Demand for GAO’s analysis and advice remains strong across the Congress. During the past 3 years, GAO has received requests or mandated work from all of the standing committees of the House and the Senate and over 90 percent of their subcommittees. In fiscal year 2007, GAO received over 1,200 requests for studies. This is a direct result of the high quality of GAO’s work that the Congress has come to expect as well as the difficult challenges facing the Congress where it believes having objective information and professional advice from GAO is instrumental. Not only has demand for our work continued to be strong, but it is also steadily increasing. The total number of requests in fiscal year 2007 was up 14 percent from the preceding year. This trend has accelerated in fiscal year 2008 as requests rose 26 percent in the first quarter and are up 20 percent at the mid-point of this fiscal year from comparable periods in 2007. As a harbinger of future congressional demand, potential mandates for GAO work being included in proposed legislation as of February 2008 totaled over 600, or an 86 percent increase from a similar period in the 109th Congress. The following examples illustrate this demand: Over 160 new mandates for GAO reviews were imbedded in law, including the Consolidated Appropriations Act of 2008, the Defense Appropriations Act of 2008, and 2008 legislation implementing the 9/11 Commission recommendations; New recurring responsibilities were given to GAO under the Honest Leadership and Open Government Act of 2007 to report annually on the compliance by lobbyists of registration and reporting requirements; and Expanded bid protest provisions applied to GAO that 1) allow federal employees to file protests concerning competitive sourcing decisions (A- 76), 2) establish exclusive bid protest jurisdiction at GAO over issuance of task and delivery orders valued at over $10 million, and 3) provide GAO bid protest jurisdiction over contracts awarded by the Transportation Security Administration. Further evidence of GAO’s help in providing important advice to the Congress is found in the increased numbers of GAO appearances at hearings on topics of national significance and keen interest (see table 1). In fiscal year 2007 GAO testified at 276 hearings, 36 more than fiscal year 2006. The fiscal year 2007 figure was an all-time high for GAO on a per capita basis and among the top requests for GAO input in the last 25 years. This up tempo of GAO appearances at congressional hearings has continued, with GAO already appearing at 140 hearings this fiscal year, as of April 4th. Our FTE level in fiscal year 2008 is 3,100—the lowest level ever for GAO. We are proud of the results we deliver to the Congress and our nation with this level, but with a slightly less than 5 percent increase in our FTEs to 3,251 we can better meet increased congressional requests for GAO assistance. While this increase would not bring GAO back to the 3,275 FTE level of 10 years ago, it would allow us to respond to the increased workload facing the Congress. GAO staff are stretched in striving to meet Congress’s increasing needs. People are operating at a pace that cannot be sustained over the long run. I am greatly concerned that if we try to provide more services with the existing level of resources, the high quality of our work could be diminished in the future. But I will not allow this to occur. This is not in the Congress’s nor GAO’s interest. One consequence of our demand vs. supply situation is the growing list of congressional requests that we are not able to promptly staff. While we continue to work with congressional committees to identify their areas of highest priority, we remain unable to staff important requests. This limits our ability to provide timely advice to congressional committees dealing with certain issues that they have slated for oversight, including Safety concerns such as incorporating behavior-based security programs into TSA’s aviation passenger screening process, updating our 2006 study of FDA’s post-market drug safety system, and reviewing state investigations of nursing home complaints. Operational improvements such as the effectiveness of Border Security checkpoints to identify illegal aliens, technical and programmatic challenges in DOD’s space radar programs, oversight of federally-funded highway and transit projects and the impact of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. Opportunities to increase revenues or stop wasteful spending including reducing potential overstatements of charitable deductions and curbing potential overpayments and contractor abuses in food assistance programs. Our fiscal year 2009 budget request seeks to better position us to maintain our high level of support for the Congress and better meet increasing requests for help. This request would help replenish our staffing levels at a time when almost 20 percent of all GAO staff will be eligible for retirement. Accordingly, our fiscal year 2009 budget request seeks funds to ensure that we have the increased staff capacity to effectively support the Congress’s agenda, cover pay and uncontrollable inflationary cost increases, and undertake critical investments, such as technology improvement. GAO is requesting budget authority of $545.5 million to support a staff level of 3,251 FTEs needed to serve the Congress. This is a fiscally prudent request of 7.5 percent over our fiscal year 2008 funding level, as illustrated in table 2. Our request includes about $538.1 million in direct appropriations and authority to use about $7.4 million in offsetting collections. This request also reflects a reduction of about $6 million in nonrecurring fiscal year 2008 costs. Our request includes funds needed to increase our staffing level by less than 5 percent to help us provide more timely responses to congressional requests for studies; enhance employee recruitment, retention, and development programs, which increase our competitiveness for a talented workforce; recognize dedicated contributions of our hardworking staff through awards and recognition programs; address critical human capital components, such as knowledge capacity building, succession planning, and staff skills and competencies; pursue critical structural and infrastructure maintenance and improvements; restore program funding levels to regain our lost purchasing power; and undertake critical initiatives to increase our productivity. Key elements of our proposed budget increase are outlined as follows: Pay and inflationary cost increases We are requesting funds to cover anticipated pay and inflationary cost increases resulting primarily from annual across-the-board and performance-based increases and annualization of prior fiscal year costs. These costs also include uncontrollable, inflationary increases imposed by vendors as the cost of doing business. GAO generally loses about 10 percent of its workforce annually to retirements and attrition. This annual loss places GAO under continual pressure to replace staff capacity and renew institutional memory. In fiscal year 2007, we were able to replace only about half of our staff loss. In fiscal year 2008, we plan to replace only staff departures. Our proposed fiscal year 2009 staffing level of 3,251 FTEs would restore our staff capacity through a modest FTE increase, which would allow us to initiate congressional requests in a timelier manner and begin reducing the backlog of pending requests. Critical technology and infrastructure improvements We are requesting funds to undertake critical investments that would allow us to implement technology improvements, as well as streamline and reengineer work processes to enhance the productivity and effectiveness of our staff, make essential investments that have been deferred year after year but cannot continue to be delayed, and implement responses to changing federal conditions. Human capital initiatives and additional legislative authorities GAO is working with the appropriate authorization and oversight committees to make reforms that are designed to benefit our employees and to provide a means to continue to attract, retain, and reward a top- flight workforce, as well as help us improve our operations and increase administrative efficiencies. Among the requested provisions, GAO supports the adoption of a “floor guarantee” for future annual pay adjustments similar to the agreement governing 2008 payment adjustments reached with the GAO Employees Organization, IFPTE. The floor guarantee reasonably balances our commitment to performance-based pay with an appropriate degree of predictability and equity for all GAO employees. At the invitation of the House federal workforce subcommittee, we also have engaged in fruitful discussions about a reasonable and practical approach should the Congress decide to include a legislative provision to compensate GAO employees who did not receive the full base pay increases of 2.6 percent in 2006 and 2.4 percent in 2007. We appreciate their willingness to provide us with the necessary legal authorities to address this issue and look forward to working together with you and our oversight committee to obtain necessary funding to cover these payments. The budget authority to cover the future impact of these payments is not reflected in this budget request. As you know, on September 19, 2007, our Band I and Band II Analysts, Auditors, Specialists, and Investigators voted to be represented by the GAO Employees Organization, IFPTE, for the purpose of bargaining with GAO management on various terms and conditions of employment. GAO management is committed to working constructively with employee union representatives to forge a positive labor-management relationship. Since September, GAO management has taken a variety of steps to ensure it is following applicable labor relations laws and has the resources in place to work effectively and productively in this new union environment. Our efforts have involved delivering specialized labor-management relations training to our establishing a new Workforce Relations Center to provide employee and labor relations advice and services; hiring a Workforce Relations Center director, who also serves as our chief negotiator in collective bargaining deliberations, and postponing work on several initiatives regarding our current performance and pay programs. In addition, we routinely notify union representatives of meetings that may qualify as formal discussions, so that a representative of the IFPTE can attend the meeting. We also regularly provide the IFPTE with information about projects involving changes to terms and conditions of employment over which the union has the right to bargain. We are pleased that GAO and the IFPTE reached a prompt agreement on 2008 pay adjustments.