform

initiatives, and evolving public attitudes about

the federal workforce. To sustain the quality

of our services and the demand for our work,

we must continue to focus our efforts on

recruiting, developing, and retaining our

workforce. We must also continue to build on

our efforts to promote a work environment

that is fair, unbiased, and inclusive, as well as

one that offers opportunities for all employees

to realize their full potential. To strengthen

our human capital programs and processes to

address this challenge in 2010, we

■ negotiated the majority of the articles

for our master collective bargaining

agreement with the GAO Employees

Organization, IFPTE, Local 1921 using

interest based bargaining;

■ implemented actions in our Workforce

Diversity Plan to improve recruitment,

such as increasing the use of the

student career experience program

(SCEP), establishing partnerships with

intern programs representing diverse

populations, and expanding outreach

activities to campuses and professional

associations with diverse members and

affiliates;

■ enhanced our recruiting, hiring, and

retention programs by developing a

strategic recruiting framework, and
56 GAO-11-2SP

GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis 

streamlining the student loan repayment

program process;

■ completed a review of our performance

management system in response to

concerns from staff that it was not

working well, briefed all employees on

the findings, and awarded a contract

for development of a new performance

management system; and

■ expanded supervisory and leadership

training to improve how managers and

staff elicit, receive, and give feedback,

and introduced new courses to develop

and refine skills on teamwork, improving

communication, and coaching.

In fiscal year 2011, we plan to

■ complete a master collective bargaining

agreement with IFPTE, Local 1921;

■ leverage social media tools to further

enhance our recruiting and outreach

efforts to address changing technologies

and communication norms;

■ continue to focus on attracting and

retaining staff of certain population

groups identified in our Workforce

Diversity Plan with low representation in

our workforce-Hispanics, veterans, and

people with disabilities;

■ ensure consistency of our human capital

practices and procedures with Office of

Personnel Management’s civil service

reform initiatives, to the extent practicable;

■ ensure the integrity of personnel-related

data in our human resource information

systems;

■ optimize the utility of our human resource

information systems by better aligning

technology solutions with critical business

processes;

■ continue to align our learning activities

with organizational priorities and leverage

technology to deliver, track, and report on

them;

■ finalize a strategic plan for providing

human capital services for the next 5 years

that aligns with our strategic plan; and

■ complete the redesign of our performance

management system and implement short

and long-term recommendations from the

Performance Appraisal Study.

Mitigating External Factors

Other external factors that could affect

our performance and progress toward

our goals include shifts in congressional

interests; the ability of other agencies to

make improvements needed to implement our

recommendations; resource constraints; and

access to agency information. We mitigate

these factors in several ways.

While demand for our work is very high,

with nearly 1,000 congressional requests

and new mandates in fiscal year 2010,

as the Congress responds to current and

unforeseen events, the mix of work we are

asked to perform can and does change. To

be prepared to address timely and relevant

issues, in our 2010 strategic planning process,

we identified 8 broad trends to guide our

work plans. We determined these trends

through literature review, discussions with

advisors and experts, and input from mission

teams. We communicate frequently with our

congressional clients to stay abreast of their

interests. In addition, each year we conduct

a limited number of evaluations under the

Comptroller General’s authority to address

priority issues we identify. We also strive

to maintain flexibility in deploying our

resources in response to shifting priorities

and have successfully redirected our

resources when appropriate and maintained
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GAO Performance and Accountability Report 2010

Management’s Discussion and Analysis

broad-based staff expertise. For example, to

address recent mandates for work related to

the Recovery Act and TARP in fiscal year

2010, we employed multidisciplinary teams

composed of staff from across the agency.

We devoted almost 40 percent of our audit

resources to mandates in fiscal year 2010. We

expect the level of demand for our work to

continue as we fulfill ongoing requirements

under mandates and other responsibilities.

For example, recent health care and financial

regulatory reform legislation include many

new mandates for us. Moreover, all Senate

committees are required to review programs

within their jurisdiction to root out fraud,

waste, and abuse in program spending—

giving particular scrutiny to issues raised in

our reports—and develop recommendations

for improved government performance, and

House rules require each standing committee

or subcommittee to hold at least one hearing

on issues raised by us indicating that federal

programs or operations authorized by the

committee are at high risk for fraud, waste,

abuse, or mismanagement (see p. 39 for more

information about our high-risk list areas and

programs.)

Federal funding and resource constraints

could also affect our ability to serve the

Congress and meet our performance targets.

To improve our ability to work efficiently and

make the best use of resources, we are focused

on leveraging technology and enhancing our

quality assurance processes. For example, in

fiscal year 2010, we upgraded the capability

of several information systems used by our

engagement teams to manage their work.

Another external factor that affects our

ability to serve the Congress is the extent

to which we can obtain access to agency

information. This access to information plays

an essential role in our ability to report on

issues of importance to the Congress and

the American people. Executive departments

and agencies are generally very cooperative

in providing us access to the information

we need. It is fairly rare for an agency to

deny us access to information, and rarer still

for an agency to refuse to work toward an

accommodation that will allow us to do our

work.

While we generally receive very good

cooperation, over time we have experienced

access issues at certain departments and

agencies. Some of these are agency specific,

stemming from long-standing processes and

procedures that impede our access; others

reflect misinterpretations of our authorities.

We actively pursue access issues as they

arise, and we are engaged in discussions

and efforts across the executive branch to

enhance our access to information. In 2010,

there were some positive developments

on the access front stemming from these

discussions. In the past year, DHS took the

significant step of finalizing its new DHS

Management Directive and implementing

instruction for responding to our requests for

information and interviews. In particular, the

new protocols are designed to provide us with

direct access to designated program officials

for the purpose of requesting and receiving

documents, information, and interviews,

rather than working through liaisons. When

fully implemented, these processes should

result in key improvements in our access to

records and knowledgeable program officials

at DHS.

The Department of Justice (DOJ) in recent

years has also employed a centralized process

for screening our access requests, resulting

in delays and occasional denials of access

to information. Given this, in 2010 we held

discussions with senior officials at DOJ

about options for streamlining our access to

information. We have agreed to initiate a pilot

with target time frames for DOJ production

of documents and for the scheduling of
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Management’s Discussion and Analysis

interviews with agency officials. We are

hopeful that the pilot will lead to a more

efficient and effective working relationship

with DOJ.

We have sometimes experienced issues at

certain agencies due to long-standing and

erroneous interpretations of our access

authority, even where the agencies involved

are otherwise generally cooperative. In some

cases, agencies have interpreted language in

program statutes limiting their disclosure

or use of data as restricting our access,

notwithstanding our statutory access rights.

Examples include an interpretation by the

Food and Drug Administration with respect

to a provision of the Federal Food, Drug, and

Cosmetic Act, as well as an interpretation by

the Federal Trade Commission of a provision

in the Hart-Scott-Rodino Act, as amended.

Legislation that passed the House earlier

this year (the Government Accountability

Office Improvement Act of 2010, H.R. 2646)

and pending in the Senate (S. 2991) would

confirm our access rights, refuting agency

interpretations that restrict our access in

these and other circumstances.

We devote a high level of attention to

monitoring and aggressively pursuing

access issues as they arise. 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.
Serving The Congress And The Nation

Part II

Performance Information
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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 2010 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.
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GAO Performance and Accountability Report 2010

Performance Information

Source: See Image Sources.

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 2010-2015) strategic objectives

under this goal are to provide information

that will help address

■ financing and programs to serve 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;

■ viable communities;

■ a stable financial system and consumer

protection;

■ responsible stewardship of natural

resources and the environment; and

■ a viable, efficient, safe, and accessible

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

health providers and patients, students and

schools, employees and workplaces, 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 

Attacks on federal facilities in 2010 demonstrate the 

continued vulnerability of federal facilities. In a series of 

reports, we identified a number of challenges that hamper 

the Federal Protective Service’s ability to protect about 

9,000 federal facilities from a potential terrorist attack or 

other act of violence. On the basis of our work, legislation 

was introduced in Congress to improve the protection of 

federal facilities and employees. DHS also used our work 

to help support moving the Federal Protective Service to 

another component within the department. (GAO-10-901, 

GAO-10-341)

Goal 1 

Overview

Address Current and Emerging 

Challenges to the Well-Being and 

Financial Security of the American 

People
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Performance Information 

To accomplish our work under these strategic objectives in fiscal year 2010, we conducted

engagements, audits, analyses, and evaluations of programs at major federal agencies, such as

the Departments of Health and Human Services, Education, Energy, Homeland Security (DHS),

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 9, we exceeded all three of the goal 1 performance targets we set for fiscal

year 2010 financial and nonfinancial benefits and testimonies.

Table 9: Strategic Goal 1’s Annual Performance Results and Targets

Performance 

measure

2006 

actual

2007 

actual

2008 

actual

2009 

actual

2010 

target

2010 

actual

Met/ 

not met

2011 

targeta

Financial benefits 

(dollars in billions) $22.0 $12.9 $19.3 $12.1 $13.4 $17.8 met $13.4

Nonfinancial benefits 268 238 226 224 225 233 met 225

Testimonies 97 125 123 85 80 86 met 78

Source: GAO.

a

Our fiscal year 2011 targets for all three performance measures are the same as those we reported in our fiscal year 2011 performance 

budget in January 2010.

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 10. This table indicates that the 4-year average for goal 1 financial benefits

has declined steadily since fiscal year 2006. This decline is mostly due to some large financial

benefits from earlier years that are reflected in the averages. Goal 1’s nonfinancial benefits

peaked in fiscal year 2007 and have also declined since then. The average number of hearings at

which we testify increased from 2006 through 2008 and has remained fairly stable from 2008-

2010.

Table 10: Four-Year Rolling Averages for Strategic Goal 1

Performance measure 2006 2007 2008 2009 2010

Financial benefits (dollars in billions) $22.0 $19.3 $17.5 $16.6 $15.5

Nonfinancial benefits 254 259 252 239 230

Testimonies 88 99 108 108 105

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 2011.
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GAO Performance and Accountability Report 2010

Performance Information

Financial Benefits

The financial benefits reported for this

goal in fiscal year 2010 totaled $17.8

billion, which exceeded the target we set by

$4.4 billion. Among these accomplishments

are large financial savings from our work

on the level of funding for the Medicare

Advantage program and insurance claims

for Federal Housing Administration-insured

mortgages. We further describe financial

accomplishments in the goal 1 section of

appendix 1.

While we exceeded our target in 2010, we

do not expect this level of performance to

continue based on our recent experience and

our 4-year average. We have set the target

for fiscal year 2011 at $13.4 billion—the same

level we set for fiscal year 2010.

Example of Goal 1’s

Financial Benefits 

Spending on the Medicare Advantage (MA) program—a 

private health option under Medicare—increased rapidly 

after 2003, rising 64 percent from 2004 to 2006. We found 

that in 2007 some beneficiaries enrolled in MA plans likely 

experienced higher cost sharing than if they were enrolled 

in Medicare fee-for-service. Further, in 2006, MA plans 

spent less on medical expenses than they projected, leading 

to greater than estimated profits. The 2008 Medicare 

Improvements for Patients and Providers Act reduced 

payments to MA plans, resulting in estimated reductions 

of $3.4 billion for fiscal years 2010-2011. (GAO-08-359, 

GAO-09-132R)

Nonfinancial Benefits

Nonfinancial benefits reported for goal 1 in

fiscal year 2010 included 222 actions taken by

federal agencies to improve their services to

the public in response to our work and another

11 in which information we provided to the

Congress resulted in statutory or regulatory

changes. This total of 233 nonfinancial benefits

exceeded our target of 225. We further describe

our nonfinancial accomplishments in the goal 1

section of appendix 1.

For fiscal year 2011, we have set a target of

225 for nonfinancial benefits. This target is

the same as our fiscal year 2010 target, as we

believe that we are more likely to achieve a

greater number of nonfinancial benefits under

goals 2 and 3 over the next few years based on

our prior experience. This target is the same as

that we set in our fiscal year 2011 performance

plan.

Example of Goal 1’s 

Nonfinancial Benefits

Our work has been the cornerstone for numerous legislative 

proposals in both the House and Senate to amend the Toxic 

Substances Control Act—the primary federal law to protect 

the American public from the threats of harmful chemicals 

in consumer products. Our body of work on the regulations 

controlling the manufacture and use of dangerous chemicals 

continues to be at the forefront in influencing the Congress 

to strengthen U.S. chemical control laws and to keep pace 

with the European Union and other countries in protecting 

the public. (GAO-09-428T, GAO-07-825)
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GAO Performance and Accountability Report 2010

Performance Information 

Testimonies

Our witnesses testified at 86 congressional

hearings related to this strategic goal, which

exceeded the fiscal year 2010 target by 6

testimonies, or 8 percent. Among the topics

on which we testified were unemployment

insurance trust funds; concussions in high

school athletes; corporate crime; Interior’s

oversight of oil and gas, and high-speed rail

projects. (See p. 34 for selected testimony

topics by goal.) We set our fiscal year 2011

target at 78 testimonies on goal 1 issues

because 2011 is the first year of a new

Congress and we generally have fewer

hearing requests in those years.

Example of Goal 1’s Testimonies

We testified on the state of Unemployment Insurance 

(UI) trust funds, which we found to have outstanding 

loans totaling $38.9 billion from the federal government 

to pay benefits. At the end of 2009, no state had enough 

reserves to cover 12 months of benefits, and net reserves 

are projected to remain negative for several years. We 

identified options to improve state UI trust fund financial 

conditions, such as raising and indexing the taxable wage 

base, adjusting state tax rates more frequently, and raising 

solvency targets before lowering rates. (GAO-10-692T)
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Performance Information

Source: See Image Sources.

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.

The federal government is also working to

balance national security demands overseas

and at home with demands related to an

evolving national security environment.

Given the importance of these efforts, our

second strategic goal focuses on helping the

Congress and the federal government in their

responses to changing security threats and

the challenges of global interdependence. Our

multiyear (fiscal years 2010-2015) 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. foreign policy

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, Homeland Security

and Justice, 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 Financial Markets and Community

Investment, Information Technology, and

Natural Resources and Environment teams.

Selected Work under Goal 2 

Since 2005 we have reviewed FEMA’s preparedness grantallocation methodologies and its efforts to implement a 

national system of emergency-response planning, exercises, 

and capability assessment. In 2010, in response to our 

Recommendations, FEMA enhanced its project planning for 

implementation of the Comprehensive Assessment System, 

obtained information from past principal level exercises and 

conducted remedial action tracking and long-term trend 

analysis, and included the National Council on Disability on 

committees involved in the design and execution of national 

level exercises for issues related to populations with special 

needs.

Goal 2 

Overview

Respond to Changing Security 

Threats and the Challenges of 

Global Interdependence 
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Performance Information 

To accomplish our work in fiscal year 2010 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 11, we exceeded our fiscal year 2010 performance targets for financial and

nonfinancial benefits, but we did not meet the target for testimonies.

Table 11: Strategic Goal 2’s Annual Performance Results and Targets

Performance 

measure

2006 

actual

2007 

actual

2008 

actual

2009 

actual

2010 

target

2010 

actual

Met/ 

not met

2011 

targeta

Financial benefits 

(dollars in billions)

$12.0 $10.3 $15.4 $12.4 $13.8 $20.5 met $13.9

Nonfinancial benefits 449 468 468 457 345 444 met 345

Testimonies 68 73 93 67 73 58 not met 65

Source: GAO.

a

Our fiscal year 2011 target for testimonies differs from the targets we reported in our fiscal year 2011 performance budget in January 

2010. Specifically, we decreased the number of testimonies by six. 

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 12. This table indicates that over the past 5 years goal 2 financial benefits reached the

highest level in 2010, and average nonfinancial benefits and testimonies increased steadily from

2006 to 2009 and declined slightly in 2010.

Table 12: Four-Year Rolling Averages for Strategic Goal 2

Performance measure 2006 2007 2008 2009 2010

Financial benefits (dollars in billions) $10.4 $11.2 $12.7 $12.5 $14.7

Nonfinancial benefits 364 413 438 461 459

Testimonies 57 63 67 75 73

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 2011.
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GAO Performance and Accountability Report 2010

Performance Information

Financial Benefits

The financial benefits reported for this goal

in fiscal year 2010 totaled $20.5 billion which

exceeded our target by $6.7 billion. Among

these accomplishments are large financial

benefits from our work, including reductions

DOD made to the Army’s Future Combat

System vehicle program and the Missile

Defense Agency’s cancellation of the Kinetic

Energy Interceptor program and second

airborne laser aircraft prototype. We further

describe financial 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; however

we set our fiscal year 2011 target at $13.9

billion based on an assessment of our recent

results and our 4-year rolling average.

Example of Goal 2’s

Financial Benefits 

Our prior work identified issues such as excessive payments 

of enlistment and reenlistment bonuses to servicemembers in 

occupations that exceeded their authorized levels while other 

occupations were underfilled. We made recommendations 

that DOD assess reasons for occupations being over- or 

underfilled and justify use of financial incentives for overfilled 

occupations. On the basis of our work, DOD developed a 

more rigorous approach to managing and overseeing its 

recruiting and retention budget, resulting in a financial benefit 

of $947.3 million. (GAO-06-134)

Nonfinancial Benefits

The nonfinancial benefits reported for goal

2 in fiscal year 2010 included 423 actions

taken by federal agencies to improve their

services to the public and business processes

in response to our recommendations and

another 21 in which information we provided

to the Congress resulted in statutory or

regulatory changes. This total of 444

nonfinancial benefits exceeded our target by

99. 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. We further

describe nonfinancial accomplishments in the

goal 2 section of appendix 1.

Looking ahead, our assessments of the

executive branch’s current efforts to

implement our recommendations made

under this goal led us to set our fiscal year

2011 target at 345, which is the same as we

reported for goal 2 in our fiscal year 2011

performance plan. While this target is lower

than our fiscal year 2010 actual performance

and 4-year average for this measure, we

believe that this is a realistic estimate based

on the level of our outstanding goal 2

recommendations.

Example of Goal 2’s 

Nonfinancial Benefits

In fiscal year 2006, we analyzed how well multiple 

Department of Homeland Security (DHS) components 

were basing their security efforts on risk management—a 

systematic process for assessing threats and taking steps 

to address them. We recommended that DHS standardize 

its risk management approach, better link local and 

national risk assessment efforts, provide guidance on 

using risk management to develop performance measures, 

and integrate risk management activities with resource 

allocation. DHS has taken action to implement these 

recommendations, and as a result is better positioned 

to allocate its resources to those areas of highest risk. 

(GAO-06-91, GAO-08-627SP) 
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Performance Information 

Testimonies

Our witnesses testified at 58 congressional

hearings related to this strategic goal in

fiscal year 2010, missing our target of 73

hearings. Goal 2 testimony topics included

financial markets regulation, TARP, aviation

security, global food security, DOD military

and civilian compensation, and defense space

acquisitions. (See p. 34 for selected testimony

topics by goal.) We have set our target at 65

for presenting testimony at hearings in fiscal

year 2010—7 more hearings than our fiscal

year 2010 actual performance. We anticipate

an increase in hearings due to ongoing work

of the Congress on these and other defense

and global interdependence issues.

Example of Goal 2’s Testimonies

We testified on U.S. governmentwide efforts to address 

global food security. We found that while the U.S. 

government supports a wide variety of programs and 

activities in this area—totaling at least $5 billion in fiscal 

year 2008—it lacks readily available comprehensive funding 

data and cannot determine precisely the total amount. The 

administration is making progress toward a governmentwide 

global food security strategy, but the lack of a commonly 

accepted governmentwide operational definition of global 

food security programs and activities and comprehensive 

data on programs and funding make it hard to establish a 

baseline for planning. (GAO-10-494T)
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Performance Information

Source: See Image Sources.

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 2010-2015) strategic

objectives under this goal are to

■ analyze the government’s fiscal position

and opportunities to strengthen

approaches to address the current and

projected fiscal gap;

■ identify fraud, waste, and abuse; and

■ support congressional oversight of major

management challenges and program

risks.

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,

Forensic Audits and Special Investigations,

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 the General

Counsel’s Office.

Selected Work under Goal 3 

We advocated increased congressional scrutiny of 

problematic, major IT projects intended to modernize the 

Department of Veterans Affairs’ (VA) systems for outpatient 

appointment scheduling as well as asset and financial 

management. In multiple reports, we identified weaknesses 

in IT management capabilities that were undermining the 

department’s efforts to develop and implement new systems. 

Our work spurred improvements to the appointmentscheduling and asset management system projects and 

contributed to VA’s decision to terminate its financial 

management system project. (GAO-10-579, GAO-10-40)

To accomplish our work under these

objectives, we performed our foresight work,

for example, examining the nation’s longterm fiscal and management challenges,

and our insight work focusing on federal

programs at high risk for fraud, waste, abuse,

and mismanagement.

As shown in table 13, we did not meet our

fiscal year 2010 performance targets for this

goal’s financial benefits, we exceeded our

target for nonfinancial benefits, and we did

not meet our target for testimonies for this

goal.

Goal 3 

Overview

Help Transform the Federal 

Government to Address 

National Challenges
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Performance Information 

Table 13: Strategic Goal 3’s Annual Performance Results and Targets

Performance 

measure

2006 

actual

2007 

actual

2008 

actual

2009 

actual

2010 

target

2010 

actual

Met/ 

not met

2011 

targeta

Financial benefits 

(dollars in billions)

$17.0 $22.8 $23.4 $18.5 $14.8 $11.6 not met $14.7

Nonfinancial benefits 625 648 704 634 630 684 met 630

Testimonies 73 74 76 49 59 45 not met 54

Source: GAO.

a

Our fiscal year 2011 target for testimonies differs from the target we reported in our fiscal year 2011 performance budget in January 

2010. Specifically, we decreased the number of testimonies by five. 

To help us examine trends for these measures over time, we look at their 4-year averages—

shown in table 14—which minimize the effect of an unusual level of performance in any single

year. Table 14 indicates that over the 5-year period from 2006-2010, financial benefits increased

steadily from 2006-2009 and decreased somewhat in 2010. Nonfinancial benefits rose from

2006-2008, decreased in 2009, and increased again in 2010. The trend in the average number

of hearings during which our senior executives testified on goal 3 issues also rose from 2006-

2008, remained stable in 2009, and declined substantially in 2010.

Table 14: Four-Year Rolling Averages for Strategic Goal 3

Performance measure 2006 2007 2008 2009 2010

Financial benefits (dollars in billions) $10.1 $14.6 $18.6 $20.4 $19.1

Nonfinancial benefits 630 654 686 653 668

Testimonies 59 64 68 68 49

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 2011.
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GAO Performance and Accountability Report 2010

Performance Information

Financial Benefits

The financial benefits reported for this goal in

fiscal 2010 totaled $11.6 billion, missing our

target of $14.8 billion by about $3.2 billion. We

further describe financial accomplishments in

the goal 3 section of appendix 1.

While we did not meet our fiscal year 2010

target, we have kept our fiscal year 2011

target for financial benefits at $14.7 billion,

which is the same as the target we reported

in our fiscal year 2011 performance plan, as

we expect more financial benefits from our

work on information technology, financial

management, and government operations.

Example of Goal 3’s

Financial Benefits 

We have reported on the continuing cost, schedule, 

and management challenges facing the acquisition and 

development of the National Polar-orbiting Operational 

Environmental Satellite System (NPOESS)—a tri-agency 

program managed by NOAA, DOD, and NASA. In a 

series of reports, we found that ineffective and inefficient 

executive management over the program led to the 

continuing unresolved cost increases and schedule delays. 

After forming a task force to assess options and identify 

a governance structure to address these problems, in 

February 2010, the Director of the Office of Science and 

Technology Policy disbanded the NPOESS program, 

announcing that it could not be successfully executed with 

the current management and budget structure. After the 

decision to disband the program, the President’s fiscal 

year 2011 budget excluded any further NOAA funding 

for NPOESS for a total benefit of about $1.6 billion. 

(GAO-10-558, GAO-09-564)

Nonfinancial Benefits

Nonfinancial benefitsreported for goal 3 in

fiscal year 2010 included 673 instancesin

which agencies’ core business processes were

improved or governmentwide management

reforms were advanced because of our work.

In addition, there were 11 instancesin which

information we provided to the Congress

resulted in statutory orregulatory changes. This

total of 684 nonfinancial benefits exceeded our

target by 54. We further describe nonfinancial

accomplishmentsin the goal 3 section of

appendix 1.

Ourforward-looking assessments of the

executive branch’s current effortsto implement

ourrecommendations made underthis goal led

usto keep ourfiscal year 2011 target at 630, the

same level that we set in our 2011 performance

plan. While we recognize that thistarget islower

than ourfiscal year 2010 actual performance and

4-year average forthis measure, we believe it

is a realistic estimate based on our outstanding

recommendationsfrom our goal 3 work.

Example of Goal 3’s 

Nonfinancial Benefits

We developed a methodology adopted by the Congress to 

efficiently target billions of dollars in Medicaid assistance 

through the Recovery Act. Initial estimates showed that the 

act would provide about $87 billion in increased federal 

support through the Federal Medical Assistance Percentage 

(FMAP)—the rate states are reimbursed for Medicaid costs. 

About 38 percent of the $87 billion total is provided by a 

percentage increase targeted to states based on changes 

in each state’s unemployment rate, a measure closely 

correlated with recession-induced increased state Medicaid 

expenditures. Most of the remaining 62 percent is provided 

through an across-the-board percentage increase in the 

FMAP. For the targeted portion of the increased Medicaid 

assistance, the legislation is based on our strategy for 

allocating supplemental federal Medicaid assistance during 

economic downturns—according to when and to what 

extent states’ unemployment rates increase. The Congress 

sought our input in designing the targeted allocation of 

supplemental Medicaid assistance for the Recovery Act. As 

a result, about $33 billion in grants to states are allocated 

according to where, when, and how severely they are 

impacted by recession-induced increases in Medicaid costs. 

(GAO-09-320R, GAO-07-97)
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GAO Performance and Accountability Report 2010

Performance Information 

Testimonies

Our witnesses testified at 45 congressional

hearings related to this strategic goal in

fiscal year 2010, missing the target of 59

by 14 hearings. Among the testimonies

presented were those related to the Recovery

Act, DOD financial management, strategies

for balancing the government-to-contractor

workforce at federal agencies, and fraud in

the Service Disabled Veteran-Owned Small

Business Program. (See p. 34 for selected

testimony topics by goal.) For fiscal year

2011, we have set a target of testifying at

54 hearings, which is somewhat less than

the target we set in our fiscal year 2011

performance plan. While this target is higher

than our actual 2010 results, it is more

consistent with our experience over the past

several years.

Example of Goal 3’s Testimonies

 Our 2010 review on use of recovery audit contractors 

(RAC) in Medicare found that the Centers for Medicare & 

Medicaid Services lacked an adequate process for using 

RAC findings to address vulnerabilities that led to over $230 

million dollars in improper payments to Medicare providers. 

This influenced the Congress to add a provision to the 

Improper Payments Elimination and Recovery Act of 2010. 

All agencies that use RACs are now required to report yearly 

to the Office of Management and Budget and the Congress 

on actions taken to address RAC recommendations on how 

to reduce vulnerabilities leading to improper payments.

(GAO-10-864T)
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Performance Information

Source: See Image Sources.

Our fourth strategic goal embraces the spirit

of continuous and focused improvement in

order to sustain high-quality, timely service

to the Congress, while also implementing

leading practices in our internal operations.

Activities carried out under this goal also

address our three internal management

challenges and our management improvement

initiatives. The multiyear (fiscal years 2010-

2015) strategic objectives under this goal are

to

■ improve efficiency and effectiveness in

performing our mission and delivering

quality products and services to the

Congress and the American people;

■ maintain and enhance a diverse workforce

and inclusive work environment through

strengthened recruiting, retention,

development, and reward programs;

■ expand networks, collaborations, and

partnerships that promote professional

standards and enhance our knowledge,

agility, and response time; and

■ be a responsible steward of our human,

information, fiscal, technological, and

physical resources.

Selected Work under Goal 4 

To attract more applicants from demographic groups with 

low representation in our workforce, we implemented a 

number of leading practices in our recruitment program. 

We issued a diversity recruitment strategy to guide 

recruiting activities. We also trained diverse teams of staff 

representing all of our mission teams, locations, and affinity 

groups to recruit at college campuses and recruiting events.

To deliver training more cost effectively to staff in our 

headquarters and field offices, we implemented virtual 

classroom courses or Webinars, and converted four key 

leadership courses from standard classroom to virtual 

courses. We certified 29 staff to teach these courses and 

trained 10 technicians to assist with course delivery. 

To support our analysts in conducting their work efficiently, 

we improved capabilities of several engagement 

support systems used by our analysts for required 

audit documentation, and we upgraded our document 

management system to streamline the user interface. 

To make our work more accessible to users of small-screen 

electronic devices, we created a simplified version of our 

Web site to provide easy access to our most frequently 

viewed products—reports, testimonies, and legal decisions. 

We also piloted a new electronic format for presenting our 

reports online.

To reduce energy consumption in our headquarters building, 

we replaced ceiling light fixtures with energy efficient 

fixtures and installed energy efficient gas boilers for heating 

that should reduce annual costs by more than $.75 million.

Goal 4 

Overview

Maximize the Value of GAO by 

Enabling Quality, Timely Service to 

the Congress and by Being a Leading 

Practices Federal Agency
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GAO Performance and Accountability Report 2010

Performance Information 

Data Quality and Program Evaluation

Verifying and Validating 

Performance Data

Each year, we measure our performance with

14 indicators of the results of our work, client

service, people management, and internal

operations. To assess our performance, we use

actual, rather than projected, data for almost

all of our performance measures. We believe

the data are reliable based on our verification

and validation procedures to ensure 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 15.

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 through the following offices: the

Controller and Administrative Services, Field

Operations, Human Capital, Information

Systems and Technology Services, Knowledge

Services, and the Professional Development

Program. Assistance on specific key efforts is

provided by the Special Assistant for Diversity

Issues, the Applied Research and Methods

team and other offices including Strategic

Planning and External Liaison, Congressional

Relations, Opportunity and Inclusiveness,

Quality and Continuous Improvement, Public

Affairs, and General Counsel. To accomplish

our work under these four objectives, we

performed internal studies and completed

projects that further the strategic goal. As

shown in table 6 on page 38, our internal

operations exceeded out targets for services

and functions that help employees get their

jobs done and improve the quality of their

work life. Goal 4 contributions are highlighted

throughout this report and in appendix 1.
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GAO Performance and Accountability Report 2010

Performance Information

Table 15: 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 estimated benefit is based on actions taken in 

response to our work, such as reducing government expenditures, increasing revenues, or 

reallocating 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. 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 long-term projects, changes in tax laws, program terminations, or sales of 

government assets are limited to 5 years. 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, 

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 

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. For all financial accomplishment reports 

the managing director prepares a memorandum addressed to the Chief Quality Officer 

attesting that the accomplishment report meets GAO standards for accomplishment 

reporting. The memorandum specifically (1) addresses how linkage to GAO is established 

and (2) attests that the financial benefits are claimed in accordance with GAO procedures. 

In fiscal year 2010, the teams were also required to consult with our Center for Economics 

on the calculation for financial benefits of $500 million or more. For each of the financial 

accomplishment reports, an economist reviewed and approved the methodology for 

calculating the proposed financial benefit. The assessment results were documented in the 

accomplishment’s supporting documentation and provided to the second reviewers.

The team’s managing 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. In fiscal year 2010, QCI approved accomplishment reports covering 

95 percent of the dollar value of financial benefits we reported.

In fiscal year 2010, accomplishments of $100 million or more were also reviewed by 

independent second and third reviewers (reemployed GAO annuitants), who have substantial 

experience and knowledge of GAO accomplishment reporting policies and procedures. 

GAO’s total fiscal year 2010 reported financial benefits reflect the views of the independent 

reviewers.

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 

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

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 team 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. In response to the IG’s recommendations, we 

strengthened the documentation of our nonfinancial benefits. 

Data 

limitations

The data may be underreported because we cannot always document a direct cause-andeffect relationship between our work and the 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. 

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 

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 2010 implementation rate is the percentage of recommendations made in fiscal 

year 2006 products that were implemented by the end of fiscal year 2010). 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 2006 that were 

implemented in the ensuing years is as follows: 12 percent by the end of the first year (fiscal 

year 2007), 27 percent by the end of the second year (fiscal year 2008), 42 percent by the 

end of the third year (fiscal year 2009), and 82 percent by the end of the fourth year (fiscal 

year 2010).

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 IG. 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 and implemented. Since then, we have continued to 

use this approved process to compute and report this measure.

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

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 verifies the total number of hearings 

at which we testified. As a result of the IG’s most recent review, we adjusted the figure for the 

number of hearings we testified at in fiscal year 2008 from 304 to 298. We also are improving 

the guidance and documentation for recording hearings at which we testify.

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 a question related to 

timeliness that appears on our electronic client outreach form. Because our products often 

have multiple congressional clients, we often outreach to more than one congressional staff 

person per product. We send a form to key staff working for requesters of our testimony 

statements and to clients of our more significant written products—specifically, engagements 

assigned an interest level of “high” by our senior management and those requiring an 

expected investment of 500 GAO staff days or more. One question asks the respondent 

whether the product was delivered on time. When a product that meets our criteria is 

released to the public, we electronically send relevant congressional staff an e-mail message 

containing a link to the form. When this link is accessed, the form recipient is asked to 

respond to the timeliness question using a five-point scale—”strongly agree”, “generally 

agree”, “neither agree nor disagree”, “generally disagree”, or “strongly disagree”—or to 

choose “not applicable/no answer.” For this measure, favorable responses are “strongly 

agree” and “generally agree.” 
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GAO Performance and Accountability Report 2010

Performance Information 

Data sources To identify the products that meet our criteria (testimonies and other products that are 

high interest or expected to reach 500 staff days or more), we run a query against GAO’s 

Documents Database maintained by a contractor. To identify appropriate recipients of the 

form 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 another database 

that is managed by QCI. This database then combines product, form recipient, and data 

from our Congressional Relations staff and creates an e-mail message with a Web link to 

the form. (Congressional Relations staff serve as the GAO contacts for form 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 form. Our Congressional Feedback 

Database creates a record with the product title and number and captures the responses to 

every form 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 QCI database. QCI staff also check 

the congressional staff directory to ensure that form recipients listed in the QCI database 

appear there. In addition, our Congressional Relations staff review the list of form recipients 

entered by the engagement teams and identify the most appropriate congressional staff 

person to receive a form for each client. E-mail messages that are inadvertently sent with 

incorrect e-mail addresses automatically reappear in the form 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 reviewed the timeliness performance measure in fiscal year 

2009, and as a result of this work, we have clarified the description of this measure and are 

documenting our procedures.

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 60 percent of the congressionally 

requested written products we issued during fiscal year 2010. We exclude from our 

timeliness measure low-, and medium-interest reports expected to take fewer than 500 staff 

days when completed, 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 

a form, we will not send one to this person again, even though a product subsequently 

requested meets our criteria. The response rate for the form is 29 percent, and 99 percent 

of those who responded answered the timeliness question. We received responses from 

one or more people for about 58 percent of the products for which we sent a form in fiscal 

year 2010. In our timeliness calculations for fiscal years 2004 through 2007, we inadvertently 

included nonresponses to the timeliness question and therefore recalculated the results for 

these fiscal years. While the percentage of favorable responses did not change significantly, 

the recalculation did result in us meeting our target (from 94 to 95 percent).

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 Acting Comptroller General, Acting 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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Performance Information

Data sources The Executive Committee approves the workforce plan. The workforce plan is coordinated 

and maintained by the Chief Administrative Officer (CAO). 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 National Finance Center (NFC) database, which handles payroll 

and personnel data for GAO and other agencies.

Verification 

and 

validation

The CAO maintains a database that monitors and tracks all our hiring offers, declinations, 

and accessions. In coordination with our Human Capital Office, our CAO staff input 

workforce information supporting this measure into the CAO database. While the database 

is updated on a daily basis, CAO staff provide monthly reports to the Acting Comptroller 

General and the CAO to monitor progress by GAO units in achieving workforce plan hiring 

targets. The CAO 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. In fiscal 

year 2009, we developed 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.

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.

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

CAO staff continually monitor and review accessions and attritions against their database 

that contains 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. In fiscal year 2009, we developed 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.
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Performance Information 

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 2010 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.” Responses of “no basis to judge/not 

applicable” or “no answer” were excluded from the calculation. While including “no basis to 

judge/not applicable” or “no answer” in the calculation would result in a different percentage, 

our method of calculation is an acceptable survey practice and we believe it produces a 

better and more valid measure because it represents only those employees who have an 

opinion on the questions.

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 to indicate that those data are not comparable to 

the data beginning in fiscal year 2006.

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 2010, our 

response rate to this survey was about 70 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 reviews the reliability and validity of the 

staff development measure. The IG’s most recent evaluation showed that for fiscal year 2007 

we accurately calculated the measure. 
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Performance Information

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 “always or almost always” or “most of the time.” Responses 

of “no basis to judge” or “no answer” were excluded from the calculation. Including “no 

basis to judge/not applicable” or “no answer” in the calculation (in those few instances 

where it occurred) would not result in a different percentage. Our method of calculation is 

an acceptable survey practice, and we believe it produces a better and more valid measure 

because it represents only those employees who have an opinion on the questions.

Verification 

and 

validation

See Staff development, Verification and validation. The IG’s most recent evaluation showed 

that for fiscal year 2007 we accurately calculated the measure.

Data 

limitations

See Staff development, Data limitations.
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Performance Information 

Effective leadership by supervisors

Definition 

and 

background

This measure is based on staff’s favorable responses to 10 of 20 questions related to six 

areas of supervisory 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.” In fiscal year 2009 we changed the name 

of this measure from “Leadership” to its current nomenclature to clarify that the measure 

reflects employee satisfaction with the immediate supervisor’s leadership. (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. (Beginning with the 2010 survey, 

question 10 will be not be used for this measure and we will substitute a question on 

respecting and valuing differences among individuals. We are making this change because 

there is a large number of respondents who answer “no basis/not applicable” to the Equal 

Employment Opportunity/discrimination question. We believe this is due to GAO having so 

few discrimination cases and the safeguarding of private information, thus many employees 

do not have direct knowledge about how supervisors deal with such 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.” Responses 

of “no basis to judge/not applicable” or “no answer” were excluded from the calculation. 

While including “no basis to judge/not applicable” or “no answer” in the calculation would 

result in a different percentage, our method of calculation is an acceptable survey practice 

and we believe it produces a better and more valid measure because it represents only those 

employees who have an opinion on the questions.

Verification 

and 

validation

See Staff development, Verification and validation. The IG’s most recent evaluation showed 

that for fiscal year 2007 we accurately calculated the measure.

Data 

limitations

See Staff development, Data limitations.

Organizational climate

Definition 

and 

background

This measure is based on staff’s favorable responses to 5 of the 13 questions related 

to organizational climate on our annual employee survey. This subset of questions was 

selected on the basis of senior management’s judgment about the questions’ relevance to 

the measure and specialists’ knowledge about the development of indexes. Staff were asked 

to respond to these 5 questions on a five-point scale or choose “no basis to judge” or “no 

answer.” (For background information about our entire employee feedback survey, see Staff 

development.)
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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.” Responses of “no basis to judge” or “no answer” were excluded from the 

calculation. Including the “no basis to judge/not applicable” or “no answer” in the calculation 

(in those few instances where it occurred) would not result in a different percentage. Our 

method of calculation is an acceptable survey practice, and we believe it produces a better 

and more valid measure because it represents only those employees who have an opinion 

on the questions.

Verification 

and 

validation

See Staff development, Verification and validation. The IG’s most recent evaluation showed 

that for fiscal year 2007 we accurately calculated the measure.

Data 

limitations

See Staff development, Data limitations.

Internal operations measures

Help get job done and quality of work life

Definition 

and 

background

To measure how well we are doing at delivering internal administrative services to our 

employees and identify areas for improvement, we conduct an annual Web-based survey in 

November. The customer satisfaction survey on administrative services, conducted by an 

outside contractor to ensure the confidentiality of every respondent, is administered to all 

of our employees once a year. Through the survey we encourage our staff to indicate how 

satisfied they are with 20 services that help them get their jobs done and another 13 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 20 

services that help employees get their jobs done. These services include Internet and 

intranet services, information technology customer support, mail services, and voice 

communication services. The second measure reflects satisfaction with another 13 services 

that affect quality of work life. These services include assistance related to pay and benefits, 

building maintenance and security, and workplace safety and health. The composite score 

represents how employees rated their satisfaction with services in each of these areas 

relative to how they rated the importance of those services to them. The importance scores 

and satisfaction levels are both rated on a scale of 1 (low) to 5 (high).
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Performance Information 

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 54 percent in 2009. 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. To 

address these recommendations, we worked with a contractor to implement an automated 

process for following up with survey nonrespondents, while maintaining their anonymity. 

This significantly increased our response rate and reliability. To enhance objectivity, we have 

more explicitly disclosed our survey response rate and other data limitations consistent with 

our reporting on the response rate and data limitations for our people measures. 

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.

Program Evaluation

To assess our progress toward our missionbased strategic goals (1-3) and related

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 from 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 (see http://www.

gao.gov/openrecs.html). We use this analysis

to determine the need for further work in

specific issue 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 in

that area. We also use our biennial high-risk

report to update the status of the areas we

consider vulnerable to fraud, waste, abuse,

and mismanagement, or in need of broadbased transformation. The report serves as

an evaluation and planning tool to help us to

identify areas where our continued efforts are

needed to maintain focus on important policy

and management issues facing the nation.

(See http://www.gao.gov/docsearch/featured/

highrisk.html.)

In fiscal year 2010, under strategic goal 4, we

conducted management studies to examine

internal issues, operations, and processes

affecting all four of our strategic goals. We

also continued our management improvement

initiatives and reported on several projects
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Performance Information

completed within five priority areas identified

in fiscal year 2008: Recognizing and Valuing

Diversity; Reassessing the Performance

Appraisal System; Managing Workload,

Quality, and Streamlining Processes;

Enhancing Staffing Practices and Developing

the Workforce; and Strengthening

Recruitment and Retention Initiatives. The

results of some of these projects led to longerterm initiatives such as our engagement

streamlining initiative and development of a

new product line.

■ Engagement streamlining initiative. 

This initiative focuses on streamlining

our engagement processes—especially

those activities performed by mission

team analysts—and increasing efficiency

through the use of information technology,

while still adhering to our high standards

for product quality and timeliness.

The engagement streamlining team

is comprised of mission team analysts,

technical staff, and representatives from

our Offices of Quality and Continuous

Improvement, Information Systems and

Technology Services, and Knowledge

Services and our employee organizations.

The team is identifying short-term and

longer-term improvements that can be

addressed through changes in technology,

refinements in policy and processes, or a

combination of the two.

■ Product line modernization. This

initiative focuses on modernizing our

product line’s format and dissemination

methods to more effectively meet the

information needs of our clients and the

public and reach a wider audience in an

increasingly wireless, multimedia, and

Web-based communications environment.

The Steering Committee is comprised

of mission team representatives and

staff from the Offices of Quality and

Continuous Improvement, Information

Systems and Technology Services,

Knowledge Services, Applied Research

and Methods, Congressional Relations,

General Counsel, Human Capital,

and Public Affairs and our employee

organizations. The team is identifying

short-term improvements for better

communicating our existing product

line to our various audiences as well

as long-term improvements to adapt

our product line to modern Web-based

communications. During fiscal year 2010,

we began a series of audio podcasts on

significant issues we reviewed and our new

reports; launched a mobile version of our

Web site geared for easy access with smart

phones and other small-screen electronic

devices; and piloted a Web-based

reporting format to make our products

more accessible, useful, and recognizable

for users. We also added a “Share/Save”

feature on our home page to make it easier

for users to alert their colleagues and

others about our products.

■ Quality assurance improvements. 

In response to the findings of internal

inspections and suggestions resulting

from our most recent external peer

review, we enhanced our quality assurance

framework in several areas to simplify

and clarify some of our key processes

and to help ensure compliance with our

professional standards. These changes

included development of a new framework

for categorizing our work, enhancements

to our policy for obtaining comments on

our draft products from external entities,

revisions to how we document data

reliability assessments, a new approach to

organizing engagement documentation,

enhancements to documenting the

assessment of the collective evidence,

and clarifications on how to document

referencing of draft products. In

preparation for our next external peer
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GAO Performance and Accountability Report 2010

Performance Information

review in 2011, we have also conducted

mandatory quality assurance training for

our audit staff.

We also completed our annual evaluation

of financial management practices and

processes. Each year, we monitor internal

financial management controls through the

use of reviews that include identification of

key controls over financial reporting and

assessment of the operating effectiveness of

those controls. We review control objectives

across all cycles15 and, where applicable,

implement consolidated end-to-end testing

of some processes (e.g. budget, procurement,

property and disbursement cycles). We

also develop corrective action plans for any

identified control issues and monitor the

plans until the issue is resolved. Our program

meets the objectives of the Federal Managers’

Financial Integrity Act of 1982, even though,

as a legislative branch agency, we are not

legally required to do so. We report the

results of our analyses to the appropriate

internal control working groups and the

Senior Assessment Team, composed of senior

agency managers and chaired by our Chief

Financial Officer, that actively oversee the

process. Additionally, our review of financial

management systems is consistent with

OMB Circular A-127 and includes analyses

of Statement on Auditing Standards (SAS)

number 70, Service Organizations audit

reports for our shared service providers.

The review also includes the results of

our auditor’s opinions on our financial

statements and on internal controls over

financial reporting and the auditor’s report on

compliance with laws and regulations.

15 In fiscal year 2010, GAO operations were segmented into 10

business cycles: Entity-wide Controls, IT Controls, Property, Travel,

Procurement, Disbursements, Budget, Fund Balance with Treasury,

Financial Reporting, and Payroll.
Serving The Congress And The Nation

Part III

Financial Information
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GAO Performance and Accountability Report 2010

From the Chief Financial Officer 

Source: See Image Sources.

November 15, 2010

I am pleased to report that during fiscal year 2010, the U.S. Government

Accountability Office continued to honor its commitment to lead by

example in government financial management. For the 24th consecutive

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

statements, citing no material weaknesses or 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 2009

PAR received a certificate of excellence in accountability reporting from the

Association of Government Accountants, an honor we have received each

year since we first applied in fiscal year 2001.

In fiscal year 2010, we continued to implement our oversight activities

under the American Recovery and Reinvestment Act of 2009 (Recovery

Act), reviewing the use of Recovery Act funds by states and localities. In

fiscal year 2009, in order to quickly begin work under the act, we used

current, permanent staff who were well versed in GAO practices, were

knowledgeable about state and local practices, and had contacts in the

states and localities, and also hired more than 80 temporary staff and

federal retirees to assist with this work. We sustained this investment

through most of fiscal year 2010, although all temporary and annuitant

staff were released before the end of the fiscal year. For fiscal year 2011,

we are conducting a revised scope of work under the Recovery Act using

permanent GAO staff funded by our annual appropriations.

In fiscal year 2010, we completed phase 2 of our financial system

implementation. Under this phase, we fully integrated our travel

management processes with the agencywide implementation of an eGov

travel system, GovTrip. We successfully tested and implemented the

GovTrip travel system, through a phased-in approach, adding the final

group of users to the system in August. In addition to providing a more

intuitive user interface, automatic routing of approved authorizations to the

travel agent, online travel guidance, and electronic submission of receipts,

From the

Acting Chief Financial Officer
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From the Chief Financial Officer

GovTrip provides travelers with the option to book flights, hotels, and rental

cars online without travel agent assistance. Travel is critical to enabling

GAO to carry out its work in support of the Congress, and the improved

transaction efficiency achieved through the integration of travel activity

directly with the financial system benefits both the traveler and the agency.

The third and final phase of our financial system implementation focuses on

automating budget formulation and workforce planning functions. This year

we researched and evaluated budget formulation and workforce planning

software tools available to improve data integration, provide analytical

tools, and increase the efficiency of decision making and reporting. We

selected Oracle Hyperion as the analytic tool, which will be supplemented

by a consolidated, integrated data repository. These tools will allow GAO

to automate manual processes, eliminate redundant systems, and provide

enhanced analytical capabilities through a modern, integrated business

intelligence solution.

This year we continued to expand our internal control testing and

monitoring for end-to-end transaction testing to include budget and

property, along with the procurement and disbursement cycles started last

year. Through testing of the integrity of data through the life cycle flow

of transactions, we were able to ensure that proper procurement requests;

procurement processes; receipts of goods and services; and appropriate

approval authority for these transactions were operating as designed. Also,

in fiscal year 2010, we further enhanced self-monitoring of programs,

particularly in vulnerable areas such as purchase cards, disbursements, and

property. Program managers now review or monitor performance metrics

and determine how best to use them in their specific control environments.

These enhancements to the self-monitoring of programs improved

efficiencies in the operations of internal controls. We also continue to review

the independent auditors’ reports on our service providers to ensure that we

are able to proactively address any issues with appropriate compensating

controls. All of these efforts contributed to our independent auditors

providing a positive opinion on the effectiveness of our internal controls

again this year.

Looking ahead to fiscal year 2011, we will continue implementing new

systems and initiatives to ensure efficient and effective financial operations.

We plan to implement the budget formulation and workforce planning

tool to facilitate data integration and better enable analysis, planning,

and management of GAO resources. Also, we will continue to expand our

internal control testing and monitoring of critical human capital systems

to enhance the quality of human capital data. In addition, we will continue

our commitment to the Engagement Streamlining Initiative (ESI), which is

identifying ways to streamline GAO’s engagement processes and increase
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From the Chief Financial Officer 

efficiency through the use of information technology, while adhering to our

high standards for product quality and timeliness. ESI’s major emphasis is

to make data and information more accessible, findable, and actionable for

our analyst staff performing GAO’s core mission.

It has been my privilege to serve as the Acting Chief Financial Officer,

following the retirement of Sallyanne Harper this past September, to

ensure that GAO continues to be a leading practices agency and effectively

and efficiently supports the Congress in improving the performance and

accountability of the federal government.

Cheryl Whitaker

Acting Chief Financial Officer
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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 three times with respect to its responsibilities as

described above. During two of 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 2010 Performance and Accountability

Report.

Sheldon S. Cohen

Chairman

Audit Advisory Committee

Audit Advisory Committee’s Report
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Independent Auditor’s Report

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1 

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Independent Auditor’s Report 

Acting Comptroller General of the United States 

In our audits of the Government Accountability Office (GAO) for fiscal years 2010 and 2009, 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 maintained, in all material respects, effective internal control over financial 

reporting. 

• 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, 2010 and 

2009, 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 as of September 30, 2010 that provided reasonable assurance that misstatements, 

losses, or noncompliance material in relation to the financial statements would be prevented or 

detected and corrected 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). 

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

communicate in a separate management letter. 
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2 

Opinion on FFMIA Compliance 

In our opinion, GAO’s financial management systems, as of September 30, 2010, 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 for federal financial management systems, 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. 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 on laws and regulations 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 

than 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 and 

maintaining effective internal control over financial reporting, and evaluating its effectiveness, 

(3) ensuring that GAO’s financial management systems substantially comply with FFMIA 

requirements, and (4) complying with applicable laws and regulations. GAO management 

evaluated the effectiveness of GAO’s internal control over financial reporting as of September 

30, 2010, based on criteria established under FMFIA. GAO management’s assertion is included 

in the Financial Reporting Assurance Statements section of the Performance and Accountability 

Report. 

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, in all material respects, effective internal 

control over financial reporting as of September 30, 2010. Our examination included obtaining 

an understanding of the entity and its operations, including its internal control over financial 

reporting; considering GAO’s process for evaluating and reporting on internal control over 

financial reporting the GAO is required to perform by FMFIA; assessing the risk that a material 

misstatement exists in the financial statements and the risk that a material weakness exists in 

internal control over financial reporting; evaluating the design and operating effectiveness of 

internal control and assessing risk; testing relevant internal controls over financial reporting; 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 FMFIA. 

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel, the objectives of which are to provide 

reasonable assurance that (1) transactions are properly recorded, processed, and summarized 

to permit the preparation of financial statements in accordance with accounting principles 

generally accepted in the United States, and assets are safeguarded against loss from 

unauthorized acquisition, use, or disposition; and (2) transactions are executed in accordance 

with the laws governing the use of budget authority and other laws and regulations that could 

have a direct and material effect on the financial statements. 

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 selected 

provisions of those laws and regulations that have a direct and material effect on the financial 

statements and those required by OMB audit guidance that we deemed applicable to the 

financial statements for the fiscal year ended September 30, 2010. 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 9, 2010 
GAO-11-2SP 97

GAO Performance and Accountability Report 2010

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.
98 GAO-11-2SP

GAO Performance and Accountability Report 2010

Financial Information 

Financial Statements

U.S. Government Accountability Office

Balance Sheets

As of September 30, 2010 and 2009

(Dollars in thousands)

2010 2009

Assets

Intragovernmental

Funds with the U.S. Treasury (Note 3) $88,244 $101,710 

Accounts receivable 871 983 

Total Intragovernmental 89,115 102,693 

Property and equipment, net (Note 4) 32,824 32,684 

Other 328 307 

Total Assets $122,267 $135,684

Liabilities

Intragovernmental

Accounts payable $11,573 $14,857 

Employee benefits (Note 6) 4,404 3,662 

Workers' compensation (Note 7) 2,620 2,764 

Total Intragovernmental 18,597 21,283 

Accounts payable and other 16,286 12,500 

Salaries and benefits (Note 6) 23,365 23,069 

Accrued annual leave (Note 5) 35,178 33,351 

Workers' compensation (Note 7) 15,217 16,332 

Capital leases (Note 9) 2,637 4,814 

Total Liabilities 111,280 111,349 

Net Position

Unexpended appropriations 28,531 48,330 

Cumulative results of operations (17,544) (23,995)

Total Net Position (Note 13) 10,987 24,335 

Total Liabilities and Net Position $122,267 $135,684 

The accompanying notes are an integral part of these statements.
GAO-11-2SP 99

GAO Performance and Accountability Report 2010

Financial Information

Financial Statements

U.S. Government Accountability Office

Statements of Net Cost

For Fiscal Years Ended September 30, 2010 and 2009

(Dollars in thousands)

2010 2009 

Net Costs by Goal (Note 2)

Goal 1: Well-Being/Financial Security of American People $210,295 $191,316 

Less: reimbursable services (145) - 

Net goal costs 210,150 191,316 

Goal 2: Changing Security Threats/Challenges of Global 

 Interdependence 178,479 173,645 

Less: reimbursable services (5,008) (5,283)

Net goal costs 173,471 168,362 

Goal 3: Transform the Federal Government to Address 

 National Challenges 208,315 182,384 

Less: reimbursable services (11,802) (5,255)

Net goal costs 196,513 177,129 

Goal 4: Maximize the Value of GAO 29,441 27,658 

Less: reimbursable services - - 

Net goal costs 29,441 27,658 

Less: reimbursable services not attributable to goals (6,619) (5,672)

Net Cost of Operations (Note 10) $602,956 $558,793 

The accompanying notes are an integral part of these statements.
100 GAO-11-2SP

GAO Performance and Accountability Report 2010

Financial Information 

Financial Statements

U.S. Government Accountability Office

Statements of Changes in Net Position

For Fiscal Years Ended September 30, 2010 and 2009

(Dollars in thousands)

2010 2009 

Cumulative Results of Operations, Beginning of fiscal year ($23,995) ($21,146)

Budgetary Financing Sources - Appropriations used 576,126 530,184 

Other Financing Sources

Intragovernmental transfer of property and equipment (14) (1)

Federal employee retirement benefit costs paid by OPM 

and imputed to GAO (Note 6) 33,295 25,761 

Total Financing Sources 609,407 555,944 

Net Cost of Operations (602,956) (558,793)

Net Change 6,451 (2,849)

Cumulative Results of Operations, End of fiscal year (17,544) (23,995)

Unexpended Appropriations, Beginning of fiscal year 48,330 24,064 

Budgetary Financing Sources and Uses

Current year appropriations 557,849 556,000 

Permanently not available (1,522) (1,550)

Appropriations used (576,126) (530,184)

Total Unexpended Appropriations, End of fiscal year 28,531 48,330 

Net Position $10,987 $24,335

The accompanying notes are an integral part of these statements.
GAO-11-2SP 101

GAO Performance and Accountability Report 2010

Financial Information

Financial Statements

U.S. Government Accountability Office

Statements of Budgetary Resources

For Fiscal Years Ended September 30, 2010 and 2009

(Dollars in thousands)

2010 2009 

Budgetary Resources (Note 11)

Unobligated balance, brought forward October 1 $30,373 $6,756 

Recoveries of prior year unpaid obligations 2,344 2,370 

Budget authority

Appropriations 557,849 556,000 

Spending authority from offsetting collections

Earned and collected 24,139 16,299 

Change in receivable from federal sources (133) 373 

Change in unfilled customer orders - advance received (86) 433 

Change in unfilled customer orders - without advance 1 (125)

Subtotal 581,770 572,980 

Permanently not available (1,522) (1,550)

Total Budgetary Resources $612,965 $580,556 

Status of Budgetary Resources

Obligations incurred

Direct $581,262 $536,692 

Reimbursable 20,865 13,491 

Subtotal 602,127 550,183 

Unobligated balance - Apportioned 6,515 26,463 

Unobligated balance not available 4,323 3,910 

Total Status of Budgetary Resources $612,965 $580,556 

Change in Obligated Balances

Obligated balance, net:

Unpaid obligated balance, brought forward October 1 $72,317 $64,448 

Uncollected customer payments from federal sources, 

 brought forward October 1 (978) (730)

Total, unpaid obligations, net, brought forward October 1 71,339 63,718 

Obligations incurred 602,127 550,183 

Less: Gross outlays (593,836) (539,944)

Recoveries of prior-year unpaid obligations, actual (2,344) (2,370)

Change in uncollected customer payments from federal sources 132 (248)

Obligated balance, net, end of period:

Unpaid obligations 78,264 72,317 

Uncollected customer payments from federal sources (846) (978)

Total, unpaid obligations, net, end of period $77,418 $71,339 

Net Outlays

Gross outlays $593,836 $539,944 

Less: Offsetting collections (24,053) (16,733)

Net Outlays $569,783 $523,211 

The accompanying notes are an integral part of these statements.
102 GAO-11-2SP

GAO Performance and Accountability Report 2010

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 U.S. 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 presented on the statements of net cost as “reimbursable services” and

included as part of “spending authority earned and collected” on the statements of budgetary

resources. The financial statements, except for federal employee benefit costs paid by the Office

of Personnel Management (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. The Davis-Bacon Act trust’s

assets, related liabilities, revenues, and costs related to beneficiary payments are not those of

GAO and therefore are not included in the accompanying financial statements. See Note 14,

Davis-Bacon Act Trust Function.

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, as amended.

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 Sheets.

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.
GAO-11-2SP 103

GAO Performance and Accountability Report 2010

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 sheets. The building’s

designation as a 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

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).
104 GAO-11-2SP

GAO Performance and Accountability Report 2010

Financial Information 

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 postretirement 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 as a financing

source on the statements of changes in net position and are also included as a component of net

cost by goal on the statements 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 longterm 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. GAO’s policy is to include provision in

the 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, and expenses and in the note disclosures. Actual results could differ from these

estimates.
GAO-11-2SP 105

GAO Performance and Accountability Report 2010

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 nonfederal entity. Intragovernmental costs and exchange revenue for

the periods ended September 30, 2010, and September 30, 2009, are as follows:

Dollars in thousands

 2010 2009

Goal 1: Well-Being/Financial Security of American People

Intragovernmental costs $56,875 $49,421

Public costs 153,420 141,895

Total goal 1 costs 210,295 191,316

Goal 1 intragovernmental earned revenue (145) –

Net goal 1 costs 210,150 191,316

Goal 2: Changing Security Threats/Challenges of Global Interdependence

Intragovernmental costs 47,997 44,368

Public costs 130,482 129,277

Total goal 2 costs 178,479 173,645

Goal 2 intragovernmental earned revenue (5,008) (5,283)

Net goal 2 costs 173,471 168,362

Goal 3: Transform the Federal Government to Address National Challenges

Intragovernmental costs 53,042 45,260

Public costs 155,273 137,124

Total goal 3 costs 208,315 182,384

Goal 3 intragovernmental earned revenue (11,802) (5,255)

Net goal 3 costs 196,513 177,129

Goal 4: Maximize the Value of GAO

Intragovernmental costs 9,510 10,084

Public costs 19,931 17,574

Total goal 4 costs 29,441 27,658

Earned revenue not attributable to goals

Intragovernmental (6,315) (5,534)

Public (304) (138)

Total earned revenue not attributable to goals ($6,619) ($5,672)

Goal 4 has no associated year-to-date intragovernmental revenues and all public earned revenue

collected is not attributable to goals. The Government Accountability Office Act of 2008

provided GAO the authority to bill for costs related to certain audit work provided to other

government entities, this resulted in additional revenue in fiscal year 2010 under Goal 3.
106 GAO-11-2SP

GAO Performance and Accountability Report 2010

Financial Information 

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, 2010, and September 30, 2009, is as follows:

Dollars in thousands

2010 2009

Unobligated balance

Available $6,515 $26,461

Unavailable 4,311 3,910

Obligated balances not yet disbursed 77,418 71,339

Total funds with U.S. Treasury $88,244 $101,710

A significant portion of the unobligated balance available in fiscal year 2009 (approximately

$20,800,000) is due to the remaining unobligated balance of GAO’s supplemental multiyear

appropriation for efforts that include reviewing states’ uses of the American Recovery and

Reinvestment Act (Recovery Act) funds.

Note 4. Property and Equipment, Net

The composition of property and equipment as of September 30, 2010, is as follows:

Dollars in thousands

Classes of property and equipment Acquisition value Accumulated depreciation Book value

Building $15,664 $13,784 $1,880

Land 1,191 – 1,191

Building improvements 115,736 99,530 16,206

Computer and other

equipment and software 41,059 30,513 10,546

Leasehold improvements 6,203 5,982 221

Assets under capital lease 19,432 16,652 2,780

Total property and equipment $199,285 $166,461 $32,824
GAO-11-2SP 107

GAO Performance and Accountability Report 2010

Financial Information

The composition of property and equipment as of September 30, 2009, is as follows:

Dollars in thousands

Classes of property and equipment Acquisition value Accumulated depreciation Book value

Building $15,664 $13,158 $2,506

Land 1,191 – 1,191

Building improvements 109,841 96,780 13,061

Computer and other

equipment and software 40,258 30,360 9,898

Leasehold improvements 6,238 6,037 201

Assets under capital lease 20,954 15,127 5,827

Total property and equipment $194,146 $161,462 $32,684

Note 5. Liabilities Not Covered by Budgetary Resources

The liabilities on GAO’s balance sheets as of September 30, 2010, and September 30,

2009, 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, 2010, and September 30, 2009, is as follows:

Dollars in thousands

 2010 2009

Intragovernmental liabilities—Workers’ compensation $2,620 $2,764

Salaries and benefits—Comptrollers’ General retirement plan* 1,878 1,961

Accrued annual leave 35,178 33,351

Workers’ compensation** 15,217 16,332

Capital leases 2,637 4,814

Total liabilities not covered by budgetary resources $57,530 $59,222

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

** See Note 7 for further discussion of workers’ compensation.
108 GAO-11-2SP

GAO Performance and Accountability Report 2010

Financial Information 

Note 6. Federal Employee Benefits

All permanent employees participate in either 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

(FEGLI) Program and may continue to participate after retirement. GAO makes contributions

through OPM to FEHBP and FEGLI Program 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. As a result of OPM

adopting Statement of Federal Financial Accounting Standards No. 33, Pensions, Other Retirement 

Benefits, and Other Post Employment Benefits: Reporting the Gains and Losses from Changes in 

Assumptions and Selecting Discount Rates and Valuation Dates, our estimated future pension costs

increased from a change in the cost factors (see federal employee benefits costs table below).

Amounts owed to OPM and Treasury as of September 30, 2010, and September 30, 2009

are $4,404,000 and $3,662,000, respectively, for FEHBP, FEGLI, FICA, FERS, and CSRS

contributions and are shown on the balance sheets as an employee benefits liability.

Details of the major components of GAO’s federal employee benefit costs for the periods ended

September 30, 2010, and September 30, 2009, are as follows:

Dollars in thousands

Federal Employee Benefits Costs 2010 2009

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

Estimated future pension costs (CSRS/FERS) $15,816 $9,372

Estimated future postretirement health and life insurance (FEHBP/FEGLIP) 17,479 16,389

Total $33,295 $25,761

Pension expenses (CSRS/FERS) $36,386 $33,895

Health and life insurance expenses (FEHBP/FEGLIP) $19,283 $17,377

FICA and Medicare payments made by GAO $21,796 $19,436

Thrift Savings Plan – matching contribution by GAO $12,898 $11,436
GAO-11-2SP 109

GAO Performance and Accountability Report 2010

Financial Information

Comptrollers general and their surviving beneficiaries who qualify and so elect to participate

are paid retirement benefits by GAO under a separate retirement plan. These benefits are paid

from current year appropriations. Because GAO is responsible for future payments under this

plan, the estimated present value of accumulated plan benefits of $1,878,000 as of September 30,

2010, and $1,961,000 as of September 30, 2009, is included as a component of salary and benefit

liabilities on GAO’s balance sheets. The following summarizes the changes in the actuarial

liability for current plan year:

Dollars in thousands

Actuarial liability as of September 30, 2009 $1,961

Expense:

Interest on the liability balance 127

Actuarial loss:

From experience 95

From assumption changes 20

Total expense 242

Less benefits paid (325)

Actuarial liability as of September 30, 2010 $1,878

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,

2010, and September 30, 2009, which is expected to be paid in future periods. This estimated

liability of $15,217,000 and $16,332,000 as of September 30, 2010, and September 30, 2009,

respectively, is reported on GAO’s balance sheets. GAO also recorded a liability for amounts

paid to claimants by Labor as of September 30, 2010, and September 30, 2009, of $2,620,000

and $2,764,000, respectively, but not yet reimbursed to Labor by GAO. The amount owed to

Labor is reported on GAO’s balance sheets as an intragovernmental liability.

Note 8. Building Lease Revenue

In fiscal year 2010 the current lease with the U.S. Army Corps of Engineers (USACE) expired

and GAO entered into a new 10-year lease agreement to continue to lease the entire third floor

and part of the sixth floor of the GAO building. The period of this agreement begins with fiscal

year 2011 with an option to renew each year through fiscal year 2020. Total rental revenue to

GAO includes a fixed base rent plus operating expense reimbursements, with escalation clauses

each year, if the option years are exercised.

Rent received by GAO for fiscal years 2010 and 2009 was $5,338,000 and $5,264,000,

respectively. These amounts are included in reimbursable services shown on the statements of

net costs. Total rental revenue for the period of the new 10-year lease is as follows:
110 GAO-11-2SP

GAO Performance and Accountability Report 2010

Financial Information 

Dollars in thousands

Fiscal year ending September 30 Total Projected Receipts*

2011 $6,845

2012 6,928

2013 7,014

2014 7,102

2015 7,194

2016 - 2020 37,452

Total $72,535

*If option years are exercised.

Note 9. Leases

Capital Leases

GAO has entered into capital leases for office equipment and computer equipment under which

the ownership of the equipment covered under the leases transfers to GAO when the leases

expire. When GAO enters into these leases, the present value of the future lease payments

is capitalized, net of imputed interest, and recorded as a liability. The acquisition value and

accumulated depreciation of GAO’s capital leases are shown in Note 4, Property and Equipment,

Net. As of September 30, 2010, and September 30, 2009, the capital lease liability was

$2,637,000 and $4,814,000, respectively.

These lease agreements are written as contracts with a base year and option years. The option

years are subject to the availability of funds. Early termination of the leases for reasons other

than default is subject to 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

2011 $2,437

2012 272

2013 38

Total estimated future lease payments 2,747

Less: imputed interest (110)

Net capital lease liability $2,637
GAO-11-2SP 111

GAO Performance and Accountability Report 2010

Financial Information

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 2010 and fiscal

year 2009 amounted to approximately $13,963,000 and $11,780,000, respectively. Leases for

equipment under operating leases are generally less than 1 year therefore there are no associated

future minimum lease payments. Estimated future minimum lease payments for field office

space under the terms of the leases are as follows:

Dollars in thousands

Fiscal year ending September 30 Total

2011 $8,653

2012 6,995

2013 5,709

2014 4,909

2015 3,620

2016 and thereafter 7,855

Total estimated future lease payments $37,741

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 2010 and fiscal year 2009 amounted

to $475,530,000 and $441,438,000, respectively, about 79 percent of GAO’s annual net cost of

operations in fiscal year 2010 and fiscal year 2009. Included in the net cost of operations are

federal employee benefit costs paid by OPM and imputed to GAO of $33,295,000 in fiscal year

2010 and $25,761,000 in fiscal year 2009.

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 2010 and

fiscal year 2009 amounted to $23,574,000 and $16,210,000, 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 statements of changes in net position.
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Financial Information 

Note 11. Budgetary Resources

Budgetary resources available to GAO during fiscal year 2010 include current year

appropriations; prior years’ unobligated balances, including almost $21,000,000 available

through fiscal year 2010 to cover program reviews required by the Recovery Act; and

reimbursements earned by GAO from providing goods and services to other federal entities for

a price (reimbursable services) and cost-sharing arrangements with other federal entities.

Earned reimbursements consist primarily of rent collected from USACE for lease of space and

related services in the GAO building and program and financial audits of federal entities, including

the Department of the Treasury, Securities and Exchange Commission, Federal Deposit Insurance

Corporation, and Federal Housing Finance Agency. Earned revenue from rent is available

indefinitely, subject to annual obligation ceilings, and must be used to offset the cost of operating

and maintaining the GAO headquarters building. Reimbursements from program and financial

audits are available without limitations on their use and may be subject to annual obligation

ceilings. GAO’s pricing policy for reimbursable services is to seek reimbursement for actual costs

incurred, including overhead costs where allowed by law. The costs and reimbursements for

cost-sharing arrangements from other federal entities for the support of the Federal Accounting

Standards Advisory Board are not included in the statements of net cost.

Fiscal years 2009 and 2010 budgetary resources do not include any transfers of budget authority.

Comparison of GAO’s fiscal year 2009 statement of budgetary resources with the corresponding

information presented in the 2011 President’s Budget is as follows:

Dollars in thousands

Budgetary Resources Obligations Incurred

Fiscal year 2009 Statement of Budgetary Resources $580,556 $550,183

Unobligated balances, beginning of year – (funds activity, 

expired accounts) (5,756) -

Recovery of prior-year unpaid obligations (2,370) -

Obligations incurred – expired years - (2,836)

Permanently not available –(funds activity, expired accounts) 1,550 -

Spending Authority from offsetting collections (funds activity, 

expired accounts) (461) -

Other – rounding in President’s Budget (519) (347)

2011 President’s Budget – fiscal year 2009, actual $573,000 $547,000

As the fiscal year 2012 President’s Budget will not be published until February 2011, a

comparison between the fiscal year 2010 data reflected on the statement of budgetary resources

and fiscal year 2010 data in the President’s Budget cannot be performed, though we expect

similar differences will exist. The fiscal year 2012 President’s Budget will be available on the

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

Budgetary resources obligated for undelivered orders at the end of fiscal year 2010 and the end

of fiscal year 2009 totaled $24,906,000 and $20,670,000, respectively. GAO’s apportionments

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

incurred for fiscal years 2010 and 2009 are as follows:

Dollars in thousands

Fiscal year ending September 30 2010 2009

Direct – Category A $581,262 $536,692

Reimbursable – Category A 20,865 13,491

Total obligations incurred $602,127 $550,183
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GAO Performance and Accountability Report 2010

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, 2010, and 2009, are as follows:

Dollars in thousands

Fiscal year ending September 30 2010 2009

Resources used to finance activities

Budgetary resources obligated

Obligations incurred $602,127 $550,183

Less: spending authority from offsetting collections and recoveries (26,265) (19,351)

Obligations net of offsetting collections and recoveries 575,862 530,832

Other resources

Intragovernmental transfer of property and equipment (14) (1)

Federal employee retirement benefit costs paid by OPM imputed to GAO 33,295 25,761

Net other resources used to finance activities 33,281 25,760

Total resources used to finance activities 609,143 556,592

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

Change in unliquidated obligations (4,320) (5,127)

Reduction in lease liability and other (2,177) (2,203)

Assets capitalized (9,975) (3,784)

Net decrease/(increase) in receivables not generating resources until 

collected and other adjustments 17 (17)

Total resources used to fund items not part of the net cost of operations (16,455) (11,131)

Total resources used to finance net cost of operations 592,688 545,461

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

the current period

Decrease in workers’ compensation (1,259) (104)

Increase in accrued annual leave 1,827 2,398

Decrease in other liabilities (83) (14)

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

in the current period 485 2,280

Costs that do not require resources

Depreciation and other 9,783 11,052

Net cost of operations $602,956 $558,793

Note 13. Net Position

Net position on the balance sheets comprises unexpended appropriations and cumulative results

of operations. Unexpended appropriations are 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 fiscal years ended September 30, 2010, and 2009, are as follows:
GAO-11-2SP 115

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Financial Information

Dollars in thousands

2010 2009

Investment in property and equipment, net $32,824 $32,684

Net reimbursable funds activity 6,892 2,378

Other – supplies inventory 270 165

Liabilities not covered by budgetary resources (57,530) (59,222)

Cumulative results of operations ($17,544) ($23,995)

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 revenue and costs related to beneficiary payments and prepares separate, audited

financial schedules 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 claimant. GAO is accountable to the Congress

and to the public for the proper administration of the assets held in the trust. Trust assets and

liabilities under GAO’s administration as of September 30, 2010 and 2009, totaled approximately

$4,937,000 and $4,781,000, respectively. These assets are not the assets of GAO or the federal

government and are held for distribution to appropriate claimants. Revenues and costs related

to beneficiary payments in the trust amounted to $801,000 in fiscal year 2010 and $528,000 in

fiscal year 2009.
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Serving The Congress And The Nation

Inspector General’s View of GAO’s 

Management Challenges

Part IV
118 GAO-11-2SP

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Inspector General’s View of GAO’s Management Challenges

Inspector General’s View of GAO’s Management 

Challenges

Memorandum

Date: October 28, 2010

To: Acting Comptroller General – Gene L. Dodaro 

From: Inspector General – Frances Garcia

Subject: GAO Management Challenges and Performance Measures

We have considered management’s assessment of GAO’s 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. At the same time, given that current 

management challenges have remained unchanged since 2002, we believe an 

examination by GAO management in the coming year is warranted to determine 

whether (1) significant actions have been taken in the areas of physical security, 

information security, or human capital to justify removal of any of these management 

challenges and (2) other risks have emerged that may also warrant designation as 

GAO management challenges.

During fiscal year 2010, we completed work on two performance measures. First, we 

reviewed accomplishment reports that claimed $1 billion or more in fiscal year 2009 

financial benefits and recommended GAO consider steps that could assist its staff in 

complying with agency policies.1 In response, GAO initiated two actions that address 

the issues raised in the report, including a requirement that teams consult with GAO’s 

Center for Economics on the calculation for financial benefits of $500 million or 

more. Second, we reviewed the agency’s testimony performance measure and found 

that the number of hearings was slightly less than the 304 reported by the agency for 

fiscal year 2008.2 We recommended that specific steps for addressing the type of 

issues identified in our review be included in its revised procedures. GAO agreed with 

our recommendation and has issued revised procedures to address the issues 

discussed in this report. In addition, the agency has revised the number of hearings 

that it reports for fiscal year 2008.

1GAO/OIG, Performance Measure: GAO Had a Reasonable Basis for Reporting Its Largest Financial Benefits for Fiscal

 Year 2009, GAO/OIG-10-4, May 21, 2010.

2GAO/OIG, Testimony Measure: Verification of Performance Data Could Be Improved, GAO/OIG-10-1, November 18, 2009.

Office of the Inspector General

United States Government Accountability Office

O I G
Serving The Congress And The Nation

Part V

Appendixes
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GAO Performance and Accountability Report 2010

Appendixes 

This appendix provides details on selected

accomplishments and contributions we

documented in pursuing our strategic goals

during fiscal year 2010. In reporting financial

benefits, nonfinancial benefits, and other

contributions, 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 document them.

Contributions, which generally refer to

work completed in fiscal year 2010, describe

cases in which we provided information or

recommendations that substantially aided

congressional decision making or informed

the public debate. At the end of each

accomplishment and contribution summary,

we list the product numbers associated with

the work discussed. In the electronic version

of this document, readers can link directly to

these products for more information on the

issue.

1. Accomplishments and Other Contributions
GAO-11-2SP 121

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Appendixes

Source: See Image Sources.

Health Care Needs and 

Financing

1.01. Reducing Vulnerability to Improper 

Payments Identified by Recovery Auditors:

Our 2010 review on use of recovery audit

contractors (RAC) in Medicare found that the

Centers for Medicare & Medicaid Services

(CMS) lacked an adequate process to use

RAC findings to address vulnerabilities

that led to over $230 million in improper

payments to Medicare providers. This

influenced the Congress to add a provision

to the Improper Payments Elimination and

Recovery Act of 2010. All agencies that use

RACs are now required to report yearly to

the Office of Management and Budget and

the Congress on actions taken to address

RAC recommendations on how to reduce

vulnerabilities leading to improper payments.

(GAO-10-143, GAO-10-864T)

1.02. Strengthening Oversight of 

Infection Control Practices in Surgical 

Centers: Because there was no nationwide

information on infections transmitted in

ambulatory surgical centers (ASC), we

recommended that the Department of Health

and Human Services (HHS) strengthen

its routine inspections of ASC facilities

by collecting detailed information on

practices that reduce the risk of transmitting

infections, and conduct inspections on a

random sample of ASCs to determine how

well these practices were followed. As a

result, HHS enhanced its inspection process

in 2009, leading to a fourfold increase in the

proportion of facilities found to have deficient

infection control practices—up to 61 percent

in fiscal year 2010. (GAO-09-213)

1.03. Strengthening Oversight of 

Medicare Home Health Agencies: Our

February 2009 report on improper payments

made by Medicare home health agencies

(HHA) noted that gaps in screening allow

problem providers to enter the program,

leading to fraud and abuse. In response, the

Centers for Medicare & Medicaid Services

issued regulations strengthening enrollment

requirements. For example, HHAs whose

Medicare billing privileges are deactivated

are now required to obtain an initial state

survey or accreditation before their billing

privileges can be reactivated. (GAO-09-185)

1.04. Improving the Medicare Program:

Our recommendations have led to many

improvements to Medicare. For example,

in 2009 we found that some Medicare

Advantage (MA) plans charged beneficiaries

more for certain covered services if the

plans were not notified before service

delivery. Due to our report, this practice

was prohibited, which will protect over 11

million beneficiaries enrolled in MA plans. In

2000, we recommended that private insurers

provide information on their enrollees to

Strategic

Goal 1

Address Current and Emerging 

Challenges to the Well-Being and 

Financial Security of the American 

People
122 GAO-11-2SP

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Appendixes 

improve identification of beneficiaries with

other insurance. This became a requirement

in 2007, with an estimated financial benefit to

Medicare of $447 million in fiscal years 2010

through 2014. (GAO-09-25, GAO-10-304)

1.05. Improving Administration of 

Health Care for Veterans: Our work at the

Department of Veterans Affairs (VA) has led

the agency to implement changes to more

efficiently plan and conduct its mission to

provide care to veterans. In response to our

recommendations on improving strategic

planning for veterans’ long term care, VA

strengthened its September 2009 long-term

care strategic plan by including information

on estimated demand for and growth in

institutional and noninstitutional services. As

a result of our recommendation to examine its

process for checking physician credentials, VA

determined that the process could be simplified

and has adjusted its policies for obtaining the

information. (GAO-09-145, GAO-10-26)

Lifelong Learning to Enhance 

U.S. Competitiveness

1.06. Enhancing Classroom Instruction:

We reported on the use of Recovery Act

funds for classroom instruction, and the

Department of Education’s role in supporting

programs that prepare and develop teachers

to instruct all students, including those

with disabilities and English language

learners; student access to arts education;

and instructional practices that help students

achieve academic standards. The Congress

is deliberating the reauthorization of the

Elementary and Secondary Education Act.

(GAO-09-593, GAO-09-573, GAO-09-286,

GAO-10-18)

Benefits and Protection for 

Workers, Families, Children

1.07. Improving Child Nutrition: In

light of recent concerns about the safety of

foods provided through domestic nutrition

assistance programs, particularly among

programs targeting children, we made several

recommendations to improve food safety in

the National School Lunch Program. The

Senate-passed Healthy, Hunger-Free Kids

Act, which reauthorizes federal child nutrition

programs, includes provisions to implement

our recommendations. We also identified

areas of potential program overlap that could

lead to more efficient delivery of nutrition

assistance programs, and USDA has agreed

to consider studying potential inefficiencies

among its smaller programs. (GAO-10-346,

GAO-09-649, GAO-09-814)

1.08. Improving Disability Evaluation 

System: In 2008, we reported on the

Departments of Defense (DOD) and Veterans

Affairs (VA) early efforts to improve their

disability evaluation systems through a joint

pilot of a merged system. We recommended

that DOD and VA sustain executive focus

on the pilot and develop more complete

plans for evaluating the merits of large-scale

implementation. Subsequently, the Congress

extended DOD and VA’s Senior Oversight

Committee, and DOD and VA created offices

to coordinate related policy. As follow-up, we

advised DOD, VA, and the Congress of key

implementation issues to inform decisions and

plans for worldwide expansion. (GAO-08-1137)

1.09. Addressing Insolvency in 

Unemployment Insurance Trust Funds:

We gave the Congress information on the

state of Unemployment Insurance (UI) trust

funds, which we found to have outstanding

loans totaling $38.9 billion from the federal

government to pay benefits. At the end of

2009, no state had enough reserves to cover
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Appendixes

12 months of benefits, and net reserves are

projected to remain negative for several years.

We identified options to improve state UI trustfund financial conditions, such as raising and

indexing the taxable wage base, adjusting state

tax rates more frequently, and raising solvency

targets before lowering rates. As a result of this

work, the Congress asked us to testify in late

2010. (GAO-10-440, GAO-10-692T)

Financial Security for an 

Aging Population

1.10. Disclosing More Information on 

401(k) Fees: Our recent work found that

401(k) plan participants bear the majority of

a plan’s fees and possess limited information

to invest wisely, and that the Department of

Labor (DOL) lacks the information to ensure

effective oversight. We recommended better

fee disclosure by plan sponsors to participants

and by plan service providers to plan

sponsors. Subsequently, the Congress added

provisions calling for better fee disclosure

and DOL issued regulations on fees and

information that service providers must

disclose. (GAO-10-153T, GAO-09-641, GAO08-222T, GAO-08-95T)

Responsive, Fair, Effective 

System of Justice

1.11. Improving Accountability for Civil 

Rights Division’s Workload: Our review of

the Justice Department’s Civil Rights Division,

which enforces federal laws prohibiting

discrimination, informed the Congress about

matters and cases the division pursued, but

exposed that the division did not record data

about the protected class (e.g., race and sex)

and subject (alleged discrimination) involved.

We maintained that the division needed to

record these data in its case management

system to be able to monitor its activities

and be accountable to the Congress, and as a

result, in January 2010, the division required

that such data be recorded. (GAO-09-938R,

GAO-10-75, GAO-10-256T)

Viable Communities

1.12. Improving Federal Efforts to 

Combat Foreclosure Rescue Schemes:

In 2009, the administration created the

Financial Fraud Enforcement Task Force

(FFETF), led by the Department of Justice

(DOJ), to combat financial crimes, including

schemes that promise but do not provide

relief to vulnerable homeowners facing

pending foreclosure. In 2010, we reported

that the FFETF’s Mortgage Fraud Working

Group had developed an action plan that

articulated the group’s purpose and activities

but did not contain long-term strategies and

performance measures. DOJ agreed with

our recommendations to incorporate longterm strategies and metrics and consider

developing strategies specific to foreclosure

rescue schemes. (GAO-10-787)

1.13. Improving Collaboration of 

Federal Agencies on Matters Related to 

Homelessness Programs: We reported that

limited collaboration among federal agencies

on matters related to differences in definitions

and terminology regarding homelessness

and the linking of housing and supportive

services may impede the effective delivery of

services to those experiencing homelessness.

We recommended that the Departments of

Education, Housing and Urban Development

(HUD), and Health and Human Services

(HHS) develop a common vocabulary for

homelessness and that HUD and HHS

explore further opportunities to link housing

and supportive services. Our work provides

constructive steps to improve collaboration

to effectively deliver homelessness services.

(GAO-10-702, GAO-10-724)
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Appendixes 

Stable Financial System and 

Consumer Protection

1.14. Identifying Options to Reform the 

Long-Term Structures of Fannie Mae 

and Freddie Mac: Fannie Mae and Freddie

Mac, two government sponsored housing

enterprises, were placed in conservatorships

in September 2008 by the Federal Housing

Finance Agency out of concern that their

deteriorating financial condition would

destabilize the financial system. Based on the

amount of government financial support, the

Congressional Budget Office estimates that

the conservatorships could cost taxpayers

nearly $400 billion. Our report identified

several potential options to strengthen

the enterprises’ long-term structures as

well as some of the associated trade-offs.

Congress has used the report in considering a

structural reform strategy. (GAO-09-782)

Natural Resources and 

Environment

1.15. Increasing Focus on Children’s 

Environmental Health: Our report and

testimony on children’s environmental

health issues resulted in the Environmental

Protection Agency (EPA) reorganizing and

elevating its Office of Children’s Health to

report directly to the EPA Administrator and

more proactively use its Children’s Health

Advisory Committee to increase the federal

government’s focus on children’s health issues.

In addition, the Congress cited our work in

introducing legislation to protect children

from dangerous chemicals. (GAO-10-205,

GAO-10-545T)

1.16. Assessing the Interdependence 

between Energy and Water: Energy

and water are inexorably linked—large

quantities of water are needed to develop

energy, and energy is needed to pump, treat,

and transport water. Energy and water

may face serious constraints as demand for

both continues to rise. In 2010, we assessed

the amount of water required to generate

electricity in thermoelectric power plants and

to cultivate and convert feedstocks, such as

corn, into biofuels. We identified key research

and data needed to better understand these

vital links and testified on these issues

before the House Committee on Science

and Technology. (GAO-10-116, GAO-10-23,

GAO-09-862T)

Viable National Infrastructure

1.17. Identifying Options to Restructure 

the U.S. Postal Service (USPS): USPS

faces a deteriorating financial situation due to

continuing mail volume decline and changing

use of the mail. We added USPS’s financial

condition to our high-risk list in 2009, stating

that USPS urgently needs to restructure to

address its current and long-term financial

viability. We asked USPS to develop and

implement a restructuring plan. In response,

USPS published its plan in 2010, which

included some options to improve its financial

viability that we identified. Congressional

hearings on USPS’s financial viability focused

on our work and the plan as the Congress and

other stakeholders continue to concentrate

on key aspects of the plan. (GAO-09-937SP,

GAO-10-191T, GAO-10-455, GAO-10-538T,

GAO-10-601T)

1.18. Monitoring the Implementation of 

the Next Generation Air Transportation 

System: We testified before the Congress

in fiscal year 2010 on the Federal Aviation

Administration’s (FAA) efforts to implement

the satellite-based Next Generation Air

Transportation System (NextGen). Our

work assisted the Congress in overseeing

FAA’s progress and keeping members

aware of critical issues that threaten timely
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Appendixes

implementation of NextGen, which is

expected to reduce flight delays and save

time and fuel. For example, we found a

lack of integration and coordination within

FAA, and across federal partners and other

stakeholders, and a lack of clear goals and

metrics to guide NextGen. (GAO-10-188T,

GAO-10-649T, GAO-10-629)

1.19. Increasing the Likelihood That 

High-Speed Rail Projects Will Achieve 

Public Benefits: With $3.6 billion in federal

funds set aside for projects in California

and Florida, the U.S. is anticipated to have

high-speed rail, similar to that in other

countries. Following our recent work on

potential economic viability, funding, and

leadership and accountability challenges

to building and sustaining these systems,

our 2010 report assessed how states may

be able to overcome these challenges, and

plans for federal oversight. These reports

can help policymakers and those planning

rail investments assess whether high-speed

rail proposals will likely benefit the public

and justify their large costs. (GAO-10-625,

GAO-09-317)

1.20. Improving Emergency 

Communications: Emergency

communications are critical during war,

terrorist attacks, and natural disasters,

yet the nation depends on an antiquated,

unreliable alert system. In 2009, we reported

that the Federal Emergency Management

Agency (FEMA) has made little progress

in modernizing the alert system, with

project milestones being left undefined

since 2006. We recommended that FEMA

ensure the dependability of systems used to

disseminate alerts and update its strategic

goals, implementation plans, and performance

measures. As a result, FEMA is developing

a strategic plan to achieve a solution for a

national public alert and warning system.

(GAO-09-834, GAO-09-1044T)

1.21. Improving Amtrak’s Management 

and Performance: In response to continued

heavy reliance on federal subsidies, we

reported in 2005 on the National Railroad

Passenger Corporation’s (Amtrak)

management and performance. We found

systemic problems in a range of areas,

including strategic planning and financial

management, that hindered efficiency,

effectiveness, and accountability. In 2009

and 2010, Amtrak addressed some of our

recommendations by issuing strategic

guidance and developing new financial

management tools. These actions have helped

to mitigate the systemic problems we found

and contribute to improved management and

performance at Amtrak. (GAO-06-145)

1.22. Improving Air Travel for 

Consumers: Our 2010 work on consumer

air travel resulted in recommendations to

the Department of Transportation (DOT)

and the FAA. We reported that airlines

do not fully reveal the full cost of travel

to consumers because of hidden fees, and

DOT is considering our recommendation

to help consumers by requiring airlines to

standardize disclosure of fees. We reported

on FAA efforts to reduce airport delays

and found that seven airports accounted

for 80 percent of departure delays. We

recommended that FAA set airportspecific on-time performance targets, and

FAA is developing these airport targets.

(GAO-10-785, GAO-10-885T, GAO-10-542,

GAO-10-543SP)
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Source: See Image Sources.

Protect and Secure the 

Homeland 

2.01. Using the Terrorist Watch List 

Process to Strengthen Aviation Security:

The December 25, 2009, attempted bombing

of flight 253 raised questions about the U.S.

government’s ability to protect the homeland,

including the commercial aviation system. We

conducted numerous briefings with House

and Senate committees and testified on how

the U.S. government uses the terrorist watch

list to screen individuals and how failure to do

so contributed to the attempted attack. Our

work helped the Congress better understand

the complexities of the watch listing process

and the challenges associated with deploying

enhanced explosive-detection technology, such

as advanced-imaging technology, in airports.

(GAO-10-401T)

2.02. Improving the Department of 

Homeland Security’s (DHS) Secure Border 

Initiative: Since 2006, we have reviewed

DHS’s Secure Border Initiative—a multibillion

dollar program aimed at securing U.S.

borders through technology and fencing. We

reported on continued delays and program

management weaknesses and risks. DHS’s

actions to address our recommendations could

reduce these program weaknesses and risks

and improve accountability. DHS is analyzing

alternatives and costs to ensure it employs the

most efficient and effective border security

solutions. As of October 2010, the first stage

of the assessment is complete and DHS senior

management was reviewing the results.

2.03. Exposing Weaknesses in Behavior 

Based Identification of High-Risk 

Aviation Passengers: In response to a

Congressional request, in May 2010 we

reported weaknesses in the Transportation

Security Administration’s (TSA) program to

identify high-risk air passengers based on their

behaviors. We reported that the underlying

science is unproven, potential threats need

to be better identified, and TSA missed

opportunities to study terrorist behaviors.

We recommended that TSA conduct an

independent review of the program’s scientific

basis, better use information it collects, and

study terrorist behaviors using airport video

recordings. TSA is taking action to address

these issues. (GAO-10-763)

2.04. Strengthening DHS’s Efforts to 

Implement Its Management Functions: Our

work identified ongoing challenges in DHS’s

acquisition, information technology, financial,

and human capital management functions.

We found that most acquisition programs we

reviewed experienced significant cost growth

and schedule delays. We also reported that

DHS’s major information technology programs

had not met capability, benefit, cost, and

schedule expectations. DHS had also not yet

implemented a consolidated departmentwide

financial management system to provide

Strategic

Goal 2

Respond to Changing Security 

Threats and the Challenges of 

Global Interdependence 
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GAO Performance and Accountability Report 2010

Appendixes

reliable financial data and faced difficulties

in human capital management, including

improving its foreign language capabilities.

Our work drew congressional and agency

attention to DHS management challenges,

and the department is taking steps to improve

implementation of its management areas.

(GAO-10-911T, GAO-10-588SP, GAO-10-76,

GAO-10-714)

Ensure Military Capabilities 

and Readiness

2.05. Improving Shipbuilding Programs 

through the Adoption of Best Practices:

Our May 2009 report on best practices in

shipbuilding highlighted changes needed to

overcome billions of dollars in cost overruns.

Our report called for relying on fixed

price contracts, constraining requirements,

stabilizing ship design, and expanding

workforce capability. As a result, the Navy is

building the Joint High Speed Vessel under

a fixed-price contract and new ship designs

recognize affordability in setting requirements.

The Senate passed a provision in 2010

incorporating metrics we suggested for design

stability. Further, the Navy added 400 positions

to the command responsible for managing

shipbuilding programs. (GAO-09-322)

2.06. Not Building European Missile 

Defense Sites Will Save $1.4 Billion: In

2009, we identified likely cost growth in

military construction, base operations, and

support for planned missile defense sites

in Poland and the Czech Republic, and the

administration later terminated plans for the

sites based, in part, on that work. Our prior

work had influenced the Congress to require

DOD to review its ballistic defense policy

and strategy to determine the most effective

approach to ballistic missile defense in the

region. Terminating these plans resulted in a

financial benefit of over $1.4 billion through

fiscal year 2013 by avoiding planned military

construction and the costs to operate and

support the sites. (GAO-09-771)

2.07. Contributing to Properly Funding 

the Military’s Needs: In several reviews, we

analyzed DOD’s base budget request for fiscal

year 2010 and DOD’s approach to requesting

funds and reporting obligations for overseas

contingency operations. Our analysis of

unobligated balances—funding that has been

approved or is available, but not yet committed

for a particular purpose—and execution

trends for operation and maintenance, and

military personnel expenditures resulted

in financial benefits of about $2.3 billion.

DOD subsequently took steps to improve

the transparency of its funding requests and

the reliability of its cost reporting, resulting

in financial benefits of about $670 million.

(GAO-10-288R, GAO-10-562R)

2.08. Assessing DOD’s Ability to Provide 

Trained and Ready Forces for Military 

Operations: In numerous reports and

testimonies on military operations and

readiness, we identified issues with DOD’s

ability to provide trained and ready forces,

supply and reset equipment, improve processes

to address urgent needs identified by ground

commanders in Iraq and Afghanistan,

strengthen force protection for deployed forces,

and plan for troop drawdown. Our work in

framing these issues for congressional and

public debate triggered action by DOD and

the Congress. For example, the Navy is now

required to report the impact of changes

in crew size and training on ship readiness

and life spans and any plans to address it.

(GAO-10-376, GAO-10-460, GAO-10-465,

GAO-10-592, GAO-10-842T)

2.09. Assessing DOD’s Management and 

Oversight of the Recruiting and Retention 

Budget: Our prior work identified issues

such as excessive payments of enlistment and

reenlistment bonuses to servicemembers in
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occupations that exceeded their authorized

levels while other occupations were

underfilled. We made recommendations that

DOD assess reasons for occupations being

over- or underfilled and justify use of financial

incentives for overfilled occupations. On the

basis of our work, DOD developed a more

rigorous approach to managing and overseeing

its recruiting and retention budget, resulting

in a financial benefit of $947.3 million.

(GAO-09-256, GAO-06-134)

2.10. Assessing DOD’s Management of 

Operational Contractor Support: In 2006,

we identified long-standing problems with

DOD’s management of contractor support

on the battlefield, including insufficient

predeployment training of military personnel

on the use of and oversight for such support

and failure to develop a repository for lessons

learned on working with contractors. In

response to our recommendations on these

issues, DOD provided training on the use

of operational contract support, integrated

contractors in rehearsal exercises in 2008,

developed a DOD-wide lessons learned

program in 2007, and an Operational Contract

Support Community of Interest in 2009.

(GAO-10-829T)

2.11. Revamping Missile Defense 

Acquisition Policy: The Missile Defense

Agency (MDA) was established with

unprecedented funding and decision-making

flexibility. For years, we have reported that

missile defense testing was less productive

than anticipated due to a lack of robust

planning, and that cost progress could

not be assessed because MDA had no full

cost baselines. Over the past year, MDA

has incorporated more knowledge-based

approaches to testing missile defense systems

through development of a new test plan

and revamped acquisition policies including

reporting some baselines. As a result of our

work, MDA is in a better position to more

effectively manage and oversee its acquisitions.

(GAO-10-311, GAO-08-448, GAO-06-327,

GAO-09-338, GAO-08-113)

2.12. Improving the Nuclear Weapons 

Stockpile Life Extension Process: The

National Nuclear Security Administration

(NNSA) manages the Stockpile Life Extension

Program (LEP), the purpose of which is to

extend the operational lives of the weapons

in the nuclear stockpile. Each of NNSA’s

life extensions has experienced significant

problems, and we have recommended changes

to the LEP process to better assess cost,

schedule and technical risk. As a result, in

2009 NNSA improved its accounting for LEP

costs, thereby providing greater transparency

for program management. In 2010, NNSA has

taken formal steps to better assess and manage

technical risk early in its next planned LEP.

(GAO-09-385, GAO-03-583)

Advance U.S. Foreign Policy 

Interests

2.13. Improving the Security of U.S. 

Travel Documents: Travel document

security depends on well-designed security

features and inspection procedures that utilize

these features. We found deficiencies in the

design process and recommended that the

Department of State (State) conduct testing

and evaluation of the passport and bordercrossing cards and address any problems

found. Further, DHS is not fully realizing the

security benefits from the use of e-passports,

and we recommended that DHS implement

the systems needed to read and fully validate

the data stored on e-passports at U.S. ports

of entry. State and DHS agreed with the

recommendations, which will help prevent

U.S. travel document fraud. (GAO-10-96,

GAO-10-589)
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2.14. Encouraging Management 

Reform and U.S. Participation in the 

United Nations: Consistent with our

recommendations, State and the United

Nations (UN) have strengthened UN

management by improving UN procurement

processes, strengthening internal oversight,

and boosting U.S. employment. The UN,

with an annual procurement budget of about

$3.5 billion, made its procurement processes

more accountable and transparent. The

UN Office of Internal Oversight Services

adopted a risk assessment framework and

operations work plans, and State continues to

advocate more budgetary independence for

this office. State also has developed a roster

of qualified American candidates and better

targeted its recruiting efforts. (GAO-10-168,

GAO-08-1094, GAO-07-597, GAO-07-14,

GAO-06-988)

2.15. Improving International Food 

Assistance: Since 2007, our work on

international food assistance, including

six testimonies before the Congress,

has contributed to multiple operational

improvements. Consistent with our

recommendations to improve the efficiency

and effectiveness of U.S. food aid, agencies

have enhanced monitoring and evaluation,

quality control, and transportation and

logistics, saving several million dollars

annually through improved contracting

practices. Our 2008 and 2010 reports

on global food security have contributed

to efforts to develop a governmentwide

global food security strategy, including

an interagency coordination mechanism

and implementation guide. (GAO-10-352,

GAO-09-977SP, GAO-09-570, GAO-08-680,

GAO-07-560)

2.16. Making U.S. Sanctions against Iran 

More Effective: Ongoing concerns about

nuclear weapons proliferation and terrorism

have led the Congress to expand both

sanctions against Iran and related reporting

requirements. Its actions underscore the

importance of a comprehensive assessment

of the effectiveness of U.S. sanctions. We

have reported and testified on the challenges

to preventing illegal transshipment of U.S.

goods to Iran, restricting foreign investment

in Iran’s energy sector, and maintaining

accurate data on U.S. exports to Iran. As

a result, the U.S. Census Bureau has taken

steps to improve the accuracy of its exports

data, and the Congress cited our work in

passing new legislation on Iran sanctions.

(GAO-10-375, GAO-10-515R, GAO-10-639R,

GAO-10-967R, GAO-10-928T)

2.17. Improving Long-Term Management 

of New Embassy Compounds: In 2006,

we found that the size and complexity of

new embassy compounds significantly

increased operations and maintenance costs

compared to the prior facilities, but State did

not clearly identify or project these costs. In

2010, in response to our recommendation,

State issued its first Long-Range Overseas

Maintenance Plan, outlining the required

financial resources to meet the maintenance

requirements for the new embassy

compounds. The plan provides greater

transparency to congressional policymakers

for the resources needed to protect the U.S.

government’s multibillion dollar investment

in overseas facilities. (GAO-06-641)

Respond to Global Market 

Forces

2.18. Reforming the U.S. Export Control 

System: Over the past decade, we have

identified significant weaknesses in the

U.S. export control system and in our 2007

high-risk series, we called for a fundamental

reexamination of programs designed to

protect critical technologies, including export

controls. While agencies have implemented
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recommendations in several areas, other

significant changes still need to be made.

In April 2010, the President proposed a

framework to reform the export control

system. State and Commerce officials noted

the value of our reports in guiding this

effort, including our May 2010 observations

on selected foreign countries’ export control

systems. (GAO-10-557, GAO-09-767T,

GAO-07-1103, GAO-07-265, GAO-02-120)

2.19. Strengthening the Framework 

for Providing Financial Assistance to 

Private Companies: In 2010, we identified

underlying principles to protect the

government’s interests when considering

large-scale federal assistance efforts. These

principles—including coordinating actions on

a global and comprehensive basis, mitigating

perceived or potential conflicts, ensuring

transparency by establishing an effective

communication strategy, establishing strong

systems of accountability, and mitigating

moral hazard—build on those we developed

following financial crises of the 1970s and

1980s. Together, the principles provide

a guide for government action should

intervention in the private market be

necessary in the future. (GAO-10-719)

2.20. Increasing Regulatory Attention to 

Identifying and Monitoring Systemwide 

Leverage: Leverage played a considerable

role in the financial crisis, but no regulator

was clearly responsible for monitoring either

the potential effects of a buildup in leverage

in the system or the collective activities of

institutions to deleverage. We suggested

that the Congress task the new systemic

risk regulator with this responsibility. The

Congress’s Dodd-Frank Act of 2010 created

the Financial Stability Oversight Council

with authority to identify and respond to

emerging systemic threats. By collecting and

sharing information among the regulators,

the council can better monitor systemwide

leverage and its implications. (GAO-09-739,

GAO-10-555T)

2.21. Strengthening Protection of 

Intellectual Property Rights: In a series

of products, we have found weaknesses in

federal agencies’ efforts to protect intellectual

property (IP) and limitations in studies of

the economic effects of counterfeiting and

piracy. Informed by this work, the Congress

revised the federal IP enforcement structure,

enhanced agency resources, and required

a new interagency strategic plan for IP

enforcement. Key agencies have taken steps

to improve their collection and analysis

of IP enforcement data and renew their

commitment to an interagency mechanism

for coordinating the IP-related activities

of multiple law enforcement agencies.

(GAO-10-219T, GAO-10-423, GAO-08-157,

GAO-07-735, GAO-07-74)
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Analyze the Government’s 

Fiscal Position

3.01. Improving Federal Financial 

Reporting and Related Internal 

Controls: We furthered a number of

significant improvements in federal financial

reporting and related internal control.

Based on our work, Treasury significantly

improved information presented in the

U.S. government’s consolidated financial

statements. These statements now include

more complete and accurate information

concerning actions taken to stabilize the

financial system and disclosures on federal

liabilities, contingencies, and social insurance.

Further, our IRS financial audit work

resulted in actions to address long-standing

weaknesses in internal controls over financial

reporting as well as tax revenue and refunds.

3.02. Improving the Effectiveness of Tax 

Expenditures: We recommended changes to

the design of two major tax expenditures—

the Research Credit and New Markets

Tax Credit (NMTC)—to improve their

effectiveness. We suggested to the Congress

that the Research Credit be changed to limit

windfalls now received by those who would

have spent on additional research without

the credit. For the NMTC, we suggested to

the Congress that a grant program be tested

to replace the credit because we found that

with grants more investment would reach

the targeted low-income communities. Both

reports received wide attention among tax

professionals and have helped shape the

debate about the future of these credits.

(GAO-10-334, GAO-10-136)

3.03. Enhancing the Internal Revenue 

Service’s Ability to Improve Tax 

Compliance: Consistent with our

suggestions to the Congress, the Worker,

Homeownership, and Business Assistance

Act of 2009 (1) required certain paid

tax return preparers to file tax returns

electronically and (2) granted IRS authority

to automatically verify compliance with the

first-time homebuyer credit’s provisions.

Additionally, our work on paid preparers

supported IRS’s decision to extend regulation

of paid tax return preparers, including

requiring them to obtain an identifying

number and be tested for competency.

These changes should substantially

improve tax compliance by improving

the quality of tax return preparation.

(GAO-09-1026, GAO-08-567, GAO-08-781,

GAO-07-27)

3.04. Analyzing the Fiscal Year 2010 

Appropriation for the USCIS: Our work

showed that the U.S. Citizenship and

Immigration Service’s (USCIS) budget

request would provide two sources of funding

for processing and adjudicating refugee,

asylum, and military naturalizations: taxfunded appropriations and application-fee

surcharges. Based on this work, the Congress

Help Transform the Federal 

Government to Address 

National Challenges

Strategic

Goal 3

Source: See Image Sources.
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appropriated $151 million less than the $206

million requested and restricted $50 million

until a final rule eliminating the applicationfee surcharge was issued. The Congress

provided the remaining $5 million to USCIS

for processing military naturalizations. These

actions resulted in a better use of taxpayer

resources.

3.05. Informing the Nation’s Response to 

Long-Term Fiscal Challenges: Our 2010

reports on state and local fiscal conditions

helped frame the policy debate regarding

long-term fiscal challenges by informing

congressional planning for a response to the

long-term fiscal challenges facing all levels

of government. Our state and local fiscal

model attracted the attention of numerous

outside experts and publications. Our

report on state and local fiscal pressures

and the interconnectedness that defines

intergovernmental programs generated

intense interest among state budget officers

and local officials as they implement health

care reform and continue efforts to balance

their budgets. (GAO-10-358, GAO-10-899,

GAO-10-604, GAO-10-231, GAO-10-437)

Identify Fraud, Waste, and 

Abuse

3.06. Strengthening Efforts to Reduce 

Governmentwide Improper Payments:

Over the past decade, our work has helped to

better identify and minimize federal improper

payments, including payments to individuals

who used invalid information to improperly

receive federal disaster assistance. For fiscal

year 2009, 22 federal agencies reported

estimated improper payments totaling $98.7

billion, and we estimate a reduction of over

$1 billion for agencies that reported prior

amounts and took steps to reduce them. Our

work and recommendations contributed to

the enactment of the Improper Payment

Elimination and Recovery Act in fiscal year

2010, which calls for enhanced reporting

and recouping of improper payments.

(GAO-02-749, GAO-04-99, GAO-06-347,

GAO-07-92, GAO-09-442)

3.07. Identifying Fraud in the Small 

Business Administration (SBA) 8(a) 

Program: SBA helps socially and

economically disadvantaged small

businesses gain access to federal contracting

opportunities through its 8(a) program. By

investigating complaints to our fraud hotline

and reviewing SBA data, we identified

$325 million in set-aside and sole-source

contracts awarded to firms that were not

eligible to participate in the program. Most

of the improper awards we identified were

obtained through fraudulent schemes, such

as underreporting income and assets or

misrepresenting ethnicity. Our investigators

were also able to obtain 8(a) certification

for a bogus firm using fabricated business

information. (GAO-10-425)

3.08. Improving Defense Contract Audits’ 

Ability to Protect Public Interest: A

September 2009 GAO report uncovered

pervasive quality problems with Defense

Contract Audit Agency (DCAA) audits

rooted in a flawed management environment

and culture. In response, DOD revised

DCAA’s mission statement to clearly focus on

protecting hundreds of billions in taxpayer

dollars, assigned new agency leadership,

rescinded over 80 DCAA audit reports,

removed over 200 contractors’ ability

to submit invoices for payment without

government review, and moved to better

meet audit standards with a risk-based audit

approach. DOD actions are important steps

toward performing quality audits that better

protect the public’s interests. (GAO-08-857,

GAO-09-468)
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Address Major Management 

Challenges and Program Risks

3.09. Contributing to the Debate Over 

U.S. Human Spaceflight: We reported in

2009 that U.S. human spaceflight is at risk

as NASA continues to experience setbacks in

its Constellation Program, which is expected

to cost about $100 billion through 2020. We

found that over $10 billion had been obligated

since 2005, and due to aggressive schedules,

technical challenges, funding issues, cost

increases, and changing requirements, NASA

did not establish a sound business case for

the program. Our work led NASA to delay

milestones and restructure contracts to limit

risk and helped spur an independent review of

U.S. human spaceflight that was the basis for

the President’s proposal to cancel the program.

(GAO-10-387T, GAO-10-227SP, GAO-09-844,

GAO-09-436T, GAO-09-306SP)

3.10. Advancing DHS Efforts to Improve 

Acquisition Management: We have

reported on DHS’s continuing struggle

to implement acquisition oversight for its

expanding portfolio of complex investments

worth hundreds of billions of dollars. This

year, in our first-time-ever assessment

of selected major acquisitions, we found

that most programs reviewed experienced

significant cost growth and schedule delays

and that contracts were awarded before

approval of key documents, such as the

mission need statement. Our work drew

congressional and agency attention to the

issues facing DHS, and the department is

taking steps to improve implementation

of its acquisition review processes.

(GAO-10-588SP)

3.11. Providing the Impetus for Cost 

Savings and Improved Interagency 

Contract Management: In 2010, the

administration cited our work in calling for

reduced use of high-risk contract vehicles to

achieve substantial governmentwide savings.

We have identified opportunities for cost

savings and improved management in a

series of reports on high-risk and interagency

contract vehicles covering a range of defense

and civilian agencies. We highlighted

opportunities to increase competition, realize

savings, ensure that risky contracts types

are used only when necessary, and improve

visibility and management of interagency

contracts. We also highlighted GSA’s need

to improve management of its multiple

award schedules program. (GAO-10-833,

GAO-10-367, GAO-09-792, GAO-09-921,

GAO-09-579)

3.12. Increasing Choice in Rigorous 

Evaluation Methods: To help the Congress

assess efforts to identify programs with

rigorous evidence of effectiveness, we

examined how well randomized studies can

assess the effectiveness of different types of

programs. We found that requiring evidence

from randomized studies will likely exclude

many potentially effective and worthwhile

programs, while other rigorous methods are

appropriate when random assignment is not

possible. A broad set of methods can inform

OMB’s planned interagency effort to develop

governmentwide evaluation guidance that

gives agencies flexibility to choose methods

suited to the specific needs of their programs.

(GAO-10-30)

3.13. Implementing Improved 

Government Auditing Standards: Since

our 2007 major revision to the Government

Auditing Standards, we have conducted

extensive outreach and training to hundreds

of federal, state, and local auditors, as well

as public accounting firms conducting

government audits, to guide their application

of these standards, including providing

extensive training. We have also continued

to work closely with other audit standardsetting organizations and advisory councils
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focused on ensuring that accountability

professionals rise to the increasingly critical

challenge of producing high-quality and

efficient audits. In August 2010, we issued

an exposure draft proposing additional

refinements to the standards.

3.14. Improving the Medical Certification 

Process for Commercial Drivers’ 

Licenses (CDLs): Based on a comparison

of federal disability recipients and state

CDL holders, we identified nearly 600,000

individuals holding CDLs despite having a

medical condition giving them full federal

disability benefits. We referred these

individuals to state licensing agencies,

several of which revoked CDLs from drivers

with physical impairments preventing

safe vehicle operation. As a result of our

work, the Department of Transportation

finalized a new rule requiring commercial

drivers to furnish a medical examiner’s

certificate to their state licensing agency to

prevent uncertified drivers from operating

commercial vehicles.

3.15. Improving Management and 

Oversight of Governmentwide Premium 

Class Travel: In 2007, we found that

breakdowns in internal controls and a

weak control environment resulted in at

least $146 million in improper first- and

business-class travel governmentwide. Based

on statistical sampling, we estimated that

two-thirds of premium class travel was not

properly authorized or justified. In response

to our recommendations, GSA amended the

Federal Transportation Regulations (FTR)

to strengthen authorization and justification

requirements and to help agencies comply

with existing FTR requirements. These

amendments will help reduce waste in

premium-class travel costs across the federal

government. (GAO-07-1268)

3.16. Improving Oversight of a Critical 

Satellite Acquisition: Since 2002, we

have assisted the Congress with oversight

of the National Polar-orbiting Operational

Environmental Satellite System, a $15

billion satellite acquisition expected to assist

weather forecasting and climate monitoring

for the next two decades. Our reports and

testimonies have identified the status and

risks of satellite development, including

those related to recent plans to disband the

program, and made recommendations to

address these risks. This work helped focus

congressional, administration, and agency

attention onto this important program,

and resulted in more active oversight

of the planned programmatic changes.

(GAO-10-558, GAO-10-858T, GAO-09-772T,

GAO-09-564, GAO-08-899T)

3.17. Improvements to IT Oversight and 

Transparency: Enhancements to OMB’s IT

Dashboard: Federal IT spending is projected

to reach $79 billion in fiscal year 2011. We

have issued a series of reports and testimonies

with recommendations to OMB for improving

its oversight and transparency of growing

federal IT investments. In June 2009, OMB

deployed a “dashboard,” which is a Web site

clearinghouse of information that provides

details on all major federal IT investments and

provides OMB and others with the ability to

track the progress of these investments. More

recently, in July 2010, we identified areas of

the dashboard that needed improvements, and

OMB has efforts under way to make these

improvements. (GAO-10-701, GAO-09-624T,

GAO-08-1174T, GAO-08-1051T,

GAO-08-925)

3.18. Increasing Visibility of Veterans 

Affairs Information Management 

Weaknesses: We advocated increased

congressional scrutiny of problematic, major

IT projects intended to modernize the

Department of Veterans Affairs’ (VA) systems
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for outpatient appointment scheduling as

well as asset and financial management. In

multiple reports, we identified weaknesses

in IT management capabilities that were

undermining the department’s efforts

to develop and implement new systems.

Our work spurred improvements to

the appointment-scheduling and asset

management system projects and contributed

to VA’s decision to terminate its financial

management system project. (GAO-10-40,

GAO-10-579)
Source: See Image Sources.

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Maximize the Value of GAO by 

Enabling Quality, Timely Service to 

the Congress and by Being a Leading 

Practices Federal Agency

Strategic

Goal 4

Improve Efficiency and 

Effectiveness

4.01. Enhancing Support for Managing 

our Engagements: To improve usability

and expand IT system functionality for our

analysts, we

■ upgraded our document management

system to streamline the user interface and

integrate it with our new e-mail program;

■ improved capabilities of several

engagement support systems widely used

by our analysts to record congressional

contacts, record information on hearings,

and research weapon systems; and

■ modified the capabilities of our survey

software for easier use by survey design

specialists.

Enhance Recruitment, 

Development, Retention, and 

Rewards 

4.02. Strengthening Recruiting Initiatives 

to Attract a Diverse Workforce: To ensure

that our recruitment efforts are aligned with

workforce and diversity needs, we implemented

a number of leading practices that supported

our goal for a diverse workforce and inclusive

work environment. For example, we

■ issued a recruitment strategy that guided

all recruiting activities in fiscal year

2010 and improved outreach to diverse

candidates;

■ conducted mandatory training to

communicate our recruitment strategy and

reinforce our expectation that recruiters

will develop networks with student and

professional organizations;

■ ensured that diverse, well-trained teams of

staff representing all of our mission teams,

locations, staff levels, and affinity groups

recruited on college campuses and at

recruiting events;

■ increased use of the student career

experience program (SCEP) and established

relationships with two programs—the

Public Policy and International Affairs

Fellowship Program and the Hispanic

Association of Colleges and Universities

National Internship Program;

■ participated in targeted job fairs and

conferences, such as the Career Expo for

People with Disabilities and the Annual

Federal Hispanic Career Advancement

Summit, to help recruit people from

population groups with low representation

in GAO’s workforce; and
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■ centralized program direction for the

analyst intern program, which serves as the

primary pipeline for GAO hiring, to ensure

that interns received consistent experiences

throughout the agency.

4.03. Improving Our Performance 

Management Systems: To ensure fairness

and equity in our performance management

processes, we implemented most of the shortterm recommendations from our November,

2009 performance appraisal study. We also

developed a detailed statement of requirements,

with broad stakeholder input, and selected a

vendor to design a new performance system.

4.04. Enhancing Efforts to Develop the 

Workforce: To facilitate cost-effective,

interactive delivery of training to headquarters

and field locations, we implemented virtual

classroom courses—or Webinars—converted

four key leadership courses from standard

classroom to virtual courses; certified 29 staff

members to teach these courses; and trained 10

technicians to assist with course delivery. To

strengthen management and leadership skills,

we redesigned two courses for analysts and

analyst-related staff on audit documentation

and appropriations law, and developed a new

course for managerial analysts. We also

expanded access to language training to all

staff to assist those who review programs in

other countries.

4.05. Promoting a Fair and Unbiased 

Environment that Values Opportunity and 

Inclusiveness: To continue to strengthen our

commitment to diversity and inclusion and to

enhance understanding of diversity across the

agency, we

■ implemented diversity training for all staff;

■ developed a course to assist new employees

with the transition to our workplace and

culture;

■ signed a memorandum of understanding

with the Library of Congress to obtain

access to its Assistive Technology

Demonstration Center to help address

reasonable accommodation requests;

■ prepared transcripts of our podcasts

and accessible versions of legal decisions

and opinions, and began captioning live

broadcasts, such as selected congressional

hearings, to make information on our Web

site accessible to people with disabilities;

■ posted information on our intranet home

page to recognize special observances

such as Native American Heritage Month,

Veterans Day, and African American

History Month; and

■ updated our training on compliance with

the Americans with Disabilities Act and

our reasonable accommodation process

to promote better understanding of the

requirements of the law and to assist

eligible employees.

Expand Networks, 

Collaborations, and 

Partnerships

4.06. Enhancing Professional Accounting 

and Auditing Standards: To strengthen

worldwide financial auditing of public sector

entities, we worked with INTOSAI to

incorporate key components from privatesector International Standards on Auditing

into INTOSAI financial audit guidelines and

helped draft the guidelines. INTOSAI has

adopted 38 of these financial audit guidelines.

To enhance international accounting

and auditing standards more broadly,

we provided comments on International

Standards for Supreme Audit Institutions

(SAIs) and INTOSAI Guidance for Good

Governance. Many of these comments were
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Appendixes 

incorporated into (1) high level transparency,

accountability, and quality control principles

for SAIs; (2) guidance on the role and

use of internal auditors in SAIs; and

(3) comprehensive international guidelines

for conducting financial, performance, and

compliance audits.

4.07. Building the Capacity of Domestic 

and International Accountability 

Communities: We helped build a permanent

capacity for strategic planning at INTOSAI

by providing important leadership on the

development of INTOSAI’s 2011-2016 plan.

Our input helped to ensure that the plan was

crafted in accordance with leading practices

and circulated to appropriate stakeholders

for comment. We also provided substantial

leadership in drafting and developing

consensus for an international memorandum

of understanding for INTOSAI’s task force on

donor funding to move this initiative forward.

To expand information sharing in the

international accountability community, we

launched several electronic enhancements

to the quarterly International Journal of 

Government Auditing, which, as the primary

conduit for information sharing across

audit staff and managers around the world,

plays a critical role in fostering global

understanding of professional standards,

best practices, and technical issues. These

changes included publishing the Journal

in other formats for easier downloading in

other countries, completing digitization of

issues of the Journal back to the 1970s for

all of INTOSAI’s five official languages, and

working with INTOSAI partners to expedite

translating the Journal into Arabic.

4.08. Sharing Information and Expertise 

through Government Networks: To share

our experiences with using social media

outlets such as Twitter and YouTube, we

met with representatives from our sister

agencies—the Congressional Research

Service and the Congressional Budget

Office—and discussed legal, logistical, and

policy issues to consider when using such

tools. We also participated in two sessions

sponsored by the Partnership for Public

Service to share information on hiring and

onboarding employees and discuss best

practices.

Human, Information, Fiscal, 

Technological, and Physical 

Resources 

4.09. Proactively Protecting Physical 

and Information Security: Consistent

with addressing our management challenges

in protecting our people and assets, we

continued implementation of two major

initiatives to align our physical security

procedures with Homeland Security

Presidential Directive-12 guidelines. We

awarded a contract for upgrading the

electronic security systems in our field offices

and integrating them with our headquarters

system, and continued conducting minimum

background investigations on our employees

and contractor staff to comply with federal

requirements.

To ensure our information systems and

assets are protected and continue our work

addressing FISMA requirements, we

■ updated “Authorization to Operate” (ATO)

for 32 systems so that all of our FISMA

systems now have a current ATO, which

is necessary to meet certification and

accreditation requirements under FISMA,

and

■ completed Certification and Accreditation

(C&A’s) and Security Tests and

Evaluations (ST&E’s) for 13 systems

and completed the validation of security

controls for all of our FISMA systems.
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Appendixes

We also implemented other actions to

strengthen information security controls,

including

■ completing replacement of our managed

Internet security contract, which includes

failover capabilities;

■ replacing intrusion detection systems to

improve capabilities and access to vendor

support; and

■ upgrading controls to provide more

effective warnings for site access and

anti-virus/anti-malware support for Web

surfing.

To ensure appropriate responses to any type

of emergency and the ability to maintain

our operational capability in the likelihood

of significant and sustained absenteeism

or the need for off-site operations, we

established an agencywide pandemic plan, as

well as individual unit pandemic plans, and

completed all employee and manager training

in continuity operations.

4.10. Supporting Federal Environmental 

Sustainability Goals and Reducing Costs 

and Waste: To reduce energy consumption

and waste, we:

■ completed a headquarters-wide retrofit

of energy-efficient ceiling light fixtures

to reducing power consumed by about

21 percent, resulting in an estimated

$200,000 in savings per year;

■ installed energy-efficient gas boilers

in headquarters for building heating,

replacing an inefficient steam system, and

reducing heating costs by an estimated

50 percent, leading to about $600,000 in

annual savings;

■ developed environmental baseline metrics

for use of information technology (IT),

which will enable us to monitor and

manage energy use of IT equipment over

time; and

■ began a “Greening Your Printing” pilot

project to reduce paper use and printing

costs.

4.11. Leveraging Technology to Achieve 

Business Process Improvement and 

Efficiency Gains: We replaced our manual

travel booking system with a new, fully

integrated online reservation booking and

document processing travel system to

■ reduce transaction fees;

■ help ensure compliance with Federal

Travel Regulations;

■ improve financial management processes

and reporting through integration with

our financial management system;

■ address external audit recommendations

on replacing the outdated database with its

associated security concerns; and

■ provide enhanced travel information for

our employees.

We also implemented a number of technical

projects that provide improved service to

users or enhance underlying systems that

support our engagement or management

functions. For example, we

■ implemented a new e-mail system

to increase hardware/software

interoperability, expand calendaring

functionality, improve junk e-mail filters

and features that disable links and warn

about threatening content within an e-mail

message, and provide access to a greater

pool of expert technical support;
140 GAO-11-2SP

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Appendixes 

■ migrated all intranet content to a new

intranet infrastructure to provide a

consistent navigation structure for users,

improve search functionality, and facilitate

real-time changes across the site, and

enable management to communicate

directly to employees and reinforce our

core values;

■ procured taxonomy software to improve

search results for products on our external

Web site and reduce processing time

to apply search terms, created rules for

indexing, and indexed our entire report

collection;

■ developed a database to improve

collecting, monitoring, and reporting

on implementation of mission support

activities in our strategic plan; and

■ completed independent verification and

validation of our Enterprise Architecture

Program, which is a key requirement

for achieving “stage 4 maturity” of our

Enterprise Architecture Management.

4.12. Improving Management of Key 

Administrative Processes: To enhance

customer service and management in our

contracting and human resource functions,

we

■ began conducting quarterly customer

satisfaction surveys of staff receiving

services from our contracting unit

to obtain timely customer feedback

and facilitate timely responses and

improvements in operations, if necessary,

and

■ implemented a new help desk customer

service model to improve responsiveness

to employees’ human resources questions.

To optimize use of our work space, we

renovated 16,000 square feet in our

headquarters building for a technical

library that improves work space, realigns

utilization from stacks of reference

materials to computer-based research, and

provides four additional video conference

rooms—a 25 percent capacity increase—

to handle increased demand from across

the agency. We also completed office

renovations in the Chicago, Los Angeles,

and San Francisco field offices to optimize

productivity of work space and align space

utilization with current staffing plans.
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Appendixes

2. GAO’s Report on Personnel Flexibilities

As required by section 11(a) of the GAO

Human Capital Reform Act of 2004 (Pub. L.

No. 108-271, July 7, 2004), we reported on

actions the agency took under sections 2, 3, 4,

6, 7, 9, and 10 of the act in our performance

and accountability reports for fiscal years

2005 through 2009. In July 2010, we issued

the final required report on agency actions

under section 11. This report was required

to provide (1) a summary of the information

included in GAO annual performance and

accountability reports for the fiscal year 2005

through 2009 reporting cycle for sections 2,

3, 4, 6, 7, 9, and 10; (2) recommendations for

any legislative changes to sections 2, 3, 4, 6,

7, 9, or 10; and (3) any assessment furnished

by the GAO Personnel Appeals Board or any

interested groups or associations representing

officers and employees of GAO. The final

report, GAO Human Capital Reform Act of 

2004: Final Report on GAO’s Use of Provisions 

in the GAO Human Capital Reform Act of 

2004, GAO-10-811SP, was submitted to the

Congress on July 6, 2010, and is available on

our Web site.
142 GAO-11-2SP

GAO Performance and Accountability Report 2010

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