GAO-09-383CG

CHALLENGES FACING T

ADMINISTRATION AND T

CONGRESS

Before the AGA 2009 Leadership C

Washington, DC

February 19, 2009

By Gene L. Dodaro

Acting Comptroller Genera
GAO-09-383CG

Transition: Assisting Th

Administration & The New 
GAO-09-383CG GAO-09-383

C

G
GAO-09-383CG GAO-09-383

C

G
GAO-09-383CG

Financial Institutions and 

• Financial Regulatory System• GAO Role in Financial Rescue • Auditors of Bank Insurance Fund, FHFA, T

Government Financial Statements
GAO-09-383CG

Modernizing The U.S. Fi

Regulatory System

Financial Regulation: A Framework for Crafting 

Proposals to Modernize the Outdated U.S. FinRegulatory System (GAO-09-216, Jan. 8, 2009

• Explains the origins of the current fi

regulatory system

• Describes market developments an

pose challenges to the current syste

• Presents an evaluation framework t

and others can use to craft or evaluregulatory reform efforts.
GAO-09-383CG

Regulatory System Out

Risks Posed By:• Emergence of large, complex, and inter

financial conglomerates

• Less-regulated entities are playing incre

roles in the financial system

• New and complex products pose challe

stability and consumer protection
GAO-09-383CG

Crafting or Assessing Regulatory Ref

GAO Framework—9 Essential Cha

• Clearly defined regulatory goals in statute • Appropriately comprehensive• Systemwide focus• Flexible and adaptable• Efficient and effective• Consistent consumer and investor protectio• Regulators provided with independence, pr

authority, and accountability

• Consistent financial oversight• Minimal taxpayer exposure
GAO-09-383CG

Financial Institutions and 

• Emergency Economic Stability Act of 2008 cre• GAO given statutory oversight role• GAO’s TARP reports recommendations follow 

• Monitoring the use of funds to meet the Act• Articulating a better communication strateg• Ensuring effective Treasury management s
GAO-09-383CG

Other Urgent Issue

Timely Action Critic

• U.S. Efforts in Iraq, Afghanistan, and Pakistan• Defense Readiness, Spending, and Care for Se• Protecting the Homeland and Preparing for Pub

Emergencies

• Improving U.S. Image Abroad• Food Safety • Transition to Digital TV
GAO-09-383CG
GAO-09-383CG GAO-09-383

C

G
GAO-09-383CG GAO-09-383

C

G
GAO-09-383CG GAO-09-383

C

G
GAO-09-383CG

2009 HIGH-RISK LIS

30 items grouped into four categories:

• Broad-Based Transformation Challe

(e.g., DOD, DHS, surface transportatiooversight)

• Federal Contracting• Tax Law Administration• Insurance and Benefit Programs

(e.g., Medicare, Medicaid, PBGC, flood 
GAO-09-383CG

Latest High-Risk List Add

• Modernizing the Outdated U.S. Financial Reg• Protecting Public Health through Enhanced O

Products

• Transforming EPA’s Processes for Assessing 

Toxic Chemicals
GAO-09-383CG

Long-Term Challeng

• Today’s focus—understandably—is on:

• Dealing with financial system stress • Addressing the economic downturn

• BUT.... Underlying issues still need to be a

• Long-term fiscal challenge• Sustaining progress on federal financia
GAO-09-383CG

Long-Term Fiscal Chal

-20-15-10

-5

05

2005 2010 2015 2020 2025 2030 2035 

Fiscal year

Percent of GDP

Combined 

Surplus/Deficit

Source: GAO January 2009 analysis.aFederal surplus/deficit is from GAO’s Alternative Simulation using the Trustees’ assumptions.
GAO-09-383CG

Long-Term Fiscal Challe

Driven by Health Care Spe

05

1015202530

2008 2020 2030 2040 2050 2060 

Social Security

Medicaid

Medicare

Source: GAO analysis of data from the Office of the Chief Actuary, Social Security Administration, Office of the Services, and the Congressional Budget Office.Note: Social Security and Medicare projections based on the intermediate assumptions of the 2008 Trustees’ RCBO’s January 2009 short-term Medicaid estimates and CBO’s December 2007 long-term Medicaid projections consistent with the 2008 Trustees intermediate assumptions.

Percent of GDP
GAO-09-383CG

Federal Financial Manag

Need to Continue Pro

• Significant improvements in federal financi

but still a long way to go

• Important to ensure that information for dec

reliable
GAO-09-383CG

Federal Financial Manag

Key Challenges

• Improve internal control—enhanced accountability a

payments

• Obtain clean opinion on U.S. government’s consolid

statements

• Improve extent and reliability of cost information for e

program operations

• Implement more effective federal financial managem• Improve federal grant accountability• Streamline and enhance relevance and effectivenes

accountability requirements and practices 
GAO-09-383CG

On the Web

Web site: www.gao.gov/cghome.htm

Contact

Chuck Young, Managing Director, Public AffairsYoungC1@gao.gov (202) 512-4800 

U.S. Government Accountability Office441 G Street NW, Room 7149Washington, D.C. 20548

Copyright

This is a work of the U.S. government and is not copyright protection in the United States. The pmay be reproduced and distributed in its entirety permission from GAO. However, because this wcopyrighted images or other material, permissiocopyright holder may be necessary if you wish to material separately.