United States Government Accountability Office: Supporting the Congress through Oversight, Insight, and Foresight
Published: 2007-03-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Committee sought GAO's views on the role GAO has played in assisting congressional oversight and the authorities and resources GAO needs to further improve its assistance to the Congress. Today's testimony discusses some of the ways that GAO has helped "set the table" for this Committee, the Congress, the executive branch, and the nation to engage in a constructive and informed dialogue about the challenges and opportunities our nation is facing in the 21st century. It also discusses the authority and resources GAO will need to address the critical oversight and other needs of the Congress.
section_title: What GAO Found
paragraphs: GAO is a key tool for the Congress as it works to improve economy, efficiency, effectiveness, equity, and ethics within the federal government. To better meet the needs of the Congress, GAO has transformed itself to provide a range of key oversight, insight, and foresight services while "leading by example" in transforming how government should do business. GAO's oversight work has traditionally focused on ensuring government entities are spending funds as intended by the Congress and complying with applicable laws and regulations, while guarding against fraud, waste, abuse, and mismanagement. For example, since the early 1990s, GAO has updated its list of government programs and operations across government that it identifies as "high risk." It has contributed to the Congress enacting a series of governmentwide reforms and achieving tens of billions of dollars in financial benefits. Last November, GAO issued recommendations for oversight in the 110th Congress ranging from Iraq, to food safety, to the tax gap. GAO work also provides important insight into what programs, policies, and operations are working well; best practices to be shared and benchmarked; how agencies can improve the linkages across the silos of government; and how different levels of government and their nongovernmental partners can be better aligned to achieve important outcomes for the nation. For example, GAO developed a number of crosscutting and comprehensive reviews of the preparedness for, response to, and recovery from the 2005 Gulf Coast hurricanes. GAO has issued over 40 related reports and testimonies, and in work for this Committee and others GAO is examining lessons learned from past national emergencies and catastrophic disasters--both at home and abroad--that may prove useful in identifying ways to approach rebuilding. Finally, GAO's work can provide the Congress with foresight by highlighting the long-term implications of today's decisions and identifying key trends and emerging challenges facing our nation before they reach crisis proportions. As the Chief Accountability Officer of the United States Government, the Comptroller General continues to call attention to the nation's long-term fiscal challenge and the risks it poses to our nation's future. Continuously improving on the critical role GAO plays in supporting the Congress will require enhancements to GAO's resources and authorities. GAO's fiscal year 2008 budget request seeks resources to allow it to rebuild and enhance its workforce, knowledge capacity, employee programs, and infrastructure. GAO will be proposing changes to its authority, such as the ability to administer oaths in conducting its work, relief from certain mandated reviews, additional human capital flexibilities, and the creation of a Board of Contract Appeals at GAO. Finally, the Comptroller General has noted that GAO should be increased in size over the next 6 years to address the current and anticipated needs of the Congress.

section_title: Letter
paragraphs: I appreciate the invitation to talk with you today about the important role  that GAO plays in supporting the Congress. I believe that GAO is a key tool  for the Congress as it works to improve economy, efficiency,  effectiveness, equity, and ethics within the federal government. I would  like to share with you some of the many ways that GAO has transformed  itself to provide a range of key oversight, insight, and foresight services to  the Congress while “leading by example” in transforming how government  should do business. In this regard, I will highlight some of the ways that  GAO has helped “set the table” for this Committee, the Congress, the  executive branch, and the nation to engage in a constructive and informed  dialogue about the challenges and opportunities we are all facing in the  21st century.
As this Committee well knows, if the federal government continues on its  current fiscal path it would gradually erode, if not suddenly damage, our  economy, our standard of living, and ultimately even our domestic  tranquility and our national security. To build public awareness of our  fiscal challenges and the hard decisions that must be made, I have engaged  in a number of actions, including participating in a series of town hall  forums around the nation to discuss the federal government’s current  financial condition and deteriorating long-term fiscal outlook. These  challenges are driven primarily by known long-term demographic trends  and rising health care costs. These town hall forums, and related “outside  the Beltway events,” popularly referred to as the “Fiscal Wake-Up Tour,”  are led by the Concord Coalition and also include representatives from the  Heritage Foundation, the Brookings Institution, and a range of “good  government” groups. The Fiscal Wake-Up Tour states the facts regarding  the nation’s current financial condition and long-term fiscal outlook in a  professional and nonpartisan manner in order to increase public  awareness and hopefully accelerate actions by appropriate federal, state,  and local officials.
In addition to the great fiscal challenge we face, the world in which we live  and in which the federal government and the Congress operate is rapidly  changing because of numerous borderless trends, such as globalization,  changing security threats, societal change, and scientific and technological  advancement. These forces are exerting increasing pressure on the current  outmoded state of the federal government, presenting fundamental and  difficult public policy, organizational, operational, and funding decisions.  As such, these trends are driving the public, the executive branch, and the  Congress to engage in a fundamental reexamination of the government  and its priorities. At the center of this reexamination are basic questions  about what the government does, how it does it, who does it, and how it is  financed.
Such a broad and fundamental reexamination of the federal government is  going to test political wills, agency cultures, and oversight frameworks. As  you know, the traditional committee structures loosely aligned with  federal budget categories do not always lend themselves to addressing the  many crosscutting and long-range challenges facing our nation. However,  this Committee is uniquely positioned in the Senate to take the long view  and reach across jurisdictional boundaries to confront the challenges and  capitalize on related opportunities with a unity of spirit and of purpose.  The members of this Committee—and you are not alone in the Congress— have recognized the importance of oversight in beginning to address our  many 21st century challenges. Hearings, investigations, and special studies  that come with oversight can help not only to reveal the underlying causes  of these challenges, but also—importantly—help educate the American  people about the makeup of these challenges so that the nation, and the  Congress, is better prepared to confront them together. In this regard, I  believe that to be effective, congressional oversight needs to be  constructive. For example, related hearings and other activities should  offer opportunities for leading federal agencies to share best practices and  facilitate governmentwide transformation. They should also hold people  accountable for delivering positive results in an economical, efficient,  effective, ethical, and equitable manner. This balanced approach is likely  to help accelerate progress while avoiding a further erosion of the public’s  trust and confidence in government.
GAO also seeks to help provide the insight and foresight to complement  the oversight work we have performed for the Congress for many years.  Our oversight work has focused on ensuring that government entities are  spending funds for their intended purposes; and complying with applicable  laws and regulations, and guarding against fraud, waste, abuse, and  mismanagement. Our work also provides important insight on what  programs, policies and questions are working well; best practices to be  shared and benchmarked; how agencies can improve the horizontal  linkages across the silos of government; and how different levels of  government and their nongovernmental partners can become better  aligned to achieve important outcomes for the nation. Finally, our work  can provide the Congress with foresight by highlighting the long-term  implications of today’s decisions and identifying key trends and emerging  challenges facing our nation before they reach crisis proportions.
Our work increasingly brings a combination of oversight, insight, and  foresight to bear on our nation’s most pressing and important emerging  issues. The following are two recent examples. First, in January 2007, we  issued a report containing a series of issue papers for the Congress to  consider in developing an oversight agenda for securing, stabilizing, and  rebuilding Iraq. Those papers built on our ongoing work and the 67 Iraq- related reports and testimonies we have provided to the Congress since  May 2003. By spanning the security, political, economic, and  reconstruction prongs of the U.S. national strategy in Iraq, our work helps  the Congress maximize the benefits of its oversight dollars by minimizing  the possibility of overlap and duplication by any individual inspector  general. Our Iraq work has focused on keeping the Congress current and  informed on key topics of direct interest, such as the U.S. strategy and  costs of operating in Iraq, training and equipping the Iraqi security forces,  selected governance and reconstruction issues, the readiness of U.S.  military forces, and achieving desired acquisition outcomes.
Second, also in January of this year, we issued a new publication, titled  Fiscal Stewardship: A Critical Challenge Facing Our Nation that is  designed to provide the Congress and the American public, in a relatively  brief and understandable form, selected budget and financial information  regarding our nation’s current financial condition, long-term fiscal  outlook, and possible ways forward. In the years ahead, our support to  the Congress will likely prove even more critical because of the pressures  created by our nation’s current and projected budget deficit and growing  long-term fiscal imbalance. Indeed, as the Congress considers those fiscal  pressures, it will be grappling with tough choices about what government  does, how it does business, who will do the government’s business, and  how we should measure success. We strive to continue to be an invaluable  tool for helping the Congress review, reprioritize, and revise existing  mandatory and discretionary spending programs and tax policies.
Although our work often entails multiple elements of oversight, insight,  and foresight, I will use these terms as categories to highlight just some of  the ways that GAO has helped in framing the challenges and opportunities  facing the nation, as well as possible ways forward in addressing them.
subsections: section_title: Helping the Congress through Oversight
paragraphs: GAO’s work helps to facilitate holding agencies accountable for delivering  positive results in an economical, efficient, effective, ethical, and equitable  manner. I would like to highlight just a few of our recent efforts to assist  the Congress in identifying and addressing areas for continued or  additional oversight:  Identifying pressing oversight issues for the Congress: On   November 17, 2006, I provided three sets of recommendations for  consideration as part of the agenda of the 110th Congress. The first set of  recommendations suggested targets for near-term oversight, such as the  need to reduce the tax gap—the difference between the amounts  taxpayers pay voluntarily and on time and what they should pay under the  law. The second proposes policies and programs in need of fundamental  reform and reengineering, such as reforming Medicare and Medicaid to  improve their integrity and sustainability. The third listed various  governance issues that need to be addressed, such as the need for various  budget controls and legislative process revisions in light of current deficits  and our long-range fiscal imbalance. The proposals, which synthesized  GAO’s institutional knowledge and special expertise, point to both the  breadth and the depth of the issues facing the Congress. Appendix I  provides a complete list of the 36 recommendations in our letter.
Identifying high-risk areas: We provide updates to our list of  government programs and operations that we identify as “high-risk” at the  start of each new Congress to help in setting congressional oversight  agendas. These reports, which have been produced since the early 1990s,  have brought a much-needed oversight focus to a targeted list of major  challenges that are impeding effective government and costing the  government billions of dollars each year. They help the Congress and the  executive branch carry out their responsibilities while improving the  government’s performance and enhancing its accountability. In recent  years, we have also identified several high-risk areas to focus on the need  for broad-based transformations to address major economy, efficiency,  effectiveness, relevance, and relative priority challenges. In fact, our focus  on high-risk challenges contributed to the Congress enacting a series of  governmentwide reforms to strengthen financial management; improve  information technology practices; instill a more effective, credible, and  results-oriented government; and address critical human capital  challenges.
Further, our high-risk program has helped sustain attention from members  of the Congress who are responsible for oversight and from executive  branch officials who are accountable for performance. This Committee  has a particular interest in a number of areas on our latest high-risk list.  For example, implementation and transformation of the Department of  Homeland Security (DHS), protecting the federal government’s  information systems, establishing appropriate and effective information- sharing mechanisms to improve homeland security, and Department of  Defense (DOD) supply chain management. In part because of the oversight  and legislative efforts of the Congress, of the 47 areas that have appeared  on our high-risk list since 1990, 18 improved enough to be removed from  the list. Such leadership can be invaluable in identifying and putting in  place the kinds of change needed to address these often long-standing  problems.
In our recent January 2007 High-Risk Series update, we added three new  high-risk areas; (1) financing the nation’s transportation system,   (2) ensuring the effective protection of technologies critical to U.S.  national security interests, and (3) transforming federal oversight of food  safety.  But we also reported that progress had been made in all existing  high-risk areas, and that progress was sufficient in two areas for us to  remove high-risk designation: (1) U.S. Postal Service transformation  efforts and long-term outlook, and (2) HUD single-family mortgage  insurance and rental housing assistance programs.   This Committee has  provided valuable leadership to efforts to gain needed improvements in  high-risk areas. In this regard, and, as one example, I want to acknowledge  the key commitment and contribution of this Committee in passing postal  reform legislation last December. This action was one of the primary  reasons we felt that we could take the Postal Service’s transformation and  long-term outlook off of our high-risk list in January. As I have been  testifying on the need for comprehensive postal reform since 2001, I  believe that the recently passed legislation will provide opportunities to  build a sound foundation for modernizing the Postal Service, reassessing  the service standards required by the American people, and ensuring  continued affordable universal postal services for the future. Our work  related to areas we have designated as high-risk has also had a financial  impact.  In fiscal year 2006 alone, actions by both the Congress and the  executive branch in response to GAO’s recommendations resulted in  approximately $22 billion in financial benefits. Appendix II lists the  current high-risk areas.
Identifying systemic federal financial management challenges: As I  testified yesterday, for the 10th consecutive year, GAO was unable to  express an opinion on the federal government’s financial statements due  to the government’s inability to demonstrate the reliability of significant  portions of the financial statements. Federal agencies will need to  overcome three major impediments to our ability to render an opinion on  the federal government’s financial statements: (1) resolving serious  weaknesses in DOD’s business operations, including pervasive, complex,  long-standing, and deeply rooted financial management weaknesses;   (2) adequately accounting for and reconciling intragovernmental activity  and balances; and (3) developing adequate systems, controls, and  procedures to ensure that the consolidated financial statements are  consistent with the underlying audited agency financial statement,  balanced, and in conformity with generally accepted accounting  principles. In testimony earlier this month, I outlined the principal  challenges and ideas on how to move forward to fully realizing world-class  financial management in the federal government. Additionally, I have  suggested to the Congress that it may be time to consider further revisions  to the current federal financial reporting model. Such an effort could  address the kind of information that is most relevant and useful for a  sovereign nation; the role of the balance sheet in federal government  reporting; the reporting of items that are unique to the federal government,  such as social insurance commitments and the power to tax; and the need  for additional fiscal sustainability, intergenerational equity and  performance reporting.
Addressing governmentwide acquisition and contracting issues:  Acquisition issues are heavily represented on GAO’s list of government  high-risk areas, and in the 21st century, the government needs to  reexamine and evaluate both its strategic and tactical approaches to  acquisition and contracting matters. GAO has played an important role in  describing the current state of government contracting, identifying the  challenges agencies face, and recommending specific steps agencies  should take to improve their acquisition and contracting outcomes. I  hosted a forum in July 2006 that brought together experts in the  acquisition community from inside and outside the government to share  their insights on challenges and opportunities for improving federal  acquisition outcomes in an environment of increasing reliance on  contractors and severe fiscal constraint. The observations from that  forum help frame many of the federal acquisition workforce challenges  that the government is going to have to wrestle with. In addition, the  Congress has assigned GAO the responsibility for adjudicating protests of  agency procurement decisions. Our bid protest decisions address specific  allegations raised by unsuccessful offerors challenging particular  procurement actions as contrary to procurement laws and regulations. In  carrying out this role, GAO is instrumental not only in resolving the  specific cases at hand, but also helping to focus attention on how various  initiatives by both the Congress and the executive branch are being  implemented in practice, and we provide Congress with assurance of  enhanced transparency, performance and accountability in the federal  procurement system.
Investing in GAO’s forensic investigation capabilities: This  committee actively encouraged and supported the creation within GAO of  the additional capacity provided by our new Forensic Audits and Special  Investigations (FSI) team in May 2005. This unit integrates the strengths of  GAO’s investigative, forensic audit, the FraudNet hotline, and analyst staff.  Since its creation, FSI has performed audits and investigations for  numerous congressional committees focused on fraud, waste, and abuse  and homeland and national security issues. Specifically, for this  Committee and the Permanent Subcommittee on Investigations, FSI has  delivered testimonies highlighting billions of dollars of delinquent federal  taxes owed by government contractors, over $1 billion of potentially  fraudulent and improper hurricane Katrina and Rita individual assistance  payments, tens of millions of dollars of waste associated with misuse of  premium class travel at the State Department, and millions more of waste  related to improper use of government aircraft at the National Aeronautics  and Space Administration. FSI also testified that it was able to smuggle  radioactive materials across the northern and southern borders using  counterfeit documents. Recently, FSI hired a senior-level expert in  procurement fraud, waste, and abuse, giving it the capability to do  targeted work in this area. In fact, the first FSI work in this area is being  performed at the request of this Committee and relates to allegations of  fraud, waste, and abuse by contractors involved in recovery work  following hurricanes Katrina and Rita.
section_title: Helping the Congress through Insight
paragraphs: GAO’s work helps to identify programs, policies, and practices that are  working well, and opportunities to improve their linkages across agencies,  across all levels of government, and with nongovernmental partners in  order to achieve positive national outcomes. The following are a few  examples of our recent efforts to assist the Congress with such insight:  Providing a comprehensive framework for congressional oversight  of hurricanes Katrina and Rita: We developed a number of crosscutting  and comprehensive reviews of aspects of the preparedness for, response  to, and recovery from the 2005 Gulf Coast hurricanes. In the immediate  aftermath of the storms, staff drawn from across the agency spent time in  the hardest hit areas of Louisiana, Mississippi, Alabama, and Texas,  collecting information from government officials at the federal, state, and  local levels as well as from private organizations assisting with this  emergency management effort. We examined how federal funds were used  during and after the disaster and identified the rescue, relief, and  rebuilding processes that worked well and not so well throughout the  effort. We issued over 40 related reports and testimonies to date, focusing  on, among other issues, minimizing fraud, waste, and abuse in disaster  assistance; rebuilding the New Orleans hospital care system; and  developing the capabilities needed to respond to and recover from future  catastrophic disasters. Building on this work, we continue to support your  Committee and others through a range of audit and evaluation  engagements to examine federal programs that provide rebuilding  assistance to the Gulf Coast, including the federal government’s  contribution to the rebuilding effort and the role it might play over the  long term. We are examining lessons learned from past national  emergencies and catastrophic disasters—both at home and abroad—that  may prove useful in identifying ways to approach rebuilding.
Recommending improved management structures for enhancing  performance and ensuring accountability: We have identified a chief  operating officer (COO)/chief management officer (CMO) position as one  approach for building the necessary leadership and management structure  that could be used to help to elevate, integrate, and institutionalize  responsibility for key functional management initiatives, and provide the  continuing, focused attention essential to successfully completing  multiyear, high-risk, business transformations. Such a COO/CMO position  could be useful in selected agencies with significant transformation and  integration challenges, such as DOD, DHS, and the Office of the Director  of National Intelligence (ODNI), and would improve accountability within  those agencies and to the Congress for outstanding business challenges. In  that regard, I was pleased to see that an amendment creating a Deputy  Secretary for Management position at DHS was recently accepted by the  Senate as part of the proposed Improving America’s Security Act of 2007,  and that a similar position would be established in DOD with other  legislation recently introduced in the Senate. As you know, in 2005, we  reported that as currently structured, the roles and responsibilities of the  DHS Under Secretary for Management contained some of the  characteristics of a COO/CMO, but we suggested that the Congress should  consider whether a revised organizational arrangement is needed at DHS  to fully capture the roles and responsibilities of a COO/CMO position.  While I believe that a COO/CMO position is highly desirable within DHS  and ODNI, I believe it is essential for a successful business transformation  effort within DOD.
Developing a framework for human capital reform: In recent years,  many federal agencies, including DOD, DHS, and GAO, have achieved  various legislative flexibilities in the human capital area. Others are  seeking such authorities, and a risk exists that the system relating to civil  servants will fragment over time. In order to help prevent such a  fragmentation and guide human capital reform efforts, we have proposed  that there should be a governmentwide framework. A forum that I hosted  in 2004 outlined a set of principles, criteria, and processes that establish  boundaries and checks while also allowing needed flexibility to manage  agency workforces. To help build on this framework, we have provided  information on the statutory human capital authorities that the Congress  has already provided to numerous federal agencies. Given that there is  widespread recognition that a “one size fits all” approach to human capital  management is not appropriate for the challenges and demands  government faces, we have proposed a phased approach to reform—a  “show me” test—that requires agencies to demonstrate institutional  readiness before they are allowed to implement major human capital  reforms. That is, each agency should demonstrate that it has met certain  conditions before it is authorized to undertake significant human capital  reforms, such as linking pay to performance. The Congress used this  approach in the establishment of a new performance management system  for the Senior Executive Service (SES), which required agencies’ systems  to be certified before allowing a higher pay range for SES members. Using  a governmentwide framework to advance needed human capital reform  should be beneficial as the federal government continues to transform  how it classifies, compensates, develops, and motivates its employees to  achieve maximum results within available resources and existing  authorities.
Key national indicators initiative: A set of key and outcome-based  national indicators can help to assess the overall position and progress of  our nation in key areas, frame strategic issues, support more informed  policy choices, and enhance accountability. A cooperative initiative to  develop a key national indicator system emerged after we, in cooperation  with the National Academies, convened a forum in February 2003. This  initiative is attempting to develop a key national indicator system for the  United States. In response to congressional interest in building upon  lessons learned from other efforts both around the country and  worldwide, we reported in November 2004 on the current state of the  practice of developing comprehensive key indicator systems, identifying  design features and organizational options for such a system in the United  States. We have also helped increase international understanding and use  of indicator systems, such as through my participation in the Organisation  for Economic Co-operation and Development’s (OECD) First World  Forum on Key Indicators in 2004 and through my upcoming participation  in OECD’s Second World Forum, Measuring and Fostering the Progress of  Societies, in June 2007. As development of a U.S. key national indicator  system progresses, we expect to continue to be involved, building upon  prior efforts and in response to congressional interests. Finally, in my view  such a key national indicator system is needed, and the Congress should  strongly consider a public/private partnership in order to help it become a  reality.
section_title: Helping the Congress through Foresight
paragraphs: Our products and assistance to the Congress also focus on a wide range of  emerging needs and identify and address governance issues that must be  addressed to respond to a broad range of 21st Century challenges and  opportunities. I would like to highlight just a few of our recent efforts to  assist the Congress with foresight.
Increasing public understanding of the long-term fiscal challenge:  Since 1992, we have published long-term fiscal simulations in response to  a bipartisan request from members of the Congress who were concerned  about the long-term effects of our nation’s fiscal policy. Our current  simulations continue to show ever-larger deficits resulting in a federal  debt burden that ultimately spirals out of control. As the Chief  Accountability Officer of the United States Government, I continue to call  attention to our long-term fiscal challenge and the risks it poses to our  nation’s future. I mentioned earlier my participation with the Concord  Coalition, the Brookings Institution, and the Heritage Foundation in the  Fiscal Wake-Up Tour. In our experience, having these people, with quite  different policy views on how to address our long-range imbalance, agree  on the nature, scale, and importance of the issue—and on the need to sit  down and work together on a bipartisan basis and start making tough  choices now—resonates with the audiences. I have long believed that the  American people can accept difficult decisions as long as they understand  why such steps are necessary. The Fiscal Wake-Up Tour has received the  active support and involvement of community leaders, local colleges and  universities, the media, the business community, and both former and  current members of the Congress. We have coordinated town hall  meetings in 20 states to date with more planned in the future.
Improving transparency in connection with financial, fiscal, budget,  and selected legislative matters: Washington often suffers from both  myopia and tunnel vision. This can be especially true in the budget debate  in which we focus on one program at a time and the deficit for a single  year or possibly the costs over 5 years without asking about the bigger  picture and whether the long term is getting better or worse. Since at its  heart the budget challenge is a debate about the allocation of limited  resources, the budget process can and should play a key role in helping to  address our long-term fiscal challenge and the broader challenge of  modernizing government for the 21st century. We are helping to increase  the understanding of and focus on the long term in our policy and budget  debates. To that end, I have outlined a number of ideas in a draft  legislative proposal that we refer to as TAB—Transparency in Accounting  and Budgeting. I have been sharing it with selected Members of Congress  and others interested in this issue. The proposal would serve to  increase transparency in financial and budget reporting as well as in  the budget and legislative processes to highlight our long-term fiscal  challenges;  require publication of a summary annual report and periodic fiscal  sustainability reports; and  require GAO to report annually on selected financial, fiscal, and  reporting matters.
I am hopeful that this committee will embrace this proposal and work with  other interested members of Congress toward enactment of legislation  advancing these important goals.
Identifying 21st century challenges: In February 2005 we issued a  report titled 21st Century Challenges: Reexamining the Base of the Federal  Government, in which we identified challenges our government—and  nation—face. The report laid out the case for change and identified a  range of challenges and opportunities. It also presented more than 200  illustrative questions that need to be asked and answered. These questions  look across major areas of the budget and federal operations, including  discretionary and mandatory spending and tax policies and programs.  Questions raised specific issues, such as how intelligence and information  on threats can be shared with other levels of government, yet be held  secure, and whether our current federal income-based tax system is  adequate, equitable, competitive, sustainable, and administrable in an  increasingly global economy. I am very pleased to see that this important  report, among other things, is being used by various congressional  committees as they consider which areas of government need particular  attention and reconsideration.
Continuing to apply a strategic framework to GAO’s work: We will  be issuing products soon to help communicate the strategic framework we  are using to guide all of our work, in support of the 110th Congress and in  light of the challenges the nation faces. Specifically, we will soon issue an  update of our strategic plan, which describes our goals and strategies for  serving the Congress for fiscal years 2007 through 2012. The broad goals  and objectives of our plan have not altered dramatically since our last  plan, but events such as the continuing war in Iraq and recent natural  disasters account for modifications in emphasis. Appendix III provides a  draft summary of GAO’s strategic plan framework for serving the Congress  (2007-2012). To assist policymakers and managers, we are also issuing  separately a part of the strategic plan that contains detailed descriptions of  the key themes and issues framing our strategic plan and their  implications for governance. Those themes are listed in the text box  below. We will also be issuing a report that brings together in one place  the many strategic tools and approaches that we have identified or  proposed that the Congress and others can use to help set priorities and  move forward in addressing the government’s challenges.
section_title: Congressional Support to Enhance GAO’s Effectiveness
paragraphs: Continuously improving on the critical role we play in supporting the  Congress will require modest enhancements to GAO’s resources and  authorities that I proposed in our fiscal year 2008 budget request and  discussed in my Senate appropriations hearing. Our fiscal year 2008  budget request seeks the resources necessary to allow us to rebuild and  enhance our workforce, knowledge capacity, employee programs, and  critical infrastructure. These items are necessary to ensure that we can  continue to provide congressional clients with timely, objective, and  reliable information on how well government programs and policies are  working and, when needed, recommendations for improvement. In the  years ahead, our support to the Congress will likely prove even more  critical because of the pressures created by our nation’s current and  projected budget deficit and growing long-term fiscal imbalance. GAO is  an invaluable tool for helping the Congress review, reprioritize, and revise  existing mandatory and discretionary spending programs and tax policies.
Shortly after I was appointed Comptroller General in November 1998, I  determined that the agency should undertake a major transformation  effort. As a result, led by myself and many others, GAO has become a more  results-oriented, partnerial, and client-focused organization. With your  support, we have made strategic investments; realigned the organization;  streamlined our business processes; modernized our performance  classification, compensation, and reward systems; enhanced our ability to  attract, retain, and reward top talent; enhanced the technology and  infrastructure supporting our staff and systems; and made other key  investments. These transformational efforts have allowed us to model best  practices, lead by example, and provide significant support for  congressional hearings, while achieving record results and very high client  satisfaction ratings and high employee feedback ratings without significant  increases in funding. In fact, despite record results, GAO’s budget has  declined by 3 percent in purchasing power from 2003 to 2007, as shown in  appendix IV.
Transformational change and innovation is by definition challenging and  controversial, but at the same time is essential for progress. Our fiscal year  2008 budget request includes funds to regain the momentum needed to  achieve our key goals. Specifically, our fiscal year 2008 budget request will  allow us to    address supply and demand imbalances in responding to congressional  requests for studies in areas such as health care, disaster assistance,  homeland security, the global war on terrorism, energy and natural  resources, and forensic auditing;    address our increasing bid protest workload;    be more competitive in the labor markets where we compete for talent;    address critical human capital components, such as knowledge  capacity building, succession planning, and staff skills and  competencies;    enhance employee recruitment, retention, and development programs;   restore program funding levels and regain our purchasing power;    undertake critical initiatives necessary to continuously reengineer  processes aimed at increasing our productivity and effectiveness and  addressing identified management challenges; and    pursue deferred and pending critical structural and infrastructure  maintenance and improvements.
In my recent testimony, I noted that we would be seeking to increase  GAO’s staffing level from 3,159 up to 3,750 over the next 6 years in order to  address critical needs including supply and demand imbalances, high-risk  areas, 21st century challenges questions, technology assessments, and  other areas in need of fundamental reform. Furthermore, we plan to  establish a presence in Iraq beginning later this fiscal year to provide  additional oversight of issues deemed important to the Congress, subject  to receiving support from the State Department and approval of our  supplemental budget request.
In addition to providing the resources we need to support the Congress,  we will also be seeking enactment of a set of statutory provisions that  would enhance our ability to provide the Congress the information and  analysis it needs to discharge its constitutional responsibilities. Among  other things, we will seek to modernize authority for the Comptroller  General and his/her authorized representatives to administer oaths in  performance of the work of the office. To keep the Congress apprised of  difficulties we have interviewing agency personnel and obtaining agency  views on matters related to ongoing mission work, we will suggest new  reporting requirements. When agencies or other entities fail to respond to  requests by the Comptroller General to have personnel provide  information under oath, make personnel available for interviews, or  provide written answers to questions, the Comptroller General would  report to the Congress as soon as practicable and also include such  information in the annual report to the Congress. These reporting  requirements would be a supplement to existing GAO statutory  authorities.
GAO has authority to audit and access the records of elements of the  Intelligence Community. Nevertheless, over the years, the Justice  Department has questioned our authority in the area. In that regard, the  Congress is considering S.82, The Intelligence Community Audit Act of  2007, sponsored by Senators Akaka and Lautenberg. S.82 would reaffirm  GAO’s existing statutory authority to audit and evaluate financial  transactions, programs, and activities of the Intelligence Community. The  success of the Intelligence Community is obviously of enormous  importance to the nation, and it commands significant budget resources. I  believe that there are many areas in which GAO can support the  intelligence committees in their oversight roles and, by extension, the  Congress and the Intelligence Community. For example, we could review  human capital management, including pay for performance systems;  information technology architectures and systems; acquisition and  contract management; information-sharing processes, procedures, and  results; and Intelligence Community transformation efforts, metrics, and  progress. I would add that while GAO personnel with appropriate  clearances and accesses have responsibly reviewed programs that deal  with technical sources and methods of intelligence collection, I am  confident that there are very few cases in which our review of systems,  processes, and their applications would require access to sensitive  intelligence sources and methods or names of individuals.
In regard to GAO’s human capital flexibilities, among other provisions, we  are proposing a flexibility that allows us to better approximate market  rates for certain professional positions by increasing our maximum pay for  other than the SES and Senior Level from GS-15, step 10, to Executive  Level III. This authority has already been granted to selected other federal  agencies, including DOD. Additionally, under our revised and  contemporary merit pay system, certain portions of an employee’s merit  increase, below applicable market-based pay caps, are not permanent.  Since this may affect an employee’s high three for retirement purposes,  another key provision of the bill would enable these nonpermanent  payments to be included in the retirement calculation for all GAO  employees, except senior executives and senior-level personnel.
We are also seeking enactment of legislation to establish a Board of  Contract Appeals at GAO to adjudicate contract claims involving contracts  awarded by legislative branch agencies. GAO has performed this function  on an ad hoc basis over the years for appeals of claims from decisions of  the Architect of the Capitol on contracts that it awards. Recently we have  agreed to handle claims arising under Government Printing Office  contracts. The legislative proposal would promote efficiency and  predictability in the resolution of contractor and agency claims by  consolidating such work in an established and experienced adjudicative  component of GAO, and would permit GAO to recover its costs of  providing such adjudicative services from legislative branch users of such  services.
Finally, we have identified a number of legislative mandates that are either  no longer meeting the purposes intended or should be performed by an  entity other than GAO. We are working with the cognizant entities and the  appropriate authorization and oversight committees to discuss the  potential impact of legislative relief for these issues.
I appreciate your support for our efforts to provide the best professional  products and services to the Congress. GAO, of course, is not alone in  helping the Congress. For example, the inspectors general of the various  agencies and departments are essential partners in carrying out  congressional oversight. In addition, the Congressional Research Service  and Congressional Budget Office have important roles to play. However,  GAO is uniquely positioned to provide the Congress with the timely,  objective, reliable, and original research information it needs to discharge  its constitutional responsibilities, especially in connection with oversight  matters. We look forward to continuing to work with you on near-term  oversight, fundamental review of the base of government, and approaches  to this century’s governance challenges and opportunities.
This concludes my prepared statement. I would be happy to respond to  any questions the members of the Committee may have.
section_title: Appendix I: GAO’s Suggested Areas for Oversight for the 110th Congress
paragraphs: 1. Reduce the Tax Gap  2. Address Governmentwide Acquisition and Contracting Issues  3. Transform the Business Operations of the Department of Defense, Including  Addressing All Related “High-Risk” Areas  4. Ensure the Effective Integration and Transformation of the Department of Homeland  5. Enhance Information Sharing, Accelerate Transformation, and Improve Oversight  Related to the Nation’s Intelligence Agencies  6. Enhance Border Security and Enforcement of Existing Immigration Laws  7. Ensure the Safety and Security of All Modes of Transportation and the Adequacy of  8. Strengthen Efforts to Prevent the Proliferation of Nuclear, Chemical, and Biological  Weapons and Their Delivery Systems (Missiles)  9. Ensure a Successful Transformation of the Nuclear Weapons Complex  10.
Enhance Computer Security and Deter Identity Theft  11.
Ensure a Cost-Effective and Reliable 2010 Census  12.
Transform the Postal Service’s Business Model   13.
Ensure Fair Value Collection of Oil Royalties Produced from Federal Lands  14.
Ensure the Effectiveness and Coordination of U.S. International  15.
Review the Effectiveness of Strategies to Ensure Workplace Safety  Policies and Programs That Are in Need of Fundamental Reform and  Reengineering  1.  Review U.S. and Coalition Efforts to Stabilize and Rebuild Iraq and Afghanistan  2. Ensure a Strategic and Integrated Approach to Prepare for, Respond to, Recover, and  3. Reform the Tax Code, Including Reviewing the Performance of Tax Preferences  4. Reform Medicare and Medicaid to Improve Their Integrity and Sustainability  5. Ensure the Adequacy of National Energy Supplies and Related Infrastructure  6. Reform Immigration Policy to Ensure Equity and Economic Competitiveness  7. Assess Overall Military Readiness, Transformation Efforts, and Existing Plans to  Assure the Sustainability of the All-Volunteer Force  8. Assure the Quality and Competitiveness of the U.S. Education System  9. Strengthen Retirement Security Through Reforming Social Security, Increasing  Pension Saving and Promoting Financial Literacy  10.
Examine the Costs, Benefits, and Risks of Key Environmental Issues  11.
Reform Federal Housing Programs and Related Financing and Regulatory  12.
Ensure the Integrity and Equity of Existing Farm Programs  13.
section_title: Appendix II: GAO’s 2007 High-Risk List
paragraphs: Addressing Challenges In Broad-Based Transformations     Strategic Human Capital Management    Managing Federal Real Property    Protecting the Federal Government’s Information Systems and the Nation’s Critical  Implementing and Transforming the Department of Homeland Security     Establishing Appropriate And Effective Information-Sharing Mechanisms to Improve    DOD Approach to Business Transformation    DOD Personnel Security Clearance Program     FAA Air Traffic Control Modernization     Financing the Nation’s Transportation System(New)
Ensuring the Effective Protection of Technologies Critical to U.S. National Security  Interests(New)
Transforming Federal Oversight of Food Safety(New)
section_title: Appendix IV: Budget Authority in Fiscal Year 2006 Dollars and Full-Time Equivalent Usage, Fiscal Years 1992 - 2007
paragraphs: This is a work of the U.S. government and is not subject to copyright protection in the  United States. It 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.