Fiscal Year 2011

PERFORMANCE AND ACCOUNTABILITY REPORT

U.S. Government Accountability Office

ERVING THE CONGRESS AND THE NATION
S E R V I N G T H E C O N G R E S S

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.
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GAO Performance and Accountability Report 2011

Contents

Source: See Image Sources.

Contents

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

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

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

From the 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 Our Client.......................................................................32

Focusing on Our People......................................................................34

Focusing on Our Internal Operations.......................................................37

GAO’s High-Risk Program....................................................................38

Duplication Mandate..........................................................................40

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010...............42

The Troubled Asset Relief Program.........................................................43

The American Recovery and Reinvestment Act...........................................43

General Counsel Decisions and Other Legal Work.......................................45

Managing Our Resources.....................................................................48

Strategic and Annual Work Planning.......................................................53

Internal Management Challenges and External Factors That Could

Affect Our Performance....................................................................56

Part II: Performance Information......................................................................65

Performance Information by Strategic Goal.....................................................66

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

and Financial Security of the American People..............................................67

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

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

Testimonies....................................................................................70
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GAO Performance and Accountability Report 2011

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......................................................................76

Financial Benefits.............................................................................77

Nonfinancial Benefits.........................................................................78

Testimonies....................................................................................78

Goal 3 Overview: Help Transform the Federal Government to Address

National Challenges..............................................................................83

Financial Benefits.............................................................................85

Nonfinancial Benefits.........................................................................85

Testimonies....................................................................................86

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

Service to the Congress and by Being a Leading Practices Federal Agency..............90

Data Quality and Program Evaluation............................................................94

Verifying and Validating Performance Data...............................................94

Program Evaluation...........................................................................94

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

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

Audit Advisory Committee’s Report............................................................ 100

Independent Auditor’s Report................................................................... 101

Purpose of Each Financial Statement.......................................................... 104

Financial Statements............................................................................. 105

Notes to Financial Statements.................................................................. 109

Part IV: Inspector General’s View of GAO’s Management Challenges......................... 123

Inspector General’s View of GAO’s Management Challenges................................ 124

Part V: Appendix........................................................................................ 125

Data Quality....................................................................................... 126

Image Sources........................................................................................... 135

Providing Comments on This Report................................................................ 136

Obtaining Copies of GAO Documents................................................................ 136

Connect with GAO...................................................................................... 136
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GAO Performance and Accountability Report 2011

Abbreviations

AD/CV antidumping and countervailing

AEITC Advance Earned Income Tax Credit

APSS Administrative Professional and Support Staff

ASP Advanced Spectroscopic Portal

CAO Chief Administrative Office

CBP U.S. Customs and Border Protection

CGAB Comptroller General’s Advisory Board

CMS Centers for Medicare & Medicaid Services

CRA Congressional Review Act

CSI Container Security Initiative

CSRS Civil Service Retirement System

DHS Department of Homeland Security

DNI Director of National Intelligence

DOD Department of Defense

DOE Department of Energy

DOJ Department of Justice

DOL Department of Labor

DOT Department of Transportation

DWG Domestic Working Group

EAP Educator’s Advisory Panel

EESA 2008 Emergency Economic Stabilization Act

EN employment network

EPA Environmental Protection Agency

ERS Engagement Reporting System

ESC Enterprise Services Center

EVM earned value management

FAIS Forensic Audits and Investigative Service

FCS Future Combat System

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

FFMIA Federal Financial Management Improvement Act of 1996

FICA Federal Insurance Contributions Act

FMFIA Federal Managers’ Financial Integrity Act of 1982

GAGAS generally accepted government auditing standards

GPRA Government Performance and Results Act of 1993

GPRA 2010 GPRA Modernization Act of 2010

Abbreviations
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GAO Performance and Accountability Report 2011

Abbreviations 

GSA General Services Administration

HAI health-care-associated infection

HHS Department of Health and Human Services

HSPD-12 Homeland Security Presidential Directive 12

HUBZone Historically Underutilized Business Zone

HUD Department of Housing and Urban Development

IC U.S. Intelligence Community

IDES Integrated Disability Evaluation System

IFPTE International Federation of Professional and Technical Engineers

IG inspector general

INTOSAI International Organization of Supreme Audit Institutions

IRS Internal Revenue Service

IT information technology

JSF Joint Strike Fighter

LOGCAP Logistics Civil Augmentation Program

MA Medicare Advantage

MKV Multiple Kill Vehicle

NASA National Aeronautics and Space Administration

NFC National Finance Center

NFIP National Flood Insurance Program

OMB Office of Management and Budget

OPM Office of Personnel Management

OSDBU Office of Small and Disadvantaged Business Utilization

PAR performance and accountability report

PIV Personal Identity Verification

QCI Quality and Continuous Improvement

SAI supreme audit institution

SBA Small Business Administration

SBInet Secure Border Initiative Network

SEC Securities and Exchange Commission

SSA Social Security Administration

TARP Troubled Asset Relief Program

TSAT Transformational Satellite

USACE U.S. Army Corps of Engineers

USAID U.S. Agency for International Development

USCP U.S. Capitol Police

USDA Department of Agriculture

VA Department of Veterans Affairs
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GAO Performance and Accountability Report 2011

How to Use This Report

How to Use This Report

This report describes the U.S. Government Accountability Office’s performance measures,

results, and accountability processes for fiscal year 2011. 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 website at http://www.gao.gov/sp.html.

This report has an introduction, four parts, and a supplementary appendix as follows:

Introduction

This section includes the letter from the Comptroller General and a statement attesting to

the completeness and reliability of the performance and financial data in this report and

the effectiveness of our internal controls 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 2011. 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 2011

and the targets we are aiming for in fiscal year 2012. It also includes a summary of our

program evaluation for the fiscal year.

Financial Information

This section includes details on our finances in fiscal year 2011, including a letter from our

Chief Financial Officer, audited financial statements and notes, and the reports from our

external auditor and Audit Advisory Committee. This section also includes an explanation

of the 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.

Appendix on Data Quality

This section describes how we ensure the completeness and reliability of the data for each

of our performance measures.
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SERVING THE CONGRESS AND THE NATION

Introduction
Source: See Image Sources.

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GAO Performance and Accountability Report 2011

From the Acting Comptroller General 

November 15, 2011

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

fiscal year 2011. This year our products covered a wide spectrum of issues—

from banking to health care and retirement to defense, homeland, and

information security. We issued our biennial high-risk report calling attention to

opportunities for cost savings and improvements in federal agency and program

management. We issued our first annual report under a new mandate in which

we identified duplication, overlap, cost-saving opportunities, and revenue

enhancements in government programs. We issued several products under the

Dodd-Frank Wall Street Reform Act on mortgages, securities markets, financial

institutions, the Federal Reserve, and consumer protection and many other

products related to health insurance reform. We also reported and testified on

the Department of Homeland Security’s progress and challenges ten years after

9/11. We continued to regularly report the results of our work related to the

Troubled Asset Relief Program and the American Recovery and Reinvestment

Act. Additionally, we updated our Yellow Book on government auditing

standards to reflect recent developments in the accountability profession.

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

on our financial statements for fiscal year 2011. We began to implement the

requirements of the Government Performance and Results Modernization Act of

2010 and identified financial and nonfinancial benefits as our priority measures.

This year, we documented $45.7 billion in financial benefits for the federal

government—a return of $81 for every dollar invested in GAO. We also recorded

1,318 other benefits in broad program and operational areas cutting across the

government. 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.

The 112th Congress relied on us to inform its work on national and international

issues, with our senior officials testifying at 174 hearings. Getting our message

out is crucial; to better serve our clients and the public we continued to pilot

our e-report—formatted for faster and easier Internet access to key aspects

of our reports—and we launched Facebook and Flickr pages to reach a wider

audience.

We undertook and received a clean opinion on our triennial external peer

review conducted by an international team of our counterparts at national

From the Comptroller General
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GAO Performance and Accountability Report 2011

From the Acting Comptroller General

audit institutions. This was our third international peer review and the first

to examine both financial and performance audits. The peer review team

identified a number of good practices that should interest other audit offices as

well as future changes for us to consider to further strengthen our products.

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 in uncertain times, we met our clients’ needs with

95 percent on-time delivery. Our people and internal operations measures

indicate that our employees feel they have the developmental opportunities,

work experiences and environment, and operational support they need to

produce high-quality products. We met or exceeded six of the targets for

our seven people measures—retention rate (with and without retirements),

staff development, staff utilization, effective leadership by supervisors,

and organizational climate. We did not meet our target for new hires as we

curtailed hiring to filling only critical needs because of budget constraints.

We have updated our internal management challenges—removing physical

security and information security based on progress in those areas. We

continue to focus on human capital by completing work on a new performance

management system and enhancing efforts on succession planning, training,

critical hiring, and alternative staff rewards and recognition. This year,

we are adding a new engagement efficiency challenge focused on making

improvements in three areas given constrained resources: managing and

conducting engagements, utilizing resources, and communicating our message.

We maintained our productive working relationship with the employees’

union, GAO Employees Organization, International Federation of Professional

and Technical Engineers, Local 1921, and began implementing 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 2011 continued a very active and challenging time for GAO, yet

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

accomplishing many of our goals while managing budget constraints. Fiscal year

2012 brings more challenges with responsibilities to further assess and report

on duplicative government programs and financial regulatory reform efforts

among many other pressing issues. At the same time, in anticipation of a lower

budget, we are reducing spending through limiting hiring, attrition, and scaling

back or rescoping mission support contracts. Our 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 in the coming year.

Gene L. Dodaro

Comptroller General

of the United States
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GAO Performance and Accountability Report 2011

Financial Reporting Assurance Statements 

November 15, 2011

We, as GAO’s 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 (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, 2011, 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 and complete. Transactions are (1) 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, and (2) executed in accordance with laws governing the use of

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

material effect on the financial statements.

■ Our performance reporting is reliable and complete. 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, as amended, (GPRA) and related OMB

guidance.

We also believe that (1) these 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

Financial Reporting 

Assurance Statements
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GAO Performance and Accountability Report 2011

Financial Reporting Assurance Statements

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

Comptroller General

of the United States

David M. Fisher

Chief Administrative Officer/

Chief Financial Officer

Patricia A. Dalton

Chief Operating Officer

Cheryl B. Whitaker

Acting Controller

Lynn H. Gibson

General Counsel
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GAO Performance and Accountability Report 2011

About GAO 

GAO is an independent, nonpartisan professional services agency in the legislative branch

of the federal government. Commonly known as the audit and investigative arm of the

Congress or the “congressional watchdog,” we examine how taxpayer dollars are spent

and advise lawmakers and agency heads on ways to make government work better. As

a legislative branch agency, we are exempt from many laws that apply to the executive

branch agencies. However, we generally hold ourselves to the spirit of many of the laws,

including FMFIA, GPRA, and the Federal Financial Management Improvement Act of 1996

(FFMIA).1 Accordingly, this performance and accountability report for fiscal year 2011

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.

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.

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. The

GPRA Modernization Act of 2010 incorporates additional requirements for reporting and transparency, which we have begun to implement.

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.

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.

Source: See Image Sources.

About
GAO-12-4SP 7

GAO Performance and Accountability Report 2011

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

Figure 1: GAO’s Strategic Planning Hierarchy

Source: GAO.

Each strategic goal is composed of strategic

objectives, for which there are specific

strategies taking the form of performance goals,

each of which has a set of key efforts. Figure 1

illustrates this hierarchy and the text box on the

left provides an example of structure of one of

our strategic goals. 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 the results of this work described in Part II of this report.

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-12-4SP 

GAO Performance and Accountability Report 2011

Source: GAO.

Note: Additional information on accomplishments by goal is highlighted in Part II of this report.

 Encouraged enhanced desktop computer security to protect sensitive information, which 22 federal agencies 

implemented

 Identified progress and remaining work to implement homeland security missions at DHS ten years after 9/11

 Led DHS to scale back the flawed advanced radiation detector program—avoiding costs of $1.2 billion

 Identified challenges and recommended improvements in DOD’s expanding cybersecurity mission

 Surfaced potential costs and risks of contract transition during drawdown from Iraq, resulting in benefits of 

$77.5 million

 Led DOD to restructure the Joint Strike Fighter program—DOD’s most costly and ambitious acquisition

 Increased USAID focus on planning, coordination, and monitoring of Afghan water projects

 Improved monitoring and evaluation of State, Labor, and USAID projects to combat human trafficking

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

 Provided timely information on the debt limit and budget controls to help address the long-term fiscal challenge

 Helped eliminate the Advanced Earned Income Tax Credit, avoiding $569 million in costs

 Identified 227,700 tax delinquents receiving federal benefits to explore ways to increase collection of unpaid taxes

 Found ways to incorporate required data into Centers for Medicare & Medicaid systems to better detect improper 

payments

 Issued updated government auditing standards to reflect recent developments in the accountability profession

 Identified opportunities to reduce risk and achieve cost savings in several types of government contracting

 Recommended improvements to planning and implementation of federal data center consolidation at 24 federal 

agencies

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

 Tested use of quick response, or “QR” codes, on our products to quickly link users to our website

 Completed training for all staff on diversity and inclusion awareness issues

 Began implementing our first Master Collective Bargaining Agreement with IFPTE, Local 1921

 Received a clean opinion on our third international triennial peer review

 Began implementing GPRA Modernization Act of 2010 by identifying priority performance measures and 

incorporating performance data on our website

 Identified savings of $3.7 billion by reducing unneeded payments to Medicare Advantage plans

 Improved consistency and compatibility of health care-associated infection data

 Led the Social Security Administration to improve oversight of its Ticket-to-Work program

 Identified opportunities to enhance investigation of online child pornography

 Recommended ways to strengthen the Federal Reserve’s management of emergency assistance to stabilize 

financial markets

 Developed a series of assessments of emerging technologies with important implications for the nation

 Found regulatory weaknesses in EPA’s water-based lead testing and treatment program

 Informed improvements in air passenger rights to compensation for mishandled baggage

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 2011
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GAO Performance and Accountability Report 2011

About GAO

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.

In July 2010, we issued and began the transition to our strategic plan for fiscal years 2010

through 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. In keeping with the GPRA Modernization Act of 2010,

we plan to shift to a 4-year planning cycle with an interim update in 2012 and the next

full update in 2014. 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 prior annual performance plans and

performance and accountability reports.

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 increasing 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 website (http://www.gao.gov/sp.html).

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 tenth

consecutive year its Certificate of Excellence in Accountability Reporting for outstanding

accountability reporting for our fiscal year 2010 performance and accountability report.

We also received a “Best-in-Class” award for a concise, well-written, and highly readable

Summary of GAO’s Performance and Financial Information for Fiscal year 2010 (see fig. 4).

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.
10 GAO-12-4SP

GAO Performance and Accountability Report 2011

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

● Bene
 ts and 

protections for workers, 

families, and children

● Financial security

● E ective system of 

justice

● Viable communities

● Stable 
 nancial 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 
 scal 

position and options for 

closing gap

● Fraud, waste, and abuse

● Major management 

challenges and program risks

● E ciency, e ectiveness, 

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 related to...

...Respond to Changing Security 

Threats and the Challenges of Global 

Interdependence involving...

Help Transform the Federal Government to 

Address National Challenges by assessing...

Maximize the Value of GAO by Enabling 

Quality, Timely Service to the Congress and 

Being a Leading Practices Federal Agency in 

the areas of...

Figure 3: GAO’s Strategic Plan Framework
GAO-12-4SP About GAO 11

GAO Performance and Accountability Report 2011

Source: GAO.

Figure 4: GAO’s Performance and Accountability Report Awards

U.S. Government Accountability Office

Serving the Congress and the Nation 

Summary of 

GAO’s Performance 

and 

Financial Information

Fiscal Year 2010

Accountability Integrity Reliability

CERTIFICATE OF

EXCELLENCE IN

ACCOUNTABILITY

REPORTING®

BEST-IN-CLASS AWARD

Presented to the

In recognition for Providing the

Best Summary of Performance 

and Financial Information

in your FY10 Agency Financial Report

U.S. Government 

Accountability Office

in Accountability Reporting Board

 CERTIFICATE OF 

 EXCELLENCE IN 

ACCOUNTABILITY

 REPORTING®

Presented to the

In recognition of your outstanding efforts 

preparing the GAO’s Performance and 

Accountability Report for the fiscal 

year ended September 30, 2010.

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

U.S. Government Accountability Office

Serving the Congress and the Nation 

Accountability Integrity Reliability

Performance and 

Accountability Report

Fiscal Year 2010

P&A 2010 Awards
12 GAO-12-4SP

GAO Performance and Accountability Report 2011

About GAO 

Organizational Structure

As the Comptroller General of the United States, Gene L. Dodaro is the head of GAO.

On December 22, 2010, he was confirmed as Comptroller General after serving as the

Acting Comptroller General since March 2008. Prior to that, Mr. Dodaro served as GAO’s

Chief Operating Officer for 9 years. Three other executives join Comptroller General

Dodaro to form our Executive Committee: Chief Operating Officer Patricia A. Dalton, Chief

Administrative Officer/Chief Financial Officer David M. Fisher, and General Counsel Lynn

Gibson.

To achieve our strategic goals, our staff is 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 Investigative Service (FAIS) 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. FAIS also 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. FAIS is an integrated unit composed of investigators,

analysts, and auditors who have experience with forensic auditing and data mining assisted

by staff in our Office of General Counsel.

Senior executives in 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-12-4SP 13

GAO Performance and Accountability Report 2011

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 

Investigative Service

• 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

• Field Operations

• Human Capital 

Office

– Chief Human

Capital Officer

• Information Systems 

and Technology 

Services

– Chief Information

Officer

• Knowledge Services

• Professional 

Development 

Program

Note: The structure of the Office of the General Counsel 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 Office of the General Counsel is structured to facilitate the delivery of legal services

to the teams and staff offices that support our four strategic goals. This structure allows

General Counsel to (1) provide legal support to our staff offices and audit teams concerning

all matters related to their work and (2) produce legal decisions and opinions for the

Comptroller General. Specifically, the goal 1, goal 2, and goal 3 groups are organized

to provide each of the audit teams with a corresponding team of attorneys dedicated

to supporting each team’s needs for legal services. In addition, these groups prepare
14 GAO-12-4SP

GAO Performance and Accountability Report 2011

About GAO 

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 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 a statutory office within the

agency. The IG is appointed by and reports to the Comptroller General. 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 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.

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-12-4SP 15

GAO Performance and Accountability Report 2011

About GAO

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 to strengthen 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 decision-making

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

2011, we devoted 94 percent of our engagement resources to work requested or mandated

by the Congress. We devoted the remaining 6 percent of the engagement resources to work

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 Afghanistan, our highrisk list, and the federal debt.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,

2

 In fiscal years 2009 and 2010, the work performed under the Comptroller General’s authority represented 5 percent of our engagement efforts

each year.
16 GAO-12-4SP

GAO Performance and Accountability Report 2011

About GAO 

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. In recent

years, we have issued around 900 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

■ 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 website information extracted from those reports. Collectively, our products 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 are reported in terms of the financial benefits and nonfinancial benefits. We

actively monitor the status of our open recommendations—those that remain valid but have

not yet been implemented—and report our findings annually to the Congress and the public

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

Similarly, our biennial high-risk report, most recently issued in February 2011, provides 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 (see p. 38). Such special publications are valuable planning tools because

3

 GAO, The Federal Government’s Long-Term Fiscal Outlook: January 2011 Update, GAO-11-451SP (Washington, D.C.: January 2011); GAO, 

Bid Protest Annual Report to the Congress for Fiscal Year 2010, GAO-11-211SP (Washington, D.C.: Nov. 23, 2010); and Principles of Federal 

Appropriations Law: Annual Update of the Third Edition, GAO-11-210SP (Washington, D.C.: March 2011).
GAO-12-4SP 17

GAO Performance and Accountability Report 2011

About GAO

they help us to identify areas to 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 issuespecific 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 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) to reach 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 to encourage consistent

performance across goals. Internally, we track our performance by strategic goal in
18 GAO-12-4SP

GAO Performance and Accountability Report 2011

About GAO 

order to understand why we meet or do not meet the agencywide target. We also use

this information to provide feedback to our teams on the extent to which they are

contributing to the overall target and to help them identify areas for improvement.

■ Client. To measure how well we are serving our client, we capture the number of

congressional hearings where we are asked to present expert testimony and our

timeliness in delivering products to the Congress. We use an electronic client feedback

form to collect data 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 impact 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-12-4SP 19

GAO Performance and Accountability Report 2011

About GAO

Setting Performance Targets

To establish targets for all of our measures, we consider our past performance, including

recent patterns and 4-year rolling averages, as well as upcoming events we are aware

of for most of our results measures (see p. 24) and the external factors that influence

our work (see p. 56). Based on this information, the teams and offices that are directly

engaged in the work discuss with our top executives their views of what we have planned

to accomplish in the strategic plan and what they believe they can accomplish in the

upcoming fiscal year. Members of our Executive Committee 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 2011 against our

previously established performance targets. We also present our financial statements, the

independent auditor’s report, and a statement from GAO’s Inspector General.

4

 Our most recent performance plan is available on our website at http://www.gao.gov/products/GAO-11-343SP.
20 GAO-12-4SP

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About GAO

This page intentionally left blank
SERVING THE CONGRESS AND THE NATION

Part I

Management’s

Discussion and Analysis
22 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

Assisting the Congress and the Nation during 

Changing and Challenging Times

In fiscal year 2011, the most pressing and demanding issues faced by the Congress and

the public helped to define our priorities. Our reporting helped inform the Congress

and the administration in developing policies and executing programs in areas such as

duplication and overlap in government programs, the Dodd-Frank Wall Street Reform Act,

our high-risk update, and nationwide funding provided through the American Recovery and

Reinvestment Act of 2009 (Recovery Act) and the Troubled Asset Relief Program (TARP), as

well as our continued oversight of areas across the government.

This work also allowed us to achieve many of our performance goals, and we monitored

how well we performed and supported our staff using 15 annual performance measures.

The results of our efforts are reflected in our solid performance in fiscal year 2011—we

met or exceeded all but two of the performance targets we set for our client and people

measures—those for which data are available (see table 1). We exceeded our targets for

our two priority measures—financial and nonfinancial benefits. We achieved $45.7 billion

in financial benefits, exceeding our target of $42 billion by $3.7 billion.5 This represents

an $81 return on every dollar the Congress invested in us. We recorded 1,318 nonfinancial

benefits, exceeding our target of 1,200 by 118 benefits. We met our target for past

recommendations implemented and we exceeded our target for new products with

recommendations by 8 percentage points. We did not meet our target of 200 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 six of seven of

our people measures.

Concerning our two internal operations measures, we assess our performance related to

how well our internal administrative services (e.g., computer support, mail service, and

physical security) help employees get their jobs done or impact employees’ quality of work

life based on responses to an annual internal survey. These measures are directly related

to our efforts under goal 4 of our strategic plan to enable quality, timely service to the

Congress and being a leading practices federal agency. The survey asks staff to rank the

importance of each service to them and indicate their satisfaction with it. There always

is a lag in reporting on this measure because our customer feedback survey is conducted

after we issue the performance and accountability report. In fiscal year 2010, our scores

were 3.94 for each of our measures to help get the job done and for our quality of work

life. We did not meet our targets of 4.0 for both scores. However, on a scale of 1 to 5, with

5 being the highest, these scores indicate that our employees were largely satisfied with

the internal administrative services we provide.

5

 A financial benefit is an estimate of the federal cost reduction of agency or congressional actions.
GAO-12-4SP 23

GAO Performance and Accountability Report 2011

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

actual

2011

target actual

Met/

not met

2012

target

Results

Financial benefits

(dollars in billions) $51.0 $45.9 $58.1 $43.0 $49.9 $42.0 $45.7 Met $40.0

Nonfinancial benefits 1,342 1,354 1,398 1,315 1,361 1,200 1,318 Met 1,200

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

New products with

recommendations 65% 66% 66% 68% 61% 60% 68% Met 60%

Client

Testimonies 240 276 298 203 192 200 174 Not met 180

Timelinessa 93% 95% 95% 95% 95% 95% 95% Met 90%

People

New hire rate 94% 96% 96% 99% 95% 95% 84% Not met 95%

Retention rate

With retirements 90% 90% 90% 94% 94% 90% 92% Met 90%

Without

retirements 94% 94% 93% 96% 96% 94% 96% Met 94%

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

Staff utilizationb,c 75% 73% 75% 78% 77% 75% 78% Met 75%

Effective leadership 

by supervisorsb,d 79% 79% 81% 83% 83% 80% 83% Met 80%

Organizational

climateb 73% 74% 77% 79% 79% 75% 80% Met 75%

Internal operationse

Help get job done 4.1 4.05 4.0 4.03 3.94 4.0 N/A N/A 4.0

Quality of work life 4.0 3.98 4.01 4.01 3.94 4.0 N/A N/A 4.0

Source: GAO.

Note: Information explaining all of the measures included in this table appears in the Appendix on Data Quality 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 2011 was 25 percent, and 98 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

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.

d

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.

e

For our internal operations measures, we ask staff to rank 32 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 37

of this report. We will report actual data for fiscal year 2011 once data from our November 2011 internal customer satisfaction 

survey have been analyzed. N/A indicates that the data are not yet available.
24 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

Our fiscal year 2012 targets for 12 of 15 of our performance measures are the same as

those targets we reported in our fiscal year 2012 performance plan in February 2011. We

believe that these targets are challenging yet realistic for our staff given current fiscal

constraints. For example, we lowered our financial benefits target for 2012 from $42 billion

to $40 billion. We expect to have fewer resources to monitor agency actions to implement

our recommendations.

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 our averages for financial benefits and new products with recommendations increased

each year from 2006 to 2009 and then remained fairly stable from 2009 to 2011. The

average number of nonfinancial benefits we recorded increased from 2006 to 2008 and has

remained fairly stable for the period from 2009 to 2011.

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

Performance measure 2006 2007 2008 2009 2010 2011

Results

Financial benefits (billions) $43.0 $45.1 $48.7 $49.5 $49.2 $49.2

Nonfinancial benefits 1,248 1,325 1,376 1,352 1,357 1,348

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

Client

Testimonies 206 228 248 254 242 217

Source: GAO.

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. In the months after an election, the members usually only meet for a short

session, and then they reorganize in the following months, providing fewer opportunities

for us to testify. In both 2010 and 2011, our experience was less than anticipated because

of 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 therefore have set a lower target for

congressional testimonies in 2012.

Focusing on outcomes and the efficiency of the processes needed to achieve them is

fundamental to accomplishing our mission. The following four annual measures—financial

benefits, nonfinancial benefits, past recommendations implemented, and new products

containing recommendations—indicate that we have fulfilled our mission and delivered

results that benefit the nation.
GAO-12-4SP 25

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

Financial Benefits and Nonfinancial Benefits

We describe many of the results produced by our work as either financial or nonfinancial

benefits. In many cases, the benefits we claimed in fiscal year 2011 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. Our methodology

for determining financial benefits can be found in table 19 in the Appendix on Data Quality

of this report.

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

financial benefit can be the result of changes in business operations and activities; the

restructuring of federal programs; or modifications to entitlements, taxes, or user fees.

In fiscal year 2011, our work generated about $45.7 billion in financial benefits

(see fig. 7). We exceeded our target by almost 9 percent because of several large

unanticipated accomplishments. Part II of this report provides more information on these

accomplishments by goal. (See fig. 8.) In light of resource constraints that may affect our

ability to follow up on actions taken, we have reduced our target for financial benefits to

$40 billion in 2012.

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 2011 2011

$43.0 $42.0

$49.9 $45.7

$58.1

$45.9

$51.0

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
26 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

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 nonGAO sources are typically the agency that acted on our work, a congressional committee,

or the Congressional Budget Office. Additional examples of financial benefits can be found

in Part II of this report.

Figure 8: GAO’s Selected Major Financial Benefits Reported in Fiscal Year 2011

Financial Benefits

Source: See Image Sources.

Description

Amount

(Dollars in 

billions)

Termination of Future Combat System (FCS) Manned Ground Vehicle. Section 211 

of the fiscal 2006 National Defense Authorization Act required us to provide annual 

reports on the Army’s FCS. We reported that knowledge deficiencies remained in key 

areas—critical technologies, FCS system designs, actual demonstrations, and network 

performance. In April 2009, the Secretary of Defense effectively made a no-go decision 

on the program when he recommended canceling the manned ground vehicle portion of 

the FCS development effort—8 of 14 core systems—and directed the Army to pursue an 

alternative ground combat vehicle program, as well as to demonstrate and field the FCS 

spinout equipment. The President’s budget request reflected this decision, and the Office 

of Management and Budget cited our work in its rationale. (GAO-09-288) $11.2

Department of Defense (DOD) Transformational Satellite (TSAT) Communications 

System Termination. TSAT is one of the most ambitious, expensive, and complex space 

systems ever built. In 2003, we recommended that the start of the TSAT acquisition 

program be delayed until the program showed that the technologies were mature and 

the design was feasible and producible. In 2006, we reported that DOD was not meeting 

the original cost, schedule, and performance goals and the satellite’s initial capability 

would be less than what DOD planned. Citing our 2009 assessment of the program, the 

President’s Fiscal Year 2010 Budget proposed to terminate the TSAT program because of 

significant cost increases and schedule delays. (GAO-06-537, GAO-04-71R) $5.3

Reductions in Payments to Medicare Advantage (MA) Plans. Medicare spending on 

private health plans increased rapidly after the enactment of the Medicare Prescription 

Drug, Improvement, and Modernization Act of 2003, rising 64 percent from 2004 to 

2006, while enrollment increased by more than 50 percent. For 2007, some beneficiaries 

enrolled in the MA program could have experienced higher cost sharing than if they were 

enrolled in Medicare fee-for-service. For 2005, MA plans spent less on medical expenses 

than they had projected, leading to profits that were about $1.14 billion greater than 

projected. Congressional staff said our body of work was instrumental in the passage 

of the 2008 Medicare Improvements for Patients and Providers Act, which reduced 

payments to the MA program. (GAO-08-359, GAO-08-827R, GAO-08-522T) $3.6
GAO-12-4SP 27

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

DOD Terminates Multiple Kill Vehicle (MKV) Program. In March 2008, we reported 

that the MKV program encountered technical anomalies during testing that led to 

multiple investigations and cost increases. In July 2008, we reported that DOD had not 

yet established an effective process to identify, prioritize, and address the combatant 

command’s ballistic missile defense needs. In March 2009, we highlighted software 

development issues that affected planned tests and further development of the MKV 

program. Citing our information, the administration terminated the MKV program and 

the Congress did not appropriate funds for the program in the Fiscal Year 2010 DOD 

Appropriations Act. The associated reduction for fiscal years 2010 through 2013 is about 

$2.7 billion. (GAO-09-338, GAO-08-448, GAO-08-740) $2.7

Congress Transfers Funds into “Cash for Clunkers” Program. In 2008, as part of 

a mandated review of the Department of Energy’s (DOE) implementation of the Loan 

Guarantee Program for Innovative Energy Technologies, we reported that DOE was not 

well positioned to manage the program effectively or maintain accountability because 

it had not completed a number of key management and internal control activities. In 

2009, we updated the appropriations staff on DOE’s efforts to address our previous 

recommendations regarding program management and accountability. We also noted that 

DOE had received loan guarantee applications for at least 68 projects but had committed 

to only one loan guarantee, even though a number of the applications had been 

submitted in response to a solicitation issued in 2006. Subsequently, in August 2009, the 

Congress authorized the transfer of about $2.05 billion from the Loan Guarantee program 

to the “Cash for Clunkers” program. (GAO-10-627, GAO-08-750) $2.05

Pakistani Reimbursement Claims. In June 2008, we reported that DOD did not 

consistently apply its Coalition Support Funds oversight guidance and that deficiencies 

existed in its oversight procedures. The DOD Comptroller’s 2003 guidance calls for 

Coalition Support Fund reimbursement claims to contain quantifiable information to 

substantiate claims, but DOD did not obtain detailed documentation to verify that 

claimed costs were valid, actually incurred, or correctly calculated. In response to our 

recommendations, DOD issued revised guidance for requesting and processing Coalition 

Support Fund claims. Additionally, in fiscal 2011, DOD provided data on Coalition Support 

Fund payments to Pakistan for 2008 through 2009. The cost reduction associated with the 

improved reimbursement process is about $1.1 billion. (GAO-08-806) $1.1

Source: GAO.

Note: Additional examples of fiscal year 2011 financial benefits can be found in Part II of this report.

Nonfinancial Benefits

Many of the benefits that result from our work cannot be measured in dollar terms.

During fiscal year 2011, we recorded a total of 1,318 nonfinancial benefits (see fig. 9). We

exceeded our target by nearly 10 percent largely because of a number of accomplishments

we documented that related to national security, defense acquisitions, and international

affairs. We have set our 2012 target for nonfinancial benefits at 1,200 again, notwithstanding

resource constraints.
28 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

Figure 9: Nonfinancial Benefits

0

300

600

900

1200

1500

2006 2007 2008 2009 2010 2011 2011

Number

Source: GAO.

Actual Target Actual

1,361

1,200

1,315 1,318 1,398 1,342 1,354

In fiscal year 2011 we documented actions taken across federal programs—about 32 percent

of the total nonfinancial benefits were in the area of public safety and security, including

programs such as homeland security and justice programs and critical technologies.

About 40 percent resulted from improvements in business process and management, such

as improved oversight of federal oil and gas resources and detection of fraud, waste,

and abuse. (See figure 10.) In figure 11, we provide examples of nonfinancial benefits

we claimed as accomplishments in fiscal year 2011. Additional examples of nonfinancial

benefits can be found in Part II of this report.

Figure 10: Types of Fiscal Year 2011 Nonfinancial Benefits

0

10

20

30

40

Percentage of total

Source: GAO.

 Public Insurance 

 and Benefits 

 Public Safety and 

 Security

 Acquisition and 

Contract Management

 Tax Law 

Administration

 Program Efficiency 

 and Effectiveness

Business Process 

 and Management

3

32

3

9

13

40

Note: These categories closely align with those in our high-risk list (see table 7).

Examples of programs included in categories:

 Public Insurance and Benefits: Medicare, Medicaid, Department of Veterans Affairs and DOD health care, disability 

programs, national flood insurance, federal deposit insurance, and other insurance programs.

 Public Safety and Security: Homeland security and justice programs, critical infrastructure, critical technologies, food 

safety, transportation safety, telecommunications safety, international food assistance, public health, consumer protection, 

environmental issues, and national defense and foreign policy.
GAO-12-4SP 29

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

 Acquisition and Contract Management: DOD weapon system acquisition, National Aeronautics and Space Administration 

acquisition management, and all federal agency and interagency contract management.

 Tax Law Administration: Internal Revenue Service (IRS) business systems modernization, tax policy, and enforcement of 

tax laws.

 Program Efficiency and Effectiveness: Fraud, waste, and abuse; U.S. financial regulatory system; federal oil and gas 

resources; U.S. Postal Service; transportation funding; and telecommunications funding.

 Business Process and Management: Federal agency financial audits, federal information systems, federal real property, 

human capital management, DOD business transformation, business systems modernization, financial management, support 

infrastructure management, and supply chain management.

Figure 11: GAO’s Selected Nonfinancial Benefits Reported in Fiscal Year 2011

Nonfinancial Benefits

Source: See Image Sources.

Program Description

Public 

Insurance and 

Benefits

Enforcement Actions Posted on Nursing Home Compare. In March 2007, we 

reported that while Nursing Home Compare had been modified a number of times 

to add important quality information, such as the results of surveys and complaint 

investigations, it did not contain information about the sanctions implemented 

against nursing homes. To improve public information available to consumers that 

helps them assess the quality of nursing home care, we recommended that the 

Centers for Medicare & Medicaid Services (CMS) expand Nursing Home Compare 

to include implemented sanctions, such as the amount of civil monetary penalties 

and the duration of denial of payment for new admissions. In July 2011, CMS began 

posting such information on Nursing Home Compare. (GAO-10-844T, GAO-05-656)

Public Safety 

and Security

HHS Finalized Antiviral Guidance for Pharmaceutical Interventions during 

Influenza Pandemic. Antivirals are a type of pharmaceutical intervention available 

during an influenza pandemic. They are one of the primary methods used to prevent 

the spread of disease as well as to reduce morbidity and mortality caused by the 

influenza virus. Given the wider recognition of factors, such as protecting health 

care and law enforcement personnel, needed to keep society functioning, and 

a greater production capacity, we noted the need for the Department of Health 

and Human Services (HHS) to finalize guidance on how antivirals would be used 

during a pandemic. In December 2008, HHS released guidance incorporating the 

recognition of these and other factors. (GAO-08-671)
30 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

Acquisition 

and Contract 

Management

Reducing Risk in Government Contracting. The federal government spends more 

than $500 billion annually on goods and services, using a variety of contracting 

mechanisms. We identified opportunities for cost savings and reduced risk to 

the government in a series of reports on undefinitized contracts, use of blanket 

purchase agreements where discounts were not sought, and cost-reimbursement 

contracts. As a result of our work, federal acquisition regulations were amended and 

the Office of Federal Procurement Policy and DOD issued new policies to focus on 

opportunities to reduce risk in government contracting. (GAO-10-299, GAO-09-792, 

GAO-09-921)

Tax Law 

Administration

Congress Increased the Statute of Limitations for IRS Audits of Offshore 

Financial Activity. In 2007, we found that the time it took the IRS to complete 

examinations involving U.S. taxpayers with offshore financial activity was significantly 

longer than for other examinations and that additional time was required for these 

examinations because of their technical complexity and challenges associated 

with obtaining information from foreign sources. As a result, IRS examiners may 

prematurely close, or not even open, offshore-related examinations because of the 

3-year statute of limitations. We suggested that the Congress extend the statute of 

limitations for examinations involving offshore financial activity. The Hiring Incentives 

to Restore Employment Act, enacted in March 2010, included provisions from the 

Foreign Account Tax Compliance Act that increase the statute of limitations to 6 

years for offshore examinations. (GAO-07-237)

Program 

Efficiency and 

Effectiveness

Small Business Administration (SBA) Decertifies Companies from Historically 

Underutilized Business Zone (HUBZone) Program. In July 2008, we reported 

on control weaknesses and vulnerabilities in SBA’s application and monitoring 

process for its HUBZone Program that exposed the government to fraud and 

abuse. In March 2009, we also found that fraud and abuse in the HUBZone 

Program extends beyond the Washington, D.C., area. Based on our investigations 

of HUBZone companies in Texas, Alabama, and California, we determined that 

several companies did not meet the program eligibility requirements and referred 

these companies to the SBA Inspector General for further investigation. As a result, 

SBA took action and decertified the companies from the HUBZone Program. 

(GAO-09-440)

Business 

Process and 

Management

OMB Sets Milestones for Implementation of the Infrastructure Needed for 

Use of Personal Identity Verification (PIV) Cards. In February 2008, we reported 

that much work had been accomplished to lay the foundations for implementation 

of Homeland Security Presidential Directive 12 (HSPD-12), but that agencies had 

made limited progress in implementing and using PIV cards. We recommended that 

OMB revise its approach to overseeing implementation of HSPD-12 by establishing 

realistic milestones for full implementation of the infrastructure needed to best use 

the electronic authentication capabilities of PIV cards in agencies. In response, OMB 

issued memorandum M-11-11 setting such milestones. (GAO-08-292)

Source: GAO.

Note: Additional examples of fiscal year 2011 nonfinancial benefits can be found in Part II of this report.
GAO-12-4SP 31

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

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 2011, 80 percent of

the recommendations we made in fiscal year 2007 had been implemented (see fig. 12),

primarily by executive branch agencies. Putting these recommendations into practice

generates tangible benefits for the nation.

Figure 12: Percentage of Past Recommendations Implemented

Four-year implementation rate

Source: GAO.

Actual Target Actual

0

10

20

30

40

50

60

70

80

90

2006 2007 2008 2009 2010 2011 2011

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

The 80 percent implementation rate for fiscal year 2011 met our target for the

year. As figure 13 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 13: Cumulative Implementation Rate for Recommendations Made in Fiscal Year 2007

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

80%

41%

32%

9%
32 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

New Products Containing Recommendations

In fiscal year 2011, about 68 percent of the 592 written products we issued (excluding

testimonies) contained recommendations (see fig. 14). 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 exceeded our target of 60 percent by 8 percentage points.

However, we have set our target again in fiscal year 2012 at 60 percent because we

recognize that our products do not always include recommendations, and 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 14: 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 2011 2011

68%

61% 60%

66% 66% 68% 65%

Focusing on Our Client

To fulfill the Congress’s information needs, we plan to deliver the results of our work orally

as well as in writing at a time agreed upon with our client. Our performance this year

indicates that we assisted the Congress well, by striving to respond to all congressional

requests for testimony and delivering almost all of our products on time based on the

feedback from our clients.

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 2011, experts from our staff testified at 174 congressional hearings covering a wide

range of complex issues. We did not meet our target of 200 hearings at which we testify

(see fig. 15) by 26 hearings. This measure is client driven based on invitations to testify,

and we cannot always anticipate clients’ specific subject area interests. The 174 hearings

at which the Congress asked our executives to testify in fiscal year 2011 covered the scope

of our mission areas. (See fig. 17 for selected topics we testified on by strategic goal in

fiscal year 2011.) Fifty-seven of the hearings at which our senior executives testified were

related to high-risk areas and programs, which are listed on page 39.
GAO-12-4SP 33

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

Figure 15: Testimonies

0

50

100

150

200

250

300

350

2006 2007 2008 2009 2010 2011 2011

Hearings at which GAO testified

Source: GAO.

Actual Target Actual

192 200

174

203

298

276

240

We have reduced our fiscal year 2012 target of testimonies to 180 hearings and believe this

should be a reasonable estimate given recent trends and the Congress’s continuing interest

in financial regulatory reform, natural resources, and the conflicts in Iraq and Afghanistan.

Timeliness

To be useful to the Congress, our products must be available when our clients need them.

In fiscal year 2011, we met our timeliness target of 95 percent. (See fig. 16.) 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

management6 and those expected to reach 500 staff days or more), which represented

about 56 percent of the congressionally requested written products we issued in fiscal year

2011. 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 2011, of the forms returned to us, 98 percent of the congressional staff responding

answered the question on timeliness. Overall, the response rate to our entire form was

25 percent, though we received feedback on 50 percent of the products for which we sent

forms.

We have consistently set a high target for timeliness because it is important for us to

meet congressional needs when they occur. We have reduced our fiscal year 2012 target to

90 percent because of resource constraints that may affect our on-time delivery.

6

 As part of our risk-based engagement management process, we identify a new engagement as high interest if the work we need to perform will

likely require a large investment of our resources, involve a complex methodology, or examine controversial or sensitive issues.
34 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

Figure 16: Timeliness

Percentage of products on time

Source: GAO.

Actual Target Actual

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

0

20

40

60

80

100

2006 2007 2008 2009 2010 2011 2011

Focusing on Our People

Our highly professional, multidisciplinary, and diverse staff were critical to the level of

performance we demonstrated in fiscal year 2011. 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 2011, we met or exceeded six of 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 Table 19 on page 126 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 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. Adjustments to the plan are made throughout the year, if necessary, to reflect

changing needs and conditions. In fiscal year 2011, our original plan was to hire 90 new

staff. Because of the delay in receiving our final appropriations, compounded by a

significantly reduced budget, we adjusted our plan to 56 new staff, but we were only able

to bring on board 47 staff by year-end. Table 3 shows that we did not meet our target of

95 percent of our goal for new hires, achieving an 84 percent new hire rate.

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

Performance

measure

2006

actual

2007

actual

2008

actual

2009

actual

2010

actual

2011

target

2011

actual

People

New hire rate 94% 96% 96% 99% 95% 95% 84%

Source: GAO.
GAO-12-4SP 35

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

 Safety of Medical Devices

 DOD and VA Care Coordination Program

 VA Prevention of Sexual Assaults

 State Oversight of Private Health Insurance Rates

 Potential Overlap and Duplication in Government

Programs

 Incapacitated Adults

 Federal Workers’ Compensation

 Military and Veterans Disability System

 Oversight of DOD Tuition Assistance Program

 Securities Lending in 401(k) Plans

 Pension Benefit Guaranty Corporation Management

 Financial Literacy

 Mortgage Foreclosures Regulatory Oversight

 Oversight of Residential Appraisals

 TARP

 Interior’s Major Management Challenges

 Federal Oil and Gas Restructuring

 Improvements Needed for Safe Drinking Water

 Food and Agriculture Emergency Preparedness

 Airport and Airway Trust Funds

 Traffic and Vehicle Safety

 Use of Recovery Act Transportation Funds

 Unneeded Owned and Leased Federal Facilities

 VA Real Property Realignment

 Needed U.S. Postal Service Legislation

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

Security of the American People

 DHS 10 Years After 9/11

 Electronic Employment Eligibility Verification

 Aviation Security Behavior Detection Program

 Maritime Security U.S. Counterpiracy Action Plan

 Cross-Border Currency Smuggling

 Assessing National Preparedness Capabilities

 Visa Overstay Enforcement

 Combatting Nuclear Smuggling

 Flood Insurance Reform

 Effortsto Address Terrorist Safe Havens

 Antidumping and Countervailing Duties

 Diplomatic Security Training Challenges

 DOD Space Acquisitions

 Missile Defense Transparency and Accountability

 DOD Cost Overruns

 Joint Strike Fighter Program Restructuring

 Coast Guard Deepwater Program

 Army’s Ground Force Modernization

 Littoral Combat Ship Acquisition Strategies

 Contract Oversight of non-U.S. Vendorsin Afghanistan

 Addressing Urgent Warfighter Needs

 Personnel Security Clearance Process

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

Interdependence

 Oversight and Accountability of Federal Grants

 Reducing Improper Payments

 Fiscal Year 2010 U.S. Government Financial Statements

 DOD Financial Management Challenges

 Medicare and Medicaid Fraud, Waste, and Abuse

 Fraud Prevention in Service-Disabled Veteran-Owned

Small Business Program

 Fraud Prevention in SBA’s 8(a) Program

 Tax Delinquent Recovery Act Contractors

 Protecting Federal Information Systems

 Information Technology Investment Oversight

 VA Information Technology

 Federal Information Technology Spending

 Unfunded Mandates Reform Act Requirements

 Budget Enforcement Mechanisms

 2010 Census Lessons Learned

 Value Added Taxes

 Tax System Complexity and Taxpayer Compliance

 GPRA Modernization Act Implementation

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

Source: GAO.

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

Figure 17: Selected Testimony Topics • Fiscal Year 2011
36 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

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 surveys have shown that staff who retire do so for

family, life, or health considerations; whereas nonretirees leave for new opportunities to

work elsewhere, for family reasons, or to make better use of their skills. Table 4 shows that

prior to fiscal years 2009 and 2010, we consistently met the 90 percent target rate for overall

retention (with retirements), and in fiscal years 2009 and 2010 we exceeded that rate by 4

percentage points. In fiscal year 2011, we exceeded this target rate by 2 percentage points

at 92 percent. We also exceeded our target for our retention rate without retirements by 2

percentage points at 96 percent. As with fiscal years 2009 and 2010, we attribute exceeding

the target retention rates to a slow economy, which has caused some staff to delay

retirement and reduced other attrition, such as resignations or transfers to other agencies.

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

actual

2011

target

2011

actual

People

Retention rate

With retirements 90% 90% 90% 94% 94% 90% 92%

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

Source: GAO.

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 is administered to all of our employees once a year. To ensure the

confidentiality of every respondent, we use an outside contractor to administer the survey

and to analyze the responses. 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. (See Part V of this report on pp. 132-134

for additional information about these measures.) This fiscal year, about 70 percent of
GAO-12-4SP 37

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

our employees completed the survey and we exceeded all four targets (see table 5). Our

fiscal year 2011 performance on all of these measures was very consistent with our fiscal

year 2010 results. Our performance on the staff development and leadership measures

was the same as last year, and staff utilization and organizational climate were higher by

1 percentage point. Given our performance on these measures over the last 5 years, we

have decided to retain our fiscal year 2011 targets for fiscal year 2012 (see table 1).

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

actual

2011

target

2011

actual

People

Staff development 76% 76% 77% 79% 79% 76% 79%

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

Effective leadership 

by supervisorsb 79% 79% 81% 83% 83% 80% 83%

Organizational 

climate 73% 74% 77% 79% 79% 75% 80%

Source: GAO.

a

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

b

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.

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 32 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 efforts under goal 4 of our strategic plan to enable quality,

timely service to the Congress and be a leading practices federal agency. The first measure

encompasses 17 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 15 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. While we did not meet our target of 4.0 for each of the

two categories, our score of 3.94 for each shows that staff are largely satisfied with the

services they receive.
38 GAO-12-4SP

GAO Performance and Accountability Report 2011

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

actual

2011

target

2011

actual

Internal operations

Help get job done 4.10 4.05 4.00 4.03 3.94 4.0 N/A

Quality of work life 4.00 3.98 4.01 4.01 3.94 4.0 N/A

Source: GAO.

Note: We will report actual data for fiscal year 2011 once the data from our November 2011 internal operations survey have 

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

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 also used the high-risk designation to draw attention to the need for broadbased 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. 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. Since 1990, GAO has designated over 50 areas as high risk

and subsequently removed over one-third of the areas based on progress made. As of the

end of fiscal year 2011, our high-risk list highlighted 30 areas across government. Table 7

lists each current high-risk area and the year it was added to the list.

In our February 2011 high-risk update (GAO-11-278), we reported that sufficient progress

had been made to remove the high-risk designation from two areas: the DOD Personnel

Security Clearance Program and the 2010 Census. High-level attention by DOD, OMB, and

the Office of the Director of National Intelligence, along with consistent congressional

oversight, led to significant improvements in processing security clearances. For example,

DOD processed 90 percent of all initial clearances in an average of 49 days in fiscal year

2010 and thus met the 60-day statutory timeliness objective. The U.S. Census Bureau,

with active congressional oversight, took steps to address problems we pointed out since

designating the 2010 Census a high-risk area in March 2008. Those steps included efforts

to control costs, better manage operations, strengthen its risk management activities, and

enhance the testing of automated systems.

Our 2011 high-risk area work:

 186 reports

 57 testimonies

 $29.2 billion in financial benefits

 544 nonfinancial benefits
GAO-12-4SP 39

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

Table 7: GAO’s High-Risk List as of September 30, 2011

High-risk area Year 

designated

Strengthening the Foundation for Efficiency and Effectiveness

■ Management of Federal Oil and Gas Resources (new) 2011

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

■ Restructuring the U.S. Postal Service to Achieve Sustainable Financial Viability 2007

■ Funding the Nation’s Surface Transportation System 2008

■ Strategic Human Capital Management 2001

■ Managing Federal Real Property 2003

Transforming DOD Program Management

■ DOD Approach to Business Transformation 2005

■ DOD Business Systems Modernization 1995

■ DOD Support Infrastructure Management 1997

■ DOD Financial Management 1995

■ DOD Supply Chain Management 1990

■ DOD Weapon Systems Acquisition 1990

Ensuring Public Safety and Security

■ Implementing and Transforming the Department of Homeland Security 2003

■ Establishing Effective Mechanisms for Sharing and Managing Terrorism-Related Information to 

Protect the Homeland 2005

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

Infrastructures 1997

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

■ Revamping Federal Oversight of Food Safety 2007

■ Protecting Public Health through Enhanced Oversight of Medical Products 2009

■ Transforming EPA’s Process for Assessing and Controlling Toxic Chemicals 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 Laws 1990

■ IRS Business Systems Modernization 1995

Modernizing and Safeguarding Insurance and Benefit Programs

■ Improving and Modernizing Federal Disability Programs 2003

■ Pension Benefit Guaranty Corporation Insurance Programs 2003

■ Medicare Program 1990

■ Medicaid Program 2003

■ National Flood Insurance Program 2006

Source: GAO.
40 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

Also in our February 2011 high-risk update, we designated one new high-risk area—

Management of Federal Oil and Gas Resources. The Department of the Interior (Interior) does

not have reasonable assurance that it is collecting its share of billions of dollars of revenue

from oil and gas produced on federal lands and it continues to experience problems in hiring,

training, and retaining sufficient staff to provide oversight and management of oil and gas

operations on federal lands and waters. Further, Interior recently began restructuring its oil

and gas program, which is inherently challenging, and there are many open questions about

whether Interior has the capacity to undertake this reorganization while carrying out its

range of responsibilities, especially in a constrained resource environment.

Several high-risk areas likely require legislative action in addition to executive branch action

to effectively address the area. For example, for the high-risk area “Transforming EPA’s

Process for Assessing and Controlling Toxic Chemicals,” we have recommended statutory

changes to provide the Environmental Protection Agency (EPA) with additional authorities

to obtain health and safety information from the chemical industry and to shift more of

the burden to chemical companies for demonstrating the safety of their chemicals. More

information on statutory changes recommended can be found in the “What Remains to be

Done” section for the relevant high-risk area in the report (http://www.gao.gov/highrisk).

In fiscal year 2011, we issued 186 reports and delivered 57 testimonies to the Congress

related to our high-risk work. We documented $29.2 billion in financial benefits and 544

nonfinancial benefits related to high-risk areas. These results are based on reviews spanning

the high-risk areas. The area with the largest amount of financial benefits was DOD Weapon

Systems Acquisition, and the largest number of nonfinancial benefits was in Protecting the

Federal Government’s Information Systems and the Nation’s Cyber Critical Infrastructures.

Our next biennial high-risk update is planned for January 2013. More information on the highrisk series is available on our website at http://www.gao.gov/highrisk.

Duplication Mandate

In 2010, a new statutory requirement—the Duplication Mandate—called for GAO to

identify federal programs, agencies, offices, and initiatives—either within departments

or governmentwide—that have duplicative goals or activities and report annually to the

Congress on our findings, as well as actions to reduce such duplication.7

In March 2011 we issued our first annual report (GAO-11-318SP), which identified 34 areas

either where agencies, offices, or initiatives have similar or overlapping objectives or

provide similar services to the same populations, or where government missions are

fragmented across multiple agencies or programs. For example, 82 programs designed

to help improve teacher quality are administered across 10 federal agencies. At least 31

entities within the DOD provide items urgently needed to U.S. warfighters at a cost of

over $76 billion since 2005. Overlap and fragmentation can be indicators of unnecessary

duplication, which can waste scarce federal resources, negatively impact key federal

technology and other efforts, and result in less effective and efficient services for

the American public. However, we also noted that some degree of duplication may be

necessary given the nature or magnitude of the federal effort, as in the case of national

security and defense. In light of the nation’s fiscal pressures, we also identified 47 other

areas where the federal government may be able to achieve cost savings or revenue

7

 Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note.
GAO-12-4SP 41

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

enhancement. Many of these exist within single departments or agencies, such as multiple

opportunities within the Internal Revenue Service to improve tax compliance. We further

identified several potentially significant governmentwide cost-saving opportunities, such

as promoting competition for the more than $500 billion in federal contracts and applying

strategic sourcing best practices throughout the federal procurement system.

In many areas, we suggested actions—outlining some new options, as well as underscoring

numerous existing GAO recommendations—that policymakers could take to reduce or

eliminate unnecessary duplication, overlap, and fragmentation or achieve other potential

financial benefits. A number of these actions can be addressed by agency officials, such

as closing collaboration and information sharing gaps and pursuing more comprehensive

and strategic approaches to managing and overseeing broad-based efforts. Others may

require executive branch or enhanced congressional oversight or legislative action,

particularly where fragmentation or overlap may be partially due to the legislative creation

of separate programs under the jurisdiction of several different agencies, as in the case

of some federal homeless programs; where fragmentation and overlap challenges have

been long-standing, as they have been in the federal approach to surface transportation.

We identified areas where additional information, including the implementation costs

associated with potential options, such as program consolidations or terminations, could

help identify the optimal course of action.

Streamlining federal efforts, reducing government costs, and enhancing revenue collections

can offer near-term financial and other benefits, as well as help set the government on

a more sustainable, long-term fiscal path. Depending on the nature and extent of actions

taken, these actions could collectively result in tens of billions of dollars in annual savings.

Actions in some areas alone could produce significant savings. For example, we estimated

that addressing potentially duplicative policies designed to boost domestic ethanol production

could reduce federal revenue losses by up to $5.7 billion annually. Estimating financial

benefits was not always possible. In some cases necessary information was not readily

available, and in other cases, the benefits that may result from reducing or eliminating

duplication, such as better law enforcement or coordination, can be difficult to monetize.

Nevertheless, given the amount of program dollars involved in the issues we identified, even

limited adjustments to the federal approach could result in significant savings.

The 81 areas identified in our report were drawn from our prior and ongoing audit work

and cover a wide range of government missions, federal agencies, and federal programs.

Combined with areas that will be covered in our reports for fiscal years 2012 and 2013, our

work, which leverages the diverse skills of interdisciplinary teams throughout the agency,

will provide policymakers with a systematic and practical examination of potentially

significant instances of duplication governmentwide.

In addition to testifying over 30 times before the Congress on our first annual report

findings and on specific issues highlighted in the report, we addressed issues of

duplication, overlap, and fragmentation in our routine audit work during fiscal year 2011.

For example, we testified on opportunities to reduce duplication both in federal teacher

quality programs (GAO-11-510T) and in small business programs (GAO-11-558T) and on

examining the extent of overlap and fragmentation in the federal government’s economic

development efforts (GAO-11-872T). We continue to monitor executive, legislative, and

agency developments in the areas identified in our March 2011 report and will provide

periodic updates on those developments to the Congress.
42 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

Dodd-Frank Wall Street Reform and Consumer Protection Act 

of 2010

The Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act on July

21, 2010, to address regulatory gaps and oversight failures in the U.S. mortgage, securities,

and financial markets. The act requires significant rule making by regulatory agencies and

requires us to conduct over 40 studies on a broad array of issues and, for a third of these

studies, to report our findings within a year of the act’s passage. As a result, in fiscal year

2011, we issued 17 products on issues such as mortgages, securities markets, financial

institutions, and consumer protection, making 15 recommendations to various financial

regulators.

We studied several issues related to mortgages, including appraisals and the effect of

the act’s requirements on the mortgage market. We recommended that federal banking

regulators, the Federal Housing Finance Agency, and the Bureau of Consumer Financial

Protection consider addressing several key areas related to appraisers, including selection

criteria, as part of joint rulemaking under the act to establish minimum standards for

states to apply in registering appraisal management companies (GAO-11-653). We also

studied the potential impact on the mortgage market of the act’s criteria for lower-risk

mortgages, credit risk retention requirement, and provisions concerning homeownership

counseling and regulation of high-cost loans (GAO-11-656).

With regard to securities markets, we studied the risks and regulation of proprietary

trading by banking entities and recommended that regulators collect and review more

comprehensive information on the nature and volume of activities potentially covered by

the act (GAO-11-529). In our work on the movement of former Securities and Exchange

(SEC) employees to regulated firms, we recommended that SEC establish standards for

documentation of ethics advice issues associated with the movement of employees

between SEC and other employers (GAO-11-654). We explored other issues as well,

including the role of the Governmental Accounting Standards Board in the municipal

securities market (GAO-11-267R); the liability of parties who assisted, aided, and abetted

fraud in securities transactions (GAO-11-664); and the feasibility of a self-regulatory

organization to oversee private fund advisers (GAO-11-623).

Regarding issues related specifically to financial institutions, we evaluated the

implementation of the prompt corrective action framework for troubled institutions

and recommended that bank regulators consider additional triggers and other actions

to improve prompt corrective action (GAO-11-612). In our audit of the Federal Reserve

System’s emergency program activities, we made seven recommendations to strengthen

the Federal Reserve System’s policies and processes for managing future emergency

programs (GAO-11-696). We also studied bankruptcy and orderly liquidation processes for

financial companies and international coordination related to the bankruptcy of these

companies (GAO-11-707).

Our studies on consumer protection issues first looked at oversight issues related to financial

planners. We made recommendations to SEC and the National Association of Insurance

Commissioners related to consumers’ understanding of the titles and designations financial

planners use and the standard of care that applies to them (GAO-11-235). We studied the

regulatory requirements for mutual fund advertisements and the advertisements’ impact on

investors and recommended that regulators communicate better to the industry any changes
GAO-12-4SP 43

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

in rule interpretations affecting fund advertising (GAO-11-697). In addition, we assessed

regulatory approaches for person-to-person lending (GAO-11-613) and reviewed evaluations of

methods and strategies for improving financial literacy (GAO-11-614).

The Troubled Asset Relief Program

The 2008 Emergency Economic Stabilization Act (EESA) that created the Troubled Asset

Relief Program (TARP) originally authorized the Department of the Treasury (Treasury) to

purchase or guarantee up to $700 billion in troubled assets and to mitigate foreclosures. The

$700 billion ceiling was never reached, and in July 2010 the Dodd-Frank Wall Street Reform

and Consumer Protection Act reduced the amount to $475 billion. EESA provided us with an

oversight role with broad monitoring and reporting responsibilities, including a requirement

to submit a report on our work at least every 60 days. While TARP programs that provide

mortgage assistance remain ongoing, other TARP programs continue to wind down as Treasury

manages and sells assets purchased to address the financial crisis that began in 2007.

In fiscal year 2011, we issued 13 products with 16 recommendations. We reported on the

status of TARP programs and related ongoing challenges; the management infrastructure

for TARP programs; and the status of our recommendations to Treasury. For example, we

analyzed the process Treasury used under the Capital Purchase Program to provide capital

to banks during the financial crisis (GAO-11-47) and monitored the financial condition of

American International Group, Inc. and the status of Treasury’s investment (GAO-11-46 and

GAO-11-716). We also reviewed the continuing implementation of Making Home Affordable

foreclosure mitigation programs (GAO-11-288 and GAO-11-367R). In addition, we completed

our annual financial statement audit for Treasury’s Office of Financial Stability—the entity

established to implement TARP (GAO-11-174 and GAO-11-434R).

Our recommendations generally followed two themes: (1) helping to ensure that Treasury is

managing TARP programs effectively and (2) monitoring the use of funds to meet the EESA’s

objectives. Specifically, we recommended that Treasury finalize a staffing plan to help ensure

that its programs are well managed as TARP winds down, given that term appointments

continue to expire for staff hired when TARP was first established. We also recommended

a number of improvements to the foreclosure mitigation programs, such as capturing

better information on program outcomes. In addition, our financial audit recommended

improvements to internal controls over financial and accounting reporting processes.

The American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009 (Recovery Act) mandated several

studies for GAO, including conducting bimonthly reviews on the uses of and accountability

for Recovery Act funds in selected states and localities and commenting on the estimates

of jobs created or retained as reported by recipients of Recovery Act funds. In fiscal year

2011, the focus of our bimonthly reviews shifted from our prior work reporting on the uses

of funds across a wide range of programs by the selected states and the District of Columbia

to providing enhanced analysis of selected programs in states and localities, with each

bimonthly review highlighting a single Recovery Act program. With this approach, we have

provided the Congress and other decision makers with more in-depth analyses of programs

and their results.
44 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

To respond to the mandate to comment on jobs created or retained, we have commented

each quarter on the required Recovery Act reports of nonfederal recipients of Recovery

Act funds, including grants, contracts, and loans. These recipient reports included 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 2011, this work focused on recipient reporting related

to the specific programs reviewed, and included work addressing steps that states and

localities took to ensure the quality of the data they submitted. We also reviewed steps

that federal agencies took after recipients reported to ensure that their recipients’ data

were of high quality and that those required to report did so.

In fiscal year 2011, we issued five reports fulfilling these two ongoing mandates—on

Recovery Act funding for Head Start (GAO-11-166), Energy Efficiency and Conservation Block

Grants (GAO-11-379), transportation and water infrastructure projects (GAO-11-600 and

GAO-11-608), and education programs (GAO-11-804). In addition to fulfilling our bimonthly

and recipient reporting mandates, our fiscal year 2011 Recovery Act-related reports have

covered a wide spectrum of program and policy areas, including

■ efforts to award Recovery Act broadband funds and risks in providing oversight of

funded projects (GAO-11-371T),

■ steps that the Federal Emergency Management Agency could take to protect sensitive

Recovery Act port security grant details (GAO-11-88),

■ ways to improve the responsiveness of federal Medicaid assistance to states during

economic downturns (GAO-11-395),

■ ways that the Department of Justice could improve the assessment of Justice Assistance

Grants’ impact (GAO-11-87);

■ knowledge of past recessions and how it can inform future federal fiscal assistance to

state and local governments (GAO-11-401),

■ an assessment of grant award procedures for the Recovery Act’s Transportation

Investment Generating Economic Recovery grants (GAO-11-234),

■ states’ access to and use of the increased Federal Medicaid Assistance Percentage funds

and states’ plans to sustain their Medicaid programs once these funds are no longer

available (GAO-11-58), and

■ known federal tax debt owed by Recovery Act contract and grant recipients (GAO-11-485

and GAO-11-686T).

Agencies have implemented more than half of the 68 recommendations we have made

since our first report was issued in April 2009, including providing additional guidance for

fulfilling reporting requirements, improving the monitoring of recipients and subrecipients

of Recovery Act funds, clarifying approaches states can take to recover administrative

costs associated with the wide range of activities to comply with the Recovery Act, and

developing procedures to measure impact.

We also have made a number of suggestions to states and localities for improvements

in their use of Recovery Act funds. Our presence in the selected states and localities

heightened the level of vigilance, including influencing officials to make real-time
GAO-12-4SP 45

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

improvements to head off problems before they could occur. For example, Massachusetts

officials commented that the regular meetings with the GAO team members helped them

clarify their policies for managing recipient reporting, and the regular reports helped state

officials reinforce the message of appropriate oversight and control. In Ohio, in response to

our findings on institutions of higher education’s use of the State Fiscal Stabilization Fund,

the Board of Regents improved its monitoring plan; it now requires institutions to identify

cumulative program revenues and expenditures and attest that funds were used only for

allowable expenditures. Moving forward, our capacity to continue this work has been

enhanced by the strong and productive working relationships established with state and

local government leaders.

We continue to maintain a separate page on our external website devoted to our Recovery

Act work. In one place (http://www.gao.gov/recovery), the public can find information on

the Recovery Act, see biweekly updates on Recovery Act outlays, access our bimonthly

reviews on the use of funds, view related podcasts, use an interactive map to access reports

on each of the selected states and the District of Columbia, learn about other mandates and

related work, and 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, which reflects considerable

legal input, the Congress and the public also benefited from the legal products and

activities undertaken by our Office of General Counsel in fiscal year 2011. The following

exemplify some of our key contributions.

We redesigned GAO’s Legal Decisions & Bid Protest web pages in response to comments

and questions received from the public and to conform with our reconfigured Internet site.

These newly streamlined pages are accessible at http://www.gao.gov/legal/index.html. The

user-friendly format, additional content, and enhanced search capabilities help to ensure

that our legal products are easily accessible to the public and the Congress.

The Procurement Law Division within the Office of General Counsel handled more

than 2,300 bid protests during the course of fiscal year 2011.8 Bid protests have been

increasing in part because of our expanded jurisdiction over task orders, A-76 protests,

and Transportation Security Administration protests. 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 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 2011, we issued more than 400 decisions on the merits,

which addressed a wide range of issues involving compliance with, and the interpretation

of, procurement statutes and regulations. Certain of these protests involved significant

government programs and received extensive media coverage. For example, we

■ denied U.S. Aerospace’s protest of an Air Force decision to reject as late the protester’s

proposal for the closely watched KC-X tanker modernization program, valued at

approximately $40 billion;

8

 In comparison, nearly 2,300 bid protests were filed in fiscal year 2010 and 1,989 in fiscal year 2009.
46 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

■ denied a protest challenging the award of a contract valued in excess of $3 billion by

DOD’s TRICARE Management Activity to provide dental health care insurance for family

members of military personnel;

■ sustained challenges from three offerors to the General Services Administration’s (GSA)

decision to award a 15-year lease for office space for the Department of Health and

Human Services—GSA’s lease prospectus estimated the value of this lease at approximately

$30 million per year; and

■ sustained a challenge to the award by the U.S. Army Corps of Engineers (USACE) of a

$675 million design-build contract for permanent canal closures and pumps being built

as part of the hurricane protection program in New Orleans. In addition to a conflict of

interest issue, the decision concluded that the USACE had failed to determine whether

the awardee’s construction approach would meet the solicitation’s requirements for

withstanding lateral loads.

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

from contracting officer decisions with respect to any contract entered into by a legislative

branch agency. In addition to using alternative dispute resolution procedures to resolve

contract disputes, the Board conducted two hearings and published three decisions in fiscal

year 2011, which appear on our website. As of the end of the fiscal year, 21 appeals were

pending on the board’s docket.

In addition to our bid protest decisions, we also issued a congressionally mandated analysis

of “aiding and abetting” liability for securities fraud violations9 and a comprehensive

identification of statutory exemptions from federal safety rules for motor carriers.10 In fiscal

year 2011, we published 21 appropriations decisions, opinions, and letters on such issues

as the U.S. government’s sovereign immunity, the Antideficiency Act, and violations of the

Miscellaneous Receipts statute. We issued two letters and an opinion affirming the U.S.

government’s constitutional sovereign immunity from local and state taxation absent an

express waiver in statute. The letters addressed a Washington, D.C. tax on stormwater, and

the opinion addressed a California tax on e-waste.11 We subsequently assisted the Congress in

drafting legislation to provide an express waiver of sovereign immunity on stormwater taxes,

which was enacted into law on January 4, 2011.

We issued a number of opinions to congressional committees, including two opinions

determining that agencies had violated the Miscellaneous Receipts statute. One opinion

found that the Bureau of Land Management violated the statute when it sold land and used

the proceeds without authority to augment its appropriation for the purchase of land.12

The other opinion found that the U.S. Army violated the statute when it directed cash

rent payments into an escrow account instead of a special account in the U.S. Treasury as

provided by law.13 We noted that both agencies should adjust their accounts in accordance

with the opinions and report Antideficiency Act violations if unable to do so.

9

 B-321063/GAO-11-664, July 21, 2011.

10 B-321295, January 31, 2011. 11 B-318274, December 23, 2010. 12 B-320998, May 4, 2011.

13 B-321387, March 30, 2011
GAO-12-4SP 47

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

The third edition of Principles of Federal Appropriations Law, commonly known as the Red

Book, continued to be the primary resource for appropriations law guidance in the federal

financial community. In fiscal year 2011, the Red Book averaged 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 accessed 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 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. We held 22 classes and

had participation from staff at nine agencies as well as a number of congressional staff. In

addition, appropriations lawyers taught several 1-day seminars on specialized appropriations

law topics for eight agencies, including the Executive Office of the President, and spoke

on our appropriations law work at conferences and training hosted by three agencies. To

enhance communication within the appropriations law community across all agencies and

within the three branches of government, we hosted our seventh annual appropriations law

forum in March 2011. Attorneys from more than 86 agency counsel offices as well as offices of

inspectors general participated in an analysis of significant decisions and opinions from 2010

and interactive sessions on budget scoring, the appropriations legislative process and the

obligational consequences of incremental funding.

In March and April during the pendency of a possible government shutdown, attorneys

from our General Counsel’s Office assisted congressional committees (including the House

and Senate Appropriations Committees), the Chief Administrative Officer of the House, the

Secretary of the Senate, and numerous federal agencies by fielding hundreds of inquiries

on funding gaps and interpretations of the Antideficiency Act based on appropriations case

law. Questions were wide-ranging on implications for various government operations in the

event that the Congress and the President failed to enact appropriations.

For fiscal year 2011, we received 22 Antideficiency Act reports for our repository and

made selected information from these reports publicly available on our website. Since the

Congress amended the Antideficiency Act in December 2004 requiring agencies to send

us a copy of reports of Antideficiency Act violations, we have received 141 reports and

maintain an official repository of Antideficiency Act reports.

We continued to report under the Congressional Review Act (CRA) on major rules proposed

by federal agencies to the standing committees of jurisdiction of both Houses of the

Congress. For fiscal year 2011, we issued 79 reports. To improve compliance with CRA,

we tracked executive branch rules that were published in the Federal Register and crosschecked to ensure that they were submitted to us. We also outreached to OMB and the

relevant agencies to assist them in meeting the CRA requirement that rules be submitted

to us. Following this outreach, the number of rules not received by us has declined

significantly over the last 2 fiscal years.

The General Counsel’s Legal Services group worked closely with GAO management and union

representatives in preparation for an upcoming election to determine if the GAO Employees

Organization, International Federation of Professional and Technical Engineers (IFPTE)

should be the exclusive bargaining representative for particular Administrative Professional
48 GAO-12-4SP

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis 

and Support Staff (APSS) employees. Legal Services worked closely with GAO management

and IFPTE representatives to determine which employees should be included in the APSS

proposed bargaining unit and eligible to vote on the issue of representation. Legal Services

also reviewed for legal sufficiency our first master collective bargaining agreement for those

analyst employees who are represented by IFPTE, Local 1921. The group was also involved in

the analysis of a range of labor relations issues during the course of the year.

Managing Our Resources

Resources Used to Achieve Our Fiscal Year 2011 Performance Goals

Our financial statements for the fiscal year ending September 30, 2011, were audited by an

independent auditor, Clifton Gunderson, LLP, and received an unqualified opinion. The auditor

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, the auditor 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 101 in this report.14 Table 8 summarizes key data.

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

Fiscal year 2011 Fiscal year 2010

Total budgetary resourcesa $591.5 $613.0

Total outlaysa $569.7 $593.8

Net cost of operations

Goal 1: Well-being/financial security of the 

American people $245.0 $213.1

Goal 2: Changing security threats/challenges 

of global interdependence 147.3 171.6

Goal 3: Transform the federal government to 

address national challenges 164.2 195.4

Goal 4: Maximizing the value of GAO 20.1 29.4

Less reimbursable services not attributable to 

goals (7.1) (6.6)

Total net cost of operationsa $569.5 $602.9

Actual full-time equivalents (FTEs) 3,212 3,347

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.

14Note 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.
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GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

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 2011, our budgetary resources included new direct appropriations of

$546.3 million (net of an approximate $1 million rescission)—a reduction of $10.5 million

from the fiscal year 2010 level. We also received reimbursements from the lease of space

in our Washington, D.C. headquarters building, audits of agency financial statements, and

support activities related to monitoring the implementation of TARP, including bimonthly

reporting and conducting an annual audit of the Office of Financial Stability’s financial

statements on TARP. In fiscal year 2010, in addition to our appropriation and earned

reimbursements, our resources included $20.8 million to cover program reviews required by

the Recovery Act.

Our total assets were $125 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 net property and equipment balance

increased $3.9 million in fiscal year 2011 to $36.7 million. Capital asset acquisitions include

replacement of the headquarters building steam heating system with a more energy

efficient natural gas system as well as necessary information systems data storage capacity

hardware. Total liabilities of $108 million were composed largely of employees’ accrued

annual leave, employees’ salaries and benefits, amounts owed to other government

agencies, and nongovernmental accounts payable.

Overall, our net cost of operations in fiscal year 2011 is approximately $33 million below

the fiscal year 2010 level largely because of expiration of fiscal year 2010 funding for our

work under the Recovery Act and a reduced current year appropriation. In fiscal year 2011,

the Executive Committee made resource decisions in accordance with our strategic plan

and budgetary constraints and reallocated resources between some areas of work and

reduced work in other areas. Goal 1 (Well-being and Financial Security of the American

People) increased to reflect the reallocation of resources from goal 3 (Transform the

Federal Government to Address National Challenges) because of the expiration of fiscal

year 2010 Recovery Act funds and a reduction in the level of TARP work from goal 2

(Changing Security Threats). Goal 1 also increased to reflect the realignment of resources

from goal 2 to goal 1, consistent with our strategic plan issued in late fiscal year 2010.

Goal 4 (Maximizing the Value of GAO) resources for both contracts and staff time declined

because of budget constraints.
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Management’s Discussion and Analysis 

Figure 18 shows how our fiscal year 2011 costs break down by category.

Figure 18: Use of Fiscal Year 2011 Funds by Category

Percentage of total net costs

Building and

hardware maintenance

services

Salaries

and benefits

10.6%

82.0%

Rent (space

and hardware) 2.2%

Depreciation

Other 3.4%

1.8%

Source: GAO.

Figure 19 shows our net costs by goal for fiscal year 2007 through fiscal year 2011.

Figure 19: Net Cost by Goal

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 213.1 171.6 195.4 29.4

2011 245.0 147.3 164.2 20.1

Dollars in millions

Source: GAO.

0

50

100

150

200

250

Goal 1 Goal 2 Goal 3 Goal 4

Note: Totals are not adjusted for inflation

Summary of Financial Systems Strategies and Financial Management System 

Framework

Our financial management system processing is performed by 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
GAO-12-4SP 51

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

PRISM, a contract and procurement system; U.S. Bank’s purchase card system for small

purchases; Northrop Grumman’s GovTrip system for travel; and Kofax’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 versions; therefore, our systems remain current.

Additionally, these systems ensure that we can produce timely, useful, and reliable

financial information and strengthen internal controls.

Going forward, we are planning to complete implementation of a new workforce planning

system during fiscal year 2012. A Pentaho database forms the basis of this project. In fiscal

year 2011, we “stood up” the project’s phase 1, which has the 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 No. A-123, Management’s Responsibility for 

Internal Control, which provides guidance for agencies’ assessments of internal control

over financial reporting. We performed a risk-based 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, 2011, 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, 2011. We made this assessment based on criteria established under FFMIA

and guidance issued by OMB.

The Improper Payments Elimination and Recovery Act of 2010 requires that agencies

(1) periodically review activities susceptible to significant improper payments; (2) estimate

the amount of improper payments; (3) implement a plan to reduce improper payments;
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Management’s Discussion and Analysis 

and (4) report the estimated amount of improper payments and the progress to reduce

them. We have implemented and maintained internal control procedures that help monitor

disbursement of federal funds for valid obligations. These controls are tested annually. Based

on the results of our tests, we made no improper payments in fiscal year 2011.

Our Inspector General (IG) also conducts audits and investigations that are internally

focused. During fiscal year 2011, the IG evaluated the effectiveness of our policy and

procedures for preventing and detecting travel charge card misuse and reviewed our

information security program. In addition, the IG operates an internal hotline for use by our

employees and contractors to report potential fraud, waste, and abuse of our government

property, assets, and resources and other potentially serious problems in our operations,

including the possible violation of any law or regulation. The results of the IG’s work and

actions taken by us to address IG recommendations are highlighted in the IG’s semiannual

reports to the Congress. (See for example OIG-11-4.)

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:

■ Judith H. O’Dell (Chair), CPA CVA, President of O’Dell Valuation Consulting LLC, Chair

of the Financial Accounting Standards Board’s Private Company 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 100.

Limitation on Financial Statements

Responsibility for the integrity and objectivity of the financial information presented in the

financial statements in this report rests with our managers. The statements were prepared

to report our financial position and results of operations, consistent with the requirements

of the Chief Financial Officers Act, as amended (31 U.S.C. 3515). The statements were

prepared from our financial records in accordance with the formats prescribed in OMB

Circular No. A-136, Financial Reporting Requirements. These financial statements differ

from the financial reports used to monitor and control our budgetary resources. However,

both were prepared from the same financial records.

Our financial statements should be read with the understanding that as an agency of a

sovereign entity, the U.S. government, we cannot liquidate our liabilities (i.e., pay our bills)

without legislation that provides resources to do so. Although future appropriations to fund

these liabilities are likely and anticipated, they are not certain.
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GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

Planned Resources to Achieve Our Fiscal Year 2012 Performance Goals

As with the rest of the federal government, we are operating under a continuing resolution

appropriation at funding levels slightly below the fiscal year 2011 level, pending enactment

of the final fiscal year 2012 appropriations. Although final congressional action on our

fiscal year 2012 request of $556.8 million is still pending, indications are that we will be

operating below our fiscal year 2011 appropriation level, which was 1.9 percent below

our fiscal year 2010 budget. On July 22, 2011, the House Committee on Appropriations

approved direct appropriations of $511.3 million, a reduction of 6.4 percent from our

fiscal year 2011 appropriation level. On September 15, 2011, the Senate Committee on

Appropriations approved $504.5 million, a reduction of 7.6 percent from our fiscal year 2011

appropriation level. Both the House and Senate Committees on Appropriations emphasized

that the legislative branch will lead by example by tightening its belt wherever possible,

employing best practices, finding efficiencies, and improving business practices.

Given the likelihood of reduced funding in fiscal year 2012, we built on our previous cost

cutting efforts, which have included significantly reduced hiring and audit-related travel

since fiscal year 2010, and reexamined our budget, line by line, pinpointing potential

savings across the agency and opportunities to further minimize administrative costs.

As part of this effort, we completed a comprehensive assessment of our field office

structure and reassessed spending at our headquarters office. Using this information, we

are targeting reductions of about $45 million from our fiscal year 2012 budget request.

These planned cuts will touch on operations across the agency. Our staff head count

will fall below 3,000 for the first time in the agency’s modern history (a reduction of

375 people since fiscal year 2010), and critical information technology and infrastructure

improvements will be deferred or canceled. While these reductions will be significant

and wide ranging, and diminish our current heavy reporting volume, they have been

crafted to ensure that our reputation for producing high-quality reports will not suffer.

Importantly, we are coupling our spending reductions with ongoing and planned efficiency

improvements in areas such as streamlining our engagement processes and identifying

further reductions to our long-term operations costs. Together, our spending reductions

and efficiency improvements will help ensure that we maintain the capacity to assist the

Congress in priority areas during a difficult budget time, and position the agency to meet

the performance goals as outlined in our strategic plan through fiscal year 2015.

Strategic and Annual Work Planning

As noted in our current strategic plan, in the current dynamic, fiscally constrained

environment, the challenges we face cross national borders; the public, private, and

nonprofit sectors; and levels of government. Achieving our strategic goals and objectives

requires us to coordinate and collaborate with international and intergovernmental

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.
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Management’s Discussion and Analysis 

Advisory boards and panels help us to identify key trends, opportunities and challenges,

and lessons learned that we should factor into our work and operations. During fiscal

year 2011, following the swearing in of a permanent Comptroller General, we began a

comprehensive reexamination of the membership and charters of the Comptroller General’s

Advisory Board (CGAB), the Domestic Working Group (DWG), the Educator’s Advisory

Panel (EAP), and the Accountability Advisory Council. We also organized meetings of the

CGAB, the DWG, and the EAP. At its September 2011 meeting, the CGAB comprising of

distinguished individuals with experience in the public, private, and nonprofit sectors,

shared their views on our nation’s fiscal sustainability, our technology assessments, and

our key initiatives, including our high-risk, financial reform, and duplication and overlap

work. The November 2010 meeting of the DWG, comprising 19 inspectors general, state

auditors, and local auditors, provided us a better understanding of their fiscal sustainability

challenges and other issues at the federal, state and local levels. The July 2011 meeting

of the EAP, comprising deans of leading academic institutions, identified emerging public

policy and human capital issues and provided ideas on diversity inclusion and recruiting,

emerging talent and learning needs, and partnership opportunities.

To improve planning and performance, we shared information and expertise as host of an

annual meeting with senior representatives from our sister legislative branch agencies—the

Congressional Research Service and the Congressional Budget Office. Held in June 2011,

the agenda included discussions on concrete ways to streamline and improve operations,

modernize information delivery to the Congress, expand use of social media, explore

collaboration on database subscriptions and training, and ensure proper handling of

sensitive information. After the highly productive meeting, the sister agencies have agreed

to meet more frequently.

Networks, Collaborations, and Partnerships

Unlike the national audit offices of some countries, we have no direct audit responsibility

over states and localities. As a result, we face unique challenges in “following the federal

dollar” and ensuring accountability for grants and other federal funds flowing out to

subfederal recipients. We also have an important role of coordinating professional audit

standards, setting audit standards for federally funded programs, and representing U.S.

views and interests in the international community. The State Department and the U.S.

Agency for International Development look to us to represent the broader interests of the

U.S. Government in promoting good governance internationally and often seek our support

of educational visits by leaders from foreign countries. Domestic audit and accountability

offices look to us for guidance, expertise, and technical assistance in implementing

professional standards.

We have leveraged our resources by collaborating with our domestic and global networks.

Through these networks, such as the federal inspectors general and state and local

auditors groups, notably the National Association of State Auditors, Controllers, and

Treasurers and Association of Local Government Auditors, we have continued to build

capacity within our agency and among our partners to do quality work auditing programs

involving U.S. funds.
GAO-12-4SP 55

GAO Performance and Accountability Report 2011

Management’s Discussion and Analysis

Intergovernmental Audit Forums

On the domestic front, we organized the National Intergovernmental Audit Forum meeting

of federal, state, and local auditors in the fall of 2010. State and local officials briefed

their federal counterparts on their responses to fiscal challenges as well as their efforts

to assure adequate oversight of federal funds expended under the Recovery Act. We also

convened our annual coordination meeting with the Council of Inspectors General for

Integrity and Efficiency (CIGIE), the umbrella organization for the almost 80 inspectors

general in the federal departments and agencies. At the meeting, we shared our high-risk

report and work relating to improper payments and the Recovery Act. We have also begun

discussions with the Council to explore potential partnership opportunities in delivering

training to auditors and analysts.

We organized 12 meetings of the various regional Intergovernmental Audit Forums to

discuss such topics as the 2011 update of the Yellow Book, which sets standards for

auditing federally funded programs, as well as promote dialogue regarding common issues,

opportunities, and challenges.

INTOSAI

For over three decades, we have been a member of the International Organization of

Supreme Audit Institutions (INTOSAI), an association of 190 national audit offices that are

our counterparts. This network has positioned us well to address a more interdependent

world where domestic challenges (e.g., regulation of financial markets, drugs, consumer

products, homeland security, and rebuilding our infrastructure) have global dimensions. In

November 2010, we participated in the triennial INTOSAI congress in Johannesburg, South

Africa, along with more than 550 attendees from 152 national audit offices. Chief among the

congress’s accomplishments were the adoption of voluntary international auditing standards

for supreme audit institutions, an important accountability resource, especially in developing

and emerging countries. Through our active participation in the Professional Standards

Committee and subcommittees, we stayed abreast of changes in international accounting,

auditing, and reporting standards and shared the U.S. perspective in shaping the standards,

given the consensus building that the world is rapidly moving toward adopting international

accounting and auditing standards. Delegates also approved an update to the INTOSAI

strategic plan, the development of which was led by the Comptroller General.

In participating in INTOSAI knowledge-sharing working groups (e.g., Public Debt,

Information Technology, Environmental Auditing, Program Evaluation, Fight Against

International Money Laundering and Corruption, Value of SAIs, and Key National Indicators)

and task forces, we acquire knowledge and network with experts in other countries. For

example, our participation in the Public Debt Working Group and our leadership of the Task

Force on the Global Financial Crisis: Challenges to Supreme Audit Institutions involves some

25 countries and has provided us current information on global events and multiple facets

of the financial crisis. We presented a status report of the task force’s preliminary findings

at the 20th INTOSAI Congress in November 2010. The task force has also issued its first two

preliminary reports—on causes of the crisis and implications for SAIs, and on the effects of

government actions taken in response to the crisis. We also participated in a joint United

Nations-INTOSAI symposium where we explained how citizens and the public can help

enhance the audit process and strengthen accountability. The symposium was attended by

140 representatives of SAIs and international organizations.
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Management’s Discussion and Analysis 

Capacity Building

In support of the Federal government’s interest in promoting good governance and ensuring

that federally funded programs abroad are effectively and efficiently used, we continued to

advance INTOSAI-Donor Cooperation and Capacity Building.

We played a significant role in continuing to move the 2009 international memorandum

of understanding with INTOSAI forward in 2011, participating in two steering committee

meetings and helping to focus the agenda and the dialogue on the most critical issues.

INTOSAI and the donors approved a first-ever global SAI stocktaking report in November

2010. It found that many SAIs in developing countries fall short of being able to perform

the full range of their responsibilities. The report has led to matching donors to relevant

SAI capacity building projects, which represent some of the first funding streams under

this initiative. At the July 2011 steering committee meeting, work was launched to develop

a databank on SAI Support and create a pooled funding mechanism. Both represent

significant steps towards strengthening developing country SAIs.

In fiscal year 2011, 20 participants from 17 countries completed our 4-month International

Auditor Fellowship Program for mid- to senior-level staff from other countries. Demand for

the program has continued to increase, with participation levels up by 18 percent compared

with the average of the previous 10 years. We also improved the program by updating the

case study on performance audits. Through this program, our instructors, mentors, and

sponsors become part of a growing community of good government professionals and experts

across nations. The goodwill engendered supports our country’s image abroad and facilitates

our staff’s access to foreign officials relevant to our audit work.

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.

For many years, we have focused high level management attention on three challenges—

physical security, information security, and human capital. For fiscal year 2012, we are

removing the first two challenges, as we have advanced our security programs’ maturity

levels to a point where we have programs in place to adequately protect our people,

property, and other assets; continuously monitor for threats; and respond as needed

when new threats arise. We will continue focusing high-level management attention on

human capital issues and have identified several high-priority areas for fiscal year 2012.

In addition, we have identified a new challenge related to improving the efficiency and

effectiveness of our engagements and delivery of timely and quality information to the

Congress.
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Management’s Discussion and Analysis

Physical Security Challenge

We identified physical security as a management challenge in our 2001 performance and

accountability report as a result of the September 11, 2001, terrorist attacks and the

anthrax incidents at the U.S. Postal Service. We continued reporting physical security

as a challenge over the last 10 years because of the substantial effort necessary to put

effective programs in place. We created offices focused on safety, security, and emergency

preparedness, which collectively have taken a multitude of actions we have reported in

prior performance and accountability reports. For example, to improve physical security at

our headquarters building in Washington, D.C., we

■ maintain an armed contract guard force, ballistic-rated guard booths, and a vehicleresistant perimeter wall,

■ implemented an integrated electronic security system to significantly improve

monitoring and controls, which also supports implementation of relevant Homeland

Security Presidential Directive 12 measures,

■ installed measures to address mailroom safety, including downdraft tables to protect

staff when screening incoming mail, exterior wall blast protection, and X-ray machines;

and

■ enhanced building air filtration and system controls that enable closure of outside air

intakes.

We are also implementing 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 from

headquarters.

In addition, we implemented a modern alarm system with public address and text message

board capabilities and created two operations centers—a security operations center to

provide a centralized 24/7 command center to ensure protection of the headquarters

building and its occupants and an emergency operations center to serve as the central

staging location for essential personnel and management during major emergencies. We

also developed a Continuity of Operations Plan that outlines our response to a variety of

events that could affect the operations of the agency. During the last 4 years, we have

exercised building evacuations, shelter-in-place, and alternate computing facility operations

as part of our disaster preparedness program to ensure that these program components

function as intended, and we provide continuity awareness training for all employees and

contractors.

We participate as a member of the federal Interagency Security Committee to remain

aware and apprised of the latest practices and threats that agency programs should

address. For example, we are working to formalize a Facility Security Plan that would

address a number of proactive security and protective initiatives being adopted by the

committee. This includes the creation of a Facility Security Committee and a vulnerability

assessment program and schedule, and formalizing the security response and actions

necessary during escalated security conditions.

While we still have several projects under way or planned to enhance our safety, security,

and emergency preparedness functions, we believe that reporting physical security as a

management challenge is no longer warranted. In our review of these programs for this year’s
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Management’s Discussion and Analysis 

report, we have determined that our programs are mature; meet federal requirements; and

provide appropriate protections for our people, property, and other assets. Embedded in our

programs are procedures for continuous monitoring of threats and changing requirements

and practices, and processes for evolving our programs, as needed. We are confident that we

have the ability to respond to and address new threats and emergencies as they arise.

Information Security

Since our fiscal year 2002 performance and accountability report, we have reported

information security as a management challenge because of the magnitude of risk

associated with weaknesses identified during internal reviews and independent evaluations

of our information security program. For example, we did not have a comprehensive

disaster recovery program dealing with the continuity of information technology (IT)

services and had not implemented a comprehensive intrusion detection strategy to provide

effective compensating security controls against malware and external threats. In addition,

we needed to ensure that our policies and procedures were consistent with federal

information security governance.

Through sustained commitment and top leadership support, we have developed and

implemented an information systems security program that comprehensively addresses risks

and provides for continuous evolution of our processes and controls. In past performance and

accountability reports, we have discussed the many program elements and controls we have

implemented to protect our information and systems. For example, we have implemented

robust, two-factor authentication using tokens for internal and external access to our

network, and protect our data at rest through full disk encryption on our mobile computers.

We ensure that staff and contractors complete IT security awareness training annually, as

required by law. While implementing our “defense-in-depth” strategy, we have deployed

multiple layers of security controls to actively monitor our network traffic between internal

systems and out across the Internet. In addition, we have implemented an integrated security

solution on our laptops and desktops that provides managed antivirus, antimalware, and

personal firewalls as part of our standard business practice. We also have a disaster recovery

program that includes use of an alternate computing facility, which is capable of maintaining

many of our operations during a major crisis or threat.

Of note, our program has been assessed by our IG every year since 2003 and, for the

past 3 years, has been found to be consistent with the requirements of the Federal

Information Security Management Act of 2002. This sustained performance demonstrates

that our program (1) provides a sufficient process for planning, implementing, evaluating,

and documenting remedial action to address any deficiencies in our information systems

security policies, procedures, and practices; (2) includes processes and procedures to

continue to build our capability to minimize IT security threats and incidents and enhance

our disaster recovery efforts; and (3) adheres to federal information security governance,

such as OMB and National Institute of Standards and Technology guidance. As such, we have

determined that reporting information security as a management challenge is no longer

warranted. However, given the constantly evolving nature of information security threats,

we will maintain management focus on continuing to support a robust security program.
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Management’s Discussion and Analysis

Human Capital

We depend on a talented and diverse, high-performing, knowledge-based workforce to

carry out our mission in support of the Congress. Like other federal agencies, human

capital management poses many challenges with an ever-changing workforce, emerging

civil service reforms, and continuous pressure to do more with less. We were able to make

progress in several key areas as planned for fiscal year 2011. Specifically, we

■ completed the first master collective bargaining agreement with GAO Employees Union,

IFPTE, Local 1921;

■ continued to focus on attracting and hiring staff to address our staffing needs in support

of our strategic plan and Workforce Diversity Plan, while filling critical needs identified

in our annual Workforce Plan;

■ completed implementation of all the short-term recommendations from the

Performance Appraisal Study; and

■ made significant progress on design of a new performance management system by

conducting job analyses and developing draft rating criteria and a new rating scale.

Additional details on these and related actions taken in fiscal year 2011 are discussed in

Part II of this report.

This past year also saw a number of economic and political changes that have greatly

affected federal agencies. Like the rest of the federal government, we are facing an era

of austere budgets and the associated impacts on our ability to hire, retain, and motivate

a top-performing workforce. At the same time, demand for our work remains high. While

we have achieved many successes in recruiting and hiring top-notch diverse candidates,

providing outstanding entry-level development training, and offering employees a wide

range of highly desired benefits programs, it may be difficult to continue and build on

these successes. As a result, the overarching human capital challenge that we face now,

and for the foreseeable future, is ensuring that we continue to support the mission of

the agency with the right resources, where and when they are needed, in the face of

declining budgets, and provide meaningful rewards and recognition needed to retain our

highly skilled workforce. In order to ensure continued high-quality and timely service to the

Congress, in fiscal year 2012, we will focus our efforts on a few top priorities to sustain an

agile, well-trained, balanced, diverse workforce.

■ Succession planning. As staff reductions seem inevitable, we will strengthen our

succession planning so that staff who are eligible to advance to key positions are

provided with the training and other necessary development to ensure that they have

the requisite skills and experience for those positions. Succession planning is particularly

critical for our senior executive corps, of which 40 percent are eligible to retire. Thus,

we will have our senior executives work with management staff at the next level down

to convey important historical information about agency programs and operations; key

working relationships, partnerships, and experts in relevant fields; and perspectives

on emerging issues and areas for continued agency involvement, to ensure that critical

knowledge and expertise are not lost.
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Management’s Discussion and Analysis 

■ Training. We will begin to shift the emphasis of our training program from primarily

entry-level training providing more targeted, needed “just-in-time” training, which may

be subject matter or audit skill related in nature.

■ Hiring. Even though we will need to greatly curtail hiring, we cannot forget the lessons

learned from the workforce reductions in the 1990s, which resulted in a lengthy hiring

freeze and corresponding concentration of staff at higher band levels. Thus, we will

need to reduce our heavy focus on entry-level recruiting to enable swift hiring that

addresses critical needs regardless of the level or position. However, we must also

preserve some level of partnerships with colleges and professional associations so we do

not lose access and appeal to quality, diverse entry-level candidates.

■ Rewards and recognition. Lastly, since we cannot achieve our mission without our

people, we will begin exploring alternative methods for rewarding and recognizing our

high-performing workforce to incentivize and retain them given likely limitations in our

ability to provide financial rewards and salary increases.

We will also continue management attention on several long-term priority issues in

fiscal year 2012—namely, development of a new performance management system and

implementation of the long-term recommendations from the Performance Appraisal Study,

as well as leveraging technology to ensure accuracy and efficiency in human capital

processes and management.

Engagement Efficiency Challenge

With the many complex challenges facing the Congress and the nation, we need to look for

ways to produce our reports and analysis more quickly and efficiently without sacrificing

quality. We have taken steps to improve management and prioritization of the “pipeline”

of Congressional requests and mandates we receive, as outlined in our Congressional

Protocols and through the extensive outreach that our Office of Congressional Relations

and our senior executives conduct in our day-to-day operations. In addition, while we

have been able to sustain high levels of productivity and continue to be an important

resource for our congressional clients, we are not immune from the concerns about federal

spending, already receiving a lower budget in fiscal year 2011. With more than 80 percent

of our budget devoted to personnel costs, modest reductions or even static funding will

require that we reduce staffing levels and curtail hiring. As a result, our ability to continue

to provide timely information and analysis to the Congress as it debates critical issues of

national and international concern poses a significant management challenge in this time of

limited resources as compared to previous years.

Accordingly, in an environment where quality and effectiveness are paramount and must

be maintained while resources are declining, we must improve our efficiency in responding

to congressional requests and mandates to meet the Congress’s needs and remain a

trusted resource in a fast-moving, ever-changing world. To address this challenge, we

have identified three areas of opportunity for improved efficiency and will be taking the

following steps in these areas in fiscal year 2012.
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■ Managing and conducting engagements. While we have relieved some administrative

burdens in managing and conducting engagements by streamlining certain business

processes and improving technology support, more work remains to significantly improve

our efficiency. The way in which we plan and conduct our engagements has changed

little over the years and the business process for most types of GAO engagements

is fundamentally the same. Accordingly, we will begin an end-to-end analysis of our

engagement process to identify areas for improvements in efficiency while maintaining

adherence to essential quality standards.

■ Utilizing resources. Our highly professional workforce, which represents a broad array

of disciplines, is our most important asset. Our work covers the breadth of government

and requires that our employees frequently master intricate details of federal programs

and agency operations to which they have sometimes had little previous exposure. Their

ability to do so is a hallmark of a “GAO analyst” and is critical to our ability to respond

to changing congressional needs. However, we could do more to capitalize on our

employees’ flexibility and agility when assigning work. We need to improve our ability to

multitask staff across multiple engagements, tapping needed skills and expertise where

and when they are needed. As a result, we will evaluate our current model for utilizing

staff on engagements and identify changes to enhance our agility and responsiveness.

■ Communicating our message. In recent years, the way in which the world

communicates has changed dramatically as a result of electronic media. While our

findings and conclusions are a standard of excellence and accepted authoritative

statements on the functioning of federal agencies and programs, producing a typical

GAO report can be made more efficient and the reports do not port easily to the

electronic world. We have made significant progress in the past year tailoring the

presentation of the results of our work to be more web friendly; however, this process

adds another step to an already multilayered report writing and production process.

In addition, we have tremendous amounts of valuable content in existing reports

that could be quickly repurposed and in-house expertise that should be leveraged to

inform Congressional decision making on key issues of national importance. Thus, we

will continue to assess our clients’ and audited agencies’ key information needs and

communication-style preferences, and explore alternative ways of meeting those needs

that will enable us to “bring our product to market” in a more efficient and effective

manner, without sacrificing quality or context.

Mitigating External Factors

In addition to the resource constraints and uncertainty of the budget for fiscal year 2012,

which directly affect our internal management challenges, 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 in a constrained budget environment, and access to agency information.

We mitigate these factors in several ways.

While demand for our work is very high, with 929 congressional requests and new

mandates in fiscal year 2011, unanticipated shifts in congressional priorities change the mix

of work we are asked to perform. To be prepared to address timely and relevant issues, we

use the eight broad trends identified in our strategic plan to guide our work plans. We also
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Management’s Discussion and Analysis 

communicate frequently with our congressional clients to stay abreast of their interests.

In addition, each year we conduct about 80 evaluations annually 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 broad-based staff expertise.

For example, to address the recent Duplication Mandate in fiscal year 2011, we employed

multidisciplinary teams composed of staff from across the agency. We devoted 34 percent

of our audit resources to mandates in fiscal year 2011. The level of demand for our work

remains high as we fulfill ongoing requirements under mandates and other responsibilities.

For example, we have just completed the first year of multiyear mandates to report on

health care and financial regulatory reform issues. Moreover, all Senate committees are

required to review programs within their jurisdiction to identify potential fraud, waste, and

abuse in program spending—giving particular scrutiny to issues raised in our reports—and

to develop recommendations for improved government performance. Similarly, 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. 38 for more information

about our high-risk list areas and programs.)

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. 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 2011, there were several developments on the access

front relating to these discussions and efforts. As we reported in the performance and

accountability report for fiscal year 2010, the Department of Justice (DOJ) in recent years

has employed a centralized process for screening our access requests, resulting in delays

and occasional denials of access to information. Given this, in 2011 DOJ initiated a trial

program designed to improve its responsiveness to our requests. The program included

target time frames for DOJ production of documents and for the scheduling of interviews

with agency officials, as well as the designation by DOJ of senior component officials for

our reviews. We and DOJ are in agreement that the trial program has led to efficiencies in

conducting work at the department, including receiving information in a timelier manner

and enhanced communication. DOJ is currently in the process of making the trial program

changes a permanent part of its procedures for working with us.

Another development in fiscal year 2011 relating to our access to information was in the

context of intelligence. The Intelligence Authorization Act for Fiscal Year 2010, Pub. L.

No. 111-259, § 348 required the Director of National Intelligence (DNI), in consultation

with the Comptroller General, to issue a written directive by May 1, 2011, governing the

access of the Comptroller General to information in the possession of an element of the

U.S. Intelligence Community (IC). The statutory requirement to develop a directive on
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Management’s Discussion and Analysis

this subject was designed to address the historic challenges that we have experienced in

gaining access to information in the IC. The DNI and his staff did consult with us during

the development of the directive, and we believe that the resulting directive (Intelligence

Community Directive 114) provides a starting point for addressing these challenges. The

directive contains a number of provisions designed to promote constructive interaction

between us and elements of the IC, such as establishing a presumption of cooperation

with us. However, we have concerns with how several terms in the directive could be

interpreted, since they are framed as areas where information would generally not be

available to us for certain audits or reviews. It is crucial that these terms and the overall

directive be carefully implemented and monitored to ensure that we are able to obtain

the information we need to assist the Congress in its oversight responsibilities, including

responding to requests from the committees on armed services, justice, homeland

security, foreign affairs, and appropriations, as well as the congressional intelligence

committees.

We have experienced other access issues at certain agencies because of 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 currently pending in the House

(H.R. 2646) and the Senate (S. 237) would confirm our access rights, refuting agency

interpretations that restrict GAO’s 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.
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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 2011 performance results. 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 as well

as accomplishments under the strategic objectives for these goals. Most teams and units also

contributed toward meeting the targets for the agencywide measures that were discussed

in part I of this report. For goal 4—our internal goal—we present selected work for that

goal’s strategic objectives as well as program evaluations conducted under this goal. We also

present additional accomplishments and contributions for each of the four goals.
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Performance Information

Our first strategic goal upholds our mission to support the Congress in carrying out its

constitutional responsibilities by focusing on work that helps address the current and

emerging challenges affecting the well-being and financial security of the American people

and American communities. Our multiyear (fiscal years 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

website 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 educators, 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

Since 2008, we have been providing technical assistance 

to the U.S. Capitol Police (USCP) and the Congress on 

USCP’s acquisition of a new radio system, which has been 

funded with over $100 million in appropriations. We have 

improved the system’s technical design by reviewing and 

providing feedback on the radio system design, including 

an examination of issues related to system coverage and 

interference. We have improved the management of the 

project by reviewing the integrated project schedule and 

working with USCP and its partner agencies to improve 

its completeness and accuracy, including identifying and 

prioritizing program risks in the schedule.

Source: See Image Sources.

Address Current and Emerging 

Challenges to the Well-being and 

Financial Security of the American 

People

Strategic

Goal 1
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Performance Information 

To accomplish our work under these strategic objectives in fiscal year 2011, 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, Justice, 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 did not meet the target set for financial benefits for goal 1, but we

exceeded the targets for 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

actual

2011

target

2011

actual

Met/

not met

2012

targeta

Financial benefits

(dollars in billions) $22.0 $12.9 $19.3 $12.1 $17.8 $13.4 $12.6 Not met $11.0

Nonfinancial benefits 268 238 226 224 233 225 243 Met 225

Testimonies 97 125 123 85 86 78 84 Met 85

Source: GAO.

Note: Financial benefits for goals 1 through 3 do not sum to the total agencywide target as we have left a portion of the financial 

benefits target unassigned in 2012. Experience leads us to believe that we can meet the agencywide target but we cannot predict 

under which goals because of governmentwide resource constraints.

a

Our fiscal year 2012 targets for financial benefits and testimonies have been revised from those we reported in our fiscal year 2012 

performance budget in February 2011. Specifically, we have reduced the financial benefits target from $17.0 billion to $11.0 billion and 

the testimony target from 90 to 85. The nonfinancial benefits target remains the same.

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 gradually declined 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 declined until 2010 and then increased

slightly in 2011. The average number of hearings at which we testify increased from 2006

through 2008 and remained fairly stable from 2008 through 2010, declining somewhat in

2011.

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

Performance measure 2006 2007 2008 2009 2010 2011

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

Nonfinancial benefits 254 259 252 239 230 232

Testimonies 88 99 108 108 105 95

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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Performance Information

Financial Benefits

The financial benefits reported for this goal

in fiscal year 2011 totaled $12.6 billion,

missing the target we set by $.8 billion, or

6 percent. Among these accomplishments are

large financial savings from our work on the

level of funding for the Medicare Advantage

program and DOE’s Loan Guarantee Program

for Innovative Energy Technologies.

Because we expect to have fewer resources

with which to follow up on actions to

implement our recommendations, we have

set the target for fiscal year 2012 at $11 billion based on discussion with the goal 1 teams

about the level of benefits they believe they can achieve.

Example of Goal 1’s

Financial Benefits

We identified overlap and duplication in 47 federal 

employment and training programs funded at a total of 

$18 billion in 2009, and found that their effectiveness was 

not always proven. Members of the Congress cited our 

findings and questioned continued funding at the same 

levels given the lack of information about their effectiveness. 

The Congress subsequently enacted the Department of 

Defense and Full-Year Continuing Appropriations Act, 2011 

(P.L. 112-10), which reduced funding for several employment 

and training programs we identified by a total of more than 

$1.1 billion. (GAO-11-92)

Nonfinancial Benefits

Nonfinancial benefits reported for goal 1 in

fiscal year 2011 totaled 243, exceeding our

target of 225 by 18 benefits, or 8 percent.

The majority of goal 1’s nonfinancial benefits

were in the areas of public safety and security,

including programs in the areas of public

health, food safety, transportation safety,

consumer protection, environmental safety,

and telecommunications safety, and in the

area of business process and management,

including federal real property, human capital

management, and facilities management.

For fiscal year 2012, we maintained the 2011

target of 225 for nonfinancial benefits. 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

experience. This target is the same as that we set in our fiscal year 2012 performance plan.

Example of Goal 1’s

Nonfinancial Benefits

We found that without a coordinated federal strategy, the 

nation is at risk of investing in biofuel production, distribution 

infrastructure—such as fueling stations—and biofuelcompatible vehicles that could not be effectively used. As 

a result, the Biomass Research and Development Board, 

which includes members from 10 federal agencies and is 

co-chaired by the Departments of Energy and Agriculture, 

developed a National Biofuels Action Plan. The plan 

documents the government’s strategies—in collaboration with 

the private sector—for coordinating biofuel production, fuel 

distribution, and end use to help ensure effective investment. 

(GAO-07-713)
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Performance Information 

Testimonies

Our witnesses testified at 84 congressional

hearings related to this strategic goal, which

exceeded the fiscal year 2011 target by 6

testimonies, or 8 percent. Among the topics

on which we testified were medical devices,

Social Security disability, financial literacy,

oil and gas, and the U.S. Postal Service.

(See fig. 17 for selected testimony topics by

goal.) We set our fiscal year 2012 target at

85 testimonies on goal 1 issues based on our

experience over the past few years.

Table 11 provides examples of goal 1 accomplishments and contributions.

Table 11: Goal 1 Accomplishments and Contributions

Health Care Needs and Financing

1.01

Contributing to 

Congressional 

Oversight of Health 

Care Reform

We contributed to congressional oversight of early implementation

of health insurance reforms included in the Patient Protection and

Affordable Care Act through 20 reports and 5 testimonies on health

insurance and aspects of the Medicaid program significant to its

expansion. For example, we testified on how states are using federal

grants to bolster their health insurance premium rate reviews and

reported on insurers’ anticipated responses to new requirements. Our

work on the Medicaid program included reviews of managed care, access

to services, and efforts to reduce improper payments and adjust the

program during the economic downturn. (GAO-11-878T, GAO-11-711,

GAO-11-701, GAO-11-662)

1.02

Adding a Public 

Input Process before 

Approval of Medicaid 

Demonstrations

States can depart from Medicaid requirements through demonstrations

designed to test new approaches for delivering services. The Department

of Health and Human Services (HHS) established a policy in 1994 to

allow public input during the demonstration approval process but was

not implementing it. We recommended that HHS do so and when the

department disagreed, we asked the Congress to consider requiring a

public input process. In March 2010, the Patient Protection and Affordable

Care Act required HHS to ensure that its approval process for pending

demonstrations provides for a meaningful level of public input at both

state and federal levels. (GAO-02-817)

1.03

Adding Scrutiny 

of Medicare Home 

Health and Durable 

Medical Equipment 

Providers

Because our reviews of the Medicare home health and durable medical

equipment (DME) benefits indicated that they were targets of fraud

and abuse, we recommended that the Centers for Medicare & Medicaid

Services (CMS) assess the feasibility of verifying the criminal history of all

key officials named on a home health agency enrollment application and

strengthen enrollment processes for DME providers. Citing the findings of

GAO in its final rule, CMS began new screening procedures effective on

March 25, 2011, that will involve criminal background checks and other

additional scrutiny for new home health and DME providers. (GAO-09-185,

GAO-10-844T, GAO-05-656, GAO-05-43)

Example of Goal 1’s Testimonies

Financial Literacy plays an important role in helping ensure 

the financial health and stability of individuals, families, and 

our broader national economy. Economic changes in recent 

years have highlighted the need to empower Americans to 

make informed financial decisions, yet evidence indicates 

that many U.S. consumers could benefit from a better 

understanding of financial matters. For example, recent 

surveys indicate that many consumers have difficulty with 

basic financial concepts and do not budget. We testified on 

(1) the state of the federal government’s approach to financial 

literacy, (2) observations on overall strategies for addressing 

financial literacy, and (3) the role we can play in addressing 

and raising awareness on this issue. (GAO-11-504T)
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Performance Information

1.04

 Improving 

Consistency and 

Compatibility of 

Hospital Infection 

Data

Our 2008 report on federal efforts to reduce or prevent health-careassociated infections (HAI) in hospitals recommended that HHS establish

greater consistency and compatibility of HAI data collected. Consistent

with this recommendation, in 2011, HHS began requiring hospitals to

report central-line-associated bloodstream infection data to qualify

for full Medicare payments and, in 2012, will begin requiring hospitals

to report other infection data. HHS is also taking steps to ensure the

compatibility of HAI data and to improve the reliability of national

estimates of HAIs—for example, by conducting a national prevalence

survey. (GAO-08-283)

1.05

Increasing Review of 

Medicare Suppliers’ 

Compliance with 

Standards

In a 2005 report, we concluded that CMS must strengthen oversight

of suppliers of durable medical equipment. We recommended that

inspectors review a minimum number of patient files to determine

supplier adherence to standards for maintaining documentation of

services and information provided to beneficiaries. Consistent with this

recommendation, in 2011, CMS began requiring inspectors to review 5 to

10 beneficiary files to validate that suppliers are in compliance with a new

requirement to maintain certain ordering and referring documentation of

services and information provided for 7 years. (GAO-05-656)

Lifelong Learning

1.06

Improving 

Implementation of the 

Post-9/11 GI Bill

We found that the VA’s Post-9/11 GI Bill program to provide education

benefits to veterans and servicemembers faced inadequate information

systems and program guidance and an increase in improper benefit

payments. We recommended that VA provide better information to

schools and leverage the experience of officials who administer aid. VA

issued guidance to schools, made key data available, and worked with

Department of Education officials. In addition, the Senate requested that

VA conduct a full accounting of steps that have been taken in response to

our report and assess ways to reduce improper payments. (GAO-11-356R)

Benefits and Protection for Workers, Families and Children

1.07

Integrating Federal 

Disability Evaluation 

Systems

We made recommendations to improve the implementation and

monitoring of the Integrated Disability Evaluation System (IDES), the

DOD and VA pilot program for integrating their disability systems. The

agencies implemented our recommendations: DOD contracted for a study

of differences in diagnoses between VA and military physicians to assess

their prevalence and causes, and VA took steps to improve its ability to

track and resolve problems with the sufficiency of medical examinations.

We testified twice on IDES’s challenges, alerting the Congress to a decline

in the timeliness of case completion. (GAO-11-69)

1.08

Preventing Sex 

Offenders’ Access to 

Children

Using the National Sex Offender Registry, we identified three registered

sex offenders who were employed at schools or child care facilities in

violation of state laws. We referred these individuals to their respective

state oversight bodies; these referrals resulted in all three offenders

being removed from their positions, preventing their access to vulnerable

children. This work further helped identify the systemic vulnerabilities

that allowed registered sex offenders access to schools, and better

informed the Congress of opportunities to enhance protections to

separate sex offenders from vulnerable school populations. (GAO-11-200,

GAO-11-757)
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Performance Information 

1.09

Ensuring Elder Justice 

and Well-Being

Our work on elder justice informed reauthorization of the Older

Americans Act and drew attention to the challenges of addressing elder

abuse. We recommended ways for the HHS to improve data collection on

adult protective services and establish a national resource center to make

these data accessible and comprehensible. The agency is establishing a

national resource center for state adult protective services programs.

The Congress also invited us to testify on these issues, which we did.

(GAO-11-384T, GAO-11-208, GAO-11-129SP)

1.10

Strengthening 

Oversight of 

Social Security 

Administration’s 

Ticket to Work 

Program

We found that almost one-third of payments the Social Security

Administration (SSA) made to Ticket to Work program service providers,

known as employment networks (EN), went to those providing limited

or no direct services beyond passing back a portion of the payments to

beneficiaries. We also found weaknesses in its process to approve ENs

and no performance measures to evaluate them. We recommended

ways for SSA to address this. SSA now requires prospective ENs to submit

comprehensive business plans, is identifying more specific criteria to

assess their qualifications, and has developed performance measures.

Financial Security for An Aging Population

1.11

Ensuring Key 

Information Is 

Available to Defined 

Contribution Plan 

Sponsors

Our work found that participants in defined contribution plans, such as

401(k) and 403(b) plans, have limited information to compare investment

options and invest wisely. We recommended that the Department of

Labor (DOL) ensure that information, such as fees and expenses, is made

available. DOL issued a rule requiring plan administrators and their

service providers to disclose certain information regarding investments

to plan sponsors. The regulation is intended to ensure that beneficiaries

have the information they need to manage their retirement savings.

(GAO-08-222T, GAO-07-21)

Responsive, Fair, and Effective System of Justice

1.12

Managing Overlap 

Among Federal 

Law Enforcement 

Agencies’ CrimeFighting Efforts

Four Department of Justice (DOJ) law enforcement components share

authority for addressing certain crimes, including those that involve

explosives. Over a third of the DOJ agents we surveyed reported

differences with agents from other components when determining roles

and responsibilities during investigations, which negatively affected the

investigations to some degree. In response to our 2011 recommendation,

DOJ has promoted greater use of an existing deconfliction system and

committed to holding periodic meetings among the four components to

identify differences, discuss conflict resolution mechanisms, and improve

information sharing. (GAO-11-314)

1.13

Identifying 

Opportunities 

to Enhance 

Investigations 

of Online Child 

Pornography

Our March 2011 report on federal efforts to address online child

pornography highlighted for the Congress challenges to law enforcement

in investigating these crimes. We also discussed efforts to address

challenges through assisting electronic service providers in identifying

and reporting pornography, making tips to law enforcement more useful,

better coordinating investigations, and ensuring that steps taken to

analyze digital evidence are cost-effective. As of June 2011, DOJ senior

management said the agency is addressing our recommendation to

assess costs and benefits of the forensic process and plans to update the

Congress on progress in late 2011. (GAO-11-334)
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Performance Information

Viable Communities

1.14

Collecting Information 

on Tribes’ Plans for 

Improving Housingrelated Infrastructure

In 2010, we recommended that the Department of Housing and Urban

Development (HUD) collect information on tribes’ plans to address

housing-related infrastructure needs in revising the reporting form for

Native American Housing Assistance and Self-Determination Act of 1996

grant recipients. Developing infrastructure is an eligible grant activity

and a pressing need for many tribes. Our review of the draft form

showed that HUD would not be tracking grantees’ plans specifically for

infrastructure. In 2011, OMB approved HUD’s new form, which will allow

tribes to identify and detail their housing plans, including improving

the quality of existing infrastructure or of substandard housing units.

(GAO-10-326)

1.15

Improving Contracting 

Opportunities for 

Small Businesses

In 2011, we examined federal small business contracting efforts and

recommended that agencies comply with reporting requirements for

Office of Small and Disadvantaged Business Utilization (OSDBU) directors,

consider collecting data on small businesses in federal mentor-protégé

programs after program completion, and improve the reliability of data on

actions that help small businesses access federal contracts. In response,

certain agencies have begun to take actions, including revising the

reporting structure for the OSDBU director, collecting data on protégé

achievements, and updating guidance for reporting and verifying data.

(GAO-11-418, GAO-11-548R, GAO-11-549R)

Stable Financial System and Consumer Protection

1.16

Increasing Securities 

Regulators’ Use of 

DOD’s Information on 

Banned Sales Agents

In 2005, we recommended that securities regulators make use of

information that the DOD maintains on individuals or firms that have been

sanctioned by the military for improper solicitation practices. The SEC

recently reported using such information to conduct investigations and

targeted examination sweeps of securities firms that market products to

members of the military. These efforts, based on our recommendation,

enhance financial regulators’ ability to identify instances of problematic

financial product sales to military members. (GAO-06-23)

1.17

Improving the Federal 

Response to the 

Foreclosure Crisis

In 2011, we issued several reports on the housing foreclosure crisis. Two

reports provided previously unavailable information on foreclosure actions

that were abandoned or processed without proper legal documentation.

The Congress and federal regulators are considering recommendations

we made to help reduce the negative effects of these actions on families

and communities. In response to recommendations in another report,

the Department of the Treasury now penalizes mortgage servicers for

not suitably processing loan modifications for distressed borrowers and

has increased monitoring of servicers’ complaint-handling practices.

(GAO-11-338T, GAO-11-367R, GAO-11-93, GAO-11-433)

1.18

Strengthening the 

Federal Reserve’s 

Management of 

Emergency Assistance

On numerous occasions in 2008 and 2009, the Federal Reserve Board

invoked emergency authority under the Federal Reserve Act of 1913

to authorize new, broad-based programs and financial assistance to

individual institutions to stabilize financial markets. In a 2011 report,

we helped increase transparency of the Federal Reserve by providing

information on its actions in response to the financial crisis. This report

represents the first time the Federal Reserve’s emergency lending

activities have been audited by us. We identified opportunities to

improve the management of vendors, risks, conflicts of interest, and

documentation related to the emergency programs. The Federal Reserve

Board agreed that our recommendations would benefit its response in the

event of a future crisis and agreed to strongly consider them. (GAO-11-696)
74 GAO-12-4SP

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Performance Information 

Stewardship of Natural Resources and the Environment

1.19

Informing the 

Congress about 

Emerging 

Technologies

To better inform the Congress about emerging technologies with

important implications for the nation, we have issued a series of

technology reports—most recently, a congressionally requested

assessment of emerging climate engineering technologies. For this report

we developed a multidisciplinary approach with an assessment of the

technologies’ maturity and potential consequences; foresight efforts (e.g.,

scenarios to elicit views on future directions); and consideration of issues

such as public engagement. The first report in the series informed the

Intelligence Reform and Terrorism Prevention Act of 2004. (GAO-11-71,

GAO-03-174)

1.20

Strengthening 

Efforts to Protect 

Consumers from Lead 

Contamination

Elevated lead levels in the District of Columbia’s water raised questions

about how well consumers are protected nationwide. Our report on the

Environmental Protection Agency’s (EPA) lead testing and treatment

requirements revealed regulatory weaknesses, a lack of public

information, and other problems. In response to our recommendations

on these issues, EPA proposed regulatory changes to strengthen testing,

treatment, and consumer notification requirements. In addition, EPA

conducted an outreach campaign and provided tools to help schools and

child care facilities assess and take steps to address lead contamination in

their drinking water. (GAO-06-148)

1.21

Developing a Strategy 

for Using Long-term 

Stewardship Contracts

Federal land management agencies are increasingly using a tool known as

stewardship contracting to conduct land management projects, such as

thinning forests to reduce the risk of wildland fire. This tool was designed

to help the agencies work more efficiently by using any of several

innovative contracting approaches. To ensure the tool’s appropriate use

and funding, we recommended that the agencies develop a strategy for

its use that recognizes certain risks of these contracts and addresses the

circumstances in which they should be used. In response, the Bureau

of Land Management developed a strategy to address these risks and

enhance the tool’s use. (GAO-09-23)

1.22

Strengthening 

Controls Over Federal 

Farm Program 

Payments

Farmers receive federal farm program payments for crop subsidies,

conservation practices, and disasters. We found that the Department of

Agriculture (USDA) made $1.1 billion in farm program payments in the

names of about 173,000 deceased individuals from 1999 through 2005. As

a result, the Congress directed USDA to strengthen its controls over such

payments through the Food, Conservation, and Energy Act of 2008. In

response, USDA implemented computer matching with data from SSA to

verify that individuals receiving payments are not deceased and improved

payment guidance to its 2,200 local offices. (GAO-07-818, GAO-07-1137T)

Viable National Infrastructure

1.23

Improving Oversight 

of Broadband 

Programs

In reports and testimonies following passage of the Recovery Act, we

identified weaknesses in the Rural Utilities Service’s oversight plans for

the Broadband Initiatives Program, which funded broadband infrastructure

in rural areas. We reported that the agency may be unable to ensure that

all recipients of program funds complete their projects as required, since

the Recovery Act did not provide funding beyond September 30, 2010. We

recommended that the agency develop contingency plans and incorporate

variability of funding into its oversight plans, and our work helped the

agency develop an oversight plan that will guard against waste, fraud, and

abuse. (GAO-11-371T, GAO-10-823, GAO-10-80, GAO-10-192T)
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Performance Information

1.24

Monitoring the 

U.S. Investment in 

Chrysler and General 

Motors

In exchange for providing $62 billion in restructuring assistance to

Chrysler and General Motors through the Troubled Asset Relief Program,

Treasury received an equity stake in the companies. Following our

November 2009 report on the importance of having sufficient expertise

to monitor its investment, Treasury hired two additional employees and

a financial advisor, better positioning it to maximize its return. Treasury

sold a portion of its General Motors equity in the company’s initial public

offering in November 2010, and fully divested its Chrysler equity in July

2011, recouping a substantial amount of its investment.(GAO-10-151,

GAO-11-471)

1.25

Improving Governance 

at the Smithsonian 

Institution

After a number of highly publicized governance and accountability

breakdowns, the Smithsonian’s Board of Regents initiated a governance

reform effort in 2007. In a subsequent series of reports and

testimonies, we monitored and evaluated the board’s efforts, and made

recommendations related to improving communication, transparency,

and accountability. In response, the board has put in place governance

structures and policies that will allow it to exercise its oversight functions

and help to ensure that it can be an effective steward for the institution.

(GAO-08-632, GAO-08-250T, GAO-10-190R, GAO-10-297T)

1.26

Improving Security 

at National Icons and 

Parks

In 2009, we reported that the National Park Service faced several

challenges in protecting national icons and parks from the threat of

terrorism. These challenges related to managing risk, using technology,

sharing information, measuring performance, and managing human

capital. Our work led to improvements in all of these areas and

influenced other organizational changes, including a reorganization of the

U.S. Park Police and the creation of an Icon Protection Council within the

National Park Service. As a result of these efforts, the service is better

equipped to protect national icons and parks, as well as the millions of

people who visit them. (GAO-09-983)

1.26

Improving Air 

Passenger Rights

In 2010, we reported that the Department of Transportation (DOT) did

not have a policy on airlines’ compensation of passengers for mishandled

bags. Also, federal agencies that assess airline ticket fees were not

clearly disclosing which fees were reimbursable for unused nonrefundable

tickets. We recommended that the agencies improve disclosure. In 2011,

following our report, DOT issued rules for baggage compensation, and two

agencies that assess fees—the Departments of Homeland Security and

Agriculture—issued guidance that their fees are refundable. Passengers

will now benefit from more compensation for mishandled bags and

reimbursement of fees. (GAO-10-785, GAO-10-885T)

1.27

Reducing Unneeded 

Federal Real Property

For years, we have reported that the federal government spent billions

of dollars on unneeded real property. Real property holding-agencies

have retained unneeded real property because of underlying obstacles—

such as competing stakeholder interests and various legal and budgetary

limitations—that have hampered real property reform efforts. We

recommended that OMB develop an action plan to address the underlying

obstacles. In 2011, the administration proposed the Civilian Property

Realignment Act to address the underlying obstacles and help agencies

reduce their unneeded real property, which could save taxpayers billions

of dollars. (GAO-07-349)

Source: GAO.
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Performance Information 

The federal government is working to promote foreign policy goals, sound trade policies,

and other strategies to advance the interests of the United States and its allies. 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

website 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.

To accomplish our work in fiscal year 2011 under these strategic objectives, we conducted

engagements and audits that involved fieldwork related to international and domestic

programs that took us across multiple continents. As in the past, we developed reports,

testimonies, and briefings on our work.

As shown in table 12, we exceeded our fiscal year 2011 performance targets for financial

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

Selected Work under Goal 2

The Joint Strike Fighter (JSF) is DOD’s most costly and 

ambitious acquisition; life-cycle costs are projected to 

exceed $1 trillion. Since 2001, we have chronicled the 

program’s poor performance, substantial cost increases, 

persistent schedule delays, and the cost and benefits of a 

competitive engine strategy. We’ve recommended numerous 

ways to improve management, control costs, and reduce 

risks. DOD is now restructuring the JSF program consistent 

with our recommendations. Our several assessments of the 

competitive engine strategy have provided the Congress 

with timely and objective assessments on a contentious and 

long-standing issue. (GAO-11-325, GAO-11-903R)

Source: See Image Sources.

Respond to Changing Security 

Threats and the Challenges of 

Global Interdependence

Strategic

Goal 2
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GAO Performance and Accountability Report 2011

Performance Information

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

Performance

measure

2006

actual

2007

actual

2008

actual

2009

actual

2010

actual

2011

target

2011

actual

Met/

not met

2012

targeta

Financial benefits

(dollars in billions)

$12.0 $10.3 $15.4 $12.4 $20.5 $13.9 $25.9 Met $11.4

Nonfinancial benefits 449 468 468 457 444 345 447 Met 450

Testimonies 68 73 93 67 58 65 48 Not met 50

Source: GAO.

Note: Financial benefits for goals 1 through 3 do not sum to the total agencywide target as we have left a portion of the financial 

benefits target unassigned. Experience leads us to believe that we can meet the agencywide target but we cannot predict under which 

goals because of governmentwide resource constraints.

a

Our fiscal year 2012 target for all three performance measures differs from those we reported in our fiscal year 2012 performance 

budget in February 2011. Specifically, we decreased financial benefits from $14.0 billion to $11.4 billion, and testimonies from 70 to 50 

and increased nonfinancial benefits from 345 to 450.

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

which minimize the effect of an unusual level of performance in any single year and are

shown in table 13. This table indicates that over the past 5 years goal 2 financial benefits

reached the highest level in 2011, and average nonfinancial benefits and testimonies

increased steadily from 2006 to 2009 and declined in 2010 and 2011.

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

Performance measure 2006 2007 2008 2009 2010 2011

Financial benefits (dollars in billions) $10.4 $11.2 $12.7 $12.5 $14.7 $18.6

Nonfinancial benefits 364 413 438 461 459 454

Testimonies 57 63 67 75 73 67

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.

Financial Benefits

The financial benefits reported for this goal

in fiscal year 2011 totaled $25.9 billion,

which exceeded our target by $12 billion, or

86 percent. Among these accomplishments

are large financial benefits, including

DOD’s termination of the Army’s Future

Combat System manned ground vehicle

program and the Transformational Satellite

Communications System.

Example of Goal 2’s

Financial Benefits

We identified the potential costs and risks of transitioning 

the Logistics Civil Augmentation Program from LOGCAP 

III to the LOGCAP IV contract during the final stages of the 

drawdown of U.S. forces from Iraq and recommended that 

the Army conduct an analysis of the costs and benefits 

of this transition. The Army analysis recommended the 

continued use of LOGCAP III. In May 2010 the Army 

announced that it would continue to use the LOGCAP III 

contract to support U.S. Forces in Iraq until December 

2011. According to the Army this decision will result in cost 

avoidance of about $77.5 million. (GAO-10-376)
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GAO Performance and Accountability Report 2011

Performance Information 

We expect our work on defense and acquisition issues to continue to produce economies

and efficiencies, but we do not expect the same level of benefits as in the past 2 years

because of large savings from termination of a portion of DOD’s Future Combat System and

its Transformational Satellite Communications System that will not continue in future years.

Therefore, we set our fiscal year 2012 target at $11.4 billion, which is more consistent with

the trend in prior years.

Testimonies

Our witnesses testified at 48 congressional

hearings related to this strategic goal in

fiscal year 2011, missing our target of 65 by

17 hearings, or 26 percent. Goal 2 testimony

topics included DHS 10 years after 9/11,

flood insurance, space acquisitions, DOD

personnel security clearances, defense space

acquisitions, and diplomatic security. (See

fig. 17 for selected testimony topics by goal.)

We have set our target at 50 for presenting

testimony based on our experience over the past 2 years.

Example of Goal 2’s Testimonies

Corresponding with the 10-year anniversary of 9/11, we 

testified on our comprehensive report assessing progress 

made by DHS in implementing its missions, and operational 

weaknesses that contributed to delays and problems. We 

noted areas that have affected DHS’s implementation 

efforts, such as the need for DHS to better lead and 

coordinate the efforts of its homeland security partners, 

strengthen its management functions, and strategically 

manage risks and adjust, as needed, its efforts to address 

current and evolving threats. (GAO-11-919T)

Nonfinancial Benefits

The nonfinancial benefits reported for goal

2 in fiscal year 2011 totaling 447 nonfinancial

benefits, exceeded our target by 102

benefits, or 30 percent. The majority of goal

2’s nonfinancial accomplishments were in

the areas of public safety and security for

programs, including homeland security and

justice, international aid, national defense

and foreign policy, and acquisition and

contract management at DOD, NASA, and

DOE. Based on our recent experience, and

our 4-year rolling average, we set our fiscal

year 2012 target at 450. This target is close

to our recent experience and our 4-year average.

Example of Goal 2’s

Nonfinancial Benefits

We continued to review development efforts in Afghanistan 

with our 2010 report on U.S. support of water projects. 

In response to five of our recommendations on planning, 

coordination, and project monitoring, the U.S. Agency for 

International Development established a mechanism to 

enhance interagency and international project coordination, 

improved interagency planning among U.S. agencies and 

the Afghan government, began a routine review of water 

project performance data, improved its efforts to establish 

annual targets for all performance indicators, and distributed 

guidance for project monitoring in high-threat environments. 

(GAO-11-138)
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GAO Performance and Accountability Report 2011

Performance Information

Table 14 provides examples of goal 2 accomplishments and contributions.

Table 14: Goal 2 Accomplishments and Contributions

Protect and Secure the Homeland

2.01.

Encouraging Changes 

to Container Staffing 

Model Resulted in 

Financial Benefits

Our reviews of U.S. Customs and Border Protection’s (CBP) Container

Security Initiative (CSI) revealed that CBP did not consider whether some

functions performed by staff at overseas ports could be performed

remotely in the United States nor did it consider the optimal number of

staff that should be placed overseas as opposed to in the United States.

We recommended that CBP revise its staffing model. As a result, CBP

began transferring CSI positions from overseas ports to the United States

in January 2009. Foreign staffing levels for CSI decreased from 170 in

January 2009 to 86 in April 2011, resulting in net financial benefits of

$35.4 million. (GAO-05-557, GAO-08-187)

2.02.

Leading DHS to 

Scale Back Flawed 

Advanced Radiation 

Detector Program

The United States deploys radiation detectors to prevent the smuggling

of nuclear and radiological materials. The Department of Homeland

Security’s (DHS) Advanced Spectroscopic Portals (ASP) are secondgeneration radiation detectors designed to replace detectors already

deployed. In a series of products since 2006 about problems with the

cost, testing, and performance of ASPs, we found that ASPs would be

significantly more expensive than current-generation detectors but had

not been shown to be more effective. Our work led DHS to significantly

scale back the scope of the ASP program, resulting in estimated financial

benefits of $1.2 billion. (GAO-10-252T, GAO-09-804T, GAO-09-655,

GAO-08-979)

2.03.

Framing the National 

Flood Insurance 

Program Debate

In 2011, we testified before House and Senate committees and reviewed

the Federal Emergency Management Agency’s (FEMA) management of the

National Flood Insurance Program (NFIP). We reported that in order for

NFIP to become financially sound, premium rates must fully reflect the

risk of loss, and that FEMA needs to address management weaknesses in

multiple areas. We evaluated proposed changes to the program against a

framework we developed for federal involvement in natural catastrophe

insurance, pointing out the benefits and challenges of different

approaches. Our work in this area has helped frame the ongoing NFIP

reform debate. (GAO-11-297, GAO-11-670T, GAO-11-429T)

2.04.

Identifying Internal 

Control Weaknesses 

in Transportation 

Worker Credentialing

In May 2011 we reported on internal control weaknesses in the DHS

program to provide credentials to transportation workers who require

access to secure areas of maritime facilities and vessels. We reported

that control weaknesses in the program hindered the achievement of the

program’s security objectives. We recommended that DHS perform an

assessment of control-related weaknesses and risks and determine actions

needed to correct or compensate for them. This work informed both the

congressional and public discussion about the program. (GAO-11-657)

2.05.

Ensuring 

Accountability 

for FEMA to 

Develop Metrics 

to Aid in Assessing 

Preparedness

In 2010, we reported that FEMA had not yet developed national

preparedness capability requirements based on established metrics as

required by the Post-Katrina Emergency Management Reform Act. Citing

our work, the Senate report accompanying the Redundancy Elimination

and Enhanced Performance for Preparedness Grants Act of 2010 requires

FEMA to report the results of its plans, including a specific timetable,

for developing a set of quantifiable performance metrics to assess

the effectiveness of preparedness grant programs, thus establishing

accountability for FEMA’s actions. (GAO-11-51R)
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GAO Performance and Accountability Report 2011

Performance Information 

2.06.

Ensuring An 

Authorized U.S. 

Workforce

In response to ongoing congressional interest, we reported and

testified several times since 2005 on DHS’s progress and challenges in

implementing E-Verify, an electronic employment verification tool. We

reported that DHS had improved E-Verify’s accuracy, but the system

remained vulnerable to fraud and work site enforcement resources

were limited. We made recommendations to help DHS further reduce

E-Verify errors, better ensure compliance with E-Verify rules, and plan

for expansion of E-Verify. Our work was widely cited by the Congress and

in the media, and has helped frame the debate on whether the E-Verify

system is ready for mandatory use. (GAO-11-146)

2.07.

Enhancing Federal 

Desktop Computer 

Security

In FY 2010, we recommended that 22 major federal agencies fully

implement the federal desktop core configuration—a set of strong

security settings for Windows-based workstations. In fiscal year 2011,

a number of agencies have acted to implement the stronger security

settings, ensure contractual language is in place so that new acquisitions

include the settings, and document and approve any deviations. As a

result, these agencies have significantly improved their ability to protect

the confidentiality, integrity, and availability of sensitive information

maintained on agency workstations. (GAO-10-202)

Military Capabilities and Readiness

2.08.

Identifying Potential 

Defense Budget 

Savings

In our annual review of DOD’s procurement and research, development,

evaluation and test budgets for selected weapon systems, we

examined the President’s fiscal year 2011 budget requests for 146

defense acquisition programs. In performing this work, we identified

approximately $6 billion in potential fiscal year 2011 budget reductions

and restrictions as well as excess prior year appropriations. The Congress

used this information to make budgetary decisions resulting in about

$3 billion in budget reductions and rescissions.

2.09.

Highlighting Risks in 

DOD Weapon System 

Acquisitions

We continue to be one of the primary sources of information for the

Congress and the public on the risks associated with individual weapon

system programs and the performance of the defense acquisition system.

Our annual assessment of DOD weapon programs is a comprehensive

independent examination and a key oversight tool for the Congress. In

2010, we found that weapon system acquisition costs have grown by over

$135 billion over the past 2 years and that most of the 71 programs we

reviewed were still not fully adhering to a knowledge-based acquisition

approach, putting them at higher risk of cost growth and schedule delays.

(GAO-11-233SP)

2.10.

Assessing DOD’s 

Ability to Provide 

Trained and Ready 

Forces for Military 

Operations

In numerous reports on training and military operations, we identified

issues with DOD’s ability to improve training management skills, readiness

reporting, and coordination of language and culture training; enhance

Army brigade support to advise missions; manage and oversee its

processes for responding to urgent needs in Iraq and Afghanistan; and

distribute supplies and equipment to the forces in Afghanistan. Our work

helped frame significant issues for congressional and public debate, and

prompted DOD and the Congress to take action. For example, the Army

and the Marine Corps have improved the consistency of their readiness

reporting. (GAO-11-760, GAO-11-456, GAO-11-273, GAO-11-526, GAO-11-673)
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GAO Performance and Accountability Report 2011

Performance Information

2.11.

Assessing DOD’s 

Expanding Cyber 

Mission

Our work identified key challenges in DOD’s cybersecurity efforts. Our

recommendations were designed to strengthen DOD’s cyber-related joint

doctrine, develop common definitions, improve guidance on command

and control relationships, gain a complete picture of cyberspace

capabilities and gaps, clarify policy on which personnel can perform

cyber operations, define mission requirements, and develop full-spectrum

cyberspace budget estimates. DOD has generally agreed with our

recommendations and in some cases outlined steps it plans to take in

response. Our work has also assisted the Congress in its oversight of this

evolving threat. (GAO-11-75, GAO-11-421, GAO-11-695R)

2.12.

Improving Global 

Defense Posture 

Management

Since 2006, we have reported on issues related to DOD’s overall global

posture strategy and management practices, and the transformation

of military posture in Europe and Asia. Those reports make numerous

recommendations to improve DOD’s management of these efforts and

the information about them that DOD makes available to the executive

branch and congressional committees. Our reports have highlighted

the need for comprehensive cost information that can be used to fully

evaluate investment requirements and affordability of posture initiatives.

In many cases, DOD has agreed with our recommendations and has begun

to implement them. (GAO-11-316, GAO-09-706R, GAO-06-852, GAO-11-131)

2.13.

Removing DOD’s 

Personnel Security 

Clearance Program 

from Our High-Risk 

List

Our oversight—through continuous monitoring, reporting, and

participation in 14 congressional hearings—contributed to our ability

to remove DOD’s personnel security clearance program from our highrisk list. We designated DOD’s program as high-risk in 2005 because of

significant processing delays, and kept the program on the list in 2007 and

2009 for continued delays and quality issues. As a result, DOD improved

timeliness, worked with executive agencies to develop a strategic

framework, implemented quality assessment tools, issued guidance, and

committed to reform. Our work brought attention and correction to issues

that have a governmentwide impact.

Advance U.S. Foreign Policy Interests

2.14.

Improving Monitoring 

and Evaluation of 

Projects to Combat 

Human Trafficking

In response to our 2007 recommendations, the Department of State

(State), DOL, and USAID strengthened monitoring and evaluation of

projects to combat human trafficking. State improved project design

and baseline data collection and developed indicators for program

outputs and outcomes. USAID published an evaluation framework for

antitrafficking and victim protection programs and is developing guidance

for more effective evaluations. DOL updated its evaluation procedures

and training plans, and revised its terms of reference for contracting

evaluations. It also pilot tested a tool that may strengthen performance

data reliability and validity. (GAO-07-1034)

2.15.

Combating Arms 

Trafficking to Mexico

In 2009, we reported that U.S. agencies were not coordinating efforts to

combat the arms trafficking to Mexico. To address our recommendations,

the Bureau of Alcohol, Tobacco, Firearms and Explosives and U.S.

Immigration and Customs Enforcement signed an agreement that resulted

in collaboration and information sharing on investigations of firearms

trafficking and possession of firearms by illegal aliens. The U.S. Attorney

General and State also acted in response to our recommendations by

supporting the Mexican government in disseminating an electronic

firearms tracing system to Mexican law enforcement agencies.

(GAO-09-709)
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GAO Performance and Accountability Report 2011

Performance Information 

2.16.

Improving DOD and 

State’s Management 

of Security Assistance 

Programs

DOD and State have used Section 1206 and 1207 funding authorities

to help other countries respond to threats of terrorism and instability

through military and nonmilitary assistance projects. In response to our

findings and recommendations, DOD significantly improved its guidance

for developing Section 1206-funded military projects and is establishing a

system for evaluating them. Furthermore, in fiscal year 2011, the Congress

did not reauthorize funding for Section 1207 nonmilitary projects, which

we reported as being virtually indistinguishable from those of other

foreign assistance programs but more costly and slower to implement.

(GAO-10-431)

Respond to Global Market Forces

2.17.

Improving Duty 

Collections

In 2008, we reported on problems in collecting antidumping and

countervailing (AD/CV) duties. Over $600 million was uncollected

from fiscal years 2001 through 2007. We identified weaknesses in

communication between the Department of Commerce (Commerce) and

CBP; as a result, agencies took steps to improve timeliness and clarity.

Commerce also developed a human capital plan to address challenges

affecting AD/CV duty operations. We suggested that the Congress

require Commerce and other agencies to evaluate the relative merits of

prospective versus retrospective duty collection systems. Commerce did

so in 2010 in response to congressional direction. (GAO-08-391)

Source: GAO.
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GAO Performance and Accountability Report 2011

Performance Information

Our third strategic goal focuses on the collaborative and integrated elements needed

for the federal government to achieve results. The work under this goal highlights the

intergovernmental relationships that are necessary to achieve national goals. Our multiyear

(fiscal years 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

website 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 Investigative

Service, 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 Office of the

General Counsel.

To accomplish our work under these objectives, we performed our foresight work, for

example, examining the nation’s long-term 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 15, we did not meet our fiscal year 2011 performance targets for this

goal’s financial benefits, we missed our target for nonfinancial benefits by two, and we did

not meet our target for testimonies for this goal.

Selected Work under Goal 3

Our work helped inform the public debate on the debt 

limit and budget controls to address the long-term fiscal 

challenge. We reported on the debt limit and explained that 

failure to raise it in a timely manner could have serious 

negative consequences for the federal government and the 

Treasury market. We testified on ways the budget process 

can help enforce budget decisions and we expanded our 

web page to include answers to key questions about federal 

debt. This page and the debt limit report were frequently 

used by Congress, the press, and the public during the 

year. (GAO-11-203, GAO-11-451SP, GAO-11-626T, Debt 

Frequently Asked Questions (http://www.gao.gov/special.

pubs/longterm/debt))

Source: See Image Sources.

Help Transform the Federal 

Government to Address National 

Challenges

Strategic

Goal 3
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GAO Performance and Accountability Report 2011

Performance Information 

Table 15: Strategic Goal 3’s Annual Performance Results and Targets

Performance

measure

2006

actual

2007

actual

2008

actual

2009

actual

2010

actual

2011

target

2011

actual

Met/

not met

2012

targeta

Financial benefits

(dollars in billions)

$17.0 $22.8 $23.4 $18.5 $11.6 $14.7 $7.2 Not met $7.3

Nonfinancial benefits 625 648 704 634 684 630 628 Not met 525

Testimonies 73 74 76 49 45 54 39 Not met 40

Source: GAO.

Note: Financial benefits for goals 1 through 3 do not sum to the total agencywide target as we have left a portion of the financial 

benefits target unassigned. Experience leads us to believe that we can meet the agencywide target but we cannot predict under which 

goals because of governmentwide resource constraints.

a

Our fiscal year 2012 target for all three performance measures differs from those we reported in our fiscal year 2012 performance 

budget in February 2011. Specifically, we decreased financial benefits from $11.0 billion to $7.3 billion, nonfinancial benefits from 630 

to 525, and testimonies from 57 to 40.

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

shown in table 16—which minimize the effect of an unusual level of performance in

any single year. Table 16 indicates that over the 6-year period from 2006 through 2011,

financial benefits increased steadily from 2006 through 2009, decreased somewhat in 2010,

and decreased substantially in 2011. Nonfinancial benefits rose from 2006 through 2008,

decreased in 2009, increased in 2010, and decreased in 2011. The trend in the average

number of hearings during which our senior executives testified on goal 3 issues also rose

from 2006 through 2008, remained stable in 2009, and declined substantially in 2010 and

2011.

Table 16: Four-Year Rolling Averages for Strategic Goal 3

Performance measure 2006 2007 2008 2009 2010 2011

Financial benefits (dollars in billions) $10.1 $14.6 $18.6 $20.4 $19.1 $15.2

Nonfinancial benefits 630 654 686 653 668 663

Testimonies 59 64 68 68 52 52

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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Performance Information

Financial Benefits

The financial benefits reported for this goal

in fiscal 2010 totaled $7.2 billion, missing our

target of $14.7 billion by $7.5 billion. Among

these accomplishments are benefits from

eliminating the advanced earned income tax

credit, reducing governmentwide improper

payments, and improving oversight of a critical

border surveillance system acquisition.

Because we have missed our target for this

goal for the past 2 years, we are modifying

our approach for 2012. We have set our 2012

target at $7.3 billion based on the steady

decline in financial benefits for this goal over

the past 4 years. We have also left a portion

of our agencywide target unallocated rather

than increasing the target for each goal. Our experience leads us to believe that we can

meet the target, but we are uncertain under which goals.

Example of Goal 3’s

Financial Benefits

We found that the VA had significant weaknesses in its 

information systems and technology architecture. We 

recommended that the department implement the earned 

value management (EVM) practices that addressed the 

detailed weaknesses we had identified, as well as take 

action to reverse negative performance trends to mitigate a 

potential cost overrun. In response, the department began to 

formulate policies as part of the Program Management and 

Accountability System that incorporate critical practices of 

EVM. Based on these new policies, the department found 

the Vista-FM program to be poorly planned and managed; 

we also reported that this program had weaknesses. 

Following this evaluation and our recommendations, the 

department eliminated the program, resulting in a net 

financial benefit totaling $385.3 million from fiscal years 

2010 to 2014. (GAO-10-2)

Nonfinancial Benefits

Nonfinancial benefits reported for goal 3

in fiscal year 2010 totaled 628, missing our

target by 2 benefits, or less than 1 percent.

The majority of goal 3’s benefits were in the

area of business process and improvement,

including federal agency financial audits;

federal information systems; business

systems modernization; and in public safety

and security, including critical infrastructure.

We set our 2012 target at 525 benefits. While

we recognize that this target is lower than our fiscal year 2011 actual performance and

4-year average for this measure, we believe it is a realistic estimate based on our projected

goal 3 work.

Example of Goal 3’s

Nonfinancial Benefits

As part of our ongoing series of investigations into tax 

delinquents who receive federal benefits, we identified 

224,000 tax delinquent individuals who received passports 

and 3,700 tax delinquent contractors and grantees that 

received Recovery Act funds. These investigations are 

used as a tool by the Congress to help explore new ways 

to increase collection of unpaid taxes and to prevent the 

award of federal funds to tax delinquents (GAO-11-272, 

GAO-11-485)
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Performance Information 

Testimonies

Our witnesses testified at 39 congressional

hearings related to this strategic goal in fiscal

year 2011, missing the target of 54 by 15

hearings, or 28 percent. Among the testimony

topics covered were tax system complexity

and taxpayer compliance, tax delinquent

Recovery Act contractors, DOD financial

management, and information technology

investment oversight. (See fig. 17 for selected

testimony topics by goal.) For fiscal year

2012, we have set a target of testifying at 40

hearings based on the decline in hearings in this goal over the past 2 years.

Table 17 provides examples of goal 3 accomplishments and contributions.

Table 17: Goal 3 Accomplishments and Contributions

Analyze the Government’s Fiscal Position

3.01.

Eliminating the 

Advance Earned 

Income Tax Credit

Our work found that few taxpayers claimed the Advance Earned Income

Tax Credit (AEITC) and noncompliance with requirements was high. Both

the President’s fiscal year 2010 and 2011 budgets proposed elimination

of this credit and our work was cited as justification. In August 2010, the

AEITC was eliminated, and our analysis of Joint Committee on Taxation

data showed that the federal government will save about $569 million

from fiscal years 2011 through 2015. (GAO-07-1110)

3.02.

Adjusting Internal 

Revenue Service (IRS) 

Penalties for Inflation

In August 2007, we reported that civil tax penalties are not indexed for

inflation and recommended that the Congress consider requiring IRS to

periodically adjust penalties for inflation to account for the decrease

in real value over time. In two separate acts, the Congress took action

consistent with our recommendation and increased the fixed value of

three penalties. Together, according to estimates by the Joint Committee

on Taxation, these increases in the value of the penalties will result in

additional federal revenues of about $233 million over the first 5 years

after their enactment. (GAO-07-1062)

3.03.

Improving User Fee 

Compliance

Our User Fee Design Guide identifies key principles to consider

when designing and implementing cost-based fees. In applying these

principles, we identified numerous ways to improve the efficiency

and effectiveness of various fees and the operations they support.

For example, we recommended that DHS and the U.S. Army Corps of

Engineers ensure timely payment of harbor maintenance fees by charging

interest for late payments and sharing information to monitor fee

compliance. The agencies implemented our recommendations, and fee

collections increased by over $26 million as of April 2011. (GAO-08-321,

GAO-08-386SP, GAO-09-180, GAO-07-1131, GAO-09-70)

Example of Goal 3’s Testimonies

As the Congress considers the role and design of 

appropriate budget enforcement mechanisms in changing 

the government’s fiscal path, we testified on some elements 

that could facilitate debate and contribute to efforts to place 

the government on a more sustainable long-term fiscal path. 

We discussed broad principles for a more transparent and 

effective budget process, the history of budget enforcement 

mechanisms, and options to consider going forward. We 

noted that carefully designed mechanisms can enforce 

agreements that have already been made and ensure 

compliance. (GAO-11-626T)
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Performance Information

3.04.

Improving Federal 

Financial Reporting 

and Related Internal 

Controls

Our financial audit work helped promote improved transparency and

more complete and accurate financial reporting concerning unsustainable

federal fiscal policy, uncertainties surrounding the costs of federal

actions taken to stabilize the nation’s financial markets, and uncertainties

surrounding social insurance costs. In addition, our work furthered a

number of significant improvements in financial reporting, including

improved reporting on the reconciliation of overall federal net operating

costs with reported unified budget deficit amounts, and agency-level

improvements in financial reporting internal controls (including controls

at IRS and the Federal Deposit Insurance Corporation). (GAO-11-363T,

GAO-11-536, GAO-11-687R)

Identify Fraud, Waste, and Abuse

3.05.

Avoiding Unnecessary 

Redundancies and 

Improving Efficiencies 

in Defense Programs

We identified five defense areas for congressional consideration related

to duplication, overlap, or fragmentation, such as opportunities to

avoid unnecessary redundancies and improve efficiencies in the

military medical command and warfighter urgent-needs acquisitions.

The Congress has directed several actions in fiscal year 2011 related to

this work. For example, DOD began an evaluation of its urgent-needs

processes as mandated by the Congress. This evaluation will examine

areas of duplication we identified and report on needed improvements.

(GAO-11-441T, GAO-11-714T)

3.06.

Preventing Fraud 

in SBA’s HUBZone 

Program

In 2008, we identified substantial vulnerabilities in SBA’s HUBZone

program application and monitoring process, clearly demonstrating

that the program is vulnerable to fraud and abuse. We also identified

29 cases of eligibility fraud by program participants, which we referred

to SBA. In response to our referrals, 20 participants were removed

from the program, preventing them from receiving contracts meant for

truly disadvantaged businesses. Based on this work and other related

engagements, the Congress has taken steps to strengthen punishments for

businesses that misrepresent their eligibility for such small business setaside programs.

3.07.

Identifying Improper 

Payments Through the 

Use of Information 

Technology

We reported that CMS faced challenges in developing and implementing

a centralized data warehouse, the Integrated Data Repository. We made

recommendations to help ensure that required data are incorporated into

the system. Accordingly, the Congress included language that requires

CMS to incorporate prepayment data by the end of 2012 and Medicaid

data by the end of 2014 in the Medicare and Medicaid Fighting Fraud and

Abuse to Save Taxpayers’ Dollars Act, which was introduced in June 2011.

If enacted, this action should help ensure that CMS’s systems provide

capabilities needed to predict and detect improper payments in Medicare

and Medicaid, thus preventing the loss of billions of taxpayer dollars.

(GAO-11-475, GAO-11-822T)

Address Major Management Challenges and Program Risks

3.08.

Improving Oversight 

of a Critical Border 

Surveillance System 

Acquisition

We have reported on a range of management challenges facing the

Secure Border Initiative Network (SBInet). In a series of reports, we

highlighted numerous cost, schedule, and performance risks, and

concluded that DHS had not economically justified its investment in

SBInet. After initiating a departmentwide assessment of the SBInet

program, the DHS Secretary froze SBInet funding and, at the completion

of the assessment in January 2011, the Secretary decided to end SBInet

as originally conceived. The Secretary’s actions resulted in a total

financial benefit of $1.61 billion. (GAO-10-340, GAO-10-158, GAO-10-588SP,

GAO-09-896, GAO-09-1013T)
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Performance Information 

3.09. Improving 

Census Cost Estimates 

and Productivity

Our recommendations helped the U.S. Census Bureau reduce costs

and improve operations for the 2010 Census. For example, the bureau

updated its cost estimate for the nonresponse follow-up operation using

better assumptions and identified savings of approximately $602 million.

The bureau also increased productivity during the address canvassing

operation by enhancing the reliability of handheld computers used to

collect data. As a result, the bureau saved an estimated $98 million.

(GAO-11-193, GAO-11-154, GAO-11-45, GAO-11-496T, GAO-08-554)

3.10.

Issuing Major Update 

to Government 

Auditing Standards

The 2011 revision to the Government Auditing Standards—applicable to

audits of government programs and entities—is the first major update

since 2007. The revision modernized and updated the standards to

reflect recent developments in the accountability and auditing profession

applicable in the government environment, and represents a major step

in achieving greater consistency with international and U.S. auditing

standards. Further, the revision includes a principles-based framework

for analyzing threats to auditor independence and applying safeguards

to help ensure a strong, ethical, and independent foundation for all

government audits.

3.11.

Establishing a 

Foundation for 

Effective DOD 

Financial Management 

and Accountability

In 2011, our DOD work helped focus the department’s efforts to establish

a sound foundation and the top-level support critical to effectively

improving its financial management operations and achieving financial

statement auditability. Our work helped focus attention on actions

needed to address long-standing financial management challenges, such

as those in the areas of leadership, oversight, and systems development.

In particular, our work helped focus congressional oversight on DOD

financial management issues, including establishing a panel dedicated to

addressing these issues and holding five oversight hearings on the topic

this past year. (GAO-11-851, GAO-11-830, GAO-11-932T, GAO-11-933T)

3.12.

Improving Methods for 

Obtaining Sensitive 

Policy Information

We earlier proposed an innovative method for obtaining sensitive policyrelevant information in self-report surveys while protecting respondent

privacy—and explored this in response to a congressional request. This

approach is now being used to study illegal immigration, in a methodology

grant awarded to the University of Chicago by the National Science

Foundation. With this method, each respondent’s answer applies to a

group of survey items (including a sensitive item) shown on two cards.

No answer identifies an individual respondent with the sensitive item,

but that item can be estimated indirectly for the population as a whole.

(GAO-06-775)

3.13.

Improving Oversight 

of NASA through 

Transparent Budget 

Documentation

Based on our work on NASA’s major projects, we have found that NASA

does not provide the Congress with enough information for it to conduct

oversight of NASA’s $69 billion portfolio and hold NASA accountable

for results. For example, the lack of specific project information on

plans to use funding leaves the Congress with little information with

which to hold NASA accountable for achieving what it says it will in any

given year. As a result of our work, we were asked by the Congress to

provide a blueprint of information to increase the transparency of NASA

budget documentation. This information was included in the fiscal year

2012 House appropriations report language for NASA. (GAO-11-239SP,

GAO-11-364R, GAO-11-216T, GAO-10-227SP)
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Performance Information

3.14.

Improving the 

Government’s Process 

for Reimbursing Basic 

Research Cost

In 2010, we found that the government’s policies for setting indirect

cost rates—the basis of federal government payments—for universities

performing basic research needed to be updated. In response, OMB

established an interagency task force to review and update the federal

government’s process to establish the universities’ indirect cost rates.

We also identified the need for DOD, whose basic research funding

mostly goes to universities, to increase its oversight of indirect cost

reimbursements based on those rates. As a result, DOD issued new

requirements in November 2010 to help ensure accurate reimbursement

of research costs. (GAO-10-937)

3.15.

Improving Planning 

and Implementation 

of Federal Data 

Center Consolidation

In 2010, OMB announced plans for 24 federal agencies to consolidate 800

data centers by 2015, an initiative intended to address a dramatic rise in

the number of centers and a corresponding increase in operational costs.

Our report reviewed the agencies’ asset inventories and consolidation

plans, identified weaknesses, and made recommendations to address

the weaknesses. This work helped focus congressional, administration,

and agency attention on the key elements of consolidation planning and

resulted in increased oversight of the plans enacted by each agency.

(GAO-11-565)

3.16.

Improving HUD 

IT Modernization 

Management

Since 2008, we have assisted the Congress with oversight of HUD’s IT

modernization efforts. We identified the status and risks of these efforts,

including weaknesses related to key IT management controls, and made

recommendations to address them. This work helped focus congressional

and administration attention on this important initiative, and resulted in

HUD reducing the number of its modernization projects from 29 to 7. This

allowed the department to more effectively manage its modernization

projects relative to the progress made in establishing critical IT

management controls (GAO-11-72, GAO-11-762)

3.17.

Improving the 

Regulatory Process

To improve the effectiveness and transparency of agencies’ reviews of

existing regulations, we recommended that the OMB develop guidance,

policies, and procedures incorporating multiple elements. All of our

recommendations were prominent features of an executive order

and related OMB guidance issued in 2011. For example, the order and

guidance directed agencies to prioritize plans for retrospective reviews of

existing regulations, include public input when planning and conducting

the reviews, and write future regulations in ways that will facilitate

evaluation of their consequences. (GAO-07-791)

Source: GAO.
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Performance Information 

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.

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 website 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, while our internal operations

did not meet our targets for services and functions that help employees get their jobs

Selected Work under Goal 4

We boradened the use of social media technologies to help 

reach new external audiences by launching Facebook and 

Flickr pages. We also tested use of quick response, or “QR” 

codes, on our products to quickly link users to our website.

We implemented a mandatory e-learning course for 

managers of staff who telework to ensure that managers 

understand federal requirements, policy, and relevant terms 

of the collective bargaining agreement with our Employees 

Organization, IFPTE, Local 1921. 

For the first time in 10 years, we conducted a study of our 

field office structure to evaluate the degree to which it is 

configured in a manner that realizes changing conditions 

and is producing long-term efficiencies in how we do our 

work today. 

The energy-efficient lighting that was installed in the 

Headquarters building last year resulted in a 20 percent 

energy usage reduction for a savings of over $210,000, and 

reducing air conditioning used in the building on weekends 

resulted in more than $100,000 in savings.

Source: See Image Sources.

Maximize the Value of GAO by 

Enabling Quality, Timely Service to 

the Congress and by Being a Leading 

Practices Federal Agency

Strategic

Goal 4
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GAO Performance and Accountability Report 2011

Performance Information

done and improve the quality of their work life, the scores of 3.94 against our target of

4.0 indicate that our staff are largely satisfied with the services they receive. Table 18

provides examples of goal 4 accomplishments and contributions and additional examples

are included throughout this report.

Table 18: Goal 4 Accomplishments and Contributions

Improve Efficiency and Effectiveness

4.01.

Enhancing Support 

for Conducting, 

Managing, and 

Reporting on Our 

Work

To expand functionality and address user requests, we eliminated

unnecessary system constraints in a key engagement-management

system. We also implemented 14 standard graphic templates that will

decrease turnaround time, ensure consistency, and reduce rework. As

part of a longer-term effort, we completed requirements definition for

the first phase of a multiphase effort to consolidate and streamline

essential engagement management functions that currently rely on three

outdated, stand-alone systems. In addition, we implemented a new

search engine to provide enhanced search functionality for internal and

external users.

4.02.

Monitoring Factors 

Affecting the Federal 

Government and 

Demands for Our 

Work

To stay abreast of changing issues that could affect our work, we

participated in a series of Anticipatory Governance workshops organized

by the National Defense University with the intention of increasing the

government’s capacity to anticipate and plan for crosscutting national

challenges. We also established an internal “Wiki” page to share foresight

resources (e.g. critical thinking concerning long-term developments)

throughout the agency, such as publications and presentations that

provide insight into emerging issues and potentially changing demands

for our work. In addition, we hosted several experts who spoke with our

staff through the Comptroller General’s Speaker Series to explore and

understand current trends and strategic challenges.

Enhance Recruitment, Development, Retention, and Rewards

4.03.

Strengthening 

Recruiting Initiatives 

to Attract a Diverse 

Workforce

To ensure that our recruitment efforts are aligned with workforce

and diversity needs and changing agency priorities and resources, we

developed a recruiting plan that creates a strong linkage between the

recruitment program and organizational needs, increases the diversity

of staff serving as recruiters, provides enhanced support to recruiting

staff, and institutes stronger program management and accountability

processes, particularly over recruitment-related expenditures. Even

though we curtailed hiring due to our constrained fiscal year 2011 budget,

we maintained critical relationships with our educator advisory partners

and addressed needs identified in our annual Workforce Plan by increasing

the percentage of staff with disabilities.

4.04.

Improving Our 

Performance 

Management Systems

To ensure fairness and equity in our performance management process,

we completed implementation of all the short-term recommendations

from our recent Performance Appraisal Study. For example, we

standardized midpoint feedback by providing updated guidance, and we

developed a new training course to ensure that all staff receive required

feedback and that the feedback addresses required elements. In addition,

we made significant progress on the design of a new performance

management system by conducting job analyses and developing draft

rating criteria, a new rating scale, and performance expectation tools.
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Performance Information 

4.05.

Enhancing Efforts 

to Develop the 

Workforce

To continue to develop and support staff outside of their primary

assignments, we revised our mentoring program and launched a new

cohort of participants. Major changes included adding a midpoint

evaluation for mentors and mentees, improving the process for matching

mentors and mentees, and facilitating a panel discussion of current and

former mentors and mentees on how to mentor effectively. We also

piloted a “speed mentoring” program to provide another method for staff

to get advice without going through the formal, 6-month-long program.

To continue to enhance employees’ report-writing skills, we added a

new advanced writing workshop for our analysts that received very high

reviews from participants, and we updated content for two other writing

courses.

4.06.

Supporting an 

Unbiased Environment 

That Values 

Opportunity and 

Inclusiveness

To continue our commitment to ensuring an inclusive and inviting

workplace, we completed delivery of Part I and began delivery of Part II

of our diversity training, which is focused on discussing team-specific areas

of concern regarding diversity and inclusion, and developing solutions.

We also created a new Diversity and Inclusion statement for the agency

that was publicized broadly upon its issuance. In addition, we provided

communications to staff to ensure that they are aware of the many

counseling services and other programs to support work-life balance that

we offer.

Expand Networks, Collaborations, and Partnerships

4.07.

Enhancing 

Professional 

Accounting and 

Auditing Standards

We met with the new Chairman of the Public Company Accounting

Oversight Board to promote collaboration with this professional audit

standards-setting body. We worked with INTOSAI on using the INTOSAI

Journal to ensure broad understanding of the new INTOSAI standards. We

also helped strengthen public sector accounting and auditing standards

by providing comments on INTOSAI’s guide for peer review. We leveraged

technology to enable our experts to provide “virtual presentations” at

several intergovernmental audit forums, saving travel time and dollars.

4.08.

Enhancing Information 

Sharing and 

Collaboration with 

Others to Expand 

Audit Knowledge

We refreshed membership on the Comptroller General’s Advisory Board,

and the Domestic Working Group on current and emerging issues,

such as financial market regulation and health care reform. We also

leveraged relationships with leading organizations and experts to convene

Comptroller General’s Forums to gather perspectives in two areas of

our work—municipal ratings and financial literacy. In addition to annual

coordination meetings, we sponsored separate meetings with CIGIE to

share information about areas of ongoing work. We also worked with

NASACT and ALGA to facilitate our research on engagements requiring

information and access to state and local government officials.

Human, Information, Fiscal, Technological, and Physical Resources

4.09.

Proactively Protecting 

Physical and 

Information Security

To continue our efforts to align our physical security procedures

with Homeland Security Presidential Directive 12 guidelines, and in

anticipation of a lower fiscal year 2012 budget, we accelerated our

minimum background investigation work and completed investigations for

more than half of our employees who required them in fiscal year 2012.

To ensure timely notification and dissemination of critical information to

emergency response team members, we implemented an application that

allows designated Blackberry users to contact all key emergency response

members even when the Blackberry server is down.
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Performance Information

4.10.

Leveraging 

Technology to Achieve 

Business Process 

Improvement and 

Efficiency Gains

We implemented a new web-based system in our Workforce Relations

Office that provides automated case-management tracking. We developed

a workforce planning system that will help eliminate redundant systems

and enhance our decision-making processes through enhanced analytical

capabilities provided by a modern, integrated business intelligence

solution. We invested significant effort in optimizing use of our recently

purchased human resources system to enable it to become the single

authoritative source for accurate and reliable human capital data and

support all essential human capital functions. Program implementation

for this system is under way with go-live scheduled by mid-fiscal year

2012. In addition, we indexed our entire legislative histories collection,

which dramatically improves search results. We began implementing an

enterprise storage and backup solution for our network, which is a critical

step toward necessary upgrades. We expanded use of our software to

support web-based data collection for a number of internal programs,

such as mentoring, student loan repayment, and the Senate financial

disclosure process. Lastly, we enabled staff to use personally owned, nonBlackberry smart phones to access their e-mail.

4.11.

Improving 

Management of 

Key Administrative 

Processes

To strengthen internal controls over our time-and-attendance reporting

process, we added a statement to our electronic reporting system

for employees to attest to the accuracy of their time-and-attendance

submissions. We also strengthened controls over the use of travel charge

cards by implementing procedures to more closely manage the number

of staff with cards and the spending limit on individual cards. In addition,

we significantly strengthened procedures for addressing staff with

delinquent travel card accounts and established a target for the agency’s

delinquency rate. This enabled us to achieve a very low delinquency rate

that is well under our target. To strengthen our strategic planning process,

we conducted a “lessons learned” exercise on the development of our

fiscal year 2010 to 2015 strategic plan to evaluate strengths and areas for

improvement. Lastly, to address fiscal year 2011 funding reductions, we

implemented a number of actions to streamline our operations, reduce

discretionary costs, and leverage technology to help us achieve our

mission more efficiently and effectively. For example, we reduced our

travel costs by over 25 percent by focusing on immediate travel needs to

support congressional commitments, making strategic staffing decisions,

reducing the number of travelers on necessary trips, and using technology

in lieu of traveling. We also reduced administrative support services in

areas such as office cleaning, facilities management, security, IT, and

human capital support. We curtailed recruiting activities, recognition and

retention incentives, and training. In addition, we reduced investments

not resulting in a short-term payback, deferred them, or both..

4.12.

Enhancing 

Informationsharing and 

Collaboration with 

Internal Employee 

Organizations

We finalized the first comprehensive collective bargaining agreement

with IFPTE, Local 1921, that sets the agreed-upon working conditions,

processes, and rights of the parties. Through the year, we negotiated

with IFPTE in good faith and worked constructively with our Employee

Advisory and Diversity Advisory Committees to reach agreement on

several specific agency actions that affect employee working conditions,

such as annual performance-based compensation for fiscal year 2011 and

upgrades to a key engagement database and to our operating system. We

also implemented training for our managers on the collective bargaining

agreement to ensure consistent understanding and application of the

requirements of managers under the agreement.

Source: GAO.
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Performance Information 

Data Quality and Program Evaluation

Verifying and Validating Performance Data

Each year, we measure our performance with 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 complete and 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 19 of the Appendix on Data Quality.

Program Evaluation

To assess our progress toward our mission-based strategic goals 1 through 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

recommendation based on our audit work, 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 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.)

Under strategic goal 4, we also conduct management studies and projects to examine

internal issues, operations, and processes affecting all four of our strategic goals. Our

management improvement initiatives, first identified in 2008, have addressed a range

of human capital and engagement management areas and have continued to evolve as

projects within specific offices, such as development of our product line and the evaluation

of our performance management system. These projects are now covered under the

performance information by strategic objective for goal 4. In fiscal year 2011, we

■ deployed to analysts wide-screen or dual computer monitors that can display two

documents side by side, which has speeded up our process for checking our draft

reports against the evidence supporting our message. We also began pilot testing

desktop video technology to reduce travel costs and facilitate work between

headquarters and field office staff. In addition, we fielded several procedural changes to

streamline our engagement management process. This ongoing engagement streamlining

initiative focuses on streamlining our engagement processes—especially those activities
GAO-12-4SP 95

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Performance Information

performed by mission team analysts—and increasing efficiency through the use of

IT, while still adhering to our high standards for product quality and timeliness. The

engagement streamlining team comprises 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.

■ enhanced our quality assurance processes in response to the findings of internal

inspections. We simplified and clarified some of our key processes to help ensure

compliance with our professional standards. These changes included enhancements

to our policies on (1) conducting and documenting supervisory review of engagement

documentation, (2) conducting limited investment engagements, and (3) preparing

engagement management and product files. We updated our online Words @ Work

resource, which provides analysts with authoritative guidance on our product types and

their elements. We also developed and released a revised web-based data reliability

course which covers and elaborates on Assessing the Reliability of Computer-Processed 

Data GAO-09-680G. We provided an additional 28 mandatory quality assurance training

classes for our audit staff. The quality assurance improvements and the web-based

training provided our staff with clear guidance on a variety of key policies to help

ensure compliance with our professional standards.

■ engaged an international team of senior representatives from five national audit

institutions to conduct a peer review of our performance and financial audit practices

for the year ended December 31, 2010. This review was our third international peer

review and the first to examine both financial and performance audits. In previous

years, private sector auditing firms conducted the financial audit reviews. The external

peer review offers feedback on the quality of reports and work processes. Generally

Accepted Government Auditing Standards (GAGAS) requires that an external peer

review be done every 3 years; the main purpose is to ensure that we and other audit

organizations comply with GAGAS (GAGAS 3.56). The peer review identified good

practices that may interest other audit institutions and identified some areas that may

need attention from management.

■ assessed the requirements of the GPRA Modernization Act of 2010 (GPRA 2010)—

although we are not subject to these requirements, we intend to implement the spirit

of the law as a matter of policy. We identified financial and nonfinancial benefits as

our priority measures and developed a new presentation of nonfinancial benefits to

provide readers with more information on the program and operational areas in which

these benefits are achieved. In keeping with the GPRA 2010 requirement to improve

transparency of priority-area performance results, concurrent with the issuance of this

report, we updated our website on strategic planning, performance, and accountability

to include data on our priority performance measures (http://www.gao.gov/about/

strategic.html). The Comptroller General designated the Chief Operating Officer as the

Performance Improvement Officer for mission areas and the Chief Administrative Officer

as the Performance Improvement Officer for internal operations. In addition, beginning

with this report, we will no longer print hard copies of the full performance and

accountability report. It will be available electronically at http://www.gao.gov/products/

GAO-12-4SP.
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Performance Information

■ 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 an analysis of the Standards for Attestation

Engagements No. 16 (SSAE 16) Audits for our shared service providers. The review also

includes 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 2011, 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/Human Capital.
SERVING THE CONGRESS AND THE NATION

Part III

Financial Information
98 GAO-12-4SP

GAO Performance and Accountability Report 2011

From the Chief Financial Officer 

November 15, 2011

I am pleased to report that during fiscal year 2011, the U.S. Government

Accountability Office continued to honor its commitment to lead by

example in federal financial management. For the 25th 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 2010 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.

Our financial management system continues to be centered on Oracle

Federal Financials, hosted and supported by the Enterprise Services Center

(ESC) at the Department of Transportation. ESC maintains the accounting

system and related subsidiary systems and performs the bulk of our daily

transaction processing. The implementation of a workforce planning

system is underway; this system will help eliminate redundant systems

and enhance our decision-making processes through enhanced analytical

capabilities provided by a modern, integrated business intelligence

solution. The optimization of our human resources system, HR Connect,

is also under way. HR Connect will serve as the single integrated system

that supports virtually all of the human capital functions and processes

performed by us. When fully implemented, HR Connect will serve as

the primary source for timely and accurate human capital data and our

personnel system of record. It will also establish a human capital data

architecture that enables the right information to be available to the right

people at the right time, thereby enhancing the timeliness and accuracy of

personnel actions, and support more timely and informed decision making.

Given that our staff account for more than 80 percent of our budget,

efficient and effective human capital management is critical.

In the area of internal controls, we continue to perform rigorous testing

in accordance with Office of Management and Budget Circular A-123,

Management’s Responsibility for Internal Control, Appendix A, including

Source: See Image Sources.

Chief Financial Officer

From the 
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From the Chief Financial Officer

end-to-end transaction testing (following a transaction through the

budget, procurement, disbursement, and property business cycles).

These tests validate compliance, effectiveness and efficiency, and

proper financial reporting, as well as act as a compensating control for

accounting activities performed at the various shared service providers.

These efforts contributed to our independent auditor providing a

positive opinion on the effectiveness of our internal controls as well as

management providing the assurances regarding our financial reporting

and internal controls as provided in detail on page 4 of this report.

In anticipation of funding constraints in fiscal years 2011 and 2012, we

began implementing actions in fiscal year 2010, fiscal year 2011, and

continuing in fiscal year 2012 to reduce our staffing, streamline our

operations, reduce administrative expenses, and leverage technology

to improve our efficiency and effectiveness. To achieve these goals,

we constrained hiring; offered voluntary separation incentives and

early retirement opportunities; reduced and deferred investments; and

reduced discretionary spending in human capital, engagement support

(including travel), and infrastructure support operations, including

facilities management, information technology, and other administrative

services. We also continued to identify and implement additional energy

efficiency measures.

To improve the efficiency of our mission work, we took several significant

steps to more effectively use staff time and leverage technology.

For example, we eliminated unnecessary system constraints in a key

engagement management system and created graphics templates to

standardize and expedite development of report graphics. We also

clarified responsibilities and procedures for coordinating with external

entities, such as state and local audit offices, which provide an important

resource for engagement teams to expand their reach into key areas.

In addition, we leveraged technology and use of social media tools to

help reach new audiences and provide external users with additional

ways to access our products. We are currently studying our end-to-end

engagement management process to identify additional opportunities for

process efficiency and are establishing a new management challenge that

addresses this area.

While our constrained fiscal environment continues to be challenging,

GAO will continue to meet the highest-priority needs of the Congress

and implement our strategic goal 4 objectives to provide quality, timely

service to the Congress and be a leading practices agency.

David M. Fisher

Chief Financial Officer
100 GAO-12-4SP

GAO Performance and Accountability Report 2011

From the Chief Financial Officer 

Audit Advisory Committee’s Report

The Audit Advisory Committee (the Committee) assists the Comptroller

General in overseeing the U.S. Government Accountability Office’s

financial operations. As part of that responsibility, the Committee

meets with agency management and its internal and external auditors

to review and discuss GAO’s external financial audit coverage, the

effectiveness of GAO’s internal controls over its financial operations,

and its compliance with certain laws and regulations that could

materially impact GAO’s financial statements. GAO’s external auditors

are responsible for expressing an opinion on the conformity of

GAO’s audited financial statements with the U.S. generally accepted

accounting principles. The Committee reviews the findings of the

internal and external auditors, and GAO’s responses to those findings,

to ensure that GAO’s plan for corrective action includes appropriate

and timely follow-up measures. In addition, the Committee reviews

the draft performance and accountability report, including its financial

statements, and provides comments to management who have primary

responsibility for the performance and accountability report. The

Committee met twice with respect to its responsibilities as described

above. During these sessions, the Committee met with the internal

and external auditors without GAO management being present and

discussed with the external auditors the matters that are required

to be discussed by generally accepted auditing standards. Based on

procedures performed as outlined above, we recommend that GAO’s

audited statements and footnotes be included in the 2011 performance

and accountability report.

Judith H. O’Dell CPA CVA

Chair

Audit Advisory Committee
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Financial Information

Independent Auditor’s Report

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Independent Auditor’s Report 

Comptroller General of the United States 

In our audits of the Government Accountability Office (GAO) for fiscal years 2011 and 2010, 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, 2011 and 

2010, 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, 2011, 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), the Office of 

Management and Budget (OMB) Circular No. A-123, Management’s Responsibility for Internal 

Control, and GAO’s Standards for Internal Control in the Federal Government, as required by 

OMB audit guidance. 

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

communicate in a separate management letter. 
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GAO Performance and Accountability Report 2011

Financial Information 

Opinion on FFMIA Compliance 

In our opinion, GAO’s financial management systems, as of September 30, 2011, 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, 2011, 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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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, 2011. 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, 2011. 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 op



inions. 

Calverton, Maryland 

November 10, 2011 
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Financial Information 

Purpose of Each Financial Statement

The financial statements on the next four pages present the following information:

■ The balance sheet presents the combined amounts we had available to use (assets)

versus the amounts we owed (liabilities) and the residual amounts after liabilities were

subtracted from assets (net position).

■ The statement of net cost presents the annual cost of our operations. The gross cost

less any offsetting revenue earned from our activities is used to arrive at the net cost of

work performed under our four strategic goals.

■ The statement of changes in net position presents the accounting items that caused the

net position section of the balance sheet to change from the beginning to the end of

the fiscal year.

■ The statement of budgetary resources presents how budgetary resources were made

available to us during the fiscal year and the status of those resources at the end of the

fiscal year.
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Financial Information

Financial Statements

U.S. Government Accountability Office

Balance Sheets

As of September 30, 2011 and 2010

(Dollars in thousands)

2011 2010

Assets

Intragovernmental

Funds with the U.S. Treasury (Note 3) $84,253 $88,244

Accounts receivable 3,820 871

Total Intragovernmental 88,073 89,115

Property and equipment, net (Note 4) 36,745 32,824

Other 504 328

Total Assets $125,322 $122,267

Liabilities

Intragovernmental

Accounts payable $8,288 $11,573

Employee benefits (Note 6) 4,632 4,404

Workers' compensation (Note 7) 2,554 2,620

Total Intragovernmental 15,474 18,597

Accounts payable and other 17,249 16,286

Salaries and benefits (Note 6) 24,375 23,365

Accrued annual leave (Note 5) 32,241 35,178

Workers' compensation (Note 7) 16,181 15,217

Capital leases (Note 9) 23 2,637

Note payable (Note 5) 2,931 -

Total Liabilities 108,474 111,280

Net Position

Unexpended appropriations 29,701 28,531

Cumulative results of operations (12,853) (17,544)

Total Net Position (Note 13) 16,848 10,987

Total Liabilities and Net Position $125,322 $122,267

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

Financial Statements

U.S. Government Accountability Office

Statements of Net Cost

For Fiscal Years Ended September 30, 2011 and 2010

(Dollars in thousands)

2011 2010

Net Costs by Goal (Note 2)

Goal 1: Well-being/Financial Security of American People $247,123 $218,277

Less: reimbursable services (2,089) (5,153)

Net goal costs 245,034 213,124

Goal 2: Changing Security Threats/Challenges of Global 

 Interdependence

147,330 171,597

Less: reimbursable services - -

Net goal costs 147,330 171,597

Goal 3: Transforming the Federal Government’s Role 177,402 207,215

Less: reimbursable services (13,211) (11,802)

Net goal costs 164,191 195,413

Goal 4: Maximize the Value of GAO 20,094 29,441

Less: reimbursable services - -

Net goal costs 20,094 29,441

Less: reimbursable services not attributable to goals (7,152) (6,619)

Net Cost of Operations (Note 10) $569,497 $602,956

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

Financial Statements

U.S. Government Accountability Office

Statements of Changes in Net Position

For Fiscal Years Ended September 30, 2011 and 2010

(Dollars in thousands)

2011 2010

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

Budgetary Financing Sources - Appropriations used 543,327 576,126

Other Financing Sources

Intragovernmental transfer of property and equipment - (14)

Federal employee retirement benefit costs paid by OPM 

and imputed to GAO (Note 6) 30,861 33,295

Total Financing Sources 574,188 609,407

Net Cost of Operations (569,497) (602,956)

Net Change 4,691 6,451

Cumulative Results of Operations, End of fiscal year (12,853) (17,544)

Unexpended Appropriations, Beginning of fiscal year 28,531 48,330

Budgetary Financing Sources and Uses

Current year appropriations 547,349 557,849

Permanently not available (2,852) (1,522)

Appropriations used (543,327) (576,126)

Total Unexpended Appropriations, End of fiscal year 29,701 28,531

Net Position $16,848 $10,987

The accompanying notes are an integral part of these statements.
108 GAO-12-4SP

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Financial Information 

Financial Statements

U.S. Government Accountability Office

Statements of Budgetary Resources

For Fiscal Years Ended September 30, 2011 and 2010

(Dollars in thousands)

2011 2010

Budgetary Resources (Note 11)

Unobligated balance, brought forward October 1 $10,838 $30,373

Recoveries of prior year unpaid obligations 7,361 2,344

Budget authority

Appropriations 547,349 557,849

Spending authority from offsetting collections

Earned and collected 21,048 24,139

Change in receivable from federal sources 2,978 (133)

Change in unfilled customer orders - advance received 206 (86)

Change in unfilled customer orders - without advance 4,589 1

Subtotal 576,170 581,770

Permanently not available (2,852) (1,522)

Total Budgetary Resources $591,517 $612,965

Status of Budgetary Resources

Obligations incurred

Direct $550,308 $581,262

Reimbursable 22,315 20,865

Subtotal 572,623 602,127

Unobligated balance - apportioned 8,479 6,515

Unobligated balance not available 10,415 4,323

Total Status of Budgetary Resources $591,517 $612,965

Change in Obligated Balances

Obligated balance, net:

Unpaid obligated balance, brought forward October 1 $78,264 $72,317

Uncollected customer payments from federal sources, 

 brought forward October 1 (846) (978)

Total, unpaid obligation, net, brought forward October 1 77,418 71,339

Obligations incurred 572,623 602,127

Less: Gross outlays (569,743) (593,836)

Recoveries of prior year unpaid obligations, actual (7,361) (2,344)

Change in uncollected customer payments from federal sources (7,567) 132

Obligated balance, net, end of period:

Unpaid obligations 73,783 78,264

Uncollected customer payments from federal sources (8,413) (846)

Total, unpaid obligations, net, end of period $65,370 $77,418

Net Outlays

Gross outlays $569,743 $593,836

Less: Offsetting collections (21,254) (24,053)

Net Outlays $548,489 $569,783

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

Notes to Financial Statements

Note 1. Summary of Significant Accounting Policies

Reporting Entity

The accompanying financial statements present the financial position, net cost of

operations, changes in net position, and budgetary resources of the United States

Government Accountability Office. GAO, 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 as well as revenue from reimbursable audit services 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 from offsetting collections 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 DavisBacon 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.
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Financial Information 

Accounts Receivable

GAO’s accounts receivable are due principally from federal agencies for reimbursable

services; therefore, GAO has not established an allowance for doubtful accounts.

Property and Equipment

The GAO headquarters building qualifies as a multiuse heritage asset, is GAO’s only

heritage asset, and is reported with property and equipment on the balance 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).

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 work-related occupational disease, and beneficiaries of employees whose deaths
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Financial Information

are attributable to job-related injury or occupational disease. Claims incurred for benefits

for GAO employees under FECA are administered by the Department of Labor (DOL) 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 long term in nature. Sick

leave and other types of leave are expensed as leave is taken. All leave is funded when

taken.

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

estimates.

Reclassifications

Certain prior year amounts in the statement of net costs have been reclassified to conform

to the current year presentation.
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Note 2. Intragovernmental and Public 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 and public costs

and exchange revenue for the periods ended September 30, 2011, and September 30, 2010,

are as follows:

Dollars in thousands

 2011 2010

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

Intragovernmental costs $65,880 $59,127

Public costs 181,243 159,150

Total goal 1 costs 247,123 218,277

Goal 1 intragovernmental earned revenue (2,089) (5,153)

Net goal 1 costs 245,034 213,124

Goal 2: Changing Security Threats/Challenges of Global Interdependence

Intragovernmental costs 39,505 46,069

Public costs 107,825 125,528

Total goal 2 costs 147,330 171,597

Goal 3: Transform the Federal Government to Address National Challenges

Intragovernmental costs 42,276 52,717

Public costs 135,126 154,498

Total goal 3 costs 177,402 207,215

Goal 3 intragovernmental earned revenue (13,211) (11,802)

Net goal 3 costs 164,191 195,413

Goal 4: Maximize the Value of GAO

Intragovernmental costs 6,288 9,510

Public costs 13,806 19,931

Total goal 4 costs 20,094 29,441

Earned revenue not attributable to goals

Intragovernmental (6,983) (6,315)

Public (169) (304)

Total earned revenue not attributable to goals ($7,152) ($6,619)

Goals 2 and 4 have no associated year-to-date intragovernmental revenues and all public

earned revenue collected is not attributable to goals.
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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, 2011, and September 30, 2010, is as follows:

Dollars in thousands

2011 2010

Unobligated balance

Available $8,479 $6,515

Unavailable 10,404 4,311

Obligated balances not yet disbursed 65,370 77,418

Total funds with U.S. Treasury $84,253 $88,244

In fiscal year 2011, GAO collected amounts for reimbursable services that it did not have

authority to spend. This restriction of spending authority of these funds added to the

increase in the unobligated-unavailable balance.

Note 4. Property and Equipment, Net

The composition of property and equipment as of September 30, 2011, is as follows:

Dollars in thousands

Classes of property and equipment Acquisition value Accumulated depreciation Book value

Building $15,664 $14,411 $1,253

Land 1,191 – 1,191

Building improvements 122,900 100,825 22,075

Computer and other

equipment and software 44,365 33,013 11,352

Leasehold improvements 4,340 4,222 118

Assets under capital lease 18,557 17,801 756

Total property and equipment $207,017 $170,272 $36,745
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Financial Information 

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

Note 5. Liabilities Not Covered by Budgetary Resources

The liabilities on GAO’s balance sheets as of September 30, 2011, and September 30,

2010, 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, 2011, and September 30, 2010, is

as follows:

Dollars in thousands

 2011 2010

Intragovernmental liabilities—Workers’ compensation $2,554 $2,620

Salaries and benefits—Comptrollers’ General retirement plan* 1,431 1,878

Accrued annual leave 32,241 35,178

Workers’ compensation** 16,181 15,217

Capital leases - 2,637

Notes payable 2,931 -

Total liabilities not covered by budgetary resources $55,338 $57,530

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

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

In fiscal year 2011, GAO fully funded the balance of outstanding capital leases. This fiscal

year GAO also entered into an agreement to finance the replacement of the building’s hot

water boilers under the Federal Energy Management Program following Section 201(a)(3)

of the Federal Property Act. Financing guidance under this program allows participating

agencies to obligate only the annual payments. The balance of the note payable is

scheduled to be paid in fiscal years 2012 though 2015 with annual payments, including

interest of approximately $733,000.
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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 Benefit Program (FEHBP) and the Federal Employees Group Life

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

contributions through OPM to FEHBP and FEGLI for active employees to pay for their

current benefits. GAO’s contributions for active employees are recognized as operating

expenses. Using the cost factors supplied by OPM, GAO has also recognized an expense in

its financial statements for the estimated future cost of postretirement health benefits and

life insurance for its employees. These costs are financed by OPM and imputed to GAO.

Amounts owed to OPM and Treasury as of September 30, 2011, and September 30, 2010,

are $4,632,000 and $4,404,000, 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, 2011, and September 30, 2010, are as follows:

Dollars in thousands

Federal employee benefits costs 2011 2010

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

Estimated future pension costs (CSRS/FERS) $13,444 $15,816

Estimated future postretirement health and life insurance (FEHBP/FEGLI) 17,417 17,479

Total $30,861 $33,295

Pension expenses (CSRS/FERS) $37,971 $36,386

Health and life insurance expenses (FEHBP/FEGLI) $20,640 $19,283

FICA and Medicare payments made by GAO $20,762 $21,796

Thrift Savings Plan – matching contribution by GAO $13,188 $12,898

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

$1,431,000 as of September 30, 2011, and $1,878,000 as of September 30, 2010, 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:
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Financial Information 

Dollars in thousands

Actuarial liability as of 9/30/2010 $1,878

Expense:

Interest on the liability balance 78

Actuarial (gain)/loss:

From experience (241)

From assumption changes 17

Total gain (146)

Less benefits paid (301)

Actuarial liability as of 9/30/2011 $1,431

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, 2011, and September 30, 2010, which is expected to be paid in future

periods. This estimated liability of $16,181,000 and $15,217,000 as of September 30, 2011,

and September 30, 2010, respectively, is reported on GAO’s balance sheets. GAO also

recorded a liability for amounts paid to claimants by DOL as of September 30, 2011, and

September 30, 2010, of $2,554,000 and $2,620,000, respectively, but not yet reimbursed

to DOL by GAO. The amount owed to DOL is reported on GAO’s balance sheets as an

intragovernmental liability.

Note 8. Building Lease Revenue

At the end of fiscal year 2010 the existing 10-year 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 new agreement began 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 2011 and 2010 was $6,845,000 and $5,338,000,

respectively. These amounts are included in reimbursable services shown on the

statements of net cost. Total rental revenue for the future periods of the new 10-year

lease is as follows:
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Financial Information

Dollars in thousands

Fiscal year ending September 30 Total projected receipts*

2012 $6,928

2013 7,014

2014 7,102

2015 7,194

2016 7,288

2017 - 2020 30,164

Total $65,690

*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, 2011, and September 30, 2010, the capital lease

liability was $23,000 and $2,637,000, respectively. In fiscal year 2011, GAO paid off balances

of the majority of these leases.

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

2012 $24

2013 2

Total estimated future lease payments 26

Less: imputed interest (3)

Net capital lease liability $23
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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 2011 and fiscal year 2010 amounted to approximately $12,619,000 and

$13,963,000, respectively. Leases for equipment under operating leases are generally

for 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

2012 $9,115

2013 6,240

2014 5,401

2015 4,113

2016 3,289

2017 and thereafter 5,356

Total estimated future lease payments $33,514

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 2011 and fiscal year 2010

amounted to $467,064,000 and $475,530,000, respectively, about 82 and 79 percent of

GAO’s net cost of operations in fiscal year 2011 and fiscal year 2010, respectively. Included

in the net cost of operations are federal employee benefit costs paid by OPM and imputed

to GAO of $30,861,000 in fiscal year 2011 and $33,295,000 in fiscal year 2010.

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 2011 and fiscal year 2010 amounted to $22,452,000 and $23,574,000, 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 2011 include current year

appropriations, prior years’ unobligated balances, 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. In fiscal year 2010, in addition

to the appropriation and reimbursements earned, the prior year’s unobligated balance

includes almost $21,000,000 available through fiscal year 2010 to cover program reviews

required by the American Recovery and Reinvestment Act of 2009.

Earned reimbursements consist primarily of rent collected from USACE for lease of space and

related services in the GAO headquarters building and program and financial audits of federal

entities, including the Department of the Treasury, Securities and Exchange Commission,

Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, 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 costsharing 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 2011 and 2010 budgetary resources do not include any transfers of budget

authority.

Comparison of GAO’s fiscal year 2010 statement of budgetary resources with the

corresponding information presented in the 2012 President’s Budget is as follows:

Dollars in thousands

Budgetary resources Obligations incurred

Fiscal year 2010 statement of budgetary resources $612,965 $602,127

Unobligated balances, beginning of year – (funds activity, 

expired accounts) (5,384) -

Recovery of prior year unpaid obligations (2,344) -

Obligations incurred – expired years - (1,831)

Permanently not available –(funds activity, expired accounts) 1,522 -

Spending authority from offsetting collections (funds activity, 

expired accounts) 861 -

Other – rounding in President’s Budget 380 (296)

2012 President’s Budget – fiscal year 2010, actual $608,000 $600,000

As the fiscal year 2013 President’s Budget will not be published until February 2012, a

comparison between the fiscal year 2011 data reflected on the statement of budgetary

resources and fiscal year 2011 data in the President’s Budget cannot be performed, though
120 GAO-12-4SP

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Financial Information 

we expect similar differences will exist. The fiscal year 2013 President’s Budget will be

available on the OMB’s website and directly from the Government Printing Office.

Budgetary resources obligated for undelivered orders at the end of fiscal year 2011 and

the end of fiscal year 2010 totaled $21,269,000 and $24,906,000, respectively. GAO’s

apportionments fall under Category A, quarterly apportionment. Apportionment categories

of obligations incurred for fiscal years 2011 and 2010 are as follows:

Dollars in thousands

Fiscal year ending September 30 2011 2010

Direct – Category A $550,308 $581,262

Reimbursable – Category A 22,315 20,865

Total obligations incurred $572,623 $602,127
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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, 2011 and 2010, are as follows:

Dollars in thousands

Fiscal year ending September 30 2011 2010

Resources used to finance activities

Budgetary resources obligated

Obligations incurred $572,623 $602,127

Less: spending authority from offsetting collections and recoveries (36,182) (26,265)

Obligations net of offsetting collections and recoveries 536,441 575,862

Other resources

Intragovernmental transfer of property and equipment - (14)

Federal employee retirement benefit costs paid by OPM imputed to GAO 30,861 33,295

Net other resources used to finance activities 30,861 33,281 

Total resources used to finance activities 567,302 609,143

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

Net decrease/(increase) in unliquidated obligations 8,432 (4,320)

Net increase/(decrease) in lease liability and other 317 (2,177)

Assets capitalized (14,057) (9,975)

Net (increase)/decrease in receivables not generating resources until 

collected and other adjustments (154) 17

Total resources used to fund items not part of the net cost of operations (5,462) (16,455)

Total resources used to finance net cost of operations 561,840 592,688

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

the current period

Increase/(decrease) in workers’ compensation 898 (1,259)

(Decrease)/increase in accrued annual leave (2,937) 1,827

Decrease in other liabilities (447) (83)

Total components of net costs that will not (generate) or require 

resources in the current period (2,486) 485

Costs that do not require resources

Depreciation and other 10,143 9,783

Net cost of operations $569,497 $602,956
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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, 2011, and 2010, are as follows:

Dollars in thousands

2011 2010

Investment in property and equipment, net $36,745 $32,824

Net reimbursable funds activity 5,355 6,892

Other – supplies inventory and accounts receivable from public 385 270

Liabilities not covered by budgetary resources (55,338) (57,530)

Cumulative results of operations ($12,853) ($17,544)

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

Davis-Bacon 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, DOL investigates violation allegations to determine if federal contractors owe

additional wages to covered employees. If DOL 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, 2011 and 2010, totaled approximately $5,037,000 and $4,937,000, 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 $1,264,000 in fiscal year 2011 and $801,000 in fiscal year 2010.
SERVING THE CONGRESS AND THE NATION

Part IV

Inspector General’s View of 

GAO’s Management Challenges
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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 27, 2011

To:	 Comptroller General Gene L. Dodaro

From:	 Inspector General Frances Garcia

Subject:	 GAO Management Challenges

In October 2010, the OIG reported that the management challenges identified by GAO

had remained unchanged for many years. We are pleased to report that GAO

responded to our recommendations 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.

We reviewed management’s assessment and decision to remove physical and

information security and to retain human capital as management challenges for fiscal

year 2011. Based on our work and institutional knowledge, we believe that GAO has

taken sufficient action to establish an appropriate framework of policies, processes,

procedures, and personnel to effectively comply with federal requirements intended

to mitigate physical and information security risks and adapt as new threats evolve.

As a result, we support management’s decision to remove physical security and

information technology as management challenges that may affect GAO’s

performance. Further, we agree that while improvements have been made in GAO’s

human capital management, this area continues to represent a management challenge

for the agency as it strives to maintain an agile and effective workforce.

In 2011, GAO identified “engagement efficiency” as a new management challenge in

recognition of its need to find ways to improve its efficiency in producing quality

work in support of the Congress within a declining resource environment. We concur

with GAO’s decision to recognize the importance of these efforts by designating

engagement efficiency as a management challenge.

Office of the Inspector General United States Government Accountability Office
SERVING THE CONGRESS AND THE NATION

Part V

Appendix on Data Quality
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GAO Performance and Accountability Report 2011

Appendix on Data Quality 

Table 19: 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 cost reduction 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. 

In some cases, 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 longterm 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 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 Office of Quality and Continuous Improvement (QCI) for review. Once accomplishment 

reports are approved, they are entered into our Engagement Reporting System (ERS), which is 

the official reporting database.

Data Quality
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Appendix on Data Quality

Verification 

and 

validation

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

the financial benefits that result from our work. They also provide guidance on estimating 

those financial benefits. The team identifies when a financial benefit has occurred as a result 

of our work. The team develops estimates based on non-GAO sources, such as the agency 

that acted on our work, a congressional committee, or the Congressional Budget Office, 

and files accomplishment reports based on those estimates. When non-GAO estimates are 

not readily available, teams may use GAO estimates—developed in consultation with our 

experts, such as the Chief Economist, Chief Actuary, or Chief Statistician, and corroborated 

with a knowledgeable program official from the executive agency involved. The estimates 

are reduced by significant identifiable offsetting costs. The team develops documentation to 

support accomplishments with evidence that meets our evidence standard, supervisors review 

the documentation, 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 our 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 our procedures. Beginning in fiscal year 2010, teams are 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 2011, QCI approved accomplishment reports covering 96 

percent of the dollar value of financial benefits we reported.

In fiscal year 2011, accomplishments of $500 million or more were also reviewed by 

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

experience and knowledge of our accomplishment reporting policies and procedures. Our total 

fiscal year 2011 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-and-effect relationship exists 

between the benefits reported and our recommendation or work performed.

Data sources Our Accomplishment Reporting System provides the data for this measure. Teams use this 

automated system to prepare, review, and approve accomplishments and forward them to QCI 

for its review. Once accomplishment reports are approved, they are entered into ERS, which is 

the official reporting system.
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Appendix on Data Quality 

Verification 

and 

validation

We 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 benefits resulting from our work. The team develops documentation to 

support accomplishments with evidence that meets our standards. Supervisors review the 

documentation; an independent staff person checks the facts of the accomplishment report; 

and the team’s managing director, director, or both approve the accomplishment report to 

ensure its appropriateness, 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.

Data 

limitations

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

ensure that recommendations are directed at resolving the cause of identified problems; that 

are addressed to parties who have the authority to act; and are specific, feasible, and costeffective. Some of our products are informational and do not contain recommendations.

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.

Data sources Our Publications Database incorporates recommendations from products as they are issued. 

The database is updated daily.

Verification 

and 

validation

Our Information Management team enters data on recommendations into a “staging” system 

where they are reviewed for accuracy and completeness. Once reviewed, the data are posted 

to the Publications 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.

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.

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 2011 implementation rate is the percentage of recommendations made in fiscal year 

2007 products that were implemented by the end of fiscal year 2011). Our experience has 

shown that if a recommendation has not been implemented within 4 years, it is not likely to be 

implemented.

Data sources Our Publications Database incorporates recommendations as products are issued. The 

database is updated daily. As our staff monitor implementation of recommendations, they 

submit updated information to the database.
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Appendix on Data Quality

Verification 

and 

validation

Our policies and procedures specify that our staff must verify and document 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 team and by QCI.

Summary data are provided to the teams that issued the recommendations. The teams 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.

Data 

limitations

The data may be underreported because, in some cases, a recommendation may require 

more than 4 years to implement. We also may not count cases in which a recommendation 

is partially implemented. Therefore, the data represent a conservative measure of our overall 

contribution toward improving government.

Client measures

Testimonies

Definition 

and 

background

The Congress asks 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 hearings at which we testify reflect the importance 

and value of our institutional knowledge in assisting congressional decision making. When we 

have multiple witnesses with separate testimonies at a single hearing, we count this as a single 

testimony. We do not count statements submitted for the record when our 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 our Office of Congressional Relations (Congressional Relations).

Verification 

and 

validation

The teams responding to requests for testimony are responsible for entering data into the 

Congressional Hearing System. After we have 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.

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 solicit feedback from the client using an electronic form. We compute the 

proportion of favorable responses to a question related to timeliness. 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 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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Appendix on Data Quality 

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 our Publications 

Database, which is maintained by a contractor. To identify appropriate recipients of the form 

for products meeting our criteria, we ask the engagement teams to provide in our 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 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 Client 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 released GAO products 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 the errors and resend the e-mail 

message.

Data 

limitations

Testimonies and written products that met our criteria for this measure represented about 

56 percent of the congressionally requested written products we issued during fiscal year 

2011. 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 25 percent, and 98 percent of those who responded answered the timeliness question. We 

received responses from one or more people for about 50 percent of the products for which we 

sent a form in fiscal year 2011.

People measures

New hire rate

Definition 

and 

background

This performance measure is the ratio of the number of people hired to the number we 

planned to hire. Annually, we develop a workforce plan that takes into account our strategic 

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

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

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

Administrative Officer, Chief Human Capital Officer, and 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.

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

and maintained by the Chief Administrative Officer. 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 us and other agencies.

Verification 

and 

validation

The Chief Administrative Officer maintains a database that monitors and tracks all our hiring 

offers, declinations, and accessions. In coordination with our Human Capital Office, our CAO 

staff enter 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 Chief Operating 

Officer and the Chief Administrative Officer that allow them to monitor progress by unit 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.
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Appendix on Data Quality

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 CAO database that contains 

some data from the NFC database, which handles payroll and personnel data for us and other 

agencies.

Verification 

and 

validation

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

contains NFC data and follow up on any discrepancies. In fiscal year 2009, we developed 

standard operating procedures, which are still in effect, to document how we calculate and 

ensure quality control over data relevant to this measure.

Data 

limitations

See New hire rate, Data limitations.

Staff development

Definition 

and 

background

One way that we measure how well we are doing and identify areas for improvement is through 

our annual employee feedback survey. This web-based survey, which is conducted by an 

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

our employees once a year. Through the survey, we encourage our staff to indicate what they 

think about GAO’s overall operations, work environment, and organizational culture and how 

they rate our managers—from the immediate supervisor to the Executive Committee—on key 

aspects of their leadership styles. The survey consists of over 100 questions. To further ensure 

confidentiality, in fiscal year 2011 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 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.
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Appendix on Data Quality 

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 2011, 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 followon work to gain a better understanding of the information from the survey.

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 rather than entering the data into a database, 

thus eliminating a potential 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. See also Staff development, 

Data sources.

Verification 

and 

validation

See Staff development, Verification and validation.

Data 

limitations

See Staff development, Data limitations.

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.
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Appendix on Data Quality

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. See also Staff development, Data sources.

Verification 

and 

validation

See Staff development, Verification and validation.

Data 

limitations

See Staff development, Data limitations.

Organizational climate

Definition 

and 

background

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

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

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

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

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

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. See also Staff 

development, Data sources.

Verification 

and 

validation

See Staff development, Verification and validation.

Data 

limitations

See Staff development, Data limitations.

Internal operations measures

Help get job done and quality of work life

Definition 

and 

background

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

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

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

outside contractor, is administered to all of our employees. Through the survey we encourage 

our staff to indicate how satisfied they are with 17 services that help them get their jobs done 

and another 15 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 have 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.
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Data sources These data come from our staff’s responses to an annual web-based survey. To determine 

how satisfied our employees are with internal administrative services, we calculate composite 

scores for two measures. One measure reflects the satisfaction with the 17 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 15 services that affect quality of work 

life. These services include assistance related to pay and benefits, building maintenance and 

security, and workplace safety and health. The composite score represents how employees 

rated their satisfaction with services in each of these areas relative to how they rated the 

importance of those services to them. The importance scores and satisfaction levels are both 

rated on a scale of 1 (low) to 5 (high).

Verification 

and 

validation

The satisfaction survey on administrative services is housed on a website maintained by a 

contractor, and only the contractor has the ability to link the survey results with individual 

staff. Our survey response rate was 56 percent in 2010. To ensure that the results are largely 

representative of our population, we analyze them by demographic representation (unit, tenure, 

location, band level, and job type). Each unit responsible for administrative services conducts 

follow-on work, including analyzing written comments to gain a better understanding of the 

information from the survey.

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. 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 entered into a database by 

someone other than the respondent, thus eliminating a potential source of error.

Source: GAO.
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GAO Performance and Accountability Report 2011

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