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entitled 'U.S. Government Accountability Office: Performance & 
Accountability Report: Fiscal Year 2012' which was released on 
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GAO-13-2SP: 

Serving the Congress and the Nation: 

U.S. Government Accountability Office: 

Performance and Accountability Report: Fiscal Year 2012: 

Serving The Congress: 

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. 

Accountability: 

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. 

Integrity: 

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. 

Reliability: 

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. 

Scope of work: 

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. 

[End of section] 

GAO Performance and Accountability Report 2012: 

Contents: 

Abbreviations: 

How to Use This Report: 

Introduction: 

Financial Reporting Assurance Statements: 

About GAO: 
Mission: 
Strategic Planning and Management Process: 
Organizational Structure: 
Strategies for Achieving Our Goals: 
How We Measure Our Performance: 

Part I: Management’s Discussion and Analysis: 

Assisting the Congress and Benefiting the Nation during Challenging 
Times: 
Focusing on Our Client: 
Focusing on Our People: 
Focusing on Our Internal Operations: 
GAO’s High-Risk Program: 
Opportunities to Reduce Duplication, Overlap and Fragmentation, 
Achieve Savings, and Enhance Revenue: 
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010: 
The Patient Protection and Affordable Care Act: 
The Troubled Asset Relief Program: 
The American Recovery and Reinvestment Act: 
General Counsel Decisions and Other Legal Work: 
Managing Our Resources: 
Strategic Planning and Partnerships: 
Internal Management Challenges: 

Part II: Performance Information: 

Performance Information by Strategic Goal: 

Goal 1 Overview: Address Current and Emerging Challenges to the Well-
being and Financial Security of the American People: 
Financial Benefits: 
Nonfinancial Benefits: 
Testimonies: 

Goal 2 Overview: Respond to Changing Security Threats and the 
Challenges of Global Interdependence: 
Financial Benefits: 
Nonfinancial Benefits: 
Testimonies: 

Goal 3 Overview: Help Transform the Federal Government to Address 
National Challenges: 
Financial Benefits: 
Nonfinancial Benefits: 
Testimonies: 

Goal 4 Overview: Maximize the Value of GAO by Enabling Quality, Timely 
Service to the Congress and by Being a Leading Practices Federal 
Agency: 

Data Quality: 
Verifying and Validating Performance Data: 

Part III: Financial Information: 
Audit Advisory Committee’s Report: 
Independent Auditor’s Report: 
Purpose of Each Financial Statement: 
Financial Statements: 
Notes to Financial Statements: 
Other Accompanying Information: 

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

Part V: Appendix: 
Data Quality: 

Image Sources: 

Providing Comments on This Report: 

Obtaining Copies of GAO Documents: 

Connect with GAO: 

Abbreviations: 

AAC: Audit Advisory Council: 

AIT: advanced-imaging technology: 

ALGA: Association of Local Government Auditors: 

APQA: Audit Policy and Quality Assurance: 

APSS: Administrative Professional and Support Staff: 

ARTF: Afghanistan Reconstruction Trust Fund: 

BRAC: DOD’s Base Realignment and Closure: 

CAO: Chief Administrative Officer: 

CFPB: Consumer Financial Protection Bureau: 

CGAB: Comptroller General’s Advisory Board: 

CHIP: State Children’s Health Insurance Program: 

CIGIE: Council of Inspectors General for Integrity and Efficiency: 

CMS: Centers for Medicare & Medicaid Services: 

COR: Contracting Officer Representative: 

CPP: Capital Purchase and Improvement Program: 

CRA: Congressional Review Act: 

CS: U.S. Commercial Service: 

CSRS: Civil Service Retirement System: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DOE: Department of Energy: 

DOJ: Department of Justice: 

DOL: Department of Labor: 

DOT: Department of Transportation: 

DWG: Domestic Working Group: 

DWSS: Defense Weather Satellite System: 

EA: enterprise architecture: 

EAP: Educator’s Advisory Panel: 

ECI: Employment Cost Index: 

ED: Department of Education: 

EESA: 2008 Emergency Economic Stabilization Act: 

EMS: Engagement Management System: 

EPA: Environmental Protection Agency: 

EPP: Electronic Prescribing Program: 

ERS: Engagement Reporting System: 

ESC: Enterprise Services Center: 

FAIS: Forensic Audits and Investigative Service: 

FCC: Federal Communications Commission: 

FDA: Food and Drug Administration: 

FECA: Federal Employees’ Compensation Act: 

FEGLI: Federal Employees Group Life Insurance Program: 

FEHBP: Federal Employees Health Benefit Program: 

FEMA: Federal Emergency Management Agency: 

FERS: Federal Employees Retirement System: 

FFMIA: Federal Financial Management Improvement Act of 1996: 

FICA: Federal Insurance Contributions Act: 

FINRA: Financial Industry Regulatory Authority: 

FISMA: Federal Information Security Management Act: 

FMFIA: Federal Managers’ Financial Integrity Act of 1982: 

FTE: full-time equivalent: 

GPO: Government Printing Office: 

GPRA: Government Performance and Results Act as amended: 

GSA: General Services Administration: 

HHS: Department of Health and Human Services: 

HUD: Department of Housing and Urban Development: 

IAF: Intergovernmental Audit Forums: 

IC: U.S. Intelligence Community: 

ICD: Intelligence Community Directive: 

IFPTE: International Federation of Professional and Technical 
Engineers: 

IG: inspector general: 

INTOSAI: International Organization of Supreme Audit Institutions: 

IRS: Internal Revenue Service: 

ISSAI: International Standards of Supreme Audit Institutions: 

IT: information technology: 

MA: Medicare Advantage: 

NASA: National Aeronautics and Space Administration: 

NASACT: National Association of State Auditors, Controllers, and 
Treasurers: 

NFC: National Finance Center: 

NFIP: National Flood Insurance Program: 

NIAF: National Intergovernmental Audit Forum: 

NPOESS: National Polar-orbiting Operational Environmental Satellite 
System: 

OIG: Office of Inspector General: 

OMB: Office of Management and Budget: 

PAB: Personnel Appeals Board: 

PAR: performance and accountability report: 

PBGC: Pension Benefit Guarantee Corporation: 

PMR: Product Metadata Repository: 

PPACA: Patient Protection and Affordable Care Act: 

SAI: supreme audit institution: 

SDVOSB: service-disabled veteran-owned small business: 

SEC: Securities and Exchange Commission: 

SRO: self-regulatory organization: 

SSA: Social Security Administration: 

STEM: Science, Technology, Engineering, and Math: 

TARP: Troubled Asset Relief Program: 

TIPS: Treasury Inflation-Protected Securities: 

TSA: Transportation Security Administration: 

USACE: U.S. Army Corps of Engineers: 

USAID: U.S. Agency for International Development: 

USDA: Department of Agriculture: 

VA: Department of Veterans Affairs: 

VOIP: voice over Internet Protocol: 

WMATA: Washington Metropolitan Area Transit Authority: 

[End of section] 

How to Use This Report: 

This report describes the U.S. Government Accountability Office’s 
performance measures, results, and accountability processes for fiscal 
year 2012. 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 [hyperlink, 
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 2012. 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 2012 and the targets we are aiming for in fiscal 
year 2013. 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 2012, 
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. Inspector 
General’s View of GAO’s Management Challenges 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. 

[End of How to Use This Report] 

Introduction: 

From the Comptroller General: 

November 15, 2012: 

I am pleased to present GAO’s performance and accountability report 
for fiscal year 2012. During the year, we reported on a broad range of 
issues including retirement security and nutrition assistance, 
foreclosure mitigation, Medicare and Medicaid, transportation safety, 
missile defense acquisitions, emergency management grants, 
counterterrorism, cybersecurity, and the debt limit. We issued our 
second annual report identifying duplication, overlap, cost-saving 
opportunities, and revenue enhancements in a total of 51 areas such as 
unmanned aircraft systems, surface freight transportation, information 
technology investment management, and housing assistance. We issued 11 
products in response to the Dodd-Frank Wall Street Reform and Consumer 
Protection Act on financial institutions and securities markets and 
several reports on insurance markets and publicly financed health 
insurance programs related to the Patient Protection and Affordable 
Care Act. We also continued to regularly report the results of our 
work on the Troubled Asset Relief Program and the American Recovery 
and Reinvestment Act. We again received from independent auditors an 
unqualified or “clean” opinion on our financial statements for fiscal 
year 2012. The detailed performance and financial information in this 
report is complete and reliable, and meets our high standards for 
accuracy and transparency. 

It was another strong year for our performance. We documented $55.8 
billion in financial benefits for the federal government-—a return of 
$105 for every dollar invested in us. Additionally, we recorded 1,440 
other program and operational benefits across the government. For 
example, we documented 504 benefits in public safety and security 
programs including homeland security, critical infrastructure, food 
safety, transportation safety, public health, and consumer protection. 
We referred over 70 cases of potential fraud or other impropriety to 
executive branch agencies, leading to such actions as recoupment of 
improperly received funds and conviction for theft of government 
property. In addition to benefits to the government, our work also 
benefitted the consumer. For example, our work resulted in savings to 
consumers from new energy standards for appliances, better information 
on fees to participants in defined contribution retirement plans, and 
about $140 million in refunds to consumers of debt protection products. 

The 112th Congress relied on us to inform its work on national and 
international issues. Our senior officials testified at 159 hearings 
on key topics, such as Department of Defense weapon systems, 
protecting federal information systems, improving disability programs, 
and Medicare. We know that getting our message out is crucial. To 
better serve our clients and the public we expanded our presence in 
digital and social media, released GAO’s iPhone application, and 
launched streaming video web chats with the public. We also continued 
our popular podcast audio series, recently releasing our 100th podcast. 

We depend upon our professional, diverse, and multidisciplinary staff 
to meet our clients’ needs. Our people enable us to fulfill our 
mission 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. Through the dedication and commitment of our staff, 
we achieved 95 percent on-time product 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 
work. 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, filling only critical needs because of budget 
constraints. 

We continued to focus on our two internal management challenges, human 
capital and engagement efficiency. In the area of human capital, we 
recruited for critical hires and implemented an enhanced telework 
pilot program in selected field offices, in conjunction with a 
workspace sharing initiative. Under our engagement efficiency 
initiative, we completed an end-to-end analysis of our engagement 
process that identified several areas of opportunity for improved 
efficiency. We have established an Office of Continuous Process 
Improvement that has begun several efficiency improvement projects 
based on our analysis results. These two management challenges will 
continue to be priorities in fiscal year 2013. 

We maintained our productive working relationship with the employees’ 
union, GAO Employee’s Organization, International Federation of 
Professional and Technical Engineers (IFPTE), Local 1921, and reached 
agreement on several initiatives, including approval of our new 
performance appraisal system. We welcomed the establishment of a new 
bargaining unit with IFPTE, Local 1921, for our administrative 
professional and support staff. We are also working with the Employee 
Advisory Council and the Diversity Advisory Council on several issues, 
and we developed additional diversity and inclusion courses and 
improved our reasonable accommodations process. 

Fiscal year 2012 provided many opportunities for GAO to address 
complex issues facing the Congress and the nation. We met these 
challenges, accomplishing our objectives under constrained budget 
circumstances. Although fiscal year 2013 may present many similar 
challenges, we plan to deliver our third annual report on overlap, 
duplication, and fragmentation across government, the biennial update 
of our high-risk list, and continued work on financial regulatory and 
health insurance issues, among other pressing matters. We will 
continue our work to improve our efficiency and will begin the process 
of updating our strategic plan for serving the Congress, which we 
expect to issue early in 2014. We look forward to continuing to serve 
the Congress and the public in the coming year through our work on 
issues and programs affecting the lives of all Americans. 

Signed by: 

Gene L. Dodaro: 
Comptroller General of the United States: 

[End of From the Comptroller General] 

Financial Reporting Assurance Statements: 

November 15, 2012: 

We, as GAO’s executive committee, 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, 2012, 
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 same systems of accounting and internal 
controls provide reasonable assurance that we are in compliance with 
FMFIA and (2) we have implemented and maintained financial systems 
that comply substantially with federal financial management systems 
requirements, applicable federal accounting standards, and the U.S. 
Government Standard General Ledger at the transaction level consistent 
with the requirements in the Federal Financial Management Improvement 
Act and OMB guidance. These are objectives that we set for ourselves 
even though, as part of the legislative branch of the federal 
government, we are not legally required to do so. 

Signed by: 

Gene L. Dodaro: 
Comptroller General of the United States: 

Signed by: 

David M. Fisher: 
Chief Administrative Officer/Chief Financial Officer: 

Signed by: 

Patricia A. Dalton: 
Chief Operating Officer: 

Signed by: 
William L. Anderson: 
Controller: 

Signed by: 

Lynn H. Gibson: 
General Counsel: 

[End of Financial Reporting Assurance Statements] 

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) and the 
Federal Information Security Management Act (FISMA).[Footnote 1] 
Accordingly, this performance and accountability report for fiscal 
year 2012 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 
provide objective and reliable information and 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. 

[Text box: 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. End of text box] 

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 figure 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. 

[Text box: 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: Viable National Infrastructure. 

Performance Goal: Assess federal regulation of transportation safety 
and 
efforts to fund improvements in safety. 

Key Efforts: 
* Assess federal oversight of aviation safety.
* Assess federal oversight of safety in highway, rail, pipeline, and 
other 
surface modes.
* Review the use of federal grants and other strategies to improve 
safety 
outcomes. 
End of text box] 

Figure 1: GAO’s Strategic Planning Hierarchy: 

[Refer to PDF for image: A four level stair-step pyramid that shows 
GAO's strategic planning hierarchy] 

Level 1: Strategic Goals (4); 
Level 2: Strategic Objectives (20); 
Level 3: Performance goals (96); 
Level 4: Key Efforts (300+). 

Source: GAO. 

[End of Figure 1: GAO’s Strategic Planning Hierarchy] 

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 right 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. 

The fourth goal is focused internally on improving efficiency and 
effectiveness in performing our work, maintaining and enhancing a 
diverse workforce, expanding collaboration to promote professional 
standards, and being a responsible steward of our resources. 

Figure 2: How GAO Assisted the Nation: Fiscal Year 2012: 

[Refer to PDF for image: list] 

Goal 1: Address Current and Emerging Challenges to the Well-Being and 
Financial Security of the American People: 

* Identified $12 billion of additional savings by reducing unneeded 
payments to Medicare Advantage Plans, 

* Improved oversight of the Food and Drug Administration’s 
investigators of medical devices. 

* Encouraged the Social Security Administration to develop goals, 
measures, and risk assessments for its plan to eliminate the backlog 
of disability hearings. 

* Led the Treasury to change requirements for its mortgage 
modification program to allow modifications for properties that are 
not owner-occupied, thereby reducing vacant and unmaintained 
properties. 

* Provided support for the Congress to eliminate the duplicative $5.7 
billion ethanol tax credit. 

* Developed findings for the Congress to establish national goals and 
require development of performance measures and targets for highway 
safety, condition, and performance. 

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

* Led the Federal Emergency Management Agency to better target 
National Flood Insurance Program bonuses for companies to focus on 
under-served areas and small businesses. 

* Identified challenges in processing increased volumes of terrorist 
watchlist information and impacts on agency resources and the 
traveling public. 

* Recommended that the Coast Guard improve its maintenance cost 
estimating process and adjust operational targets for its aging fleet. 

* Encouraged improved information security controls over multiple 
agencies’ information systems and networks to protect confidentiality, 
integrity, and availability of agency information. 

* Found cost and technical risks in the Navy’s $80 billion plan to 
purchase 40 destroyers. 

* Helped ensure the Department of Defense’s (DOD) $19 billion space 
launch vehicle acquisition is based on sound data. 

* Led DOD to establish guidelines for enhanced end-use monitoring of 
arms sales to the Persian Gulf. 

* Identified a lack of trend data on illegal exports and a need for 
effectiveness measures for the U.S. export control system. 

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

* Led the Treasury to increase the liquidity of Treasury Inflation 
Protected Securities, reducing borrowing costs by about $2.2 billion 
over 5 years. 

* Encouraged the Internal Revenue Service and Department of Education 
to improve information for tax filers about higher education tax 
benefits. 

* Contributed to reducing improper payments by about $1.4 billion for 
22 federal programs. 

* Referred over 70 individual cases of potential fraud or other 
impropriety to federal agencies for action. 

* Identified counterfeit parts that could enter the DOD supply chain 
for military grade electronic parts. 

* Ensured the soundness of National Aeronautics and Space 
Administration’s (NASA) plans to sustain the international space 
station 
through replicating NASA’s system assessments. 

* Published a guide to provide a consistent methodology for 
developing, managing, and evaluating schedules for capital investments. 

Goal 4: Maximize the Value of GAO by Enabling Quality, Timely Service 
to the Congress and Being a Leading Practices Federal Agency: 

* Provided extensive training on revised Government Auditing Standards. 

* Analyzed our engagement process and identified 31 areas of 
opportunity for improved efficiency. 

* Reduced our physical infrastructure footprint and expanded telework 
for $1.1 million in potential savings. 

* Established a three-tier certification program and certified 73 
contracting officer representatives. 

* Launched an agencywide financial literacy initiative including a 
speakers’ series and training classes. 

Source: GAO. 

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

[End of Figure 2: How GAO Assisted the Nation: Fiscal Year 2012] 

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 
figure 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 have updated 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. We issued an 
interim update to our plan in February 2012 and plan to issue 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 [hyperlink, 
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 [hyperlink, http://www.gao.gov/sp.html]. 

[Text box: 
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. End of text box] 

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 eleventh consecutive year its Certificate of Excellence in 
Accountability Reporting for outstanding accountability reporting for 
our fiscal year 2011 performance and accountability report. We also 
received a “Best-in-Class” award for the most comprehensive and candid 
presentation of forward looking information for fiscal year 2011 (see 
figure 4). 

Figure 3: GAO's Strategic Plan Framework: 

[Refer to PDF for Image: illustration] 

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. 

Trends: 

* National Security Threats; 

* Fiscal Sustainability Challenges; 

* Economic Recover and Growth; 

* Global Interdependency; 

* Science & Technology; 

* Networks and Virtualization; 

* Shifting Roles of Government; 

* Demographic and Societal Change. 

Goals & Objectives: 

Provide Timely, Quality Service to the Congress and the Federal 
Government to: 

1) Address Current and Emerging Challenges to the Well-being and 
Financial Security of the American People related to: 

* Health care needs; 

* Lifelong learning; 

* Benefits and protections for workers, families, and children; 

* Financial security; 

* Effective system of justice; 

* Viable communities; 

* Stable financial system and consumer protection; 

* Stewardship of natural resources and the environment; 

* Infrastructure; 

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

* Homeland security; 

* Military capabilities and readiness; 

* U.S. foreign policy interests; 

* Global market forces. 

Help Transform the Federal Government to Address National Challenges 
by assessing: 

* Government’s fiscal position and options for closing gap; 

* Fraud, waste, and abuse; 

* Major management challenges and program risks. 

Maximize the Value of GAO by Enabling Quality, Timely Service to the 
Congress and Being a Leading Practices Federal Agency in the areas of: 

* Efficiency, effectiveness, and quality; 

* Diverse and inclusive work environment; 

* Professional networks and collaboration; 

* Institutional stewardship and resource management. 

Core Values: 

* Accountability; 

* Integrity; 

* Reliability. 

Source: GAO. 

[End of Figure 3: GAO's Strategic Plan Framework] 

Figure 4: GAO’s Performance and Accountability Report Awards: 

[Refer to PDF for Image: 3 illustrations] 

Scanned copies of: 

1. Cover of the Government Accountability Office's Performance and 
Accountability Report for Fiscal Year 2011. 

2. AGA Certificate of Excellence in Accountability Reporting, Best-In-
Class Award, presented to the U.S. Government Accountability Office: 
"In recognition of Providing the Best Summary of Performance and 
Financial Information in your FY11 Agency Financial Report." 

Signed by: 

Robert F. Dacey, CGFM, CPA: 
Chair, Certificate of Excellence in Accountability Reporting Director: 

Signed by: 

Relmond P. Van Daniker, DBA, CPA: 
Executive Director, AGA: 

3. AGA Certificate of Excellence in Accountability Reporting, 
presented to the U.S. Government Accountability Office. 

In recognition of your outstanding efforts preparing GAO's Performance 
and Accountability Report for the fiscal year ended September 30, 2011. 

A Certificate of Excellence in Accountability is presented by AGA to 
federal government agencies whose annual Performance and 
Accountability Reports achieve the highest standards demonstrating 
accountability and communicating results. 

Signed by: 

Robert F. Dacey, CGFM, CPA: 
Chair, Certificate of Excellence in Accountability Reporting Director: 

Signed by: 

Relmond P. Van Daniker, DBA, CPA: 
Executive Director, AGA: 

Source: GAO. 

[End of Figure 4: GAO’s Performance and Accountability Report Awards] 

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, Audit Policy 
and Quality Assurance, 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. 

Figure 5: Organizational Structure: 

[Refer to PDF for image: organizational chart] 

Level one: Comptroller General of the United States: 
* Public Affairs; 
* Strategic Planning and External Liaison; 
* Congressional Relations; 
* Opportunity and Inclusiveness. 

Level one (set apart from all GAO units to denote independence and 
statutory role): Inspector General. 

Level two: 
* General Counsel; 
* Chief Operating Officer; 
* Chief Administrative Officer/Chief Financial Officer. 

Level three: 

Under General Counsel: 
Goals 1, 2, 3, and 4: 
* Provide audit and other legal support services for all goals and 
staff offices; 
* Manage GAO’s bid protest and appropriations law work. 

Under Chief Operating Officer: 
* Continuous Process Improvement: 
* Audit Policy and Quality Assurance: 
* Teams: 

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: 
* Education, Workforce, and Income Security; 
* Financial Markets and Community Investment; 
* Health Care; 
* Homeland Security and Justice; 
* Natural Resources and Environment; 
* Physical Infrastructure. 

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: 
* Acquisition and Sourcing Management; 
* Defense Capabilities and Management; 
* International Affairs and Trade. 

Goal 3: 
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. 

Under Chief Administrative Officer/Chief Financial Officer: 

Goal 4: 
Maximize the Value of GAO by Enabling Quality, Timely Service to the 
Congress and Being a Leading Practices Federal Agency: 
* Financial Management and Business Operations: 
– Controller; 
* Human Capital Office: 
– Chief Human Capital Officer; 
* Information Systems and Technology Services: 
- Chief Information Officer; 
* Infrastructure Operations; 
* Professional Development Program; 
* Field Operations. 

Source: GAO. 

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. 

[End of Figure 5: Organizational Structure] 

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 
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 in-house 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. In fiscal year 2012, we 
created a new Office of Continuous Process Improvement to establish 
change in mission and mission support operations to improve efficiency 
and effectiveness in how we conduct our work. Other teams and goal 4 
offices including the Applied Research and Methods team and the Office 
of Strategic Planning and External Liaison, Congressional Relations, 
Opportunity and Inclusiveness, Audit Policy and Quality Assurance, and 
Public Affairs assist in achieving specific key efforts. In addition, 
attorneys in the General Counsel’s office, primarily in the Legal 
Services group, provide legal support for goal 4. 

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 72 percent of 
our 2,960 employees are based at our headquarters in Washington, D.C.; 
the rest are deployed in 11 field offices across the country (see 
figure 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 
our programs and operations and for making recommendations to promote 
its economy, efficiency, and effectiveness. The IG also keeps the 
Comptroller General and the Congress fully informed through semiannual 
reports that describe the IG’s findings. In addition, the IG 
investigates allegations from our 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: 

[Refer to PDF for image: U.S. map] 

This figure is a map of the United States depicting the following GAO 
Office Locations: 

Atlanta, Georgia: 
Boston, Massachusetts: 
Chicago, Illinois: 
Dallas, Texas: 
Dayton, Ohio: 
Denver, Colorado: 
Huntsville, Alabama: 
Los Angeles, California: 
Norfolk, Virginia: 
San Francisco, California: 
Seattle, Washington: 
Washington, D.C. 

Source: See Image Sources. 

[End of Figure 6: GAO’s Office Locations] 

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 proved 
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 and 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 accurate, 
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 2012, we devoted 95 
percent of our engagement resources to work requested or mandated by 
the Congress. We devoted the remaining 5 percent of the engagement 
resources to work 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 war in Afghanistan, follow-up on 
our 2011 duplication, overlap and fragmentation report, and the 
federal, state and local government fiscal outlook.[Footnote 2] Also 
covered by this work were reviews of government programs and 
operations that we have identified as at high risk for fraud, waste, 
abuse, and mismanagement as well as reviews of agencies’ budget 
requests to help support congressional decision making. By making 
recommendations to improve the accountability, operations, and 
services of government agencies, we contribute to increasing the 
effectiveness of federal spending and enhancing the taxpayers’ trust 
and confidence in their government. 

Our staff are responsible for following high standards for gathering, 
documenting, and supporting the information we collect and analyze. 
This information is usually presented in a product that is made 
available to the public. In some cases, we develop products that 
contain classified or sensitive information that cannot be made 
available publicly. 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. 
[Footnote 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 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 [hyperlink, http://www.gao.gov/openrecs.html]. 

Similarly, our biennial high-risk report, to be updated in February 
2013, 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 
they help us to identify areas of focus on important policy and 
management issues facing the nation. 

To attain our fourth strategic goal—-an internal goal—-and its four 
related objectives, we implement projects to address the key efforts 
in our strategic plan. We conduct surveys of our congressional clients 
and internal customers to obtain feedback on our products, processes, 
and services and identify ways to improve them. We also perform 
internal management studies and evaluations. 

Because achieving our strategic goals and objectives also requires 
strategies for coordinating with other organizations with similar or 
complementary missions, we: 

* use advisory panels and other bodies to inform our strategic and 
annual work planning and; 

* maintain strategic working relationships with other national and 
international government accountability and professional 
organizations, including the federal inspectors general, state and 
local audit organizations, and other national audit offices. 

These two types of strategic working relationships allow us to extend 
our institutional knowledge and experience; leverage our resources; 
and in turn, improve our service to the Congress and the American 
people. Our Strategic Planning and External Liaison office takes the 
lead and provides strategic focus for the work with external partner 
organizations, while our research, audit, and evaluation teams lead 
the work with most of the issue-specific organizations. 

How We Measure Our Performance: 

To help us determine how well we are meeting the needs of the Congress 
and maximizing our value as a leading practices organization, we 
assess our performance annually using a balanced set of quantitative 
performance measures that focus on four key areas—results, client, 
people, and internal operations. These categories of measures are 
briefly described below. 

* Results. Focusing on results and the effectiveness of the processes 
needed to achieve them is fundamental to accomplishing our mission. To 
assess our results, we measure financial benefits, other 
(nonfinancial) benefits, recommendations implemented, and percentage 
of new products with recommendations. 

Financial benefits and nonfinancial benefits provide quantitative and 
qualitative information, respectively, on the outcomes or results that 
have been achieved from our work. They often represent outcomes that 
occurred or are expected to occur over a period of 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 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 that 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 where 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, 
infrastructure operations, 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 Internet access, voice and video 
communication systems, pay and benefits, and building security and 
maintenance. We set targets for these measures at the agencywide level. 

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 known upcoming events for most of our results measures (see p. 
24) and the external factors that influence our work (see p. 60). 
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. [Footnote 4] 
We may adjust these targets after they are initially published when 
our expected future work or level of funding 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 V, 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 
2012 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. 

[End of About GAO] 

Part I: Management’s: Discussion and Analysis: 

Assisting the Congress and Benefiting the Nation during Challenging 
Times: 

In fiscal year 2012, demand for our work was high with 924 
congressional requests and new mandates. Our work in key areas helped 
inform the Congress and the administration on issues relevant to all 
Americans. These included issues related to duplication, overlap and 
opportunities for cost-saving in government programs, for which we 
identified 51 areas where programs may be able to achieve greater 
efficiencies or become more effective in providing government 
services, the Dodd-Frank Wall Street Reform and Consumer Protection 
Act, the Patient Protection and Affordable Care Act, nationwide 
funding provided through the American Recovery and Reinvestment Act 
and the Troubled Asset Relief Program, and our continued oversight of 
high-risk and other critical areas. 

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 2012—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 $55.8 billion in financial 
benefits, exceeding our target of $40 billion by $15.8 billion. 
[Footnote 5] This represents a $105 return on every dollar the 
Congress invested in us. We recorded 1,440 nonfinancial benefits, 
exceeding our target of 1,200 by 240 benefits. We met our target of 80 
percent for past recommendations implemented, and we exceeded our 
target for new products with recommendations by 7 percentage points. 
We did not meet our target of 180 hearings at which we were asked to 
testify, due to fewer-than-anticipated hearings in a range of subject 
areas. We exceeded our 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, telework, and building maintenance) 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 indicate their 
satisfaction with each service, or to indicate if they did not use 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. Our scores from the 2011 survey were 3.98 
for services that “help get the job done” and 3.99 for services that 
impact the “quality of work life.” On a 5-point scale, with 5 being 
the highest, these scores indicate that our employees were satisfied 
with the internal administrative services we provide. 

Our fiscal year 2013 targets for 13 of 15 of our performance measures 
are the same as those targets we reported in our fiscal year 2013 
performance plan in February 2012. We believe that these targets are 
challenging yet realistic for our staff given constrained resources to 
monitor agency actions to implement our recommendations. 

Table 1: Agencywide Summary of Annual Measures and Targets: 

Performance Measure: Results: Financial benefits (dollars in 
billions); 
2007 Actual: $45.9 billion; 
2008 Actual: $58.1 billion; 
2009 Actual: $43.0 billion; 
2010 Actual: $49.9 billion; 
2011 Actual: $45.7 billion; 
2012 Target: $40.0 billion; 
2012 Actual: $55.8 billion; 
Met/Not Met: Met; 
2013 Target: $44.0 billion. 

Performance Measure: Results: Nonfinancial benefits; 
2007 Actual: 1,354; 
2008 Actual: 1,398; 
2009 Actual: 1,315; 
2010 Actual: 1,361; 
2011 Actual: 1,318; 
2012 Target: 1,200; 
2012 Actual: 1,440; 
Met/Not Met: Met; 
2013 Target: 1,200. 

Performance Measure: Results: Past recommendations implemented; 
2007 Actual: 82%; 
2008 Actual: 83%; 
2009 Actual: 80%; 
2010 Actual: 82%; 
2011 Actual: 80%; 
2012 Target: 80%; 
2012 Actual: 80%; 
Met/Not Met: Met; 
2013 Target: 80%. 

Performance Measure: Results: New products with recommendations; 
2007 Actual: 66%; 
2008 Actual: 66%; 
2009 Actual: 68%; 
2010 Actual: 61%; 
2011 Actual: 68%; 
2012 Target: 60%; 
2012 Actual: 67%; 
Met/Not Met: Met; 
2013 Target: 60%. 

Performance Measure: Client: Testimonies; 
2007 Actual: 276; 
2008 Actual: 298; 
2009 Actual: 203; 
2010 Actual: 192; 
2011 Actual: 174; 
2012 Target: 180; 
2012 Actual: 159; 
Met/Not Met: Not Met; 
2013 Target: 170. 

Performance Measure: Client: Timeliness[A]; 
2007 Actual: 95%; 
2008 Actual: 95%; 
2009 Actual: 95%; 
2010 Actual: 95%; 
2011 Actual: 95%; 
2012 Target: 90%; 
2012 Actual: 95%; 
Met/Not Met: Met; 
2013 Target: 90%. 

Performance Measure: People: New hire rate; 
2007 Actual: 96%; 
2008 Actual: 96%; 
2009 Actual: 99%; 
2010 Actual: 95%; 
2011 Actual: 84%; 
2012 Target: 95%; 
2012 Actual: 76%; 
Met/Not Met: Not Met; 
2013 Target: 95%. 

Performance Measure: People: Retention rate: With retirements; 
2007 Actual: 90%; 
2008 Actual: 90%; 
2009 Actual: 94%; 
2010 Actual: 94%; 
2011 Actual: 92%; 
2012 Target: 90%; 
2012 Actual: 93%; 
Met/Not Met: Met; 
2013 Target: 90%. 

Performance Measure: People: Retention rate: Without retirements; 
2007 Actual: 94%; 
2008 Actual: 93%; 
2009 Actual: 96%; 
2010 Actual: 96%; 
2011 Actual: 96%; 
2012 Target: 94%; 
2012 Actual: 96%; 
Met/Not Met: Met; 
2013 Target: 94%. 

Performance Measure: People: Staff development[B]; 
2007 Actual: 76%; 
2008 Actual: 77%; 
2009 Actual: 79%
2010 Actual: 79%; 
2011 Actual: 79%; 
2012 Target: 76%; 
2012 Actual: 80%; 
Met/Not Met: Met; 
2013 Target: 76%. 

Performance Measure: People: Staff utilization[B,C]; 
2007 Actual: 73%; 
2008 Actual: 75%; 
2009 Actual: 78%; 
2010 Actual: 77%; 
2011 Actual: 78%; 
2012 Target: 75%; 
2012 Actual: 76%; 
Met/Not Met: Met; 
2013 Target: 75%. 

Performance Measure: People: Effective leadership by supervisors [B,D]; 
2007 Actual: 79%; 
2008 Actual: 81%; 
2009 Actual: 83%; 
2010 Actual: 83%; 
2011 Actual: 83%; 
2012 Target: 80%; 
2012 Actual: 82%; 
Met/Not Met: Met; 
2013 Target: 80%. 

Performance Measure: People: Organizational climate[B]; 
2007 Actual: 74%; 
2008 Actual: 77%; 
2009 Actual: 79%; 
2010 Actual: 79%; 
2011 Actual: 80%; 
2012 Target: 75%; 
2012 Actual: 78%; 
Met/Not Met: Met; 
2013 Target: 75%. 

Performance Measure: Internal operations[E]: Help get job done; 
2007 Actual: 4.05; 
2008 Actual: 4.0; 
2009 Actual: 4.03; 
2010 Actual: 3.94; 
2011 Actual: 3.98; 
2012 Target: 4.0; 
2012 Actual: N/A; 
Met/Not Met: N/A; 
2013 Target: 4.0. 

Performance Measure: Internal operations[E]: Quality of work life; 
2007 Actual: 3.98; 
2008 Actual: 4.01; 
2009 Actual: 4.01; 
2010 Actual: 3.94; 
2011 Actual: 3.99; 
2012 Target: 4.0; 
2012 Actual: N/A; 
Met/Not Met: N/A; 
2013 Target: 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 
2012 was 22 percent, and 99 percent of the clients who responded 
answered this question. The percentage shown in the table represents 
the percentage of respondents who answered favorably to this question 
on the form. 

[B] This measure is derived from our annual agencywide employee 
feedback survey. From the staff who expressed an opinion, we 
calculated the percentage of those who selected favorable responses to 
the related survey questions. Responses of “no basis to judge/not 
applicable” or “no answer” were excluded from the calculation. While 
including these responses in the calculation would result in a 
different percentage, our method of calculation is an acceptable 
survey practice, and we believe it produces a better and more valid 
measure because it represents only those employees who have an opinion 
on the questions. 

[C] 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 rate 30 
internal services available to them, indicating on a five-point scale, 
with 5 being the highest, their satisfaction with each service from “
very dissatisfied” to “very satisfied” or to indicate if they did not 
use the service. These measures are described in more detail on page 
37 of this report. We will report actual data for fiscal year 2012 
once the survey results have been analyzed. N/A indicates that the 
data are not yet available. 

[End of Table 1: Agencywide Summary of Annual Measures and Targets] 

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 increased each year from 2007 to 2009 and then 
remained fairly stable from 2010 to 2012. The average number of 
nonfinancial benefits we recorded increased from 2007 to 2008 and has 
remained fairly stable for the period from 2010 to 2012. New products 
with recommendations has been very stable from 2007 through 2012. 

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

Performance measure: Results: Financial benefits; 
2007: $45.1 billion; 
2008: $48.7 billion; 
2009: $49.5 billion; 
2010: $49.2 billion; 
2011: $49.2 billion; 
2012: $48.6 billion. 

Performance measure: Results: Nonfinancial benefits; 
2007: 1,325; 
2008: 1,376; 
2009: 1,352; 
2010: 1,357; 
2011: 1,348; 
2012: 1,359. 

Performance measure: Results: New products with recommendations; 
2007: 64%; 
2008: 65%; 
2009: 66%; 
2010: 65%; 
2011: 66%; 
2012: 66%. 

Performance measure: Client: Testimonies; 
2007: 228; 
2008: 248; 
2009: 254; 
2010: 242; 
2011: 217; 
2012: 182. 

Source: GAO. 

[End of Table 2: Four-Year Rolling Averages for Selected GAO Measures] 

When setting our target for the number of hearings at which our senior 
executives testify, we base our testimonies target in part 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. For the past three years, our testimonies have been 
lower 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 2013. 

Focusing on outcomes and the efficiency of the processes needed to 
achieve them is fundamental to accomplishing our mission. The 
following four annual measures—financial benefits, nonfinancial 
benefits, past recommendations implemented, and new products 
containing recommendations—indicate that we have fulfilled our mission 
and delivered results that benefit the nation. 

Financial Benefits and Nonfinancial Benefits: 

We describe many of the results produced by our work as either 
financial or nonfinancial benefits. In many cases, the benefits we 
claimed in fiscal year 2012 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 2012, our work generated about $56 billion in financial 
benefits (see figure 7). We exceeded our target by almost 40 percent 
because of several unexpectedly large accomplishments. Part II of this 
report provides more information on these accomplishments by goal. 
(See figure 8.) In light of ongoing resource constraints that may 
affect our ability to follow up on actions taken, we have set our 
fiscal year 2013 target for financial benefits at $44 billion. This is 
above the fiscal year 2012 target but below our actual performance. 

Figure 7: Financial Benefits GAO Recorded: 

[Refer to PDF for image: vertical bar graph] 

2007 Actual: $45.9 billion; 
2008 Actual: $58.1 billion; 
2009 Actual: $43.0 billion; 
2010 Actual: $49.9 billion; 
2011 Actual: $45.7 billion; 
2012 Target: $40.0 billion; 
2012 Actual: $55.8 billion. 

Source: GAO. 

[End of Figure 7: Financial Benefits GAO Recorded] 

Financial benefits included in our performance measures are net 
benefits-—that is, estimates of financial benefits that have been 
reduced by the estimated costs associated with taking the action that 
we recommended. We convert all estimates involving past and future 
years to their net present value and use actual dollars to represent 
estimates involving only the current year. Financial benefit amounts 
vary depending on the nature of the benefit, and we can claim 
financial benefits over multiple years based on a single agency or 
congressional action. We limit the period over which benefits from an 
accomplishment can accrue to no more than 5 years. 

Estimates used to calculate our financial benefits come from non-GAO 
sources. These 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 2010: 

[Refer to PDF for image: table] 

Description: Reductions in Payments to Medicare Advantage (MA) Plans. 
As the MA program—a private plan option under Medicare—grew, some 
policymakers raised concerns about its design and cost. Specifically, 
they were concerned that payments to MA plans exceeded what Medicare 
would have paid had MA beneficiaries received services through 
Medicare fee-for-service, thereby increasing overall Medicare 
spending. Our work showed that for 2007, despite the higher MA plan 
payments, some beneficiaries enrolled in the MA program were likely to 
have higher out-of-pocket costs than if they were enrolled in Medicare 
fee-for-service. In addition, our work showed that in 2005 MA plans 
spent less on medical expenses than projected, thus gaining profits of 
about $1.14 billion more than estimated. Our work influenced 2008 
legislation that reduced payments to the MA program. For fiscal years 
2013-2014, the present value of the reduced payments will exceed $12 
billion. 
[hyperlink, http://www.gao.gov/products/GAO-08-359], 
[hyperlink, http://www.gao.gov/products/GAO-08-522T], 
[hyperlink, http://www.gao.gov/products/GAO-08-827R]. 
Amount: $12.4 billion. 

Description: NASA Cancellation of Constellation/Ares I Project. From 
2006 to 2009, we issued a number of products on various aspects of NASA’
s Constellation program, including the Orion and Ares I projects, the 
two main development efforts under that program. We questioned the 
affordability and overall acquisition strategy for each project and 
stressed that NASA needed to develop a sound business case to support 
the Constellation program before making long-term commitments. 
Development and funding issues with the project led to an extended gap 
in human space flight capability, and as a result, NASA’s fiscal year 
2011 budget request canceled the Constellation program, effectively 
halting the program’s planned entry into the implementation phase of 
development. The estimated financial benefit of canceling the program 
is about $8.0 billion. 
[hyperlink, http://www.gao.gov/products/GAO-09-844], 
[hyperlink, http://www.gao.gov/products/GAO-08-51], 
Amount: $8.0 billion. 

Description: Elimination of Ethanol Excise Tax Credit for Corn. We 
found that a federal ethanol tax credit was duplicative with a federal 
renewable fuel standard that requires U.S. transportation fuels to 
contain certain volumes of biofuels, such as ethanol. In 2011, along 
with the fuel standard, the Congress supported domestic ethanol 
production through a $5.7 billion tax credit program, which provided a 
45-cent-per-gallon federal tax credit to fuel blenders that purchase 
and blend ethanol with gasoline. We advised the Congress to consider 
allowing the tax credit to expire. The Congress took no action to 
extend the tax credit, which had been active in various forms since 
1979, and it expired at the end of 2011. Over the nine months of 
fiscal year 2012 when the tax credit did not apply, tax expenditure 
savings totaled $4.5 billion. 
[hyperlink, http://www.gao.gov/products/GAO-11-318SP], 
[hyperlink, http://www.gao.gov/products/GAO-09-446], 
Amount: $4.5 billion. 

Description: Tour Normalization for Forces in South Korea. In May 
2011, we recommended that DOD assess benefits, costs, and alternatives 
before implementing an initiative to increase the lengths of U.S. 
servicemembers’ tours in South Korea. In response to our report, the 
Congress directed that DOD conduct such an analysis, which in turn led 
the department to decide that the initiative was unaffordable. DOD 
avoided $3.1 billion in costs for additional personnel and 
infrastructure that would have been needed to support the initiative. 
[hyperlink, http://www.gao.gov/products/GAO-11-316], 
Amount: $3.1 billion. 

Description: Termination of Defense Weather Satellite System (DWSS) 
Program. DWSS was a follow-on program to the National Polar-orbiting 
Operational Environmental Satellite System (NPOESS) disbanded due to 
cost increases, schedule delays, and ineffective management structure. 
We reviewed NPOESS as well as its restructure and transition to DWSS. 
We reviewed the follow-on program and found delays in completing key 
acquisition activities while the program was accelerating planned 
development activities, thus increasing program concurrency and risk. 
In response to our work, the Congress did not fund DWSS for fiscal 
year 2012 other than for termination of the program. DOD had planned 
on spending about $3 billion in fiscal years 2012 through 2016 on 
NPOESS and DWSS activities. DOD currently has two weather satellites 
to be launched as needed and is working on the weather satellite 
follow-on effort. 
[hyperlink, http://www.gao.gov/products/GAO-11-233SP], 
[hyperlink, http://www.gao.gov/products/GAO-10-388SP], 
[hyperlink, http://www.gao.gov/products/GAO-10-558], 
[hyperlink, http://www.gao.gov/products/GAO-09-564], 
Amount: $3.0 billion. 

Source: GAO. 

Note: Additional examples of fiscal year 2012 financial benefits can 
be found in Part II of this report. 

[End of Figure 8: GAO’s Selected Major Financial Benefits Reported in 
Fiscal Year 2012] 

Nonfinancial Benefits: 

Many of the benefits that result from our work cannot be measured in 
dollar terms. During fiscal year 2012, we recorded a total of 1,440 
nonfinancial benefits (see figure 9). We exceeded our target by 20 
percent largely because of a number of accomplishments we documented 
for information technology, physical infrastructure, and environmental 
issues. We have set our 2013 target for nonfinancial benefits at 1,200 
again given ongoing resource constraints. 

Figure 9: Nonfinancial Benefits: 

[Refer to PDF for image: vertical bar graph] 

2007 Actual: 1,354; 
2008 Actual: 1,398; 
2009 Actual: 1,315; 
2010 Actual: 1,361; 
2011 Actual: 1,318; 
2012 Target: 1,200; 
2012 Actual: 1,440. 

Source: GAO. 

[End of Figure 9: Nonfinancial Benefits] 

In fiscal year 2012 we documented actions taken across federal 
programs-—about 36 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 35 percent resulted from improvements in business process and 
management, such as federal information systems, business systems 
modernization, and financial management. (See figure 10.) In figure 
11, we provide examples of nonfinancial benefits we claimed as 
accomplishments in fiscal year 2012. Additional examples of 
nonfinancial benefits can be found in Part II of this report. 

Figure 10: Types of Fiscal Year 2012 Nonfinancial Benefits: 

[Refer to PDF for image: vertical bar graph] 

Public Insurance and Benefits: 3%; 
Public Safety and Security: 36%; 
Acquisition and Contract Management: 8%; 
Tax Law Administration: 4%; 
Program Efficiency and Effectiveness: 14%; 
Business Process and Management: 35%. 

Source: GAO. 

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, including information security, critical 
technologies, food safety, transportation safety, telecommunications 
safety, international food assistance, public health, consumer 
protection, environmental issues, national defense, foreign policy, 
and international trade. 

* 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. 

[End of Figure 10: Types of Fiscal Year 20112 Nonfinancial Benefits] 

Figure 11: GAO’s Selected Nonfinancial Benefits Reported in Fiscal 
Year 2012: 

[Refer to PDF for image: table] 

Program: Public Insurance and Benefits; 
Description: We found in 2009 that the Social Security Administration 
(SSA) neither provided performance goals and measures nor identified 
implementation risks for many initiatives in its plan to eliminate its 
backlog of disability hearings, where people can appeal SSA’s decisions 
about their claims. We recommended that SSA develop goals and measures, 
and identify risks and steps to address them so that SSA could improve 
its disability claims process. SSA subsequently established goals for 
each initiative and implemented a system that includes measures and 
risk assessments for each initiative, as well as proposed risk 
mitigation strategies. For example, SSA eliminated the oldest cases in 
their backlog and reduced average processing time. 
[hyperlink, http://www.gao.gov/products/GAO-09-398]. 

Program: Public Safety and Security; 
Description: The December 2009 attempted airline bombing exposed 
weaknesses in how agencies create and use the terrorist watchlist. In 
May 2012, we reported that agencies faced challenges in processing 
increased volumes of watchlist-related information and that changes to 
screening processes based on the incident had impacted agency 
resources and the traveling public. We recommended that the Assistant 
to the President for Homeland Security and Counterterrorism routinely 
assess the results from using the watchlist to determine if outcomes 
and impacts are acceptable and manageable. This work has assisted the 
Congress in overseeing terrorist watchlist processes. 
[hyperlink, http://www.gao.gov/products/GAO-12-144T], 
[hyperlink, http://www.gao.gov/products/GAO-12-476]. 

Program: Acquisition and Contract Management; 
Description: In September 2011 we reported that DOD faced challenges 
in ensuring orderly contractor demobilization for the Iraq drawdown-—
specifically, in obtaining accurate and sufficient information from 
contractors, such as detailed demobilization plans and contractor 
employee headcount data. We recommended that DOD take steps, such as 
enforcing guidance to contractors to ensure proper planning associated 
with demobilization and engaging contractors to ensure that total 
personnel headcounts accurately reflect all personnel, including those 
working under subcontracts. In response, DOD took aggressive action to 
work with contractors to ensure robust contractor planning for 
demobilization and personnel accountability. 
[hyperlink, http://www.gao.gov/products/GAO-11-774]. 

Program: Tax Law Administration; 
Description: We reported that Internal Revenue Service’s (IRS) 
approach to the collection of unpaid taxes did not provide for the 
full effective use of the tools available. Specifically, IRS’s overall 
approach focused primarily on gaining voluntary compliance, a practice 
that has little likelihood of success for egregious payroll tax 
offenders. To strengthen IRS’s use of existing collection tools, we 
recommended that IRS review current case prioritization and assignment 
practices. In response, in October 2011, IRS changed its case routing 
processes, and in November 2011, IRS implemented a process to 
systematically accelerate entities with 30 or more delinquent tax-
reporting periods as a priority for tax collection. These changes 
should increase the likelihood of successful IRS collection action 
against identified payroll tax debtors. 
[hyperlink, http://www.gao.gov/products/GAO-08-617]. 

Program: Program Efficiency and Effectiveness; 
Description: In September 2010, we reported on results of undercover 
testing that found Head Start employees lied about applicants’ 
employment status or misrepresented their earnings in order to qualify 
applicants for enrollment under eligibility criteria designed for 
families with incomes below 130 percent of the poverty line. In 
response to our report, Head Start grantees across the nation took 
steps to improve fraud prevention controls related to eligibility for 
enrollment in Head Start centers. These actions will help reduce the 
risk that over-income children are enrolled while legitimate under-
income children are put on waitlists. 
[hyperlink, http://www.gao.gov/products/GAO-10-1049]]. 

Program: Business Process and Management; 
Description: We identified more than $794 million remaining in expired 
grant accounts in the largest civilian payment system for grants at 
the end of fiscal year 2011. Closing out grants allows agencies to 
identify and redirect unused funds to other projects or to return 
unspent balances to the Treasury. In response to our recommendations, 
OMB issued the first ever “Controller Alert,” instructing agencies to 
close out grants in a timely manner and suggesting strategies such as 
establishing annual or semi-annual performance targets for timely 
grant closeout, monitoring closeout activity, and tracking progress in 
reducing closeout backlog. 
[hyperlink, http://www.gao.gov/products/GAO-12-360], 
[hyperlink, http://www.gao.gov/products/GAO-12-704T]. 

Source: GAO. 

Note: Additional examples of fiscal year 2012 nonfinancial benefits 
can be found in Part II of this report. 

[End of Figure 11: GAO’s Selected Nonfinancial Benefits Reported in 
Fiscal Year 2012] 

In addition to benefits to the government, our work also results in 
benefits to the consumer. For example, we reviewed the Department of 
Energy’s (DOE) record of standard setting for minimum energy 
efficiency for consumer and industrial appliances and found that 
dozens of standards were backlogged [hyperlink, 
http://www.gao.gov/products/GAO-07-42]. DOE took action to address our 
recommendations to streamline the standard setting process and 
allocate additional resources to expedite setting new standards and 
has largely caught up with its backlog of unset standards. As a 
result, according to DOE’s data American consumers are currently 
saving $15 billion per year because the appliances they purchase are 
using less energy. In another review, we found that consumers only 
received 21 cents on the dollar in financial benefits for every dollar 
they spent for debt protection products from 9 large credit card 
issuers [hyperlink, http://www.gao.gov/products/GAO-11-311]. We 
recommended that the Bureau of Consumer Financial Protection (Bureau) 
consider the financial benefits and costs to consumers of these 
products. In July 2012, the Bureau announced an enforcement action—
triggered by our work, according to the Bureau’s director—that 
required one credit card issuer to provide about $140 million in 
refunds to consumers of debt protection products, and subsequently at 
least three issuers announced that they were phasing out these 
products altogether. In a third example, we reported that participants 
in defined contribution plans, such as 401(k) and 403(b) plans, had 
limited information to compare investment options and invest wisely 
[hyperlink, http://www.gao.gov/products/GAO-07-21]. We recommended 
that the Department of Labor (DOL) ensure that information, such as 
fees and expenses, be made available, and DOL issued a rule requiring 
plan administrators and their service providers to disclose certain 
information regarding investments to plan sponsors. DOL estimated that 
this change could save workers $12.3 billion in fees and 
administrative costs over a ten-year period. There are 72 million 
participants in 401(k)-type plans who now have the information they 
need to manage their retirement savings. 

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 2012, 80 percent of the 
recommendations we made in fiscal year 2008 had been implemented (see 
figure 12), primarily by executive branch agencies. Putting these 
recommendations into practice generates tangible benefits for the 
nation. 

Figure 12: Percentage of Past Recommendations Implemented: 

[Refer to PDF for image: vertical bar graph] 

Four-year implementation rate: 
2007 Actual: 82%; 
2008 Actual: 83%; 
2009 Actual: 80%; 
2010 Actual: 82%; 
2011 Actual: 80%; 
2012 Target: 80%; 
2012 Actual: 80%. 

Source: GAO. 

[End of Figure 12: Percentage of Past Recommendations Implemented] 

The 80 percent implementation rate for fiscal year 2012 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 2008: 

[Refer to PDF for image: vertical bar graph] 

After 1 year: 15%; 
After 2 years: 24%; 
After 3 years: 37%; 
After 4 years: 80%. 

[End of Figure 13: Cumulative Implementation Rate for Recommendations 
Made in Fiscal Year 2008] 

New Products Containing Recommendations: 

In fiscal year 2012, about 67 percent of the 651 written products we 
issued contained recommendations (see figure 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 7 percentage 
points. However, we have set our target again in fiscal year 2013 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: 

[Refer to PDF for image: vertical bar graph] 

2007 Actual: 66%. 
2008 Actual: 66%; 
2009 Actual: 68%; 
2010 Actual: 61%; 
2011 Actual: 68%; 
2012 Target: 60%; 
2012 Actual: 67%. 

Source: GAO. 

[End of Figure 14: Percentage of New Products with Recommendations] 

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. We issued 964 products 
and completed work for 172 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 2012, experts from 
our staff testified at 159 congressional hearings covering a wide 
range of complex issues. We did not meet our target of 180 hearings at 
which we testify (see figure 15) by 21 hearings. This measure is 
client driven based on invitations to testify, and we cannot always 
anticipate clients’ specific subject area interests. The 159 hearings 
at which the Congress asked our executives to testify in fiscal year 
2012 covered the scope of our mission areas. (See figure 17 for 
selected topics we testified on by strategic goal in fiscal year 
2012.) Fifty-five of the hearings at which our senior executives 
testified were related to high-risk areas and programs, which are 
listed on page 39 of this report. 

Figure 15: Testimonies: 

[Refer to PDF for image: vertical bar graph] 

Hearings at which GAO testified: 

2007 Actual: 276. 
2008 Actual: 298; 
2009 Actual: 203; 
2010 Actual: 192; 
2011 Actual: 174; 
2012 Target: 180; 
2012 Actual: 159. 

Source: GAO. 

[End of Figure 15: Testimonies] 

We have reduced our fiscal year 2013 target of testimonies to 170 
hearings and believe this should be a reasonable estimate given recent 
trends and the Congress’s continuing interest in such matters as 
national and homeland security, health care, information security, 
public safety, and natural resources. 

Timeliness: 

To be useful to the Congress, our products must be available when our 
clients need them. In fiscal year 2012, we met our timeliness target 
of 95 percent. (See figure 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 management[Footnote 6] and those 
expected to reach 500 staff days or more), which represented about 47 
percent of the congressionally requested written products we issued in 
fiscal year 2012. 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 2012, of the forms returned to us, 99 percent of the 
congressional staff responding answered the question on timeliness. 
Overall, the response rate to our entire form was 22 percent, though 
we received feedback on 48 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 
set our fiscal year 2013 target at 90 percent because of resource 
constraints that may affect our on-time delivery. 

Figure 16: Timeliness: 

[Refer to PDF for image: vertical bar graph] 

Percentage of products on time: 

2007 Actual: 95%; 
2008 Actual: 95%; 
2009 Actual: 95%; 
2010 Actual: 95%; 
2011 Actual: 95%; 
2012 Target: 90%; 
2012 Actual: 95%. 

Source: GAO. 

[End of Figure 16: Timeliness] 

Focusing on Our People: 

Our highly professional, multidisciplinary, and diverse staff were 
critical to the level of performance we demonstrated in fiscal year 
2012. 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 2012, 
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 124 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. Our annual workforce planning process 
helps to identify the human capital resource requirements needed to 
accomplish our mission. It is the key tool to translate strategic 
goals into human capital actions to respond to a changing work 
environment. The workforce plan takes into account strategic goals, 
projected workload requirements, and other changes, such as 
retirements, attrition, promotions, and skill gaps. It specifies the 
number of planned hires for the upcoming year. Adjustments to the plan 
are made throughout the year, if necessary, to respond to the most 
pressing issues for congressional oversight and decision making. In 
fiscal year 2012, our plan was to hire about 55 critical new staff, 
but we were only able to bring on board 42 staff by year-end. Because 
of budget concerns, we delayed moving forward with critical hire 
approvals until early summer. Consequently, the remaining 13 positions 
will be carried over to fiscal year 2013 since recruitment activities 
were not completed prior to the end of fiscal year 2012. Table 3 shows 
that we did not meet our target rate of 95 percent, achieving a 76 
percent new hire rate. 

Figure 17: Selected Testimony Topics: Fiscal Year 2012: 

[Refer to PDF for image: table] 

Goal 1: Address Current and Emerging Challenges to the Well-being and 
Financial Security of the American People: 

* DOD and VA Health Care Integration; 
* Medicare Durable Medical Equipment; 
* FDA’s Ability to Respond to Drug Shortages; 
* Oversight of Medicaid Payments; 
* Urgent Local Workforce Needs; 
* Small Employers Challenges to Pension Plan Sponsorship; 
* Modernizing SSA’s Disability Programs; 
* Unemployed Older Workers; 
* School Bullying; 
* Improving Homelessness Programs; 
* Mortgage Finance Risk Management; 
* Fragmented Economic Development Programs; 
* Federal Housing Administration’s Mutual Mortgage Insurance Fund; 
* Federal Reserve System’s Emergency Assistance; 
* Climate Change Adaptation; 
* Unconventional Oil and Gas Production; 
* Unmanned Aircraft Systems; 
* Commercial Space Transportation; 
* Transportation Issues and Management Challenges; 
* Los Angeles Federal Courthouse Construction; 
* Federal Real Property Management. 

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

* National Nuclear Security Administration Management; 
* Deepwater Horizon; 
* Securing the Modernized Electricity Grid; 
* Visa Waiver Program; 
* TSA’s Process for Vetting Foreign Flight Students; 
* DHS’s Container Security Programs; 
* FEMA’s Management of Preparedness Grants; 
* DHS’s Progress Improving and Integrating Management; 
* DOD Civilian Workforce; 
* Personnel Security Clearances; 
* Military Base Realignments and Closures; 
* Joint Strike Fighter Restructuring; 
* DOD Satellite Acquisitions; 
* DOD’s Acquisition Workforce Capacity; 
* Countering the Use of Improvised Explosive Devices; 
* Support and Security Capabilities in Iraq. 

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

* Arlington National Cemetery Contract Management; 
* Coast Guard’s Deepwater Program; 
* Suspension and Debarment Oversight; 
* Medicare Part D Fraud and Prescription Drug Abuse; 
* Fraud Prevention in Service-Disabled Veteran-Owned Small Business 
Program; 
* Oversight of Psychotropic Prescription Drugs for Foster Children; 
* Internet Availability of Counterfeit Military-Grade Electronic Parts; 
* Reducing Improper Payments; 
* Army Financial Audit Readiness; 
* Fiscal Year 2011 U.S. Government Financial Statements; 
* Information Technology Reform; 
* Social Security Administration Technology Modernization; 
* Centers for Medicare & Medicaid Fraud Detection Systems; 
* Environmental Satellite Program Risks; 
* Federal Workforce Challenges; 
* Effective Long-term Disaster Recovery; 
* Evaluating Expiring Tax Provisions; 
* Strategies to Reduce Taxpayer Noncompliance; 
* IRS’s Opportunities to Improve the Taxpayer Experience; 
* Improving 2020 Census Cost Effectiveness. 

Source: GAO. 

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

[End of Figure 17: Selected Testimony Topics: Fiscal Year 2012] 

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

Performance measures: People: New hire rate; 
2007 Actual: 96%; 
2008 Actual: 96%; 
2009 Actual: 99%; 
2010 Actual: 95%; 
2011 Actual: 84%; 
2012 Target: 95%; 
2012 Actual: 76%. 

Source: GAO. 

[End of Table 3: Actual Performance and Targets Related to Our New 
Hire Rate Measure] 

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 in fiscal year 2012, we 
exceeded our target rate of 90 percent for overall retention by 3 
percentage points at 93 percent. We also exceeded our retention rate 
of 94 percent without retirements by 2 percentage points at 96 
percent. We attribute exceeding the target retention rates for the 
past few years 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: People: Retention rate: With retirements; 
2007 Actual: 90%; 
2008 Actual: 90%; 
2009 Actual: 94%; 
2010 Actual: 94%; 
2011 Actual: 92%; 
2012 Target: 90%; 
2012 Actual: 93%. 

Performance measures: People: Retention rate: Without retirements; 
2007 Actual: 94%. 
2008 Actual: 93%; 
2009 Actual: 96%; 
2010 Actual: 96%; 
2011 Actual: 96%; 
2012 Target: 94%; 
2012 Actual: 96%. 

Source: GAO. 

[End of Table 4: Actual Performance and Targets Related to Our 
Retention Rate Including and Excluding Retirements] 

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. 124-132 for additional information about these 
measures). This fiscal year, about 70 percent of our employees 
completed the survey, and we exceeded all four targets (see table 5). 
Our fiscal year 2012 performance on all of these measures has been 
fairly consistent for the past few years. Our performance on the staff 
development was 1 percentage point higher than last year, staff 
utilization and organizational climate were 2 percentage points lower, 
and leadership was 1 percentage point lower than last year. Given our 
performance on these measures over the last 5 years, we have decided 
to retain our fiscal year 2012 targets for fiscal year 2013 (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 Measures[A]: People: Staff development; 
2007 Actual: 76%; 
2008 Actual: 77%; 
2009 Actual: 79%; 
2010 Actual: 79%; 
2011 Actual: 79%; 
2012 Target: 76%; 
2012 Actual: 80%. 

Performance Measures[A]: People: Staff utilization; 
2007 Actual: 73%; 
2008 Actual: 75%; 
2009 Actual: 78%; 
2010 Actual: 77%; 
2011 Actual: 78%; 
2012 Target: 75%; 
2012 Actual: 76%. 

Performance Measures[A]: People: Effective leadership by 
supervisors[B]; 
2007 Actual: 79%; 
2008 Actual: 81%; 
2009 Actual: 83%; 
2010 Actual: 83%; 
2011 Actual: 83%; 
2012 Target: 80%; 
2012 Actual: 82%. 

Performance Measures[A]: People: Organizational Climate; 
2007 Actual: 74%; 
2008 Actual: 77%; 
2009 Actual: 79%; 
2010 Actual: 79%; 
2011 Actual: 80%; 
2012 Target: 75%; 
2012 Actual: 78%. 

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. 

[End of 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] 

Focusing on Our Internal Operations: 

Our mission and people are supported by our internal administrative 
services, including information management, infrastructure operations, 
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 rate 30 internal services available to them, 
indicating on a 5-point scale, with 5 being the highest, their 
satisfaction with each service from “very dissatisfied” to “very 
satisfied,” or to indicate that they did not use the 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 16 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 14 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. Our scores 
of 3.98 for the services under “help get the job done” and 3.99 for 
the services under “quality of work life” from the November 2011 
survey show that staff were largely satisfied with the services they 
receive. 

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

Performance measures: Internal operations: Help get job done; 
2007 Actual: 4.05; 
2008 Actual: 4.00; 
2009 Actual: 4.03; 
2010 Actual: 3.94; 
2011 Actual: 3.98; 
2012 Target: 4.0; 
2012 Actual: N/A. 

Performance measures: Internal operations: Quality of work life; 
2007 Actual: 3.98; 
2008 Actual: 4.01; 
2009 Actual: 4.01; 
2010 Actual: 3.94; 
2011 Actual: 3.99; 
2012 Target: 4.0; 
2012 Actual: N/A. 

Source: GAO. 

Note: Staff rate their satisfaction with services on a 5-point scale 
with 5 being the highest. We will report actual data for fiscal year 
2012 once the survey results have been analyzed. N/A indicates that 
the data are not available yet. 

[End of Table 6: Actual Performance and Targets Related to Our 
Internal Operations Measures] 

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 
broad-based transformation to achieve greater efficiency, 
effectiveness, accountability, and sustainability of key government 
programs and operations. 

[Text box: Our 2012 high-risk area work: 
* 188 reports; 
* 55 testimonies; 
* $28.4 billion in financial benefits; 
* 515 nonfinancial benefits. 
End of text box] 

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, we have 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 2012, our high-risk list 
highlighted 30 troubled areas across government. Table 7 lists each 
current high-risk area and the year it was added to the list. 

Table 7: GAO’s High-Risk List as of September 30, 2012: 

High-risk area: Strengthening the Foundation for Efficiency and 
Effectiveness: 

* Management of Federal Oil and Gas Resources; 
Year designated: 2011; 

* Modernizing the Outdated U.S. Financial Regulatory System; 
Year designated: 2009; 

* Restructuring the U.S. Postal Service to Achieve Sustainable 
Financial Viability; 
Year designated: 2009; 

* Funding the Nation’s Surface Transportation System; 
Year designated: 2007; 

* Managing Federal Real Property; 
Year designated: 2003; 

* Strategic Human Capital Management; 
Year designated: 2001. 

High-risk area: Transforming DOD Program Management: 

* DOD Approach to Business Transformation; 
Year designated: 2005; 

* DOD Support Infrastructure Management; 
Year designated: 1997; 

* DOD Business Systems Modernization; 
Year designated: 1995; 

* DOD Financial Management; 
Year designated: 1995; 

* DOD Supply Chain Management; 
Year designated: 1990; 

* DOD Weapon Systems Acquisition; 
Year designated: 1990. 

High-risk area: Ensuring Public Safety and Security: 

* Protecting Public Health through Enhanced Oversight of Medical 
Products; 
Year designated: 2009; 

* Transforming EPA’s Process for Assessing and Controlling Toxic 
Chemicals; 
Year designated: 2009; 

* Revamping Federal Oversight of Food Safety; 
Year designated: 2007; 

* Ensuring the Effective Protection of Technologies Critical to U.S. 
National Security Interests; 
Year designated: 2007; 

* Establishing Effective Mechanisms for Sharing and Managing Terrorism-
Related Information to Protect the Homeland; 
Year designated: 2005; 

* Implementing and Transforming the Department of Homeland Security
Year designated: 2003; 

* Protecting the Federal Government’s Information Systems and the 
Nation’s Cyber Critical Infrasutrctures; 
Year designated: 1997; 

High-risk area: Managing Federal Contracting More Effectively: 

* Management of Interagency Contracting; 
Year designated: 2005; 

* DOD Contract Management; 
Year designated: 1992; 

* NASA Acquisition Management; 
Year designated: 1990; 

* DOE’s Contract Management for the National Nuclear Security 
Administration and Office of Environmental Management; 
Year designated: 1990. 

High-risk area: Assessing the Efficiency and Effectiveness of Tax Law 
Administration: 

* IRS Business Systems Modernization; 
Year designated: 1995; 

* Enforcement of Tax Laws; 
Year designated: 1990. 

High-risk area: Modernizing and Safeguarding Insurance and Benefit 
Programs: 

* National Flood Insurance Programs; 
Year designated: 2006; 

* Pension Benefit Guaranty Corporation Insurance Programs; 
Year designated: 2003; 

* Improving and Modernizing Federal Disability Programs; 
Year designated: 2003; 

* Medicaid Program; 
Year designated: 2003; 

* Medicare Program; 
Year designated: 1990. 

Source: GAO. 

[End of Table 7: GAO’s High-Risk List as of September 30, 2012] 

In our February 2011 high-risk update, 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 [hyperlink, http://www.gao.gov/products/GAO-11-278]. 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 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. 

Also in our last 2011 high-risk update, we designated one new high-
risk area—the Department of the Interior’s Management of Federal Oil 
and Gas Resources. At that time we found that Interior did not have 
reasonable assurance that it was collecting its share of billions of 
dollars of revenue from oil and gas produced on federal lands and it 
continued 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 had recently 
began restructuring its oil and gas program, which is inherently 
challenging, and there were many open questions about whether Interior 
had the capacity to undertake this reorganization while carrying out 
its range of responsibilities, especially in a constrained resource 
environment. Since then we have reported that Interior’s 
reorganization has been meeting expected milestones and that much 
progress has been made in strengthening environmental and worker 
safety oversight in its Gulf of Mexico jurisdiction [hyperlink, 
http://www.gao.gov/products/GAO-12-423]. We will continue to monitor 
Interior’s efforts to better manage federal oil and gas resources 
including its efforts to resolve its human capital challenges and 
weaknesses in its revenue collection processes. 

Our next biennial high-risk update is planned for January 2013. The 
update will report on progress made and what remains to be done to 
address each of the high-risk areas. Our experience over the past 22 
years has shown that the key elements needed to make progress in high-
risk areas are congressional action, high-level administration 
initiatives, and agency efforts targeted to address the risk. We have 
met with top OMB and agency leaders in a series of regular meetings to 
discuss progress and actions needed for the high risk areas. Our 
commitment to helping agencies address high-risk areas is also 
reflected in the reports, testimonies, and other work we completed in 
2012. 

In fiscal year 2012, we issued 188 reports, delivered 55 testimonies 
to the Congress, and prepared several other products, such as 
briefings and presentations, related to our high-risk work. These 
reviews span a wide range of issues such as the financial regulatory 
system, human capital management, federal oversight of food safety, 
tax laws, and Medicare and Medicaid programs. In addition, we 
documented over $28 billion in financial benefits and 515 nonfinancial 
benefits related to high-risk areas. The high-risk areas with the 
largest amount of financial benefits were the Medicare Program, NASA 
Acquisition Management, and DOD Weapon Systems Acquisition. The areas 
with the most nonfinancal benefits were Protecting the Federal 
Government’s Information Systems and the Nation’s Cyber Critical 
Infrastructures, IRS Business Systems Modernization, and DOD Weapon 
Systems Acquisition. More information on the high-risk series is 
available on our website at [hyperlink, http://www.gao.gov/highrisk]. 

Opportunities to Reduce Duplication, Overlap and Fragmentation, 
Achieve Savings, and Enhance Revenue: 

In February 2012, we issued our second annual report [hyperlink, 
http://www.gao.gov/products/GAO-12-342SP] to the Congress in response 
to the Duplication Mandate, a statutory requirement that called for us 
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.[Footnote 7] 
In addition, a companion publication [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-453SP] described the extent to 
which progress was made to address the actions we identified in 2011. 
This body of work can help to inform government policymakers as they 
address the fiscal pressures facing our national government. We also 
launched a new content area on our website titled “Improving 
Efficiency and Effectiveness” [hyperlink, 
http://www.gao.gov/duplication] to make this work more easily 
accessible to the public. 

Our 2012 report identified 51 areas where programs may be able to 
achieve greater efficiencies or become more effective in providing 
government services. Like our March 2011 publication, this year’s 
report identified 32 duplication, overlap, and fragmentation issues as 
well as 19 other areas that provide opportunities for cost savings and 
revenue enhancement. Its findings involve a wide range of government 
missions and touch virtually all major federal departments and 
agencies. In some instances of duplication, overlap, or fragmentation, 
it may be appropriate for multiple agencies or entities to be involved 
in the same programmatic or policy area due to the nature or magnitude 
of the federal effort. However, the areas discussed in this report 
identify instances where multiple government programs or activities 
have led to inefficiencies. Further, we expanded the scope of our work 
this year to look for areas where a mix of federal approaches is used, 
such as tax expenditures, direct spending, and federal grant or loan 
programs. 

Among the 32 areas where our report found evidence of duplication, 
overlap, or fragmentation, we identified ineffective acquisition 
practices and collaboration efforts in the Department of Defense’s 
$37.5 billion[Footnote 8] Unmanned Aircraft Systems acquisitions 
portfolio, which create overlap and the potential for duplication; we 
found 20 different entities that administer 160 programs, tax 
expenditures, and other tools to support homeownership and rental 
housing, and we reported that four grant programs administered by the 
Federal Emergency Management Agency need better project information 
and coordination to identify and mitigate potential unnecessary 
duplication among the billions of dollars distributed. Among the 19 
additional opportunities we identified where agencies or the Congress 
could take action to either reduce the cost of government operations 
or enhance revenue collection for the Treasury, we found that the 
Centers for Medicare & Medicaid Services can better detect and recover 
billions of dollars of improper payments of claims; the Air Force can 
reduce its overall food service costs by millions of dollars annually 
by reviewing food service contracts and adjusting them, when 
appropriate; and marketing the Department of Energy’s excess uranium 
could provide billions in revenue for the government. 

Collectively, our work shows that if actions are taken to address the 
issues raised in both our 2012 and 2011 reports, the government could 
potentially save tens of billions of dollars annually, depending on 
the extent of actions taken. However, as the “Actions Needed” 
presented in our 2012 report show, addressing our varied findings will 
require careful deliberation and tailored, well-crafted solutions. The 
GPRA Modernization Act of 2010 establishes a framework aimed at taking 
a more crosscutting and integrated approach to focusing on results and 
improving government performance. Aspects of several crosscutting 
government goals identified in the President’s fiscal year 2013 budget—
including Science, Technology, Engineering, and Math (STEM) Education; 
Entrepreneurship and Small Businesses; Job Training; Cybersecurity; 
Information Technology Management; Procurement and Acquisition 
Management, and Real Property Management—are discussed in our 2012 
report or in our March 2011 report. Effective implementation of the 
Act could play an important role in clarifying desired outcomes, 
addressing program performance spanning multiple organizations, and 
facilitating future actions to reduce unnecessary duplication, 
overlap, and fragmentation. 

Our second annual report in response to the Duplication Mandate was 
based upon work conducted for our completed products and certain 
ongoing audits during 2012 in which we addressed issues of 
duplication, overlap, and fragmentation. We also testified before the 
Congress on topics related to areas identified in the report. For 
example, we testified on opportunities to achieve more efficient and 
effective government [hyperlink, 
http://www.gao.gov/products/GAO-12-449T], and we discussed issues 
related to reexamining the structure of the federal government and its 
operations [hyperlink, http://www.gao.gov/products/GAO-12-454T]. 

Consistent with the commitment expressed in our March 2011 Duplication 
Mandate report, we monitored developments in the 81 areas we 
identified in 2011, and we described the extent to which progress was 
made [hyperlink, http://www.gao.gov/products/GAO-GAO-12-453SP]. In 
summary, our specific assessment of progress as of February 10, 2012 
showed that the majority of 176 actions needed within the 81 areas 
identified by us have been partially addressed. Specifically, 23 (or 
13 percent) were addressed; 99 (or 56 percent) were partially 
addressed; 54 (or 31 percent) were not addressed. In addition, the 
Office of Management and Budget instructed agencies to consider areas 
of duplication or overlap identified by us and others in their fiscal 
year 2013 budget submissions and management plans. We continue to 
monitor executive, legislative, and agency developments in the areas 
identified in our 2011 and 2012 reports and will provide periodic 
updates on those developments to the Congress. 

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

The Congress passed the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank 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. In fiscal year 2011, we reported 
our findings on a third of these studies. We continued to conduct 
required studies in fiscal year 2012 and issued 11 products on a range 
of issues, such as those relating to financial institutions and 
securities markets, making 11 recommendations to various financial 
regulators. 

With regard to financial institutions, we studied the potential 
effects of the exclusion of the use of hybrid instruments, such as 
trust preferred securities, as Tier 1 capital on banking institutions 
and the economy. Further, we studied the options for smaller banking 
institutions, which often had larger proportions of hybrid instruments 
as Tier 1 capital, to access regulatory capital [hyperlink, 
http://www.gao.gov/products/GAO-12-237]. We also studied the potential 
effects of changes in U.S. capital requirements on foreign-owned 
intermediate holding companies and on U.S. banks operating abroad. 
[hyperlink, http://www.gao.gov/products/GAO-12-235]. 

We studied several issues related to securities markets, including 
regulatory oversight of analyst conflicts of interest and the 
Financial Industry Regulatory Authority (FINRA). We recommended that 
the Securities and Exchange Commission (SEC) assess and document 
whether any of the Global Settlement’s remaining terms should be 
codified [hyperlink, http://www.gao.gov/products/GAO-12-209]. We also 
recommended that SEC encourage FINRA to conduct retrospective reviews 
of its rules and establish a process for examining FINRA’s reviews 
[hyperlink, http://www.gao.gov/products/GAO-12-625]. In our work on 
alternative compensations for nationally recognized statistical rating 
organizations, we recommended that SEC consult with the authors of the 
proposed models to obtain all available information as it considers 
the various alternative compensation models and document in its report 
to the Congress any recommendations for statutory changes SEC 
determines should be made to implement its findings of its Dodd-Frank 
Section 939F study [hyperlink, 
http://www.gao.gov/products/GAO-12-240]. In addition, we discussed 
options for improving municipal securities disclosure [hyperlink, 
http://www.gao.gov/products/GAO-12-698] and provided an overview of 
the market structure, pricing, and regulation of municipal securities, 
whereby we recommended that SEC collect and analyze information on 
self-regulatory organizations’ (SRO) fixed-income regulatory programs 
on an ongoing basis to better inform its risk-based inspection 
approach [hyperlink, http://www.gao.gov/products/GAO-12-265]. 

We explored other issues as well, including the actions taken by the 
Appraisal Subcommittee to implement the original Title XI and 
additional Dodd-Frank Act responsibilities. We recommended that the 
Appraisal Subcommittee improve its monitoring procedures [hyperlink, 
http://www.gao.gov/products/GAO-12-147]. In our audit of governance at 
the Federal Reserve Banks, we made four recommendations to broaden 
director recruitment efforts and increase transparency [hyperlink, 
http://www.gao.gov/products/GAO-12-18]. Further, we reviewed the 
status of the conflict minerals disclosure rule and recommended that 
SEC identify the remaining steps it needs to take and the associated 
time frames to finalize and issue such a conflict minerals disclosure 
rule [hyperlink, http://www.gao.gov/products/GAO-12-763]. With regard 
to implementation of the Dodd-Frank Act, we studied financial 
regulators’ analyses of the potential impact of the act’s regulations 
and interagency coordination in promulgating the regulations. We made 
recommendations to strengthen the regulators’ analyses and 
coordination, including improvements to agency guidance and data 
collection [hyperlink, http://www.gao.gov/products/GAO-12-151]. 
Finally, we conducted an audit of SEC financial controls [hyperlink, 
http://www.gao.gov/products/GAO-12-219] and an audit of the Bureau of 
Consumer Financial Protection [hyperlink, 
http://www.gao.gov/products/GAO-12-186]. 

The Patient Protection and Affordable Care Act: 

The Congress passed the Patient Protection and Affordable Care Act 
(PPACA) in 2010[Footnote 9] to increase the accessibility and 
affordability of health coverage for Americans. PPACA includes a wide 
range of provisions that affect individual and employer-sponsored 
health insurance markets as well as public health insurance programs. 
We studied several aspects of PPACA relating to the individual and 
employer sponsored insurance markets and publicly-financed health 
insurance programs, such as Medicaid, and issued several reports in 
fiscal year 2012. 

Relating to insurance markets, we examined the implementation of 
provisions currently in effect and the future implications of others. 
Among currently implemented provisions, we examined the Small Employer 
Health Insurance Tax Credit, a program to encourage small businesses 
to offer insurance to employees, in order to determine its frequency 
of use, IRS oversight of claims, and to understand data needed to 
evaluate the credit’s effects. We recommended that IRS improve its 
instructions to examiners and identify and address errors by credit 
claimants [hyperlink, http://www.gao.gov/products/GAO-12-549]. We 
investigated the initial implementation of the federal Pre-Existing 
Condition Insurance Plan, a temporary program to provide coverage to 
high risk individuals who might otherwise go uninsured, and compared 
its initial roll out to that of another federal health insurance 
program [hyperlink, http://www.gao.gov/products/GAO-12-62R]. In 
support of new rules for insurers, we analyzed insurer data on their 
medical loss ratios—the ratio of expenditures on health claims to 
total premium income—and determined how the ratios varied based on 
insurer characteristics and program requirements [hyperlink, 
http://www.gao.gov/products/GAO-12-90R]. Relating to the future 
implications of other provisions, we examined existing research on the 
extent to which workers stay in jobs out of fear of losing health 
coverage and the effect of this phenomenon on labor markets, and we 
compiled expert views on the ability of PPACA to mitigate this effect 
[hyperlink, http://www.gao.gov/products/GAO-12-166R]. We examined 
estimates of the effect of PPACA on the likelihood employers will 
continue to offer or begin offering health insurance, the factors that 
may contribute to variation across estimates, and identified other 
changes employers may make to the health benefits they offer 
[hyperlink, http://www.gao.gov/products/GAO-12-768]. To assess the 
effect of 2014 requirements that issuers offer coverage to all who 
apply regardless of health status, we examined estimates of the 
prevalence of individuals with pre-existing health conditions and 
summarized demographic information about the individuals and their 
most prevalent conditions 
[hyperlink, http://www.gao.gov/products/GAO-12-90R], 
[hyperlink, http://www.gao.gov/products/GAO-12-439]. 

Regarding issues related to certain publicly financed health insurance 
programs, we studied new coverage options and program expansions 
available under PPACA and state challenges related to their 
implementation. For example, we examined: 

* the potential eligibility of uninsured children for Medicaid, the 
State Children’s Health Insurance Program (CHIP), and the new premium 
tax credit available under PPACA, and recommended that the Secretary 
of the Treasury consider the costs of insuring eligible family members 
when defining access to affordable health insurance in future rule 
making [hyperlink, http://www.gao.gov/products/GAO-12-648]; 

* states’ efforts to implement PPACA’s requirement to expand Medicaid 
eligibility to non-elderly individuals with incomes at or below 133 
percent of the federal poverty level [hyperlink, 
http://www.gao.gov/products/GAO-12-821] and to implement options 
available under PPACA to expand home-and community-based services for 
Medicaid beneficiaries 
[hyperlink, http://www.gao.gov/products/GAO-GAO-12-649]; and; 

* states’ use of Medicaid managed care, including the type of managed 
care arrangements they have in place and their enrollment of 
populations with complex health care needs [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-872R]. 

We identified states’ challenges in implementing certain PPACA 
provisions, which generally related to their need for additional 
guidance or technical assistance from the Centers for Medicare & 
Medicaid Services, state budget constraints, and operational 
challenges. We are continuing to examine changes under PPACA related 
to state Medicaid and CHIP programs and exchanges and are examining 
states’ experiences related to processing Medicaid applications and 
ensuring beneficiaries’ access to services. We are also responding to 
PPACA mandates, including a mandate that we examine coordination 
between the Indian Health Service and publicly financed health 
insurance programs. 

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 assistance to homeowners seeking to avoid 
foreclosure remain active, other TARP programs have either closed or 
continue to wind down as the Treasury manages and sells assets 
purchased to address the financial crisis. 

In fiscal year 2012, we issued 7 products with 5 recommendations 
related to TARP. We reviewed the continuing implementation of Making 
Home Affordable foreclosure mitigation programs [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-296] and [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-783], examined the financial 
condition of banks receiving investments from the Capital Purchase 
Program (CPP), which Treasury used to provide capital to banks during 
the financial crisis  [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-301], monitored the status of 
Treasury’s investment in American International Group, Inc.  
[hyperlink, http://www.gao.gov/products/GAO-GAO-12-574], and analyzed 
the Office of Financial Stability’s management of conflicts of 
interest that may arise when private sector entities seek or perform 
work under TARP (GAO-12-984R). In addition, we completed our annual 
financial statement audit for Treasury’s Office of Financial Stability—
the entity established to implement TARP [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-169] and [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-415R]. Our recommendations 
generally followed two themes: helping to (1) enhance Treasury’s 
analysis and reporting of information and (2) improve internal control 
over financial reporting for TARP. Specifically, we recommended that 
Treasury assess the risks associated with the recent changes to the 
Making Home Affordable program, develop activity-level performance 
measures for each program, and consolidate the states’ Hardest Hit 
Fund performance and financial data, including administrative 
expenses, into a single public report. We also recommended that 
Treasury consider analyzing and reporting on remaining and former CPP 
participants separately. In addition, our financial audit recommended 
improvements to internal controls over financial and accounting 
reporting processes. 

As of September 2012, our oversight of TARP has resulted in over 70 
performance audit recommendations and matters for congressional 
consideration to improve TARP’s accountability and transparency. Most 
of the recommendations were to Treasury, which has overall 
responsibility for TARP. Treasury has taken a number of steps to 
address many of our recommendations. We are in the process of 
following up on outstanding recommendations and plan to report on the 
status in 2013. 

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 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 2012, 
we continued to focus our bimonthly reviews on the uses of funds 
across a wide range of programs by the states and the District of 
Columbia, with each review highlighting a single Recovery Act program. 

To respond to the mandate to comment on jobs created or retained, we 
have continued to comment each quarter on the required Recovery Act 
reports of nonfederal recipients of Recovery Act funds, including 
grants, contracts, and loans. Each of these recipient reports are to 
include a list of projects or activities 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 2012, our comments focused on recipient 
reporting related to the specific programs reviewed, and included 
reviewing 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 2012, we reviewed several programs and issued reports 
fulfilling these two ongoing mandates—-on Recovery Act funding for the 
Weatherization Assistance Program [hyperlink, 
http://www.gao.gov/products/GAO-GAO-12-195], the Public Housing 
Capital Fund and Section 1602 and Tax Credit Assistance Programs 
[hyperlink, http://www.gao.gov/products/GAO-12-634], and efforts to 
increase deployment and adoption of broadband service [hyperlink, 
http://www.gao.gov/products/GAO-12-937]. Agencies have implemented 
most of the recommendations we have made in our bimonthly review 
reports since the first report was issued in April 2009. As designed, 
the expenditures devoted to Recovery Act programs continue to 
decrease, and we will work with the Congress to seek revisions in 
our reporting requirements under the act. 

We continue to maintain a separate page on our external website 
devoted to our Recovery Act work. In one place [hyperlink, 
http://www.gao.gov/recovery], the public can find information on the 
Recovery Act, see 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 states initially 
selected for our detailed review 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 2012. The following exemplify 
some of our key contributions. 

The Procurement Law Division within the Office of General Counsel 
handled approximately 2,400 bid protests during the course of fiscal 
year 2012.[Footnote 10] 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 2012, we issued 
more than 500 decisions on the merits, which are accessible on our 
Legal Decisions & Bid Protest web pages at 
http://www.gao.gov/legal/index.html. These decisions 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 a protest filed by TriWest Healthcare Alliance Corporation 
challenging the award of a contract by DOD’s TRICARE Management 
Activity for managed health care support services for the Western 
Region of the United States. The award was valued by DOD at $20.4 
billion. 

* sustained a challenge to the award by the Department of State of a 
$450 million contract for the construction of a new embassy in London, 
England. The decision concluded that the source selection authority’s 
decision was not adequately explained and appeared to be inconsistent 
with the contemporaneous evaluation record. 

* denied a protest challenging the award of a contract valued at $230 
million by the National Aeronautics and Space Administration (NASA) to 
provide engineering, research and technology development, operations, 
and project management support for NASA’s Glenn Research Center in 
Ohio. 

* sustained challenges from seven public housing agencies to the 
Department of Housing and Urban Development’s use of cooperative 
agreements to obtain services for the administration of Project-Based 
Section 8 Housing Assistance Payment contracts. Because the agency was 
principally obtaining contract administration services for the direct 
benefit and use of the agency, the decision concluded that the 
services should be acquired under a procurement contract. 

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 2 
hearings (one of which took 3 weeks), and published one formal 
decision in fiscal year 2012, which appears on our website at 
[hyperlink, http://www.gao.gov/legal/contract/decisions.html]. As of 
the end of the fiscal year, the Board had significantly reduced the 
number of pending appeals on its docket, from 21 appeals pending at 
the end of fiscal year 2011 compared to 11 appeals pending at the end 
of fiscal year 2012. 

In addition to our bid protest decisions, we issued a management 
letter to the Secretary of Health and Human Services advising that the 
Centers for Medicare & Medicaid Services (CMS) had not established 
that the agency’s Medicare Advantage (MA) Quality Bonus Payment 
Demonstration was within its legal authority under section 402 of the 
Social Security Amendments of 1967, as amended.[Footnote 11] In 
addition, we testified before the House Committee on Oversight and 
Government Reform regarding our review of the bonus payment 
demonstration and the legal concerns raised in our letter [hyperlink, 
http://www.gao.gov/products/GAO-12-964T]. 

In fiscal year 2012, we published 34 appropriations decisions, 
opinions, and letters on such issues as the Antideficiency Act, the 
recording statute, and the purpose statute. We issued an opinion 
concluding that the Office of Science and Technology Policy (OSTP) 
violated the Antideficiency Act when it engaged in meetings prohibited 
by a restriction in OSTP’s appropriation.12 We testified on our 
opinion before the Subcommittee on Oversight and Investigations for 
the House Committee on Foreign Affairs and explained how the 
Antideficiency Act enforces the Congress’ constitutional control of 
the public purse [hyperlink, http://www.gao.gov/products/GAO-12-200T]. 
We issued a decision and a letter explaining how the Securities and 
Exchange Commission (SEC) violated the recording statute when it 
failed to recognize the full amount of its legal liability under a 
lease.[Footnote 13] We advised the SEC to adjust its accounting 
records and noted that where the SEC did not have sufficient budget 
authority, it should report an Antideficiency Act violation. The SEC 
subsequently reported that it had violated the Antideficiency Act. 

Attorneys from General Counsel also provided ongoing appropriations 
law assistance to congressional committees on a number of matters, 
including interpretation of the Budget Control Act. We appeared at a 
member briefing for the House Armed Services Committee and testified 
at a hearing before the House Budget Committee on the application of 
the Antideficiency Act, the Impoundment Control Act, and the Budget 
Control Act [hyperlink, http://www.gao.gov/products/GAO-12-675T]. We 
issued an opinion to the Senate and House Committees on Veterans’ 
Affairs that resolved an apparent conflict between statutory 
provisions of the Budget Control Act addressing sequestration and 
programs administered by the Department of Veterans Affairs (VA). 
[Footnote 14] We solicited the legal views of the Office of Management 
Budget (OMB) and after receiving OMB’s written response, concluded 
that all programs administered by the VA, including veterans’ medical 
care, are exempt from sequestration. 

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 community. In fiscal 
year 2012, 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 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 [hyperlink, 
http://www.gao.gov/products/GAO-12-413SP]. 

Attorneys from General Counsel continued to teach a 2-1/2 day course 
on appropriations law. Presenting a framework for understanding and 
properly applying provisions of appropriations laws, the course helps 
ensure that agencies use public money as the Congress directed. We 
held 18 classes across 10 agencies, as well as the House Committee on 
Appropriations. In addition, appropriations lawyers taught 1-day 
seminars on specialized appropriations law topics for two agencies and 
the Office of the Vice President, and spoke on our appropriations law 
work at conferences and training hosted by four agencies and 
professional organizations. To enhance communication within the 
appropriations law community across all agencies and within the three 
branches of government, we hosted our eighth annual Appropriations Law 
Forum in March 2012. Attorneys from 110 agency counsel offices and 
offices of inspectors general participated. 

For fiscal year 2012, we received 20 Antideficiency Act reports and 
made selected information from these reports available on our website. 
Since the Congress amended the Antideficiency Act in December 2004 
requiring agencies to send us a copy of any report of an 
Antideficiency Act violation, we have received 161 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 2012, we 
issued 77 reports. To improve compliance with the CRA, we tracked 
executive branch rules that were published in the Federal Register 
during 2011 and cross checked 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. After 
this outreach, the number of rules not received by us declined 
significantly over the last 2 fiscal years. 

Finally, the General Counsel’s Legal Services group worked closely 
with management, union representatives and the Personnel Appeals Board 
in connection with an election in which the GAO Employees 
Organization, International Federation of Professional and Technical 
Engineers (IFPTE) was chosen to be the exclusive bargaining 
representative for particular Administrative Professional and Support 
Staff (APSS) employees. The Legal Services group was also involved in 
the analysis of a range of labor relations and federal employment 
issues, as well as privacy and document disclosure matters, during the 
course of the year. Legal Services collaborated with our Learning 
Center to begin providing courses for managers on equal employment and 
other human capital responsibilities. Finally, Legal Services was 
instrumental in our agency’s adoption of particular rules regarding 
the debarment, suspension, and ineligibility of government contractors 
in order to improve our acquisition practices and procedures. 

Managing Our Resources: 

Resources Used to Achieve Our Fiscal Year 2012 Performance Goals: 

Our financial statements for the fiscal year ending September 30, 
2012, were audited by an independent auditor, CliftonLarsonAllen, LLP, 
and received an unqualified opinion. The auditor found our internal 
controls to be effective—-which means that no material weaknesses or 
significant deficiencies 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 97 in 
this report.[Footnote 15] Table 8 summarizes key data. 

Table 8: GAO’s Financial Highlights: Resource Information: 

Total budgetary resources[A]; 
Fiscal year 2012: $574.8 million; 
Fiscal year 2011: $591.5 million. 

Total outlays[A]; 
Fiscal year 2012: $538.7 million; 
Fiscal year 2011: $569.7 million. 

Net cost of operations: Goal 1: Well-being/financial security of the 
American people; 
Fiscal year 2012: $215.6 million; 
Fiscal year 2011: $237.2 million. 

Net cost of operations: Goal 2: Changing security threats/challenges 
of globalization; 
Fiscal year 2012: $132.6 million; 
Fiscal year 2011: $141.3 million. 

Net cost of operations: Goal 3: Transforming the federal government to 
address national challenges; 
Fiscal year 2012: $140.2 million; 
Fiscal year 2011: $156.9 million. 

Net cost of operations: Goal 4: Maximizing the value of GAO; 
Fiscal year 2012: $18.6 million; 
Fiscal year 2011: $19.9 million. 

Net cost of operations: Other costs in support of the Congress: 
Fiscal year 2012: $24.4 million; 
Fiscal year 2011: $21.4 million. 

Net cost of operations: Less reimbursable services not attributable to 
goals; 
Fiscal year 2012: ($7.3 million); 
Fiscal year 2011: ($7.2 million). 

Total net cost of operations[A]; 
Fiscal year 2012: $524.1 million; 
Fiscal year 2011: $569.5 million. 

Actual full-time equivalents (FTE): 
Fiscal year 2012: 2,997; 
Fiscal year 2011: 3,212. 

Source: GAO. 

[End of Table 8: GAO’s Financial Highlights: Resource Information] 

Compared with the statements of large and complex departments 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 2012, our budgetary resources included new direct 
appropriations of $511.3 million—-a reduction of $35 million from the 
fiscal year 2011 level—-and $22.3 million in current reimbursable 
authority from the lease of space in our headquarters building and 
certain audits of agency financial statements. 

Our total assets were $122.4 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 decreased $5.3 
million in fiscal year 2012 to $31.4 million. As a result of reduced 
appropriations, spending for capital assets has been minimized. Total 
liabilities of $97.2 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 2012 is 
approximately $45.4 million below the fiscal year 2011 level largely 
as a result of a reduced current year appropriation. Budget 
constraints severely limited our ability to replace all of our staff 
departures from retirements and attrition. Goal 1 (Well-
being/financial security of the American people) had the largest 
reduction in net costs from the prior year of $21.6 million mostly 
from the Education Workforce and Income Security (EWIS), Natural 
Resources and Environment (NRE) and Health Care (HC) teams. 

Figure 18 shows how our fiscal year 2012 costs break down by category. 

Figure 18: Use of Fiscal Year 2012 Funds by Category: 

[Refer to PDF for image: pie chart] 

Percentage of Total Net Costs: 

Salaries and benefits: 81.4%; 
Building and hardware maintenance services: 10.9%; 
Rent (space and hardware): 2.4%; 
Depreciation: 1.6%; 
Other: 3.7%. 

Source: GAO. 

[End of Figure 18: Use of Fiscal Year 2012 Funds by Category] 

Figure 19 shows our net costs by goal for fiscal years 2011 and 2012. 

Figure 19: Net Cost by Goal: 

[Refer to PDF for image: vertical bar chart] 

Goal 1; 
2011: $237.2 million; 
2012: $215.6 million. 

Goal 2; 
2011: $141.3 million; 
2012: $132.6 million. 

Goal 3; 
2011: $156.9 million; 
2012: $140.2 million. 

Goal 4; 
2011: $19.9 million; 
2012: $18.6 million. 

Other: 
2011: $21.4 million; 
2012: $24.4 million. 

Source: GAO. 

Note: Totals are not adjusted for inflation. 

[End of Figure 19: Net Cost by Goal] 

Summary of Financial Systems Strategies and Financial Management 
System Framework: 

Our financial management system is an off-the-shelf system that meets 
OMB’s Office of Federal Financial Management’s Federal Financial 
Management System Requirements and is hosted 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 including: Compusearch’s 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 maintain strong internal controls. In fiscal year 2013 
ESC will begin testing for a technical upgrade to Oracle Release 12. 
Production implementation for this upgrade will occur in fiscal year 
2014. 

In fiscal year 2011, Phase I implementation of a new workforce 
planning system, Pentaho database, which is the repository for 
workforce planning data, was completed. Phase I included “Staffing 
Summary” reporting. In fiscal year 2012 Phase II of the implementation 
was completed. Phase II provides for a robust analytical business tool 
that links multiple datasets to one authoritative database. This 
consolidation of information will enable accurate and timely reporting 
for FTE management as well as salary and benefits analysis. 

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. 

Although not required by law to do so, we complied with 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, 2012, 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. Consistent with the act 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, our controls 
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, 2012. 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; 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 found no improper payments in fiscal year 2012. 

Our Inspector General (IG) conducts audits and investigations that are 
internally focused on our functions and programs. During fiscal year 
2012, the IG evaluated the effectiveness of our internal controls and 
oversight mechanisms for ensuring that recruitment, relocation, and 
retention incentives were consistent with our policies and aligned 
with our strategic human capital strategic plan [hyperlink, 
http://www.gao.gov/products/OIG-12-5]. The IG also evaluated the 
effectiveness of our information security program and practices for 
fiscal year 2011 as prescribed by the Federal Information Security 
Management Act of 2002 (FISMA) [hyperlink, 
http://www.gao.gov/products/OIG-12-2] and assessed the extent to which 
we had developed the policies and programs necessary to ensure that 
staff appointed as Contracting Officer Representatives are trained and 
certified [hyperlink, http://www.gao.gov/products/OIG-12-3]. 

In addition, the IG operated an internal hotline for use by our 
employees and contractors to report potentially serious problems in 
our operations. IG investigations typically originate from hotline 
complaints and are intended to strengthen our programs and operations 
by identifying and investigating allegations of fraud, waste, and 
abuse and misconduct of our government property, assets, and 
resources, including the possible violation of any law or regulation 
that may lead to criminal, civil, and administrative penalties and 
recoveries. 

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 [hyperlink, http://www.gao.gov/products/OIG-
12-4]). In November 2011, our IG was also designated the IG of the 
United States Commission on Civil Rights by the Consolidated and 
Further Continuing Appropriations Act, 2012. 

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 96. 

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. 

Planned Resources to Achieve Our Fiscal Year 2013 Performance Goals: 

As with the rest of the federal government, we are operating under a 
continuing resolution appropriation slightly above fiscal year 2012 
funding levels, pending enactment of the final fiscal year 2013 
appropriation bills. Final congressional action on our fiscal year 
2013 request of $526.2 million—an increase of 2.9 percent over our 
fiscal year 2012 appropriation amount—is still pending, although 
indications are that we will receive less than our requested amount. 
On June 8, 2012, the House of Representatives approved direct 
appropriations of $519.8 million, an increase of 1.7 percent over our 
fiscal year 2012 appropriation level of $511.3 million. On August 2, 
2012, the Senate Committee on Appropriations approved $513.8 million, 
an increase of 0.5 percent over our fiscal year 2012 appropriation 
level. The full Senate has not yet approved this funding level. Both 
the House and Senate Committees on Appropriations approved authority 
for us to spend $24.3 million in collections derived from 
reimbursements for conducting financial audits and rental of office 
space in our headquarters building. In addition, both the House and 
Senate Committees on Appropriations continue to emphasize that the 
legislative branch will lead by example by tightening its belt 
wherever possible, employing best practices, finding efficiencies, and 
continuing to improve business practices. 

We have initiated actions to begin rebuilding our staffing capacity to 
help enable us to optimize the benefits we yield for the Congress and 
the nation. However, given the possibility of a governmentwide 
sequester that would further reduce our funding level, we are 
carefully monitoring the budget environment. We have been actively 
working to reduce costs for more than 2 years, and we are continuing 
to explore opportunities to enhance workforce and budget 
flexibilities, increase our effectiveness and efficiency, and further 
reduce our operating costs. For example, our ongoing enhanced office 
sharing and hoteling pilot is projected to reduce infrastructure costs 
in fiscal year 2013. These actions will help ensure that we have the 
capacity to provide accurate, objective, nonpartisan, and constructive 
information to the Congress to help it conduct effective oversight, 
produce results for the American people, and help enable us to meet 
the performance goals outlined in our strategic plan through fiscal 
year 2015. 

Strategic Planning and Partnerships: 

As noted in our current strategic plan, we are operating in a dynamic, 
fiscally constrained environment where the challenges we face span 
national borders; the public, private, and non-profit sectors; and 
multiple 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. 

Advisory boards and panels helped us to identify key trends, 
opportunities and challenges, and lessons learned that we should 
factor into our work and operations. During fiscal year 2012, we 
continued 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 
Audit Advisory Council (AAC). We deferred the meeting of the CGAB and 
EAP until 2013 but organized meetings of the DWG and the AAC. The 
November 2011 meeting of the DWG, comprising 19 inspectors general, 
state auditors, and local auditors, provided us a better understanding 
of their continued fiscal challenges, concerns relating to 
intergovernmental data issues, and interest in intergovernmental 
collaboration and partnerships. The AAC met twice-—once via 
teleconference in November 2011 and again in February 2012. The AAC 
members provided us insights relating to conducting the Consolidated 
Financial Statement audits, auditing the Department of Defense, 
intergovernmental balances and transactions, and agencies needing 
focused oversight. To improve planning and performance, in April 2012 
we participated in an information and knowledge exchange at an annual 
meeting with senior representatives from our sister legislative branch 
agencies-—the Congressional Research Service and the Congressional 
Budget Office. The meeting agenda included discussions on 
opportunities to increase efficiency and reduce costs, policies and 
procedures relating to external communications, and the use of social 
media. 

Networks, Collaborations, and Partnerships: 

Unlike the national audit offices of some countries, we have no direct 
audit authority over states and localities. However, we do have 
authority to “follow the federal dollar,” but we face unique 
challenges in assuring accountability for grants and other federal 
funds flowing to subfederal recipients. We also play an important role 
in 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 
current and future 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—-notably the National 
Association of State Auditors, Controllers, and Treasurers (NASACT) 
and Association of Local Government Auditors (ALGA)-—we have continued 
to build capacity within our agency and among our partners to do 
quality work auditing programs involving U.S. funds. 

Federal, State, and Local Collaboration: 

On the domestic front, we organized the National Intergovernmental 
Audit Forum (NIAF) meeting of federal, state, and local auditors in 
November 2011 and the NIAF-sponsored Biennial Forum of Government 
Auditors meeting in June 2012. The biennial meeting program-—a first 
ever collaboration among GAO, the Council of Inspectors General for 
Integrity and Efficiency (CIGIE), NASACT, and ALG-—was very well 
received by participants. We leveraged the resources invested in the 
program by videotaping most of the sessions and making them available 
to our staff, and to the broader public sector audit and 
accountability community. 

Our discussions with CIGIE to explore potential partnership 
opportunities in delivering training to auditors and analysts 
benefitted us during this past fiscal year. We were able to 
substantially reduce external training costs for our Senior Executive 
Service candidates by following up on a CIGIE recommendation to 
explore using the American University Executive Development Training 
Program. We also participated in the May annual meeting of CIGIE--
where we shared with them our strategic plan’s trends and discussed 
opportunities for further collaborations and partnerships. 

We organized 11 meetings of the various regional Intergovernmental 
Audit Forums (IAF) to discuss such topics as the 2011 update of the 
Yellow Book, which sets standards for auditing federally funded 
programs, as well as to promote dialogue regarding common issues, 
opportunities, and challenges. 

INTOSAI: 

For over 3 decades, we have been a member of the International 
Organization of Supreme Audit Institutions (INTOSAI), an association 
of 190 national audit offices—our counterparts around the world. This 
network has positioned us well to address a more interdependent world 
where domestic challenges (e.g., regulation of financial markets, 
prescription drugs, and consumer products; homeland security; and 
rebuilding our infrastructure) often have global dimensions. Through 
our active participation in INTOSAI’s 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. This is especially important 
given the increased focus recently on the development and adoption of 
international accounting and auditing standards. 

By participating in INTOSAI knowledge sharing working groups and task 
forces (e.g., Public Debt, Information Technology, Environmental 
Auditing, Program Evaluation, Fight Against International Money 
Laundering and Corruption, Value of Supreme Audit Institutions (SAI), 
and Key National Indicators), we acquire knowledge and network with 
experts in other countries. For example, our participation in the 
Working Group on Public Debt and our leadership of the Task Force on 
the Global Financial Crisis: Challenges to SAIs involves some 25 
countries and has provided us with insight into the causes and the 
continuing international response to the global financial crisis. We 
also organized a joint meeting of the INTOSAI Global Financial Crisis 
Task Force and the Working Group on Public Debt in April 2012 to 
enhance knowledge sharing across national boundaries in light of the 
evolving links between sovereign debt and the financial crisis. We 
continued to help strengthen INTOSAI’s strategic planning capacity by 
participating in a task force focused on continuous improvement, 
strategic foresight, emerging issues, and resource allocation. 

Capacity Building: 

In support of the federal government’s interest in promoting good 
governance and ensuring that federal funds for programs abroad are 
spent effectively and efficiently, we continued to advance capacity-
building efforts and the INTOSAI-Donor Cooperation initiative. 

We participated in a fourth meeting of the INTOSAI-Donor Steering 
Committee that was held in February 2012, at which eight new global 
and regional initiatives were launched, including a global program to 
implement International Standards of Supreme Audit Institutions 
(ISSAI) which received significant funding and pledges of support. In 
addition, donors[Footnote 16] expressed strong interest in response to 
a global call for proposals for SAIs in need of support. Donors agreed 
on the operating arrangements for a global pooled fund for SAI 
capacity development, which is expected to help draw major funding 
from donors to support SAI capacity building around the world. A 
database on SAI capacity development, which will serve to enhance 
coordination of support to SAIs, was launched and has begun to be 
populated. 

In fiscal year 2012, 21 participants from 17 countries completed our 4-
month International Auditor Fellowship Program for mid- to senior-
level staff from other countries. They brought the total number of 
participants during the program’s 33-year history to more than 500. 
Through this program, our instructors, mentors, and sponsors become 
part of a growing international community of good government 
professionals and experts. The goodwill engendered supports our 
country’s image abroad and facilitates our staff’s access to foreign 
officials, which is often essential to our international audit work. 

Internal Management Challenges: 

The Comptroller General, the Executive Committee, and other senior 
executives identify management challenges through the agency’s 
strategic planning, management, internal controls and budgetary 
processes. Under strategic goal 4, several performance goals and 
underlying key efforts focus attention on each of our management 
challenges. We monitor our progress in addressing these challenges 
through our annual performance and accountability process. Each year 
we also ask our IG to examine management’s assessment of the 
challenges and the agency’s progress in addressing them. 

For fiscal year 2013, we will continue focusing high-level management 
attention on human capital issues and on the new challenge identified 
last year related to improving the efficiency of our engagements and 
delivery of timely and quality information to the Congress. 

Human Capital Challenge: 

Having a talented, diverse, high-performing, knowledge-based workforce 
is essential to carrying out our mission. Like other federal agencies, 
we are challenged to address several critical human capital management 
issues, while doing more with less. These issues included preparing 
for the retirement of executives and other senior managers, creating 
and maintaining a performance-based culture that helps to motivate and 
retain talented people, and implementing workplace practices that meet 
the needs of an ever-changing workforce in a fair and equitable 
manner. As a result in fiscal year 2012, we focused our efforts on a 
few top priorities to sustain an agile, well-trained, balanced, and 
diverse workforce. Specifically, we: 

* recruited and hired staff to fill several senior executive positions 
and a few critical hires to address succession planning needs; 

* identified candidates for our executive development program, and 
provided them a more cost-effective, enhanced leadership training 
program; 

* launched an enhanced telework pilot program in conjunction with a 
workspace sharing initiative; and; 

* developed a new performance appraisal system. 

Although we have made progress, the overarching human capital issue 
that we expect to continue to face for the foreseeable future is 
ensuring that we support the mission of the agency with the right 
resources, where and when they are needed, in the face of declining 
budgets while providing meaningful rewards and recognition needed to 
retain our highly skilled workforce. For the first time in a long 
time, we have had minimal hiring over 2 consecutive years, and as a 
result, the proportion of entry-level staff is not where it needs to 
be to ensure a pipeline for the future. We will continue to address 
the same human capital issues in fiscal year 2013 as we did last year. 

* Succession planning. Succession planning remains critical. While the 
percentage of our senior executives eligible to retire has decreased 
from about 40 percent to 34 percent, almost 25 percent of all our 
senior non-executive staff are also eligible to retire. Thus, we will 
continue to emphasize the need for senior executives to work closely 
with less senior staff to ensure that critical knowledge and expertise 
are not lost. We will also continue to develop current employees to 
take on more responsibility and ensure that employees who are eligible 
to advance to key positions have the requisite skills and experience 
to succeed. 

* Hiring. While we have shifted our focus this year to address 
critical skills gaps, we plan to develop recruitment plans that are 
inclusive of all of our workforce needs. To ensure a pipeline for the 
future, a high priority will be to attract and hire entry-level staff 
to the extent that our budget will support it. We will also continue 
to maintain relationships and partnerships with colleges, 
universities, and professional associations so we do not lose access 
to well-qualified, diverse, entry-level candidates. 

* Training and staff development. We will continue to realign training 
for our employees based on our learning needs analysis, work demands 
from the Congress, and the emerging areas of emphasis identified in 
our strategic plan and by experts. We will also continue to enhance 
our learning delivery methods by using all available technologies, 
including distance learning and online courses. 

* Performance management and rewards. We will to implement a new 
performance appraisal system and finalize a revised system to reward 
and recognize our high-performing staff. Also, we plan to continue to 
support other programs and workplace practices that will help us 
motivate and retain our employees. Such steps are needed particularly 
in light of budget limitations. 

In addition, a recent audit by the IG of our use of recruitment and 
retention incentive payments identified opportunities to strengthen 
controls to help ensure that incentive payments support agency 
recruitment and retention goals, and improve effective monitoring and 
oversight. We will address these issues in the coming year by ensuring 
consistency and adherence to our recruitment, relocation, and 
retention policies; aligning the use of these incentives with 
strategic human capital and workforce planning goals and objectives; 
monitoring and evaluating the effectiveness of internal controls to 
include maintaining appropriate supporting documentation; providing 
additional guidance to human capital staff to ensure proper, timely, 
and accurate execution and recording of administrative actions; and 
providing effective monitoring and oversight of these programs. 

We will continue to work with our union partners to implement human 
capital programs in a manner that helps us meet the needs of an ever-
changing workforce in a fair, equitable, and inclusive manner. We will 
also continue to explore ways to leverage technology to help us 
improve the accuracy and efficiency of our human capital processes and 
management, and work closely with outside organizations to help us 
stay informed of prevailing and leading human capital practices. 

Engagement Efficiency Management Challenge: 

In our Fiscal Year 2011 Performance and Accountability Report, we 
identified a new management challenge stemming from a continuing high 
workload in a time of declining budgets and staff size. The agency 
made improving the efficiency with which it conducts its mission work 
a priority and identified three areas of focus—managing and conducting 
engagements, utilizing resources, and communicating its message. We 
made significant progress in initiating work in these areas in fiscal 
year 2012. Specifically, in 2012, we: 

* completed a contractor-assisted end-to-end analysis of our 
engagement process that identified 31 areas of opportunity for 
improved efficiency, 

* established a new Office of Continuous Process Improvement that 
reports to the Chief Operating Officer to focus exclusively on 
continuous process improvement and implement projects to improve 
efficiency, and, 

* created an executive-level governance structure for prioritizing and 
directing process improvement initiatives. 

These three steps represent the underlying core organizational 
commitment to improving engagement processes and efficiency. In 
addition, we completed six projects to help address process 
inefficiencies and enhance organizational focus on ensuring efficient 
outcomes along with quality outcomes. Specifically, we: 

* streamlined a final report review process by reducing documentation 
requirements and moving to electronic routing, 

* revised report production standards and processes to clarify roles 
and expectations and improve publication production efficiency, 

* streamlined the agenda for regular senior-level engagement review 
meetings by eliminating discussion of non-material topics, 

* expanded access to a key engagement system to support improved 
decision making and management of engagements, 

* consolidated results of key management meetings in one place on the 
agency’s internal website to facilitate easy access, and, 

* incorporated efficiency-oriented behaviors into our new performance 
appraisal system. 

We also have a number of projects under way that will continue into 
fiscal year 2013—some that will deliver results in the near-term while 
others are longer-term efforts. Specifically, we are: 

* identifying changes to key steps and decision points in our 
engagement process to ensure resource investments on individual 
engagements are in line with client needs and needed scope of work; 

* conducting market research to identify possible alternatives for 
more efficiently creating content, meeting our review and fact 
checking procedures, and distributing and publishing our reports and 
content in multiple formats; 

* developing guidance and tools to ensure staff and managers are more 
keenly focused on managing resources committed and expended on 
engagements; 

* identifying project management principles and best practices that 
will be adopted for all engagements; 

* pursuing major enhancements to key engagement support and management 
systems to reduce rework and improve systems support and management 
information; 

* assessing client needs and the media marketplace to identify new 
ways of communicating our message; 

* assessing ways to more efficiently manage staff on and across 
engagements; and; 

* clarifying roles and responsibilities for engagement team members 
and stakeholders including their responsibilities for reviewing draft 
products to reduce redundancies and unneeded work. 

Also in fiscal year 2013, we will continue to identify other areas of 
opportunity for improved efficiency and will continually prioritize 
how to utilize resources to ensure the most significant efficiency 
gains. In addition, we will develop performance metrics for the 
process improvement program to show the effect improvement initiatives 
are having on our operations. 

Mitigating External Factors: 

In addition to the resource constraints and uncertainty of the budget 
for fiscal year 2013, 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. 

Demand for our work is very high, with 924 congressional requests and 
new mandates in fiscal year 2012. 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 communicate frequently 
with our congressional clients to stay abreast of their interests as 
unanticipated shifts in congressional priorities can change the mix of 
work we are asked to perform. In addition, each year we conduct about 
80 evaluations annually under the Comptroller General’s authority to 
address priority issues we identify. We 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 crosscutting 
mandates we have used multidisciplinary teams composed of staff from 
across the agency. We devoted 32 percent of our audit resources to 
mandates in fiscal year 2012. We completed a second year of multiyear 
mandates to report on duplication in government programs, and health 
insurance and financial regulatory reform issues. We are also working 
with the Congress to revise or eliminate mandates that have outlived 
their usefulness. 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 2012, there were several developments on the 
access front relating to these discussions and efforts. As we reported 
in the Fiscal Year 2011 Performance and Accountability Report, the 
Department of Justice (DOJ) had initiated a trial program designed to 
improve their timeliness to our requests for information, and the 
trial program had resulted in key improvements in DOJ’s responsiveness 
and communication with us. 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. In March 2012, these procedures 
were made a permanent part of DOJ’s protocols for interacting with us. 
As these procedures continue to be implemented, we hope to see 
continued improvements in certain components’ and offices’ timeliness 
in responding to our requests for information. 

Another development relating to our access to information was in the 
context of intelligence. As we reported last year, the Director of 
National Intelligence, in consultation with the Comptroller General, 
issued a written directive in 2011 governing our access to information 
in the possession of an element of the intelligence community, 
Intelligence Community Directive (ICD) 114. The directive was designed 
to address the historic challenges that we have experienced in gaining 
access to information in the Intelligence Community, and it contains a 
number of provisions promoting constructive interaction between us and 
elements of the IC, such as establishing a presumption of cooperation 
with us. However, we have had 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 our 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. 
In fiscal year 2012, we worked through a number of issues with the 
various elements of the intelligence community related to challenges 
in obtaining information we requested, and we will continue to monitor 
the implementation of ICD 114 moving forward. 

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 and DOJ of a provision 
in the Hart-Scott-Rodino Act, as amended. Legislation that passed in 
the House this session (H.R. 2146) and that is pending in the Senate 
(S. 237) would confirm our access rights, refuting agency 
interpretations that restrict our access in these and other 
circumstances. 

We devote a high level of attention to monitoring and aggressively 
pursuing access issues as they arise. We appreciate the interest of 
the Congress in helping to ensure that we obtain access to information 
and the efforts by agencies to cooperate with our requests. 

[End of Part I: Management's Discussion and Analysis] 

Part II: 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 2012 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 and 
accomplishments for that goal’s strategic objectives. There was no 
change in our strategic goals or measures during fiscal year 2012. 

Strategic Goal 1: Address Current and Emerging Challenges to the Well-
being and Financial Security of the American People: 

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 [hyperlink, 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. 

[Text box: Example of Work under Goal 1: 
Our reports over many years identified the need for greater 
accountability for results from recipients of federal highway funds. 
As we reported, highway funding has historically not been linked to 
performance or outcomes. In July 2012, legislation was enacted 
establishing national goals and directing the Secretary of 
Transportation and the states to develop performance measures and 
targets for highway safety, condition, and performance. Our work 
helped establish the foundation for these congressional reforms.
[hyperlink, http://www.gao.gov/products/GAO-12-581T], 
[hyperlink, http://www.gao.gov/products/GAO-12-474], 
[hyperlink, http://www.gao.gov/products/GAO-11-918],
[hyperlink, http://www.gao.gov/products/GAO-11-77], 
[hyperlink, http://www.gao.gov/products/GAO-08-400]. 
End of text box] 

To accomplish our work under these strategic objectives in fiscal year 
2012, 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 met the target set for financial and 
nonfinancial benefits for goal 1, but we did not meet the target for 
testimonies. 

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

Performance measure: Financial benefits; 
2007 Actual: $12.9 billion; 
2008 Actual: $19.3 billion; 
2009 Actual: $12.1 billion; 
2010 Actual: $17.8 billion; 
2011 Actual: $12.6 billion; 
2012 Target: $11.0 billion; 
2012 Actual: $25.7 billion; 
Met/Not Met: Met; 
2013 Target[A]: $11.5. 

Performance measure: Nonfinancial benefits; 
2007 Actual; 238; 
2008 Actual: 226; 
2009 Actual: 224; 
2010 Actual: 233; 
2011 Actual: 243; 
2012 Target: 225; 
2012 Actual: 275; 
Met/Not met: Met;
2013 Target[A]: 231. 

Performance measure: Testimonies; 
2007 Actual: 125; 
2008 Actual: 123; 
2009 Actual: 85; 
2010 Actual: 86; 
2011 Actual: 84; 
2012 Target: 85; 
2012 Actual: 61. 
Met/Not Met: Not Met; 
2013 Target[A]: 70. 

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 2013. 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 2013 targets for all three performance measures 
differ from those we reported in our fiscal year 2013 performance plan 
in February 2012. Specifically, we have increased the financial 
benefits target from $11.0 to $11.5 billion and the nonfinancial 
benefits from 225 to 231, and decreased the testimony target from 85 
to 70. 

[End of Table 9: Strategic Goal 1’s Annual Performance Results and 
Targets] 

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 gradually declined from fiscal year 2007 through fiscal year 
2010. This decline was mostly because of some large financial benefits 
from earlier years that are reflected in the averages. Financial 
benefits were stable from fiscal year 2010 to 2011 and increased in 
fiscal year 2012. Goal 1’s nonfinancial benefits peaked in fiscal year 
2007 and declined until 2010 and then increased slightly in 2011 and 
again in 2012. The average number of hearings at which we testified 
increased from 2007 to 2008 and remained fairly stable from 2008 
through 2010, declining in 2011 and again in 2012. 

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

Performance measure: Financial benefits; 
2007: $19.3 billion; 
2008: $17.5 billion; 
2009: $16.6 billion; 
2010: $15.5 billion; 
2011: $15.5 billion; 
2012: $17.1 billion. 

Performance measure: Nonfinancial benefits; 
2007: 259; 
2008: 252; 
2009: 239; 
2010: 230; 
2011: 232; 
2012: 244. 

Performance measure: Testimonies; 
2007: 99; 
2008: 108; 
2009: 108; 
2010: 105; 
2011: 95; 
2012: 79. 

Source: GAO. 

[End of Table 10: Four-Year Rolling Averages for Strategic Goal 1] 

The following sections describe our performance under goal 1 for each 
of these three quantitative performance measures and describe the 
targets for fiscal year 2013. 

Financial Benefits: 

The financial benefits reported for this goal in fiscal year 2012 
totaled $25.7 billion, exceeding the target we set by nearly $15 
billion. Among these accomplishments are large financial savings from 
our work on the level of funding for the Medicare Advantage program 
and for eliminating the ethanol tax credit for corn. 

Because we expect to have constrained resources, we have set the 
target for fiscal year 2013 at $11.5 billion based on discussions with 
the goal 1 teams about the level of benefits they believe they can 
achieve. 

[Text box: Example of Goal 1’s Financial Benefits: 
In our review of United States Department of Agriculture’s (USDA) 
fiscal year 2012 budget request, we identified more than $3 billion 
that USDA had not used in an account for loans to farmers to assist 
farm ownership and operations. USDA had been carrying ever-increasing 
unobligated balances forward year after year to help ensure it had 
sufficient funds to meet farmers’ needs. However, under Credit Reform, 
USDA can obtain funds directly from the Treasury to cover any 
shortfalls and does not need to carry over funds from year to year in 
this type of account. As a result of our work, USDA returned $3.2 
billion to the Treasury and agreed to be vigilant in returning future 
balances to the Treasury in a timely manner. End of text box] 

Nonfinancial Benefits: 

Nonfinancial benefits reported for goal 1 in fiscal year 2012 totaled 
275, exceeding our target of 225 by 50 benefits, or 22 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 program 
efficiency and effectiveness, including the U.S. financial regulatory 
system, federal oil and gas resources, the U.S. Postal Service, and 
transportation and telecommunications funding. For fiscal year 2013, 
we have set our target at 231 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. 

[Text box: Example of Goal 1’s Nonfinancial Benefits: 
As part of our 2011 review of recent nationwide shortages of 
prescription drugs, we reported that the Food and Drug Administration 
(FDA) was constrained in its ability to protect the public’s health 
because of its lack of authority to require manufacturers to report 
drug shortages to the agency. We suggested that the Congress consider 
requiring manufacturers to notify FDA when they experience 
circumstances that could lead to a supply disruption. Our work was 
cited in congressional debate on this topic, and less than a year 
later, the Congress included this requirement in the Food and Drug 
Administration Safety and Innovation Act. 
[hyperlink, http://www.gao.gov/products/GAO-12-116]. 
End of text box] 

Testimonies: 

Our witnesses testified at 61 congressional hearings related to this 
strategic goal, which fell short of the fiscal year 2012 target of 85 
by 24 testimonies, or 28 percent. Among the topics on which we 
testified were DOD and VA health care integration, the Federal Housing 
Administration’s mutual mortgage insurance fund, unconventional oil 
and gas production, school bullying, and the Los Angeles federal 
courthouse construction. (See figure 17 for selected testimony topics 
by goal.) We set our fiscal year 2013 target at 70 testimonies on goal 
1 issues based on our experience over the past few years. 

[Text box: Example of Goal 1’s Testimonies: 
In recent years, improvements in technology have allowed oil and gas 
operators to extract oil and natural gas from unconventional resources—
resources that cannot be produced, transported, or refined using 
traditional techniques—including oil shale. We testified on the 
opportunities and challenges of oil shale development as identified in 
our October 2010 report [hyperlink, 
http://www.gao.gov/products/GAO-11-35]. We noted that oil shale 
development presents opportunities for increasing domestic oil 
production and certain socioeconomic benefits. We noted challenges of 
impacts on water, air, and wildlife and socioeconomic impacts. Our 
testimony also discussed key actions that federal agencies can take to 
proactively prepare for the potential development of a future oil 
shale industry. 
[hyperlink, http://www.gao.gov/products/GAO-12-740T] 
End of text box] 

Table 11 provides examples of goal 1 accomplishments and contributions. 

Table 11: Goal 1 Accomplishments and Contributions: 

Health Care Needs and Financing: 

Improving Department of Veterans Affairs (VA) Long-term Care Strategic 
Planning and Budgeting: 
In our 2009 review of VA’s processes for long-term care strategic 
planning and budgeting, we recommended that VA strengthen the 
credibility of workload estimates for noninstitutional long-term care 
services in future budget justifications by reporting which workload 
measures are used for each noninstitutional service and how these 
measures reflect the volume of services veterans receive. VA 
implemented our recommendation, making workload projections for 
different noninstitutional long-term care services more transparent 
and comparable. This increased the clarity and usefulness of VA’s 
projections for oversight and budgeting. 
[hyperlink, http://www.gao.gov/products/GAO-09-145]. 

Improving Oversight of Clinical Investigators: 
In a 2009 review of Food and Drug Administration (FDA) oversight of 
clinical investigators—individuals who conduct research involving new 
drugs and medical devices—we identified steps that FDA could take to 
help ensure that investigator misconduct does not compromise the 
safety of clinical trial participants or the integrity of clinical 
trial data. These steps included ensuring that clinical investigators 
who have engaged in misconduct for one type of product not serve as 
investigators for others. FDA took these steps, thus helping it 
protect participants in clinical trials, as well as the quality and 
integrity of clinical trial data. 
[hyperlink, http://www.gao.gov/products/GAO-09-807]. 

Improving the Safety of Medical Devices: 
In 2011, we reported on shortcomings in the FDA’s oversight of medical 
device recalls. We recommended that FDA improve its oversight by 
analyzing recall trends; clarifying procedures for conducting recalls; 
and developing criteria for determining whether recalls are 
implemented effectively, completed in a timely manner, and 
appropriately documented. Our recommendations were included in the 
Food and Drug Administration Safety and Innovation Act. Senators 
specifically attributed these new requirements for FDA to the 
recommendations contained in our report. 
[hyperlink, http://www.gao.gov/products/GAO-11-468]. 

Encouraging Provider Use of Electronic Prescribing and Health Records: 
In our 2011 review of the Centers for Medicare & Medicaid Services’ 
(CMS) Electronic Prescribing Program (EPP) and Electronic Health 
Records Program, both of which provide incentive payments to eligible 
Medicare providers who adopt and use health information technology, we 
recommended that CMS encourage physicians and other providers to adopt 
certified electronic-prescribing technology, and that CMS expedite 
efforts to remove overlap in reporting requirements for the two 
programs. Our work prompted CMS to modify the EPP’s technological 
requirements so that they include certified technology and remove 
overlapping reporting requirements. 
[hyperlink, http://www.gao.gov/products/GAO-11-159]. 

Lifelong Learning: 

Expediting School Improvement Grant Awards: 
We reported in 2011 that the school improvement grant process did not 
allow some districts and schools enough time to plan and implement 
reforms for the school year, such as replacing a principal. We 
recommended that the Department of Education (ED) consider ways to 
grant awards earlier in the school year. The Congress cited our 
findings and urged ED to make more timely awards. ED subsequently 
allowed states to submit shorter applications in some cases to 
expedite awards so that schools could have more time to make 
improvements. 
[hyperlink, http://www.gao.gov/products/GAO-11-741]. 

Benefits and Protection for Workers, Families, and Children: 

Better Reporting of Child Fatality Data: 
Child fatalities because of maltreatment are underreported, we found, 
partly because many states do not collect all relevant data from state 
agencies. We recommended in 2011 that the Department of Health and 
Human Services identify ways to help states improve data collection. 
The Chairman, House Committee on Ways and Means, cited our 
recommendations and proposed legislation to implement them. In 
September 2011, the Child and Family Services Improvement and 
Innovation Act was enacted, requiring states to improve their data 
collection on child fatalities from maltreatment. Collecting complete 
information should help target efforts for preventing maltreatment 
deaths. 
[hyperlink, http://www.gao.gov/products/GAO-11-599]. 

Addressing the Needs of Black Lung Workers: 
Consistent with our 2009 recommendations, the Department of Labor 
(DOL) improved its Black Lung Benefits Program, which provides 
assistance to miners suffering from coal dust exposure. DOL improved 
its timeliness measures and identified ways to reduce delays. The 
agency now also makes hearings available more frequently for claimants 
living in remote locations by videoconferencing. DOL redesigned its 
diagnosis reporting forms to provide better evidence required to award 
benefits and also expanded its ability to analyze complaints about 
medical evaluations. These steps should improve the claims process for 
miners. 
[hyperlink, http://www.gao.gov/products/GAO-10-7]. 

Ensuring Voting Access and Integrity in Long-Term Care Facilities: 
Our 2009 work found that states and localities varied in how they 
addressed challenges helping long-term care facility residents vote, 
and also in the extent to which they ensured residents’ ballots are 
not fraudulently completed by someone else and that these voters are 
not subjected to undue influence. As we recommended, the U.S. Election 
Assistance Commission, in developing guidance on voting in such 
facilities collected and disseminated information on cost-effective 
practices to provide voting access. As a result, citizens in long-term 
care facilities may have improved ability to cast ballots. 
[hyperlink, http://www.gao.gov/products/GAO-10-6]. 

Financial Security for an Aging Population: 

Strengthening Pension Benefit Guaranty Corporation’s (PBGC) Management 
and Governance: 
We have recommended, in 2011 and earlier, that the PBGC improve its 
governance structure and contract management. The Moving Ahead for 
Progress in the 21st Century Act, enacted in 2012, addresses some of 
our recommendations. The act has several requirements, including those 
to strengthen PBGC’s board of directors and study alternative 
governance structures. Also, PBGC implemented practices to strengthen 
accountability of its contract management. These actions should allow 
PBGC to improve its management and protect retirement incomes of 
workers in private-sector defined benefit pension plans. 
[hyperlink, http://www.gao.gov/products/GAO-11-588],
[hyperlink, http://www.gao.gov/products/GAO-11-271], 
[hyperlink, http://www.gao.gov/products/GAO-11-182T], 
[hyperlink, http://www.gao.gov/products/GAO-08-871], 
[hyperlink, http://www.gao.gov/products/GAO-09-702T]. 

Responsive, Fair, and Effective System of Justice: 

Increasing Awareness of Funding for Indigent Defense: 
In May 2012, we assessed federal support to states, localities, and 
tribes for indigent defense services—counsel for those accused of a 
crime but unable to afford representation. Our work provided 
comprehensive information on federal grants available to support such 
services. We recommended that the Department of Justice better inform 
grantees and public defender offices about these grants, which will 
better enable them to access funding. We also provided previously 
unavailable information about how grantees were using funds to support 
indigent defense and challenges to evaluating the effectiveness of 
their efforts. 
[hyperlink, http://www.gao.gov/products/GAO-12-569]. 

Viable Communities: 

Reducing Reserves in the Housing Choice Voucher Program: 
Our review of the Department of Housing and Urban Development’s (HUD) 
2012 budget request showed that in HUD’s Tenant-Based Rental 
Assistance (voucher) account, as of September 2010, almost 2,000 
housing agencies held $1.3 billion in subsidy reserves that 
potentially could be used to provide housing assistance to eligible 
households or could be used by HUD to reduce future budget requests. 
We found that up to approximately $663 million of these reserves could 
be considered excess funds and, therefore, rescinded. Subsequently, 
the Congress rescinded $650 million from housing agencies’ reserve 
accounts. 

Reducing Improper Payments Resulting from Underreported Tenant Income: 
In reports issued in the last decade, we recommended that HUD reduce 
the level of rental assistance payments it made improperly to tenants 
and regularly monitor compliance with policies for rental assistance 
payments. In response to our work, HUD deployed a new income 
verification system to identify tenants who underreport income that 
helped reduce improper payments by $186 million in fiscal year 2010, 
the last year for which data are available. 
[hyperlink, http://www.gao.gov/products/GAO-05-224], 
[hyperlink, http://www.gao.gov/products/GAO-02-749], 
[hyperlink, http://www.gao.gov/products/GAO-01-248]. 

Improving Federal Response to Foreclosure Impacts: 
To reduce the frequency of banks and other institutions not finishing 
property foreclosures—resulting in abandoned properties—banking 
regulators issued guidance directing institutions to obtain updated 
property valuations before starting foreclosure, and directed 
institutions to notify borrowers and communities of foreclosure halts 
to better ensure properties will be maintained. Responding to our 2011 
report on vacant properties, the Treasury changed requirements for its 
mortgage modification program to allow modifications for properties 
that are not owner-occupied, which could also help prevent vacant and 
unmaintained properties. 
[hyperlink, http://www.gao.gov/products/GAO-11-93], 
[hyperlink, http://www.gao.gov/products/GAO-12-34]. 

Stewardship of Natural Resources and the Environment: 

Recovering Unspent Funds at the Environmental Protection Agency (EPA): 
Over several years, we identified opportunities for EPA to recover 
unspent funds from expired grants, contracts, and interagency 
agreements, and use those funds to offset the need for new 
appropriations. We also encouraged EPA to better track these 
recoveries in its accounting systems. In response to our work, EPA 
developed a database that enables the agency to track recovered funds 
and has enhanced its efforts to recover unspent funds. In 2010 and 
2011, EPA recovered a total of over $380 million in unspent funds. 
EPA’s enhanced efforts to recover these funds reflect stronger fiscal 
management and improved compliance with the agency’s policies and 
procedures. 

Identifying Native American Human Remains and Objects for Repatriation: 
We found that almost 20 years after the Native American Graves 
Protection and Repatriation Act was enacted, eight key federal 
agencies had not fully complied with the requirements of the act. We 
recommended that the agencies develop and provide to the Congress a 
needs assessment and timetable for complying with the act for their 
historical collections of Native American human remains and objects. 
In response, most of the agencies have provided their needs 
assessments and timetables. Furthermore, most of the agencies have 
begun reporting their repatriation data to the National Park Service, 
as we recommended, so repatriations can now be tracked governmentwide. 
[hyperlink, http://www.gao.gov/products/GAO-10-768], 
[hyperlink, http://www.gao.gov/products/GAO-11-755T]. 

Protecting Animal and Public Health through Improved Planning: 
Our work over several years identified challenges the federal 
government faces in planning for animal disease outbreaks that can 
cause serious harm to the economy and human health. We found that USDA 
and the Department of Homeland Security (DHS) had not clarified agency 
roles and responsibilities for such an event, that state plans lacked 
critical components, and that there was a growing national shortage of 
veterinarians. In response, in 2011, USDA and DHS took steps to better 
define their response roles. In 2010, USDA provided states with key 
information to develop more complete response plans, and the federal 
government took steps to improve agencies’ veterinary workforce 
planning. 
[hyperlink, http://www.gao.gov/products/GAO-07-652], 
[hyperlink, http://www.gao.gov/products/GAO-09-178]. 

Viable National Infrastructure: 

Reducing the Risk of Disruptions in Aviation Funding: 
In 2009, we reported that actual revenues into the Airport and Airway 
Trust Fund (Trust Fund) have been less than the forecast revenues, 
which serve as the basis for appropriations from the Trust Fund, and 
have resulted in a $6 billion decline in the fund’s balance over 7 
years. Given this decline and the inherent uncertainty of forecasts, 
we suggested that the Congress consider not making the full amount of 
forecast revenues available for appropriation from the Trust Fund. In 
2012, the Congress enacted such a provision, limiting the amount made 
available from the fund, thereby reducing the risk of disruptions in 
funding for aviation programs. 
[hyperlink, http://www.gao.gov/products/GAO-09-393], 
[hyperlink, http://www.gao.gov/products/GAO-12-222]. 

Addressing Excess and Underutilized Real Property: 
For years, we have identified problems with excess and underused 
federal real property. The properties can be burdensome for agencies 
to maintain and can be difficult to demolish, better use, or sell. We 
found problems in June 2012 with the accuracy of real property data 
that the General Services Administration (GSA), the Office of 
Management and Budget (OMB), and other agencies use. Despite reform 
efforts, we also reported that the government lacks a comprehensive 
national strategy to address the underlying reasons the problems 
persist, including stakeholder resistance and the cost of disposal. 
Our work has refocused efforts on improving federal real property data 
and strategically managing federal property. 
[hyperlink, http://www.gao.gov/products/GAO-12-645]. 

Determining Responsibility for the Cost of Postal Service Pension 
Benefits: 
Facing insolvency, the Postal Service asked the Congress to refund $75 
billion in what it referred to as “overpayments” that it made to the 
Civil Service Retirement System (CSRS). We were asked by House and 
Senate oversight committees to review current law, actuarial analyses 
used in pending legislation, and potential impacts of a refund on USPS’
s financial outlook. We determined that the methodology for 
determining the USPS’s responsibility for the cost of CSRS benefits 
was consistent with current law, that the transfer of assets would 
increase the federal government’s current and future liability for 
federal retirement payments by an estimated $56 billion to $85 
billion, and that the question of a refund was a congressional policy 
decision. Based on our work, the relevant committees of the Congress 
decided not to pursue legislation to grant a refund. 
[hyperlink, http://www.gao.gov/products/GAO-12-146], 
[hyperlink, http://www.gao.gov/products/GAO-10-455]. 

Improving Transit Governance: 
Washington Metropolitan Area Transit Authority’s (WMATA) rail system 
has experienced challenges that include costs, service reliability, 
and safety. We reported in 2011 that WMATA’s board has, at times, 
focused on management’s responsibilities, rather than its 
responsibilities to provide oversight and strategic planning. This 
lack of strategic focus raised concerns about WMATA’s ability to 
confront its challenges. In response to our recommendations, the board 
issued bylaws to clearly delineate its responsibilities and is engaged 
in developing a strategic plan for WMATA to better equip the agency to 
provide safe and reliable transit service. 
[hyperlink, http://www.gao.gov/products/GAO-11-660]. 

Source: GAO. 

[End of Table 11: Goal 1 Accomplishments and Contributions] 

[End of Strategic Goal 1] 

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

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 [hyperlink, 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 2012 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. 

[Text box: Example of Work under Goal 2: 
Since the release of our report in 2008 on the encryption of 
information on federal information systems, the Office of Management 
and Budget and selected agencies have acted in response to our 
recommendations. These actions include issuing governmentwide policy 
and monitoring federal agencies’ encryption efforts. In addition, 
agencies developed training programs on encryption concepts,
implemented mechanisms to monitor the successful installation and 
functioning of encryption products, and ensured that encryption 
technologies are installed in accordance with the validated federal 
cryptographic modules program. These actions helped to reduce the risk
of unauthorized disclosure, modification, or loss of sensitive
federal information. 
[hyperlink, http://www.gao.gov/products/GAO-08-525] 
End of text box] 

As shown in table 12, we exceeded our fiscal year 2012 performance 
targets for financial and nonfinancial benefits and testimonies. 

Table 12: Strategic Goal 2’s Annual Performance Results and Targets: 

Performance measure: Financial benefits; 
2007 Actual: $10.3 billion; 
2008 Actual: $15.4 billion; 
2009 Actual: $12.4 billion; 
2010 Actual: $20.5 billion; 
2011 Actual: $25.9 billion; 
2012 Target: $11.4 billion; 
2012 Actual: $13.4 billion; 
Met/Not Met: Met; 
2013 Target[A]: $12.7 billion. 

Performance measure: Nonfinancial benefits; 
2007 Actual: 468; 
2008 Actual: 468; 
2009 Actual: 457; 
2010 Actual: 444; 
2011 Actual: 447; 
2012 Target: 450; 
2012 Actual: 513; 
Met/Not Met: Met; 
2013 Target[A]: 338. 

Performance measure: Testimonies; 
2007 Actual: 73; 
2008 Actual: 93; 
2009 Actual: 67; 
2010 Actual: 58; 
2011 Actual: 48; 
2012 Target: 50; 
2012 Actual: 54; 
Met/Not Met: Met; 
2013 Target[A]: 45. 

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 2013 targets for all three performance measures 
differ from those we reported in our fiscal year 2013 performance 
budget in February 2012. Specifically, we increased financial benefits 
from $11.4 billion to 12.7 billion, decreased nonfinancial benefits 
from 450 to 338, and decreased testimonies from 50 to 45. 

[End of Table 12: Strategic Goal 2’s Annual Performance Results and 
Targets] 

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 6 years goal 2 financial benefits 
reached the highest level in 2011 and remained fairly stable in 2012. 
Average nonfinancial benefits increased from 2007 to 2009, declined in 
2010 and 2011, and increased again in 2012. Testimonies also increased 
from 2007 to 2009 and have declined steadily from 2010 through 2012. 

Table 13: Four-Year Rolling Averages for Strategic Goal 2: 

Performance measure: Financial benefits; 
2007: $11.2 billion; 
2008: $12.7 billion; 
2009: $12.5 billion; 
2010: $14.7 billion; 
2011: $18.6 billion; 
2012: $18.1 billion. 

Performance measure: Nonfinancial benefits; 
2007: 413; 
2008: 438; 
2009: 461; 
2010: 459; 
2011: 454; 
2012: 465. 

Performance measure: Testimonies; 
2007: 63; 
2008: 67; 
2009: 75; 
2010: 73; 
2011: 67; 
2012: 57. 

Source: GAO. 

[End of Table 13: Four-Year Rolling Averages for Strategic Goal 2] 

The following sections describe our performance under goal 2 for each 
of our quantitative performance measures and describe the targets for 
fiscal year 2013. 

Financial Benefits: 

The financial benefits reported for this goal in fiscal year 2012 
totaled $13.4 billion, which exceeded our target by $2 billion, or 18 
percent. Among these accomplishments are large financial benefits, 
including $8 billion for NASA’s cancellation of the Constellation/Ares 
I project and $3.1 billion for modifications concerning tour 
normalization for forces in South Korea. 

We expect our work on defense and acquisition issues to continue to 
produce economies and efficiencies close to the fiscal year 2012 
level. Therefore, we set our fiscal year 2013 target at $12.7 billion. 

[Text box: Example of Goal 2’s Financial Benefits: 
In 2011, we reported that the Federal Emergency Management Agency 
(FEMA) needed to improve its oversight of preparedness grants and 
assess capabilities to identify gaps and prioritize investments. We 
suggested the Congress could limit funding until FEMA completed an 
assessment of capability gaps. In April 2011, the Congress reduced 
funding for FEMA preparedness grants by $875 million from the 
President’s fiscal year 2011 budget request. In addition, citing our 
concerns regarding FEMA’s lack of assessment capabilities, the Congress 
concurred with our suggestion and recommended substantially reduced 
future funding for preparedness grants until metrics can be used to 
assess results. 
[hyperlink, http://www.gao.gov/products/GAO-12-526T], 
[hyperlink, http://www.gao.gov/products/GAO-12-453SP], 
[hyperlink, http://www.gao.gov/products/GAO-11-318SP]. 
End of text box] 

Nonfinancial Benefits: 

The nonfinancial benefits reported for goal 2 in fiscal year 2012 
totaling 513 nonfinancial benefits, exceeded our target by 63 
benefits, or 14 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 trade, 
national defense and foreign policy, and in acquisition and contract 
management, including DOD weapon system acquisition, and NASA and DHS 
acquisition management. We set our fiscal year 2013 target at 338. 
This target is lower than our recent experience as we do not expect 
the level of nonfinancial benefits to continue at such a high volume. 

[Text box: Example of Goal 2’s Nonfinancial Benefits: 
We have identified significant weaknesses in the U.S. export control 
system, which is designed to protect against the transfer of U.S. 
defense and other items to foreign parties that might use them against 
U.S. interests. In 2012, we identified challenges facing the many 
agencies responsible for enforcing export controls, including the lack 
of trend data on illegal exports and measures of effectiveness to 
gauge mission success. To improve enforcement, agencies are addressing 
the challenges by developing a more robust system to measure 
performance, and facilitating the exchange of data on illegal export 
activity. 
[hyperlink, http://www.gao.gov/products/GAO-12-246]. 

Testimonies: 

Our witnesses testified at 54 congressional hearings related to this 
strategic goal in fiscal year 2012, exceeding our target of 50 by 4 
hearings, or 8 percent. Goal 2 testimony topics included the Deepwater 
Horizon oil spill, DHS container security programs, DOD personnel 
security clearances, and improvised explosive devices. (See figure 17 
for selected testimony topics by goal.) We have set our target at 45 
for presenting testimony based on our recent experience. 

[Text box: Example of Goal 2’s Testimonies: 
DOD has faced long-term challenges in managing and halting degradation 
of its facilities and reducing unneeded infrastructure to free up 
funds to better maintain the facilities it still uses to meet other 
needs. DOD plans to reduce force structure and DOD will request that 
the Congress authorize the base realignment and closure (BRAC) process 
for 2013 and 2015. To inform the process, we discussed key factors and 
challenges that contributed to BRAC 2005 implementation and results, 
and the most recent estimated costs and savings attributable to BRAC 
2005. 
[hyperlink, http://www.gao.gov/products/GAO-12-513T]. 

Table 14 provides examples of goal 2 accomplishments and contributions. 

Table 14: Goal 2 Accomplishments and Contributions: 

Protect and Secure the Homeland: 

Targeting National Flood Insurance Bonus Formula to Match Agency 
Marketing Goals: 
In 2009, we recommended that the Federal Emergency Management Agency’s 
(FEMA) National Flood Insurance Program (NFIP) establish more targeted 
marketing goals for the private companies that sell flood insurance. 
We also stated that the bonuses that FEMA provided to those companies 
would be more effective if FEMA established more targeted goals in 
line with its NFIP goals. In response to our report, FEMA changed the 
bonus formula for 2013 to include incentives for increasing sales in 
under-served areas, for small business, and in areas of moderate or 
low flood risk, which are all among NFIP goals. These changes should 
increase program participation in these targeted areas. 
[hyperlink, http://www.gao.gov/products/GAO-09-455]. 

Identifying Deficiencies in the Transportation Security 
Administration’s (TSA) Advanced Imaging Technology Program: 
TSA deployed advanced imaging technology (AIT) across the country, a 
high-priority technology to identify threat items concealed under 
passengers’ clothing. In January 2012, we issued a report on TSA’s 
adherence to DHS acquisition policy and TSA’s efforts to test the 
effectiveness of AIT. TSA changed key performance parameters during 
the acquisition process without formally informing DHS acquisition 
officials-—a violation of DHS policy. We recommended that TSA develop 
a road map describing when vendors will meet milestones for further 
developing AIT. Our work informed the Congress about the state of the 
technology and a reduction in planned buys. 
[hyperlink, http://www.gao.gov/products/GAO-12-541T], 
[hyperlink, http://www.gao.gov/products/GAO-12-644T]. 

Strengthening DHS’s Oversight of the Student and Exchange Visitor 
Program: 
Our June 2012 report noted weaknesses in DHS’s management of the 
Student and Exchange Visitor Program, assisting the Congress in 
overseeing the program and identifying vulnerabilities. We identified 
significant challenges in DHS’s processes for certifying and 
monitoring the more than 10,000 U.S. schools eligible to accept 
foreign students. We reported that DHS had not analyzed program risks 
or implemented existing controls to verify schools’ legitimacy and 
program eligibility, such as their accreditation status. We 
recommended that DHS assess program risks and strengthen its oversight 
of schools. 
[hyperlink, http://www.gao.gov/products/GAO-12-572], 
[hyperlink, http://www.gao.gov/products/GAO-12-895T]. 

Improving Cost Estimates and Targets for Coast Guard’s Aging Fleet: 
Given delays in acquiring new vessels, we were asked to examine the 
condition and performance of the Coast Guard’s fleet of older vessels. 
In July 2012, we reported that the condition of the vessels was poor, 
the Coast Guard’s process for estimating maintenance costs did not 
fully reflect best practices, and the vessels’ capacity to perform 
missions would continue to decline until new vessels are deployed. We 
recommended that the Coast Guard improve its maintenance cost-
estimating process and adjust operational targets to be more realistic 
given the aging vessels’ declining capacity. 
[hyperlink, http://www.gao.gov/products/GAO-12-741]. 

Improving Information Security at Multiple Federal Agencies: 
Over the past 2 years, multiple agencies including the Internal 
Revenue Service, National Aeronautical and Space Administration, 
Federal Deposit Insurance Corporation, Los Alamos National Laboratory, 
and Federal Housing Finance Agency have acted, in response to our 
recommendations, to improve the security controls over their 
computerized information systems and networks. These actions include 
conducting risk assessments, improving password controls, configuring 
devices more securely, and securing sensitive assets. These actions 
helped to better protect the confidentiality, integrity, and 
availability of agency information and reduce the risk that 
information would be inappropriately used or modified. 
[hyperlink, http://www.gao.gov/products/GAO-09-136], 
[hyperlink, http://www.gao.gov/products/GAO-11-708], 
[hyperlink, http://www.gao.gov/products/GAO-10-28], 
[hyperlink, http://www.gao.gov/products/GAO-10-528]. 

Military Capabilities and Readiness: 

Contributing to Cost Savings in Military Compensation: 
We reported in 2010 that using the Employment Cost Index (ECI) to 
determine the amount of the annual basic pay raise for servicemembers 
is generally reasonable. In recent years, the Congress added one-half 
percentage point to the ECI for military pay raises to reduce a 
perceived gap between military and private-sector pay. However, we 
reported that comparing changes in the ECI with changes in the rates 
of basic pay did not necessarily show pay gaps between the two, or 
that such comparisons were relevant. Therefore, the Congress decided 
not to increase military pay beyond the ECI for fiscal years 2012-
2015, resulting in about $2 billion in savings. 
[hyperlink, http://www.gao.gov/products/GAO-10-561R], 
[hyperlink, http://www.gao.gov/products/GAO-10-666T], 
[hyperlink, http://www.gao.gov/products/GAO-10-803R]. 

Contributing to the Department of Defense’s (DOD) Avoidance of $797 
Million in the Costs of Excess Inventory: 
We reported over the last five years that DOD held significantly more 
spare parts inventory than it needed. As directed by the Congress, and 
as we recommended, DOD developed an inventory management improvement 
plan to reduce its excess inventory. As a result, DOD avoided 
approximately $797 million of costs for spare parts in fiscal year 
2012. 
[hyperlink, http://www.gao.gov/products/GAO-07-232], 
[hyperlink, http://www.gao.gov/products/GAO-09-103], 
[hyperlink, http://www.gao.gov/products/GAO-09-199], 
[hyperlink, http://www.gao.gov/products/GAO-10-469], 
[hyperlink, http://www.gao.gov/products/GAO-12-493]. 

Ensuring DOD’s $19 Billion Space Launch Vehicle Acquisition Is Based 
on Sound Data: 
DOD developed a space launch vehicle acquisition strategy for the 
government to buy several launch vehicles from a single contractor and 
associated subcontractors over many years. In 2011-2012, we identified 
gaps in the data upon which DOD based its strategy and recommended DOD 
reassess various parts prices and reconsider the length of the 
purchasing commitment. The Congress responded to our work by 
legislating that DOD explain how it would address the deficiencies we 
found. DOD is taking actions to ensure it can negotiate fair prices. 
DOD’s launch acquisitions should thus provide greater assurance that 
the government and taxpayers will benefit. 
[hyperlink, http://www.gao.gov/products/GAO-11-641], 
[hyperlink, http://www.gao.gov/products/GAO-12-822]. 

Identifying Risks in the Navy’s Future Destroyer Program: 
In 2012, we identified significant risks in the Navy’s plan to buy 
over 40 upgraded Arleigh Burke destroyers at a cost of up to $80 
billion over the next several decades. We found that the Navy lacked a 
sufficient analytical basis to ensure that it selected the most cost-
effective solution that is also capable of meeting future threats. We 
also highlighted significant cost and technical risks and identified 
the need for additional oversight of this program. DOD took action on 
our recommendation, resulting in the Under Secretary of Defense’s 
approval prior to the Navy’s making major acquisition decisions. 
[hyperlink, http://www.gao.gov/products/GAO-12-113]. 

Assisting Congressional Oversight of the 2005 Base Realignment and 
Closure (BRAC) Process: 
DOD’s BRAC 2005 was meant to transform the military, foster jointness 
among the services, and reduce excess infrastructure. Our work has 
shown that DOD faced several challenges in aligning those goals. We 
testified in 2012 that DOD’s fiscal year 2011 budget submission to the 
Congress included a one-time implementation cost growth of 67 percent 
(from $21 billion estimated in 2005 to about $35.1 billion in fiscal 
year 2011), largely because of increased construction costs for new 
and renovated facilities needed to enhance military capabilities. We 
plan to report in fiscal year 2013 on lessons learned that could be 
applied to any future BRAC round. 
[hyperlink, http://www.gao.gov/products/GAO-12-709R], 
[hyperlink, http://www.gao.gov/products/GAO-12-513T]. 

Contributing to Successful Reform of DOD’s Personnel Security 
Clearance Program: 
Our body of work—-including a 2009 report-—on problems with DOD’s 
Personnel Security Clearance Program, and placing the program on our 
list of high-risk activities and programs, contributed to its 
successful reform. The Deputy Director of OMB, Director of the Office 
of Personnel Management, and other reform leaders issued (1) a 
strategic framework which included strategic goals, communications 
plan, information technology initiatives, and funding, and (2) a 
letter to the Congress outlining outcome performance measures. As a 
result, DOD significantly improved the timeliness for processing 
initial clearances for 90 percent of industry personnel from 129 days 
in 2008 to 63 days in 2010. We subsequently removed this issue from 
our high-risk list. 
[hyperlink, http://www.gao.gov/products/GAO-09-488]. 

Improving DOD’s Reporting on Headquarters Activities: 
In our 2012 review of DOD’s headquarters organizations and their 
functions, we recommended that DOD improve its tracking and reporting 
of headquarters personnel data. As a result, DOD took steps to 
increase its visibility over headquarters personnel by requiring more 
accurate identification and reporting of headquarters data. With this 
improved visibility, DOD may be able to identify opportunities to save 
additional costs by consolidating organizations and centralizing 
administrative and support functions. 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP], 
[hyperlink, http://www.gao.gov/products/GAO-12-345]. 

U.S. Foreign Policy Interests: 

Monitoring Use of U.S. Arms Sent to Persian Gulf Countries: 
The United States has authorized billions of dollars in arms sales and 
exports to Persian Gulf countries. However, concerns have been raised 
about gaps in programs intended to assure that the arms are not 
acquired by groups posing a threat to the United States. In 2011, we 
recommended that DOD require its officials to document efforts to 
verify host country security and accountability procedures for 
sensitive equipment. In response, DOD established guidelines for 
enhanced end-use monitoring, such as requiring that physical security 
and accountability checklists be attached to inventory records. 
[hyperlink, http://www.gao.gov/products/GAO-12-89]. 

Improving Accountability of U.S. Direct Assistance to Afghanistan: 
In fiscal year 2010, the U.S. Agency for International Development 
(USAID) awarded direct assistance to the Afghan government of over 
$1.4 billion and to the multilateral Afghanistan Reconstruction Trust 
Fund (ARTF) of $1.3 billion. The vulnerability of this assistance to 
waste, fraud, and abuse makes it essential that U.S. agencies assess 
risks and safeguard the funds. In response to recommendations we made 
in 2011, USAID has taken steps to ensure risk assessments are 
completed in advance of direct assistance awards to the Afghan 
government and to ensure adherence with policies for assessing risks 
associated with multilateral trust funds in awarding funds to the ARTF. 
[hyperlink, http://www.gao.gov/products/GAO-11-710]. 

Making Administrative Services Overseas More Cost Effective: 
U.S. agencies overseas spent over $2 billion on administrative 
services in 2011 through an interagency system called International 
Cooperative Administrative Support Services. The State Department 
primarily provides these services. In 2012, we found that in some 
cases, agencies such as USAID may provide services more cost 
effectively. In response, State and USAID released guidance stating 
that USAID may provide administrative services in place of State where 
it will achieve savings and superior levels of customer satisfaction. 
As a result, agencies may be able to obtain administrative services at 
a lower cost in future years. 
[hyperlink, http://www.gao.gov/products/GAO-12-317]. 

Global Market Forces: 

Supporting Export Promotion by Improving Management of the U.S. 
Commercial Service: 
Policymakers have emphasized the role of exports in strengthening the 
U.S. economy. However, in a 2010 report, we identified several 
weaknesses in the management controls of the U.S. Commercial Service 
(CS), a key export promotion agency. Responding to our 
recommendations, CS made several improvements that will shift its 
resources to higher-priority countries. These include establishing a 
new human capital plan, using updated resource allocation models and a 
strategic analysis tool to decide where to place staff, and 
reorganizing the personnel office. It also abolished over 103 vacant 
positions that incurred needless administrative charges. 
[hyperlink, http://www.gao.gov/products/GAO-10-874]. 

Source: GAO. 

[End of Table 14: Goal 2 Accomplishments and Contributions] 

[End of Strategic Goal 2] 

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

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 [hyperlink, 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. 

[Text box: Example of Work under Goal 3: 
We analyzed the actions taken by the Treasury to manage federal debt 
to avoid exceeding the debt limit when delays in raising the limit 
occurred in 2011 and found that such delays led to an increase in the 
Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011. 
We also found that the increased focus on debt limit-related 
operations as the delays occurred diverted the Treasury staff from other
important cash and debt management responsibilities. These findings 
were widely reported and, along with related findings in our previous 
reports, will help inform the debate for the next debt limit increase. 
[hyperlink, http://www.gao.gov/products/GAO-12-701]. 
End of text box] 

As shown in table 15, we exceeded our fiscal year 2012 performance 
targets for this goal’s financial and nonfinancial benefits and 
testimonies. 

Table 15: Strategic Goal 3’s Annual Performance Results and Targets: 

Performance measure: Financial benefits; 
2007 Actual: $22.8 billion; 
2008 Actual: $23.4 billion; 
2009 Actual: $18.5 billion; 
2010 Actual: $11.6 billion; 
2011 Actual: $7.2 billion; 
2012 Target: $7.3 billion; 
2012 Actual: $16.7 billion; 
Met/Not Met: Met; 
2013 Target[A]: $5.75 billion. 

Performance measure: Nonfinancial benefits; 
2007 Actual: 648; 
2008 Actual: 704; 
2009 Actual: 634; 
2010 Actual: 684; 
2011 Actual: 628; 
2012 Target: 525; 
2012 Actual: 652; 
Met/Not Met: Met; 
2013 Target[A]: 520. 

Performance measure: Testimonies; 
2007 Actual: 74; 
2008 Actual: 76; 
2009 Actual: 49; 
2010 Actual: 45; 
2011 Actual: 39; 
2012 Target: 40; 
2012 Actual: 41. 
Met/Not Met: Met; 
2013 Target[A]: 29. 

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 2013 targets for all three performance measures 
differ from those we reported in our fiscal year 2013 performance 
budget in February 2012. Specifically, we decreased financial benefits 
from $7.3 to $5.75 billion, nonfinancial benefits from 525 to 520, and 
testimonies from 40 to 29. 

[End of Table 15: Strategic Goal 3’s Annual Performance Results and 
Targets] 

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 2007 through 2012, financial benefits 
increased from 2007 through 2009 and have decreased each year from 
2009 through 2012. Nonfinancial benefits rose from 2007 to 2008 and 
fluctuated from 2009 through 2012. The trend in the average number of 
hearings during which our senior executives testified on goal 3 issues 
also rose from 2007 to 2008, remained stable in 2009, and declined in 
2010 and again in 2012. 

Table 16: Four-Year Rolling Averages for Strategic Goal 3: 

Performance measure: Financial benefits; 
2007: $14.6 billion; 
2008: $18.6 billion; 
2009: $20.4 billion; 
2010: $19.1 billion; 
2011: $15.2 billion; 
2012: $13.5 billion; 

Performance measure: Nonfinancial benefits;
2007: 654; 
2008: 686; 
2009: 653; 
2010: 668; 
2011: 663; 
2012: 650. 

Performance measure: Testimonies; 
2007: 64; 
2008: 68; 
2009: 68; 
2010: 52; 
2011: 52; 
2012: 44. 

Source: GAO. 

[End of Table 16: Four-Year Rolling Averages for Strategic Goal 3] 

The following sections describe our performance under goal 3 for each 
of our quantitative performance measures and describe the targets for 
fiscal year 2013. 

Financial Benefits: 

The financial benefits reported for this goal in fiscal 2012 totaled 
$16.7 billion, exceeding our target of $7.3 billion by $9.4 billion. 
Among these accomplishments are benefits from cancellation of the 
national polar-orbiting environmental satellite follow-on program, and 
increasing the liquidity of the Treasury Inflation Protected 
Securities (TIPS). 

We have set our 2013 target at $5.75 billion because we do not expect 
the high level of fiscal year 2012 benefits to continue. 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. 

[Text box: Example of Goal 3’s Financial Benefits: 
In our 2009 review of the Treasury’s debt management challenges 
following the financial market crisis, we found that improving 
Treasury Inflation Protected Securities (TIPS) liquidity could lower 
the Treasury’s cost of borrowing. Liquid securities can be auctioned 
at lower rates and cost the Treasury less money. Based on our work, 
the Treasury increased TIPS issuance and the frequency of TIPS 
auctions, issued TIPS with longer-dated maturities, and made public 
statements to reassure investors about its commitment to the TIPS 
program. These actions reduced the Treasury’s cost of borrowing by 
about $2.2 billion over 5 fiscal years by improving the liquidity of 
TIPS. 
[hyperlink, http://www.gao.gov/products/GAO-09-932]. 
End of text box] 

Nonfinancial Benefits: 

Nonfinancial benefits reported for goal 3 in fiscal year 2012 totaled 
652, exceeding our target by 127 benefits, or about 24 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 human 
capital. We have set our 2013 target at 520 benefits. While we 
recognize that this target is lower than our fiscal year 2012 actual 
performance and 4-year average for this measure, we believe it is a 
realistic estimate based on our projected goal 3 work. 

[Text box: Example of Goal 3’s Nonfinancial Benefits: 
Based on concerns that counterfeit, military-grade electronic parts 
may have entered the DOD supply chain, we created a fictitious company 
and purchased a total of 16 military-grade electronic parts. We then 
contracted with a qualified, independent testing lab for full 
component authentication analysis, which revealed that parts had been 
re-marked to display manufacturer logos and numbers of authentic 
parts. Other part features were deficient from military standards. 
Finally, after submitting requests for bogus parts, we purchased 4 
parts from four vendors, showing their willingness to supply parts 
that do not technically exist. 
[hyperlink, http://www.gao.gov/products/GAO-12-213T], 
[hyperlink, http://www.gao.gov/products/GAO-12-375]. 
End of text box] 

Testimonies: 

Our witnesses testified at 41 congressional hearings related to this 
strategic goal in fiscal year 2012, exceeding the target of 40 by 2.5 
percent. Among the goal 3 testimony topics covered were Arlington 
National Cemetery contract management, fraud prevention in the service-
disabled veteran-owned small business program, reducing improper 
payments, cybersecurity vulnerabilities in the electricity grid, and 
effective long-term disaster recovery. (See figure 17 for selected 
testimony topics by goal.) For fiscal year 2013, we have set a target 
of testifying at 29 hearings as we do not expect goal 3 hearings to 
continue at the same level. 

[Text box: Example of Goal 3’s Testimonies: 
Fiscal year 2011 marked the eighth year of implementation of the 
Improper Payments Act of 2002 and agencies reported an estimated 
$115.3 billion in improper payments—a decrease of $5.3 billion from 
the prior year. Ten programs accounted for about $107 billion or 93 
percent of the total estimated improper payments reported. We 
testified on federal agencies’ reported progress in estimating and 
reducing improper payments; challenges in meeting current requirements 
to estimate and evaluate improper payments; and possible strategies 
for moving forward in reducing improper payments. 
[hyperlink, http://www.gao.gov/products/GAO-12-405T], 
[hyperlink, http://www.gao.gov/products/GAO-12-573T]. 

Table 17 provides examples of goal 3 accomplishments and contributions. 

Table 17: Goal 3 Accomplishments and Contributions: 

Analyze Government’s Fiscal Position: 

Internal Revenue Service (IRS) Saves At Least $487 Million in First-
Time Homebuyer Credit Claims: 
At a hearing in 2009, we and others discussed the need to broaden 
IRS’s statutory math error authority to ensure compliance with First-
Time Homebuyer Credit requirements. With math error authority, IRS can 
automatically correct calculation errors and obvious noncompliance 
without costly audits. After the hearing, the Congress granted IRS the 
broader authority. As a result, IRS prevented at least $487 million in 
fiscal years 2010 and 2011 in erroneous First-Time Homebuyer Credit 
claims that would not otherwise have been caught. 
[hyperlink, http://www.gao.gov/products/GAO-09-1026]. 

Improving Consumer Protection Bureau’s Financial Reporting: 
We worked collaboratively with the Bureau of Consumer Financial 
Protection (CFPB) to successfully audit its first set of financial 
statements for fiscal year 2011. Because CFPB did not officially begin 
operations until July 2011, it was developing its policies as we were 
conducting our audit. While working within the short time available, 
we provided suggestions which CFPB incorporated to improve its 
financial reporting, including more clearly delineating its employee 
retirement funding commitments and preparing a management discussion 
and analysis of CFPB’s operations for year. 
[hyperlink, http://www.gao.gov/products/GAO-12-186]. 

Improving Federal Financial Reporting: 
Our financial audit of the U.S. Government’s Consolidated Financial 
Statements helped promote more complete and accurate financial 
reporting at the governmentwide level in such key areas as social 
insurance and federal employee and veterans benefits. In addition, our 
agency-level financial audit work furthered significant financial 
reporting control improvements at IRS, the Federal Deposit Insurance 
Corporation, and the Securities and Exchange Commission. 
[hyperlink, http://www.gao.gov/products/GAO-12-444T]. 

Improving the Effectiveness of Higher Education Assistance: 
In 2012, we found that tax filers do not always optimize available 
higher education tax benefits. For example, about 1.5 million 2009 
filers failed to claim a benefit for which they appeared to be 
eligible, foregoing a total of $726 million. Accordingly, we 
recommended that IRS work with the Department of Education to develop 
a strategy to improve information provided to tax filers who appear 
eligible to claim a tax benefit. In August 2012, IRS stated that it is 
coordinating with Education to improve outreach efforts and revising 
Form 8863, Education Credits, to simplify the decision-making process 
for taxpayers. 
[hyperlink, http://www.gao.gov/products/GAO-12-560]. 

Prevent Fraud, Waste, and Abuse: 

Reducing Federal Improper Payments: 
Since fiscal year 2000, we have issued reports and testimonies to 
increase attention to federal improper payments—i.e. payments that 
should not have been made, were made in the wrong amount, or did not 
have sufficient supporting documentation—and encourage corrective 
actions. For fiscal year 2011, 79 programs reported $115 billion in 
estimated improper payments, a decrease of $5 billion from the prior 
year. Thirty-five of the 79 programs reported reductions in estimated 
improper payments from fiscal year 2010. Our work contributed to 
reducing improper payments by about $1.4 billion for 22 federal 
programs during fiscal year 2011. 
[hyperlink, http://www.gao.gov/products/GAO-12-405T], 
[hyperlink, http://www.gao.gov/products/GAO-12-573T], 
[hyperlink, http://www.gao.gov/products/GAO-12-312]. 

Improving Fraud Prevention Controls in the Service-Disabled Veteran-
Owned Small Business (SDVOSB) Verification Program: 
In response to our ongoing work assessing fraud prevention controls 
within the SDVOSB verification program, the Department of Veterans 
Affairs’ (VA) has taken several actions to reduce the program’s 
vulnerability to fraud, waste, and abuse. These actions include 
verifying that firms meet program eligibility requirements and 
providing guidance to VA staff on identifying firms that misrepresent 
their status in the application process. These actions will help VA 
provide reasonable assurance that the contracting opportunities meant 
for our nation’s service-disabled veteran entrepreneurs make it to the 
intended beneficiaries. 
[hyperlink, http://www.gao.gov/products/GAO-12-152R]. 

Preventing Doctor Shopping in Medicare Part D: 
In September 2011, we reported on indications of doctor shopping in 
the Medicare Part D program for 14 categories of frequently abused 
prescription drugs. In response to our report, Centers for Medicare & 
Medicaid Services (CMS) directed Part D prescription drug plan 
sponsors to withhold payment on suspicious claims, such as when 
enrollees use doctor shopping to obtain painkillers and narcotics. 
This guidance will help prescription drug plan sponsors to address 
doctor shopping in Medicare Part D and to curb overutilization of 
prescription drugs funded by taxpayers. 
[hyperlink, http://www.gao.gov/products/GAO-11-699]. 

Major Management Challenges and Program Risks: 

Leveraging Enterprise Architectures to Achieve Measurable Benefits: 
In 2006, we made recommendations aimed at improving federal agencies’ 
enterprise architecture (EA) programs and achieving related benefits. 
In response, EA programs at the Departments of Health and Human 
Services (HHS) and Agriculture have supported important agency 
modernizations that have begun to yield results. Specifically, HHS 
will achieve financial benefits of over $150 million between fiscal 
year 2011 to 2015 by leveraging its EA to improve its 
telecommunications infrastructure. In addition, Agriculture will 
realize benefits of almost $24 million over the same period by 
leveraging its EA to move its e-mail to the cloud. 
[hyperlink, http://www.gao.gov/products/GAO-06-831], 
[hyperlink, http://www.gao.gov/products/GAO-11-318SP]. 

Enhancing Understanding of the Department of Defense’s (DOD) Financial 
Challenges: 
We assisted the Congress in overseeing DOD’s financial accountability 
in the context of federal budget constraints, focusing on DOD’s 
efforts toward audit readiness of its Statement of Budgetary Resources 
by 2014. We identified internal control and other process deficiencies 
that threaten DOD’s efforts to achieve this goal, including processes 
in a key step toward auditability that used unreliable and unsupported 
data and significant problems in a component’s reported $46 billion 
payroll. Our recommendations from these and related audits are 
directed at helping DOD achieve its financial management and 
auditability goals. 
[hyperlink, http://www.gao.gov/products/GAO-12-134], 
[hyperlink, http://www.gao.gov/products/GAO-12-662R], 
[hyperlink, http://www.gao.gov/products/GAO-12-565R], 
[hyperlink, http://www.gao.gov/products/GAO-12-642T], 
[hyperlink, http://www.gao.gov/products/GAO-12-501T]. 

Identifying Needed Improvements in Acquisition Planning for Iraq and 
Afghanistan: 
The State Department (State) has relied heavily on DOD for the 
acquisition of critical goods and services to support the missions in 
Iraq and Afghanistan. In 2012, we identified planning and management 
weaknesses in contracts valued at almost $1 billion that DOD awarded 
and managed for State. We recommended that State and DOD 
comprehensively review existing and proposed interagency acquisitions 
supporting State’s missions in Iraq and Afghanistan and implement 
corrective measures. The departments agreed to do so, and this should 
improve the effectiveness and accountability of DOD acquisitions on 
State’s behalf. 
[hyperlink, http://www.gao.gov/products/GAO-12-750]. 

Improving Contract Management at Arlington National Cemetery: 
The Army’s management of Arlington National Cemetery came under 
scrutiny after burial errors and serious management deficiencies were 
discovered. In 2011, we reported on multiple contracting issues, 
including a lack of complete data on contracts supporting cemetery 
operations, and unclear roles for organizations providing contracting 
support. Without this information, cemetery officials will be unable 
to ensure the effective oversight of contracts used to support the 
cemetery’s need to serve the nation’s veterans and their families. Our 
work, highlighted in multiple hearings, has aided Congressional 
oversight of the cemetery’s management. 
[hyperlink, http://www.gao.gov/products/GAO-12-99], 
[hyperlink, http://www.gao.gov/products/GAO-12-374T], 
[hyperlink, http://www.gao.gov/products/GAO-12-436T]. 

Ensuring the Soundness of the National Aeronautics and Space 
Administration’s (NASA) Plans to Sustain the International Space 
Station: 
In 2010, the Congress authorized the extension of the International 
Space Station program through 2020. NASA must use sophisticated 
analytical techniques and judgments to assess the reliability of key 
components, the health of systems that affect safety, and the ability 
to deliver spare parts. In 2011, we replicated aspects of NASA’s 
assessments, comparing them to those used for other complex 
structures. We found that the process NASA used is commonly accepted 
within the risk assessment community and provides reasonable assurance 
that NASA is taking the steps necessary to ensure space station use 
through 2020. 
[hyperlink, http://www.gao.gov/products/GAO-11-519R], 
[hyperlink, http://www.gao.gov/products/GAO-12-162]. 

Improving the Department of Housing and Urban Development’s (HUD) IT 
Management: 
In March and May 2012, we noted that HUD had made progress in 
implementing our prior recommendations on modernizing its IT 
environment (e.g., developing new systems, replacing paper processes) 
and that its plan for spending funds on modernization efforts 
satisfied statutory conditions. A report from a congressional 
committee responsible for HUD’s appropriations highlighted our 
continual audits as having contributed to improvements in HUD’s IT 
management. Specifically, HUD had taken steps to establish key 
management controls, such as enterprise architecture, investment 
management, and strategic planning. 
[hyperlink, http://www.gao.gov/products/GAO-12-654], 
[hyperlink, http://www.gao.gov/products/GAO-12-580T]. 

Adopting a Crosscutting Approach to Improve Federal Government 
Performance: 
Many federal efforts, such as ensuring food safety and providing 
homeland and economic security, require effective collaboration by 
more than one agency, level of government, or sector. Our past work 
has highlighted challenges agencies face when attempting to work 
collaboratively, and how effective implementation of the Government 
Performance and Results Act of 1993 could improve collaboration to 
achieve meaningful results. The Congress used our work in crafting the 
GPRA Modernization Act of 2010, which established a new crosscutting 
framework aimed at taking a more integrated approach to improving 
government performance. 
[hyperlink, http://www.gao.gov/products/GAO-04-38], 
[hyperlink, http://www.gao.gov/products/GAO-05-927], 
[hyperlink, http://www.gao.gov/products/GAO-06-15], 
[hyperlink, http://www.gao.gov/products/GAO-08-1026T], 
[hyperlink, http://www.gao.gov/products/GAO-09-1011T]. 

Analyzing the Varying Results of Key Federal/Non-Federal Pay 
Comparisons: 
Congressional policy has long held that pay for federal workers under 
the General Schedule aligns with pay for comparable nonfederal 
workers. Recent studies comparing compensation of federal workers to 
those in other sectors came to different conclusions about which group 
of employees is paid more, as well as the size of the disparities. We 
reported in 2012 that the conclusions varied because the studies used 
different approaches, methods, and data, so the conclusions should not 
be used in isolation to answer how federal pay and compensation 
compares with other sectors. Our work has helped inform the Congress 
and others interested in federal pay reform. 
[hyperlink, http://www.gao.gov/products/GAO-12-564]. 

Assessing Integrated Master Schedules: 
We published an exposure draft of the Schedule Assessment Guide in 
2012 to provide federal and other government program officers with a 
consistent methodology for developing, managing, and evaluating 
schedules for capital programs. A well-planned schedule is a 
fundamental management tool that can help government programs use 
public funds effectively by specifying when work will be performed in 
the future and measuring program performance against an approved plan. 
The guide presents scheduling best practices that should be able to 
better heighten the accountability of capital programs. 
[hyperlink, http://www.gao.gov/products/GAO-12-120G]. 

Designing Useful Program Evaluations: 
We updated our methodology guide, “Designing Evaluations,” in 2012 to 
help us and other agencies’ evaluators identify and use appropriate 
methods to study the performance of government programs. The guide 
identifies different types of evaluation approaches, key steps in 
designing studies, and issues evaluators should consider to help 
ensure study quality. Our evaluators have used the guidance to assess 
how other agencies have evaluated their own programs’ effectiveness. 
Several agencies and organizations, such as the Office of Personnel 
Management, have cited our guide as useful advice for planning high 
quality program evaluations. 
[hyperlink, http://www.gao.gov/products/GAO-12-208G]. 

Source: GAO. 

[End of Table 17: Goal 3 Accomplishments and Contributions] 

[End of Strategic Goal 3] 

Strategic Goal 4: Maximize the Value of GAO by Enabling Quality, 
Timely Service to the Congress and by Being a Leading Practices 
Federal Agency: 

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 two internal management challenges. 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. 

[Text box: Examples of Work under Goal 4: 
We implemented cost-savings measures by reducing our physical 
infrastructure footprint. Specifically, we piloted expanded telework 
and added office sharing and hoteling in two field offices that 
reduced our physical footprint and furthered our efforts to provide 
work-life balance opportunities for employees. Our recent agreements to
add two additional field offices to the pilot and schedule the 
additional field offices for implementation will result in significant 
economic benefits associated with space-related costs and improved 
flexibility for our staff. We also identified a new tenant and 
successfully negotiated a 10-year memorandum of agreement to occupy 
space in our headquarters building; and we moved the Personnel Appeals 
Board (PAB) back into our building, eliminating rent and security 
costs associated with the off-site location. 
We developed a robust analytical business tool that links multiple 
datasets to one authoritative database to enable timely and accurate 
tracking, reporting, and projecting of staff resources and costs by 
coordinating information related to salary and benefits with full-time 
equivalents and payroll cost projections. End of text box] 

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 [hyperlink, 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 Financial Management and Business Operations, Human 
Capital, Information Systems and Technology Services, Infrastructure 
Operations, the Professional Development Program, and Field 
Operations. Assistance on specific key efforts is provided by the 
Applied Research and Methods team, and other offices, including 
Strategic Planning and External Liaison, Congressional Relations, 
Opportunity and Inclusiveness, Audit Policy and Quality Assurance, 
Public Affairs, and General Counsel. To accomplish our work under 
these four objectives, we performed internal studies and completed 
projects that further the strategic goal. As shown in table 6 on page 
38, our internal operations for services and functions that help 
employees get their jobs done and improve the quality of their work 
life were rated by our staff with scores of 3.98 and 3.99 respectively 
on a five-point scale. 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: 

Enhancing Support for Conducting, Managing, and Reporting on Our Work: 
Consistent, repeatable processes. To consolidate and streamline 
essential engagement management functions that rely on three outdated, 
stand-alone systems, we deployed phase 1 of a new Engagement 
Management System (EMS), which is expected to save staff time when 
locating key engagement-related information and eliminate the need to 
store information multiple times in other databases. Over the next 
year, EMS will begin to subsume the remaining two legacy systems. This 
transformational effort will help us establish standardization and 
consistency across the organization to gain significant efficiency 
advantages while improving our management reporting and operational 
execution. We also launched the Product Metadata Repository (PMR), 
whose capabilities include publishing to multiple output formats and 
enhanced searching across all product types and content, positioning 
us to realize efficiencies via consistent, repeatable processes for 
creating and formatting electronic reports and other publication 
formats. 
Workflow. To reduce the administrative and environmental burden 
associated with paper-based reviews prior to issuance, our Office of 
Congressional Relations transitioned to a new electronic report review 
process for our unclassified products. We also consolidated 
information that was spread across many locations on our internal 
website and in our document repository into a single web page on our 
intranet to further facilitate analysts’ ability to quickly find 
critical engagement-related information. 
Communication and outreach. To continue expansion of our digital and 
social media presence, we released the GAO iPhone application, 
providing quick access to a range of our reports and legal decisions; 
launched streaming-video web chats with the public; posted our 100th 
audio podcast, cumulatively exceeding 250,000 podcast downloads in 
fiscal year 2012; implemented web analytics to better understand how 
visitors to [hyperlink, http://www.GAO.gov] use the site; and 
conducted web usability testing to further enhance that understanding 
with feedback from actual users. Our Office of Public Affairs is 
sharing our successful social media outreach efforts and is briefing 
other federal agencies on using social media to inform key audiences 
and the public. 

Monitoring Factors Affecting the Federal Government and Demands for 
Our Work: 
Workload. To address the challenge of significant resource 
constraints, the Comptroller General met with 42 Chairs and Ranking 
Members of standing committees to glean their opinion of our work, 
which is extremely positive across the board, and to emphasize the 
need to prioritize committee requests for us to respond to the highest 
priority needs. As a result, while we continue to be highly engaged on 
significant issues facing the Congress and the nation, our outreach 
efforts yielded a reduction in our total requests and mandates for 
fiscal year 2012 by more than 8 percent from fiscal year 2010 levels. 
In addition, the Senate recently passed a bill to revise or repeal 
eight GAO mandates. We are working with the House to do the same. Five 
other mandates were also modified in this Congress in bills that have 
already passed, and an additional eight revisions or repeals are in 
other bills that are currently under consideration. 
Internal efficiencies. We instituted biweekly review meetings, led by 
our Chief Operating Officer and attended by audit team representatives 
and other stakeholders, to discuss a consolidated list of all 
potential mandates requiring congressional consultation. We created a 
database for our Office of Congressional Relations that allows us to 
track and compare information on outcomes from one Congress to the 
next, and to provide teams expanded information on the status of the 
legislation and examples where the potential mandate is repeated in 
other legislative vehicles. 

Enhance Recruitment, Development, Retention, and Rewards: 

Strengthening Recruiting Initiatives to Attract a Diverse Workforce: 
Recruitment. Limited by constrained resources, we took steps to fill, 
as needed, critical positions. We also worked to identify highly 
qualified candidates to address our succession plan needs, and 
attracted and hired a highly diverse group of candidates. We 
maintained relationships within our higher-education network from 
which we seek assistance and advice on acquiring the best students. We 
established the Human Capital Strategic Leadership Board to update our 
process for maintaining recruiting relationships. We also implemented 
a formal Student Volunteer Program that encourages interest in public 
service careers, introduces students to GAO, and provides valuable 
work experiences that support students’ learning goals. The program is 
integrated with our workforce planning process and includes consistent 
and transparent processes for requesting, approving, and monitoring 
student volunteers. Twenty-three students from 11 colleges and 
universities participated in the program both in headquarters and four 
field office locations in fiscal year 2012. 
Development and retention. To ensure succession planning at our 
highest ranks and bolster our senior executive pool, we selected 12 
candidates to participate in this year’s Executive Candidate 
Assessment and Development Program. To enhance their readiness, we 
revised their training options and augmented their on-the-job special 
assignments. We recently announced the beginning of another candidate 
selection program to further enhance our executive corps. To retain 
highly qualified staff agencywide, we provided an annual promotion 
cycle and promoted staff at all levels. 

Improving Our Performance Management Systems: 
To continue our commitment to ensuring fairness and equity in our 
performance management process, we developed new performance 
competencies, standards, and related management processes based on 
employee feedback, working group analyses, and survey data. These new 
streamlined competencies and validated standards will be the basis for 
our performance framework for fiscal year 2013. This multi-year effort 
has resulted in a system designed by our people for our people, and is 
expected to address many of the concerns raised about our performance 
appraisal system over the years. 

Enhancing Efforts to Develop the Workforce: 
Financial literacy. To raise awareness, empower staff, and improve 
access to information on personal financial matters, we launched an 
agencywide financial literacy initiative that included a speakers’ 
series featuring five experts who presented to more than 550 staff on 
topics such as retirement planning and saving for college; an internal 
website with links to information on personal finance and external 
education resources; and three pilot training courses with about 200 
staff, which addressed federal benefits and financial planning for 
employees in different stages of their careers. We also have met with 
other federal agencies to learn about their programs and to identify 
best practices and opportunities for collaboration. 
Professional development. To continue to develop and support staff 
outside of their primary assignments, we launched a new mentoring 
framework that offers 6- and 9-month options and uses a streamlined, 
web-based application and matching process. We completed a range of 
virtual-learning activities to headquarters, field offices, and 
telework locations in support of our mobile workforce. 
Work-life balance. We delivered 17 seminars on topics such as stress 
management and parenting, and facilitated five employee support groups 
reaching more than 300 employees. 

Supporting an Unbiased Environment That Values Opportunity and 
Inclusiveness: 
Governance. To continue our commitment to ensuring an inclusive and 
inviting workplace, we created a Human Capital Governance Board 
responsible for establishing agencywide human capital objectives; 
monitoring strategies to ensure our business needs are met; and 
leading initiatives related to diversity and inclusion, learning, 
recruitment and hiring, pay, and other human capital-related endeavors. 
Learning. We completed agencywide delivery of Part II of our diversity 
training, which required units to implement self-established plans for 
improving inclusion, communication, and collaboration, and added three 
new elective workshops on this topic to our curriculum. To broaden 
supervisors’ understanding of their legal responsibilities, we offered 
two new courses-—The Americans with Disabilities Act and The 
Prevention of Sexual Harassment Workshop for GAO Managers. 
Accessibility. Under the direction of the newly appointed full-time 
Disability Program Manager, we improved our processing, tracking, and 
reporting on reasonable accommodations in support of our employees. We 
began issuing quarterly reports that enabled us to benchmark our 
progress in providing reasonable accommodations and meeting the needs 
of disabled employees. We responded to over 200 cases with a much 
improved processing time. In addition, we ensured that our intranet 
content meets 508 compliance standards through a formalized process 
for creating and posting accessible PDF files and added a dedicated 
web page on accessibility compliance to our website. 

Expand Networks, Collaborations, and Partnerships: 

Enhancing Professional Accounting and Auditing Standards: 
Training. After we revised the Government Auditing Standards in 2011, 
we provided extensive training through numerous professional audit 
conferences to enhance understanding and implementation of the extent 
and nature of the revisions. We also collaborated with other standards-
setting organizations (e.g., the American Institute of CPAs and the 
Institute of Internal Auditors) to help assure the consistent 
convergence of emerging standards on quality audits and audit 
reporting. 
Outreach. We participated as a member of the international peer review 
team reviewing the performance audit function of the Supreme Audit 
Institution of India. We presented sessions on professional accounting 
and auditing standards as part of the 2012 Biennial Forum of 
Government Auditors meeting. The domestic public sector audit 
community will be able to view videos of these sessions via the 
Intergovernmental Audit Forum website. 

Enhancing Information Sharing and Collaboration with Others to Expand 
Audit Knowledge: 
Information sharing. We organized and hosted a joint meeting of the 
INTOSAI Working Group on Public Debt and Global Financial Crisis Task 
Force that resulted in identifying areas of collaboration. We hosted 
major study visits for counterparts from Jordan, Russia, the United 
Kingdom, China, and South Africa on such topics as performance 
auditing and procurement reform. 
Collaboration. Our Chief Operating Officer and the Oregon State 
Auditor are co-chairing the task force responsible for updating the 
National Intergovernmental Audit Forum’s strategic plan. 

Human, Information, Fiscal, Technological, and Physical Resources: 

Proactively Protecting Physical and Information Security: 
To replace an antiquated, stand-alone security system, we finalized 
the design for a system that will facilitate the monitoring and 
assessment of field office security from a centralized, headquarters-
based location. At the request of the Internal Revenue Service (IRS), 
we established Secure Data Transfer, a capability that enables secure 
and reliable electronic transmission of IRS documents and data 
requested by our analysts. 

Leveraging Technology to Achieve Business Process Improvement and 
Efficiency Gains: 
Workplace tools. We implemented HR Connect as the authoritative source 
of personnel records to electronically capture nearly all human 
capital functions and processes in the employee life cycle from hiring 
to separation from the agency, eliminating the manually intensive, 
paper-based system. We upgraded to and trained employees in new 
versions of word-processing and e-mail software. We provided enhanced 
tools such as desktop video-conferencing equipment, voice over 
Internet Protocol (VOIP), and a web-based work space reservation 
system to support employees participating in expanded telework. We 
replaced our outdated and costly-to-maintain mechanical mail metering 
systems with an online software system, reducing costs and providing 
real-time tracking of postage-related expenditures. We used an 
electronic software program in headquarters to identify vacant 
workspace, report headcount by team or floor, and facilitate move 
management, replacing a time-consuming manual process. 
Internet access. To facilitate employees’ use of online accessibility 
software and to allow visitors to more readily connect to the Internet 
when leading meetings, we created wireless hotspots in both 
headquarters and field offices. To expedite employees’ ability to 
perform full-text searches of our products, we added this capability 
to our intranet’s search engine, allowing one-stop searching for all 
publicly available reports, legal decisions, testimonies, and special 
publications. 

Improving Management of Key Administrative Processes: 
Time-work reporting. To optimize resource management and better 
enhance the linkage between the cost of our work and employees’ 
reporting of time, we streamlined our job code structure and 
supporting electronic systems, and published revised agencywide job 
code guidance. 
Automated efficiencies. To reduce the human capital burden associated 
with several manual processes, we instituted automated systems to 
purge electronic records according to our records management retention 
schedule and improved the use of our automated hiring solutions system 
to eliminate redundant data entry, increase data accuracy, and 
streamline workflow processes. We upgraded our budget tracking 
software to provide greater reporting capabilities, enhanced site 
administrator security privileges, and completed integration with the 
Federal Procurement Registration System to report all awards over 
$3,000. 
Training. To enhance our contracting program and ensure consistent and 
accurate contract oversight agencywide, we established a three-tier 
certification program that better reflects the important role of the 
Contracting Officer Representative (COR) and recognizes that CORs 
manage contracts that involve varying degrees of risk. The 
requirements include competency-based core training and assignment-
specific training to achieve Level I certification, and additional 
training and experience requirements for Level II and III 
certification. To date, we have certified a total of 73 staff as COR-
eligible and ensured that all active contracts are managed by a 
certified COR. 

Enhancing Information-sharing and Collaboration with Internal Employee 
Organizations: 
We successfully reached agreement with IFPTE, Local 1921, on many 
important initiatives. We reached agreement on an enhanced telework 
policy in conjunction with a work space sharing initiative in two 
field offices to decrease infrastructure costs and enhance flexibility 
for employees. As a result, office space in both locations has 
officially been turned back to the General Services Administration 
(GSA), decreasing our lease costs. We successfully negotiated the next 
two field office pilots and the schedule and plan for rolling out the 
pilot throughout our field offices. We collaborated with both IFPTE 
and the Employee Advisory and Diversity Advisory Committees to create 
a new internal website, accessible to all employees, dedicated to 
further promoting diversity and inclusion. Further, we reached a 
successful agreement to proceed with our newly designed performance 
appraisal system. We also welcomed the establishment of a new 
bargaining unit with the GAO Employee’s Organization, IFPTE, Local 
1921, for our administrative professional and support staff. 

Source: GAO. 

[End of Table 18: Goal 4 Accomplishments and Contributions] 

[End of Strategic Goal 4] 

Data Quality: 

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. 

[End of Part II: Performance Information] 

Part III: Financial Information: 

From the Chief Financial Officer: 

November 15, 2012: 

The Performance and Accountability Report (PAR) is the main mechanism 
for us to report on our financial operations and provide transparency 
and accountability to the American people. The financial statements 
included in the PAR demonstrate our sound stewardship for the
taxpayers’ dollars entrusted to us. 

I am pleased to report that we received an unqualified “clean” opinion 
on our fiscal year 2012 consolidated financial statements for the 26th 
consecutive year. More importantly, our independent auditors noted no 
significant deficiencies in internal control and no compliance issues. 
The financial statements that follow were prepared, audited, and made 
publicly available as an integral part of this PAR 45 days after the 
end of the fiscal year. Our fiscal year 2011 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, and a Best in Class 
Award for providing the “Most Comprehensive and Candid Presentation of 
Forward Looking Information” in our PAR. 

Like most federal agencies, our operations were strained by the fiscal 
challenges facing the nation, with significant reductions enacted in 
our funding levels during fiscal years 2010 and 2011. Operating within 
these challenges we continued actions to reduce administrative 
expenses, streamline our operations, and leverage technology to 
improve the efficiency and effectiveness of our operations. For 
example, during fiscal year 2012 we began optimizing our physical 
footprint, both in headquarters and the field. In the field we 
implemented an extended telework pilot and began using hoteling 
arrangements similar to the private sector. In headquarters, we 
strategically optimized office space that enabled us to attract a new
tenant and that will begin to generate revenue to help offset our 
costs in fiscal year 2013. In addition, we began expanding the use of 
technology, such as desktop videoconferencing, to help reduce travel 
costs and enhance communication across distances, both internally and
with other agencies. These initiatives are expected to generate 
significant long-term financial benefits for us. 

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 established Secure Data Transfer, an IRS-
requested capability that enables secure and reliable electronic 
transmission of IRS documents and data requested by our analysts. We 
eliminated unnecessary system constraints in a key management system 
by launching a new Engagement Management System (EMS) that provides 
all staff access to key engagement-related information such as scanned
copies of request and acceptance letters used to develop the agendas 
for our meetings where we review and accept incoming engagement 
requests and mandates. Open access to this information is expected to 
save staff time when locating key information at the start of an 
engagement, and eliminate the need to store these documents multiple 
times in other databases. Over the next 12 months, EMS will begin to 
subsume the functions currently performed by two other legacy systems 
and will result in substantial time-saving benefits to analysts and 
managers. 

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 performs the bulk of our daily transaction 
processing. Our Financial Management Office will begin working with 
ESC in fiscal year 2013 to upgrade Oracle Federal Financials to the 
version 12 platform. During fiscal year 2013 in collaboration with 
ESC, we will begin to implement the latest eGov Travel System recently 
awarded by the General Services Administration. These upgrades are 
expected to provide us with improved reporting capabilities and 
tracking of travel expenditures. 

In the area of internal controls, although not required by law to do 
so, we continue to perform testing consistent with the Office of 
Management and Budget Circular A-123, Management’s Responsibility for 
Internal Control. This year we tested all key business cycles such as 
financial reporting and payroll. To ensure the integrity of financial 
transactions data and that appropriate levels of authorizations 
occurred, we tested the life-cycle of transactions from initial 
request and procurement, through receipt of the goods and services to 
payment. We also reviewed the independent auditors’ reports of the 
“Design and Operating Effectiveness of Controls” for our service 
providers to ensure that we were able to proactively address any 
issues with appropriate compensating controls. 

In addition, we revamped our Contracting Officer’s Representative 
(COR) program, establishing a risk-based certification program 
consistent with Office of Federal Procurement Policy guidance. The 
program better reflects the important role of the COR in the 
procurement process and recognizes that CORs manage contracts that 
involve varying degrees of risk. The certification program is designed 
to promote continued development of essential business and technical 
competencies for CORs. The requirements include competency-based core 
training and assignment-specific training to achieve Level I 
certification, and additional training and experience requirements for 
Level II and III certifications. As of September 30, 2012, all of our 
active contracts had a certified COR assigned to manage the contract. 

All of these efforts contributed to our independent auditors providing 
a favorable opinion on the effectiveness of our internal controls 
again this year. Going forward, we will continue to implement 
important initiatives throughout the agency to improve the performance 
of our operations and the accountability of our employees. By focusing 
on measured results we can further our ability to meet the highest 
priority needs of the Congress and maintain the quality, timeliness 
and usefulness of our reports, testimonies, briefings and other 
products and services. 

Signed by: 

David M. Fisher: 
Chief Financial Officer: 

[End of 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 
(GAO) financial operations. As part of that responsibility, the 
Committee meets with agency management, its Inspector General, and its 
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 Inspector General 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 Inspector General 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 2012 Performance and Accountability 
Report. 

Signed by: 

Judith H. O’Dell CPA CVA:
Chair:
Audit Advisory Committee: 

[End of Audit Advisory Committee’s Report] 

Independent Auditor’s Report: 

CliftonLarsonAllen LLP: 
[hyperlink, http://www.cliftonlarsonallen.com] 
        
Independent Auditor’s Report: 

Comptroller General of the United States: 

We have audited the accompanying balance sheets of the Government 
Accountability Office (GAO) as of September 30, 2012 and 2011, and the 
related statements of net cost and changes in net position, and the 
statements of budgetary resources (“financial statements”) for the 
years then ended. The objective of our audit was to express an opinion 
on the fairness of these financial statements. We have also examined GAO
’s internal control over financial reporting, and GAO’s compliance 
with applicable requirements of the Federal Financial Management 
Improvement Act of 1996 (FFMIA). In connection with our audit, we also 
considered GAO’s compliance with selected provisions of laws and 
regulations. In our audit, 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 (U.S.); 

* 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); and; 

* No reportable noncompliance with selected provisions of laws and 
regulations tested. 

The following sections discuss in more detail (1) these conclusions, 
(2) Management’s Discussion and Analysis (MD&A) and other accompanying 
information, (3) management’s responsibility for the financial 
statements, and (4) our responsibility for the audit. 

Opinion on Financial Statements: 

In our opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of GAO as of 
September 30, 2012 and 2011, and its net costs; changes in net 
position; and budgetary resources for the years then ended in 
conformity with accounting principles generally accepted in the U.S. 

Opinion on Internal Control: 

In our opinion, GAO maintained, in all material respects, effective 
internal control over financial reporting as of September 30, 2012, 
that provided reasonable assurance that misstatements, losses, or 
noncompliance material in relation to the financial statements would 
be prevented or detected and corrected on a timely basis. Our opinion 
is based on criteria established under 31 U.S.C. 3512 (c), (d), the 
Federal Managers’ Financial Integrity Act (FMFIA). 

We noted certain nonreportable matters that we communicated to GAO 
management in a separate letter dated November 9, 2012. 

Opinion on FFMIA Compliance: 

In our opinion, GAO’s financial management systems, as of September 
30, 2012, 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 
U.S., and the SGL. 

Compliance with Laws and Regulations: 

In connection with our audit, we performed tests of GAO’s compliance 
with selected provisions of laws and regulations. The results of our 
tests for fiscal year 2012 disclosed no instances of noncompliance 
that are required to be reported in accordance with Government 
Auditing Standards, issued by the Comptroller General of the United 
States. However, the objective of our audit was not to provide an 
opinion on compliance with laws and regulations except for FFMIA 
referred to above. Accordingly, we do not express such an opinion. 

This conclusion on laws and regulations is intended solely for the 
information and use of GAO’s management, Audit Advisory Committee and 
Office of Inspector General, OMB, and the U.S. Congress, and is not 
intended to be, and should not be, used by anyone other than these 
specified parties. 

Other Information: 

Accounting principles generally accepted in the U.S. require that 
GAO’s MD&A included as Part I of the Performance and Accountability 
Report (PAR) be presented to supplement the financial statements. Such 
information, although not a part of the financial statements, is 
required by the Federal Accounting Standards Advisory Board, which 
considers it to be an essential part of financial reporting for 
placing the financial statements in an appropriate operational, 
economic, or historical context. We have applied certain limited 
procedures to the MD&A in accordance with auditing standards generally 
accepted in the U.S., which consisted of inquiries of management about 
the methods of preparing the information and comparing the information 
for consistency with management's responses to our inquiries, the 
financial statements, and other knowledge we obtained during our audit 
of the financial statements. We do not express an opinion or provide 
any assurance on the information because the limited procedures do not 
provide us with sufficient evidence to express an opinion or provide 
any assurance. 

Other information included in the PAR, other than the basic financial 
statements, MD&A, and the auditor’s report, is presented for 
additional analysis and is not a required part of the basic financial 
statements. Such information has not been subjected to the auditing 
procedures applied in the audit of the basic financial statements, and 
accordingly, we do not express an opinion or provide any assurance on 
it. 

Management’s Responsibility for the Financial Statements: 

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 U.S., (2) assets are 
safeguarded against loss from unauthorized acquisition, use, or 
disposition, and (3) transactions are executed in accordance with laws 
and regulations that could have a direct and material effect on the 
financial statements. 

Management is responsible for (1) preparing the financial statements 
in conformity with accounting principles generally accepted in the 
U.S., (2) preparing and presenting other information in documents 
containing the audited financial statements and auditor’s report, and 
ensuring the consistency of that information with the audited 
financial statements, (3) designing, implementing, and maintaining 
effective internal control over financial reporting, and evaluating 
its effectiveness, (4) ensuring that GAO’s financial management 
systems substantially comply with FFMIA requirements, and (5) 
complying with applicable laws and regulations. GAO management 
evaluated the effectiveness of GAO’s internal control over financial 
reporting as of September 30, 2012, based on criteria established 
under FMFIA. GAO management’s assertion is included in the 
Introduction section of the PAR. 

Auditor’s Responsibility: 

We are responsible for conducting our audits in accordance with 
auditing standards generally accepted in the U.S.; the standards 
applicable to the financial audits contained in Government Auditing 
Standards, issued by the Comptroller General of the United States. We 
are responsible for planning and performing the audit to obtain 
reasonable assurance and provide our opinion about whether (1) the 
financial statements are presented fairly, in all material respects, 
in conformity with accounting principles generally accepted in the 
U.S., (2) GAO management maintained, in all material respects, 
effective internal control over financial reporting as of September 
30, 2012, and (3) GAO’s financial management systems substantially 
comply with the three FFMIA requirements. We are also responsible for 
(1) testing compliance with selected provisions of laws and 
regulations that have a direct and material effect on the financial 
statements and applicable laws for which OMB Bulletin 07-04, Audit 
Requirements for Federal Financial Statements, as amended (OMB 
Bulletin 07-04), requires testing, and (2) performing limited 
procedures with respect to other information appearing in the 
published PAR. 

In order to fulfill these responsibilities, we (1) examined, on a test 
basis, evidence supporting the amounts and disclosures in the 
financial statements; (2) assessed the appropriateness of the 
accounting policies used and the reasonableness of significant 
estimates made by management; (3) evaluated the overall presentation 
of the financial statements; (4) obtained an understanding of GAO and 
its operations, including its internal control over financial 
reporting; (5) assessed the risk that a material misstatement exists 
in the financial statements and that a material weakness exists in 
internal control over financial reporting; (6) evaluated the design 
and operating effectiveness of internal control over financial 
reporting based on the assessed risk; (7) tested the operating 
effectiveness of relevant internal control over financial reporting; 
(8) considered GAO’s process for evaluating and reporting on internal 
control over financial reporting under FMFIA and financial management 
systems under FFMIA; (9) tested whether GAO’s financial management 
systems substantially complied with the three FFMIA requirements 
referred to above; (10) tested compliance with selected provisions of 
the laws and regulations; (11) read the other information included 
with the financial statements in order to identify material 
inconsistencies, if any, with the audited financial statements; and 
(12) performed such other procedures as we considered necessary in the 
circumstances. The procedures selected depend on the auditors’ 
judgment, including our assessment of risks of material misstatement 
of the financial statements, whether due to fraud or error. 

We did not evaluate all internal controls relevant to operating 
objectives as broadly defined by FMFIA, such as those controls 
relevant to preparing statistical reports and ensuring efficient
operations. We limited our internal control testing to controls over 
financial reporting and compliance. Because of inherent limitations in 
internal control, misstatements due to error or fraud, losses, or 
noncompliance may nevertheless occur and not be detected. We also 
caution that projecting our audit results to future periods is subject 
to risk that controls may become inadequate because of changes in 
conditions or that the degree of compliance with controls may 
deteriorate. 

We did not test compliance with all laws and regulations applicable to 
GAO. We limited our tests of compliance to selected provisions of laws 
and regulations that have a direct and material effect on the 
financial statements and those required by OMB Bulletin 07-04 that we 
deemed applicable to GAO’s financial statements for the fiscal year 
ended September 30, 2012. We caution that noncompliance with laws and 
regulations may occur and not be detected by these tests and that such 
testing may not be sufficient for other purposes. Also, our work on 
FFMIA would not necessarily disclose all instances of noncompliance 
with FFMIA requirements. 

We performed our audit in accordance with government auditing 
standards generally accepted in the U.S. We believe that our audit 
provides a reasonable basis for our opinions and conclusions. 

Signed by: 

CliftonLarsonAllen LLP: 

Calverton, Maryland: 
November 9, 2012: 

[End of Independent Auditor's Report] 

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. 

[End of Purpose of Each Financial Statement] 

The accompanying notes are an integral part of these statements. 

Financial Statements: 
U.S. Government Accountability Office: 
Balance Sheets As of September 30, 2012 and 2011 (Dollars in 
thousands): 

Assets: 

Intragovernmental: Funds with the U.S. Treasury (Note 3); 
2012: $85,341; 
2011: $84,253. 

Intragovernmental: Accounts receivable; 
2012: $5,138; 
2011: $3,820. 

Total Intragovernmental: 
2012: $90,479; 
2011: $88,073. 

Property and equipment, net (Note 4): 
2012: $31,388; 
2011: $36,745. 

Other: 
2012: $578; 
2011: $504. 

Total Assets: 
2012: $122,445; 
2011: $125,322. 

Liabilities: 

Intragovernmental: Accounts payable and other; 
2012: $5,619; 
2011: $7,700. 

Intragovernmental: Advances from others (Note 8); 
2012: $2,233; 
2011: $588. 

Intragovernmental: Employee benefits (Note 6); 
2012: $4,380; 
2011: $4,632. 

Intragovernmental: Workers' compensation (Note 7); 
2012: $2,637; 
2011: $2,554. 

Total Intragovernmental: 
2012: $14,869; 
2011: $15,474. 

Accounts payable and other: 
2012: $10,834; 
2011: $17,249. 

Salaries and benefits (Note 6): 
2012: $22,288; 
2011: $24,375. 

Accrued annual leave (Note 5): 
2012: $31,067; 
2011: $32,241. 

Workers' compensation (Note 7): 
2012: $15,959; 
2011: $16,181. 

Capital leases (Note 9): 
2012: $2; 
2011: $23. 

Note payable (Note 5): 
2012: $2,198; 
2011: $2,931. 

Total Liabilities: 
2012: $97,217; 
2011: $108,474. 

Net Position: 

Unexpended appropriations: 
2012: $31,496; 
2011: $29,701. 

Cumulative results of operations: 
2012: ($6,268);
2011: ($12,853). 

Total Net Position (Note 13): 
2012: $25,228; 
2011: $16,848. 

Total Liabilities and Net Position: 
2012: $122,445; 
2011: $125,322. 

[End of Balance Sheets] 

Financial Statements: 
U.S. Government Accountability Office: 
Statements of Net Cost For Fiscal Years Ended September 30, 2012 and 
2011: 

Net Costs by Goal (Note 2): 

Goal 1: Well-being/Financial Security of American People: 
2012: $216,771; 
2011: $239,330. 

Less: reimbursable services;
2012: ($1,169); 
2011: ($2,089). 

Net goal costs; 
2012: $215,602; 
2011: $237,241. 

Goal 2: Changing Security Threats/Challenges of Global Interdependence: 
2012: $132,581; 
2011: $141,270. 

Less: reimbursable services;
2012: 0; 
2011: 0. 

Net goal costs;
2012: $132,581; 
2011: $141,270. 

Goal 3: Transforming the Federal Government’s Role;
2012: $161,839; 
2011: $168,884. 

Less: reimbursable services;
2012: ($21,659); 
2011: ($12,006). 

Net goal costs;
2012: $140,180; 
2011: $156,878. 

Goal 4: Maximize the Value of GAO;
2012: $18,555; 
2011: $19,865. 

Less: reimbursable services;
2012: 0; 
2011: 0. 

Net goal costs;
2012: $18,555; 
2011: $19,865. 

Other Costs in Support of the Congress;
2012: $25,672; 
2011: $22,600. 

Less: reimbursable services;
2012: ($1,205);
2011: ($1,205). 

Net goal costs;
2012: $24,467; 
2011: $21,395. 

Less: reimbursable services not attributable to above cost categories;
2012: ($7,253);
2011: ($7,152). 

Net Cost of Operations (Note 10): 
2012: $524,132; 
2011: $569,497. 

[End of Statements of Net Cost] 

Financial Statements: 
U.S. Government Accountability Office: 
Statements of Changes in Net Position: 
For Fiscal Years Ended September 30, 2012 and 2011 (Dollars in 
thousands): 

Cumulative Results of Operations, Beginning of fiscal year: 
2012: ($12,853);
2011: ($17,544). 

Budgetary Financing Sources - Appropriations used;
2012: $505,633; 
2011: $543,327. 

Other Financing Sources: 

Federal employee retirement benefit costs paid by OPM and imputed to 
GAO (Note 6);
2012: $25,084; 
2011: $30,861. 

Total Financing Sources;
2012: $530,717; 
2011: $574,188. 

Net Cost of Operations;
2012: ($524,132);
2011: ($569,497). 

Net Change;
2012: $6,585 
2011: $4,691. 

Cumulative Results of Operations, End of fiscal year:
2012: ($6,268);
2011: ($12,853). 

Unexpended Appropriations, Beginning of fiscal year:
2012: $29,701; 
2011: $28,531. 

Budgetary Financing Sources and Uses: 

Current year appropriations received; 
2012: $511,296; 
2011: $547,349. 

Appropriations transferred in (Note 11);
2012: $250; 
2011: 0. 

Appropriations permanently not available;
2012: ($4,118);
2011: ($2,852). 

Appropriations used;
2012: ($505,633);
2011: ($543,327). 

Total Unexpended Appropriations, End of fiscal year:
2012: $31,496; 
2011: $29,701. 

Net Position:
2012: $25,228; 
2011: $16,848. 

[End of Statements of Changes in Net Position] 

Financial Statements: 
U.S. Government Accountability Office: 
Statements of Budgetary Resources: 
For Fiscal Years Ended September 30, 2012 and 2011 (Dollars in 
thousands): 

Budgetary Resources (Note 11): 

Unobligated balance, brought forward October 1;
2012: $18,894; 
2011: $10,838. 

Recoveries of prior year unpaid obligations;
2012: $10,509; 
2011: $7,361. 

Other changes in unobligated balance;
2012: ($4,118);
2011: ($1,757). 

Unobligated balance from prior year budget authority, net;
2012: $25,285; 
2011: $16,442. 

Appropriations;
2012: $511,296; 
2011: $546,254. 

Transfers in;
2012: $250; 
2011: 0. 

Spending authority from offsetting collections;
2012: $37,967; 
2011: $28,821. 

Total Budgetary Resources:
2012: $574,798; 
2011: $591,517. 

Status of Budgetary Resources: 

Obligations incurred;
2012: $542,804 
2011: $572,623. 

Unobligated balance, end of year: 

Apportioned;
2012: $9,737; 
2011: $8,479. 

Unapportioned;
2012: $22,257; 
2011: $10,415. 

Unobligated balance, end of year;
2012: $31,994; 
2011: $18,894. 

Total Status of Budgetary Resources;
2012: $574,798; 
2011: $591,517. 

Change in Obligated Balances: 

Obligated balance, net: 

Unpaid obligated balance, brought forward October 1;
2012: $73,783; 
2011: $78,264. 

Uncollected customer payments from federal sources, brought forward 
October 1;
2012: ($8,413);
2011: ($846). 

Total, unpaid obligation, net, brought forward October 1;
2012: $65,370; 
2011: $77,418. 

Obligations incurred;
2012: $542,804; 
2011: $572,623. 

Gross outlays;
2012: ($538,665);
2011: ($569,743). 

Change in uncollected customer payments from federal sources;
2012: ($5,650);
2011: ($7,567). 

Recoveries of prior-year unpaid obligations, actual;
2012: ($10,509);
2011: ($7,361). 

Obligated balance, net, end of year: 

Unpaid obligations, end of year;
2012: $67,413; 
2011: $73,783. 

Uncollected customer payments from federal sources;
2012: ($14,063);
2011: ($8,413). 

Obligated balance, net, end of year;
2012: $53,350; 
2011: $65,370. 

Budget Authority and Outlays, Net: 

Budget authority, gross; 
2012: $549,513; 
2011: $576,170. 

Actual offsetting collections; 
2012: ($32,317);
2011: ($21,254). 

Change in uncollected customer payments from federal sources; 
2012: ($5,650);
2011: ($7,567). 

Budget authority, net; 
2012: $511,546; 
2011: $547,349. 

Outlays, gross; 
2012: $538,665; 
2011: $569,743. 

Actual offsetting collections; 
2012: ($32,317);
2011: ($21,254). 

Outlays, net; 
2012: $506,348; 
2011: $548,489. 

[End of Statements of Budgetary Resources] 

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). 
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 Davis-
Bacon Act trust’s assets, related liabilities, revenues, and costs 
related to beneficiary payments are not those of GAO and therefore are 
not included in the accompanying financial statements. See Note 14, 
Davis-Bacon Act Trust Function. 

Basis of Accounting: 

GAO’s financial statements have been prepared on the accrual basis and 
the budgetary basis of accounting in conformity with generally 
accepted accounting principles for the federal government. 
Accordingly, revenues are recognized when earned and expenses are 
recognized when incurred, without regard to the receipt or payment of 
cash. These principles differ from budgetary reporting principles. The 
differences relate primarily to the capitalization and depreciation of 
property and equipment, as well as the recognition of other long-term 
assets and liabilities. The statements were also prepared in 
conformity with OMB Circular A-136, Financial Reporting Requirements, 
as amended. 

Assets: 

Intragovernmental assets are those assets that arise from transactions 
with other federal entities. Funds with the U.S. Treasury comprise the 
majority of intragovernmental assets on GAO’s balance sheets. 

Funds with the U.S. Treasury: 

The U.S. Treasury processes GAO’s receipts and disbursements. Funds 
with the U.S. Treasury represent appropriated funds Treasury will 
provide to pay liabilities and to finance authorized purchase 
commitments. 

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 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 Statements of Net Cost have been 
reclassified to conform to the current year presentation. See Note 10 
for further discussion. 

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, 2012, and September 30, 
2011, are as follows: 

Dollars in thousands: 

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

Intragovernmental costs; 
2012: $52,140; 
2011: $56,252. 

Public costs; 
2012: $164,631; 
2011: $183,078. 

Total goal 1 costs; 
2012: $216,771; 
2011: $239,330. 

Goal 1 intragovernmental earned revenue; 
2012: ($1,169); 
2011: ($2,089). 

Net goal 1 costs: 
2012: $215,602; 
2011: $237,241. 

Goal 2: Changing Security Threats/Challenges of Global Interdependence: 

Intragovernmental costs; 
2012: $31,896; 
2011: $33,733. 

Public costs; 
2012: $100,685; 
2011: $107,537. 

Total goal 2 costs: 
2012: $132,581; 
2011: $141,270. 

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

Intragovernmental costs; 
2012: $43,266; 
2011: $36,100. 

Public costs; 
2012: $118,573; 
2011: $132,784. 

Total goal 3 costs: 
2012: $161,839; 
2011: $168,884. 

Goal 3 intragovernmental earned revenue; 
2012: ($21,659); 
2011: ($12,006). 

Net goal 3 costs: 
2012: $140,180; 
2011: $156,878. 

Goal 4: Maximize the Value of GAO: 

Intragovernmental costs; 
2012: $3,516; 
2011: $5,368. 

Public costs; 
2012: $15,039; 
2011: $14,497. 

Total goal 4 costs; 
2012: $18,555; 
2011: $19,865. 

Other costs in support of the Congress: 

Intragovernmental costs; 
2012: $24,779; 
2011: $22,402. 

Public costs; 
2012: $893; 
2011: $198. 

Total other costs; 
2012: $25,672; 
2011: $22,600. 

Related intragovernmental earned revenue; 
2012: ($1,205); 
2011: ($1,205). 

Net other costs; 
2012: $24,467; 
2011: $21,395. 

Earned revenue not attributable to above cost categories: 

Intragovernmental; 
2012: ($7,023); 
2011: ($6,983). 

Public; 
2012: ($230); 
2011: ($169). 

Total earned revenue not attributable to above cost categories: 
2012: ($7,253); 
2011: ($7,152). 

[End of Table: Intragovernmental and Public Costs and Exchange Revenue] 

Goals 2 and 4 have no associated intragovernmental revenues and all 
public earned revenue collected is not attributable to goals or other 
costs. 

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, 2012, and September 30, 2011, is as follows: 

Dollars in thousands: 

Unobligated balance: 

Available: 
2012: $9,737; 
2011: $8,479. 

Unavailable: 
2012: $22,254; 
2011: $10,404. 

Obligated balances not yet disbursed: 
2012: $53,350; 
2011: $65,370. 

Total funds with U.S. Treasury: 
2012: $85,341; 
2011: $84,253. 

[End of Table: Funds with the U.S. Treasury] 

Note 4. Property and Equipment, Net: 

The composition of property and equipment as of September 30, 2012, is 
as follows: 

Dollars in thousands: 

Classes of property and equipment: Building; 
Acquisition value: $15,664; 
Accumulated depreciation: $15,038; 
Book value: $626. 

Classes of property and equipment: Land; 
Acquisition value: $1,191; 
Accumulated depreciation: 0; 
Book value: $1,191. 

Classes of property and equipment: Building improvements; 
Acquisition value: $125,336; 
Accumulated depreciation: $104,716; 
Book value: $20,620. 

Classes of property and equipment: Computer and other equipment and 
software; 
Acquisition value: $62,686; 
Accumulated depreciation: $53,799; 
Book value: $8,887. 

Classes of property and equipment: Leasehold improvements; 
Acquisition value: $4,345; 
Accumulated depreciation: $4,281; 
Book value: $64. 

Total property and equipment: 
Acquisition value: $209,222; 
Accumulated depreciation: $177,834; 
Book value: $31,388. 

Depreciation expense for property and equipment for fiscal year 2012 
amounted to $8,419,000. 

The composition of property and equipment as of September 30, 2011, is 
as follows: 

Dollars in thousands: 

Classes of property and equipment: Building; 
Acquisition value: $15,664; 
Accumulated depreciation: $14,411; 
Book value: $1,253. 

Classes of property and equipment: Land; 
Acquisition value: $1,191; 
Accumulated depreciation: 0; 
Book value: $1,191. 

Classes of property and equipment: Building improvements; 
Acquisition value: $122,900; 
Accumulated depreciation: $100,825; 
Book value: $22,075. 

Classes of property and equipment: Computer and other equipment and 
software; 
Acquisition value: $62,922; 
Accumulated depreciation: $50,814; 
Book value: $12,108. 

Classes of property and equipment: Leasehold improvements; 
Acquisition value: $4,340; 
Accumulated depreciation: $4,222; 
Book value: $118. 

Classes of property and equipment: Total property and equipment; 
Acquisition value: $207,017; 
Accumulated depreciation: $170,272; 
Book value: $36,745. 

Depreciation expense for property and equipment for fiscal year 2011 
amounted to $10,125,000. 

[End of Table: Property and Equipment, Net] 

Note 5. Liabilities Not Covered by Budgetary Resources: 

The liabilities on GAO’s balance sheets as of September 30, 2012, and 
September 30, 2011, 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, 2012, and September 30, 2011, is as 
follows: 

Dollars in thousands: 

Intragovernmental liabilities-—Workers’ compensation: 
2012: $2,637; 
2011: $2,554. 

Salaries and benefits—-Comptrollers’ General retirement plan[A]: 
2012: $1,386; 
2011: $1,431. 

Accrued annual leave: 
2012: $31,067; 
2011: $32,241. 

Workers’ compensation[B]: 
2012: $15,959; 
2011: $16,181. 

Note payable: 
2012: $2,198; 
2011: $2,931. 

Total liabilities not covered by budgetary resources: 
2012: $53,247; 
2011: $55,338. 

[A] See Note 6 for further discussion of the Comptrollers’ General 
retirement plan. 

[B] See Note 7 for further discussion of workers’ compensation. 

[End of Table: Liabilities Not Covered by Budgetary Resources] 

In fiscal year 2011 GAO 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 
2013 through 2015 with annual payments, including interest, of 
approximately $733,000. 

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, 
2012, and September 30, 2011, are $4,380,000 and $4,632,000, 
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, 2012, and September 30, 
2011, are as follows: 

Dollars in thousands: 

Federal employee benefits costs: 

Federal employee retirement benefit costs paid by OPM and imputed to 
GAO: 

Estimated future pension costs (CSRS/FERS);
2012: $9,519; 
2011: $13,444. 

Estimated future postretirement health and life insurance (FEHBP/FEGLI);
2012: $15,565; 
2011: $17,417. 

Total: 
2012: $25,084; 
2011: $30,861. 

Pension expenses (CSRS/FERS): 
2012: $36,538; 
2011: $37,971. 

Health and life insurance expenses (FEHBP/FEGLI): 
2012: $20,434; 
2011: $20,640. 

FICA and Medicare payments made by GAO: 
2012: $19,788; 
2011: $20,762. 

Thrift Savings Plan – matching contribution by GAO: 
2012: $12,937; 
2011: $13,188. 

[End of Table: Federal Employee Benefits] 

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 
$1,386,000 as of September 30, 2012, and $1,431,000 as of September 
30, 2011, is included as a component of salary and benefit liabilities 
on GAO’s balance sheets. The following summarizes the changes in the 
actuarial liability for current plan year: 

Dollars in thousands: 

Actuarial liability as of September 30, 2011: $1,431. 

Expense: Interest on the liability balance: $57. 

Expense: Actuarial loss: 
From experience: $34; 
From assumption changes: $34. 

Total gain: $125; 
Less benefits paid: ($170); 
Actuarial liability as of September 30, 2012: $1,386. 

[End of table] 

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, 2012, and 
September 30, 2011, which is expected to be paid in future periods. 
This estimated liability of $15,959,000 and $16,181,000 as of 
September 30, 2012, and September 30, 2011, respectively, is reported 
on GAO’s balance sheets. GAO also recorded a liability for amounts 
paid to claimants by DOL as of September 30, 2012, and September 30, 
2011, of $2,637,000 and $2,554,000, 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: 

In fiscal year 2011 GAO entered into a 10-year lease agreement with 
U.S. Army Corps of Engineers (USACE) 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. 

In fiscal year 2012 GAO entered into a new 10-year lease with the 
Department of Justice (DOJ) to lease part of the first and sixth 
floors of the GAO headquarters building. The period of this new lease 
begins in fiscal year 2012 with an option to renew each year through 
fiscal 2022. The space will be ready for occupancy in fiscal year 
2013. In fiscal year 2012, GAO received $2,175,000 from DOJ as advance 
payment for construction which as of September 30, 2012, had not been 
completed. The balance sheet reflects this payment as the majority of 
the intragovernmental liability line “Advances from others” in fiscal 
year 2012. 

Rent received from USACE by GAO for fiscal years 2012 and 2011 was 
$6,852,000 and $6,845,000, respectively. These amounts are included in 
reimbursable services shown on the statements of net cost as 
“reimbursable services not attributable to above cost categories.” 
Total rental revenue for the future periods from both USACE and DOJ is 
as follows: 

Dollars in thousands: 

Fiscal year ending September 30, 2013: 
Total projected receipts[A]: $8,559. 

Fiscal year ending September 30, 2014: 
Total projected receipts[A]: $9,178. 

Fiscal year ending September 30, 2015: 
Total projected receipts[A]: $9,283. 

Fiscal year ending September 30, 2016: 
Total projected receipts[A]: $9,395. 

Fiscal year ending September 30, 2017: 
Total projected receipts[A]: $9,507. 

Fiscal years ending September 30, 2018-2022: 
Total projected receipts[A]: $33,644. 

Total: 
Total projected receipts[A]: $79,566. 

[A] If option years are exercised. 

[End of Table: Building Leases] 

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, 
2012, and September 30, 2011, the capital lease liability was $2,000 
and $23,000, respectively. In fiscal year 2012, GAO paid off balances 
of the majority of these capital 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 fiscal year 2013. GAO 
has estimated future minimum lease payments under the terms of the 
leases in fiscal year 2013 of $2,000. 

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 2012 and 
fiscal year 2011 amounted to approximately $12,670,000 and 
$12,619,000, 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 current terms of the leases are 
presented in the table below. We anticipate that renegotiations 
underway will result in reductions of future lease payments. 

Dollars in thousands: 

Fiscal year ending September 30, 2013: 
Total: $8,081. 

Fiscal year ending September 30, 2014: 
Total: $6,059. 

Fiscal year ending September 30, 2015: 
Total: $4,419. 

Fiscal year ending September 30, 2016: 
Total: $2,936. 

Fiscal year ending September 30, 2017: 
Total: $2,982. 

Fiscal years ending September 30, 2018 and thereafter: 
Total: $2,565. 

Total estimated future lease payments: 
Total: $27,042. 

[End of Table: Capital Leases] 

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 in the statements of net cost. 

Note 10. Net Cost of Operations: 

Expenses for salaries and related benefits for fiscal year 2012 and 
fiscal year 2011 amounted to $426,429,000 and $467,064,000, 
respectively, about 81 and 82 percent of GAO’s net cost of operations 
for fiscal years 2012 and 2011, respectively. Included in the net cost 
of operations are federal employee benefit costs paid by OPM and 
imputed to GAO of $25,084,000 in fiscal year 2012 and $30,861,000 in 
fiscal year 2011. 

Revenues from reimbursable services are shown as an offset against the 
full cost to arrive at net cost. Earned revenues that are 
insignificant or cannot be associated with a major goal or other cost 
category 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 2012 and fiscal year 2011 
amounted to $31,286,000 and $22,452,000, 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. 

In fiscal year 2012, “Other costs in support of the Congress” were 
separately disclosed on the Statement of Net Costs. This new cost 
category presentation represents costs of work which directly supports 
Congress and which represents GAO’s fulfillment of its statutory 
responsibilities but which is not engagement specific. Examples of 
this work include support of the Federal Accounting Standards Advisory 
Board, General Counsel statutory procurement activities, 
recommendation follow up work and other direct support to Congress. 
Prior year amounts were reclassified to conform to the current year 
presentation. Previously, this work was not separately disclosed but 
rather was allocated to the other cost categories. 

Note 11. Budgetary Resources: 

Budgetary resources available to GAO during fiscal year 2012 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. 

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 components of 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. 

Fiscal years 2012 budgetary resources include $250,000 of budget 
authority transfer to GAO’s Inspector General Office to carry out the 
duties of the Inspector General of the Commission on Civil Rights. 
During fiscal year 2011 there were no transfers of budget authority. 

Comparison of GAO’s fiscal year 2011 statement of budgetary resources 
with the corresponding information presented in the 2013 President’s 
Budget is as follows: 

Dollars in thousands: 

Fiscal year 2011 statement of budgetary resources: 
Budgetary resources: $591,517; 
Obligations incurred: $572,623. 

Unobligated balances, beginning of year – (funds activity, expired 
accounts): 
Budgetary resources: ($4,037); 
Obligations incurred: 0. 

Recovery of prior year unpaid obligations: 
Budgetary resources: ($7,361); 
Obligations incurred: 0. 

Obligations incurred – expired years: 
Budgetary resources: 0; 
Obligations incurred: ($4,819). 

Permanently not available –(funds activity, expired accounts): 
Budgetary resources: $1,757; 
Obligations incurred: 0. 

Spending authority from offsetting collections (funds activity, 
expired accounts): 
Budgetary resources: ($2,154); 
Obligations incurred: 0. 

Other – rounding in President’s Budget: 
Budgetary resources: $278; 
Obligations incurred: $196. 

2013 President’s Budget – fiscal year 2011, actual: 
Budgetary resources: $580,000; 
Obligations incurred: $568,000. 

[End of Table: Budgetary Resources] 

As the fiscal year 2014 President’s Budget will not be published until 
February 2013, a comparison between the fiscal year 2012 data 
reflected on the statement of budgetary resources and fiscal year 2012 
data in the President’s Budget cannot be performed, though we expect 
similar differences will exist. The fiscal year 2014 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 2012 and the end of fiscal year 2011 totaled $25,682,000 
and $21,269,000, respectively. GAO’s apportionments fall under 
Category A, quarterly apportionment. Apportionment categories of 
obligations incurred for fiscal years 2012 and 2011 are as follows: 

Dollars in thousands: 

Direct – Category A: 
Fiscal year ending September 30, 2012: $521,026; 
Fiscal year ending September 30, 2011: $550,308. 

Reimbursable – Category A: 
Fiscal year ending September 30, 2012: $21,778; 
Fiscal year ending September 30, 2011: $22,315. 

Total obligations incurred: 
Fiscal year ending September 30, 2012: $542,804; 
Fiscal year ending September 30, 2011: $572,623. 

[End of table] 

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, 2012 and 
2011, are as follows: 

Dollars in thousands: 

Resources used to finance activities: 

Budgetary resources obligated: 

Obligations incurred: 
Fiscal year ending September 30 2012: $542,804; 
Fiscal year ending September 30 2011: $572,623. 

Less: spending authority from offsetting collections and recoveries; 
Fiscal year ending September 30 2012: ($48,476); 
Fiscal year ending September 30 2011: ($36,182). 

Obligations net of offsetting collections and recoveries;
Fiscal year ending September 30 2012: $494,328; 
Fiscal year ending September 30 2011: $536,441. 

Other resources: 

Federal employee retirement benefit costs paid by OPM imputed to GAO;
Fiscal year ending September 30 2012: $25,084; 
Fiscal year ending September 30 2011: $30,861. 

Net other resources used to finance activities;
Fiscal year ending September 30 2012: $25,084; 
Fiscal year ending September 30 2011: $30,861. 

Total resources used to finance activities;
Fiscal year ending September 30 2012: $519,412; 
Fiscal year ending September 30 2011: $567,302. 

Resources used to finance items not part of the net cost of operations: 

Change in undelivered orders and unfilled customer orders;
Fiscal year ending September 30 2012: $1,560; 
Fiscal year ending September 30 2011: $8,432. 

Net (decrease)/increase in lease liability and other;
Fiscal year ending September 30 2012: ($754); 
Fiscal year ending September 30 2011: $317. 

Assets capitalized:
Fiscal year ending September 30 2012: ($3,268); 
Fiscal year ending September 30 2011: ($14,057). 

Net decrease/(increase) in receivables not generating resources until 
collected and other adjustments:
Fiscal year ending September 30 2012: $119; 
Fiscal year ending September 30 2011: ($154). 

Total resources used to fund items not part of the net cost of 
operations:
Fiscal year ending September 30 2012: ($2,343); 
Fiscal year ending September 30 2011: ($5,462). 

Total resources used to finance net cost of operations;
Fiscal year ending September 30 2012: $517,069; 
Fiscal year ending September 30 2011: $561,840. 

Components of net costs that will not require or generate resources in 
the current period: 

(Decrease)/increase in workers’ compensation;
Fiscal year ending September 30 2012: ($139); 
Fiscal year ending September 30 2011: $898. 

Decrease in accrued annual leave;
Fiscal year ending September 30 2012: ($1,173); 
Fiscal year ending September 30 2011: ($2,937). 

Decrease in other liabilities;
Fiscal year ending September 30 2012: ($45); 
Fiscal year ending September 30 2011: ($447). 

Total components of net costs that will not (generate) or require 
resources in the current period;
Fiscal year ending September 30 2012: ($1,357); 
Fiscal year ending September 30 2011: ($2,486). 

Costs that do not require resources: 

Depreciation and other;
Fiscal year ending September 30 2012: $8,420; 
Fiscal year ending September 30 2011: $10,143. 

Net cost of operations;
Fiscal year ending September 30 2012: $524,132; 
Fiscal year ending September 30 2011: $569,497. 

[End of Table: Reconciliation of Net Costs of Operations to Budget] 

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, 2012, and 2011, are as follows: 

Dollars in thousands: 

Investment in property and equipment, net: 
2012: $31,388; 
2011: $36,745. 

Net reimbursable funds activity: 
2012: $15,093; 
2011: $5,355. 

Other – supplies inventory and accounts receivable from public: 
2012: $498; 
2011: $385. 

Liabilities not covered by budgetary resources: 
2012: ($53,247); 
2011: ($55,338). 

Cumulative results of operations: 
2012: ($6,268); 
2011: ($12,853). 

[End of Table: Net Position] 

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, 2012 and 2011, totaled approximately $4,726,000 and 
$5,037,000, 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 $806,000 in fiscal year 2012 and $1,264,000 in 
fiscal year 2011. 

Other Accompanying Information: 

Consistent with OMB Circular No. A-136 requirements, we are including 
a new unaudited Schedule of Spending (Schedule) in Other Accompanying 
Information for the year ended September 30, 2012 following our 
audited financial statements and notes. The Schedule presents an 
overview of how we are spending money on a budgetary basis, and is not 
meant to agree to the cost information on the Statement of Net Cost, 
which presents accrual based proprietary information. The data used to 
populate the Schedule is the same underlying data used to populate the 
Statement of Budgetary Resources. The amounts in the Schedule agree 
with the budgetary resources, obligations incurred, and gross outlays 
reported in the Statement of Budgetary Resources. 

U.S. Government Accountability Office: 
Schedule of Spending for the Fiscal Year Ended September 30, 2012: 
(Dollars in thousands): 

Unaudited: 

2012 

What Money is Available to Spend? 

Direct appropriations: $511,296. 
Offsetting collections: $37,967. 
Recoveries and other changes in prior year unobligated balances: 
$25,285. 
Transfers in from other agencies: $250. 

Total Resources: $574,798. 
Less: amount available but not agreed to be spent: ($9,737). 
Less: amount not available to be spent: ($22,257). 

Total Amounts Agreed to be Spent: $542,804. 

How was the Money Spent? 

Direct Funds: 
Personnel: 
Salaries and benefits: $416,127. 
Training: $3,478. 

Operations: 
IT services and equipment: $52,054. 
Buildings and equipment: $18,875. 
Travel: $7,071. 
Contractual services (non-IT): $20,620. 

Total Direct Funds Spending: $518,225. 

Reimbursable Funds: 

Personnel: 
Salaries and benefits: $12,278. 
Training: 0. 

Operations: 
IT services and equipment: 0. 
Buildings and equipment: $7,578. 
Travel: $517. 
Contractual services (non-IT): $67. 

Total Reimbursable Funds Spending: $20,440. 

Total Spending: $538,665. 
Amounts remaining to be spent: $4,139. 
Total Amounts Agreed to Be Spent: $542,804. 

[End of table: Schedule of Spending for the Fiscal Year Ended 
September 30, 2012] 

[End of Notes to Financial Statements] 

[End of Part III: Financial Information] 

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

Inspector General’s View of GAO’s Management Challenges: 

Office of the Inspector General: 
United States Government Accountability Office: 

Date: October 11, 2012: 

To: Comptroller General Gene L. Dodaro: 

From: [Signed by] Inspector General Frances Garcia: 

Subject: GAO Management Challenges: 

Based on our work and institutional knowledge, we agree that GAO faces 
challenges in (1) ensuring that it has the high-performing and agile 
workforce (human capital) needed to carry out its mission and (2) 
improving its capacity to effectively and efficiently produce quality 
work in support of the Congress (engagement efficiency). 

Our recent audit[Footnote 1] of the Human Capital Office’s controls 
over recruitment, relocation, and retention incentives identified 
needed improvements in its maintenance of appropriate supporting 
documentation; provision of additional guidance to human capital staff 
to ensure proper, timely, and accurate execution and recording of 
administrative actions; and provision of effective monitoring and 
oversight. In addition, we identified an opportunity for GAO to help 
ensure that incentive payments support agency recruitment and 
retention goals by establishing a clear agency-wide strategy and 
results-oriented performance measures for these payments. We made 
seven recommendations to help ensure consistency and adherence to GAO 
policy related to recruitment, relocation, and retention and to better 
align the use of these incentives with strategic human capital and 
workforce planning goals and objectives; and one recommendation to 
help GAO monitor and evaluate the effectiveness of controls. 

While we have not assessed GAO’s engagement efficiency efforts, our 
recent discussions with GAO management have confirmed the significance 
of this challenge and the importance of successful efforts in 
improving GAO’s engagement efficiency. The April 2012 establishment of 
the Continuous Process Improvement Office, which organizationally 
reports to the Chief Operating Officer,is an important step toward 
providing the executive leadership and support needed to help this 
initiative succeed. 

Footnote: 

[1] OIG, Human Capital: Opportunities Exist to Strengthen Controls 
over Recruitment, Relocation, and Retention Incentives, [hyperlink, 
http://www.gao.gov/products/OIG-12-5] (Washington, D.C.: Aug. 28, 
2012). 

[End of Part IV: Inspector General’s View of GAO’s Management 
Challenges] 

Part V: Appendix on Data Quality: 

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 long-term projects, changes in tax 
laws, program terminations, or sales of government assets are limited 
to 5 years. Financial benefits can be claimed for past or future 
years. For financial benefits involving events that occur on a regular 
but infrequent basis—such as the decennial census—we may extend the 
measurement period until the event occurs in order to compute the 
associated financial benefits using our present value calculator. 
Managing directors decide when their staff can claim financial 
benefits. A managing director may choose to claim a financial benefit 
all in 1 year or 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 Audit Policy 
and Quality Assurance (APQA) for review. Once accomplishment reports 
are approved, they are entered into our Engagement Reporting System 
(ERS), which is the official reporting database. 

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 APQA, which reviews all accomplishment 
reports and approves accomplishment reports claiming benefits of $100 
million or more. In fiscal year 2012, APQA approved accomplishment 
reports covering 96 percent of the dollar value of financial benefits 
we reported. 

In fiscal year 2012, 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 2012 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 APQA for its review. Once 
accomplishment reports are approved, they are entered into ERS, which 
is the official reporting system. 

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 APQA, where it is reviewed for 
appropriateness. APQA 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-and-effect 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 cost-effective. 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 2012 
implementation rate is the percentage of recommendations made in 
fiscal year 2008 products that were implemented by the end of fiscal 
year 2012). 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. 

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 
APQA. 

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.” 

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 APQA. 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: 
APQA staff review released GAO products to check the accuracy of the 
addressee information in the APQA database. APQA staff also check the 
congressional staff directory to ensure that form recipients listed in 
the APQA 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, APQA 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 22 percent, and 99 percent of those who 
responded answered the timeliness question. We received responses from 
one or more people for about 48 percent of the products for which we 
sent a form in fiscal year 2012. 

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 (CAO) maintains a database that 
monitors and tracks all our hiring offers, declinations, and 
accessions. In coordination with our Human Capital Office, our CAO 
staff 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 CAO 
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. 

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 2012 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. We correlated each of the questions with job satisfaction and 
selected those questions with the highest correlation. 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. 

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 2012, our response rate to this survey was about 71 
percent, which indicates that its results are largely representative 
of the GAO population. In addition, many teams and work units conduct 
follow-on work to gain a better understanding of the information from 
the survey. 

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. We correlated each question with job satisfaction and selected 
those questions with the highest correlation. 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. We correlated each of the questions with job 
satisfaction and selected those questions with the highest 
correlation. 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. 

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. We correlated each of the questions with job satisfaction and 
selected those questions with the highest correlation. 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 a web-based survey annually. The customer satisfaction survey 
on administrative services, historically conducted by an outside 
contractor, was administered in-house for the first time in 2011. All 
employees were administered this survey and were encouraged to 
indicate how satisfied they are with 16 services that help them get 
their jobs done and another 14 services that affect their quality of 
work life. 

We asked staff to rate the 30 internal services available to them, 
indicating on a 5-point scale from “very dissatisfied” to “very 
satisfied”—-or to indicate if they did not use a service—-and to 
provide a written reason for their rating and recommendations for 
improvement, if desired. Based on employees’ responses to these 
questions, we calculate a composite score. 

Data sources: 
These data come from our staff’s responses to an annual web-based 
survey. To determine how satisfied our employees are with internal 
administrative services, we calculate composite scores for two 
measures. One measure reflects the satisfaction with the 16 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 14 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. Unlike the surveys in prior years, in which both the 
importance of, and satisfaction with, administrative services were 
rated, employees were asked to rate only their satisfaction with 
services, or to indicate if they did not use a service. 

Verification and validation: 
The survey this year was brought in-house for the first time and 
administered by GAO’s Web Survey Services Group, in the Applied 
Research and Methods (ARM) team. While the two managers of this unit 
could access individual responses, they complied with the privacy 
statement that was posted on the website to only provide aggregated 
data to GAO management that could not be used to identify responses of 
any individual. Our survey response rate was 63 percent in 2011. We 
analyzed responses by demographic representation (unit, tenure, 
location). 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. 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 minimizing a 
potential source of error. 

Source: GAO. 

[End of Table 19: How We Ensure Data Quality for Our Annual 
Performance Measures] 

[End of Part V: Appendix on Data Quality] 

Image Sources: 

This section contains credit and copyright information for images and 
graphics in this product, as appropriate, when that information was 
not listed adjacent to the image or graphic. 

Front cover: GAO (Capitol and GAO seal). 

Inside front cover: GAO (GAO building). 

Page i: GAO (Capitol) Pages 1, 21, 63, 93, 121, and 123: GAO (Capitol 
and GAO seal). 

Page 2: GAO (GAO building and flag). 

Page 6: GAO (GAO seal), Photodisc (Capitol). 

Page 15: Map Resources (map). 

Page 26: PhotoDisc (bills), GAO (flag). 

Page 29: GAO (flag), Photodisc (Statue of Liberty). 

Page 65: Digital Vision (School children), GAO (flag and train). 

Page 73: DOD (soldier and truck), GAO (flag). 

Page 80: PhotoDisc (computer and people), GAO (flag). 

Page 87: GAO (GAO building and flag). 

Page 94: GAO (GAO building). 

Inside back cover: GAO (GAO building). 

[End of Image Sources] 

Providing Comments on This Report: 

To provide comments for improving this report, please contact our 
Chief Quality Officer, who can be reached at (202) 512-6100, at 
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[End of section] 

Footnotes: 

[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. FFMIA emphasizes the need to improve 
federal financial management by requiring federal agencies to 
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. FISMA requires federal agencies to implement 
policies and procedures to cost-effectively reduce information 
technology risks. 

[2] In fiscal year 2011 the work performed under the Comptroller 
General’s authority represented 6 percent of our engagement resources. 

[3] GAO, The Federal Government’s Long-Term Fiscal Outlook: Spring 
2012 Update, [hyperlink, http://www.gao.gov/products/GAO-12-521SP] 
(Washington, D.C.: Apr. 2, 2012); GAO, Bid Protest Annual Report to 
the Congress for Fiscal Year 2011, [hyperlink, 
http://www.gao.gov/products/GAO-12-199SP] (Washington, D.C.: Nov. 15, 
2011); and GAO, Principles of Federal Appropriations Law: Annual 
Update of the Third Edition, [hyperlink, 
http://www.gao.gov/products/GAO-12-413SP] (Washington, D.C.: Mar. 8, 
2012). 

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

[5] A financial benefit is an estimate of the federal cost reduction 
of agency or congressional actions. 

[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. 

[7] Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712 
Note. 

[8] For fiscal years 2012 through 2016, according to a Defense 
department estimate. 

[9] Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the 
Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-
152, 124 Stat. 1029 (2010). 

[10] In comparison, there were more than 2,350 bid protests filed in 
fiscal year 2011 and nearly 2,300 in fiscal year 2010. 

[11] B-323170, July 11, 2012. 

[12] B-321982, October 11, 2011. 

[13] B-322160, October 3, 2011. 

[14] B-323157, May 21, 2012. 

[15] Note 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. 

[16] Donors are international government agencies and multilateral 
institutions that provide funds with the objective of promoting 
economic development and improving the welfare of developing countries. 

[End of Footnotes] 

[End of United States Government Accountability Office's Performance 
and Accountability Report Fiscal Year 2012]