This is the accessible text file for GAO report number GAO-07-1SP
entitled 'GAO's Strategic Plan 2007–2012' which was released on April
2, 2007.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States Government Accountability Office:
Serving the Congress and the Nation:
GAO's Strategic Plan:
2007–2012:
GAO-07-1SP:
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.
Themes:
* Changing Security Threats;
* Sustainability Concerns;
* Economic Growth & Competitiveness;
* Global Interdependency;
* Societal Change;
* Quality of Life;
* Science & Technology.
Goals and Objectives:
Provide Timely, Quality Service to the Congress and the Federal
Government to Address Current and Emerging Challenges to the Well-being
and Financial Security of the American People related to:
* Health care needs;
* Lifelong learning;
* Work benefits and protection;
* Financial security;
* Effective system of justice;
* Viable communities;
* Natural resources use and environmental protection;
* Physical infrastructure.
Respond to Changing Security Threats and the Challenges of Global
Interdependence involving:
* Homeland security;
* Military capabilities and readiness;
* Advancement of U.S. interests;
* Global market forces.
Help Transform the Federal Government's Role and How It Does Business
to Meet Twenty-first Century Challenges by assessing:
* Roles in achieving federal objectives;
* Government transformation;
* Key management challenges and program risks;
* Fiscal position and financing of the government.
Maximize the Value of GAO by Being a Model Federal Agency and a World-
Class Professional Services Organization in the areas of:
* Client and customer satisfaction;
* Strategic leadership;
* Institutional knowledge and experience;
* Process improvement
* Employer of choice.
Core Values:
* Accountability;
* Integrity;
* Reliability.
[End of section]
Table of Contents:
Abbreviations:
Letter from the Comptroller General:
Our Mission, Goals, Strategies, and Means:
Mission Statement:
Statutory Responsibilities:
Our Strategic Goals:
Key Performance Measures:
Strategies and Means:
Internal Management Challenges:
External Factors That Could Affect Our Performance:
Our Organizational Structure:
Themes Affecting the Plan: Preparing the United States for an
Interdependent World:
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 1.1: The Health Needs of an Aging and Diverse
Population:
Performance Goal 1.1.1: Evaluate Medicare Reform, Financing, and
Operations:
Performance Goal 1.1.2: Assess Trends and Issues in Private Health
Insurance Coverage:
Performance Goal 1.1.3: Assess Actions and Options for Improving VA’s
and DOD’s Health Care Services:
Performance Goal 1.1.4: Evaluate the Effectiveness of Federal Programs
to Promote and Protect the Public Health:
Performance Goal 1.1.5: Evaluate the Effectiveness of Federal Programs
to Prevent, Prepare for, and Respond to Public Health Emergencies:
Performance Goal 1.1.6: Evaluate Federal and State Program Strategies
for Financing and Overseeing Long-term Health Care:
Performance Goal 1.1.7: Assess State Experiences and Federal Oversight
in Providing Health Insurance Coverage for Low-Income Populations:
Strategic Objective 1.2: Lifelong Learning to Enhance U.S.
Competitiveness:
Performance Goal 1.2.1: Identify Opportunities to Improve Programs That
Target Federal Resources to Activities That Support Lifelong Learning:
Performance Goal 1.2.2: Assess the Effectiveness of Education and
Training Programs in Meeting the Needs of the 21st Century Workforce:
Performance Goal 1.2.3: Support Improved Oversight and Management of
Education and Training Programs:
Strategic Objective 1.3: Benefits and Protections for Workers,
Families, and Children:
Performance Goal 1.3.1: Identify Opportunities to Improve Programs That
Provide Social Services, Economic, and Nutrition Assistance to
Individuals, Families, and Children:
Performance Goal 1.3.2: Identify Ways to Improve Federal Policies and
Support for People with Disabilities:
Performance Goal 1.3.3: Assess the Effectiveness of Strategies and
Safeguards to Protect Workers, as Well as Individuals’ Identities, in
an Increasingly Complex Work and Economic Environment:
Strategic Objective 1.4: Financial Security for an Aging Population:
Performance Goal 1.4.1: Assess the Policy and Administrative Challenges
to the Federal Government in Providing for Americans’ Financial
Security in Retirement:
Performance Goal 1.4.2: Assess the Financial and Administrative
Challenges to Providing Employer-Sponsored Pensions and Retaining Older
Americans in the Workforce, and the Implications of These Challenges
for National Retirement Security:
Performance Goal 1.4.3: Assess Options and Strategies to Help
Individuals Ensure Retirement Security for Themselves and Their
Families:
Strategic Objective 1.5: Ensuring a Responsive, Fair, and Effective
System of Justice:
Performance Goal 1.5.1: Assess the Federal Justice System’s Ability to
Operate Fairly and Efficiently:
Performance Goal 1.5.2: Identify Ways to Improve Federal Agencies’
Ability to Prevent and Respond to Terrorism and Other Major Crimes:
Strategic Objective 1.6: The Promotion of Viable Communities:
Performance Goal 1.6.1: Assess Federal Community and Economic
Development Assistance and Its Impact on Communities:
Performance Goal 1.6.2: Assess the Effectiveness of Federal Initiatives
to Assist Small and Minority-Owned Businesses:
Performance Goal 1.6.3: Assess How the Federal Government Can Balance
Promoting Home Ownership and Financial Risk While Adapting to Changing
Markets and Policies:
Performance Goal 1.6.4: Assess How Well Federal Programs That Support
Affordable Rental Housing Meet Objectives, Manage Financial Risk, and
Improve Recipients’ Well-being:
Strategic Objective 1.7: Responsible Stewardship of Natural Resources
and the Environment:
Performance Goal 1.7.1 Assess the Nation’s Ability to Ensure Reliable
and Environmentally Sound Energy for Current and Future Generations:
Performance Goal 1.7.2: Assess Federal Strategies for Managing Land and
Water Resources in a Sustainable Fashion for Multiple Uses:
Performance Goal 1.7.3: Assess Environmental Protection Strategies and
Programs:
Performance Goal 1.7.4: Assess Efforts to Reduce the Threats Posed by
Hazardous and Nuclear Wastes:
Performance Goal 1.7.5: Assess Federal Programs’ Ability to Ensure a
Plentiful and Safe Food Supply, Provide Economic Security for Farmers,
and Minimize Agricultural Environmental Damage:
Strategic Objective 1.8: A Safe, Secure, and Effective National Physical
Infrastructure:
Performance Goal 1.8.1: Assess Strategies for Identifying, Evaluating,
Prioritizing, Financing, and Implementing Integrated Solutions to
the Nation’s Transportation Infrastructure Challenges:
Performance Goal 1.8.2: Assess the Impact of Transportation and
Telecommunications Policies and Practices on Competition and
Consumers:
Performance Goal 1.8.3: Assess the Federal Government’s Role in
Fostering and Overseeing Telecommunications in the Public Interest:
Performance Goal 1.8.4: Assess Efforts to Improve Safety in Moving
People and Goods across the Nation’s Transportation System:
Performance Goal 1.8.5: Assess the U.S. Postal Service’s Transformation
Efforts to Ensure Its Viability and Accomplish Its Mission:
Performance Goal 1.8.6: Assess Federal Efforts to Plan for, Acquire,
Manage, Maintain, Secure, and Dispose of the Government’s Real Property
Assets:
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 Objective 2.1: Protect and Secure the Homeland from Threats
and Disasters:
Performance Goal 2.1.1: Assess Federal Homeland Security Management,
Resources, and Coordination:
Performance Goal 2.1.2: Assess Efforts to Strengthen Border Security and
Immigration Enforcement to Enhance Homeland Security:
Performance Goal 2.1.3: Assess U.S. National Emergency Preparedness and
Response Capabilities:
Performance Goal 2.1.4: Assess Efforts to Strengthen Security in All
Transportation Modes:
Performance Goal 2.1.5: Evaluate Ways to Strengthen Government
Information Security and Protect Computer and Telecommunications
Systems That Support the Nation’s Critical Infrastructures:
Performance Goal 2.1.6: Assess Homeland Security Information and
Intelligence Sharing:
Strategic Objective 2.2: Ensure Military Capabilities and Readiness:
Performance Goal 2.2.1: Assess DOD’s Ability to Maintain Adequate
Readiness Levels While Transforming Forces and Capabilities to Meet
21st Century Challenges:
Performance Goal 2.2.2: Assess DOD’s Efforts to Respond to Emerging
Threats and Irregular Warfare:
Performance Goal 2.2.3: Assess Progress and Challenges DOD Faces in
Emphasizing Increased Joint Capabilities:
Performance Goal 2.2.4: Assess Overall Human Capital Management to
Ensure a High-Quality Total Force:
Performance Goal 2.2.5: Assess the Ability of Weapon System Acquisition
Programs and Processes to Achieve Desired Outcomes:
Performance Goal 2.2.6: Assess Progress in Improving the Economy,
Efficiency, and Effectiveness of DOD’s Support Infrastructure and
Business Systems and Processes:
Performance Goal 2.2.7: Assess the National Nuclear Security
Administration’s Efforts to Maintain a Safe and Reliable Nuclear
Weapons Stockpile:
Performance Goal 2.2.8: Analyze and Support DOD’s Efforts to Improve
Planning, Programming, Budgeting, Execution, and Program Performance:
Strategic Objective 2.3: Advance and Protect U.S. International
Interests:
Performance Goal 2.3.1: Analyze the Plans, Strategies, Roles, Costs,
and Results of the United States and Its Allies in Conflict
Interventions:
Performance Goal 2.3.2: Analyze the Effectiveness and Management of
U.S. Foreign Aid and Developmental and Humanitarian Programs and
the Tools Used to Implement Them:
Performance Goal 2.3.3: Analyze the Plans, Costs, and Outcomes of
Responding to Challenges to U.S. Strategic Interests:
Performance Goal 2.3.4: Evaluate the Extent to Which U.S. Interests Are
Effectively Served by U.S. Participation in Multilateral
Organizations:
Performance Goal 2.3.5: Assess the Strategies and Management Practices
for U.S. Foreign Affairs Functions and Activities:
Performance Goal 2.3.6: Evaluate the Effectiveness and Coordination of
U.S. International Counterterrorism Efforts:
Performance Goal 2.3.7: Assess the Effectiveness of U.S. and
International Efforts to Prevent Proliferating Nuclear, Biological,
Chemical, and Conventional Weapons and Sensitive Technologies:
Strategic Objective 2.4: Respond to the Impact of Global Market Forces
on U.S. Economic and Security Interests:
Performance Goal 2.4.1: Analyze How U.S. Interests Are Served through
Trade Agreements, U.S. Programs, and International Cooperative
Efforts:
Performance Goal 2.4.2: Improve Understanding of the Effects of a Global
Supplier Base on U.S. National Security Interests:
Performance Goal 2.4.3: Assess How the United States Can Influence
Improvements in the World Financial System:
Performance Goal 2.4.4: Assess the Ability of the Financial Services
Industry and Its Regulators to Maintain a Stable and Efficient
Financial System in the Face of Market Change and Innovation:
Performance Goal 2.4.5: Assess the Effectiveness of Regulatory Programs
and Policies in Ensuring Access to Financial Services and Deterring
Fraud and Abuse in Financial Markets:
Goal 3: Help Transform the Government by Supporting a Broad-Based
Reexamination of Federal Programs:
Strategic Objective 3.1: Reexamine the Federal Government’s Role in
Achieving Evolving National Objectives:
Performance Goal 3.1.1: Examine Emerging Challenges and Opportunities to
Position the Federal Government for the 21st Century:
Performance Goal 3.1.2: Examine the Relationships of Governmental and
Nongovernmental Organizations and the Use of Policy Tools in Achieving
National Goals:
Strategic Objective 3.2: Support the Transformation to Results-Oriented,
High-Performing Government:
Performance Goal 3.2.1: Analyze and Support Efforts to Improve the Human
Capital Infrastructure Key to Successfully Transforming the
Government:
Performance Goal 3.2.2: Assess Efforts to Improve Results-Oriented
Management Oversight across the Government:
Performance Goal 3.2.3: Identify Ways to Improve the Collection,
Dissemination, and Quality of Federal Information:
Performance Goal 3.2.4: Identify Ways to Improve Financial Management
Infrastructure Capacity to Provide Useful Information for Managing
Results and Costs Day to Day:
Performance Goal 3.2.5: Assess the Government’s Planning,
Implementation, and Use of IT to Improve Performance and Modernize
Federal Programs and Operations:
Performance Goal 3.2.6: Identify Ways to Improve How Federal Agencies
Acquire Goods and Services:
Strategic Objective 3.3: Support Congressional Oversight of Key
Management Challenges and Program Risks to Improving Federal Operations
and Ensuring Accountability:
Performance Goal 3.3.1: Highlight High-Risk Federal Programs and
Operations and Monitor Progress of Executive Branch Management
Reforms:
Performance Goal 3.3.2: Identify Ways to Strengthen Accountability for
the Federal Government’s Assets and Operations:
Performance Goal 3.3.3: Assess the Management and Results of the Federal
Investment in Science and Technology and the Effectiveness of Efforts
to Protect Intellectual Property:
Strategic Objective 3.4: Analyze the Government’s Fiscal Position and
Strengthen Approaches for Addressing the Current and Projected Fiscal
Gap:
Performance Goal 3.4.1: Analyze the Structure and Information for
Budgetary Choices and Explore Alternatives for Improvement, Including
Implications for the Long-term Fiscal Position:
Performance Goal 3.4.2: Contribute to Congressional Deliberations on
Tax Policy:
Performance Goal 3.4.3: Identify Specific Opportunities to Reduce the
Tax Gap and Improve Federal Tax Administration:
Performance Goal 3.4.4: Assess the Reliability of Financial Information
on the Government’s Fiscal Position and Financing Sources:
Goal 4: Maximize the Value of GAO by Being a Model Federal Agency and a
World-class Professional Services Organization:
Strategic Objective 4.1: Improve Client and Customer Satisfaction and
Stakeholder Relationships:
Performance Goal 4.1.1: Strengthen Communication with Congressional
Clients:
Performance Goal 4.1.2: Measure Our Clients’ Satisfaction with Our Work
and Act on Client Feedback:
Performance Goal 4.1.3: Assess Internal Customer Satisfaction with Our
Services and Processes and Implement and Measure Improvement Efforts:
Performance Goal 4.1.4: Modernize and Transform the Accountability
Profession in the Public and Private Sectors, Both Domestically and
Internationally, to Leverage Our Resources and Better Meet the
Challenges of the 21st Century:
Strategic Objective 4.2: Lead Strategically to Achieve Enhanced
Results:
Performance Goal 4.2.1: Ensure a Seamless Strategic Planning, Workforce
Planning, and Budget Process to Maximize Results and Manage Risks
within Current and Expected Resources:
Performance Goal 4.2.2: Strengthen Our Strategic Human Capital
Management to Achieve Enhanced Results:
Performance Goal 4.2.3: Ensure Exemplary Practices and Systems in Our
Fiscal Operations:
Performance Goal 4.2.4: Further Enhance IT Governance to Achieve
Strategic Results by Applying Emerging Best Practices in IT Processes
and Management:
Strategic Objective 4.3: Leverage Our Institutional Knowledge and
Experience:
Performance Goal 4.3.1: Maximize the Collection, Use, and Retention of
Essential Organizational Knowledge:
Performance Goal 4.3.2: Increase Our Knowledge-Sharing Capability:
Performance Goal 4.3.3: Enhance Knowledge Sharing with Other National
and International Accountability and Professional Organizations:
Strategic Objective 4.4: Enhance Our Business and Management
Processes:
Performance Goal 4.4.1: Streamline the Engagement Process and Improve
Engagement Services:
Performance Goal 4.4.2: Enhance the Quality, Content, and Appearance of
Our Products:
Performance Goal 4.4.3: Improve Our Administrative and Management
Processes and Use Enabling Technology to Improve Crosscutting
Processes:
Strategic Objective 4.5: Become a Professional Services Employer of
Choice:
Performance Goal 4.5.1: Promote an Environment That Is Fair and
Unbiased and That Values Opportunity and Inclusiveness:
Performance Goal 4.5.2: Provide Our Staff with Tools, Technology, and
a World-class Working Environment:
Performance Goal 4.5.3: Provide a Safe and Secure Workplace:
Performance Goal 4.5.4: Enhance Employee Views about GAO:
Performance Goal 4.5.5: Improve the Development and Experiences of
Newly Hired Staff:
Image Sources:
Abbreviations:
DHS: Department of Homeland Security:
DOD: Department of Defense:
Fannie Mae: Federal National Mortgage Association:
FEMA: Federal Emergency Management Agency:
Freddie Mac: Federal Home Loan Mortgage Corporation:
GAO: Government Accountability Office:
GDP: gross domestic product:
Ginnie Mae: Government National Mortgage Association:
GSE: government-sponsored enterprise:
HUD: Department of Housing and Urban Development:
INTOSAI: International Organization of Supreme Audit Institutions:
IRS: Internal Revenue Service:
IT: information technology:
K-12: kindergarten through 12th grade:
NNSA: National Nuclear Security Administration:
SBA: Small Business Administration:
SCHIP: State Children’s Health Insurance Program:
VA: Department of Veterans Affairs:
[End of section]
Letter from the Comptroller General:
March 2007:
In keeping with GAO’s commitment to update its strategic plan at least
once every 3 years—consistent with the Government Performance and
Results Act—this strategic plan describes our proposed goals and
strategies for serving the Congress for fiscal years 2007 through 2012.
As expected, with the Congress and the nation facing such challenges as
the large and growing long-term fiscal imbalance and increased concerns
about meeting the health care needs of American citizens, this plan
includes bodies of work that address anticipated requests for
evaluations of those and other major issues. In addition, our plan
covers anticipated work related to major government transformation
efforts, especially in the areas of homeland security and defense.
Since our last update to the strategic plan, many challenges continue
and others have emerged. For example, the war on terrorism has
continued, as has the nation’s involvement in Iraq and the ensuing
reconstruction effort that is still unfolding. Hurricanes Katrina and
Rita and predictions of an influenza pandemic have raised the nation’s
awareness of nonmilitary threats to homeland security. Historic budget
deficits have added to our country’s national debt. Perhaps more
disturbing is that our nation’s long-range fiscal outlook remains
unsustainable given existing federal commitments and the challenges of
caring for a growing elderly population. Consequently, policymakers
will be increasingly required to judge what the nation can afford, both
now and in the future. In addition, national boundaries are becoming
less relevant to policymakers as they address a range of economic,
security, social, and environmental issues. At the same time, the
composition of our nation’s population is becoming older and more
diverse, resulting in a virtual kaleidoscope of demands for federal
funds and services. Scientific research and technological developments
provide opportunities to improve the lives of U.S. citizens but also
raise profound ethical questions for society. Accompanying these
changes are new expectations about the quality of life for Americans
and the ways of measuring the nation’s position and progress.
Governance structures are evolving in order to contend with these new
forces and an accelerating pace of change. These broad themes—changing
security threats, sustainability concerns, economic growth and
competitiveness, global interdependence, societal change, quality of
life, and science and technology—provide the context for our plan.
The broad goals and objectives of our plan have not altered
dramatically since our last plan, but events such as the continuing war
in Iraq and recent and predicted natural disasters account for some
modifications in emphasis. Also, we have retained our goal of becoming
a model agency and world-class professional services organization—a
goal that remains as vital to us as ever. To ensure that our plan
reflects evolving congressional and national needs, we solicited input
on the plan from members of the Congress and their staffs, our sister
congressional agencies—the Congressional Budget Office and the
Congressional Research Service, the inspectors general, state and local
government audit organizations, and other key accountability
organizations. We are dedicated to our mission of serving the Congress
and our nation and to achieving results that are unmatched by any other
accountability organization in the world. By working together, leading
by example, and focusing on our results, we hope to continue to improve
our performance and strengthen the GAO brand name both domestically and
internationally. If you would like to know more about specific areas of
our work, detailed performance and accountability information is
available on our Web site at [hyperlink, http://www.gao.gov/sp.html].
If you have questions about the strategic plan, please contact me at
(202) 512-5500 or walkerd@gao.gov or Gene L. Dodaro, Chief Operating
Officer, at (202) 512-5600 or dodarog@gao.gov.
Signed by:
David M. Walker:
Comptroller General of the United States:
[Image: Picture of a Bald Eagle]
Source: See Image Sources.
[End of image]
Our Mission, Goals, Strategies, and Means:
[Image: Picture of the U. S. Capitol Building]
Source: See Image Sources.
[End of image]
Mission Statement:
The Government Accountability Office (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.
Statutory Responsibilities:
Through the Budget and Accounting Act of 1921, the Congress established
GAO with the broad role of investigating “all matters relating to the
receipt, disbursement, and application of public funds” and to “make
recommendations looking to greater economy or efficiency in public
expenditures.” Since World War II, the Congress has clarified and
expanded that original charter in the following ways:
* The Government Corporation Control Act of 1945 provided GAO the
authority to audit the financial transactions of government
corporations.
* The Budget and Accounting Procedures Act of 1950 assigned GAO
responsibility for establishing accounting standards for the federal
government and carrying out audits of internal controls and financial
management.
* The Legislative Reorganization Act of 1970 expressly authorized GAO
to conduct program evaluations and analyses of a broad range of federal
activities.
* The General Accounting Office Act of 1980 reiterated GAO’s authority
to obtain agency and other records needed for its investigations and
evaluations and added the authority for GAO to enforce its access
rights in court.
* The Chief Financial Officers Act of 1990 and the Government
Management Reform Act of 1994 authorized GAO to audit agencies’
financial statements and annually audit the consolidated financial
statements of the United States.
* Numerous other laws complement GAO’s basic audit and evaluation
authorities, including the Congressional Budget and Impoundment Control
Act of 1974, which provided for GAO review of reported or unreported
impoundments; the Inspector General Act of 1978, which provided for GAO-
established standards for the audit of federal programs and activities;
and the Competition in Contracting Act of 1984, which provided for
GAO’s review of protested federal contracting actions.
At GAO, we implement our statutory responsibilities by engaging in a
range of oversight, insight, and foresight activities that span the
full breadth and scope of federal activities and programs. We publish
thousands of reports and other documents annually and provide a number
of other related services. By making recommendations to improve the
practices and operations of government agencies, we contribute not only
to the increased effectiveness of and accountability for federal
spending, but also to the enhancement of the taxpayers’ trust and
confidence in their federal government. We also look at national and
international trends and challenges to anticipate their implications
for public policy.
Our Strategic Goals:
To accomplish our mission, we use a strategic planning and management
framework that is based on a hierarchy of four elements (see fig. 1),
beginning at the highest level with the following four strategic
goals:
* Strategic Goal 1: Provide Timely, Quality Service to the Congress and
the Federal Government to Address Current and Emerging Challenges to
the Well-being and Financial Security of the American People:
* Strategic Goal 2: Provide Timely, Quality Service to the Congress and
the Federal Government to Respond to Changing Security Threats and the
Challenges of Global Interdependence:
* Strategic Goal 3: Help Transform the Government by Supporting a Broad-
Based Reexamination of Federal Programs:
* Strategic Goal 4: Maximize the Value of GAO by Being a Model Federal
Agency and a World-class Professional Services Organization.
Figure 1: Our Strategic Planning Hierarchy:
This figure depicts four stacked blocks, indicating the following, from
bottom to top:
* Key efforts (300+);
* Performance goals (93);
* Strategic objectives (21);
* Strategic goals (4).
[End of figure]
Our work is primarily aligned under the first three strategic goals,
which span issues that are both domestic and international, affect the
lives of all Americans, and influence the extent to which the federal
government serves the nation’s current and future interests. The fourth
goal is our only internal one and is aimed at maximizing our
productivity through such efforts as investing steadily in information
technology (IT) to support our work; ensuring the safety and security
of our people, information, and assets; pursuing human capital
transformation; and leveraging our knowledge and experience.
Each of our strategic goals is further defined by strategic objectives,
performance goals, and key efforts. The strategic objectives and
performance goals provide progressively more detailed descriptions of
what we plan to achieve. Each key effort outlines a body of work that
supports a performance goal. The performance goals and key efforts
described later in this strategic plan cover areas in which we plan to
complete work by the end of fiscal year 2009.
Key Performance Measures:
We primarily use quantitative performance measures to assess progress
in achieving our strategic goals and objectives. Collectively, these
measures help demonstrate the degree to which we (1) provide timely,
quality service to the Congress and the federal government so that they
can respond to current and emerging challenges and (2) help the
government meet 21st century challenges by transforming its role and
its ways of doing business. To assess our progress toward achieving our
strategic goals and their objectives, we use a variety of quantitative
measures, which are described in table 1. We set performance targets
for all of these quantitative measures annually and compare our actual
performance with the targets.
We publish annual performance and accountability reports that describe
our progress in achieving our performance measures. These are available
on our Web site, [hyperlink, http://www.gao.gov/sp.html]. We are
continuing to refine our measures, working toward a balanced set of
measures that evaluate performance based on four key perspectives: our
results, our clients, our people, and our internal operations.
Table 1: Annual Quantitative Performance Measures:
Measure: Financial benefits;
Description: Benefits to the federal government that can be estimated
in dollar terms (e.g., decreased costs, increased revenues, or revenues
made available for other purposes) that result in improved services to
the public, improved statutes or regulations, or improved government
business operations that occurred because of work that we completed
over the past several years.
Measure: Nonfinancial benefits;
Description: Benefits to the federal government that cannot be
estimated in dollar terms that result in improved services to the
public, improved statutes or regulations, or improved government
business operations that occurred because of work that we completed
over the past several years.
Measure: Past recommendations implemented;
Description: Of the recommendations made 4 fiscal years prior to the
current fiscal year, the percentage of recommendations that were
implemented.
Measure: Percentage of products with recommendations;
Description: Of the written products issued in the fiscal year, the
percentage that included at least one recommendation. Not all products
that we issue during the fiscal year contain recommendations—some
provide the Congress with policy options or are purely informational.
Measure: Testimonies;
Description: The number of hearings at which we presented testimony.
Measure: Timeliness;
Description: From a survey sent to our congressional clients for our
more significant written products, the percentage that indicated the
product was delivered on time.
Measure: New hire rate;
Description: The ratio of the number of people hired to the number we
planned to hire.
Measure: Acceptance rate;
Description: The ratio of the number of applicants accepting offers to
the number of offers made.
Measure: Retention rate;
Description: The ratio of the number of people who did not leave GAO
during the fiscal year to the average number of people on board during
the year. (Retention rate is the inverse of attrition rate.) We examine
two calculations of retention rate—one that includes retirees and one
that excludes retirees.
Measure: Staff development;
Description: From an annual employee survey, the percentage of people
responding favorably to questions on internal, external, and on-the-job
training.
Measure: Staff utilization;
Description: From an annual employee survey, the percentage of people
responding favorably to questions on our use of staff’s knowledge and
skills.
Measure: Leadership;
Description: From an annual employee survey, the percentage of people
responding favorably to questions about specific qualities of our
managers, such as whether leaders treated staff fairly, made timely
decisions, demonstrated GAO’s core values, implemented change
effectively, and dealt effectively with diversity issues.
Measure: Organizational climate;
Description: From an annual employee survey, the percentage of people
responding favorably to questions on teamwork, morale, and overall
satisfaction.
Measure: Help get job done;
Description: From an annual employee survey, we calculate a composite
score from questions related to how well internal processes help
employees get their jobs done. The composite score represents how
employees rated their satisfaction with these services relative to how
they rated the importance of those services to them. The importance
scores and satisfaction levels are both rated on a scale of 1 (low) to
5 (high).
Measure: Quality of work life;
Description: From an annual employee survey, we calculate a composite
score from questions related to how internal processes affect
employees’ quality of work life. The composite score represents how
employees rated their satisfaction with these services relative to how
they rated the importance of these services to them. The importance
scores and satisfaction levels are both rated on a scale of 1 (low) to
5 (high).
Source: GAO.
[End of table]
Another major evaluation we used to inform the update of the strategic
objectives under goals 1, 2, and 3 was the January 2007 edition of our
biennial high-risk report. This report provides the status of major
government operations considered high risk because of their greater
vulnerabilities to waste, fraud, abuse, and mismanagement. The series
is, among other things, a valuable planning tool for us, helping us
identify those areas in which our continued efforts are needed to
maintain the focus on important policy and management issues facing the
nation.
Similarly, we drew from our report 21st Century Challenges: Reexamining
the Base of the Federal Government in preparing this strategic plan.
This report was intended to help the Congress in reviewing and
reconsidering the base of federal spending and tax programs. In
preparing our strategic plan, we took into consideration the federal
activities that are discussed in this report and the related work that
we might perform to support congressional decision making.
Finally, our Office of the Inspector General evaluates the
administration of the agency, including an assessment of key
performance measurements. The Inspector General’s evaluations are
useful for ensuring that our operations are efficient and economical
and serve as additional input for updating the objectives under
strategic goal 4. We also evaluated (1) our engagement policies and
quality control practices and (2) the effectiveness of a number of our
core and support processes to enhance their usefulness and improve
efficiency.
Figure 2: GAO's Business Model:
{See PDF for image]
This figure is a series of concentric circles consisting of labeled
arrows pointing to one another. The outer circle of arrows is labeled
as follows:
* Meet Statutory Responsibilities;
* Improve Performance;
* Ensure Accountability.
The first inner circle of arrows is labeled as follows:
* Infrastructure Services;
- Information and Technology Management;
- Human Capital Management;
- Financial Services;
- Facilities Management Safety and Security;
* Oversight, Insight, and Foresight;
- Legal Decisions and Opinions;
- Nonaudit services;
- Audit Services;
* Engagement Services;
- Expert Services;
- Knowledge Management and Communications.
The second inner circle of arrows is labeled as follows:
* Integrity;
* Accountability;
* Reliability.
Inside that circle the following text is displayed:
* Strategic Management:
- Strategic Planning and Policy;
- Relationship Management;
- Portfolio Management.
Source: GAO.
[End of figure]
Strategies and Means:
The business model depicted in figure 2 shows how we strategically
manage our work to meet our statutory requirements while improving our
performance and ensuring that we are accountable to our clients. Our
strategic management processes—including efforts to plan our work,
periodically assess whether we are on the right track, and make
adjustments when necessary—are at the center of this model. Staff
aligned with all four of our strategic goals are involved in these
processes. In addition, our three core values of accountability,
integrity, and reliability are part of the model’s core, which is
appropriate because they are an integral part of all of our work. The
remaining business of the agency is divided into the following three
parts:
* Oversight, insight, and foresight. We conduct performance audits,
financial audits, attestations, and investigations; issue legal
decisions and opinions; and provide nonaudit services for our clients.
This work is aligned primarily with strategic goals 1, 2, and 3.
* Engagement services. Some of our staff provide direct support to our
oversight, insight, and foresight activities by lending expert services
that include legal analyses and counsel, quality assurance, and design
and methodological development. This work also is aligned primarily
with goals 1, 2, and 3.
* Infrastructure services. We conduct foundational services that
support GAO operations and activities—many of which are aligned with
strategic goal 4. These services include financial management, IT
management, security and safety, and human capital management.
Throughout GAO, we emphasize two overarching strategies to achieving
our strategic goals. These are (1) providing information from our work
to the Congress and the public and (2) continuing and strengthening our
internal operations. Specifically, we achieve our results mainly
through the actions taken by the Congress and federal agencies in
response to the information and recommendations that we provide. Our
strategies also emphasize the importance of (1) working with other
organizations on crosscutting issues and (2) effectively addressing
the challenges to achieving our agency’s goals and recognizing the
internal and external factors that could impair our performance.
Through these strategies, which have proven successful for us for a
number of years, we plan to achieve the level of performance that is
needed to meet our annual performance measures as well as our multiyear
performance goals. That level of performance, in turn, will allow us to
achieve our strategic goals.
Attaining our three external strategic goals (goals 1, 2, and 3) and
their related objectives rests, for the most part, on providing
professional, objective, fact-based, nonpartisan, nonideological, fair,
and balanced information to support the Congress in carrying out its
constitutional responsibilities. To implement the performance goals and
key efforts related to these three goals, we develop and present
information in a number of ways, including:
* evaluations of federal programs, policies, operations, and
performance;
* 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 help guide their efforts toward achieving positive
results;
* legal decisions and opinions to 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,
appropriations, legislative, and other responsibilities.
We conduct specific engagements based on requests from congressional
committees and mandates written into legislation, resolutions, and
committee reports. We also coordinate our work with our sister agencies
in the legislative branch and the offices of inspector general in the
executive branch. While we devote most of our engagement resources to
work requested or mandated by the Congress, we initiate some work under
the Comptroller General’s authority. Traditionally, this work has been
related to government programs and operations that we have identified
as being at high risk for fraud, abuse, or mismanagement; reviews of
agencies’ budget requests; and various emerging challenges that are of
broad-based interest to the Congress, such as the cost of fighting
terrorism and the status of the reconstruction efforts in Iraq.
[Footnote 1] When appropriate, we make recommendations that are
intended to improve the accountability, operations, and services of
government agencies; contribute to increasing the effectiveness of
federal spending; and enhance 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.
More often than not, this information is documented in a product that
is made available to the public. We generally issue around 1,200 to
1,300 products each year, both electronically and in printed format. In
addition, we publish about 250 to 350 legal decisions and opinions each
year. Our products include the following:
* letter reports, chapter reports, and other written correspondence;
* testimonies and statements for the record, where the former are
delivered orally by one or more of our senior executives at a hearing
and the latter are provided for inclusion in the congressional record;
* oral 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 all Americans. For example, we issued a primer on motor
fuels to help improve public understanding of the major factors that
influence the U.S. price of gasoline and we issued a guide on Social
Security that answers concisely some basic questions about how the
program works and why it needs to be reformed. [Footnote 2] Our
publication, Principles of Federal Appropriations Law, is viewed both
within and outside of the government as the primary resource in the
area of appropriations law. It discusses in detail Comptroller General
and federal case law on the availability, use, and control of federal
funds. In addition, we maintain the government’s repository of reports
of Antideficiency Act violations and make available on our Web site
various information extracted from those reports. Collectively, our
products always 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 to examine
the impact of our past work and use that information to shape our
future work. Consequently, we evaluate actions taken by federal
agencies and the Congress in response to our past work. The results of
these evaluations are reported in terms of the financial benefits and
nonfinancial benefits that reflect the value of our work. We actively
monitor the status of our open recommendations—those that remain valid
but have not yet been implemented—and report our findings annually to
the Congress and the public (see [hyperlink
http://www.gao.gov/openrecs.html]).
Two reports have been especially valuable planning tools because they
help us to identify areas where our continued efforts are needed to
maintain the focus on important policy and management issues that the
nation faces. First, our biennial high-risk report, most recently
updated in January 2007, provides a status report on major government
operations that we consider high risk because they are vulnerable to
waste, fraud, abuse, and mismanagement or are in need of broad-based
transformation. We have made hundreds of recommendations to improve
these high-risk operations and plan to continue work that will lead to
further improvements. Second, we use our report on 21st century
challenges, which was issued in February 2005, to guide a portion of
our planned work. This report highlights current and emerging issues
facing the nation. For example, the report concludes that the nation’s
growing fiscal imbalance stems primarily from the aging of the
population and rising health care costs. Absent significant changes on
the spending, revenue, or both sides of the budget, these long-term
deficits will test the capacity of current and future generations to
afford federal commitments. Addressing the nation’s long-term fiscal
imbalances constitutes a major transformational challenge that may take
a generation to resolve.
To attain our fourth strategic goal—an internal management goal—and its
related objectives, we conduct surveys of our congressional clients and
internal customers to obtain feedback on our products, processes, and
services, and perform studies and evaluations to identify ways in which
to improve them. These studies and evaluations have included:
* assessing our administrative processes and ways to determine internal
customers’ satisfaction;
* surveying employees’ about their work environment;
* surveying employees’ skills and work preferences;
* conducting an ongoing review of our workforce and our future needs
for skilled mission and support staff as well as for senior managers;
* evaluating the practices and procedures that analysts use to develop
core products and whether these practices adhere to policies that
ensure the quality of our engagements and products;
* extensively studying our training and curriculum strategies;
* comprehensively assessing our building security and safety,
especially in the event of a major disaster or national security
incident; and:
* conducting annual security and other related audits of our IT
systems.
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; to leverage our resources;
and in turn, to improve our service to the Congress and the American
people.
Through newly established forums and a number of ongoing advisory
boards and panels, we gather information and perspectives for our
strategic and annual performance planning efforts. Ongoing advisory
boards and panels also support strategic and annual work planning by
alerting us to issues, trends, and lessons learned across the national
and international audit communities that should factor into our work.
These groups include the Comptroller General’s Advisory Board, the 40
members of which represent both the public and private sectors and have
broad expertise in areas related to our strategic objectives. The board
meets with our senior managers annually to share its views on our
strategic direction and specific initiatives. Through the National
Intergovernmental Audit Forum, chaired by the Comptroller General, and
10 regional intergovernmental audit forums, we consult regularly with
federal inspectors general and state and local auditors. In addition,
through the Domestic Working Group, the Comptroller General and the
heads of 18 federal, state, and local audit organizations exchange
information and seek opportunities to collaborate.
Internationally, we participate in the International Organization of
Supreme Audit Institutions (INTOSAI), the professional organization of
the national audit offices of 184 countries. The Comptroller General
also leads the Global Working Group, through which the heads of our
counterparts from 15 countries meet annually to discuss mutual
challenges, share experiences, and identify opportunities for
collaboration.
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.
We combine our general strategies with specific strategies for each
strategic objective. These specific strategies take the form of
performance goals, each of which has a set of key efforts that connect
with our day-to-day work. These performance goals and key efforts are
described later in this plan.
Internal Management Challenges:
For at least the next 3 fiscal years, we anticipate continuing to
address three management challenges—physical security, information
security, and human capital—because they are evolving and will require
us to continuously identify ways to adapt and improve. Under strategic
goal 4, we establish performance goals focused on each of our
management challenges, track our progress in completing the key efforts
for those performance goals quarterly, and report each year on our
progress toward meeting the performance goals. (See our performance and
accountability report for a more complete description of these
challenges.)
External Factors That Could Affect Our Performance:
Several external factors could affect the achievement of our
performance goals. These include the amount of resources we receive,
shifts in the content and volume of our work, and various national and
international developments. Limitations imposed on our work by other
organizations or limitations on the ability of other federal agencies
to make the improvements we recommend are additional factors that could
affect the achievement of our goals.
As the Congress focuses on unpredictable events—such as terrorism,
natural disasters, and military conflicts and threats abroad—the mix of
work we are asked to undertake may change, diverting our resources from
some strategic objectives and performance goals. We can and do mitigate
the impact of these events on the achievement of our goals in various
ways. For example in fiscal year 2006, we:
* stayed abreast of current events (such as protecting U.S. ports and
borders and preventing possible pandemics) and communicated frequently
with our congressional clients in order to be alert to possibilities
that could shift the Congress’s priorities or trigger new priorities;
* quickly redirected our resources when appropriate (e.g., on the cost
and recovery efforts related to Hurricane Katrina) so that we could
deal with major changes as they occurred;
* maintained broad-based staff expertise (i.e., in the Social Security,
health care financing, and homeland security areas) so that we could
readily address emerging needs; and:
* initiated research under the Comptroller General’s authority on
several selected topics, including various issues relating to Iraq, the
U.S. federal elections, and our 21st century challenges and high-risk
work.
We have experienced heavy demand from the Congress for work in a number
of subject areas, especially in the disaster recovery and preparedness
areas in the aftermath of Hurricane Katrina and in the health care
area. Our ability to effectively manage this demand could have an
impact on our ability to meet our performance targets. We will continue
to manage these requests in order to minimize any negative impact they
may have on our ability to meet the needs of the Congress and the
American people. Given large current federal budget deficits and the
nation’s long-range fiscal imbalance, the Congress is likely to place
increasing emphasis on fiscal constraint. While it is unclear how we
will ultimately be affected, it is reasonable to assume that any
attempt to exercise additional budgetary discipline in the legislative
branch will include our agency. As a result, while we believe that we
submit reasonable and responsible budget requests and we know that the
return on investment that we generate is unparalleled, we must plan and
prepare for the possibility of significant and recurring constraints on
the resources made available to the agency. In addition, because almost
80 percent of our budget is composed of people-related costs, any
serious budget situation will likely have an impact on our human
capital policies and practices. This, in turn, would have an impact on
our ability to serve the Congress and meet our performance targets.
While the nature and extent of any such budget constraints cannot be
determined at the present time, our executive team is engaged in a
range of related planning activities. It is both appropriate and
prudent for us to engage in such planning. At the same time, we are
hopeful that the Congress will recognize that performance-based
budgeting concepts would support providing additional resources to
entities with prudent budget requests and proven performance results.
If the Congress employs such an approach, we should be in a good
position to continue to provide a high rate of return on the resources
invested in the agency.
A growing area for us involves our work on bid protests. As required by
law, our General Counsel prepares Comptroller General procurement law
decisions that resolve protests filed by disappointed bidders. These
bidders challenge the way individual federal procurements are being
conducted or how the contracts were awarded. In recent years, we have
experienced an increase in the number of bid protests that have been
filed, and in fiscal year 2005 the Congress enacted legislation that
expanded our authority to allow certain representatives of affected
government employees to protest when the private sector wins a private-
public competition. We will continue to monitor our workload in this
area to ensure that we meet our statutory responsibilities with minimal
negative impact on our other work.
Another external factor is the extent to which we can obtain access to
certain types of information. With concerns about operational security
being unusually high at home and abroad, we may have more difficulty
obtaining information and reporting on sensitive issues. Historically,
our auditing and information gathering have been limited whenever the
intelligence community is involved. In addition, we do not have a right
of access to records or other materials held by other countries or,
generally, by the multinational institutions that the United States
works with to protect its interests. Consequently, our ability to fully
assess the progress being made in addressing several national and
homeland security issues may be hampered. Given the heightened security
environment, we also anticipate that more of our reports may be subject
to classification reviews than in the past, which means that the public
dissemination of these products may be limited. We plan to work with
the Congress to identify both legislative and nonlegislative
opportunities for strengthening our access authority as necessary and
appropriate.
Our Organizational Structure:
As the Comptroller General of the United States, David M. Walker is the
head of GAO and is serving a 15-year term that began in November 1998.
Three other executives join Comptroller General Walker to form GAO’s
Executive Committee; these executives are Chief Operating Officer Gene
L. Dodaro, Chief Administrative Officer/Chief Financial Officer
Sallyanne Harper, and General Counsel Gary Kepplinger.
To achieve our strategic goals, our staff is organized as shown in
figure 3. For the most part, our 13 research, audit, and evaluation
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. Senior executives in charge of
the teams manage a mix of engagements to ensure that we meet the
Congress’s need for information on quickly emerging issues as we also
continue longer-term work efforts that flow 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. In
fiscal year 2005, we formed a new unit—Forensic Audits and Special
Investigations—within our Financial Management and Assurance team. This
unit was designed to provide the Congress with high-quality forensic
audits; investigations of fraud, waste, and abuse; and evaluations of
security vulnerabilities and other appropriate investigative services
as part of its own assignments or in support of other teams. This unit
follows up on engagements and referrals from our other teams when its
special services are required to help determine whether legislative or
administrative actions are necessary. The unit is composed of
investigators and staff from our former Office of Special
Investigations; auditors from the Financial Management and Assurance
team who have experience with forensic audits; and staff in General
Counsel who worked with FraudNet—our online system designed to
facilitate the reporting of allegations of fraud, waste, abuse, or
mismanagement of federal funds.
As described below, General Counsel 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. And staff in many offices,
such as Strategic Planning and External Liaison, Congressional
Relations, Opportunity and Inclusiveness, Quality and Continuous
Improvement, Public Affairs, and the Chief Administrative Office,
support the efforts of the teams. This collaborative process, which we
refer to as matrixing, increases our effectiveness, flexibility, and
efficiency in using our expertise and resources to meet congressional
needs on complex issues.
Figure 3: Our Organizational Structure:
This figure is an organizational chart. At the top is the Controller
General of the United States, with horizontal connections to the
following:
* Public Affairs;
* Strategic Planning and External Liaison;
* Congressional Relations;
* Opportunity and Inclusiveness; and;
* Inspector General.
The next level on the chart includes three positions:
* General Counsel;
* Chief Operating Officer;
* Chief Administrative Officer/Chief Financial Officer.
Connected to the General Counsel are Goals 1, 2, 3 and 4, with the
following information:
* Provide audit and other legal support services for all goals and
staff offices;
* Manage GAO's bid protest and appropriations law work.
The Chief Operating Officer connects to Teams/Field Operations and to
Quality and Continuous Improvement. The Team/Field Operations connect
to Goals 1, 2, and 3, with the following information:
Goals 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.
Goals 3: Help transform the federal government’s role and how it does
business to meet 21st century challenges:
* Applied Research and Methods;
* Financial Management and Assurance;
– Forensic Audits and Special Investigations;
* Information Technology;
* Strategic Issues.
The Chief Administrative Officer/Chief Financial Officer connects to
Goal 4, with the following information provided:
Goal 4: Maximize the value of GAO by being a model federal agency and a
world-class professional services organization:
* Controller;
* Human Capital Office;
– Chief Human Capital Officer;
* Information Systems and Technology Services;
– Chief Information Officer;
* Knowledge Services;
– Chief Knowledge Services Officer;
* Professional Development Program.
Source: GAO.
Note: General Counsel’s structure 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]
General Counsel is structured organizationally along subject matter
lines to facilitate the delivery of legal services. This structure
allows General Counsel to (1) provide legal support to GAO and its
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 in General Counsel
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. General Counsel’s Legal
Services group provides in-house support to GAO’s 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 fourth and only internal strategic goal— staff
in our Chief Administrative Office take the lead. They are assisted on
specific key efforts by the Applied Research and Methods team and by
staff offices such as Strategic Planning and External Liaison,
Congressional Relations, Opportunity and Inclusiveness, Quality and
Continuous Improvement, and Public Affairs. In addition, attorneys in
General Counsel, primarily in the Legal Services group, provide legal
support for goal 4 efforts. To maximize their productivity, we must
make steady investments in IT. We must also ensure the safety and
security of our people, information, and assets. The strategies we will
use to ensure that we have the human capital we need to carry out our
responsibilities and that our human capital, business processes, IT,
and other resources are well managed and secure are covered under the
fourth strategic goal of this plan.
Throughout GAO, we maintain a workforce of highly trained professionals
with degrees in many academic disciplines, including accounting, law,
engineering, public and business administration, economics, and the
social and physical sciences. About three-quarters of our approximately
3,200 employees are based at our headquarters in Washington, D.C; the
rest are deployed in 11 field offices across the country. (See fig. 4.)
Staff in these field offices are aligned with our research, audit, and
evaluation teams and perform work in tandem with our headquarters staff
in support of our external strategic goals. Through our field office
structure, we have been able to attract and retain top talent from
across the country.
Figure 4: Our Office Locations:
This figure is a map of the Continental United States, depicting GAO
Office locations:
* Boston, MA;
* Washington, DC;
* Norfolk, VA;
* Dayton, OH;
* Chicago, IL;
* Atlanta, GA;
* Huntsville, AL;
* Dallas, TX;
* Denver, CO;
* Los Angeles, CA;
* San Francisco, CA;
* Seattle, WA.
Source: See Image Sources.
[End of figure]
Themes Affecting the Plan: Preparing the United States for an
Interdependent World:
In charting our work over the next several years, our strategic plan
takes into account the forces that are likely to shape our society, the
place of the United States in the world, and the role of the federal
government. We have grouped these forces under seven themes that
suggest major trends that may influence congressional actions and that
form a context for our strategic goals and objectives. Table 2
summarizes the themes, and a detailed description of each theme is
provided in a separate publication titled Forces That Will Shape
America’s Future: The Themes from GAO’s Strategic Plan (GAO-07-467SP),
which was issued in conjunction with this update of the strategic
plan.
Our nation faces a range of key public policy trends, challenges, and
opportunities that transcend geopolitical and sectoral boundaries.
Through our strategic planning efforts, we have identified seven key
themes that embrace the major trends that are likely to shape our
society, the place of the United States in the world, and the role of
the federal government in the decades to come. These themes are
ensuring the security and safety of the nation; sustaining our nation’s
capacity, national resources, and environment, especially given the
nation’s large and growing long-term fiscal imbalance; maintaining
economic growth and competition; recognizing global interdependence
related to people, information, goods, and capital; adapting to
societal changes resulting from demographic and other shifts;
sustaining U.S.citizens’ quality of life; and managing advancements in
science and technology.
These seven themes and the issues they encompass will require the
federal government to form strategic partnerships and alliances with
state and local governments, as well as with the governments of other
nations around the world. They will also require partnering for
progress between levels of government, the private sector, and the
independent sector. Successful approaches to these issues will also
need to focus on maximizing value, managing risks, and achieving real
and sustainable results.
Any significant changes in these areas over the period covered by this
plan will affect our ability to meet our goals and objectives. We will
therefore continue to track developments in these areas to ensure that
our plan continues to respond to the needs of the Congress, the federal
government, and the American people.
Table 2: Forces Shaping the United States and Its Place in the World:
* Changing security threats:
The world has changed dramatically in overall security, from the
conventional threats posed during the Cold War era to more
unconventional and asymmetric threats. Providing for people’s safety
and security requires attention to threats as diverse as terrorism,
violent crime, natural disasters, and infectious diseases. The response
to many of these threats depends not only on the action of the U.S.
government but also on the cooperation of other nations and
multilateral organizations, as well as on state and local governments
and the private and independent sectors. Complicating such efforts are
a number of failed states allowing the trade of arms, drugs, or other
illegal goods; the spread of infectious diseases; and the accommodation
of terrorist groups. Meeting the nation’s defense needs in the future
may prompt decision makers to reexamine fundamental aspects of the
nation’s security programs, such as how the Department of Defense (DOD)
and the Department of Homeland Security (DHS) plan, budget, and
position their resources to respond to these various threats.
* Sustainability concerns:
Current fiscal and environmental policies are clearly unsustainable.
The $248 billion deficit forecast for fiscal year 2006, the anticipated
growth of spending on social insurance programs, and the potential tax
gap resulting from the changing nature of the economy will erode the
ability of government to respond to the needs of U.S. citizens over the
long term. The growing awareness of the effect of climate change on the
environment and the economy and concerns about quality of life add a
new layer of complexity to the already difficult question of how to
sustain economic growth when components of that growth—factories, cars
and trucks, fertilizers, and electricity-generating plants—often
adversely affect air and water quality and can change climates in
potentially catastrophic ways.
* Economic growth and competitiveness:
Economic growth and competition are also affected by the skills and
behavior of U.S. citizens, the policies of the U.S. government, and the
ability of the private and public sectors to innovate and manage
change. The U.S. education system must prepare the workforce by
providing the necessary skills and knowledge to drive innovation,
productivity, and economic growth while enabling the United States to
continue to improve its standard of living and competitive posture.
Importantly, the saving and investment behavior of U.S. citizens
affects the capital available to invest in research, development, and
productivity enhancement. And the tax and regulatory policies of the
U.S. government affect its economic growth and ability to compete. The
U.S. economy benefits from less restrictive labor and product market
regulation and lower tax burdens than those of many other Organization
for Economic Co-operation and Developement countries, although
deregulation can present its own challenges and requires oversight to
protect the public interest.
* Global interdependency:
Economies as well as governments and societies are becoming
increasingly interdependent as more people, information, goods, and
capital flow across increasingly porous borders. Indicators like
international trade and financial transactions reveal how economic
activity has come to link nations. Both U.S. imports and exports as a
share of the gross domestic product (GDP) more than doubled from 1970
to 2005. The United States faces the challenge of securing its borders
to protect the safety and security of the nation without impeding the
exchange of people, ideas, goods, and capital needed to sustain
economic growth and to strengthen society. And transportation
systems—highway, rail, and air—as well as immigration and employment
policies and practices may require modifications to support these
changes.
* Societal change:
The U.S. population is aging and becoming more diverse. As U.S. society
ages and the ratio of elderly persons and children to persons of
working age increases, the sustainability of social insurance systems
will be further threatened. Specifically, according to the 2000 census,
the median age of the U.S. population is now the highest it has ever
been, and the baby boomer age group—people born from 1946 to 1964,
inclusive—was a significant part of the population. As this group ages,
it will have a continuing influence on society and social programs.
* Quality of life:
Concerns about the sustainability of the nation’s resources and current
U.S. policies represent threats to the quality of life of U.S. citizens
and of other people around the globe. Despite increasing productivity
and economic growth, U.S. citizens increasingly face income insecurity
and a growing gap between the haves and the have nots. Lack of
affordable housing leading to urban sprawl and growing commute times
leave many Americans struggling to balance the demands of work and
family.
* Science and technology:
Science and technology offer many possibilities for improving people’s
quality of life. These areas hold the promise of future productivity
gains and economic growth. However, with opportunities come challenges,
such as ensuring cybersecurity, protecting personal privacy, and
preserving tax bases for state and other governmental entities. The
proliferation of information on the Internet, for example, has helped
break down borders and has increased our nation’s global
interdependence. However, safeguards on the quality of information are
few. At the same time, the possibilities suggested by advances in
science and technology, especially in areas such as medicine, raise
ethical and moral questions that society must confront.
Source: See Image Sources.
[End of table]
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:
In keeping with GAO’s mission to support the Congress in carrying out
its constitutional responsibilities, our first strategic goal focuses
on several aspirations of the American people that were defined by the
founding fathers to “establish justice, insure domestic tranquility, …
promote the general welfare, and secure the blessings of liberty” for
U.S. citizens now and in the future. The nation’s aging and more
diverse population and rapid technological change and Americans’ desire
to improve quality of life have major policy and budgetary implications
for the federal government. In particular, growing commitments to the
elderly will crowd the capacity of a smaller generation of workers to
finance the competing needs and wants brought to the federal doorstep.
The first goal in this plan, therefore, continues to be to help the
Congress and the federal government address the challenges that affect
the well-being and financial security of the American people. The
stakes involved with the federal policies and programs covered under
goal 1 are high, as the benefits have become critical to the well-being
of families, businesses, state and local governments, and other key
sectors of the nation’s economy and society. Moreover, as the nation
moves to address the challenges of homeland security, it is becoming
apparent that a wide range of domestic policies and programs are
relevant to protecting the nation against terrorist threats. The
continuing presence of budget deficits should prompt greater scrutiny
of the performance and costs of many of these programs, and we expect
to be a major contributor to these debates through our audit and
evaluation work.
Our objectives for this goal are to support congressional and federal
efforts on:
1.1: the health needs of an aging and diverse population;
1.2: lifelong learning to enhance U.S. competitiveness;
1.3: benefits and protections for workers, families, and children;
1.4: financial security for an aging population;
1.5: ensuring a responsive, fair, and effective system of justice;
1.6: the promotion of viable communities;
1.7: responsible stewardship of natural resources and the environment;
and;
1.8: a safe, secure, and effective national physical infrastructure.
Strategic Objective 1.1:
The Health Needs of an Aging and Diverse Population:
Total health care spending in the United States from all sources—public
and private—continues to increase at a breathtaking pace. From 1990
through 2000, spending nearly doubled to over $1.3 trillion and by 2010
is estimated to more than double again to almost $2.9 trillion. (See
fig. 5.) This unrelenting growth is producing a health care sector that
continues to claim an increasing share of the nation’s gross domestic
product (GDP)—about 12 percent in 1990 versus an estimated 18 percent
in 2010 and 20 percent by 2015.
Figure 5: Total National Health Care Spending, Fiscal Years 1990, 2000,
and 2010:
This is a vertical bar graph depicting health care spending for fiscal
years 1990, 2000, and 2010. The vertical axis of the graph represents
dollars in trillions from 0 to 3.0. The horizontal axis represents the
fiscal years 1990, 2000, and 2010. Approximate spending is depicted as
follows:
1990: $0.7;
2000: $1.4;
2010: $2.8.
Source: Centers for Medicare and Medicaid Services.
Note: The dollar amounts for 1990 and 2000 are in nominal dollars; the
dollar amount for 2010 is projected.
[End of figure]
Not surprisingly, health care spending has been one of the most rapidly
rising elements of federal spending, growing three times faster than
the rest of the federal budget over the last quarter century. (See fig.
6.) Expenditures on health-related programs, one of the largest
components of federal spending, totaled $583 billion in fiscal year
2006, or about 22 percent of federal spending. Health care also
accounts for significant federal tax expenditures, with $132.7 billion
in forgone revenues projected for fiscal year 2006 because of employer
contributions to medical care and medical insurance. The cost pressures
of serving a growing population—particularly those 65 and older—are
compounded by scientific advances in medical treatments, which can blur
the lines between needs and wants and make it difficult to reasonably
assess what society can afford.
Figure 6: Growth of Federal Health Expenditures, Fiscal Years
1980–2006:
This is a line graph with two lines: Health outlays and All other
federal spending. The vertical axis of the graph represents percentage
increase since fiscal year 1980 from 0 to 1,000. The horizontal axis of
the graph represents fiscal years from 1980 to 2006. The line depicting
Health outlays rises from 0 in 1980 to approximately 900 in 2006. The
line depicting all other federal outlays rises from 0 in 1980 to
approximately 200 in 2006.
Sources: GAO (analysis) and Office of Management and Budget (data).
[End of figure]
Of particular concern is the growth in Medicare expenditures, which
totaled over $336 billion in 2005. Even without considering
the financial effects of its new prescription drug benefit, Medicare is
expected to more than double its share of the economy by 2030,
competing with other spending and economic activity of value. Indeed,
expenditures for hospital insurance, one component of Medicare,
exceeded hospital insurance income (exclusive of interest income) in
2004. This fiscal imbalance is projected to continue. Consequently, the
Hospital Insurance Trust Fund is projected to be depleted by 2018. Also
of concern are issues of (1) modernizing Medicare’s management
structure, payment policies and methodologies, and benefits package and
(2) reducing Medicare’s administrative burden on providers. Moreover,
because of its size and complexity, Medicare is inherently difficult to
manage and is a target for fraud, waste, and abuse. Medicare claims
administration contracting is undergoing significant changes. In the
next 3 to 5 years, all of the contracts will be recompeted and much of
the claims administration workload will be transferred to about half
the number of current contractors—an undertaking on a scale unlike
anything Medicare has experienced before. Consequently, effective
oversight is critical to protecting program dollars and promoting
efficient program operations.
Although the introduction of competitive principles to health care
helped to contain medical care cost increases for several years, costs
continue to rise, as do the number of Americans without health
insurance. These cost increases have important implications for federal
health care programs and outlays and for the availability of employer-
sponsored health insurance. Many employers reportedly have been
considering or made changes to decrease the generosity of their health
insurance benefits, or have shifted risk to employees in the form of
health plans with significantly higher deductibles, sometimes coupled
with health savings accounts. Moreover, the public is concerned about
the quality of care, consumer protection mechanisms, and the
availability of information to allow purchasers to make informed
insurance choices.
The government also must address pressing issues in its own health care
delivery systems. The Department of Veterans Affairs (VA)—one of the
nation’s largest health care delivery systems—spends about $30 billion
a year to provide health care to approximately 4.9 million of the
almost 7.7 million veterans enrolled for VA care. VA provides this care
using a physical infrastructure that is, in many instances, obsolete
and burdened with excess capacity for inpatient care. The Department of
Defense’s (DOD) health care system will spend about $38 billion in
fiscal year 2006 to provide health care to over 9 million eligible
beneficiaries who receive health care provided directly by DOD or
through DOD purchase of health care from civilian providers. Because of
potential complementary aspects of the DOD and VA health care delivery
systems, pressure is mounting to integrate aspects of the two systems
to increase the efficiency and effectiveness of federal health care
delivery, including improvement in the process for veterans returning
from Iraq and Afghanistan who transition from DOD to VA health care.
Other areas of concern are the efficiency and effectiveness of the
government’s public health programs, including those administered by
the National Institutes of Health, Food and Drug Administration,
Centers for Disease Control and Prevention, Health Resources and
Services Administration, Substance Abuse and Mental Health Services
Administration, and Indian Health Service. These programs include those
that support and conduct research on infectious and chronic diseases
and disabilities or provide grants to states and nonprofit
organizations for conducting public health activities, such as mental
health and substance abuse prevention and treatment services; for
reducing risk factors for potentially disabling conditions such as
heart disease, stroke, and diabetes; and for operating health care
safety net facilities. The Food and Drug Administration also conducts
regulatory oversight of the United States’ drug and medical device
industries.
In recent years, threats to the public health, such as Hurricane
Katrina, severe acute respiratory syndrome, and the potential for
pandemic influenza, have posed significant challenges for the
government. The threat of terrorists using biological weapons of mass
destruction, such as anthrax and smallpox, has raised similar concerns
about the nation’s ability to adequately respond to bioterrorist
attacks. Awareness of these public health threats has heightened
concern about disease surveillance systems (both domestic and
international); the surge capacity of the health care system (including
hospital beds and equipment, trained personnel, and laboratories); and
coordinated communication systems among federal, state, and local
emergency responders. Greater attention has been given to federal,
state, and local efforts to develop coordinated plans for dealing with
public health emergencies and to develop emergency response systems
linking hospitals, emergency rooms, health personnel, and fire and
police efforts to respond to any public health threat.
Finally, the baby boom generation will undoubtedly place increasing
pressure on the Medicaid program for which joint federal/state
expenditures are estimated to be $326 billion for fiscal year 2005.
Medicaid helps to pay for nursing home and other community-based forms
of long-term care services. Yet meeting an increasing demand for such
services at a time when many states are recovering from financial
difficulty and the federal government is once again operating at a
deficit will pose significant challenges for federal and state decision
makers, with important implications for the services offered by each
state. At the other end of the population spectrum are millions of
uninsured children whose families have no health insurance. Medicaid
and the State Children’s Health Insurance Program (SCHIP) help cover
the health insurance costs of these low-income Americans. However, as
state revenues continue to recover from the most recent economic
downturn, Medicaid costs continue to rise, thus prompting states to
find new ways to contain program spending. In considering
reauthorization of SCHIP in 2007, it will be important to examine state
experiences implementing SCHIP and whether the program has met the
legislation’s original goal to reduce the number of uninsured children.
Accounting for and overseeing these two programs represents a
formidable challenge for the federal government because of the
variation in state policies, procedures, and delivery systems. In
particular, Medicaid’s size and complexity make it vulnerable to fraud,
waste, and abuse, making effective federal oversight critical.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
1.1.1: evaluate Medicare reform, financing, and operations;
1.1.2: assess trends and issues in private health insurance coverage;
1.1.3: assess actions and options for improving VA’s and DOD’s health
care services;
1.1.4: evaluate the effectiveness of federal programs to promote and
protect the public health;
1.1.5: evaluate the effectiveness of federal programs to prevent,
prepare for, and respond to public health emergencies;
1.1.6: evaluate federal and state program strategies for financing and
overseeing long-term health care; and;
1.1.7: assess state experiences and federal oversight in providing
health insurance coverage for low-income populations.
Performance Goal 1.1.1:
Evaluate Medicare Reform, Financing, and Operations:
Medicare now finances health care for over 40 million Americans,
accounting for almost one-eighth of all federal expenditures. Even
without considering the financial effects of the new prescription drug
benefit, Medicare is expected to more than double its share of the
nation’s economy by 2030, crowding out other government spending and
economic activity. Medicare’s Hospital Insurance Trust Fund essentially
began running a cash deficit in 2004 and is projected to become
insolvent in 2018. The 2003 Medicare legislation did provide for the
phase-in of several reforms to help restrain program spending growth,
including reforms that seek to encourage price competition among
Medicare health plans and among suppliers. It also included a reform
that provides an incentive for beneficiaries to make cost-effective
choices among Medicare’s health plans. These reforms, while steps in
the right direction, will not be sufficient to avert Medicare’s fiscal
crises. Fundamental, structural program reforms will be necessary to
ensure Medicare’s long-term sustainability.
Any structural changes will take time to fully implement. Therefore, it
is imperative to continue to concentrate on improving the existing
program and refining Medicare’s payment methods in ways that reward
fiscal discipline while preserving access to care. Effectively managing
the Medicare program, including safeguarding its integrity, remains a
continuing challenge, in part because of the program’s size and
complexity. Since 1990, we have designated Medicare as a high-risk
program, vulnerable to waste, fraud, abuse, and mismanagement. Because
Medicare currently pays out over $336 billion annually and is
responsible for financing health services delivered by over 1 million
providers, it is an especially attractive target for fraud, waste, and
abuse, and therefore good management is critical.
Key Efforts:
* Analyze Medicare’s financial condition and the potential consequences
of program structural reforms;
* Evaluate the Centers for Medicare & Medicaid Services’ management of
Medicare, including its implementation of legislative reforms and its
service to providers and beneficiaries;
* Evaluate Medicare payment methods for health care providers and
plans;
* Assess the effects of Medicare’s payment methods on access to, and
quality of, health care services;
* Evaluate the Centers for Medicare & Medicaid Services’ safeguards and
program controls over provider and plan payments, beneficiary access,
and quality of health care services.
Potential Outcomes:
* Better congressional understanding of Medicare’s financial condition
and program reform proposals, including implications for the budget and
for health care;
* Improvements in the Centers for Medicare & Medicaid Services’ program
management and implementation of legislated Medicare program changes;
* Development of more comprehensive, accurate, and timely data for
evaluating program performance and services to beneficiaries;
* Medicare payment methods that minimize federal costs and promote
access to quality medical care;
* Reductions in improper payments to health care providers and plans
and in unnecessary program expenditures.
Performance Goal 1.1.2:
Assess Trends and Issues in Private Health Insurance Coverage:
Private health insurance provided coverage for more than 198 million
Americans in 2004; however, nearly 46 million individuals did not have
health insurance. The federal government has an increasing role in
overseeing employer-sponsored health benefits and private insurance
coverage both through its traditional roles established by the Employee
Retirement Income Security Act of 1974 and the tax code and through
more recent federal insurance standards, such as the Health Insurance
Portability and Accountability Act of 1996, and tax incentives, such as
health insurance tax credits for displaced workers in the Trade
Adjustment Assistance Reform Act of 2002.
The Congress continues to consider additional approaches to increase
private health insurance coverage, such as new tax incentives for
individuals who are unemployed or do not have coverage through their
employers or purchasing arrangements for small employers. Such new
approaches may increase access to health insurance for some individuals
or employers but need to be carefully assessed for their budget
implications, effects on those already purchasing coverage, and need
for effective regulatory oversight.
Strong interactions exist between the private health insurance market
and public health insurance programs, including Medicare and Medicaid,
with financing innovations in the private or public sector often being
adopted by the other sector. The Federal Employees Health Benefits
Program, which provides health insurance to more than 8 million federal
employees, retirees, and dependents, has sometimes been considered a
model for other large employers or public programs, but has also had to
address issues of increasing costs. For example, like many private
employers, the Federal Employees Health Benefits Program has introduced
new so-called “consumer directed health care plans,” such as those
coupled with health savings accounts. The impact these new plans will
have on cost, access, and quality of health care is currently unknown.
Recent expansion of the Medicare benefit to include outpatient
prescription drug coverage affects employers that provide health
coverage for their retirees as they may redesign their benefits to
coordinate with the Medicare coverage or receive a federal subsidy to
maintain primary drug coverage. In addition, the federal government
began offering long-term care insurance to employees, retirees, and
their families in 2002, which has contributed to the further
development of the private long-term care insurance market. Thus far,
this market has played a relatively small part in financing long-term
care services compared to public programs. However, increases in
consumer purchases of long-term care insurance could help decrease
future demands on Medicaid for such care.
The impact of public and private efforts to contain costs or improve
access in one sector may lead to unintended consequences for the other.
These complex interrelations between federal policy and the private
health insurance market greatly affect the affordability, availability,
and quality of insurance coverage that most Americans receive.
Key Efforts:
* Analyze potential modifications to federal tax policies and new
insurance purchasing arrangements for their impact on the numbers of
uninsured, costs of health care services, and implementation challenges
for federal and state agencies;
* Evaluate trends in, and distribution of, health insurance coverage,
including long-term care insurance and employer sponsorship of private
health insurance for employees and retirees;
* Analyze the coverage and affordability of products available to
consumers in the individual insurance and small group insurance
markets;
* Assess the impact of public and private agencies’ efforts to achieve
compliance with federal and state health insurance standards.
Potential Outcomes:
* Better congressional understanding of proposals to alter tax
treatment of health care insurance costs and to establish new health
insurance purchasing arrangements;
* More complete congressional understanding of trends in health and
long-term care insurance, including changes in private health insurance
coverage and the evolving health and long-term care insurance markets;
* Better congressional understanding of the impact of public and
private efforts to achieve compliance with federal health insurance
standards.
Performance Goal 1.1.3:
Assess Actions and Options for Improving VA’s and DOD’s Health Care
Services:
VA and DOD operate two of the largest health care systems in the world,
together spending about $68 billion a year for health care. Both
systems face great challenges in an era of growing demand for health
care and increasing fiscal pressures. For instance, VA operates and
maintains a large portfolio of aged health care assets, primarily
buildings, which were built when greater emphasis was placed on
inpatient care than today. These buildings are not effectively aligned
with VA’s new health care delivery model, which emphasizes outpatient
care delivered closer to where veterans live. VA has opened hundreds of
community-based outpatient clinics to increase the number of veterans
who have reasonable geographic access to VA-provided outpatient care.
As a result of multiple factors, including VA’s new health care
delivery model, the influx of new veteran enrollees because of relaxed
eligibility standards, and the return of veterans from Iraq and
Afghanistan, VA faces difficult realignment decisions involving
resource allocation, capital investments, consolidations, closures, and
contracting with local health care providers. These may have
significant ramifications for stakeholders, such as medical schools and
unions, and for the use of VA’s existing resources, primarily because
realignments involve shifting the workload among delivery locations.
Similarly, DOD faces pressures to adapt its health care structure
because of changing military threats; a decreased force size; expanded
benefits; and an evolving health care marketplace, characterized by
rising costs and increasing beneficiary concerns about access.
Beneficiaries include active duty, reserve, and retired servicemembers
and their dependents. In response to long-standing issues faced by
DOD’s health care system, DOD established its nationwide managed care
program, TRICARE, in the mid-1990s. However, beneficiary concerns have
continued under TRICARE, as have concerns about the efficiency of the
program. Further, concerns have been raised about rising program costs,
and beneficiaries continue to complain about poor access to care. These
concerns have led DOD to propose increases to some TRICARE fees, co-
payments, and deductibles to promote cost sharing and focused attention
on the need for DOD to identify cost reduction measures and alternative
approaches for delivering health care.
Key Efforts:
* Evaluate proposals to restructure or consolidate VA’s health care
system, including proposals on capital asset realignment and resource
sharing;
* Assess implications of changes to VA and DOD health benefits and
health care delivery systems;
* Examine VA and DOD efforts to provide care and seamless transition
for veterans returning from Iraq and Afghanistan;
* Assess vulnerability of VA’s system to fraud, waste, and abuse;
* Examine access to and quality and cost of care provided to VA and DOD
beneficiaries;
* Review implementation of VA resource allocation and revenue
collection systems and budget formulation and execution practices;
* Examine DOD’s efforts to contain and share costs of expanded benefits
for active duty, reserve, and retired beneficiaries.
Potential Outcomes:
* More effective and efficient organizational structures and service
delivery for both VA and DOD;
* Improved understanding of how potential changes affect costs,
utilization of services, and retention;
* Reductions in unnecessary health care expenditures;
* Better understanding of factors that explain VA and DOD variations in
access to, quality of, and timeliness of care and patient safety;
* Improved VA budgeting and resource allocation systems that more
adequately reflect workload and costs and promote efficiency and
optimization;
* Better understanding of DOD’s costs and how they are affected by
beneficiary fees and co-payments.
Performance Goal 1.1.4:
Evaluate the Effectiveness of Federal Programs to Promote and Protect
the Public Health:
To promote and protect the health of the nation, public health agencies
pursue a broad range of activities that tangibly affect the well-being
of every American. These include conducting public health surveillance
on new and emerging infectious diseases, nationally and
internationally; sponsoring and conducting biomedical research;
evaluating the effectiveness and safety of pharmaceuticals and medical
devices; leading efforts to address infectious and chronic diseases;
increasing the availability of health services and health care
providers for medically underserved populations; and funding treatment
services for people with mental health conditions. Over 90 percent of
the National Institutes of Health’s annual budget of almost $29 billion
funds biomedical research, contributing to a dramatic increase in the
number of new medical treatments. New technologies and therapies will
further test the ability of the Food and Drug Administration to ensure
the safety and efficacy of new medical products while not unduly
delaying the availability of new products to consumers. Federally
funded health centers increase access to preventive and primary health
care for medically underserved Americans, including many who are poor
or lack health insurance. These safety net and other public health
organizations can help improve health outcomes, particularly for people
with chronic conditions, such as diabetes and hypertension, and are
making efforts to eliminate racial and ethnic disparities in health. In
recent years, there has been increased recognition that many families
are affected by mental illnesses and that there are greater
opportunities to treat people with these conditions and help them lead
productive lives in their communities. There is also growing attention
to the important role that health information technology can play in
improving the delivery of health care services.
Key Efforts:
* Evaluate impediments and barriers to the development of new
prescription drugs and vaccines;
* Assess the regulatory structure for ensuring the safety and efficacy
of medical devices, drugs, and other medical products and therapies;
* Evaluate programs targeted at improving the health status of the
population;
* Evaluate the effectiveness of programs to provide prevention,
treatment, and other services related to mental health conditions,
including substance abuse.
Potential Outcomes:
* Improved medical therapies and preventive measures, including
vaccines;
* More effective and efficient determination of the safety and efficacy
of medical products by the Food and Drug Administration;
* Greater access to preventive and primary health care services,
including for medically underserved populations, resulting in improved
health status;
* More effective programs for prevention and treatment of mental health
conditions, including substance abuse, allowing people with these
conditions to function better in their work and relationships.
Performance Goal 1.1.5:
Evaluate the Effectiveness of Federal Programs to Prevent, Prepare for,
and Respond to Public Health Emergencies:
The changing nature of public health threats—including emerging
infectious diseases like severe acute respiratory syndrome and a
potential pandemic influenza—requires effective surveillance and prompt
action by the Centers for Disease Control and Prevention and other
public health agencies at international, federal, state, and local
levels. The use of anthrax as a weapon of terrorism in 2001 heightened
concern over the public health threats posed by biological terrorism
and raised worries that the nation is not adequately prepared to
respond to bioterrorist attacks. Similarly, disasters such as the
attack on the World Trade Center and Hurricane Katrina have highlighted
the need to effectively plan for events that can disable a regional
health care system or cause widespread acute or chronic physical and
mental health problems. To improve the nation’s preparedness, federal
agencies engage in a number of activities aimed at improving planning,
detection, treatment, and response, and the Congress has substantially
increased funding for these programs. These activities include public
health surveillance systems to identify disease outbreaks, development
of technologies to more rapidly detect and diagnose infectious agents,
improved communication systems to facilitate sharing information on
disease outbreaks, and plans for increasing the surge capacity of the
health care system and ensuring that the emergency and trauma care
systems can address national needs.
Federal funding, primarily through the National Institutes of Health,
has recently been increased for the development of vaccines,
antibiotics, and antivirals to treat emerging pandemic diseases and
diseases that could result from bioterrorism. The Department of Health
and Human Services is also expanding the Strategic National Stockpile
of essential drugs and equipment that could be deployed to the scene of
an outbreak. The Department of Health and Human Services also has
recently released its comprehensive plan for a medical response to an
influenza pandemic. Several federal agencies provide funding to state
and local governments for response planning, offer training for
emergency response, fund equipment purchases, and maintain response
teams that can be deployed in the event of an attack. However, concerns
remain that funding may not be directed to the areas of greatest need.
Key Efforts:
* Evaluate the ability of federal public health agencies to detect and
counter emerging threats to the nation’s health;
* Evaluate the effectiveness of federal programs in ensuring the
preparedness of state and local governments for the public health and
medical consequences of a public health emergency;
* Evaluate identified needs and associated cost projections for
federally funded efforts at state and local government levels to
improve public health surveillance, training, communication systems,
and laboratories for public health preparedness;
* Evaluate the development and acquisition of vaccines and other
treatments for biodefense.
Potential Outcomes:
* Improved federal agency efforts to counter emerging public health
threats;
* More effective programs to assist state and local government
preparedness efforts;
* More effective and efficient allocation of resources for addressing
state and local government needs;
* Improved access to essential vaccines and other treatments.
Performance Goal 1.1.6:
Evaluate Federal and State Program Strategies for Financing and
Overseeing Long-term Health Care:
The aging of the baby boomers, combined with medical advances that are
contributing to longer life expectancies, will lead to a tremendous
increase in the elderly population over the next three decades. In
particular, there will be a substantial increase in the number of
individuals 85 and older, many of whom will require long-term care
services. Financing these services—within the context of evolving
service needs and alternative settings for receiving long-term care
services—will be a challenge for the baby boomers, their families, and
federal and state governments.
Medicaid contributes the most for long-term care, covering at least
some of the costs for two-thirds of nursing home residents, followed by
private expenditures. Many individuals become impoverished, and thus
eligible for Medicaid, by “spending down” their assets. Taken together,
Medicaid, Medicare, and other public programs contributed about 70
percent of the $193 billion spent on nursing home and home health care
in 2004. Private insurance (including long-term care insurance as well
as services paid by traditional health insurance) accounted for about
10 percent, with the remainder paid by the elderly, the disabled, or
their families.
The long-term care expenditures for the elderly are disproportionately
used to purchase nursing home care. There is growing emphasis, however,
on delivering services in the community rather than in nursing homes
and other institutional settings—not only to the younger disabled but
also to elderly individuals. The highly vulnerable nature of the long-
term care population underscores the importance of oversight to ensure
that providers comply with federal and state quality standards.
Key Efforts:
* Examine nursing homes’ compliance with federal and state quality
standards, including the adequacy of federal and state oversight and
resources;
* Review federal requirements and standards and their use to ensure
quality care in community-based, long-term care settings, such as home
health arrangements, assisted living facilities, and adult day care;
* Analyze public and private payment sources and strategies that
finance the continuum of long-term care, including integrated programs
for elderly or disabled beneficiaries who are dually eligible for
Medicare and Medicaid.
Potential Outcomes:
* Improved quality of care in nursing homes;
* Improved public and private awareness of alternatives to traditional
long-term care settings and the federal role in ensuring quality care.
Performance Goal 1.1.7:
Assess State Experiences and Federal Oversight in Providing Health
Insurance Coverage for Low-Income Populations:
Two jointly funded federal-state programs that provide health insurance
to low-income Americans are vulnerable to the cyclical nature of the
economy and to the problems of exploitation endemic to large government
programs. Medicaid is a means-tested entitlement program that provides
health care coverage to over 50 million low-income individuals. SCHIP,
which was created in 1997, provides health insurance to uninsured
children whose families’ incomes are too high to qualify for Medicaid.
As SCHIP is scheduled for reauthorization in 2007, congressional
leaders will not only consider state experiences implementing SCHIP but
also whether the program has met the legislation’s original goal to
reduce the number of uninsured children.
In the economic downturn from 2000 to 2002, states were faced with
declining revenues and, with respect to their Medicaid programs,
increased enrollment of nearly 9 percent per year from 2000 to 2003. In
response to this fiscal crisis, states curtailed enrollment, reduced
benefits, and increased beneficiary cost-sharing requirements in an
effort to contain costs. While many states have recovered from this
downturn and Medicaid spending has slowed, program costs continue to
outpace growth in states’ revenues. As states and the federal
government look for ways to realize Medicaid savings, the recently
enacted Deficit Reduction Act of 2005 provides new state flexibility to
increase beneficiary cost-sharing requirements and reduce Medicaid
benefit packages. With this flexibility, the act is expected to reduce
federal Medicaid spending by $4.8 billion from 2006 to 2010 and by
$26.1 billion from 2006 to 2015; however, this reduced spending may
adversely affect access to care for these vulnerable populations.
Federal oversight continues to be essential to ensuring the programs’
financial and operational integrity. The challenges inherent in
overseeing a program of Medicaid’s size, growth, and diversity,
combined with the open-ended nature of the program’s federal funding,
puts the program at high risk for waste and exploitation. We added
Medicaid to our 2003 list of high-risk programs and have focused our
work on strengthening the program’s operations. Our work shows, for
example, that the federal government has been vulnerable to
questionable state Medicaid financing practices, through which some
states have generated excessive federal payments without paying their
fair share or without assurances that the payments are for covered
Medicaid services. The Deficit Reduction Act’s establishment of a
Medicaid Integrity Program as well as other provisions designed to
increase the Centers for Medicare & Medicaid Services’ level of effort
to support state activities to address fraud, waste, and abuse in
Medicaid are further recognition of the need to address systemic
financial weaknesses.
In addition, vigilance must be maintained regarding the appropriateness
of allowing states to enhance their flexibility in identifying eligible
populations and increasing cost sharing for beneficiaries eligible for
Medicaid and SCHIP. Our work further shows that some of the federally
approved waivers are inconsistent with statutory authority or long-
standing administration policy. Federal oversight must balance support
of state flexibility in designing and implementing states’
programs—which can vary greatly in terms of eligibility rules, benefits
offered, and delivery systems—with the need to ensure the appropriate
use of federal funds to meet the statutory and regulatory requirements
of both programs.
Key Efforts:
* Assess Medicaid and SCHIP coverage for vulnerable populations,
including chronically ill, elderly, and disabled populations;
* Evaluate Medicaid and SCHIP access to and use of services under
different service-delivery systems, payment methodologies, and cost-
sharing practices;
* Evaluate federal oversight of states’ implementation of Medicaid and
SCHIP, including ensuring fiscal integrity and the appropriate use of
authority to waive certain statutory provisions.
Potential Outcomes:
* Greater access to services for eligible beneficiaries;
* More efficient and effective delivery of services;
* Improved accountability and oversight of federal-state health
financing programs serving low-income populations.
Strategic Objective 1.2:
Lifelong Learning to Enhance U.S. Competitiveness:
Ensuring that people of all ages have the opportunity to continue to
learn throughout their lifetimes has long been regarded as critical to
the continued vitality of this democratic society and to its long-term
ability to compete in a global marketplace. To this end, the federal
government invests more than $89 billion per year in programs that
foster the development, education, and skill attainment of children and
adults of all ages. These programs include those targeted to the very
young, such as child care and early childhood education; those serving
primary and secondary school children; and higher education and
employment assistance programs that serve working-age adults. The
federal government’s involvement in programs and policies that promote
lifelong learning is becoming increasingly important in light of recent
trends in workforce demographics and changes in the global economy. For
example, immigrants, both legal and illegal, are having a profound
effect on U.S. schools, businesses, and social service programs. Our
nation’s ability to provide this population of children and adults with
the English language and academic skills they need to live as U.S.
citizens above the poverty line will contribute greatly to our nation’s
economic success. Moreover, as the demographics of the workforce change
and globalization increases, it will become even more important for
Americans to have the flexibility and skills to adapt to the changing
economic environment. As a result, it will be critical that the
Congress and the federal government have reliable information on how
efficiently and effectively federal funds are being used to provide or
augment educational and lifelong learning opportunities, particularly
among those most in need of help; how well federal programs are
achieving their objectives and meeting the needs of the 21st century
workforce; and how the management and oversight of these programs can
be improved.
The federal government has long had a central role not only in funding
child care, education, and employment services, but also in shaping
national education policy and ensuring that those most in need of help
have access to educational and employment opportunities. Federal
investment in child care has been growing, in part to support low-
income mothers who have entered the workforce after welfare reform. In
fiscal year 2005, the federal government invested over $13 billion in
early childhood education and care programs for young children. In
addition, Americans have placed a high priority on educating their
school-age children and preparing them to become self-sufficient adults
and productive workers. The federal investment in elementary and
secondary education has increased from over $20 billion in fiscal year
2000 to about $37 billion in fiscal year 2005. Beyond providing for
basic educational needs, a competitive national economy depends, in
part, on effectively preparing workers to compete in the labor force.
In fiscal year 2005, the Department of Education invested over $33
billion in vocational education, adult education, and student financial
aid.
Over the past half century, American demographics and the economy have
undergone significant changes, increasing the demand for early
childhood education and care as well as a more highly educated and
skilled workforce. As labor force participation has increased among
women, including mothers of young children, the availability of early
childhood education and care has become increasingly important. At the
same time, the aging of the American population will put additional
demands on the productivity of the working-age population, increasing
the demand for a more educated workforce. Researchers warn that unlike
in the past when economic growth was fueled in part by increases in the
size and skill of America’s workforce, over the next two decades the
potential for shortages of skilled workers could present mounting
challenges for productivity and economic growth. Since 1940, the share
of the nonfarm labor force composed of managers and professionals has
increased by more than 50 percent while the share made up of manual
production employees, laborers, and craftspeople has fallen by nearly
half. (See fig. 7.) A focus on developing and maintaining a flexible,
highly skilled workforce will be critical to ensuring our nation’s
economic competitiveness.
Figure 7: Percentage of Nonfarm Labor Force by Occupation:
[See PDF for image]
This is a line graph with two lines: Manufacturing, trade and services;
and Management and Professional. The vertical axis of the graph
represents percentage of total nonfarm labor force from 0 to 80. The
horizontal axis represents fiscal years from 1940 to 2005.
Source: GAO (analysis) and the Bureau of Labor Statistics (data).
[End of figure]
To meet these challenges, discussions of upcoming legislation affecting
key education and employment programs emphasize the increased
importance of targeting federal resources strategically to achieve
desired outcomes and managing these programs efficiently and
effectively. For example, as the Congress considers reauthorizing the
Head Start program, discussions have centered on provisions to increase
coordination between Head Start and other early childhood programs and
to increase teacher qualifications, among others. The No Child Left
Behind Act of 2001, which is due to be reauthorized in 2007, has
focused national attention on increasing accountability for states and
school districts to improve achievement for all students while
continuing the traditional focus of federal elementary and secondary
school programs that provide opportunities for children
from disadvantaged families. Helping states to meet these requirements
requires a larger role for the Department of Education in providing
leadership and oversight. The Higher Education Act, the Adult Education
and Family Literacy Act, and the Carl D. Perkins Vocational and
Technical Education Act are all due to be reauthorized in the near
future. The Congress will be debating several key issues, including the
role of federal grant and loan programs in increasing access to higher
education, institutional accountability for educational costs and
quality, how best to provide for a skilled workforce, and the
Department of Education’s management of the federal investment in
postsecondary education. Finally, the Congress has also begun work in
reauthorizing the Workforce Investment Act of 1998. Some of the issues
likely to be addressed include indicators of program performance and
funding flexibility. As these examples illustrate, the Congress and the
federal government continue to be challenged as they refine the
country’s education and employment programs to meet the needs of the
21st century economy.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
1.2.1: identify opportunities to improve programs that target federal
resources to activities that support lifelong learning;
1.2.2: assess the effectiveness of education and training programs in
meeting the needs of the 21st century workforce; and;
1.2.3: support improved oversight and management of education and
training programs.
Performance Goal 1.2.1:
Identify Opportunities to Improve Programs That Target Federal
Resources to Activities That Support Lifelong Learning:
The federal government invests more than $89 billion per year in
education and employment programs for children and adults to help them
to become self-sufficient and productive workers. To ensure the
efficient and effective use of these funds, many programs target
federal resources to disadvantaged or at-risk populations, including
those from poor families, with disabilities, or with limited English
proficiency.
In recent years, increasing emphasis has been placed on preparing
children to learn starting in early childhood. To that end, federal
resources devoted $13 billion to child care and early childhood
education in fiscal year 2005. The largest early childhood education
program, Head Start, had funding of over $6.8 billion in fiscal year
2005 and is targeted to low-income children. The federal government
also funds at least eight other programs that serve young children and
provides tax incentives for child care. In an era of scarce resources,
there is interest in ensuring that these funds are used effectively to
have the greatest impact. In ensuring that federal resources are
appropriately targeted, there continues to be concern about the cost,
coordination, and availability of child care and early childhood
education.
Americans have placed a high priority on educating children and
ensuring that all children have access to an education that will
prepare them to be productive citizens. Although most funding for
elementary and secondary education comes from state and local
resources, in fiscal year 2005 the federal government invested $38
billion in elementary and secondary education programs. Most major
sources of federal funding for elementary and secondary education are
targeted to disadvantaged or at-risk populations, including Title I of
the Elementary and Secondary Education Act (Title I), which is targeted
to low-income school districts and schools; special education programs
authorized by the Individuals with Disabilities Education Act; and the
Carl D. Perkins Vocational and Technical Education Act of 1998. In
addition, the No Child Left Behind Act of 2001 modified Title I
allocation formulas to increase targeting to high-poverty school
districts. As states move forward in improving their kindergarten
through 12th grade (K-12) education programs, it is important that the
federal government ensure that federal funds are appropriately targeted
to reach designated student groups.
To enhance U.S. competitiveness, the federal government has an interest
in promoting access to postsecondary education and lifelong learning.
The federal government’s investment in postsecondary education is
significant, but several factors confound the nation’s efforts to
support postsecondary goals. Students and their families face
escalating educational costs, postsecondary enrollments are projected
to increase in the next decade, and fiscal and budgetary pressures will
constrain the federal and state governments’ ability to support higher
education. In light of these challenges, it is critical that federal
resources be used effectively to expand access to higher education. To
that end, the federal government uses several tools to ensure access to
postsecondary education and lifelong learning, including Pell Grants,
student loans, tax benefits, state and local grant programs, funding to
improve the quality of institutions that serve high proportions of
minority and disadvantaged students, and funding to provide services to
help disadvantaged students to enter and complete college. In addition
to supporting a traditional college education, the Department of
Education and other agencies also administer programs for vocational
education, occupational training, and adult basic education that may
aid at-risk youth and other vulnerable populations’ transition to the
workplace.
Key Efforts:
* Evaluate the cost, coordination, and availability of child care and
early childhood education;
* Assess whether federal resources provided under the No Child Left
Behind Act are appropriately targeted to designated beneficiaries in K-
12 education programs;
* Assess the efficiency and effectiveness of programs designed to
promote access to and affordability of postsecondary education.
Potential Outcomes:
* More effective use of federal funds aimed at improving the
coordination and availability of child care and early childhood
education;
* Better targeting of federal resources to K-12 education programs
serving different types of at-risk students;
* Increased participation of disadvantaged students in postsecondary
education through more effective use of federal resources.
Performance Goal 1.2.2:
Assess the Effectiveness of Education and Training Programs in Meeting
the Needs of the 21st Century Workforce:
In recent years, the federal government has placed increased emphasis
on assessing the effectiveness of federally funded programs and
ensuring that they achieve their intended outcomes. While education,
starting in early childhood and continuing into adulthood, clearly
results in a more enlightened citizenry and strengthens the nation’s
democracy, it also demonstrably improves the nation’s workforce and the
quality of life for the nation’s workers. Yet, poor academic
achievement, poverty, and immigration challenge the nation’s ability to
prepare its citizens for living and working in the United States in the
21st century.
There is interest in measuring student outcomes and monitoring progress
in educational programs at all levels. In the area of early childhood
education and child care, federal initiatives emphasize the importance
of helping all children develop school readiness skills, including
early reading skills. Interest in assessing performance and outcomes
in this area contributed to our work on testing in the Head Start
program, teacher qualifications, and program data and monitoring. In
the area of K-12 education, there continues to be interest in how
schools are implementing the No Child Left Behind Act of 2001 and
measurement of outcomes. As required by the act, the states have
implemented standards-based assessments in reading and mathematics
to monitor performance outcomes and are working toward the goal of all
pupils reaching a proficient or higher level of achievement by the 2013
to 2014 school year. In the area of adult and vocational education and
employment programs, such as the Food Stamp Employment and Training
program and Trade Adjustment Assistance, a key issue is the extent to
which these programs are held accountable for achieving desired
results.In addition to improving performance and outcomes for all
students, federal initiatives have also included efforts to close
achievement gaps among disadvantaged populations. Students from ethnic
and racial subgroups, from poor families, with disabilities, or with
limited English proficiency generally have not performed as well as
other groups of children on tests. The No Child Left Behind Act of 2001
instituted new requirements to facilitate eliminating achievement gaps,
and policymakers are exploring ways to improve teaching and enhance
educational options in K-12 education. To facilitate eliminating these
achievement gaps in postsecondary education, the federal government
provides funding for services to help disadvantaged students not only
enter college, but also complete college.
Efforts to assess effectiveness of workforce development programs have
been increasingly focused on the extent to which these programs meet
the needs of employers in the face of increasing competition in the
global marketplace. The Workforce Investment Act of 1998 sought to
create a coherent nationwide service delivery system and shifted the
emphasis for federally funded workforce development services to
providing a full range of programs and services, including
postemployment training and assistance. However, there remain long-term
challenges to developing the sophisticated skills that employers
require and a slowing rate of growth in the number of workers entering
the workforce and attaining college degrees.
Key Efforts:
* Determine whether early childhood, education, and employment programs
are improving student performance and employment outcomes;
* Assess the impact of efforts to close achievement gaps among
disadvantaged populations in K-12 and postsecondary education
programs;
* Evaluate federal efforts to address employers’ changing needs for
workers.
Potential Outcomes:
* Greater assurance that the federal investment in early childhood,
education, and employment programs is improving student performance and
addressing current and future skill needs;
* Better congressional understanding of whether federal efforts to
close achievement gaps among disadvantaged populations are achieving
positive results;
* Enhanced ability of federal education and employment programs to meet
employers’ needs while enhancing the job opportunities, wage potential,
and job retention for America’s workers.
Performance Goal 1.2.3:
Support Improved Oversight and Management of Education and Training
Programs:
Ensuring adequate oversight and management of education and employment
programs is one of the federal government’s highest priorities. As
pressure increases to control federal spending in all areas of
government, it is important that reliable accountability systems are in
place. Our work has focused on evaluating and ensuring the Congress’s
ability to carry out its responsibilities to oversee federal agencies.
For example, we concluded that the Department of Health and Human
Services needed to improve monitoring of state grantees that receive
funds from the Community Services Block Grant, which provides funding
to local agencies that help disadvantaged families. We also evaluated
how the Department of Labor and states implemented some key provisions
of the Jobs for Veterans Act, which is intended to improve employment
and training services for unemployed veterans and to encourage
employers to hire them. We evaluated actions to improve performance and
accountability, data quality, and factors affecting program oversight
and accountability for a number of programs, including Workforce
Investment Act employment programs and Trade Adjustment Assistance
programs. In addition, we provided information to the Congress on
possible changes to its management of the Federal Family Education Loan
Program and the Federal Direct Loan Program that could reduce federal
costs while helping borrowers manage their student loan debt.
Because education and employment programs rely on a large network of
state, local, and private entities to provide services, there are
substantial challenges to ensuring accountability. One of these
challenges is ensuring that states provide accurate and complete data
to federal agencies. Federal programs carried out in partnership with
states and localities continually balance the competing objectives of
collecting uniform performance data with giving program implementers
the flexibility they need. For example, as a condition of receiving
federal funding for elementary and secondary education programs, states
each year provide vast amounts of data to the Department of Education.
To improve the information by which it evaluates such programs and to
ease states’ reporting burden, the Department of Education initiated an
ambitious, multiyear plan in 2002 to consolidate elementary and
secondary data collections into a single, departmentwide system focused
on performance. Given the importance of this initiative, we conducted
work to provide the Congress with information on its progress. Our work
also has focused on the quality of performance data for the key
employment and training program—the Workforce Investment Act—and for
Trade Adjustment Assistance.
Opportunities also exist to more effectively use limited resources and
improve services and outcomes through coordination between and within
programs. It is important to know the extent to which federally funded
programs target the right people and the right areas and make the best
use of available resources. For example, we found that the Department
of Education, in its oversight of the Troops-to-Teachers program, has
taken some steps to improve program management, but has not effectively
coordinated resources with another teacher recruitment program also
targeting military personnel. In addition, our recent work found
limited coordination among over 200 federally funded programs designed
to increase the numbers of students and employees in the science,
technology, engineering, and mathematics fields. Since the report was
issued, the Congress established an Academic Competitiveness Council to
identify, evaluate, coordinate, and improve federal science,
technology, engineering, and mathematics programs. We are also
evaluating opportunities for more effective coordination among Head
Start and other federally funded early childhood education programs.
Key Efforts:
* Evaluate federal oversight and management of education and employment
programs, including accountability systems and opportunities for
restructuring programs to enhance cost-effectiveness;
* Evaluate oversight of and support for state, local, and private
sector program service providers and efforts to coordinate service
delivery of education and employment programs.
Potential Outcomes:
* Administrative and potential legislative actions to improve education
and employment programs and more efficiently target federal resources;
* Enhanced oversight, support, and coordination of federal, state, and
local entities responsible for education and employment programs.
Strategic Objective 1.3:
Benefits and Protections for Workers, Families, and Children:
The shift to a more global economy, technological advances, changing
workforce demographics, and the growing federal deficit are challenging
customary federal approaches to providing benefits to the needy—low-
income workers, the indigent, at-risk children, and people with
disabilities—and protecting workers and their families. While
globalization will likely fuel economic growth, it is also likely to
create a more fluid job market where workers move from job to job
throughout their working lives. Some of this movement will be
voluntary; but some workers and their families may find the transition
more challenging and will require income support, nutrition assistance,
and other social services at some point in their lives. In order to
reach these beneficiaries and improve services, federal assistance
programs must adapt to these market changes, and they must do so within
very tight budget constraints. While enrollment and costs for the
largest federal disability programs are growing and are poised to grow
even more rapidly in the future, we have found that many of these
programs are poorly positioned to provide meaningful and timely support
for people with disabilities. Many of the same forces creating
challenges for these programs will create new challenges for worker
protection programs as well. Federal efforts to protect workers must
account for changes in the nature of work: membership in organized
labor has declined, traditional work arrangements are giving way to
alternatives such as temporary employment and teleworking, and lifelong
service with a single employer is becoming much less common. Finally,
identity theft has emerged as a growing concern for many. The Social
Security number has long been used primarily as a means to record
workers’ contributions and benefits. Now, the Social Security number is
a universal identifier used by public agencies at all levels of
government and the private sector. Efforts to address the terrorism
threat have underscored both the weaknesses and strengths of current
efforts to protect individuals’ identities.
As the labor market tightens over the next two decades, tapping into
new sources of workers will be important. The nation will need to look
outside the traditional workforce to find ways to bring people who have
long remained on the sidelines into the job market. Specifically, a
modern labor force should include at-risk populations, people with
disabilities, and people with weak attachments to the labor force.
Federal policies for providing income supports for the low-income
population have increasingly focused on promoting work in exchange for
government assistance. For example, the federal government invested
about $260 billion in fiscal year 2003 to help those who have been laid
off from their jobs and assist them in becoming reemployed, assist and
rehabilitate workers with injuries or disabilities, and encourage
people on welfare to work. (See fig. 8.) As the nation reconsiders key
aspects of its immigration policies, it will be important to balance
future workforce needs against other national and homeland security
needs and adequate protections for the current workforce.
Figure 8: Fiscal Year 2003 Expenditures on Selected Benefits Programs:
This figure is a pie-chart of Fiscal Year 2003 expenditures on selected
benefits programs, with dollars in billions. The depicted expenditures
are as follows:
Disability programs-benefits: $120.0;
Unemployment insurance benefits: $54.1;
Benefits for low-income workers, families, and children: $46.0;
Food and nutrition programs: $39.3.
Source: GAO (analysis) and the Office of Management and Budget (data).
[End of figure]
Also, work alone cannot meet some social needs. Federal programs to
feed people and educate them on the benefits of a nutritious diet have
long focused on helping low-income individuals, families, and children
avoid hunger and make healthy food choices. New nutrition concerns are
being raised as the nation seeks to protect itself against the health
hazards brought on by obesity. In schools across the country, concerns
have been raised about the nutritional content of the meals served and
the ready availability of nonnutritious foods. Likewise, a key federal
nutrition program is updating its recommended foods to respond to the
changing nutritional needs of its participants. There are also a number
of federal programs targeted to at-risk children to help ensure that
they get a healthy start. Each year, an estimated 900,000 children are
the victims of abuse and neglect by their parents, relatives, or other
caregivers. Tragically, approximately 1,300 children die each year from
abuse and neglect. The federal government supports states’ efforts to
care for these children and invests almost $8 billion annually to
provide care for children who need placement outside their homes,
services to help keep families together or to reunite them, and
training and research activities to improve child welfare services
nationwide.
Many of the nation’s benefits programs are vulnerable to fraud, waste,
and abuse. The Department of Labor estimates a 10.6 percent error rate,
including $3.4 billion in overpayments, in unemployment insurance
benefits paid in 2004. Likewise, the Department of Agriculture reports
that there were about $1.4 billion in payment errors in the Food Stamp
Program in 2004. While the federal government and the states are taking
steps to reduce these errors, more needs to be done. The mounting
federal deficit will make it difficult to maintain funding for these
benefit programs, and program officials will have to ensure that
benefits are paid correctly and reach those with the greatest need.
The federal government also plays a vital role in assisting people with
disabilities by providing employment-related services, medical care,
and income support. Public concern and congressional action have
produced a broad array of federal programs designed to help people with
disabilities, but many of these programs have not evolved in line with
economic, medical, technological, and social changes. These changes
have increased the opportunities for individuals with disabilities to
live with greater independence and more fully participate in the
workforce; however, the rate of return to work for individuals with
disabilities receiving cash and medical benefits is very low.
Furthermore, program enrollment and costs for the largest federal
disability programs have been growing and are poised to grow even more
rapidly in the future, further contributing to the federal government’s
large and growing long-term structural deficit.
Federal employment and worker protection programs must deal with new
challenges as technology, changes in the organization of work, and
increasing global interdependence are redefining the labor market for
workers and employers. These changes raise concerns about the adequacy
of efforts to ensure that workers have safe, healthy, and productive
workplaces. Regulations and activities designed to ensure workplace
safety and health must be revised to accurately reflect the
technological changes of the recent past. The Congress and the
administration face challenges as they redefine the role of public
policies to help employers and workers enhance productivity and
increase earnings while also protecting workers’ rights.
Identity theft is a growing concern for many Americans. Efforts to
address the terrorism threat have underscored both the weaknesses and
strengths of current efforts to protect individuals’ identities. In
particular, the Social Security number, once an internal marker for the
agency to record contributions and pay benefits, is now virtually a
universal identifier, used by public agencies at all levels of
government and private business entities of all sizes and from many
different economic sectors. The Social Security number’s wide use,
besides raising many serious privacy issues, has also put citizens
throughout the nation at risk of identity theft, fraud, and other types
of illegal activity. How to use the Social Security number in a way
that ensures effective agency operations, prevents its illegal use, and
protects the privacy of U.S. citizens is a formidable challenge facing
the Social Security Administration.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
1.3.1: identify opportunities to improve programs that provide social
services, economic, and nutrition assistance to individuals, families,
and children;
1.3.2: identify ways to improve federal policies and support for people
with disabilities; and:
1.3.3: assess the effectiveness of strategies and safeguards to protect
workers, as well as individuals’ identities, in an increasingly complex
work and economic environment.
Performance Goal 1.3.1:
Identify Opportunities to Improve Programs That Provide Social
Services, Economic, and Nutrition Assistance to Individuals, Families,
and Children:
As an increasingly volatile job market creates and eliminates jobs,
programs that provide income support, nutrition assistance, and other
social services to low-income people and the unemployed will have to
adapt to changes in global markets under tight federal budget
constraints. Many federal, state, and local assistance programs are
designed to ease the transition into and between jobs, but more
information is needed on whether the assistance is targeted to the
people with greatest needs or whether the programs are achieving their
intended objectives. Moreover, while globalization will likely fuel
economic growth, it is also likely to create a more fluid job market
where workers move from job to job throughout their working lives.
While some of this movement will be voluntary, some workers may face
new challenges participating in a more global marketplace. In fiscal
year 2004, unemployment insurance—the nation’s support program for
newly unemployed workers—covered about 129 million workers and paid
about $41 billion in benefits to 9 million workers; yet there is little
national information to fully assess the program’s efforts to foster
reemployment. States and the federal government spent about $26 billion
on the nation’s main welfare program—the Temporary Assistance for Needy
Families program—in fiscal year 2004. However, policymakers lack the
information they need to assess states’ progress in meeting federal
welfare reform goals and ensure that federal funds are used to assist
needy families cost effectively. The recently reauthorized Temporary
Assistance for Needy Families program will focus increased attention on
states’ efforts to involve more welfare recipients in work-related
activities.
About 27 percent of all children live in one-parent households and, in
fiscal year 2003, there were about 16 million child support cases. As
the workforce becomes increasingly mobile and workers move from job to
job, there are concerns about the Child Support Enforcement and Family
Support program’s ability to increase collections. In addition, the
effectiveness of current enforcement tools and how new databases are
used—particularly in light of privacy concerns—have drawn policymakers’
attention.While these income support payments are a crucial bridge for
many, the federal government also reaches one in five Americans through
its nutrition assistance programs. These programs spend more than $50
billion a year to provide food, cash, or services to help decrease
hunger and improve nutrition among low-income families, children, and
individuals. These programs now face the additional challenge of
confronting the rising number of adults and children who are overweight
or obese. Yet little is known about the effectiveness of nutrition
education programs, and in schools, concerns have been raised about the
nutritional content of the meals served and the ready availability of
nonnutritious foods. Also, programs are modernizing in response to the
need for more cost-effective service delivery. The program for at-risk
low-income pregnant women, infants, and young children is piloting a
new electronic benefit system while facing the dual challenges of
updating its package of recommended foods and meeting new cost
containment policies.
The mounting federal deficit combined with a steadily increasing demand
for benefits from these economic support and nutrition programs
highlight the need to ensure that benefits are paid correctly and reach
those in most need. Some progress is being made to address these
programs’ vulnerability to fraud and abuse. For example, the Food Stamp
Program has succeeded in decreasing payment errors and benefit
trafficking—the exchange of food stamps for cash or certain nonfood
items—and the Department of Labor is taking some steps to improve the
unemployment program’s integrity. Nevertheless, recent estimates show
that $1.4 billion in Food Stamp benefit payments were trafficked or
made in error, and the unemployment insurance program overpaid its
beneficiaries about $3.4 billion in 2004.
Key Efforts:
* Determine whether social services, economic, and nutrition assistance
programs are achieving their goals and whether federal resources are
targeted to the meet the needs of the people they are designed to
serve;
* Assess federal and state oversight and management of social services,
economic, and nutrition assistance programs to ensure program
integrity;
* Analyze and highlight key issues associated with cost-effective
service delivery, effects on special populations, interactions among
programs, and the changing human services environment.
Potential Outcomes:
* Improved access to benefits by targeting scarce resources to
individuals, families, and children in greatest need;
* Enhanced oversight and improved techniques to address fraud and abuse
in the nation’s social service, economic, and nutrition assistance
programs;
* Better coordination between levels of government and federal programs
to ensure that federal assistance is cost-effective, addresses the
special needs of special at-risk populations, and adapts to a changing
human services environment.
Performance Goal 1.3.2:
Identify Ways to Improve Federal Policies and Support for People with
Disabilities:
Federal disability programs have experienced significant growth over
the past decade and are expected to grow even more steeply as more baby
boomers reach their disability-prone years. In particular, the Social
Security Administration and VA oversee five major disability programs
that provide cash assistance to individuals with physical or mental
conditions that reduced their earning capacity, collectively paying
more than $120 billion in cash benefits to more than 13 million
beneficiaries in 2003. In addition, almost 200 other programs provide
varying types and levels of support for individuals with disabilities.
Paradoxically, recent scientific advances as well as economic and
social changes have redefined the relationship between impairments and
work. Advances in medicine and technology have reduced the severity of
some medical conditions and have allowed individuals to live with
greater independence and function in work settings. Moreover, the
nature of work has changed in recent decades as the national economy
has moved away from manufacturing-based jobs to service- and knowledge-
based jobs.
The labor force participation rate of people with disabilities has
remained quite low as federal disability programs remain mired in
concepts from the past and are poorly positioned to provide meaningful
and timely support for workers with disabilities. In addition, the
Social Security Administration and VA struggle to provide accurate,
timely, and consistent disability decisions to program applicants. For
these reasons, we added modernizing federal disability programs to our
2003 high-risk list. Our designation of the Social Security
Administration’s disability programs as high risk can serve as a
catalyst to bring together the partners needed to resolve these long-
standing problems. As the primary manager of multibillion-dollar
programs with responsibility for significantly large trust funds, the
Social Security Administration must take the lead in forging the
partnerships and cooperation that will be needed in reorienting federal
disability programs.
Key Efforts:
* Determine the extent to which federal policies and programs that
support employment and independence of individuals with disabilities
operate consistently with the current state of law, science, medicine,
technology, and labor market conditions, and assess the adequacy of any
actions taken to modernize these programs;
* Assess the extent to which federal disability programs’ internal
controls are adequate for ensuring program integrity and whether
services and benefits are provided in accordance with best practices;
* Assess the extent to which multiple disability programs provide
seamless and efficient service and support, through coordinated
planning, goals, and criteria for eligibility.
Potential Outcomes:
* Improvement in current and future service-delivery structures and
practices, including modernization within and increased coordination
among federal disability programs;
* Administrative and legislative actions to improve the timeliness,
accuracy, and consistency of disability decisions for program
applicants;
* Reduced fraud, waste, and overpayments in disability programs.
Performance Goal 1.3.3:
Assess the Effectiveness of Strategies and Safeguards to Protect
Workers, as Well as Individuals’ Identities, in an Increasingly Complex
Work and Economic Environment:
Regulations and activities designed to provide protections for workers
may need to be revised to reflect dramatic changes in the demographics
of the nation’s workforce as well as heightened risks of terrorism and
identify theft. Federal agencies that help employees provide safe,
healthy, and productive workplaces, such as the Occupational Safety and
Health Agency, will have to adapt their efforts to changes in the
nature of work itself. For example, membership in organized labor has
declined, traditional work arrangements are giving way to alternatives
such as temporary employment and teleworking, and lifelong service with
a single employer is becoming much less common. Federal and state
enforcement authorities, which for years have largely been able to
focus their efforts on the most dangerous work sites or exploitative
employers, now may have to rethink what types of workplace safety
issues are paramount. Namely, the nation faces heightened security
risks, and workers may be less able to work productively and creatively
if they do not feel safe in the workplace and believe their employers
are not devoting sufficient resources to protecting their health and
safety. However, the level of protection that employers should provide
in response to external threats to workers’ safety, such as threats to
national security, is unclear. As employers and workers adapt to these
changes, it will be important to maintain a balance between ensuring
the safety and health of workers and minimizing burdens for employers.
No consensus exists on the types of revisions that would result in the
most efficient ways of protecting workers and minimizing employers’
burden in the 21st century.
Protecting Americans against identity theft is a growing concern for
many, as efforts to address the terrorism threat have underscored both
the weaknesses and strengths of current efforts to protect individuals’
identities. While the Social Security Administration relies on the
Social Security number as an essential element of its operations, the
number has also become an integral part of daily life for millions of
Americans. Public and private employers, hospitals, and individuals now
use the number to conduct routine business, obtain drivers licenses and
other government documents, and apply for loans and employment as well
as for a host of other activities. As a result, Social Security numbers
are easily obtained by almost anyone from any number of public
documents, raising a wide array of serious policy issues, including the
increased potential for identify theft and other types of fraud or
illegal activity, the degree to which foreign nationals can access
federal employment and education programs, and the privacy protection
of individuals’ personal information. Our work on the use of the Social
Security number in American society and agency policies regarding its
use seeks to fill a major gap in the policy debates on all these
issues.
Key Efforts:
* Assess the effectiveness of federal and state efforts to ensure that
workers are treated fairly and receive the wage, benefit, and safety
and health protections afforded by federal labor laws and regulations;
* Assess federal and state efforts to promote workplace quality through
direct intervention and cooperative approaches with industry and labor
organizations;
* Assess efforts by the Social Security Administration and other
agencies to appropriately use and safeguard an individual’s Social
Security number while improving government operations and minimizing
the risk of illegal activity.
Potential Outcomes:
* Better-informed congressional and agency decisions on the types of
changes needed in regulations and enforcement policies to address
current work arrangements and workplace conditions;
* Enhanced ability of enforcement and other strategies, such as
voluntary compliance programs, to result in safer workplaces and
healthier workers while eliminating unnecessary burdens for employers;
* Increased efficiency and financial management in the delivery of
worker protection programs and policies;
* Improved public safety and homeland security through responsible use
and improved security of Social Security numbers.
Strategic Objective 1.4:
Financial Security for an Aging Population:
Providing retirement income security in the United States has
traditionally been a shared responsibility of government, employers,
and individual workers. However, the burgeoning federal
deficit—especially in federal retirement programs such as Social
Security and Medicare—and declining coverage of employer-provided
pension plans suggest a shift in responsibility to individual workers
for ensuring an adequate and secure retirement. These trends are the
outgrowth of broader developments associated with population aging,
global competition, and labor market trends and are unlikely to abate
in the near future. With the baby boom generation poised to move into
retirement beginning in 2008, the Congress will need more information
on the economic, financial, and social implications of these trends to
ensure that the government, employers, and workers share retirement
risk in an equitable and efficient manner. Such information will also
aid workers in making informed retirement planning decisions, including
the decisions regarding when and how to retire and invest their
savings.
Since 1960, life expectancy at age 65 has increased by over 3 years. By
2050, persons aged 65 and over will account for over 20 percent of the
total U.S. population, up from about 13 percent in 2000. Consequently,
people are expected to spend more time in retirement. These trends are
adversely affecting the sustainability of pay-as-you-go-financed
federal retirement programs. Although the Social Security trust funds
are not expected to be depleted until 2040, the strains on government
finances will begin as early 2017 when the program starts to pay out
more than it takes in each year. Given current benefit and revenue
streams, the federal retirement programs are unsustainable over the
long run, and the federal government is going to have to make some hard
choices in reforming them. To the extent that such reforms reduce
benefits to workers, this will affect the level of financial resources
they can draw upon during retirement.
Employer-provided pensions have been and remain an important
contributor to American retirement security, with private pension
benefits accounting for about 10 percent of the total income received
by persons 65 years of age and older. Yet, like the federal retirement
programs, the national employer-provided pension system is also facing
serious financial challenges. The past two decades have seen a dramatic
decline in the number of defined benefit pension plans and the
percentage of the private labor force covered by these plans. [Footnote
3] Historically, defined benefit plans have been an important and
stable source of retirement income, typically providing monthly
payments throughout the retirement life of the participant. The decline
means that workers approaching retirement will have to make up the
difference in income from another source, most likely from personal
saving or extending work life. Meanwhile, the role of defined
contribution plans in the private pension system has increased
dramatically, but this trend has not necessarily led to increases in
coverage. [Footnote 4] The number of defined contribution plans rose
from 341,000 in 1980 to 653,000 in 2003, covering 64.1 million workers
and retirees. As of 2006, 54 percent of all workers in private industry
were offered a defined contribution plan. However, participation in
such plans is typically voluntary, and many covered employees choose
not to participate. In 2006, only 43 percent of all workers in private
industry chose to participate in such a plan—an 80 percent
participation rate among those offered a defined contribution plan.
Despite the outlook for federal retirement programs and employer-
sponsored pension plans, individuals have so far not filled in the gap
with personal saving. Only 44 percent of families headed by someone
aged 55 to 64 owned an Individual Retirement Account, and among these
families, median Individual Retirement Account balances were $60,000.
From 2000 to 2005, meanwhile, personal saving as a percentage of
disposable income averaged just 1.3 percent—one-sixth the postwar
average. In 2006, the saving rate was -1.0 percent, the lowest level in
almost 50 years. (See fig. 9.) Helping to depress the saving rate has
been the widespread “leakage” of retirement assets to support
nonretirement consumption. Through 2003, for example, 21.6 percent of
recipients of lump sum pension distributions reported diverting some
part of their pension to support consumption.
Figure 9: Personal Saving Rate, 1960–2006:
This is a line graph depicting the personal savings rate from 1960
through 2006. The vertical axis of the graph represents percentage of
disposable personal income from -2 to 12. The horizontal axis of the
graph represents fiscal years from 2960 to 2005.
Source: Bureau of Economic Analysis.
[End of figure]
In response to these challenges, many workers may need to stay in the
labor market past today’s typical retirement age, which is at about age
62 for both men and women. Greater labor force participation by older
workers would benefit the economy by filling anticipated skill gaps and
by allowing workers to accumulate more assets and delay the drawdown of
assets for retirement. This trend may already be under way. In 2003,
almost 33 percent of men aged 65 to 69 participated in the labor force,
up from 26 percent in 1990; similarly, the participation rate for women
in the same age group rose from 17 percent to almost 23 percent during
this period. However, while many employers indicate a willingness to
recruit or retain older workers, most employers are not currently
engaged in these practices. To date, most employers have not made the
types of changes—such as establishing alternative work and schedule
arrangements or allowing phased retirement—that would accommodate the
needs and preferences of older workers.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals,
which are associated with the three sources of financial security for
older Americans—government, employer, and individual resources:
1.4.1: assess the policy and administrative challenges to the federal
government in providing for Americans’ financial security in
retirement;
1.4.2: assess the financial and administrative challenges to providing
employer-sponsored pensions and retaining older Americans in the
workforce, and the implications of these challenges for national
retirement security; and;
1.4.3: assess options and strategies to help individuals ensure
retirement security for themselves and for their families.
Performance Goal 1.4.1:
Assess the Policy and Administrative Challenges to the Federal
Government in Providing for Americans’ Financial Security in
Retirement:
Demography is playing a major role in the financial weakness of Social
Security and other retirement plans, as rising age longevity, declining
fertility, and the large retirement of the baby boomers is leading to
the projected rapid aging of the population. This aging will slow the
rate of labor force growth, posing challenges for robust economic
growth and the federal budget. Rising federal fiscal deficits will pose
a growing risk to the sustainability of Social Security and the future
living standards of the retired and nonretired alike. Programmatic
reforms that achieve long-term financial solvency and consider the need
to balance benefit adequacy, progressivity, and equity will continue to
be on the national policy agenda and will only become more pressing in
the future. Reform efforts will also have to consider any possible
adverse effects on labor force participation and the willingness to
save, particularly for lower-income workers. A related issue is the
impact of rising health costs on the level of Social Security benefits.
For example, the average Medicare Part B (medical services) plus Part D
(prescription drug) premiums will rise from 12 percent of the average
Social Security benefit in 2010 to about 26 percent in 2080. Similarly,
the average amount of deductibles, co-payments, and other cost-sharing
amounts would increase from 17 percent of the average Social Security
benefit in 2010 to 37 percent in 2080. Management challenges to the
Social Security Administration will also become an area of prominence.
Agency workloads are expected to explode as the baby boom generation
enters retirement. In this context, the Congress, as it continues to
grapple with these issues, will also need to be mindful of the effects
of reform on the ability of the Social Security Administration to
manage its programs effectively and the agency’s ability to implement
that reform.
Key Efforts:
* Analyze effects of Social Security solvency, economic, labor market,
pension expenditure and coverage, and health care cost trends on
retirement income adequacy for all Americans;
* Assess the implementation and administrative challenges facing the
Social Security Administration in providing customer service and
maintaining the integrity of the benefit program, despite a rising
workload.
Potential Outcomes:
* Greater congressional and public understanding of the factors that
influence the Social Security and Medicare programs’ contributions to
the retirement income adequacy of all Americans, and what changes to
these federal programs may be considered;
* Improved understanding of the administrative challenges facing the
Social Security Administration and how they might be met.
Performance Goal 1.4.2:
Assess the Financial and Administrative Challenges to Providing
Employer-Sponsored Pensions and Retaining Older Americans in the
Workforce, and the Implications of These Challenges for National
Retirement Security:
The percentage of all civilian workers participating in retirement
plans has remained more or less constant since the late 1970s,
averaging just under half of the workforce. The emergence of defined
contribution plans and the decline in coverage by defined benefit plans
has exposed an increasing number of participants to investment risk, as
participants in these plans have responsibility for managing their
retirement assets. Also, about one-fifth of workers whose employers
sponsor a defined contribution plan choose not to participate. In
addition, there is substantial evidence of “leakage”—the spending of
retirement balances prior to retirement. These trends raise the
question of whether defined contribution plans, in their current form,
are sufficient to meet future retirement needs, especially for low- and
middle-income workers. At the same time, however, funding problems also
plague the defined benefit system. The continued weakness of major
employers in manufacturing and transportation sectors suggests that the
Pension Benefit Guaranty Corporation could face larger deficits in the
years to come, posing threats to the insurance fund’s solvency. Low
pension plan participation combined with these threats to retirement
income adequacy suggest that large numbers of older Americans will need
to supplement their retirement income with earnings. At the same time,
slower population growth in the traditional working ages is likely to
tighten labor markets—which can be expected to increase employment
opportunities for older workers. To date, however, most employers have
not responded to the aging of the labor force with changes that would
facilitate the hiring of older employees. Effectively addressing fiscal
and workforce challenges associated with population aging may require
policies that balance the interests of an aging workforce with those of
labor market flexibility.
Key Efforts:
* Analyze options to address the significant financial challenges to
the Pension Benefit Guaranty Corporation and state and local government
employers from large underfunded defined benefit pension plans and
examine the current federal agency regulatory and enforcement efforts
to protect the benefits of plan participants;
* Identify strategies to enhance the role of private pensions of all
designs and increased employment of older workers in providing a secure
retirement for low- and medium-wage workers.
Potential Outcomes:
* Increased stabilization of the nation’s private defined benefit
system, improved Pension Benefit Guaranty Corporation financial
solvency, and enhanced value of defined contribution plans through
better regulation and initiatives to foster greater coverage and
benefits;
* Greater congressional and employer understanding of the labor market
challenges posed by an aging population and ways to enhance the labor
force participation of older workers.
Performance Goal 1.4.3:
Assess Options and Strategies to Help Individuals Ensure Retirement
Security for Themselves and Their Families:
As of the end of 2005, the combined assets of defined contribution
pension plans and Individual Retirement Accounts, at $6.6 trillion,
were three times greater than assets in defined benefit plans. This
growth in personally managed retirement assets is changing the
character of retirement planning. Although defined contribution plans
are portable in a way that defined benefit plans are not, along with
the increased decision making inherent to defined contribution plans,
individuals bear increased risk. These risks include such unpredictable
factors as market expectations regarding future economic growth rates,
global capital flows, and other macroeconomic factors, along with rates
of return. In addition, there is uncertainty about future health care
costs and individual longevity. All of these factors contribute to a
greater risk of outliving one’s assets in retirement. Indeed, the share
of lifetime income spent in retirement has been rising, while
individual and employer-sponsored retirement savings have not.
These trends signal the need for individuals to save more for
retirement and may stimulate demand for financial products designed to
improve individual asset and risk management. Yet if the personal
saving and pension plan participation rates are indicators, retirement
saving and pension plan participation may not be responding to the
rising costs of retirement. As individuals face the resulting shortfall
in personal retirement finances, many will seek to remain in the labor
force longer. Public and employer policies that promote lifelong
retirement planning can aid in both asset accumulation strategies and
goals as well as in the retirement decision itself. Fundamentally,
there is a real need to increase financial literacy among all
Americans.
Key Efforts:
* Examine challenges to workers posed by the rise in the risk and
responsibility they bear for their own retirement security, the
barriers to employment at older ages, and the trade-off between health
and retirement plan participation;
* Identify and assess existing financial vehicles and emerging options
to foster greater individual retirement savings, and the extent to
which such savings are redirected to alternative consumption purposes.
Potential Outcomes:
* Greater awareness of retirement income needs and the various
strategies to ensure income security in old age;
* Greater individual awareness of the need to save more, or work later,
in anticipation of higher lifetime retirement costs.
Strategic Objective 1.5:
Ensuring a Responsive, Fair, and Effective System of Justice:
The terrorist attacks of September 11, 2001, redefined the mission of
the Department of Justice, making the prevention of terrorism and the
promotion of national security its primary mission. In accordance with
this shift in focus, the Department of Justice restructured its
internal organizations. In particular, it undertook a substantial
restructuring of the Federal Bureau of Investigation, redefining the
agency’s mission and priorities in light of the increased focus on
antiterrorism. Moreover, the USA Patriot Act, passed in October 2001,
significantly expanded federal law enforcement and investigative
authority and, with billions of dollars in additional funding, greatly
increased the federal counterterrorism role. Although the Department of
Homeland Security (DHS) is expected to coordinate the executive
branch’s efforts to detect, prepare for, prevent, respond to, and
recover from terrorist attacks within the United States, many of these
functions are the primary roles of law enforcement at the federal,
state, and local levels. This heightens the importance of effective
coordination and cooperation and the Department of Justice’s
responsibilities and leadership in preventing terrorism and promoting
homeland security.
In addition to its primary mission, the Department of Justice continues
to enforce federal laws; deter, investigate, and prosecute federal
crimes, including gun, drug, and civil rights violations; incarcerate
offenders; partner with federal, state, and local governments and
organizations to prevent crime, including crimes against children; and
provide leadership and assistance in meeting the needs of crime
victims. In particular, the Congress and the public look to the federal
government for leadership on how to control domestic and transnational
crime, including terrorism, while protecting civil liberties. Increases
in funding also require that the federal government efficiently use and
effectively manage the resources available for the administration of
justice and the judiciary.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
1.5.1: assess the federal justice system’s ability to operate fairly
and efficiently and;
1.5.2: identify ways to improve federal agencies’ ability to prevent
and respond to terrorism and other major crimes.
Performance Goal 1.5.1:
Assess the Federal Justice System’s Ability to Operate Fairly and
Efficiently:
In the wake of the September 11 attacks, counterterrorism figures
prominently in the Department of Justice’s efforts, as it attempts to
balance that priority with its efforts to address traditional crimes
(such as violent, fraud, and drug crimes), protect citizens (through
incapacitation of criminal activity), and safeguard the judiciary.
Through legislation such as the USA Patriot Act, the Congress provided
the Department of Justice and DHS, which was created with the primary
mission of protecting the nation against further terrorist attacks,
with tools to facilitate investigating suspected terrorists. Under
provisions of these acts and by executive authority, investigators have
accessed information that can be viewed as private, thereby presenting
challenges to enhancing our nation’s security while at the same time
protecting individual rights.
While the Department of Justice has taken steps to align its goals with
its performance measures, independent analyses have not been performed
on the extent to which it has achieved this alignment, gathered
reliable data on performance outcomes, and used credible evaluations to
assess its effectiveness. We have opportunities to assess the degree to
which the department’s efforts are based upon knowledge of what works.
Traditionally, some of our work in this area has focused on the
agency’s grant programs. Moving forward, we need to expand our efforts
to assess the Department of Justice’s stewardship to address a variety
of substantive and programmatic matters. These may include resource
allocation issues as they relate to the Federal Bureau of Prisons’
expenditures, specific grant programs, crime victims’ rights, as well
as quality assessments of Federal Bureau of Investigation information.
Finally, both the Department of Justice and the federal judiciary,
responding to congressional direction, have undertaken a number of
actions that may have resource allocation implications. For example, in
the Justice for All Act of 2004, the Congress enumerated the rights of
victims of federal crimes and required the Department of Justice and
the federal judiciary to afford victims these rights; their efforts to
do this may affect their workloads. Other legislation provided that a
growing number of class action lawsuits may now originate in federal
court, and new requirements enacted in bankruptcy legislation may
affect the workload of the federal judiciary and the Department of
Justice’s U.S. Trustee Program. In addition, immigration cases continue
to increase, particularly along the Southwest border, and the judiciary
faces challenges of supervising an increasing number of offenders on
postprison community supervision at the same time that it is facing a
growing number of retirements among supervisory officers. Monitoring
how the judiciary responds to these and other workload demands also is
important because it affects other aspects of the federal justice
system, such as prosecution decisions and prison populations.
Key Efforts:
* Assess Department of Justice and DHS efforts to balance security with
protecting individual privacy and civil liberties;
* Evaluate whether the Department of Justice and its components are
being effective stewards of their resources;
* Evaluate the federal judiciary’s efforts to manage its workload and
respond to changing concerns related to litigation, such as those
related to bankruptcy and immigration;
* Assess major components of federal detention and correction
operations as they address new and existing challenges;
* Evaluate progress in addressing challenges facing the nation’s
election system.
Potential Outcomes:
* Increased balance between efforts to protect civil liberties and
enhance security;
* Improved congressional oversight of Department of Justice resources;
* More effective alignment of the Department of Justice’s allocations
to performance goals and outcomes based on credible evidence of the
effectiveness of its efforts;
* Identifying judicial workload imbalances and potential solutions.
Performance Goal 1.5.2:
Identify Ways to Improve Federal Agencies’ Ability to Prevent and
Respond to Terrorism and Other Major Crimes:
The September 11 attacks changed the priorities of the Department of
Justice, its components, and various other federal law enforcement
agencies. For example, the missions, roles, and relationships of
various federal law enforcement agencies were changed. New and revised
partnerships and intergovernmental agreements between and among
federal, state, and local law enforcement agencies and the private
sector were developed. Also, the Federal Bureau of Investigation
undertook a major transformation effort, including realigning its
priorities and resources toward efforts to combat terrorism and to
conduct counterintelligence. Various legacy Department of Justice law
enforcement agencies were merged into a newly established DHS. In
addition, state and local governments and other nongovernmental
entities were asked to partner with federal law enforcement agencies in
combating terrorism and other major crimes. The United States now has
more law enforcement interagency working groups and crime prevention
and joint terrorism task forces than ever before. All of these
transformation efforts raise concerns as to whether the various
government components and other key stakeholders will be able to work
effectively together and whether there are controls in place to ensure
that there are sufficient federal law enforcement resources and
mechanisms to prevent and combat terrorist acts and other major
crimes.
At the same time, the Congress has increased the budgets of the
Department of Justice, DHS, and their components to recruit, hire, and
train more law enforcement personnel to investigate and prosecute major
crimes. In addition, new priorities and a focus on sharing intelligence
gathered with the law enforcement community require the federal
government to rethink its human capital management practices and to
improve its efforts to recruit, train, and retain personnel in various
areas now being identified as critical skill sets, such as
intelligence, foreign languages, and IT. However, many of these
agencies (for example, the Federal Bureau of Investigation and the Drug
Enforcement Administration) continue to face challenges in achieving
their hiring goals and in retaining personnel in critical skill sets.
The Congress has also made billions of dollars available to states and
localities through grants and other assistance to help them prevent and
combat terrorism and respond to local crimes that have national
significance, such as efforts to prevent and combat illegal drug use
and public corruption. Among the more important issues is how well the
federal law enforcement agencies work with state government, local
government, private sector, and international stakeholders. For
example, are there adequate mechanisms in place to encourage
information sharing and to share intelligence and law enforcement data?
How well federal law enforcement agencies carry out their
responsibilities to prevent and respond to acts of terrorism and other
major crimes and work with their state and local counterparts is a
continuing concern, particularly given the competing demands for
limited resources and the impact of the shift in federal resources away
from traditional crimes to combating terrorism and securing the
homeland.
Key Efforts:
* Assess the transformation efforts of federal law enforcement agencies
in response to the war on terrorism, including its effect on other core
missions;
* Assess the effectiveness of key federal efforts to control the supply
and demand for illicit drugs;
* Assess federal law enforcement coordination and effectiveness in
addressing major crimes;
* Evaluate the management and results of key federal law enforcement
grant programs;
* Assess federal law enforcement capacity, structure, functions, and
efforts to coordinate and form partnerships among federal, state,
local, and tribal governments to more efficiently address their
missions.
Potential Outcomes:
* Improved congressional and public understanding of the use of federal
resources devoted to preventing and responding to terrorism and other
major crimes;
* Enhancements to internal controls and management oversight of federal
law enforcement and grant programs intended to combat domestic and
transnational crimes, including terrorism;
* More efficient and effective programs that target limited resources
to areas identified by the Department of Justice’s strategic plan as
high priority and critical to national security;
* Identifying potential areas for improving collaboration and
information sharing between and among federal law enforcement agencies
and other key stakeholders, such as state, local, and foreign
government partners.
Strategic Objective 1.6:
The Promotion of Viable Communities:
The economic and social well-being of communities is vital to the
nation’s overall growth and prosperity. Yet the viability of many of
America’s communities is threatened by a variety of economic and social
problems, including high levels of long-term unemployment, inadequate
retail activity, and a deteriorating housing stock. For decades,
federal, state, and local governments and the private and nonprofit
sectors have sought ways to revitalize distressed communities. The
federal government alone operates well over 100 programs that offer to
communities various grants, loans, loan guarantees, and special tax
incentives that are designed to assist distressed areas. For example,
the Community Development Block Grant program provides assistance for a
variety of infrastructure and capacity-building needs and the
Empowerment Zone program is intended to encourage investment in
targeted areas.
Despite these efforts, no simple answer has been found to the question
of how best to revitalize America’s distressed communities, in part
because of the difficulty of measuring the factors that actually
cause communities to improve. Also, the issue of how best to deliver
aid is complicated by the need to strike a balance between the goals of
the federal government and those of state and local governments and
nonprofit organizations, which administer a large share of federal
dollars for community and economic development.
Small businesses, which employ more than half the nation’s workforce,
are crucial to economic growth in many communities. The Small Business
Administration (SBA)—the nation’s single largest financial backer of
small businesses—guarantees over $61 billion of business loans and
provides management and technical assistance to about 1 million small
business owners annually. SBA also has oversight responsibility for
federal contracting goals for small and minority-owned businesses.
Because SBA has undertaken numerous initiatives to address management
issues that affect the agency’s performance, the Congress needs up-to-
date assessments of its performance.
To promote homeownership, a key element of a vibrant community, the
federal government assists home financing in several ways. VA and the
Department of Housing and Urban Development’s (HUD) Federal Housing
Administration provide mortgage guarantees and insurance, while HUD’s
Government National Mortgage Association (Ginnie Mae) guarantees
securities backed by these mortgages. Three government-sponsored
enterprises (GSE)—the Federal National Mortgage Association (Fannie
Mae), the Federal Home Loan Mortgage Corp (Freddie Mac), and the
Federal Home Loan Banks—support the mortgage market and are also
responsible for promoting homeownership among underserved households.
In recent years, the effectiveness of the regulatory structure for the
GSEs has been questioned. The federal government also promotes
homeownership through tax incentives and requirements placed on
mortgage market participants. It must balance the benefits of
increasing home ownership, especially among the underserved, against
the financial risk taken on directly (through mortgage guarantees) or
indirectly (through GSEs).
The federal government—principally HUD and the Department of
Agriculture’s Rural Housing Service—spends some $30 billion annually on
numerous programs to help rental households with lower incomes reside
in safe, decent, and affordable housing. HUD has made substantial
progress addressing long-standing management weaknesses that placed its
rental housing assistance programs at risk of waste and abuse. However,
in recent years, legislative and administrative actions have changed
HUD’s biggest programs—Section 8 and public housing—in ways that may
call for different oversight approaches. Further, both HUD and the
Department of Agriculture’s Rural Housing Service, which oversees rural
housing programs, face challenges in ensuring that federally assisted
properties are maintained in a physically and financially sound manner,
are administered in a way that best serves the needs of low-income
households, and remain available to lower-income tenants to the extent
practicable.
To support the Congress and the federal government in their efforts to
address these issues, we will use the following performance goals:
1.6.1: assess federal community and economic development assistance and
its impact on communities;
1.6.2: assess the effectiveness of federal initiatives to assist small
and minority-owned businesses;
1.6.3: assess how the federal government can balance promoting home
ownership and financial risk while adapting to changing markets and
policies; and;
1.6.4: assess how well federal programs that support affordable rental
housing meet objectives, manage financial risk, and improve recipients’
well-being.
Performance Goal 1.6.1:
Assess Federal Community and Economic Development Assistance and Its
Impact on Communities:
One way the federal government demonstrates its commitment to ensuring
strong and stable communities is through its numerous and diverse
federal economic development assistance programs. More than 100 federal
programs provide communities with such assistance in the form of
grants, tax incentives, loans, and loan guarantees involving billions
of dollars each year. These programs primarily address issues
surrounding the living conditions of low- and moderate-income families
and the stability of urban and rural American communities. A large
share of the federal commitment is administered through state and local
governments and nonprofit organizations. As a result, local support and
the state of local economies often affect the outcomes of these
programs, and achieving program goals may take years. Furthermore,
communities face an increasingly complicated governance challenge in
bringing together state, regional, and federal players and resources to
address issues and concerns that cut across governance boundaries.
Thus, federal decision makers face the challenge of finding ways to
improve the design and flexibility of federal programs to help
communities maintain their quality of life and deliver key services
while working with multiple players to meet crosscutting program goals.
At the same time, federal agencies must provide enough oversight to
ensure that programs meet their goals and comply with federal
requirements.
Key Efforts:
* Identify approaches and best practices for measuring the impact of
community and economic development programs;
* Assess the impact of program coordination on targeted communities and
residents;
* Assess the impact of specific economic development initiatives on
communities.
Potential Outcomes:
* Improved coordination among federal programs and streamlined delivery
of development assistance;
* Better congressional understanding of federal programs’ effect on the
growth and development of communities.
Performance Goal 1.6.2:
Assess the Effectiveness of Federal Initiatives to Assist Small and
Minority-Owned Businesses:
America’s small businesses play a critical role in the nation’s
economy, employing more than half the nation’s workforce. Since its
inception in 1953, SBA has had a clear mission: to serve the small
business sector of the economy by providing financial, technical, and
management assistance that helps Americans start, run, and develop
their own businesses. SBA is also charged with making sure that small
and minority-owned businesses get a fair share of the approximately
$200 billion annual federal procurement market. SBA has undertaken a
number of initiatives to address problems that have been identified in
both programmatic and operational areas, including its business loan
guarantee programs, minority business development program, and
information systems management. As SBA pursues its mission of
maintaining and strengthening the nation’s economy by aiding,
counseling, assisting, and protecting the interests of small
businesses, the Congress needs up-to-date assessments of SBA’s
performance and the effectiveness of its programs.
Key Efforts:
* Assess SBA’s initiatives to make its programs more efficient,
effective, and helpful to small businesses, especially to those
businesses least able to access credit markets;
* Assess SBA’s management initiatives in areas such as organizational
alignment, IT, financial management, and human capital and determine
how these improvements may have helped SBA better meet its mission;
* Assess SBA’s ability to achieve its mission of meeting the needs of
small businesses;
* Assess the impact of federal contracting policies and practices on
small businesses and determine what oversight SBA provides to ensure
that federal agencies meet small business contracting goals.
Potential Outcomes:
* Improved SBA assistance to small businesses;
* Improved SBA management practices that lead to more results-oriented
performance;
* Increased knowledge of the effects of SBA’s loan and technical
assistance programs on small businesses, their access to credit
markets, and their ability to contribute to the national economy;
* Increased knowledge of the effects of federal contracting practices
on small businesses and enhanced oversight of federal small business
contracting goals.
Performance Goal 1.6.3:
Assess How the Federal Government Can Balance Promoting Home Ownership
and Financial Risk While Adapting to Changing Markets and Policies:
The federal government promotes homeownership through various housing
finance programs, incentives, and requirements. HUD’s Federal Housing
Administration, VA’s Loan Guaranty Services, and the Department of
Agriculture’s Rural Housing Service participate in the primary mortgage
market, insuring home mortgages for homebuyers who might otherwise have
difficulty obtaining them. Together, these agencies are responsible for
managing more than $600 billion in insured home mortgages. In addition,
Ginnie Mae guarantees about $450 billion in mortgage-backed securities,
providing liquidity to the housing finance market. The association’s
guarantee enables lenders of government-insured loans to readily sell
their loans, and the additional funds help provide mortgages for other
qualified borrowers. Finally, GSEs—Fannie Mae, Freddie Mac, and the
Federal Home Loan Banks—through purchases of mortgages, issuances and
guarantees of mortgage-backed securities, and other means, provide
capital for home mortgages and needed liquidity for lenders. GSEs are
also required to operate in a “safe and sound” manner, but are
encouraged to focus on underserved markets.
The housing finance system supported by these federal agencies and GSEs
represents one of the nation’s largest financial markets, with
significant risks to taxpayers and investors. These entities have long-
term commitments, the ultimate costs of which depend on losses in their
underlying mortgages. For this reason, using appropriate methods to
predict loan performance is crucial to HUD’s ability to estimate the
costs of its mortgage insurance programs and manage risks to its
insurance funds. GSEs’ costs are also affected by the prudence they
exercise in their management and funding strategies. These federal
agencies and GSEs have substantial influence on the availability of
housing finance, particularly for traditionally underserved markets. In
recent years, however, they have faced challenges. For example,
economic trends and increased competition from conventional lenders
have caused HUD’s share of the mortgage market to decline sharply at
the same time that foreclosure rates for federally insured mortgages
have risen. These factors have prompted proposals to modernize and
broaden the customer base for HUD’s programs. Further, risk management
and accounting deficiencies at the GSEs have called into question the
effectiveness of the regulatory structure for these entities.
Legislation on reforming the structure has been intensely debated.
The federal government’s role in the housing market remains a
significant factor in maintaining homeownership rates in the United
States. Although the nation’s homeownership rate has reached an all-
time high, buying a home is a confusing process for many families,
partly because of complex settlement procedures and disclosure
requirements that have not kept up with changes in the mortgage
industry. But sustaining high levels of homeownership may be difficult.
For some homebuyers, credit has become easier to obtain, but only on
terms that cause uncertainty about borrowers’ ability to maintain their
mortgage payments in the future. As lenders move toward financing a
higher proportion of home purchase costs and offering nontraditional
mortgage products, some homeowners have become vulnerable to losing
their homes if their home values decline or interest rates climb.
Key Efforts:
* Evaluate the factors underlying the decline in HUD’s share of the
mortgage market and identify options for modernizing HUD’s mortgage
insurance programs;
* Assess HUD’s ability to estimate the costs of its mortgage insurance
programs and to evaluate the credit risk of potential borrowers;
* Evaluate efforts to reform and enforce fair lending laws and
disclosure requirements for mortgage products;
* Evaluate the effectiveness of federal programs, tax and other
incentives, and requirements that support financing for traditionally
underserved segments of the single-family housing market;
* Assess how federal programs can help promote and sustain high levels
of home ownership in the face of rising mortgage rates and slower
growth in home equity;
* Assess the financial risks associated with the activities of GSEs and
whether the GSEs have achieved homeownership lending goals for low- and
moderate-income households;
* Evaluate potential changes to the GSE regulatory framework and
determine how new regulatory authorities and responsibilities would
help in GSE oversight.
Potential Outcomes:
* Improved administration and effectiveness of HUD’s single-family
mortgage insurance programs;
* Improved capital reserves and funding for HUD’s insurance programs;
* Improved supervision of the GSEs, helping ensure public policy and
safe and sound operational goals are met;
* More effective efforts to help additional low- and moderate-income
families become homeowners and to ensure that gains in homeownership
rates are sustainable.
Performance Goal 1.6.4:
Assess How Well Federal Programs That Support Affordable Rental Housing
Meet Objectives, Manage Financial Risk, and Improve Recipients’ Well-
being:
The federal government administers numerous programs, at a cost of
about $30 billion annually, to help households with lower incomes
secure safe, decent, and affordable rental housing. Some of this
assistance is provided to directly increase or maintain the supply of
decent rental housing that is affordable to low-income households; for
example, HUD financially supports public housing and insures mortgages
on privately owned multifamily dwellings, while the Internal Revenue
Service (IRS) administers low-income tax credits. Other assistance
takes the form of rental assistance payments; both HUD and the
Department of Agriculture’s Rural Housing Service provide rental
assistance for individual households. However, these programs do not
operate as entitlements: less than one-fourth of the 23 million low-
income households eligible for federal housing assistance currently
receive it, and a critical shortage exists in the supply of rental
units affordable to households with extremely low incomes. Further,
existing housing assistance and supportive service programs are faced
with the growing and changing needs of special populations, including
the elderly, the homeless, and persons with disabilities.
The Quality Housing and Work Responsibility Act of 1998 provided for
greater flexibility in local public housing agencies’ use of federal
funds, including leveraging federal funds with private capital. Despite
a backlog of public housing modernization needs estimated at over $24
billion, use of these approaches has been limited; further, both HUD
and public housing agencies are just beginning to implement a new
approach, provided for by the Quality Housing and Work Responsibility
Act, for accounting for and funding the capital and operating costs of
public housing developments. Moreover, the Congress has changed how it
funds the Housing Choice Voucher program—from a unit-based approach
that funded all vouchers authorized, regardless of whether all of the
vouchers were used, to a dollar-based approach that is based on actual
expenditures from previous years. This change places a greater demand
on the agencies to limit growth in subsidies without reducing the
number of assisted households. Both HUD and the Rural Housing Service
face challenges in efficiently serving the needs of households served
through project-based programs. HUD’s large portfolio of federally
insured and HUD-held multifamily housing loans and its inventory of
foreclosed multifamily properties carry financial risks and require
proper management and oversight, areas in which HUD has historically
experienced significant challenges. Moreover, most privately owned
rental housing developments assisted through HUD and Rural Housing
Service programs were built in the 1980s or earlier, and their owners
may decide to convert them to market-rate developments as their long-
term government contracts expire; such decisions raise questions about
the availability of housing affordable to low-income households,
especially in high-cost rental markets.
Key Efforts:
* Assess federal agencies’ efforts to ensure that federally assisted
rental housing is effectively managed; remains in good physical and
financial condition; and to the extent practicable, remains available
for lower-income households;
* Assess how effectively federal programs that support rental housing
are used in combination with other community investment and federal
assistance programs to promote decent, affordable housing and suitable
living environments;
* Examine public housing agencies’ use of alternative capital financing
mechanisms and legislatively authorized management flexibilities;
* Examine how public housing agencies use Housing Choice Voucher funds
in light of the change from unit-based to dollar-based budgeting;
* Assess HUD’s performance in overseeing the administration of its
rental housing assistance programs, including its oversight of public
housing agencies and contract administrators.
Potential Outcomes:
* More effective and efficient HUD oversight of the public housing
agencies and contract administrators that play essential roles in
rental housing assistance program delivery;
* Improved efforts by HUD and the Rural Housing Service to assess and
address the physical and financial needs of federally supported rental
housing, including efforts to keep units available and affordable to
lower-income households;
* Improved physical and financial management of properties occupied by
federally assisted tenants.
Strategic Objective 1.7:
Responsible Stewardship of Natural Resources and the Environment:
The nation’s natural resources and the systems associated with their
use are under widespread and increasing stress, generating intense
debate and posing daunting challenges to policymakers at all levels of
government. In large part, this is the consequence of the country’s
growing population and economy and attendant increased demands on a
finite resource base. Accommodating these demands runs headlong into
long-standing legislation aimed at protecting the country’s resources
in a healthy state for the good of current and future generations.
Likewise, how policymakers resolve this balance has global consequences
because the United States is the world’s single largest consumer of
energy and other resources and is seen as out of step with
international efforts to limit resource use and associated pollution.
At the same time, the nation needs to protect its natural resources
from terrorist threats. In fact, nearly half of the critical
infrastructure sectors listed in the President’s National Strategy for
Homeland Security cover natural resource areas. These areas are food,
meat and poultry, energy, water, chemical industry and hazardous
materials, and agriculture.
For decades the nation has benefited from plentiful and relatively low-
priced domestic and global energy supplies. The long-standing
availability of these supplies, however, has made businesses and
consumers dependent on large amounts of low-priced energy as a means to
maintain our nation’s global competitiveness and way of life.
Unfortunately, in recent years, the nation has witnessed a tightening
of energy supplies in the face of rising demand—resulting in a more
precarious supply and demand balance. This tightening, or stress on
energy markets, has contributed to steep price increases for oil,
natural gas, and electricity, with prices more than tripling over just
a few years, in some cases. If these price increases persist, they may
cause economic dislocations for U.S. industry and financial peril for
workers and consumers. In addition, the United States has increasingly
relied on some imported energy supplies, such as oil, that come from
parts of the world that are both hostile toward the United States and
politically unstable at times. Recent global trends, such as huge
increases in oil demand by China and India, are complicating the
nation’s energy picture by further pushing up energy prices.
Exacerbating these already difficult market developments and trends is
the renewed and widespread debate as to whether the world is nearing a
peak in oil production after which global supplies would begin to
decline. Finally, despite several years of concerted efforts to combat
terrorism, key aspects of the United States’ far-flung energy
infrastructure—including hundreds of thousands of miles of transmission
lines, pipelines, and rail lines connecting to thousands of major
energy facilities—remain vulnerable. It is in this context that federal
leaders will face difficult choices on how the nation can meet its
energy needs in the near term, and daunting strategic decisions about
how the federal government can best aid in a thoughtful transition to
the energy systems that will meet the country’s needs in the 21st
century.
More than ever, the country’s lands and waters are under increasing
stress. This is evidenced by rapidly dwindling open spaces, declining
biodiversity, depleted aquifers, and collapsing fisheries—the
unintended consequences of economic growth and the need to sustain the
lifestyle of a growing population. Reconciling and balancing the
demands of often competing objectives—economic growth for today versus
natural resource protection for the future—is a major challenge facing
the American public and its elected leaders. The heated debate on
possible future oil development in the Arctic National Wildlife Refuge
in Alaska presents this issue in microcosm. In this case, the issue
pertains to the use of federal lands, which constitute about 30 percent
of the country’s total land surface, but similar controversies exist
over privately held lands affected by federal law and regulations. The
use of the nation’s waters presents equally sobering challenges,
as pollutants and overfishing rapidly threaten coral reefs and deplete
offshore fisheries, while competition over rights to freshwater
supplies grows among various interests, such as agriculture,
communities, utilities, wildlife, and recreational users. Even under
normal conditions, water managers in 36 states expect water shortages
to occur within the next 10 years. If such shortages actually occur,
they could have severe economic, environmental, and social impacts.
The increasing globalization of natural resource issues also affects
environmental protection matters, as seen in the federal government’s
discussions with other governments about climate change issues. Such
discussions add a new layer of complexity to the already difficult
question of how to sustain economic growth when the engines of that
growth—factories, cars and trucks, fertilizers, and electricity-
generating plants—often adversely affect air and water quality and can
change climates in potentially catastrophic ways. Another factor in
attaining federal air and water quality goals is that land use
practices, often resulting in “urban sprawl,” are controlled mainly by
local governments and private owners. Moreover, the federal government
relies upon state and local governments for inspection and enforcement
actions.
Because of the pervasiveness and mounting evidence of the effects of
climate change and the potential consequences of human-induced climate
change and response options, we are increasing the emphasis on climate
change over the next few years. This increase in emphasis was
overwhelmingly encouraged by the Comptroller General’s Advisory Board.
More than ever, decision makers in public and private sector
organizations need reliable and readily understood information to make
informed judgments and decisions. Over the past 15 years, the United
States has invested heavily in scientific research, monitoring, data
management, and assessment for climate change analyses to build a
foundation of knowledge for decision making.
Also, significant challenges remain in cleaning up the country’s
hazardous and radioactive waste sites. Today, an estimated 60 million
Americans live within 4 miles of a hazardous site, and radioactive
waste from weapons production still needs to be cleaned up at
Department of Energy sites in 13 states. These sites’ continued
existence poses not only potential health and safety problems, but also
fiscal and economic problems. Delayed cleanup results in higher price
tags for eventual cleanup and stunted economic development in the
affected communities. Potential terrorist attacks underline the need
for steps to ensure the security of hazardous and radioactive materials
during storage, transportation, and disposal.
Finally, the Congress continues to debate the direction of U.S. farm
policy in areas such as subsidies and world trade, land conservation,
and energy production efforts. Food safety and security lie at the
forefront of concerns about the country’s agricultural resources, an
urgent matter given the potential for, and the consequences of,
agricultural bioterrorism. Besides this troubling matter, a whole range
of other food safety issues, while less ominous, nevertheless pose
serious questions. These include questions about the adequacy of the
government’s devolution of food inspection authority and its efforts to
implement a “farm-to-table” food safety approach. At the same time, a
number of countries have raised concerns about the safety of U.S.
genetically modified crops and foods—a matter of growing importance
given the significant role that food exports play in the U.S. economy.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
1.7.1: assess the nation’s ability to ensure reliable and
environmentally sound energy for current and future generations;
1.7.2: assess federal strategies for managing land and water resources
in a sustainable fashion for multiple uses;
1.7.3: assess environmental protection strategies and programs;
1.7.4: assess efforts to reduce the threats posed by hazardous and
nuclear wastes; and;
1.7.5: assess federal programs’ ability to ensure a plentiful and safe
food supply, provide economic security for farmers, and minimize
agricultural environmental damage.
Performance Goal 1.7.1:
Assess the Nation’s Ability to Ensure Reliable and Environmentally
Sound Energy for Current and Future Generations:
As we reported to the Congress and the American people as part of our
21st century challenges report, the United States faces monumental
challenges in the energy sector. The nation’s public and private sector
leaders face choices that may well affect its economy, environment,
national security, and way of life for generations.
In the near term, today’s tighter energy markets and global energy
trends present a national challenge to assess U.S. energy security
while keeping the U.S. economy humming and its way of life unchanged.
Because there is little additional supply immediately available in some
markets, the country faces the risk that an unanticipated disruption in
supply or unforeseen increase in demand can produce sharply higher
prices or interrupt service to businesses and consumers. Rising prices
present difficult choices to many U.S. industries now facing
international competition from companies that have access to cheaper
energy. Closer to home, rising prices for natural gas and electricity
can also present difficult budgetary choices for some of the most
vulnerable citizens, many of whom must decide if they should heat and
cool their homes or purchase food, medicine, or other basic
necessities. In tight market conditions it is especially important to
ensure that markets are sufficiently well structured to provide clear
price signals. Providing these signals allows consumers to reduce
demand when it is efficient for them to do so, thereby potentially
lowering the extent of price spikes and minimizing interruptions in
service. Moreover, these signals also serve to motivate suppliers
(traditional and alternative) to bring additional supplies or new
technologies to markets. Under today’s conditions, the Congress and
regulators must remain active and vigilant in their respective
oversight roles to identify, correct, and punish behavior that
threatens public confidence.
Beyond these near-term concerns, the country may face the need to begin
to alter its energy supply base to make it more sustainable. Clearly,
some of the country’s most vital traditional energy sources are
becoming significantly more expensive and periodically more difficult
to obtain when needed. Coupled with increasing long-term environmental
health and global warming concerns, these factors raise questions about
whether the United States should consider other options. It may soon be
necessary to contemplate a long-term shift that would develop cutting-
edge technologies that could use traditional fuel sources (such as
clean coal and advanced nuclear power); reduce energy demand; use other
sources of energy, perhaps including a greater share of renewable
energy; or a combination of these actions. Although private companies
will remain primarily responsible for producing energy, the President,
the Congress, and other national leaders will have a great deal of
influence on balancing the nation’s portfolio of traditional and
alternative sources of energy. Because energy remains vital to the
health of the U.S. economy and way of life, the decades ahead require
critical policy and investment choices to create an energy system that
meets the changing needs of all Americans.
Key Efforts:
* Evaluate short-, medium-, and long-term efforts to maintain an
adequate balance between energy supply and demand, including assessing
(1) the trade-offs between increasing the availability of traditional
energy sources (e.g., oil, natural gas, coal, nuclear, and
hydroelectric) and developing viable alternative energy sources (e.g.,
solar, wind, hydrogen, and ethanol) and (2) proposed actions to reduce
demand by using energy more efficiently or conserving energy;
* Evaluate federal investments in emerging energy supply options (e.g.,
new generation nuclear power plants, fuels such as hydrogen and
ethanol, and energy conversion technologies such as photovoltaic solar
cells) and in demand-reducing technologies;
* Analyze trading and selling practices in national and international
energy markets; federal oversight of these markets; and factors
contributing to the periodic price spikes and increases, including the
identification of federal actions that could reduce their frequency and
impact;
* Assess energy security plans and other efforts to protect the
nation’s energy infrastructure from terrorism and other sources of
disruption and assess the need for additional investment in the vast
national energy infrastructure to improve systemwide capacity and
explore private investment;
* Evaluate the role of federal power providers (e.g., Tennessee Valley
Authority and Bonneville Power Administration) in light of the shift
toward competition and identify potential risks that operating in a
competitive market may pose to the federal treasury;
* Analyze management performance at the Department of Energy, Federal
Energy Regulatory Commission, and Nuclear Regulatory Commission.
Potential Outcomes:
* Congressional consideration of the full range of realistic
projections of supply options with information on the benefits and
costs of alternative actions, such as demand reduction;
* Congressional consideration of innovative alternatives to escalating
production and consuming greater amounts of energy;
* A more informed debate on alternative energy paths, including a
better understanding of related environmental effects;
* More informed congressional funding decisions resulting in effective
research spending, more efficient energy use, and budgetary savings;
* Greater congressional awareness of how energy market concentration
affects the consumer market and of the effectiveness of federal
incentives, such as energy tax credits;
* Improved congressional understanding of transitional issues in
restructuring energy markets (such as electricity), market design and
monitoring (including balanced rules and enforcement), and implications
for the role of federal power marketing administrations;
* Improved security of the nation’s energy supplies against terrorism
and other threats in areas such as the Strategic Petroleum Reserve, the
nation’s energy grid, commercial nuclear power plants, and other energy
and related infrastructure;
* Improved federal and private market structures, incentives, and
standards to encourage necessary enhancements and modernization of U.S.
energy infrastructure;
* Improvements in the Department of Energy’s, the Federal Energy
Regulatory Commission’s, and the Nuclear Regulatory Commission’s
organization, human capital, and management processes.
Performance Goal 1.7.2:
Assess Federal Strategies for Managing Land and Water Resources in a
Sustainable Fashion for Multiple Uses:
For many years, federal policies over land and water resources have
been the subject of sometimes-bitter conflict. While most land in the
United States is privately owned, the resources owned and managed by
the federal government are vast. Specifically, these resources include
over 650 million acres of land, or 30 percent of the nation’s total
land surface; over 700 million acres of mineral estate that underlie
both federal and other surface ownerships; about 1.75 billion acres of
the Outer Continental Shelf; and fisheries extending up to 200 miles
offshore. In 2002, the estimated market value of production occurring
on public lands was nearly $12.5 billion, and the direct and indirect
economic effect of all commercial activities amounted to over $27
billion. Federal laws also affect activities on some private lands by
protecting wetlands or protecting threatened or endangered species.
The inherent conflict over federal land use policies has been, first,
over which of the current competing needs and uses for resources on
federal lands should be addressed and, second, over whether to use
resources today or to preserve and sustain them for future generations.
Achieving a balance among these forces remains a constant struggle.
Amid this conflict along with competing budgetary demands, the nation’s
land and water resources are showing increasing signs of stress—more
catastrophic wildfires, shrinking aquifers, an accelerating rate of
extinction of plants and wildlife, destruction of wildlife habitats,
and the collapse of many fisheries. In this regard, there are
increasing signs that the nation is on an unsustainable ecological
path, potentially leaving future generations to face an increasingly
impoverished natural environment. Moreover, the risk of terrorist
attacks has heightened the need to protect critical natural resource
systems not only from natural disasters or negligence, but also from
acts to intentionally damage those resources or use them in assaults
against the nation’s security. In this context of competing demands and
security considerations, policymakers will need objective,
nonideological information to make rational policy choices and ensure
that federal taxpayers benefit from the use of natural resources. How
the nation addresses these challenges today will profoundly affect the
viability of its natural resources, and the well-being of the public,
for generations to come.
Key Efforts:
* Evaluate federal land and water management agencies’ progress in
coordinating activities, addressing resource issues, and protecting
critical environmental and natural resource systems from misuse,
negligence, or intentionally harmful acts;
* Review federal land management agencies’ efforts to develop and
implement a strategy to reduce wildfires on federal lands;
* Assess federal land management agencies’ operational and maintenance
needs at national parks, forests, and other facilities;
* Analyze federal efforts to identify and use various sources of
revenue to manage federal lands and obtain a fair market value for
federal land use, while balancing consumption, conservation,
environmental, and recreational needs;
* Assess federal efforts to manage and restore the nation’s rivers,
oceans, and marine environments in a way that is cost-effective and
balances resource protection with consumption and conservation needs;
* Evaluate the federal government’s efforts to clarify its relationship
with, and meet its responsibilities to, Native Americans and Alaska
Natives;
* Analyze federal agencies’ efforts to protect threatened and
endangered species on federal and nonfederal lands and in bodies of
water;
* Analyze the adequacy of the land and water resource agencies’
organization, human capital, and management processes for supporting
the agencies’ operations.
Potential Outcomes:
* More efficient and effective resource management to better protect
the nation’s land and water resources and the surrounding environment;
* Congressional action on charges for the use of federal resources to
facilitate a move toward greater self-sufficiency by the parks,
forests, and other entities and to ensure a fair return for the use of
public resources;
* Governmental steps to better balance production, revenue generation,
and conservation of natural resources;
* Clearer understanding of the government-to-government relationship
between the federal government and Native Americans and Alaska Natives
and of ways to improve programs promoting Indian self-determination and
self-sufficiency;
* An improved understanding of the political, financial, scientific,
and social issues associated with species protection efforts to inform
the debate on reauthorizing the Endangered Species Act;
* Improvements in natural resources agencies’ organization, human
capital, and management.
Performance Goal 1.7.3:
Assess Environmental Protection Strategies and Programs:
Americans have long placed a high value on protecting the environment
and human health, especially for particularly susceptible groups, such
as children and the elderly. During the last three decades, the nation
has worked hard to limit the quantities of pollutants that degrade the
nation’s air, surface and ground waters, and land. The Environmental
Protection Agency has estimated that pollution control expenditures by
all sectors from 1972 through 2000 totaled approximately $2 trillion.
Such efforts have yielded impressive results; for example, aggregate
emissions of the six principal air pollutants have declined by 25
percent since 1970, and virtually all discharges to the nation’s waters
from point sources are now controlled. Also, the Congress increased
funding for climate change by 55 percent (after adjusting for
inflation) from 1993 to 2004. Most of this funding has been aimed at
researching and developing new technologies to reduce emissions or to
increase energy efficiency and to better understand climate change
science.
However, serious problems remain. Urban areas housing millions of
Americans still fail to meet air quality standards, particularly during
summertime high-ozone periods, and acid rain continues to degrade
forests, lakes, and streams, with attendant effects on many wildlife
species. An estimated 20,000 impaired water bodies, including parts of
such national treasures as the Chesapeake Bay and the Great Lakes,
still do not meet quality standards. Improving their status will
require addressing heretofore little-regulated nonpoint pollution
sources, such as agricultural, suburban, and urban runoff. Furthermore,
drinking water systems will be hard pressed to meet more stringent
standards and address heightened security concerns. Many federal
facilities do not fully comply with a number of environmental
standards. An increasing number of experts believe that climate change
poses a threat to the U.S. economy and environment. Moreover, it is
difficult to determine when, and how, to best address emerging
environmental threats that could involve considerable or irreparable
damage, but for which there is currently imperfect information.
Several factors add complexity to the resolution of these issues. These
factors include the following:
* decision-making systems that do not effectively integrate attainment
of environmental goals with land use, transportation, energy supply
choices, and economic development;
* economic and technological changes that affect the mix of pollutants
emitted as well as the ability and cost to monitor and control
emissions;
* the difficulty in balancing consistent application of environmental
laws with flexibility for states to exceed or adapt federal standards
to their own needs;
* escalating concerns about environmental justice and its implications
on licensing major pollution sources and on selecting sites and issuing
permits for waste disposal facilities;
* the looming demand for billions of dollars over the next decade to
replace, rehabilitate, and expand the aging sewage treatment plants
necessary for meeting drinking water and surface water quality
standards;
* the transboundary nature of many pollutants with global effects that
require international solutions; and;
* the lack of comprehensive, integrated, quantifiable environmental
data with which to measure the success or failure of alternative
strategies.
In addition, there is interest in alternatives to traditional
regulatory programs, such as those that employ pollutant trading or
other market-based mechanisms or place greater control in the hands of
state or local authorities. During the next few years, the Congress
will be called upon to address these challenges as it evaluates the
implementation of, and potential changes to, the major pollution
control statutes, including the Clean Air, Clean Water, and Safe
Drinking Water acts. The Congress has also shown an interest in
introducing climate change-related legislation.
Key Efforts:
* Evaluate current and alternative strategies to improve the quality of
the nation’s air;
* Assess current and alternative approaches for improving the quality
of the nation’s surface and ground waters;
* Examine strategies for ensuring safe drinking water and wastewater
treatment for all Americans, including protection from security threats
and breaches;
* Assess approaches for controlling the harmful effects of pesticides
and toxic substances, and efforts to protect critical environmental and
health-related infrastructure from security threats and breaches;
* Examine the full implications of climate change for the nation
(including its effects on the nation’s natural environment, its
economy, and its fiscal health), and assess proposals to address this
issue including strategies for research, emissions reduction, and
adaptation to a changing environment;
* Assess the use of indicators, science-based information, and other
data to measure environmental performance, and evaluate alternative and
innovative environmental protection approaches;
* Analyze the organization, human capital, and management processes for
supporting efficient and effective environmental protection.
Potential Outcomes:
* Congressional use of information, analyses, and recommendations in
amending key statutes, including the Clean Air, Clean Water, and Safe
Drinking Water acts;
* Improved understanding of the science of climate change and the
implications of a changing climate for the U.S. economy, natural
resources, and human health;
* More efficient administration of existing statutes, including
alternative regulatory approaches for controlling air and water
pollution and cleaning up waste;
* Increased information on the efficiency and effectiveness with which
the Environmental Protection Agency and the states are spending the
billions in federal appropriations targeted for environmental
infrastructure;
* Congressional action to improve the efficiency and effectiveness of
environmental programs;
* Improvements in programs to control pollutants in drinking water and
in wastewater discharges;
* Enhanced efficiency and effectiveness of environmental protection,
organization, human capital, and management processes.
Performance Goal 1.7.4:
Assess Efforts to Reduce the Threats Posed by Hazardous and Nuclear
Wastes:
Hazardous and nuclear wastes can cause serious environmental damage
lasting decades or even centuries. The problems associated with the
containment and cleanup of these wastes pose major financial and
management challenges to the United States that will continue well into
the 21st century. Past practices have allowed health-threatening
substances to seep into the land and water at thousands of federally
and privately owned sites. Such seepages threaten public health and
quality of life nationwide. The federal government spends almost $10
billion annually to address health and environmental threats from
Superfund and other private hazardous waste sites, remove and dispose
of nuclear wastes from federal nuclear weapons facilities, and clean up
hazardous waste at active and formerly used defense facilities. Such
activities could ultimately cost the federal government over $300
billion and the private sector hundreds of billions more.
Sound management practices are needed to prioritize and hasten
cleanups, control costs, and develop innovative technologies. Cleanup
and disposal decisions must also take into account governance issues,
such as the rights of states and local communities to control land uses
within their borders, and also fiscal issues, such as the need to
assess the economic trade-offs between completely cleaning up a
contaminated property for reuse or simply restricting future access
without complete cleanup. Moreover, terrorist activities have resulted
in states and localities facing a new urgency to protect their citizens
from dangers associated with the transport and storage of hazardous and
nuclear wastes. Globally, other countries face similar concerns and
decisions, and Russia has proposed to store nuclear wastes from other
countries. Whether deliberating policy options, reauthorizing key
statutes, or annually appropriating funds to the various federal
cleanup activities, the Congress needs accurate information on the
scope of the problem, the effectiveness of existing programs and
activities, and the pros and cons of potential alternatives.
Key Efforts:
* Assess progress in, and potentially less costly alternatives for,
identifying, transporting, cleaning up, and disposing of nuclear,
ordnance, and other hazardous waste resulting from federal activities;
* Evaluate current and alternative strategies for cleaning up abandoned
Superfund and other private sector hazardous waste sites and responding
to emergency contamination releases;
* Assess federal, state, and private sector progress and performance in
finding and developing environmentally acceptable sites on which to
build essential waste disposal facilities;
* Analyze the adequacy of waste cleanup agencies’ organization, human
capital, and management processes for supporting efficient and
effective operations.
Potential Outcomes:
* Improved and potentially less costly handling of nuclear, ordnance,
and other hazardous waste related to federal activities;
* More efficient and effective cleanup of abandoned Superfund and other
private hazardous waste sites and responses to emergency
contaminations;
* A more informed discussion of federal, state, and private options for
environmentally acceptable waste disposal sites;
* More effective and efficient management of cleanup activities by
responsible federal agencies, including DOD, the Department of Energy,
and the Environmental Protection Agency.
Performance Goal 1.7.5:
Assess Federal Programs’ Ability to Ensure a Plentiful and Safe Food
Supply, Provide Economic Security for Farmers, and Minimize
Agricultural Environmental Damage:
The Department of Agriculture farm assistance programs and federal food
safety oversight play a critical role in ensuring an abundant,
affordable, and safe food supply. In fiscal year 2005, the Department
of Agriculture spent about $23 billion on a variety of farm assistance
programs, including farm loan, price support, disaster assistance, land
conservation, and environmental programs. Although many argue that
federal support of farmers is necessary to ensure a plentiful and
affordable food supply now and in the future, others question the
effect, relevance, and costs of these programs given that most farm
assistance goes increasingly to a relatively few large entities. The
most recent Farm Bill also places increased emphasis on conserving the
land, reducing agriculture’s impact on water quality, and promoting
renewable energy production on agricultural land. However, questions
remain as to how the United States can continue supporting a viable
agricultural sector while still meeting its trade agreement
commitments. For example, as a member of the World Trade Organization,
the United States has committed to eliminating export subsidies and
reducing tariffs and trade-distorting domestic support. In addition,
the Department of Agriculture’s ability to deliver farm program
assistance continues to be plagued by inefficiencies in its
organizational structure and management processes and allegations of
racial discrimination in serving farmers. In 2007, the Congress will
have the opportunity to address many of these issues through
reauthorization of the Farm Bill.
The Department of Agriculture, the Food and Drug Administration, and
other federal agencies have shared responsibilities for ensuring the
safety and security of the U.S. food supply. Although the food supply
is generally considered safe, food-borne illnesses continue to threaten
the nation’s health and tax its medical system. Experts estimate that
food-borne pathogens cause 76 million cases of gastrointestinal
illnesses, 325,000 hospitalizations, and 5,000 deaths annually.
Furthermore, illnesses from just the five principal food-borne
pathogens cost about $7 billion in medical expenses and productivity
losses each year. Additionally, an outbreak of some animal diseases,
such as mad cow disease, can rapidly bring economic havoc to segments
of the U.S. farm economy.
While the federal government distributes over $1 billion annually to
its various agencies to reduce the health and economic consequences of
food-borne illnesses, regulatory agencies, in varying degrees, are
transitioning to new science-based regulatory strategies that place
increasing responsibility on industry for identifying and controlling
risks in the production processes. Although better than the existing
outmoded process of preventing food-borne illnesses, these science-
based strategies address only a segment of the food production and
distribution continuum, and their implementation is inconsistent across
the food supply. In addition, scientific and technical advances in
producing food, such as the development of genetically modified foods,
place additional responsibilities on the federal food safety agencies.
Furthermore, recent events have heightened the awareness that threats
to the food supply are a component of terrorism and present new
challenges to an already burdened system. Consequently, a new “farm-to-
table” approach for food safety and security—one that starts with
growers and extends to retailers—is needed to ensure that the full
spectrum of food production is safeguarded.
Key Efforts:
* Evaluate the effectiveness, budgetary consequences, and international
trade implications of federal programs designed to aid farmers in times
of declining global crop prices or domestic production and compensate
farmers for crop losses;
* Evaluate the outcomes and costs of federal programs designed to
minimize the adverse land use and environmental effects of agricultural
practices and to promote renewable energy production on agricultural
land;
* Evaluate federal programs’ ability to ensure a safe and wholesome
food supply across the full spectrum of food production from the farm
to the table, including imported foods, and to guard against
agroterrorism and infectious disease;
* Analyze the adequacy of the Department of Agriculture’s organization,
human capital, and management processes for supporting efficient and
effective operations.
Potential Outcomes:
* Improvements in the cost-effectiveness of the safety net for farmers
(farm loan, price support, and disaster assistance programs);
* More effective conservation and agricultural programs designed to
conserve the land, enhance the environment, and promote renewable
energy development;
* Better understanding of how to integrate farm program assistance with
commitments made under agricultural trade agreements in order to ensure
a growing share of global food markets for American farmers and food
industries;
* Enhanced efforts to address agricultural terrorism and threats from
invasive pests and diseases, such as foot and mouth disease and avian
influenza—”bird flu”;
* Enhanced effectiveness of federal food safety programs in addressing
safety issues arising from a global food marketplace, changing
regulatory approaches, and the threat of terrorism;
* Improvements in federal food safety agencies’ actions to evaluate and
regulate the safety of new technologies, such as genetically modified
foods;
* Improved Department of Agriculture organization, human capital,
budgetary, and management processes.
Strategic Objective 1.8:
A Safe, Secure, and Effective National Physical Infrastructure:
The nation’s economic vitality and the quality of life of its citizens
depend significantly on the soundness, security, and availability of
its physical infrastructure. Transportation and telecommunications
systems, for instance, provide the superstructure for the nation’s
economic engine, facilitating the movement of people, goods, and
information. The nation faces major challenges in improving both
efficiency and safety in the movement of people and goods. The nation
relies heavily on its postal system for efficient mail delivery
service. And thousands of federal facilities house and support staff
and the other assets needed to provide services to the American
people.
In both the short and long term, the nation faces important
infrastructure challenges as federal, state, and local governments
confront new demands brought on by changes in national security,
demographics, technology, and lifestyles. The challenges are complex,
cutting across many interrelated issues, and require coordinated
intergovernmental responses. For example, the nation’s commercial
passenger airlines, which were experiencing financial difficulties even
before the September 11 terrorist attacks, have experienced
unprecedented financial losses stemming from reduced air travel,
raising debate over the appropriate federal response. Also, long-term
trends indicate that increasing numbers of motorists are encountering
increasingly congested highways, while bottlenecks have escalated for
freight transportation at intermodal connection points.
Suburban growth has raised demands for new roads, water and sewer
systems, and access to telecommunications. At the same time, existing
communities are demanding that the environment and their citizens’
quality of life not be harmed by this growth.
The cost of maintaining and modernizing its infrastructure is only one
concern of a U.S. Postal Service that faces growing financial,
operational, and human capital challenges. In addition, the deregulated
transportation and telecommunications industries require continuous
oversight to help ensure that firms compete on a level playing field
and that consumers receive the intended benefits of deregulation.
The responses of the federal government and other levels of government
to these infrastructure challenges will have important consequences for
the nation’s future because of their effects on the quality of life and
their significant costs. With the return to large federal deficits,
decision makers will be faced with difficult choices on how to allocate
funding among infrastructure needs and other demands in an increasingly
tight budget environment. Given limited resources, decision makers must
choose investments that promise to be most cost-effective and targeted
to address national infrastructure needs. These choices must be
supported by credible data on needs and costs, performance information
and measures highlighting outcomes from existing programs,
and a budget process prompting a more explicit focus on investment
spending across agencies.
It is therefore essential for government at all levels to have the
information needed to make well-informed decisions about how to
allocate funds among competing priorities, evaluate the challenges to
determine which solutions are most cost-effective, and implement these
solutions as efficiently and effectively as possible. To support
efforts by the Congress and the federal government to address these
efforts, we will use the following performance goals:
1.8.1: assess strategies for identifying, evaluating, prioritizing,
financing, and implementing integrated solutions to the nation’s
transportation infrastructure challenges;
1.8.2: assess the impact of transportation and telecommunications
policies and practices on competition and consumers;
1.8.3: assess the federal government’s role in fostering and overseeing
telecommunications in the public interest;
1.8.4: assess efforts to improve safety in moving people and goods
across the nation’s transportation system;
1.8.5: assess the U.S. Postal Service’s transformation efforts to
ensure its viability and accomplish its mission; and;
1.8.6: assess federal efforts to plan for, acquire, manage, maintain,
secure, and dispose of the government’s real property assets.
Performance Goal 1.8.1:
Assess Strategies for Identifying, Evaluating, Prioritizing, Financing,
and Implementing Integrated Solutions to the Nation’s Transportation
Infrastructure Challenges:
An integrated and efficient transportation system is critically
important to the well-being and financial security of the American
people. The nation’s highways and transit systems move people to and
from home, work, school, shopping, and recreation. Highways and
railroads help move raw materials to plants and finished products to
the marketplace. Airports and airlines facilitate the rapid movement of
people about the nation and the globe for business and pleasure. Ports,
which now account for 95 percent of the overseas freight tonnage, are a
crucial link in the rapidly increasing flow of goods to and from our
nation’s overseas trading partners. The federal government already
invests heavily in transportation—for example, in 2002, it invested
$32.8 billion for highways and $6.3 billion for transit systems.
However, federal, state, and local decision makers face daunting
challenges in meeting the public’s expectations for every
transportation mode—highway, transit, aviation, rail, and ship. The
Department of Transportation estimates that nearly $143 billion per
year could be needed over 20 years from federal and nonfederal entities
to maintain and improve the nation’s roads, bridges, and transit
systems. On the nation’s highways alone, travel time—an indicator of
congestion—increased sharply in the last decade. Similarly, air traffic
is increasing and changing, and the Federal Aviation Administration is
working both to modernize the current ground-based air traffic control
system and to transition to the next generation of satellite-based air
traffic control systems. The Federal Aviation Administration estimates
that this air traffic modernization effort, which we have designated as
a high-risk area, could cost $32 billion. The current authorization for
the Federal Aviation Administration and its principal source of
funding, the Airport and Airway Trust Fund, is due to expire on
September 30, 2007. Any policy decisions that the Congress makes
concerning reauthorization will be framed by structural changes in the
aviation industry and by external events that have affected revenues
flowing into and out of the trust fund. The capacity of ports to handle
increasing freight volumes from China and other trading partners is
dwindling, and billions will be required to expand existing ports or
build new ones. Creative mechanisms, including federal incentives to
spur private sector participation, will be needed to finance such
expansion. The role of intercity passenger rail also continues to be
questioned. While freight railroads are experiencing increasing
congestion, particularly at intermodal connection points, intercity
passenger rail carries about 0.5 percent of the nation’s intercity
travelers. According to Amtrak, about $1.7 billion in average annual
federal assistance will be needed to stabilize the railroad and bring
the infrastructure to a state of good repair.
At present, no national strategy exists to integrate these modes of
transportation into a system that is more than the sum of its parts.
Taking steps to break down the modal stovepipes within which funding
decisions are currently made could lead to considering a variety of
alternatives when deciding which mode or combination of modes will best
achieve a specific transportation objective. In addition, revenue
generated for federal highway and transit programs is not keeping pace
with planned spending. As federal, state, and local decision makers
face competing demands for scarce funds, the Congress will look to us
and others to understand the costs and benefits of potential
investments, search for and apply best practices, and consider
innovative and efficient financing alternatives to ensure that federal
expenditures maximize the nation’s mobility benefits. Recent
authorizing legislation—Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users—recognizes the problem of
funding transportation needs and includes provisions to address these
issues. Specifically, the legislation requires the creation of a
National Surface Transportation Infrastructure Financing Commission to
review the current conditions and future needs of the surface
transportation system and identify potential funding to meet such
needs.
Key Efforts:
* Assess national approaches and best practices to address challenges
to promoting mobility and establish a framework for an integrated,
multimodal transportation system to sustain economic growth;
* Evaluate federal management and oversight of infrastructure
investments, including efforts to control costs, enhance performance,
and make more effective use of existing infrastructure;
* Identify opportunities for increased efficiency and equity in
financing strategies for funding infrastructure projects and
improvements, including opportunities to optimize state, local,
regional, and private roles in, and accountability for, investments of
public funds.
Potential Outcomes:
* Sound management and investment decisions that enhance mobility,
improve infrastructure conditions, and balance the costs and benefits
of diverse strategies for investments in infrastructure;
* More informed decisions that consider the potential
interrelationships of all modes of transportation when planning for an
integrated transportation system, and better decisions by federal,
state, and local governments in planning, prioritizing, and
implementing new infrastructure investments and technology solutions;
* More sustainable infrastructure project financing; better leveraging
of federal, state, local, and private funds; and more efficient
infrastructure use.
Performance Goal 1.8.2:
Assess the Impact of Transportation and Telecommunications Policies and
Practices on Competition and Consumers:
The various modes of transportation and the telecommunications industry
provide networks to move people, cargo, and information around the
country and abroad. These networks directly contributed over $600
billion to the nation’s GDP in 2000. These industries are subject to
varying degrees and types of regulation but generally are free to
develop products, establish prices, and otherwise compete for business
in the commercial marketplace. As these industries have changed over
time, concerns have arisen about whether the existing policies,
procedures, and organizational structures are adequate to address
certain consumer and industry needs. For example, the globalization of
markets and ease of global communication have made harmonizing
standards more critical now than in the past.
Recent consolidation across the telecommunications and transportation
industries has raised concerns in the Congress and elsewhere about the
existence of a level playing field and the ability of competition to
act as a natural control over prices in the future, as well as about
the effect of financial instability on pension plans. In reaction to
the mergers of major telecommunications companies, the Department of
Justice proposed forced divestitures of certain key pieces of the
companies’ infrastructures. We are examining how competition has
changed in some of these high-capacity telecommunications services. The
Congress also looks to us and others to determine whether competition
has developed sufficiently to ensure that new telecommunications
technologies are introduced and lower costs are passed on to consumers.
Increasingly, the globalization of the economy also brings the
practices and policies of foreign entities to bear on U.S. providers of
transportation and telecommunications services. Since 2000, four major
U.S. network airlines have declared bankruptcy, and two of those
terminated their defined benefit pension plans, forcing the Pension
Benefit Guaranty Corporation to assume nearly $9.7 billion (in 2005
dollars) in unfunded liabilities.
Key Efforts:
* Determine the effects of government organization, policies, and
practices and private market forces on the status of competition and
the ability to provide affordable and accessible services in the
transportation and telecommunications industries;
* Assess whether federal and state programs and regulations adequately
protect consumers and communities from anticompetitive, abusive, and
unfair business practices;
* Assess U.S. policies and management approaches in supporting the
competitiveness, financial health, and performance of the
transportation and telecommunications industries in light of increased
globalization and emerging technologies;
* Assess U.S. policies planned to address increasing congestion and
changing needs in all transportation modes.
Potential Outcomes:
* A more informed congressional assessment of U.S. policies affecting
the level of competition in the transportation and telecommunications
industries;
* Improvements in consumer protection, enforcement of existing
requirements, and prevention of abusive and unfair practices;
* More informed congressional decisions on the appropriate role and
organization of regulatory bodies, including their interaction with
relevant state and international regulatory organizations;
* A more informed congressional assessment of technological
developments, market factors, and resource utilization issues in the
telecommunications sector, including efforts to accommodate the rapidly
growing consumer demand for advanced wireless communications services;
* A more informed congressional assessment of the nation’s global
competitive position in transportation and telecommunications and
efforts to accommodate expected growth in demand.
Performance Goal 1.8.3:
Assess the Federal Government’s Role in Fostering and Overseeing
Telecommunications in the Public Interest:
Faster than ever before, technology is changing how Americans
communicate, conduct business, and educate themselves. The rapid growth
of the Internet and mobile phone service is unmatched by any other
telecommunications technology—whether telephone, radio, or television.
From 1997 through 2005, for instance, the U.S. wireless industry’s
estimated subscribership level jumped from about 55 million subscribers
to nearly 208 million, with annual service revenues increasing from
about $27.5 billion to over $113.5 billion.
Demand for radio-frequency spectrum, which is used to provide an array
of wireless communications services, has exploded over the past several
decades. This demand will persist as the private sector continues to
introduce new technologies and services and as new needs unfold among
government users, including wireless communications critical for public
safety officials responding to natural and man-made disasters. As a
result, nearly all parties are becoming increasingly concerned about
the availability of spectrum for future needs because most of the
usable spectrum in the United States has already been allocated to
existing services and users. Many parties believe that spectrum
management reform is essential to meeting the growing and unpredictable
demand for spectrum. Broadband technology—which can bring high-speed
voice, video, and data services to businesses, schools, and homes—also
has potential to transform Americans’ lives even more fundamentally.
However, with such innovations come questions about the adequacy of the
laws, regulations, and practices that have guided federal involvement
in fostering and overseeing telecommunications in the public interest
since the 1930s. Take, for example, the federal government’s
multibillion-dollar “universal service” program to support affordable
basic telephone service to rural and low-income Americans. There is
disagreement over whether this program should be expanded to include
affordable access to the Internet and broadband services in order to
avoid having a nation of “haves and have nots” for advanced
telecommunications services.
As wireless communications services continue to grow, the nation must
decide how the government should apportion the limited technical
resources available to support operations, such as orbital slots for
communications satellites and radio frequencies for mobile
communications. Also, the Federal Communications Commission needs to
keep pace with requirements to reexamine and redefine the regulatory
framework as new services emerge that do not easily fit into current
policies and practices and as the competitive landscape of the industry
changes through consolidation. Addressing these and other challenging
issues has become an intense concern for both the Federal
Communications Commission and the Congress as they consider regulatory
and legislative options for fostering and overseeing
telecommunications.
Key Efforts:
* Assess the federal universal service program in promoting the
availability and affordability of basic and advanced telecommunications
services to all Americans;
* Assess the effectiveness of key federal agencies in managing the
technical resources needed to meet the growing demand for
telecommunications services by government and commercial users;
* Assess the ability of the Federal Communications Commission to
respond to and resolve legal, regulatory, capacity, and policy issues
that affect how the commercial telecommunications industry can develop
and operate.
Potential Outcomes:
* Strengthened effectiveness and long-term viability for the federal
universal service program;
* An improved legislative and regulatory framework for managing the
radio-frequency spectrum;
* More informed federal decision making to facilitate the availability
and deployment of modern telecommunications infrastructure.
Performance Goal 1.8.4:
Assess Efforts to Improve Safety in Moving People and Goods across the
Nation’s Transportation System:
Ensuring the safe movement of people and goods on the nation’s
transportation infrastructure is a top priority for the Department of
Transportation. Recent legislation to reauthorize federal surface
transportation programs significantly increased federal funding
authorized for highway safety programs; however, our work has raised
concerns about the performance and accountability of some of these
programs. A number of other federal authorizations are scheduled to
expire within the next 2 years. As a result, starting in fiscal year
2006, the Congress will begin considering how to fund these agencies in
the 21st century. The Federal Aviation Administration is likely to
submit a proposal that requests significant changes to its current tax-
based funding system. The Congress will also be considering
reauthorizing federal pipeline safety programs and the National
Transportation Safety Board.
Despite considerable federal investment and oversight, transportation
accidents continue to exact a horrific toll on our nation’s citizens.
Each year, 45,000 people are killed and another 3.2 million are injured
in all modes of transportation. The vast majority of these deaths and
injuries (about 42,000 and 3.1 million, respectively) occur on our
nation’s highways, with traffic accidents being the leading cause of
death for people aged 4 through 34. In addition, about 12,000 people
are killed or injured each year in rail accidents, as are another 1,200
in commercial and general aviation accidents. To support the U.S.
economy and allow it to grow and prosper, the nation relies on the safe
movement of people and goods. For example, on a typical day in the
United States in 2002 (latest data available), about 53 million tons of
goods valued at about $36 billion moved nearly 12 billion ton-miles on
the nation’s multimodal transportation network. This freight movement
is expected to increase by 70 percent by 2020, while the national
airspace system is projected to grow threefold by 2025. This growth
will likely result in larger numbers of deaths and injuries unless
transportation safety can be markedly improved. The National
Transportation Safety Board’s use of available technology to
investigate the causes of accidents—a topic we are reviewing—is one
means of obtaining information that can be used to help prevent future
transportation-related accidents.
Key Efforts:
* Examine the federal oversight, guidance, and regulations that guide
federal, state, and local governments’ and private organizations’
efforts to ensure that the American public and its goods travel as
safely as possible;
* Examine how state, local, and private organizations are using the
billions of dollars provided by the federal government to address
important transportation safety issues and determine whether efforts
have been made to assess the effectiveness of these activities;
* Assess federal research, development, and demonstration efforts to
use advances in technology to cost effectively improve the safety of
the nation’s transportation system.
Potential Outcomes:
* Improved use of billions of dollars in federal funding and state
matching funds, leading to reduced deaths, injuries, and property
damage;
* Enhanced federal oversight and regulation of actions taken by state,
local, and private organizations to improve aviation, highway, rail,
and pipeline safety;
* Improved information available to the Congress when it considers
legislation to reauthorize safety programs and organizations with
transportation safety missions;
* A better understanding of the causes of transportation-related
accidents, injuries, and fatalities and their related societal cost to
aid the Congress and the Department of Transportation in implementing
potential solutions;
* Improved federal program administration directed at finding new
technologies and adopting new solutions for increasing the safety of
people and goods on the transportation system.
Performance Goal 1.8.5:
Assess the U.S. Postal Service’s Transformation Efforts to Ensure Its
Viability and Accomplish Its Mission:
In April 2001, we designated the U.S. Postal Service’s transformation
and long-term outlook as a high-risk area because the service’s
financial outlook had deteriorated significantly and it had no
comprehensive plan to address its financial, operational, or human
capital challenges. We concluded that the need for a comprehensive
transformation of the service was more urgent than ever and called for
the Congress to act on comprehensive postal reform legislation. Since
then, the U.S. Postal Service developed a transformation plan to guide
its ongoing efforts related to implementing initiatives included in its
plan. Further, in December 2006, the Congress enacted comprehensive
postal reform legislation to provide a framework for modernizing the
U.S. Postal Service’s rate-setting processes and strengthening
regulatory oversight and financial transparency. Thus, in January 2007,
we removed the U.S. Postal Service’s transformation and long-term
outlook from our high-risk list. However, the U.S. Postal Service
continues to face major challenges from changes in technology and
increasing competition that include:
* generating sufficient revenues as the volume of First-Class mail
declines and the mail mix changes, with volume growth primarily in
lower-contribution mail;
* controlling costs while maintaining high-quality universal services;
* optimizing retail and mail processing infrastructure to reduce costs
and improve efficiency;
* managing workforce changes related to retirements and operational
changes; and;
* providing reliable data to assess performance.
The successful implementation of the postal reform law and the U.S.
Postal Service’s transformation plan will be critical to ensuring that
the U.S. Postal Service can remain self-financing and continue to
provide universal postal services at an affordable rate.
Key Efforts:
* Evaluate the U.S. Postal Service’s implementation of the postal
reform law and its impact on the service’s financial condition,
outlook, and ability to meet its mission;
* Assess the U.S. Postal Service’s operational changes, transformation
initiatives, and management of its real property assets to determine
how the results achieved compare to intended goals, cost savings, and
improved efficiencies;
* Assess the effectiveness and transparency of the new regulatory
oversight structure and reporting requirements implemented under the
recently passed postal reform law;
* Assess quality-of-service issues, including the adequacy of the U.S.
Postal Service’s information and how well it protects its customers and
employees from potential hazards sent through the mail;
* Evaluate the U.S. Postal Service’s efforts to develop a performance-
based workforce, including plans to restructure its workforce, address
future retirements, improve incentive programs, and maintain market-
based compensation.
Potential Outcomes:
* More informed congressional decision making on postal policy, reform,
and oversight of progress in implementing postal reform law and
addressing transformation challenges;
* Improved oversight and transparency of the U.S. Postal Service’s
financial condition, costs, and performance results to ensure it meets
customer obligations and remains self-sufficient;
* Increased cost savings and efficiency of mail processing,
transportation, and service delivery;
* Improved protections for customers and employees from hazardous
materials sent through the mail;
* More effective implementation of human capital initiatives and
programs.
Performance Goal 1.8.6:
Assess Federal Efforts to Plan for, Acquire, Manage, Maintain, Secure,
and Dispose of the Government’s Real Property Assets:
More than 30 federal agencies, including DOD, VA, the General Services
Administration, and the U.S. Postal Service, control about $328 billion
in real property assets worldwide and maintain buildings or offices in
11 regions across the nation. But these assets and organizational
structures reflect a business model and the technological and
transportation environment of the 1950s. Many of these assets and
organizational structures are no longer needed; others are no longer
effectively aligned with, or responsive to, agencies’ changing
missions; and many assets are in an alarming state of deterioration,
potentially costing taxpayers tens of billions of dollars to maintain
or restore. Federal agencies also face problems with their real
property data and have come to rely too much on costly leasing instead
of ownership to meet new space needs. Furthermore, the challenge of
protecting facilities from the threat of terrorism is significant.
Since we designated this area as high risk in January 2003, the
administration and executive branch agencies have initiated some
important efforts to address these problems. For example, the President
issued an executive order on real property reform, and real property
management was added to the President’s Management Agenda. The
executive order is clearly a positive step. However, it has not been
fully implemented, and further actions are necessary to address the
underlying problems and related obstacles, including competing
stakeholder interests in real property decisions and legal and budget-
related disincentives to optimal, businesslike real property decisions.
Realigning the government’s real property, taking into consideration
the government’s future role, likely organizational structure,
geographic presence, and workplace needs, will be critical to improving
the government’s performance and ensuring accountability within
expected resource limits.
Key Efforts:
* Assess the administration’s efforts to take action governmentwide in
response to GAO’s designating federal real property as a high-risk
area;
* Assess the efforts of individual federal agencies to realign and
restore federal real property assets to meet current and future mission
needs and identify best practices and innovative asset management
approaches that federal agencies are using or could pursue;
* Assess the efforts of federal agencies to acquire or construct new
facilities in a timely and cost-effective manner;
* Assess the efforts of federal agencies to ensure that their
facilities effectively and efficiently support the agencies’ strategic
planning, service-delivery, and mission accomplishment needs;
* Assess the efforts of federal agencies to prepare for, prevent,
detect, and respond to the consequences of terrorist attacks and other
possible security breaches aimed at federal facilities and their
occupants.
Potential Outcomes:
* Enhanced use of businesslike best practices, such as maintaining an
accurate facility inventory, regular property condition assessments,
public-private partnerships, and benchmarking, by agencies to acquire
and manage real property;
* Enhanced space quality, safety, and operational efficiency and
effectiveness of federal facilities;
* Improved efficiency and effectiveness in preparing for, deterring,
detecting, and responding to terrorist and other threats to federal
facilities and their occupants;
* Savings through disposing of surplus real property and reducing
reliance on costly leasing;
* Improved reliability and availability of governmentwide data on the
federal real property inventory.
[End of section]
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:
Our second strategic goal is to help the Congress and the federal
government respond to changing security threats and the challenges of
global interdependence. Our specific objectives are to support
congressional and federal efforts to:
* protect and secure the homeland from threats and disasters;
* ensure military capabilities and readiness;
* advance and protect U.S. international interests, and;
* respond to the impact of global market forces on U.S. economic and
security interests.
Responding to emerging threats to security has become increasingly
challenging. The threats to national and international security and the
means of attack have changed significantly in the post-Cold War era and
even more since the September 11 terrorist attacks. Today, there is a
greater likelihood of irregular threats, those more likely to involve
dispersed, global terrorist networks. Adversaries are more likely to
strike vulnerable civilian or military targets at home and overseas in
nontraditional ways to avoid direct confrontation with U.S. military
forces or their allies on the battlefield. Responding to today’s
threats requires new rules and new roles for all levels of government,
best represented by the federal government’s structural changes
associated with creation of DHS and realignment of intelligence
activities. Recent U.S. experience in dealing with natural disasters at
home also gives new importance to the need for more effective planning,
coordination, and response mechanisms at the federal, state, and local
government levels for responding to catastrophic events.
To ensure military capabilities and readiness against a broader array
of security challenges than those faced in the past, transformation of
U.S. forces is required. The transformation will require significant
trade-offs in defense funding priorities in the future to meet pressing
defense needs amid growing competition for resources across the
government and the need to deal with growing fiscal imbalances and
deficits. Moreover, the United States faces the challenge of
transforming its military capabilities to maintain its technological
edge while executing a global war on terrorism, recognizing that
military power alone cannot respond to today’s new threats.
Advancing and protecting U.S. international interests and responding to
the impact of global market forces on U.S. economic and security
interests has become more difficult as the world grows increasingly
interconnected. The United States is facing increasing challenges and
threats to its security and economy from sources that range from
terrorism to regional conflicts to instability sparked by adverse
economic conditions, corruption, ethnic hatred, nationalism, and
disease. In today’s environment, advancing and protecting U.S.
international interests has required interventions abroad to address
terrorism at its roots or other interventions to make or keep the
peace. Globalization of markets and rapidly developing technology have
created new opportunities for the nation as a whole and for American
producers and consumers. In response, the federal government works to
promote foreign policy goals, sound trade policies, and other
strategies to advance the interests of the United States and those of
U.S. trading partners and allies in every corner of the world.
Our objectives for this goal are to support congressional and federal
efforts to:
2.1: protect and secure the homeland from threats and disasters;
2.2: ensure military capabilities and readiness;
2.3: advance and protect U.S. international interests, and;
2.4: respond to the impact of global market forces on U.S. economic and
security interests.
Strategic Objective 2.1:
Protect and Secure the Homeland from Threats and Disasters:
The nature of the threats to national and international security and
the means of attack have changed significantly in the post-Cold War
era. Threats stem from differences in national or state ideologies and
geopolitical, economic, and strategic considerations and now,
increasingly, from religious conflicts and the aims of nonstate-
sponsored groups. Adversaries are more likely to strike vulnerable
civilian or military targets at home and overseas in nontraditional
ways to avoid direct confrontation with U.S. military forces or their
allies on the battlefield.
The nation must assess and defend against a wide range of means and
methods of attack, ranging from unconventional means to conventional
weapons to weapons of mass destruction. International access, global
interdependencies, interconnected and less diverse systems, and rapid
technological change make such threats more viable and decrease the
effectiveness of physical borders in ensuring security.
These threats put at risk the nation’s values, economic interests, way
of life, and the personal security of its citizens. National strategies
have proposed homeland security and combating terrorism initiatives to
address these threats, but the effectiveness of these efforts remains
unclear. Decision-making approaches based on risk analysis and the
coordination and alignment of federal efforts and funding with state,
local, and private sector investments are still works in progress. At
the federal level, the effectiveness of major structural changes to
provide leadership is critical. Passage of the Homeland Security Act of
2002 moved several major federal law enforcement agencies
around—the Immigration and Naturalization Service, the U.S. Customs
Service, the Coast Guard, the Transportation Security Administration,
and other agencies all moved to the newly created DHS. While the
movement of these agencies into their new units presents management
challenges, it also raises concerns about the impact the transfers will
have on agencies’ ability to perform their missions. These concerns, as
well as the sheer size of the undertaking, the fact that DHS’s proposed
components already faced a wide array of existing challenges,
and the prospect of serious consequences for the nation should DHS fail
to address its management challenges and program risks adequately, led
us to add implementing and transforming the new department to the list
of high-risk areas in 2003.
The primary mission of DHS is to prevent, reduce vulnerability to, and
aid in recovery from domestic terrorist attacks. Homeland security
requires effectively transforming DHS into a well-managed organization
and effective efforts of other federal agencies, such as the Federal
Bureau of Investigation and the intelligence community. DHS’s efforts
to effectively secure all modes of transportation; land, air, and sea
ports of entry; and our nation’s borders and enforce immigration laws
within U.S. borders are of critical importance in adequately protecting
and securing our homeland. In addition, Hurricane Katrina graphically
demonstrated the shortcomings of the nation’s ability to respond to a
catastrophic disaster whether from natural or human means. Preventing,
preparing for, and responding to emerging security threats, as well as
natural disasters, entail successful national information sharing and
coordination, involving defense and domestic federal agencies and
programs; state, local, and tribal governments and organizations; the
private sector; and domestic and international communities.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
2.1.1: assess federal homeland security management, resources, and
coordination;
2.1.2: assess efforts to strengthen border security and immigration
enforcement to enhance homeland security;
2.1.3: assess U.S. national emergency preparedness and response
capabilities;
2.1.4: assess efforts to strengthen security in all transportation
modes;
2.1.5: evaluate ways to strengthen government information security and
protect computer and telecommunications systems that support the
nation’s critical infrastructures; and;
2.1.6: assess homeland security information and intelligence sharing.
Performance Goal 2.1.1:
Assess Federal Homeland Security Management, Resources, and
Coordination:
The United States must assess, defend, and be able to recover from a
wide range of attacks that threaten its economic interests, as well as
the way of life and personal security of its citizens. Federal
leadership in directing and guiding these efforts is critical to
addressing security needs while balancing the legitimate flow of
commerce and people. DHS was created with a primary mission of
preventing, reducing vulnerability to, and aiding in the recovery from
domestic terrorist attacks. To be effective, DHS must effectively
manage, leverage, and direct the efforts of over 20 formerly separate
government agencies, while also identifying ways to address growing and
changing terrorist threats and system vulnerabilities. The sheer size
of this undertaking, and the prospect of serious consequences for the
nation should DHS fail to address its management challenges and program
risks adequately, stresses the criticality of DHS’s efforts.
Because the number of potential terrorist acts is nearly infinite, and
federal resources are finite, DHS must make difficult choices about how
to manage resources against those risks that pose the greatest threat
to the nation. In allocating resources, it is critical that the federal
government strive to ensure the efficient use of these resources, and
link strategic planning, performance measurement, program evaluation,
and operational decision making to ensure programs are achieving
intended results in the most effective and efficient manner. These
elements should be closely linked to the budget process to support
accountability, continuous improvement, and the best use of the
taxpayers’ resources.
Despite the importance of federal leadership, protecting the nation and
its citizens is a tremendous task that would overwhelm any single
agency. The federal government recognizes that it does not alone have
the resources needed to achieve this end. However, through partnering
with important external and industry stakeholders, efforts can be
coordinated and resources leveraged so that security measures are
effectively implemented. Further, if a terrorist attack does occur,
stakeholders can collectively mobilize resources to respond quickly and
effectively. These coordinated efforts include developing plans for
responding to an incident to ensure the quick restoration of freedom of
movement and commerce, developing and executing capabilities to support
a rapid and effective response to any attack, and developing after-
action activities to build public confidence and assess lessons
learned.
Key Efforts:
* Assess DHS’s transformation efforts and its ability to appropriately
measure performance;
* Assess whether DHS is identifying and directing resources to areas of
greatest risk and being an effective steward of its resources;
* Evaluate DHS’s and its components’ efforts to define requirements and
acquire, manage, and efficiently use their assets;
* Assess DHS’s efforts to develop and coordinate national and
interagency strategies and plans;
* Assess federal efforts to identify, coordinate, and direct homeland
security-related strategies.
Potential Outcomes:
* Improved management of DHS and its component agencies;
* More effective allocation and utilization of DHS resources based on
risk;
* Better clarity of roles and improved coordination between federal,
state and local, private sector, and international stakeholders
involved in homeland security efforts;
* Strengthened acquisitions of systems, such as the Coast Guard’s
Deepwater program, which will replace its aging fleet of ships,
aircraft, and related systems;
* Improved performance measurement and assessments of security
initiatives and programs implemented.
Performance Goal 2.1.2:
Assess Efforts to Strengthen Border Security and Immigration
Enforcement to Enhance Homeland Security:
Since the September 11 terrorist attacks, the Congress and the
administration have devoted significant attention and funding to
ensuring that people and cargo that enter the United States are not
connected to terrorist groups. Hundreds of millions of people and
millions of cargo containers enter each year through the over 300 ports
of entry. In addition, estimates indicate that several million people
may try to enter the country illegally each year across the over 7,000
miles of mostly unguarded land border with Canada and Mexico. DHS faces
the major challenges of identifying and apprehending those trying to
enter the country illegally, including suspected terrorists, and
interdicting suspect cargo, particularly materials that could be used
in weapons of mass destruction, while simultaneously not significantly
impeding the flow of legitimate travelers and cargo.
The terrorist attacks demonstrated vulnerabilities in the immigration
system and the impact that terrorists can have if they enter and remain
in the country. Potential vulnerabilities in the cargo transportation
network have increased concerns that weapons of mass destruction
materials could enter the country and be used by terrorists. DHS plans
to spend billions of dollars to hire thousands of additional personnel
and to deploy advanced technologies to (1) conduct more rigorous
inspections of people and cargo that enter the country through the
ports of entry and (2) deter people from crossing the border illegally.
In addition, the Congress has been considering major immigration reform
legislation, which, if passed, would significantly affect DHS’s
enforcement of immigration law within the United States. DHS faces a
major challenge in obtaining the right mix of staff and technology to
achieve its current mission and to be able to face the challenges posed
by any new immigration legislation.
Millions of noncitizens each year apply for an immigration benefit that
allows them to live and, in some cases, work in the United States. DHS
faces significant obstacles that impede its ability to process
immigration benefit applications in a timely manner while ensuring the
integrity of the immigration benefits process. These obstacles include
(1) antiquated automation systems and a reliance on paper processing;
(2) a management culture that has stressed production over integrity;
(3) weak application policies and procedures, including little if any
verification of evidence submitted by applicants; and (4) insufficient
user fees to cover the cost of processing applications. Consequently,
many legitimate applicants are not serviced in a timely manner, and DHS
is vulnerable to those wishing to commit immigration fraud, including
potential terrorists and criminals. Legislation being considered could
place significant additional demands on an already overburdened system.
Addressing these challenges will require a long-term commitment by DHS
on a number of fronts to put into place the necessary infrastructure,
operational policies and procedures, and funding mechanisms to meet
current and any future demands.
Key Efforts:
* Evaluate DHS’s efforts to prevent the unlawful movement of people,
money, and materials across United States borders;
* Evaluate DHS’s use of customs and immigration authorities to respond
to homeland security threats, address related vulnerabilities, and
perform other mandated functions within the United States;
* Assess DHS’s efforts to efficiently, effectively, and fairly process
and adjudicate alien applications for immigration benefits;
* Evaluate immigration reform initiatives and proposals.
Potential Outcomes:
* Improved management and oversight of key border security
initiatives;
* Expanded use of risk assessment to focus limited resources on the
most significant border security vulnerabilities;
* Better assurance that DHS is obtaining the right mix of people and
technology;
* Reduced vulnerabilities in the systems that process people and
cargo;
* Reduced or better allocated expenditures related to border security
initiatives;
* Improved implementation of new immigration reform legislation;
* Increased efficiency and timeliness in providing immigration benefits
to eligible applicants;
* Reduced vulnerability to immigration benefit fraud in DHS programs.
Performance Goal 2.1.3:
Assess U.S. National Emergency Preparedness and Response Capabilities:
Whether emergency incidents are caused by a natural disaster, such as a
hurricane, or a terrorist incident, our nation’s first responders must
be ready and able to prevent or mitigate, where possible; respond to;
and recover from major emergency incidents with well-planned, well-
coordinated, and effective actions across disciplines and
jurisdictions. Recent efforts related to Hurricane Katrina vividly
demonstrated that the nation was not ready and able to respond
effectively to a catastrophic disaster, including one for which there
was forewarning.
The emergency response capabilities that a state or locality may need
are determined by the specific risks the area faces. Determining how to
economically
build the appropriate mix of capabilities nationally and by state,
region, or locality is a significant challenge, particularly because
risks are not static. Success requires the coordinated efforts of all
levels of government; and the federal government plays major role in
providing leadership, guidance, and technical and financial
assistance.
Since the September 11 terrorist attacks, there has been a continuing
debate concerning emergency preparedness and response. Two principal
issues have dominated the debate to date: (1) the balance between
preparing for emergencies caused by terrorist attacks and those caused
by accidents or natural disasters and (2) the appropriate role of
federal, state, and local governments and nongovernmental entities in
preparedness, response, and recovery, including the funding of
appropriate equipment, personnel, training, and assistance. The key
issues can be reduced to four basic questions: (1) What is important?
(2) How do we know what is important? (3) How do we measure, attain,
and maintain success? (4) How do we make trade-offs, given limited
resources?
During fiscal years 2002 through 2006, the federal government provided
more than $11 billion in grants to state and local governments to build
the capacity to effectively prepare for and respond to major disasters.
At the same time, DHS developed three key policy documents—the National
Response Plan, the National Incident Management System, and the
National Performance Goal—designed to provide a comprehensive structure
for identifying and developing the capabilities—the ability to perform
specified tasks with desired results—needed for effective disaster
prevention, preparedness, response, and recovery.
Mitigation is a fundamental part of emergency preparedness and
response. As the Gulf Coast rebuilds, it faces critical decisions on
the extent to which it will include mitigation activities in its
rebuilding plans, that is, the extent to which prevention activities or
projects are put in place to prevent future disasters or reduce future
losses from disasters. Examples include assessing the relative merits
of requiring that homes in flood-prone areas be elevated or wetlands be
expanded to reduce the impact of future storm surges.
In response to terrorist attacks and catastrophic hurricanes, billions
of dollars have been appropriated for recovery and relief efforts to
assist disaster victims and their communities. Specifically,
flood insurance policyholders filed more than 150,000 claims that the
Federal Emergency Management Agency (FEMA) estimates will result in
more than $22 billion claims payments. This effectively bankrupted a
program whose income totals about $2 billion per year. FEMA and the
Congress face a major challenge in assessing how the National Flood
Insurance Program can be better structured and managed to reflect the
claims risks the program faces. These challenges have resulted in the
program being placed on our high-risk list.
In addition, as the primary federal lender to homeowners, renters, and
businesses that have been affected by disasters, SBA plays a crucial
role in assisting these victims and is charged with providing timely,
affordable financial assistance to disaster victims. Establishing an
efficient and cost-effective approach to disaster assistance is
difficult in the face of pressures to provide relief for disaster
victims. Furthermore, as concerns about controlling future disaster
spending grow, decision makers will face new issues regarding the
availability and affordability of insurance coverage and mitigation
assistance for terrorist incidents as well as natural disasters.
Key Efforts:
* Assess whether the federal government provides reasonable guidance
and assistance to state, tribal, and local governments to assess their
risks and identify, develop, and sustain needed prevention,
preparedness, response, and recovery capabilities on an individual or
regional basis;
* Assess whether local, state, and federal emergency management
organizations (and first responders) have the capabilities necessary to
ensure an adequate and effective response to the disasters for which
they are at risk, regardless of cause;
* Determine whether emergency management officials (including first
responders) are effectively and economically using federal grant funds
in conjunction with their own resources to develop and sustain
appropriate levels of capabilities;
* Assess the extent to which DHS is fulfilling its responsibilities to
lead the identification, cross-agency and cross-program coordination,
and assessment of federal emergency prevention, preparedness, response,
and recovery capabilities;
* Assess whether FEMA’s management of the National Flood Insurance
Program ensures that the areas at greatest risk of flooding are
accurately mapped and the program is actuarially sound, minimizing
taxpayer liability to pay for property losses caused by flooding;
* Assess the cost and benefits of implementing existing disaster-
related insurance programs;
* Assess the capacity of private insurance markets to supply coverage
to protect individuals, families, and businesses from catastrophic
losses, and assess federal efforts to support and supplement that
protection;
* Assess SBA’s initiatives to help people recover from disasters by
providing affordable and timely financial assistance to homeowners,
renters, businesses, and nonprofit organizations;
* Assess progress in protecting critical infrastructure.
Potential Outcomes:
* More focused, risk-based, strategic development and sustainability of
critical emergency prevention, preparedness, response, and recovery
capabilities on an organizational and regional basis;
* Effective and efficient leveraging of federal and nonfederal funds
and assets for emergency capabilities;
* Effective DHS management to set policy for, coordinate, and assess
federal, state, tribal, and local capabilities and implement necessary
policy and operational changes;
* Effective federal, state, tribal, and local government management of
needed capabilities, including mitigation activities;
* Effective and efficient management of the National Flood Insurance
Program that recognizes and manages the program’s actuarial risks;
* Increased understanding of the pros and cons of increased federal
involvement in providing catastrophic insurance or other forms of
backup protection to enhance the capacity of private insurance
markets.
Performance Goal 2.1.4:
Assess Efforts to Strengthen Security in All Transportation Modes:
Terrorist events around the world have shown that transportation
systems are often the target of attack—roughly one-third of past
terrorist attacks worldwide have targeted various components of the
transportation system. The U.S. transportation network is vast, and
includes 3.9 million miles of roads, almost 600,000 bridges, over 300
ports, 2.2 million miles of pipelines, over 500 train stations, and
over 5,000 public-use airports. Securing this vast network from
terrorism is critically important to the economy and the American way
of life. Adding to this complexity are the multiple and diverse
stakeholders involved in maintaining, funding, overseeing, and
coordinating with this network, including federal, state, and local
governments, the private sector, and the international community.
The September 11 terrorist attacks demonstrated the vulnerabilities of
the U.S. transportation system and the impact that terrorist attacks
can have on the system and the nation. While the U.S. government’s
initial focus following the attacks was ensuring the security of
commercial aviation, emphasis on securing other modes of
transportation—to include ports and mass transit—have since grown as
potential vulnerabilities are identified, such as the threats of
introducing weapons of mass destruction through ports of entry or
launching attacks on mass transit systems. The 2005 terrorist bombings
on Madrid and London’s mass transit systems have highlighted these
systems’ vulnerability to terrorist attack, further increasing the
nation’s focus on the security of the transportation network.
Recognizing that transportation systems are multimodal and intermodal
in nature, terrorists should not be driven from one mode of
transportation to another mode that is perceived to be less secure.
Further, as no single measure is likely to provide complete security,
layers of diverse but coordinated security measures should be
implemented where possible. Security approaches must also recognize
that protecting the transportation system from a terrorist attack is a
permanent mission that requires a continued commitment from the public
and private sector; that is, security approaches must be sustainable
over time. Equally important is that security measures implemented not
unduly impact the efficient flow of legitimate commerce and people or
put industry at an economic disadvantage. The need to facilitate the
legitimate flow of commerce is critical because the national economy
depends on the transportation network, and the network plays a vital
role in the continuity of all other critical sectors.
Key Efforts:
* Assess the progress the federal government has made in effectively
allocating and balancing security resources across and within all
transportation modes;
* Determine the extent to which the federal government is taking an
efficient, effective, sustainable, diverse, and coordinated approach to
securing the aviation and surface transportation sectors, while
facilitating the legitimate flow of commerce and people;
* Assess federal efforts by the Coast Guard, Customs and Border
Protection, and other agencies to improve maritime security through
implementing the Maritime Transportation Security Act and other
legislation, container cargo inspections, and other port security
programs.
Potential Outcomes:
* Better oversight, management, and coordination of federal, state,
local, and private sector efforts to strengthen security measures and
reduce vulnerabilities in the transportation network;
* Improved leveraging and balancing of the key components of
transportation security measures—people, processes, and technology;
* Expanded use of a risk-managed approach to focus and target limited
resources to the areas of greatest need across the aviation, maritime,
and surface transportation sectors;
* Increased consistency, coordination, and sustainability of security
measures within and across all transportation modes.
Performance Goal 2.1.5:
Evaluate Ways to Strengthen Government Information Security and Protect
Computer and Telecommunications Systems That Support the Nation’s
Critical Infrastructures:
Protecting federal information systems and the nation’s critical
infrastructure—including energy, financial services, transportation,
vital human services, and communications systems—is becoming
increasingly important largely because of the dependence on complex
interconnected computer and telecommunications systems. Criminals,
terrorists, and others, working anonymously from remote locations and
with relatively limited resources, can use computers and the open
interconnectivity of the Internet to severely disrupt this
infrastructure, which is essential to national defense, economic
prosperity, and quality of life. Similar means can be used to gain
access to highly sensitive information—including personally
identifiable information—and commit massive fraud and theft. Finally,
the widespread destruction that occurred during the 2005 hurricane
season demonstrated the vulnerability of key information and
communications systems to disruption following a natural disaster.
Laws, such as the Federal Information Security Management Act, and
presidential initiatives, such as Homeland Security Presidential
Directive #7, have prompted an array of federal efforts aimed at
improving critical infrastructure protection, especially information
security, in both the public and private sectors. At the same time,
efforts have been increased to protect the government’s essential
operations and restore those operations following disruptions. These
efforts have also raised a variety of policy and budgetary issues that
will need to be addressed as the government works with the private
sector to develop an effective strategy for protecting against computer-
based attacks and other significant disruptions.
Key Efforts:
* Review the effectiveness of computer and network security at federal
agencies to better ensure the protection of government and personal
information;
* Assess efforts to manage and protect the computer and
cyberinformation systems that support the nation’s critical
infrastructures;
* Assess executive branch agency continuity of operations planning.
Potential Outcomes:
* Reasonable assurance that critical federal operations are protected
from disruption, fraud, and misuse;
* Enhanced capability of organizations to detect, protect against, and
respond to computer intrusions;
* Greater coordination among public and private sector institutions in
protecting U.S. computer-based critical infrastructure systems;
* Improvements to the legislative framework for information security;
* Greater public assurance that the Internet, electronic commerce
transactions, and the nation’s telecommunication infrastructure are
secure;
* More secure and efficient electronic government operations.
Performance Goal 2.1.6:
Assess Homeland Security Information and Intelligence Sharing:
Information is a crucial tool in fighting terrorism, and the timely
dissemination of that information to the appropriate government agency
is critical to maintaining the security of our nation. The ability to
share security-related information can unify the efforts of federal,
state, and local government agencies, as well as the private sector as
appropriate, in preventing or minimizing terrorist attacks.
One of the government’s single greatest failures in the lead-up to the
September 11 attacks was the inability of federal agencies to
effectively share information about suspected terrorists and their
activities, according to the National Commission on Terrorist Attacks
Upon the United States (also known as the 9/11 Commission). In
addressing this problem, the commission recommended that the sharing
and use of information be guided by a set of practical policy
guidelines that would simultaneously empower and constrain officials,
clearly circumscribing what types of information they would be
permitted to share as well as the types they would need to protect.
This recommendation led to creating new laws, organizations, policies,
and procedures aimed at ensuring that agencies better share information
on terrorist threats, risks, vulnerabilities, and protective measures
with each other as well as with key state and local homeland security
and law enforcement organizations and the private sector, where
needed.
Exchanging terrorism-related information continues to be a significant
challenge for federal, state, and local governments—one that we
recognize is not easily addressed. For these reasons, we added
information sharing for homeland security to our list of federal
programs and initiatives that pose a relatively high risk to the
federal government and that we will continue to monitor.
Key Efforts:
* Assess whether agencies’ roles and responsibilities have been
effectively defined;
* Determine what progress federal, state, local, and tribal agencies
are making in sharing information, including their use of major
technology innovations to facilitate these efforts;
* Assess how federal, state, local, and tribal agencies are trying to
balance sharing information and protecting privacy;
* Assess how well new intelligence infrastructure efforts have been
integrated into the law enforcement culture in order to advance
domestic counterterrorism.
Potential Outcomes:
* Improved clarity of legislative and executive authorities and
requirements for terrorism-related information sharing so that the
requirements are complete, consistent, and complementary;
* Better coordination of federal, state, local, and private sector
efforts to share terrorism-related information;
* Increased understanding of the barriers and incentives for terrorism-
related information sharing at various levels of the government and the
private sector;
* Expanded use of a risk-management approach for balancing the merits
of sharing information against necessary privacy protections;
* Improved information sharing between the law enforcement and
intelligence communities.
Strategic Objective 2.2:
Ensure Military Capabilities and Readiness:
Today, DOD is engaged in a “long war,” a term recently coined to
recognize the belief that the nation’s ongoing war on terrorism
is one that will likely continue for an extended and indeterminable
number of years. This war is being fought at the same time that DOD is
attempting to adapt and transform legacy warfighting capabilities from
the Cold War era to meet 21st century needs—needs that now extend to a
more diverse range of threats than previously recognized. Events of
recent years have also highlighted the growing importance of homeland
security and multiple coordinated roles that DOD must play in addition
to the key roles played by other federal, state, and local agencies in
securing the homeland. Likewise, both the 2001 terrorist attacks and
the 2005 hurricane disasters have provided important insights into
areas needing increased attention to strengthen U.S. abilities to
respond domestically to catastrophic events either of man-made or
natural origin, especially the support that may be required from DOD.
Although DOD has received significant increases in budget authority,
including numerous supplemental appropriations, since 2001 questions
exist about the extent to which these increases can be sustained in the
coming years as the nation faces growing fiscal challenges and budget
deficits, even as DOD faces challenges in addressing its own competing
priorities under existing budget authorities. The recently completed
2006 Quadrennial Defense Review Report provides an important frame of
reference for considering these competing priorities in responding to
today’s threat environment, but many details or actions are left for
further study, development, or implementation.
In contrast to the downward trend in defense spending during the last
decade, this first decade of the new century has seen a significant
upward trend in authorized defense spending. After dropping below $300
billion in years past, total defense budget authority increased in the
years since 2001 to around $400 billion in recent years, excluding
substantial war-related appropriations totaling about $451 billion
since 2001. (See fig. 10.) However, we and others have noted that some
portion of these funds has also been used to support other needs, such
as transformation efforts. Absent steps to reshape, reduce, and
reorient defense priorities, reducing or eliminating supplemental
appropriations
could place additional pressures on regular defense appropriations to
meet defense needs.
Figure 10: Total Defense Appropriations and Supplemental Funding for
Fiscal Years 2001–2007:
This is a stacked bar graph depicting total defense appropriations and
supplemental funding for fiscal years 2001–2007. The vertical axis
represents billions of dollars from 0 to 700. The horizontal axis
represents fiscal years 2001 through 2007. A bar for each year is
stacked with three items: regular appropriations, war-related
appropriations, and pending war-related supplement requests.
Source: Congressional Research Service.
Note: The 2007 dollar amount is projected based on available
information as of April 2006; all budget data are to be updated as the
fiscal year 2007 appropriation is finalized.
[End of figure]
The 2006 Quadrennial Defense Review Report articulated a vision for
change and highlighted numerous areas for change and transformation.
The report defined two fundamental imperatives for DOD: (1) continuing
to reorient DOD’s capabilities and forces to be more agile in this time
of war, to prepare for wider asymmetric challenges, and to hedge
against uncertainty over the next 20 years and (2) implementing
enterprisewide changes to ensure that organizational structures,
processes, and procedures effectively support its strategic direction.
The quadrennial review effort reportedly has identified more than 120
action items for implementation, and DOD has named a senior-level
working group to guide their implementation as well as oversee a number
of follow-on studies in such areas as departmental institutional reform
and governance, building partnership capacity, and intelligence.
Nevertheless, some defense analysts have expressed concern that the
quadrennial review did not go far enough in identifying reductions in
conventional capabilities or providing a greater level of detail and
specificity to the framework for reshaping defense and realigning
funding priorities.
As noted in our report on 21st century challenges, as DOD seeks to meet
the demands of the new security environment, it continues to bear the
costs of the past by implicitly maintaining or continuing to pursue
many programs and practices from the Cold War era. In this context, the
magnitude of funding and potential for current investments and
operations to turn into long-term financial commitments are prompting
real questions about the affordability and sustainability of the rate
of growth in defense spending. As DOD continues its emphasis on
transformation, it faces numerous competing issues or challenges. (See
table 3 for some of the more significant issues/challenges DOD is
likely to face.)
Table 3: Significant Challenges Confronting DOD as It Furthers Its
Transformation Efforts:
* Overcoming cultural resistance to change and the inertia of various
organizations, policies, and practices that became well rooted in the
Cold War as an impediment to increased joint capability, that is,
capability to support a defined mission area using resources that cut
across functional and organizational areas;
* Realistically distinguishing between needs and wants within a risk
framework in determining to what extent DOD can afford to invest in
transformation systems and force structure initiatives, such as the
Future Combat System, national missile defense, and Army modularity, at
the same time it continues to pursue large investments
in legacy systems;
* Ensuring more realistic portrayal of long-term program costs to
provide an improved basis for program funding decisions and requisite
trade-offs;
* Addressing multiple long-standing problems with the weapon system
acquisition process, particularly those factors contributing to growth
in cost and cycle time;
* Addressing growing operational costs of the war on terrorism and
costs of resetting/replacing war-damaged equipment against other
competing priorities;
* Addressing the growing impact of military pay and benefit costs,
especially health care, on DOD’s overall budget;
* Balancing requirements for civil support and homeland security with
more traditional national security needs, including determining the
right skill mix of active, reserve, civilian, and contractor personnel
to meet current and future national defense and homeland security
demands;
* Determining how the historical allocation of resources across
services and programs should be changed to reflect the results of
forward-looking comprehensive threat/risk assessment as part of DOD’s
capabilities-based approach to determining defense needs;
* Implementing enhanced personnel management systems and practices
appropriate to 21st century needs;
* Determining the potential for reductions in conventional aircraft
given the growing long-range strike capabilities
of unmanned aircraft;
* Considering changes to the strategic triad to meet the challenge of
providing strategic deterrence in the new security and fiscal
environment;
* Making sufficient investment in joint capabilities in line with DOD’s
vision for the future;
* Strengthening interagency emphasis on stabilization and
reconstruction efforts abroad;
* Alleviating years of neglect and underfunding of facilities even as
DOD continues efforts to realign forces and facilities at overseas and
domestic locations;
* Ensuring sustained commitment and leadership to strengthen strategic
planning and transform DOD’s daily business operations and to address
the related and long-standing high-risk areas;
* Ensuring defense organizations are aligned and empowered to meet the
demands of the new security environment as efficiently as possible
considering the potential for improved economies of scale and
improvements in delivery of support services from combining,
realigning, or otherwise making changes in selected support functions
(e.g., combat support, training, logistics, procurement,
infrastructure, or health care delivery).
Source: GAO.
[End of table]
Notwithstanding these challenges, DOD is continually faced with the
overall challenge of maintaining a ready force to meet today’s
operational requirements through the requisite provision of manning,
equipping, and training of its forces even as it transforms for
tomorrow.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
2.2.1: assess DOD’s ability to maintain adequate readiness levels while
transforming forces and capabilities to meet 21st century challenges;
2.2.2: assess DOD’s efforts to respond to emerging threats and
irregular warfare;
2.2.3: assess progress and challenges DOD faces in emphasizing
increased joint capabilities;
2.2.4: assess overall human capital management to ensure a high-quality
total force;
2.2.5: assess the ability of weapon system acquisition programs and
processes to achieve desired outcomes;
2.2.6: assess progress in improving the economy, efficiency, and
effectiveness of DOD’s support infrastructure and business systems and
processes;
2.2.7: assess the National Nuclear Security Administration’s efforts to
maintain a safe and reliable nuclear weapons stockpile; and;
2.2.8: analyze and support DOD’s efforts to improve planning,
programming, budgeting, execution, and program performance.
Performance Goal 2.2.1:
Assess DOD’s Ability to Maintain Adequate Readiness Levels While
Transforming Forces and Capabilities to Meet 21st Century Challenges:
During the past few years, we have had many opportunities to assist the
Congress in analyzing the war on terrorism’s effect on DOD operations.
We have assessed military readiness, force structure, training, and
issues related to the cost of operations. The long war, DOD’s
implementation of the 2006 Quadrennial Defense Review, and changing
economic and military relationships in the Asia Pacific region and
other key areas of the world will continue to present many
opportunities for us to assist the Congress in analyzing the basis for
and effect of changes to defense strategies, programs, force structure,
deployment plans, and operations. Moreover, the need for DOD to
coordinate more closely on its future plans and operations with other
federal agencies, nongovernmental organizations, and allies has become
known in recent operations at home and abroad. Our independent
assessments will highlight potential risks associated with proposed
changes and examine how changes will affect DOD’s capabilities and
ability to address readiness problems.
The defense strategy continues to emphasize many areas under a looming
fiscal crisis. This will force the department to make difficult trade-
off decisions and more closely examine how to achieve defense goals
most cost effectively. Accordingly, analyses of the cost-effectiveness
of defense alternatives and options will be needed. Similarly, the
Congress and DOD will continue to focus on how DOD can best blend the
diverse elements of its total force (active, reserve, and civilian
forces) and how it can better manage costs related to overseas
operations, as well as the integration of contractors in its total
mix.
Key Efforts:
* Assess service plans for transforming active and reserve force
structure and capabilities, including projected funding needs relative
to available funding;
* Assess protection of forces and assets worldwide;
* Assess DOD strategies and plans for strategic triad capabilities;
* Assess application of lessons from current operations to training,
doctrine, and materiel solutions;
* Assess readiness and training to accomplish new and ongoing
missions;
* Analyze costs and funding for military operations and key
initiatives.
Potential Outcomes:
* Greater understanding of the basis for, and cost and budgetary
implications of, proposed changes in military capabilities;
* Operational improvements, including ground force protection, based on
lessons learned;
* Improved links between force structure and training to address future
threats;
* Improvements in assessments of military readiness;
* Improvements in strategic mobility capabilities and the role of pre-
positioned assets;
* Better data on costs and implications of overseas training and
operations;
* More effectively integrating military and civilian personnel,
contractors, allies, and host nations to meet defense needs;
* Improved interagency coordination of domestic and overseas
operations.
Performance Goal 2.2.2:
Assess DOD’s Efforts to Respond to Emerging Threats and Irregular
Warfare:
While globalization has had many positive developments, such as the
free movement of goods, services, and information, it also has
accelerated the transmission of diseases, the proliferation of weapons
associated with irregular warfare such as improvised explosive devices,
the movement of terrorists, and the vulnerability of major economic
segments. As a result, the U.S. forces, populace, and infrastructure
are increasingly vulnerable to these and a variety of other threats.
The 2006 Quadrennial Defense Review Report calls for continuing to
reorient DOD’s capabilities to identify and address a wider array of
challenges, such as irregular warfare (conflicts in which enemy
combatants are not regular military forces of nation states),
counterterrorism, counterinsurgency, weapons of mass destruction, and
other disruptive threats to the U.S. ability to project power. For
example, the report called for expanding U.S. special operations forces
by 15 percent. The report also recognized the growing importance of
joint command and control with deployable, standing joint task force
headquarters to meet the range of potential future contingencies. It
also emphasized the need to harness the power of information
connectivity with the potential for collecting, processing, storing,
disseminating, managing, and sharing information within DOD and with
others to include federal, state, local, and coalition partners.
Clearly, there is the need for improved processes for dealing with
national security homeland defense and other issues that may require
the involvement of DOD as well as various other agencies, which may or
may not be among those traditionally considered part of the broader
national security community. The Congress will continue to be
interested in the evolution of DOD’s strategy for homeland defense and
how well its plans are integrated into overall planning for homeland
security, including support to civil authorities for responding to
natural and man-made disasters. More broadly, the Congress will also be
interested in DOD’s strategy for addressing today’s threats worldwide
as well as protecting U.S. military forces, population, and critical
infrastructure in today’s threat environment.
Key Efforts:
* Evaluate DOD’s role in homeland security and support to civil
authorities;
* Assess DOD’s efforts to identify and respond to emerging threats and
irregular warfare posed by state and nonstate actors;
* Assess protection of critical infrastructure, forces, and assets
worldwide;
* Assess efforts to improve cooperative working relations between DOD
and others nationally and internationally;
Potential Outcomes:
* Enhanced capability of U.S. military forces to identify and respond
to emerging threats and irregular warfare from state and nonstate
actors;
* Better protecting critical military infrastructure and assets.
Performance Goal 2.2.3:
Assess Progress and Challenges DOD Faces in Emphasizing Increased Joint
Capabilities:
Much progress has been made in increasing joint capability since the
1986 passage of the landmark Goldwater-Nichols legislation; witness the
strengthened role of the Joint Chiefs of Staff relative to the
individual military service chiefs and the increased emphasis on joint
operations between the first Gulf War and current warfighting efforts.
Despite these efforts, much remains to be done. As recent experience
has shown in military operations in Afghanistan and Iraq, success
greatly depends on the ability of military forces to work effectively
as an integrated joint force. Not only must the United States integrate
its forces, it must also have the capabilities to operate with those of
its allies and coalition partners. The ability to conduct joint
operations is vital to maintaining a superior force in an era in which
the nature and extent of national security missions have become broader
and more varied and the battlefield less segmented.
DOD has begun to transform the way the military has conducted
operations in the past and establish a force that will function in
smaller, more agile and deployable units, able to react quickly to
changing missions and circumstances. However, to be effective, force
components—units, soldiers, weapons, and sensors—must be closely
aligned and able to operate seamlessly together. Central to achieving a
high degree of integration is the need for new and advanced
capabilities, such as a Global Information Grid enabling warfighters to
access, integrate, and exchange information quickly, reliably, and
securely through linked systems and military components. Also important
will be new concepts, doctrine, and institutional changes for DOD and
its partners to strengthen joint capability within DOD and across
agencies in dealing with national security and homeland defense issues
and catastrophic national disasters. The 2006 Quadrennial Defense
Review Report placed much emphasis on reorienting operational
capabilities, such as joint intelligence, surveillance, and
reconnaissance and strike capabilities, to include use of land-, air-,
and space-based systems, as well as use of unmanned systems, joint
maritime capabilities, joint mobility, and joint command and control.
It also emphasized achieving unity of effort through such means as
strengthening interagency operations and working with international
allies and partners, for example, to provide logistics support,
supplies, and services to allies and coalition partners, without
reimbursement as necessary, to enable coalition operations with U.S.
forces.
Key Efforts:
* Evaluate how DOD and the military services are establishing joint
requirements, doctrine, and other arrangements, and developing
equipment, weapon, and logistics systems to achieve integrated joint
capabilities and support to interagency and coalition partners;
* Identify ways to optimize DOD’s efforts to develop and field
networking and information systems that interoperate effectively.
Potential Outcomes:
* A better understanding of the progress, limitations, and potential
steps to mitigate future progress toward joint capability and
potentially increased operational efficiency and effectiveness;
* Improved interoperability of networking and information systems.
Performance Goal 2.2.4:
Assess Overall Human Capital Management to Ensure a High-Quality Total
Force:
Human capital management represents one of DOD’s most significant
challenges today and in the foreseeable future. Strategic human capital
management in DOD has been included in our list of high-risk programs
since 2001. DOD is the largest U.S. employer, with about 700,000
civilian federal employees, 1.2 million reservists, and about 1.4
million active duty members. DOD also increasingly relies on a large
but undetermined number of contractor personnel, which, along with
civilian federal workers functioning on the battlefield, presents a
unique force management challenge. A force of this size and diversity
requires a large financial investment. Costs to provide compensation
for military personnel, for example, are substantial and growing,
increasing from about $76 billion to about $109 billion from fiscal
years 2000 through 2006. Also, in fiscal year 2004, it cost the federal
government about $112,000, on average, to provide annual compensation
to active duty enlisted and officer personnel. Even with substantial
financial investment, DOD faces numerous challenges in managing its
total force of civilian employees, reservists, and active duty
members.
By organizing the work in this performance goal around the three
personnel components of the total force, we are positioned to address
both emerging and long-standing areas of congressional concern for any
component. Such concerns include:
* DOD’s actions to sustain the all-volunteer force via improved
recruitment and retention of enlisted and officer personnel;
* DOD’s costs to implement its new National Security Personnel System
for civilian employees;
* the adequacy of DOD’s contract workforce, which is critical to
providing services to the military forces;
* the timeliness and completeness of the personnel security
investigation and adjudication processes for top secret clearances for
DOD contractor personnel; and;
* DOD’s conversion of military positions to civilian positions.
These concerns also include various issues associated with reserve
personnel reemployment rights, military absentee voting, implementation
of the Defense Integrated Military Human Resource System, and DOD’s
casualty assistance program.
Key Efforts:
* Assess DOD’s management of its civilian (including contractor)
workforce;
* Assess DOD’s management of its reserve components;
* Assess DOD’s management of its active duty forces.
Potential Outcomes:
* A more strategic approach to overall DOD human capital planning and
overall management of the civilian (including contractor) workforce;
* An enhanced overall strategic approach to DOD human capital
management of reserve forces;
* An improved and more strategic approach to DOD human capital
management of active duty forces.
Performance Goal 2.2.5:
Assess the Ability of Weapon System Acquisition Programs and Processes
to Achieve Desired Outcomes:
DOD invests well over $147 billion each year in a wide array of weapon
systems to equip the U.S. armed forces. These systems range from tank
and fighter aircraft upgrades to sophisticated satellites and networks
of systems, such as those used for national missile defense. It is not
unusual for a single program to cost over $40 billion. These
investments represent the largest discretionary portion of the U.S.
budget.
While DOD’s investment has produced superior weapons, it is not unusual
to see cost increases that add up to tens or hundreds of millions of
dollars, schedule delays that add up to years, and large and expensive
programs frequently rebaselined or even scrapped after years of failing
to achieve promised capability. Recognizing this dilemma, DOD has tried
to embrace best practices in its policies, instill more discipline in
requirements setting, strengthen training for program managers,
reorganize offices that support and oversee programs, and require the
use of independent cost estimates and systems engineering. Yet, despite
these and many other actions, DOD still has trouble distinguishing
wants from needs, and many programs are still running over cost and
behind schedule.
Our reviews have identified a number of causes for the problems just
described, but several stand out. First, DOD starts more programs than
it can afford to sustain, which creates competition for funding. This
competition encourages low cost estimating, optimistic scheduling,
overpromising, and suppressing of bad news. Second, DOD has exacerbated
this problem by not clearly defining and stabilizing requirements
before programs are started. Third, DOD commits to its programs before
it obtains assurance that the capabilities it is pursuing can be
achieved with available resources and within time constraints. Fourth,
officials are rarely held accountable when programs go astray. Our
work, therefore, focuses on the adequacy of DOD’s business case for
starting and sustaining programs as well as on ways DOD as a whole can
strengthen planning, development, execution, and accountability.
Key Efforts:
* Assess and identify ways to optimize DOD’s investments in weapon
systems—including planning, development, and execution—across the
department as well as within specific mission areas;
* Provide annual status and risk updates on a wide range of weapon
systems, observing trends in acquisition performance and opportunities
for budgetary actions;
* Target reviews of individual weapon systems for more in-depth
analysis early enough to ensure that they are well positioned for
execution;
* Assess DOD’s progress in improving life cycle management and reducing
the total life cycle cost of military systems.
Potential Outcomes:
* Increased accountability for acquisition outcomes;
* Improved capabilities to the warfighter sooner;
* Lower costs and reduced delivery delays;
* More relevant knowledge base for congressional decision making;
* Increased use of best practices to achieve desired outcomes;
* Improved life cycle management and cost of weapon systems.
Performance Goal 2.2.6:
Assess Progress in Improving the Economy, Efficiency, and Effectiveness
of DOD’s Support Infrastructure and Business Systems and Processes:
This performance goal focuses on three areas of defense: (1) logistics
and supply chain management, (2) facilities infrastructure, and (3)
transformation of overall business processes, each having been included
on our list of high-risk government programs since 1990, 1997, and
2005, respectively. We expect significant congressional interest in
these issues.
With active engagement from the Office of Management and Budget, DOD
has developed a plan to show progress toward the long-term goal of
getting supply chain management removed from our high-risk list. As we
monitor DOD’s efforts to address this issue, we will be reporting on
efforts to make improvements in the areas of material requirements
forecasting, distribution of material, and asset visibility, and
meeting the challenges of repairing, rebuilding, and maintaining
equipment having high usage rates in the war on terrorism.
DOD has sought to address long-standing weaknesses in the management of
its facilities infrastructure, yet many challenges remain. Our recent
reports highlight continued challenges, including continued
deterioration of facilities with inadequate funding devoted to
maintenance and repair and recapitalization and migration of funds for
other uses. Likewise, our July 2005 report on the 2005 base realignment
and closure round identified likely challenges in implementing
recommendations from that round, as well as the likelihood of fewer
savings than DOD projected.
We have reported, over time, on inefficiencies in a broad array of DOD
business operations. DOD recognizes continuing challenges in this area,
and while it has taken some important recent steps to address this
issue, those efforts are largely focused on business systems
modernization rather than overall business transformation. DOD
components are expected to pursue various business reform and business
process reengineering efforts in the coming years in efforts to gain
efficiencies and reduce operating costs amid competing budget
pressures. We will be assessing and reporting on progress and
challenges in this area.
Key Efforts:
* Assess DOD’s logistics transformation efforts to meet warfighter
needs;
* Identify ways to improve the economy, efficiency, and effectiveness
of logistics functions;
* Assess efforts to improve sustainment, restoration, modernization,
and recapitalization of facilities as well as achieve efficiencies in
base operating and facility maintenance costs;
* Assess progress, challenges, and costs and savings in implementing
base realignment and closure recommendations;
* Assess DOD efforts to improve its overall business processes.
Potential Outcomes:
* Improved logistics support to enhance operations and readiness;
* Improved facilities condition, management, and cost-effectiveness of
facilities management;
* Improved management and planning to achieve overall business
transformation goals;
* Improved business practices for support functions at reduced costs;
* Improved transparency in base realignment and closure costs and
savings.
Performance Goal 2.2.7:
Assess the National Nuclear Security Administration’s Efforts to
Maintain a Safe and Reliable Nuclear Weapons Stockpile:
The National Nuclear Security Administration (NNSA)—a semiautonomous
agency within the Department of Energy—is responsible for producing
nuclear weapons, preventing the proliferation of weapons of mass
destruction, and producing naval reactors. Since its establishment,
NNSA has been developing approaches for addressing management issues
associated with planning, organization, procurement, personnel, and
security. Although NNSA has reorganized and made improvements in
project management, additional new management approaches will be vital
if NNSA is to effectively address the programmatic challenges before
it. Specifically, because it is assumed that the United States will
continue its policy of no nuclear weapons testing, NNSA must develop
first-of-a-kind experimental facilities and advanced supercomputing
technology to ensure that the nation’s nuclear weapons stockpile is
safe and reliable without underground testing. It also must ensure that
there is a modern and efficient production infrastructure to maintain
and refurbish the stockpile as it ages. It must find effective human
capital strategies to respond to an aging contractor and federal
workforce. It must continue to improve its project management and
contract administration to ensure effective results from the over $9
billion per year appropriated for this effort. Finally, in response to
the September 11 terrorist attacks, NNSA must improve security
operations at all its facilities to ensure that classified information,
nuclear materials, and weapons are adequately protected.
Key Efforts:
* Assess NNSA’s efforts to establish effective personnel, procurement,
and planning systems to address the workforce and infrastructure
challenges it faces;
* Assess NNSA’s research and development and production programs to
support a safe and reliable stockpile;
* Assess the extent to which the Department of Energy and NNSA have
developed an effective and efficient security program to protect
nuclear weapons material and information.
Potential Outcomes:
* A better understanding of the stockpile stewardship program to help
the Congress ensure that the annual investment of more than $6.6
billion is spent efficiently and supports specific program outcomes;
* Improved Department of Energy processes for safely producing and
storing nuclear materials and components at the nuclear weapons
complex;
* Improved NNSA and Department of Energy programs for ensuring the
security of classified information, nuclear materials, and weapons;
* Better information to help decision makers gauge the ability of
NNSA’s stockpile stewardship program to ensure the safety and
reliability of existing nuclear weapons.
Performance Goal 2.2.8:
Analyze and Support DOD’s Efforts to Improve Planning, Programming,
Budgeting, Execution, and Program Performance:
Over the past several years, DOD has experienced a significant infusion
of funds, with an annual defense appropriation totaling over $400
billion for fiscal year 2006 and supplemental funding of around $400
billion from fiscal years 2001 through 2006 for homeland defense and
overseas military operations related to fighting terrorism. We have
reported, over time, on long-standing problems in DOD’s financial
management systems and reporting. Our focused yearly budget
justification reviews of DOD’s spending of annual appropriations,
particularly for operations and maintenance and personnel expenses,
have shown consistent trends in over- and underexecuting funds, raising
questions about whether DOD is efficiently managing programs and
funding. Furthermore, our analysis of supplemental budget requests and
spending concluded that neither DOD nor the Congress could reliably
know how funds that were appropriated for combating terrorism had been
spent. Factors affecting the reliability of DOD’s data include long-
standing material weaknesses in DOD’s accounting systems, a lack of a
systematic process to ensure that data are correctly entered into those
accounting systems, the use of estimates rather than actual costs for
some of DOD’s reported costs, and errors in some reported costs
identified by us and some of the military services’ audit agencies. In
some cases, the difference between reported and actual costs may be
material.
In addition, DOD’s overall approach to planning and budgeting often
results in a mismatch between programs and budget and does not always
fully consider long-term resource implications and the opportunity cost
of selecting one alternative over another. To that end, we have
recommended that DOD adopt a risk-based and results-oriented strategic
investment approach. While DOD has taken some steps in this direction,
its efforts are still very much a work in progress and lack key
elements. DOD’s recent quadrennial defense review suggests that DOD
plans significant reforms to its risk-based approach and key planning,
requirements determination, and budgeting processes. We will be
assessing and reporting on progress and challenges in all these areas.
Key Efforts:
* Analyze DOD’s annual and supplemental budget requests and related
obligations, including funding and costs related to ongoing military
operations;
* Assess DOD’s efforts and identify alternative approaches to improve
planning, programming, budgeting, and processes in support of its
overall defense strategy.
Potential Outcomes:
* Improved accountability for planning, programming, budgeting, and
executing resources for current defense needs;
* Improved accountability through providing of information to defense-
related appropriations and authorization committees for their
deliberations on DOD’s budgets;
* Improved budget and program planning processes to realistically
address changing national security needs with limited resources.
Strategic Objective 2.3:
Advance and Protect U.S. International Interests:
Although U.S. leaders agree on the ultimate goal of promoting global
peace, prosperity, and stability, and spent over $35.6 billion on
international affairs in fiscal year 2005 (see fig. 11), intense debate
is occurring over how to achieve that goal.
Figure 11: Spending type for the $35.6 Billion in Fiscal Year 2005
International Affairs Funds:
This is a pie-chart depicting spending type for the $35.6 billion in
Fiscal Year 2005 International Affairs Funds. The components of the pie
are as follows:
* Bilateral assistance: 46%;
* Foreign affairs administration and broadcasting: 30;
* Military assistance: 16%;
* Multilateral assistance: 4%;
* Other: 5%.
Sources: GAO (analysis) and Department of State (data).
Note: The total adds to 101 percent because of rounding.
[End of figure]
Conflict interventions to make or keep the peace, stabilize failed
states, and end terrorist regimes have dominated recent U.S. foreign
policy actions. These interventions are sometimes controversial, both
domestically and internationally. They also are often costly. For
example, from fiscal years 2003 through 2006, the U.S. government
appropriated about $310 billion to support U.S. stabilization and
reconstruction efforts in Iraq, including over $34 billion for
reconstruction assistance alone. The United States also spent more than
$1.6 billion in Afghanistan from 2002 to 2004. Moreover, the
administration has requested about an additional $51 billion to support
U.S. stabilization and reconstruction operations in Iraq and
Afghanistan in fiscal year 2007. Such interventions are likely to
continue to play a prominent role in stabilizing regions used as
staging areas for efforts to undermine or threaten U.S. interests.
U.S. foreign aid to developing countries is critical for advancing U.S.
economic and security interests. For example, the United States
supports countries trying to adopt democratic and free market
structures through developmental and humanitarian programs as well as
rule-of-law assistance and measures to improve local governance
capacity. These countries and regions in transition have combined
populations in excess of 2 billion, and they face complex development
problems. In addition, the Millennium Challenge Corporation’s mission
is to reduce poverty by supporting sustainable, transformative economic
growth in developing countries that create and maintain sound policy
environments. Ensuring the effectiveness and efficiency of these
programs is important because the extent to which countries can
successfully make the transition to and maintain democratic governments
and market economies will significantly affect U.S. security and
economic objectives and, ultimately, the U.S. budget.
Protecting U.S. strategic interests in the face of new tests has
presented challenges for alliances established decades ago and raised
questions about how the United States should respond to shifting needs
and priorities. Traditional alliances continue to evolve. For example,
membership in the North Atlantic Treaty Organisation is expanding to
the east and south, and its missions are broadening to include
responding to security threats and crises outside of its members’
territories. The United States continues to provide bilateral security
assistance and pursue programs that counter transnational threats, like
drug trafficking, human trafficking, money laundering, and infectious
diseases, in order to foster international security.
U.S. participation in multilateral organizations, such as the United
Nations, is sometimes debated when questions arise about these
organizations’ effectiveness and their ability to advance U.S.
interests. Multilateral organizations facilitate international
cooperation in many areas, including promoting economic and social
development; responding to security and humanitarian challenges; and
addressing transnational threats, such as a potential avian flu
pandemic. The United States, as a member of these organizations, has
advocated improved accountability and management.
Conducting foreign affairs is becoming more complicated as the lines
between domestic and international issues blur and change how America
does business. About 35 federal agencies have around 19,000 U.S. staff
assigned to overseas embassies, and most federal policies have
international aspects. The Department of State plays a key role in
coordinating U.S. policy and programs for regions, countries, or
multilateral organizations. To carry out its responsibilities, the
Department of State operates more than 260 embassies and consulates in
over 185 countries. The size and composition of the department’s
overseas infrastructure and human capital are being questioned,
particularly in light of security concerns. Moreover, attacks on the
United States prompted a rethinking of U.S. public diplomacy and public
affairs activities and ways to better understand, inform, and influence
foreign publics and policymakers.
The threat of terrorist attacks on U.S. facilities and personnel
overseas has shifted the focus of many U.S. agencies’ international
activities and programs. For example, the practices for granting entry
into the United States and the need to block the entry of terrorists
and criminals while at the same time facilitating entry for legitimate
travel key to the nation’s prosperity have changed. Similarly, the
terrorist attacks against the United States and interventions in
Afghanistan and Iraq have given rise to new U.S.-led coalitions to
pursue military, political, and economic efforts to erode terrorists’
networks and their sources of support. Finally, the continuing
proliferation of weapons of mass destruction has received heightened
attention because of concerns that terrorists or a rogue regime could
threaten the United States with nuclear, chemical, or biological
attack.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
2.3.1: analyze the plans, strategies, roles, costs, and results of the
United States and its allies in conflict interventions;
2.3.2: analyze the effectiveness and management of U.S. foreign aid and
developmental and humanitarian programs and the tools used to implement
them;
2.3.3: analyze the plans, costs, and outcomes of responding to
challenges to U.S. strategic interests;
2.3.4: evaluate the extent to which U.S. interests are effectively
served by U.S. participation in multilateral organizations;
2.3.5: assess the strategies and management practices for U.S. foreign
affairs functions and activities;
2.3.6: evaluate the effectiveness and coordination of U.S.
international counterterrorism efforts; and;
2.3.7: assess the effectiveness of U.S. and international efforts to
prevent proliferating nuclear, biological, chemical, and conventional
weapons and sensitive technologies.
Performance Goal 2.3.1:
Analyze the Plans, Strategies, Roles, Costs, and Results of the United
States and Its Allies in Conflict Interventions:
The United States engages in major military operations to maintain
peace between nations, stabilize states, or end terrorist regimes,
either unilaterally or with the support of U.S. allies or other
regional organizations. The United States has employed its armed forces
and civilian agencies, often in conjunction with U.S. allies and the
international community, most prominently in Iraq and Afghanistan. In
these two countries, the United States has made a significant
financial, political, and military commitment to enhancing stability
and security; industrial infrastructure; economic growth; and
institutions in key social, economic, and legal sectors. As of April
2006, the Congress has appropriated about $310 billion to support U.S.
stabilization and reconstruction efforts in Iraq. The United States
also plans to spend about $877 million in Afghanistan in fiscal year
2006. Over the past 3 years, this commitment has brought a mix of
progress, frustration, and continuing concern over the efficiency and
efficacy of U.S. efforts. In late 2005, the U.S. government elevated
integrated postconflict intervention planning as a key aspect of
national security planning. The President announced the United States
had a significant stake in enhancing U.S. capacity to help stabilize
and reconstruct countries in transition from conflict. He directed the
Secretary of State to plan, coordinate, and conduct integrated U.S.
government and international responses to future postconflict crises
and needs. Moreover, DOD announced at about the same time that
integrated military-civilian stability operations now would be a core
U.S. military mission and would include assisting efforts to restore
rule of law, develop the private sector, and foster government
institutions.
While Iraq and Afghanistan have consumed a large share of U.S.
resources and effort, elsewhere, peacekeeping missions for the United
Nations have expanded, resulting in financial and operational pressures
for U.S. participation and support. The United Nations currently fields
16 peacekeeping missions, including operations in the Sudan, on the
Pakistan-India border, and in the Middle East. These missions address
territorial disputes, armed ethnic and nationalistic conflicts, civil
wars, and terrorist and other threats that endanger regional and
international peace and stability. Successful interventions often
require multidimensional operations involving political and diplomatic
efforts and sophisticated intelligence and communications capabilities
and security measures. Building, sustaining, and projecting these
efforts and capabilities requires commitment, coordination, resources,
and consensus—which can be difficult to achieve in the face of
conflicting international priorities and strained resource bases.
Key Efforts:
* Evaluate U.S. and multilateral activities intended to stabilize the
security environment in areas of conflict;
* Evaluate U.S. and multilateral activities intended to rebuild and
protect critical physical infrastructure in Afghanistan and Iraq and
manage their transition to secure, peaceful, and independent states;
* Evaluate U.S. and multilateral efforts to promote economic growth and
enhance management capacity within key social, economic, and legal
institutions in Afghanistan and Iraq in support of U.S. efforts to
develop stable and prosperous countries that are at peace with their
neighbors and are partners in the war against terrorism;
* Assess the roles and capabilities of the United States, coalitions of
other nations, and international organizations such as the United
Nations in peacekeeping and similar military interventions in areas of
conflict.
Potential Outcomes:
* Improved congressional oversight of U.S. and international efforts to
bring security to Afghanistan and Iraq;
* Improved planning, execution, and coordination of U.S. and
multilateral operations and more efficient use of military and civilian
resources in current and future conflict interventions.
Performance Goal 2.3.2:
Analyze the Effectiveness and Management of U.S. Foreign Aid and
Developmental and Humanitarian Programs and the Tools Used to Implement
Them:
The September 2002 National Security Strategy, which was a response to
the September 11 terrorist attacks, elevated development assistance to
the third pillar of U.S. national security, along with defense and
diplomacy. Since the United States military action began against
Afghanistan in 2001 and in 2003 in Iraq, multibillion-dollar, multiyear
efforts to rebuild these countries have been under way. Since 2003, the
U.S. government has made $34 billion available for rebuilding and
stabilization in Iraq. The United States made available over $12
billion for humanitarian and developmental assistance programs in
fiscal year 2006, including about $1.8 billion for the Millennium
Challenge Corporation. In an effort to advance democracy and support
good government around the world, the United States implements
assistance programs to strengthen local governance capacities in
foreign countries and to combat transnational crime.
Furthermore, the spread of infectious diseases, notably the HIV/AIDS
pandemic, is viewed as a threat to global economic growth and security,
in addition to causing tremendous human suffering. To respond to the
threat, the President initiated a 5-year, $15 billion emergency plan
for AIDS relief in 2003 and tasked the Department of State with
coordinating the global effort. The United States has also focused
increasingly on disaster recovery assistance. In May 2005, the Congress
appropriated $908 million for relief and reconstruction aid in
countries affected by the 2004 Southeast Asia tsunami and has provided
over $780 million for hurricane and earthquake recovery in the
Caribbean and Central America since 1999.
The United States government has taken a number of steps in an attempt
to coordinate and manage its diverse foreign aid assistance programs.
In 2004, the Secretary of State created the Office of the Coordinator
for Reconstruction and Stabilization to enhance U.S. institutional
capacity to respond to crises involving failing, failed, and
postconflict states and complex emergencies. Furthermore, the Secretary
recently created the new position of Director of Foreign Assistance to
coordinate assistance programs within both the U.S. Agency for
International Development and the Department of State. The Director of
Foreign Assistance will serve jointly as the U.S. Agency for
International Development Administrator and at the level of Deputy
Secretary of State. It is a matter of intense debate whether this move
will further politicize foreign aid assistance or will succeed in
providing a clear implementation strategy for coordinating a broader
portfolio of assistance. In light of concerns about the effectiveness
of U.S. assistance, continued attention must be given to evaluating
assistance program accountability and management, determining whether
foreign assistance efforts are achieving their intended objectives, and
assessing whether U.S. foreign aid programs are being managed
effectively to advance U.S. policy goals.
Key Efforts:
* Monitor and evaluate U.S. efforts to provide developmental and
humanitarian assistance, including assistance to Iraq and Afghanistan;
* Determine the accountability for and effectiveness of U.S.
humanitarian and development assistance, including assistance funded
through the Millennium Challenge Corporation;
* Assess U.S. efforts to conduct nation-building activities, including
programs to enhance the rule of law, democracy, and governance and to
combat crime;
* Evaluate the effectiveness and progress of U.S. programs to combat
HIV/AIDS and other infectious diseases, as well as programs to provide
disaster recovery assistance to other nations.
Potential Outcomes:
* Increased accountability for and oversight of U.S. funds and greater
focus on achieving results that advance U.S. policy objectives;
* Better-informed government decisions about the best options for
delivering foreign assistance;
* Improved effectiveness and efficiency of foreign assistance
programs;
* More informed congressional evaluations of the outcomes associated
with U.S. and multilateral assistance and their advantages and
disadvantages.
Performance Goal 2.3.3:
Analyze the Plans, Costs, and Outcomes of Responding to Challenges to
U.S. Strategic Interests:
The United States faces other serious challenges to its efforts to
promote democracy and to build a stable and secure world beyond
Afghanistan and Iraq. U.S. efforts to make or keep the peace, stabilize
failed states, combat transnational illicit activities and end regimes
that threaten U.S. interests and world security are no less important.
In response to these and other challenges to its strategic interests,
the United States has sought to achieve international stability, on the
one hand, by strengthening standing alliances such as the North
Atlantic Treaty Organisation through expansion of its membership and
capabilities, and on the other hand, by acting with an ad hoc
“coalition of the willing,” as in Iraq. These approaches leave a
variety of options for action open to the United States and its allies.
They also raise questions about the most effective approaches for
achieving international stability and the implications of these
approaches for developing effective security arrangements and providing
bilateral security assistance to other countries.
In addition to terrorist threats at home and abroad, other less
conventional transnational threats, such as trafficking in drugs and
persons and water disputes, threaten regional stability in
strategically important areas, including the Middle East, Asia, and
Latin America. These threats create different challenges for developing
effective alliances; providing assistance to other countries; and
developing the means to deny terrorists, criminals, and corrupt regimes
the ability to take advantage of the complexity of and weaknesses in
the world financial system to sustain their activities. The United
States is working with the United Nations, the Financial Action Task
Force on Money Laundering, and other organizations to reduce the
ability of transnational criminal organizations to earn, move, and
store financial or other assets.
Key Efforts:
* Analyze the implications and costs of evolving U.S. military
alliances and international security arrangements, including efforts to
transform and augment regional and international security
organizations;
* Assess the management, costs, and benefits of U.S. bilateral security
assistance programs, such as foreign military financing and
international military education and training;
* Evaluate programs and initiatives to counter transnational threats
and global forces affecting U.S. interests, such as illegal trafficking
in drugs and persons, and the movement of illegitimate financial assets
that fund illicit activities.
Potential Outcomes:
* Enhanced coordination among U.S. allies and greater support for U.S.
strategic interests;
* Improved congressional decision making and oversight concerning the
costs and benefits of new security arrangements and changes in existing
security institutions;
* More effective and coordinated implementation of programs to enhance
U.S. security interests and promote more equitably shared costs between
the United States and its allies;
* Greater oversight of how U.S. agencies cooperate with international
agencies and the financial sector in locating and repatriating
illegally obtained assets and revenues.
Performance Goal 2.3.4:
Evaluate the Extent to Which U.S. Interests Are Effectively Served by
U.S. Participation in Multilateral Organizations:
The United States seeks to advance its interests by participating in a
wide variety of multilateral organizations, including the United
Nations and 11 related agencies (such as the International Atomic
Energy Agency), the International Monetary Fund, the World Bank, and
four regional development banks. These organizations facilitate
international cooperation in many areas, including promoting economic
and social development; responding to security challenges; and
addressing transnational threats, such as terrorism, crime, and the
spread of infectious diseases. Because of humanitarian concerns and
because infectious diseases are increasingly viewed as a threat to
economic growth and political stability, the United States supports the
World Health Organization; the Global Fund to Fight AIDS, Tuberculosis
and Malaria (Global Fund); and the United Nations Joint Programme on
HIV/AIDS. In addition, the United States is working with bilateral
partners and international organizations to help plan and mitigate a
potential avian flu pandemic. These diseases are increasingly viewed as
a threat to economic growth and political stability. Programs to fight
these diseases depend on U.S. resources. To date, the United States
remains the largest single contributor to the Global Fund, having
contributed $1.5 billion since 2001.
The United States is a strong advocate of action within multilateral
institutions to (1) address today’s needs, threats, and opportunities;
(2) become more efficient and effective; and (3) ensure financial and
programmatic accountability for funds that member nations provide. For
example, the United States has urged the United Nations and the
multilateral development banks to focus on monitoring and evaluating
performance, and to use information on performance when making funding
decisions. The United States has also requested that the United Nations
improve its internal controls and has supported efforts to combat
corruption in international organizations’ programs.
Key Efforts:
* Assess multilateral organizations’ capabilities and effectiveness in
carrying out their missions;
* Evaluate U.S. efforts to fight global infectious diseases through
financing and supporting multilateral organizations’ activities;
* Assess U.S. participation in and oversight of multilateral
organizations, including efforts to reform United Nations’ management.
Potential Outcomes:
* Enhanced congressional evaluation of multilateral organizations’
activities and the results that they produce and, therefore, the
potential gains;
* Improved accountability, increased focus on results, and increased
transparency at these organizations and more consideration of options
to strengthen their capabilities and effectiveness;
* More effective use of resources to advance U.S. interests through
participating in these organizations.
Performance Goal 2.3.5:
Assess the Strategies and Management Practices for U.S. Foreign Affairs
Functions and Activities:
The United States spends over $30 billion annually for traditional
foreign affairs activities, including operating the Department of State
and providing foreign aid. Long-standing questions exist regarding the
level of resources and human capital needed to maintain the network of
about 260 U.S. embassies, consulates, and other facilities. Most
federal policies have international aspects, and about 35 agencies have
staff assigned overseas to implement a variety of programs and
activities to support U.S. foreign policies and domestic interests.
Agencies such as the Departments of Agriculture, Commerce, Defense,
Homeland Security, and Justice and the U.S. Agency for International
Development have significant overseas operations that cover a vast
array of programs and functions. These overseas operations are
generally administered in coordination with the Department of State and
its overseas embassy network. However, with so many agencies involved,
there is potential overlap and poor coordination of roles and
responsibilities, which could create confusion and discord in executing
U.S. foreign policy. Thus, it is important that the resources expended
to accomplish U.S. foreign policy goals are well managed and that
personnel assigned to overseas posts are properly trained. Setting
priorities and reconciling the many competing interests the United
States has in its relationships with foreign countries is a challenge,
but is critical for an effective overall foreign policy. This has led
to an effort to “rightsize” or align U.S. overseas resources with
policy priorities. In an effort to better position the Department of
State and other agencies to confront rising challenges and new
transnational threats, the Secretary of State announced in January 2006
that the Department of State will shift hundreds of foreign service
positions from Europe and Washington to difficult assignments in
Africa, Asia, the Middle East, and elsewhere.
In recent years, the United States has begun to rethink its foreign
affairs functions and activities, and the U.S. government has expanded
overseas staffing and increased reliance on nongovernment organizations
and contractors to respond to new international challenges. In
addition, the U.S. government has placed renewed emphasis on key
programs designed to promote U.S. foreign and domestic interests.
Throughout the world, the public face of the United States generates
strong opinions, positive and negative. The U.S. public image overseas
directly affects the U.S. government’s ability to achieve its foreign
policy and development assistance objectives. As such, public diplomacy
programs promoting U.S. national interests abroad and U.S.
international broadcasting are once again at the forefront of a
coordinated foreign policy. The Congress needs to ensure that these and
other critical programs achieve their intended results and that the
U.S. government has a sound strategic plan for carrying out its foreign
affairs functions and activities.
Key Efforts:
* Assess efforts to improve U.S. diplomatic readiness and respond to
human capital, technology, and other management challenges faced by
foreign affairs agencies;
* Assess efforts to rightsize the U.S. overseas presence;
* Evaluate the efficacy of U.S. public diplomacy and other key programs
to improve the U.S. image abroad.
Potential Outcomes:
* More effective and efficient use of federal resources and human
capital to meet foreign policy objectives;
* Better coordination and synergy among U.S. foreign affairs agencies
that are stakeholders in a given region or country;
* More effective coordination and implementation of U.S. public
diplomacy and international broadcasting efforts.
Performance Goal 2.3.6:
Evaluate the Effectiveness and Coordination of U.S. International
Counterterrorism Efforts:
The terrorist attacks of September 11, 2001, underscored significant
gaps and weaknesses in U.S. efforts to combat terrorism at home and
abroad. Growing threats from international terrorist organizations have
required the United States to rethink its international activities and
became a central focus of the U.S. national security policy. In
response to these concerns, the 9/11 Commission made numerous
recommendations and the Congress passed several acts (including the
Intelligence Reform and Terrorism Prevention Act of 2004) focused on
U.S. efforts to combat terrorism at home and abroad. Additionally, the
United States took several steps to respond to potential terrorist-
related threats to the homeland and United States interests abroad,
such as increasing and realigning resources devoted to combating
terrorist threats and taking steps to revise diplomatic, military,
intelligence, and law enforcement priorities at home and abroad. The
U.S. government has spearheaded a variety of international efforts to
combat terrorist activities. Among these efforts are a focus on (1)
identifying and disrupting currently active terrorist groups and (2)
reducing the flow of funding sources and new adherents into terrorist
organizations, through public diplomacy, criminal interdiction, and
other mechanisms. In addition, the United States has taken steps to
train and equip foreign countries to prevent, combat, and respond to
terrorism and also began a $21 billion program to replace approximately
200 of its overseas facilities to provide more secure and modern
facilities for overseas workers and U.S. citizens.
Several government agencies play a key stakeholder role in these
efforts (among them are DOD, DHS, Department State, Department of
Justice, Federal Bureau of Investigation, and Central Intelligence
Agency). Concerns have been raised as to whether the various entities
with different roles and missions face challenges coordinating an
international approach to combating terrorism and whether the
challenges they face are magnified because many of these agencies
continue to face program, human capital, and transformation challenges.
Additionally, the U.S. government has placed renewed emphasis on key
programs designed to protect U.S. borders and promote U.S. foreign and
domestic interests. The United States annually processes over 7 million
entry visas to foreign visitors, and several agencies work to prevent
the entry of those who are a danger to the United States or who are
likely to remain in the United States illegally. As such, the Congress
has an important role to play in overseeing the implementation of these
recommendations and in assessing the effectiveness and coordination of
U.S. diplomatic, military, intelligence, and law enforcement efforts to
combat terrorism abroad.
Key Efforts:
* Evaluate the management and effectiveness of U.S. programs designed
to train and equip foreign countries to prevent, combat, and respond to
terrorism;
* Assess U.S. efforts to protect overseas personnel, facilities, and
interest from terrorist attack;
* Assess the effectiveness and coordination of U.S. international
programs focused on combating and preventing the growth of terrorism;
* Evaluate U.S. efforts to improve passport, visa, and other travel
document processes to keep terrorists or other criminals out, while
minimizing disruption for legitimate travelers.
Potential Outcomes:
* Enhanced congressional and public understanding of the resources and
challenges associated with the U.S. efforts to combat terrorism
abroad;
* Improved management of counterterrorism programs and more effective
use of U.S. foreign assistance intended to reduce terrorist threats
abroad;
* Enhancements to U.S. diplomatic, military, law enforcement,
intelligence, and national security programs designed to combat
terrorism abroad;
* More efficient and effective programs to prevent terrorists from
entering the United States.
Performance Goal 2.3.7:
Assess the Effectiveness of U.S. and International Efforts to Prevent
Proliferating Nuclear, Biological, Chemical, and Conventional Weapons
and Sensitive Technologies:
The continuing proliferation of weapons of mass destruction and
delivery systems poses serious threats to the security of the United
States and its allies. Increased concern that in the near future, a
rogue regime or terrorists will be able to threaten the United States
or its allies with nuclear, biological, or chemical weapons has
prompted the United States to develop a new approach to combating
proliferation. The President’s 2006 National Security Strategy
identified the need to bolster counterproliferation efforts to deter
and defend against these threats, manage the consequences of using
weapons of mass destruction, and enhance nonproliferation efforts. The
United States is placing a renewed emphasis on strengthening these
efforts by encouraging increased political and financial support for
such activities.
Currently, the centerpiece of nonproliferation efforts is the growing
multibillion-dollar array of efforts by DOD, the Department of Energy,
and the Department of State to help former Soviet states control and
reduce their vast, diverse holdings of Cold War-era nuclear,
biological, and chemical weapons and their related delivery systems and
infrastructure. However, U.S. programs to limit proliferating weapons
of mass destruction have begun to move beyond focusing on the former
Soviet Union and are focusing more on risks in other countries, such as
Iran and North Korea; at borders; and from terrorist networks. In
addition, the United States controls the export of certain sensitive
technologies (such as chemical weapons’ precursors, missiles, and
computers) and weapon systems through its national export control
system and multilateral arrangements with other nations capable of
supplying these technologies or weapon systems.
Nevertheless, the United States is seeking ways to strengthen
multilateral export control regimes because rapidly evolving
technologies and growing trade in sensitive items among countries of
concern have weakened these controls. Finally, the United States is
reassessing the effect of existing agreements and partnerships to
control or reduce U.S. and foreign arsenals of weapons of mass
destruction in the post-Cold War era, including a multibillion-dollar
program to dispose of Russian weapons-grade plutonium. The United
States is also reassessing the ability of prospective agreements and
coalitions to prohibit and detect development of weapons of mass
destruction.
Key Efforts:
* Evaluate the management and effectiveness of U.S. programs and safety
of facilities designed to minimize proliferating nuclear, biological,
chemical, and conventional weapons; technologies; and expertise that
pose the greatest risk to the United States and its interests;
* Assess the management and effectiveness of U.S. and multilateral
controls over exports of goods and technologies that contribute to
proliferating weapons of mass destruction or conventional weapons to
sensitive regions of the world;
* Evaluate the United States’ and other countries’ use of accords and
agreements aimed at reducing arsenals of weapons of mass destruction
and the impact of their efforts.
Potential Outcomes:
* Improved management of programs and activities and more effective use
of U.S. assistance that reduces the proliferation of weapons of mass
destruction and diminishes the assets posing the greatest risks to U.S.
national security;
* Enhanced controls over the export and use of sensitive technologies
that could facilitate proliferating weapons of mass destruction or
other weapons of concern;
* Improved implementation of accords and agreements to achieve greater
impact in reducing arsenals of weapons of mass destruction.
Strategic Objective 2.4:
Respond to the Impact of Global Market Forces on U.S. Economic and
Security Interests:
The increasing interdependence of the world’s economies has a
significant impact on the national security and the economic well-being
of the American people. U.S. exports have grown much faster than the
economy as a whole. However, U.S. imports have grown faster, leading to
a widening trade deficit, as shown in figure 12. Moreover, the United
States has been the principal architect of an open world trading system
and, as the world’s largest exporter and importer of goods and
services, has benefited immensely from global trade. But segments of
U.S. and world populations have not shared equally in these benefits
and may not do so in the future. Moreover, global market forces have
resulted in large trade imbalances and made the United States more
vulnerable to overseas economic crises. Trends such as rapid growth in
China and India have increased international competition for scarce
natural resources, such as energy. In addition, it has become more
difficult for the United States to maintain control over critical
technologies and the supplier base on which U.S. economic and military
security depends. Also, the United States has faced terrorist threats
emanating from some of the least integrated countries in the world as
well as health threats from some of the most integrated regions of the
world. For policymakers, several aspects of these trends require
particular attention.
Trade agreements are increasing in number and importance to the U.S.
economy. More than 300 international trade agreements affect hundreds
of billions of dollars in trade and millions of U.S. jobs. The mutual
dependence of international markets and the U.S. economy has increased
even further with China’s 2001 admission to the World Trade
Organization and the emergence of developing countries such as India,
shifting traditional patterns of trade, production, and investment. In
addition, the United States is currently involved in major multilateral
negotiations in the World Trade Organization, as well as numerous free
trade agreements with other partners. Over 10 U.S. agencies have
programs to promote U.S. exports. These programs include providing
financial assistance through loans, loan guarantees, and grants as well
as providing U.S. businesses with information on the export process.
Figure 12: U.S. Imports, Exports, and Trade Balance, 1990–2005:
[See PDF for image]
This is a combination line an bar graph depicting U.S. Imports,
Exports, and Trade Balance, 1990–2005. The vertical axis of the graph
represents billions in constant 2000 dollars. The horizontal axis
represents fiscal years from 1990 through 2005. Bars for each year
depict Balance, while there are two lines, depicting exports and
imports.
Sources: Council of Economic Advisers and the Bureau of Economic
Analysis.
Note: Trade values are in inflation-adjusted 2000 constant U.S.
dollars. The values for fiscal year 2005 are preliminary.
[End of figure]
The globalization of the supplier base is driving changes in the way
the United States obtains technologies and capabilities to protect its
national security interests. As companies increasingly engage in a wide
variety of business arrangements across national borders, and DOD
increasingly relies on them, the department is seeking new ways to
benefit from the competitive sources and innovative technologies that a
diverse supplier base may provide. For example, the department is
partnering with foreign countries to develop major weapon systems, such
as the Joint Strike Fighter aircraft program. Although globalization
has the potential to speed innovation and reduce costs, it also carries
potential threats to the technological superiority of the U.S. military
and may require new approaches to protect national security interests.
Global financial health and the maintenance of the world financial
system are critical to long-term U.S. objectives and cornerstones of
U.S. foreign policy. International financial institutions have created
mechanisms to anticipate, prevent, and resolve financial crises, but it
remains to be seen if these mechanisms will be adequate to safeguard
the stability of the international financial system. International
financial institutions, such as the International Monetary Fund and the
World Bank, are at the center of efforts to address financial crises.
The United States is the major contributor to the International
Monetary Fund and relies heavily on it and the World Bank to promote
world economic health. The operations and transparency of these
institutions have come under increased scrutiny.
Overseeing financial institutions and markets in the 21st century is a
growing challenge. Trillions of dollars flow through the nation’s
financial institutions and markets, including the investments and
retirement savings of working households. The globalization of
financial firms and markets coupled with continuing advances in
technology have created opportunities to improve the speed and
efficiency of market operations. But these advances also provide new
opportunities for illegal market activities and may broaden the scope
of financial crises or cause them to spread more rapidly. Creating new
products and the increasing importance of new market participants
continue to pose challenges to existing regulatory frameworks and
oversight programs. Innovations such as the increasing use of Internet-
based financial activities also present new regulatory challenges.
While these innovations can benefit U.S. markets and investors, they
also expose individuals to increased risks and potential fraud.
To support efforts by the Congress and the federal government to
address these issues, we will use the following performance goals:
2.4.1: analyze how U.S. interests are served through trade and other
agreements, U.S. programs, and international cooperative efforts;
2.4.2: improve understanding and management of the effects of a global
supplier base on U.S. national security interests;
2.4.3: assess how the United States can influence improvements in the
world financial system;
2.4.4: assess the ability of the financial services industry and its
regulators to maintain a stable and efficient financial system in the
face of market change and innovation; and;
2.4.5: assess the effectiveness of regulatory programs and policies in
ensuring access to financial services and deterring fraud and abuse in
financial markets.
Performance Goal 2.4.1:
Analyze How U.S. Interests Are Served through Trade Agreements, U.S.
Programs, and International Cooperative Efforts:
The future direction of U.S. trade policy continues to be debated in
the Congress, throughout the nation, and around the world, and the
Congress may be asked to renew the President’s Trade Promotion
Authority, which expires in mid-2007. Trade proponents maintain that
liberalizing trade barriers, establishing new trade rules, expanding
coverage of trade agreements to new countries, and enforcing existing
trade agreements are critical to U.S. commercial and foreign policy
interests. For these reasons, the executive branch works to complete
trade agreement negotiations on several fronts, often through use of
trade promotion authority, which facilitates congressional approval of
trade agreements. These include the World Trade Organization’s Doha
Development Agenda and regional and bilateral free trade agreements.
Yet several of these have run into difficulty. At home, some U.S. firms
and workers are questioning the benefits versus the costs of trade
agreements. Internationally, certain issues such as agriculture are
particularly problematic. Developing countries are taking a more active
role in negotiating trade agreements, some claiming they should not be
held to the same level of trade liberalization as developed countries,
while others are seeking assistance to adjust and benefit from trade
reform.
Nevertheless, some domestic observers express concern that the United
States has not been sufficiently aggressive in monitoring and enforcing
more than 300 existing trade-related agreements. U.S. trade policy and
programs seek to increase export opportunities and to ensure that U.S.
firms are able to compete globally, while aiming to contain “unfairly
traded” imports and import surges that cause significant injury to
certain domestic industries. For example, U.S. government agencies have
a role in promoting exports as well as administering U.S. trade remedy
laws. Some critics of U.S. trade policy and programs doubt that
regional and global trade regimes can effectively achieve their desired
outcomes and believe they may compromise U.S. sovereignty.
Finally, the United States uses its trade policy and programs as tools
to support other foreign policy objectives. U.S. trade and investment
assist developing countries around the globe in instituting market-
based economies, democratically elected governments, and stability in
areas of conflict. Since the September 11 terrorist attacks, security
has become an important issue in trade policy. In such an environment,
we can provide the Congress with independent, in-depth analyses of the
status of trade negotiations, the extent to which trade agreements are
being implemented, and the effectiveness of the U.S. government
apparatus to develop and implement trade policy and programs.
Key Efforts:
* Assess preparations for, progress in, and results of trade
negotiations, including the World Trade Organization’s Doha Development
Agenda and regional and bilateral free trade agreements, including the
potential impact on U.S. policies such as the new farm bill;
* Evaluate U.S. and international efforts to ensure the implementation
of and compliance with trade agreements, which include the broad World
Trade Organization agreements and more specific provisions, such as
those pertaining to intellectual property rights;
* Analyze the structure, processes, and resources used to develop,
implement, and evaluate U.S. trade policy and programs, as well as
their effectiveness, such as trade preferences for developing nations;
export promotion; trade capacity building; legal remedies to counter
unfairly traded goods and injurious import surges; import duty
collection; and control and monitoring of in-bond shipments, textile
imports, and illegal goods;
* Evaluate the relationship between trade and other, sometimes
competing, U.S. policy goals and emerging or renewed domestic and
international challenges, such as the need to balance security and
economic concerns when regulating trade at the border and the need to
retain the United States’ openness to foreign trade and financial flows
while reducing currency and trade imbalances;
* Review how the U.S. government assesses the extent and the impact of
the dynamic change in U.S. international economic activity, such as
offshoring of services by outsourcing them to foreign nations;
* Assess U.S. participation in international efforts to address tight
supplies of energy and other commodities and mitigate their economic
impact.
Potential Outcomes:
* Improved congressional oversight of trade negotiations, key emerging
issues, economic implications, and the relationship of these issues to
achieving U.S. objectives;
* More effective congressional oversight of trade policy through better
information on and greater transparency of complex trade programs and
activities;
* Improved implementation of and compliance with trade programs and
agreements to ensure that the United States obtains anticipated
benefits and mitigates costs;
* Greater congressional understanding of the links and potential trade-
offs between trade and other U.S. policy goals.
Performance Goal 2.4.2:
Improve Understanding of the Effects of a Global Supplier Base on U.S.
National Security Interests:
The multiple, and often divergent, interests of a global supplier base
present challenges to the U.S. government as it obtains technologies
and capabilities to protect national security interests. Domestic firms
that develop defense products, produce parts and components for weapon
systems, and integrate and maintain those weapons are forming business
relationships with foreign firms. At the same time, DOD is increasingly
relying on commercial products from industries that have already
established such international relationships.
These trends are reflected in the department’s new emphasis on
partnering with foreign countries to develop major weapon systems, such
as the Joint Strike Fighter aircraft program. Taking advantage of
industry globalization has the potential to speed innovation and reduce
costs but also carries potential threats to the technological
superiority of the U.S. military. Our independent assessments of the
effects of increased globalization on defense acquisitions will provide
information needed for the U.S. government to manage technology
transfers, the industrial base, and international weapon systems
programs.
Key Efforts:
* Evaluate the management of significant national security technology
transfers;
* Improve the U.S. government’s knowledge of its commercial and foreign
supplier base, ability to select key suppliers, and capacity to manage
contractors to meet national security needs.
Potential Outcomes:
* Improved effectiveness of technology transfer processes through
maximizing value and minimizing national security risks to the U.S.
government;
* Greater understanding and improved U.S. government management of
commercial and foreign suppliers to meet national security needs.
Performance Goal 2.4.3:
Assess How the United States Can Influence Improvements in the World
Financial System:
Maintaining the health of the global financial system is critical to
long-term U.S. objectives and is a cornerstone of U.S. foreign policy.
International efforts to maintain this system are primarily undertaken
through international financial institutions, most notably the World
Bank and the International Monetary Fund, which use various means to
help countries deal with financial problems and development needs. In
light of the threat of financial crises and persistent poverty in many
developing countries, the Congress and others have raised concerns
regarding the effectiveness of the International Monetary Fund, the
World Bank, and related multilateral organizations in maintaining the
health and stability of the world financial system. This includes their
efforts to address the increasing debt burdens of middle- and low-
income countries, 42 of which have been classified as heavily
indebted.
The United States seeks to create an environment that supports its
foreign policy objectives by influencing international economic
activity and policy through various activities, including:
* negotiating international financial accords, like those sponsored by
the Organisation of Economic Co-operation and Development to promote
market economies;
* providing government finance programs like those run by the Export-
Import Bank of the United States and the Overseas Private Investment
Corporation to support U.S. trade and development objectives; and;
* seeking consensus on the use of exchange rate policies, capital
controls, and similar measures to promote efficient and sound
international trade and investment flows with other countries.
Key Efforts:
* Assess U.S. participation in and oversight of multilateral financial
institutions, including the Department of the Treasury’s efforts to
influence how these institutions address the debt problems of
developing countries;
* Evaluate U.S. government efforts to influence developments in
international markets through international accords; U.S. financing
programs that support trade and investment; and other government
activities that affect the international flow of goods, services, and
financial assets, valuation of currencies, and trade balances.
Potential Outcomes:
* Increased understanding of the funding liabilities arising from U.S.
participation in international debt relief efforts and more effective
programs for reducing poor countries’ debt burdens;
* More informed congressional oversight of U.S. foreign economic
policy, including efforts to reach accords on economic issues;
* More efficient and effective management of U.S. government
international finance programs and related activities.
Performance Goal 2.4.4:
Assess the Ability of the Financial Services Industry and Its
Regulators to Maintain a Stable and Efficient Financial System in the
Face of Market Change and Innovation:
The financial services industry continues to develop, both in the size
of financial institutions and in the range of services being provided
to customers. Combined with introducing new products and marketing
niche products—such as alternative mortgages—to a wider spectrum of
consumers, this growth presents regulators with new challenges.
Likewise, risk management practices are becoming more complex and
difficult for regulators to assess. U.S. and foreign bank regulators’
multiyear effort to better align capital standards with these risk
management practices could improve financial system soundness but could
also alter the competitive landscape. Banking regulators face expanding
challenges as they respond to the changing structure of the industry,
ensuring compliance with new rules and regulations (such as
restructured capital adequacy rules) while seeking to lessen regulatory
burden, particularly on medium- and small-sized firms. Questions have
also been raised about the adequacy of oversight of industrial loan
corporations as well as whether credit unions are meeting their
mandated responsibilities of serving people of modest means.
Securities regulators also face ever-increasing challenges as they take
on the responsibility of prudently supervising the largest investment
firms and seek to increase oversight of the activities of large
investors, including hedge funds that are increasingly active in many
financial markets. They are also struggling to update their regulatory
requirements and approaches in light of changes in the ownership
structure of U.S. and international exchanges, which raises concerns
about potential conflicts of interest. In the insurance sector, where
regulation is primarily at the state level, there is an increasing need
for regulatory consistency across the states that may call for a wider
federal role. All regulatory agencies must deal with the human capital
challenges as they compete with the private sector for staff with the
specialized skills needed to assess the more complex risk management
systems.
Ensuring that the financial system remains stable but is also efficient
and flexible enough to meet the changing demands of its customers is an
important part of the government’s role in ensuring the proper
functioning of the nation’s economy. The potential for new threats to
financial market stability—such as those from terrorism or
pandemic—challenges financial regulators and the Congress to ensure not
only that customers and markets are protected but also that increased
security does not stifle market efficiencies or hinder introducing
beneficial new products and services, including those that would enable
consumers and businesses to better manage those threats.
Key Efforts:
* Assess how regulators oversee financial firms that are increasingly
global and manage multiple business lines across regulated entities;
* Evaluate whether the overall regulatory structure and the role of
existing financial regulatory agencies are appropriate given the
ongoing changes in market practices and regulatory-ownership
structures:
* Assess how well regulators manage their operations and make effective
use of technology and human capital:
* Assess how well regulators respond to new products and market
participants; emerging threats; and the impact of these developments on
safety, soundness, and competition in the financial services industry.
Potential Outcomes:
* Improved efficiency, effectiveness, and consistency of the overall
federal regulatory framework;
* Increased efficiency and competitiveness of the nation’s financial
markets;
* Greater assurance that markets and financial institutions are
resilient in the face of damage from physical or other threats;
* Improved readiness of regulators to oversee new products and markets,
financial holding company arrangements, and risk management practices;
* Enhanced efficiency and effectiveness in the way regulators manage
their operations, technology, and human capital;
* Enhanced understanding and oversight by the Congress and regulators
of the effects of new market practices, new participants, and new
capital standards on financial market stability, efficiency, and
competitiveness.
Performance Goal 2.4.5:
Assess the Effectiveness of Regulatory Programs and Policies in
Ensuring Access to Financial Services and Deterring Fraud and Abuse in
Financial Markets:
Millions of U.S. households have invested in financial markets or
deposited money at financial institutions. To a greater degree than
ever before, the products offered by the financial services industry,
such as mutual funds and insurance, are important to the financial well-
being and retirement security of U.S. citizens. Increasingly, consumers
are being offered an ever-widening array of financial products,
including some with hybrid features involving combinations of savings,
investments, or insurance. It is becoming more and more important that
regulators ensure that consumers understand the benefits and risks of
these products. As product diversity and complexity grows, financial
regulators, consumers, and businesses must also be increasingly
vigilant of fraudulent and abusive marketing practices. As financial
institutions increasingly move into new and nontraditional markets,
regulators must maintain their ability to ensure open and fair access
to markets and consumer protection.
In response to recent scandals, various financial accounting,
disclosure, and corporate governance reforms were implemented, such as
the Sarbanes-Oxley Act or additional disclosure requirements for mutual
funds. It is important to ensure that these reforms are effective and
do not have unintended consequences. With individuals making greater
use of financial products and interacting more directly with the
markets than in the past, adequate risk disclosure and assurance of
financial privacy and security have also assumed more importance. As a
result, understanding the scope of financial literacy and evaluating
approaches to enhance it have become increasingly important. The
growing problems related to using the financial markets and
institutions for illegitimate purposes—such as identity theft, money
laundering, or terrorist financing—also demand regulatory attention to
ensure that customers are protected and that the integrity of the
financial system is preserved.
Key Efforts:
* Determine whether consumers and businesses, particularly low- and
moderate-income consumers and small businesses, have appropriate access
to financial services and assess the effectiveness of regulatory
programs in ensuring fair and open access to financial markets;
* Assess the effectiveness of regulatory programs and policies in
deterring fraud and abuse in the financial marketplace;
* Assess whether current regulatory efforts, policies, and requirements
are adequate to ensure that investors and consumers are sufficiently
informed of the costs and risks of traditional and innovative financial
products and services;
* Determine whether financial regulators and institutions are promoting
the financial literacy of consumers and investors, including providing
information on how to manage their finances with an emphasis on
preparing to meet their retirement and other goals, using credit
responsibly, and assessing and understanding risks;
* Assess the adequacy of consumer information protection monitoring by
regulators as well as regulatory responses to financial crimes,
including identity theft and money laundering and terrorist financing.
Potential Outcomes:
* Increased assurance of fair and open access to financial markets;
* Improved regulatory actions to detect and deter fraud and abuse
within the financial services industry;
* Improved disclosure of financial product costs, benefits, and risks;
* Better understanding of the state of financial literacy and which
methods enhance it;
* Regulatory oversight and financial institution compliance programs
that better ensure that all financial transactions are from legitimate
sources;
* Cost-effective improvements in oversight and compliance programs that
minimize the regulatory burden;
* Improved protection for homeowners and homebuyers from predatory and
unfair lending practices.
[End of section]
Goal 3:
Help Transform the Government by Supporting a Broad-Based Reexamination
of Federal Programs:
The federal government is in a period of profound transition and faces
an array of challenges and opportunities to enhance performance, ensure
accountability, and position the nation for the 21st century. Major
trends—such as diffuse security threats, increasing interconnectedness
of global markets and economies, and rapid technological advances—drive
the need for federal agencies to transform their cultures and
operations. In view of the broad trends and growing fiscal pressures,
the federal government needs to engage in a fundamental reexamination
of what government does, how it does business, how it is financed, and
in some instances who does the government’s business.
The federal government must work closely with other governments,
nongovernmental organizations, and the private sector—both domestically
and internationally—to achieve results. Part of this must entail a
reassessment of federal missions and strategies and the entire mix of
policy tools available to address national objectives. Because the
public expects demonstrable results from the federal government,
government leaders need to increase strategic planning, address
management challenges and high-risk issues, use integrated approaches,
enhance their agencies’ results orientation, and ensure accountability.
Examining existing programs, operations, tax policies, and tax
administration can create much-needed fiscal flexibility to address
emerging needs. Moreover, addressing today’s priorities must be
balanced against the long-term fiscal pressures of financing existing
programs and operations.
This third strategic goal guides us in our efforts to help transform
the federal government’s role and its efforts to meet 21st century
challenges. The accompanying strategic objectives focus on the
comprehensive reassessment necessary to position the government to take
advantage of emerging opportunities and meet strategic challenges.
Specifically, we focus on the government’s role in achieving national
goals in an increasingly networked environment and its ability to
deliver, and account for, high performance.
To ensure that we help transform the role of government and its efforts
to meet 21st century challenges, we have established strategic
objectives to:
3.1: reexamine the federal government’s role in achieving evolving
national objectives;
3.2: support the transformation to results-oriented, high-performing
government;
3.3: support congressional oversight of key management challenges and
program risks to improving federal operations and ensuring
accountability; and;
3.4: analyze the government’s fiscal position and strengthen approaches
for addressing the current and projected fiscal gap.
Strategic Objective 3.1:
Reexamine the Federal Government’s Role in Achieving Evolving National
Objectives:
Within the context of the major trends and long-term fiscal imbalance,
evaluating the role of the government and the programs it delivers is
vital to determining how to best position the federal government for
the 21st century. With the government facing an array of complex
challenges and opportunities, a strategic long-term view is critical in
considering how best to design programs to manage effectively across
boundaries and meet the nation’s needs and priorities today and in the
future. Policymakers will need forward-looking information to set the
stage for early warnings about emerging threats and make informed
choices about effective government responses.
As the pace of change accelerates in every aspect of American life,
policymakers and the public need more and better information to assess
where the nation is and where it is going. In this regard, developing
key national indicators for the United States can help policymakers
assess the overall position and progress of the nation in key areas,
frame strategic issues, and support informed public debate and
decisions within and between levels of government and the United States
as a whole.
Addressing the nation’s strategic challenges increasingly depends on
the joint efforts of all levels of government and the interactions and
interdependencies between the various actors, policy tools, and
management functions. In most federal mission areas—from low-income
housing to food safety to higher education assistance—national goals
are achieved through the use of various policy tools, such as direct
spending, grants, loans and loan guarantees, insurance, tax
expenditures, and regulations. Any assessment of federal missions and
strategies must look at the tools that the federal government uses and
the participation of other organizations in achieving national
objectives.
Although policy tools have proliferated in recent decades, knowledge of
how to design and manage the federal policy tool set has not kept pace.
Policymakers need a better understanding of how individual policy tools
operate, how to measure their performance and effectiveness, which
actors participate in implementing various tools, and what features are
necessary to ensure accountability and oversight.
The effectiveness of federal programs increasingly depends on state and
local management and resources as well as constructive interactions
between federal, state, and local actors, including private and
nonprofit entities. The intergovernmental system is being tested by a
complex array of specific short- and long-term challenges. Federal,
state, and local governments are facing daunting problems in managing
programs involving numerous actors inside and outside of government
that are both nonroutine and routine in nature. For example,
jurisdictions face challenges in working with other levels of
government, nonprofits, and the private sector in areas ranging from
preparing for, responding to, and recovering from catastrophes, such as
a potential influenza pandemic, to effectively managing key areas of
national life, such as providing quality education and health care.
Moreover, the unique advantages of a federal system—the flexibility and
capacity to respond to local needs—are challenged by long-term trends,
such as advances in technology and communications that span state and
national boundaries.
To support the Congress in reexamining the federal government’s role in
achieving evolving national objectives, we will use the following
performance goals:
3.1.1: examine emerging challenges and opportunities to position the
federal government for the 21st century and;
3.1.2: examine the relationships of governmental and nongovernmental
organizations and the use of policy tools in achieving national goals.
Performance Goal 3.1.1:
Examine Emerging Challenges and Opportunities to Position the Federal
Government for the 21st Century:
As demonstrated in our 21st century challenges report, the Congress
faces a daunting challenge to bring the federal government and its
programs in line with 21st century realities. Such a broad and
fundamental reexamination of the federal government will test political
wills and traditional oversight frameworks. For example, it may be
difficult politically to eliminate outright or even change some
programmatic or policy commitments, even if review and reexamination
has found them to be outdated, unneeded, or simply unaffordable.
Entrenched programs and policies may have significant segments of the
economy that have grown dependent on their continuation and that would
experience disruption and significant transition costs if the status
quo were abruptly altered. Yet the sooner that the Congress, federal
managers, and others can implement change toward a new federal base of
government, the more options they will have and the easier the changes
will be to implement.
Key Efforts:
* Examine, develop, and demonstrate information and tools to support
potential government responses to 21st century challenges;
* Examine one or more emerging challenges and the implications for
current programs;
* Identify specific foresight strategies that can be used to address
current and emerging trends;
* Monitor efforts to develop key national indicators.
Potential Outcomes:
* Enhanced congressional, agency, and GAO capability to reexamine what
the government does, how it does it, who does it, and how it is
financed;
* Development and application of reexamination tools identifying
opportunities to transform what the government does, how it does it, or
how it is financed;
* Improved anticipation and response to emerging trends and
challenges;
* Enhanced congressional, agency, state, local, and GAO capability to
oversee and evaluate the performance of government and society;
* Increased insight and foresight to the Congress and the American
public on priority and emerging national challenges and policy
decisions.
Performance Goal 3.1.2:
Examine the Relationships of Governmental and Nongovernmental
Organizations and the Use of Policy Tools in Achieving National Goals:
There is a growing understanding that the federal government is relying
increasingly on networks and partnerships—often including multiple
federal agencies, state and local governments, domestic and
international nongovernmental or quasi-governmental organizations, and
for-profit and not-for-profit contractors—to achieve results. Adding to
this complexity, the federal government uses a variety of public policy
tools, such as grants, tax expenditures, insurance programs,
regulations, vouchers, and loans, to interact through these networks.
Recognizing this increased interdependence is particularly important
when developing and implementing national strategies and presents
challenges for managing programs involving numerous actors, ensuring
appropriate flexibility, building capacity, and maintaining sufficient
accountability. In addition, there is a critical need for innovative
leadership approaches to provide the governance capacity needed to
address crosscutting and multisector 21st century challenges, such as
planning for and responding to catastrophic events such as an influenza
pandemic, and for meeting the challenges posed by more routine
concerns, such as health care financing over the long term. A
governmentwide strategic plan, informed by a comprehensive set of
national indicators, could help improve evaluations of the nation’s
progress and prospects in addressing key issues and support informed
public debate and decisions about the respective roles of the public
and governments at all levels in addressing the challenges the nation
faces. Also of key importance is the understanding that the fiscal and
policy issues facing governmental and nongovernmental parties are
increasingly intertwined, and like the federal government, state and
local governments have faced and will continue to face fiscal pressures
in the form of slowing revenue growth and greatly increased spending
demands.
Key Efforts:
* Assess the development and implementation of national and
governmentwide strategies, such as the strategy to prepare for and
respond to an influenza pandemic;
* Identify opportunities to improve the coordination, collaboration,
and governance of networks of governmental and nongovernmental
organizations to address complex national issues, such as the response
to and recovery from hurricanes Katrina and Rita and preparations for
pandemic influenza, as well as the routine delivery of services and
programs;
* Evaluate the efficiency, effectiveness, and use of policy tools, such
as grants, tax expenditures, regulations, vouchers, loans, loan
guarantees, and insurance;
* Determine how federal policies and economic trends affect the short-
and long-term fiscal capacities of states and localities to pursue
national objectives.
Potential Outcomes:
* Bolstering of the Congress’s decision making and oversight related to
national strategies and measures;
* Helping the United States prepare for nonroutine events (such as
pandemics) in ways that are sustainable over the longer term,
encompassing approaches to enhance critical capacities that will have
value to preparedness, response, and recovery;
* Improved coordination, collaboration, and governance of organizations
and networks involved in emergency events and the routine delivery of
services and programs;
* Enhanced use of the various tools of government to achieve national
outcomes and improve program results;
* Increased insight that will allow the Congress to address the
challenges facing all levels of government in the U.S. federal system,
including the imbalance between current revenues and spending demands,
financing of health care over the long term, and the adequacy of
current tax structures.
Strategic Objective 3.2:
Support the Transformation to Results-Oriented, High-Performing
Government:
The overarching trends and long-term fiscal challenges facing the
nation drive the need to change how the government does business in the
21st century. To become high-performing organizations, agencies must
transform their cultures to respond to the transition that is taking
place in the federal government’s role. By building fundamental
management capacity, the federal government can improve its performance
and deliver economical, efficient, and effective programs and services
that the American people need in a cost-effective and fiscally
sustainable manner. Focusing on accountable, results-oriented
management can help the federal government better position itself to
meet the new challenges and opportunities of this century.
As part of its transformation efforts, the federal government needs to
create a culture that moves from outputs to results, stovepipes to
matrixes, hierarchical to more horizontal structures, an inward to an
external focus, micromanagement to employee empowerment, reactive
behavior to proactive approaches, avoiding new technologies to
embracing and leveraging them, hoarding knowledge to sharing knowledge,
avoiding risk to managing risk, and protecting “turf” to forming
partnerships (see fig. 13). People are an organization’s most important
asset, and strategic human capital management should be the centerpiece
of any effort to transform the cultures of government agencies. A focus
on results, not just of the organization but of its contribution to
national goals, is essential. In establishing a results-oriented
culture that can reach its full potential, the organization and its
leaders need to carefully select the best solution for the organization
in terms of structure, systems, and processes. Information is an
important asset that needs to be managed appropriately and effectively.
Vital to successful transformation will be building the management
capacity of federal agencies to support new ways of doing
business—including human capital, financial, IT, and acquisition
management. Though progress is being made on many fronts, much remains
to be done.
Figure 13: Cultural Changes and Key Practices Necessary for Successful
Transformation:
This figures depicts two lists: current state and high-performing
organization. An arrow, labeled "Transformation" links the two lists,
with key transformation practices listed. The figure text is as
follows:
Current state:
* Output-oriented;
* Stovepipes;
* Hierarchical;
* Inwardly focused;
* Micromanaging;
* Reactive behavior;
* Avoiding technology;
* Hoarding knowledge;
* Avoiding risk;
* Protecting turf.
During transformation, the key practices depicted are:
* Leadership;
* Integrated mission and goals;
* Clear principles and priorities;
* Goals and timeline;
* Implementation team;
* Line of sight;
* Communication strategy;
* Employee involvement;
* World-class organization.
After transformation, the high-performing organization has these
characteristics:
* Results-oriented;
* Matrixes;
* Flatter and more horizontal;
* Externally focused;
* Employee empowerment;
* Proactive approaches;
* Leveraging technology;
* Sharing knowledge;
* Managing risk;
* Forming partnerships.
Source: GAO.
[End of figure]
Today’s federal human capital strategies are not suited to meet current
and emerging 21st century challenges or to drive needed transformation
across the federal government. The federal government must have the
capacity to plan more strategically, react more expeditiously, and
focus on achieving results. Critical to the success of this
transformation are the people who carry out the government’s business.
Traditionally, this work was performed largely by permanent, career
civil servants. Increasingly, however, nonpermanent federal employees,
as well as contractors and other third parties, are playing a bigger
role in carrying out agencies’ missions. We designated strategic human
capital management as a governmentwide high-risk area, and it is one of
the President’s governmentwide management reform initiatives. The area
remains high risk because the federal personnel system is clearly
broken in critical respects—designed for a time and workforce of an
earlier era and not able to meet the needs and challenges of a rapidly
changing and knowledge-based environment. While more progress in
addressing human capital challenges has been made in the last few years
than in the previous 25, improvements are needed in such areas as
succession planning, knowledge transfer, pay and reward systems,
recruitment and retention programs, and managing the multisector and
blended workforce. As new agency-specific authorities and flexibilities
are provided, it will be vital to have the institutional infrastructure
in place to use them effectively. Critical institutional infrastructure
includes agencies’ human capital planning capabilities; the ability of
their management teams to use flexibilities effectively; and the
presence of modern, effective, and credible performance management
systems with appropriate safeguards.
Agencies are confronted with long-standing and substantial challenges
to becoming more results oriented. Since the 1990s, the Congress sought
to instill a greater focus on results and accountability by enacting a
statutory framework with the Government Performance and Results Act of
1993 as its centerpiece. Our work has shown significant growth in the
number and types of results-oriented performance measures called for in
the act. Managers’ perceptions of being held accountable for results
also have grown. On the other hand, progress in building organizational
cultures to create and sustain a focus on results has been uneven. To
help agencies effectively manage their resources and link resource
decisions to results, agencies and the Congress need credible, rigorous
evaluations to assess whether current programs and policies remain
relevant, appropriate, and effective. It will also be important for the
Congress to take full advantage of the benefits arising from the reform
agenda under way in the executive branch; to do so, the government must
find ways to foster accountability in ways the Congress considers
appropriate for meeting its role, responsibilities, and interests.
Successfully transforming how the government does business depends on
building high-performing organizations that network with key partners,
both across and outside the government. Improved performance has been a
primary goal of several recent restructurings, such as forming DHS,
reorganizing the Federal Bureau of Investigation, and creating the
National Intelligence Directorate. DOD is in the process of
transforming its business operations, and the U.S. Postal Service faces
the challenge of transforming its business model for the 21st century.
However, government experience in reorganization has yielded mixed
results. Future success will depend on identifying and implementing
best practices of high-performing organizations operating in a complex,
networked environment. Critical organization elements—structure,
systems, and practices—must support achieving high performance.
Leadership must set the direction, pace, and tone for the
transformation and should provide sustained and focused attention over
the long term. Establishing a chief operating officer position or chief
management officer position with term appointments at selected agencies
could help to (1) elevate attention on management issues and
transformational change, (2) integrate various key management and
transformation efforts, and (3) institutionalize accountability for
addressing these issues and leading this change.
Information is a vital resource that needs to be properly managed. The
growth in electronic information as well as new security threats facing
the nation highlight challenges to effectively collecting and
disseminating information that agencies need to take into account in
developing new programs. While it is important to enhance the
government’s use of new technologies to improve collecting and
disseminating government information, it is also important that this
information—especially that collected for statistical purposes—meets
the current needs of federal programs, policymakers, and the public. In
areas in which the U.S. economic and social structure is undergoing
major change, statistical agencies need to respond to these changes
with relevant data on a timely basis. Timely, accurate, and useful
financial information is essential for making operating decisions day
to day; supporting results-oriented management approaches; and managing
the government’s operations more efficiently, effectively, and
economically. Yet the federal government’s financial management has
suffered from neglect, and financial systems have serious
shortcomings.
IT is a key element of management reform efforts that can dramatically
reshape government to improve performance and reduce costs. However,
numerous poorly managed IT systems have produced multimillion-dollar
cost overruns, schedule slippages, and poor results. Further, poor
information security remains a high-risk area across the federal
government with potentially devastating consequences. Electronic
government offers many opportunities to better serve the public and
reduce costs, but the federal government has not reached its full
potential in this area.
Effective acquisition management plays a key role in creating and
sustaining high-performing organizations. Despite reforms to transform
the federal acquisition process, the government still does not have a
world-class purchasing system. All too often, many of the products and
services the government buys cost more than expected, are delivered
late, or fail to perform as anticipated. Encouragement of strategic
contracting approaches that seek greater efficiencies as well as
improvements in management and accountability are needed to produce
better outcomes. Agencies are considering other approaches for
achieving greater efficiency and effectiveness in their operations,
including appropriate use of contracts with the private sector. After a
yearlong study, the Commercial Activities Panel developed a set of
principles to be used in addressing sourcing decisions and recommended
that the public and private sectors compete for the opportunity to
perform commercial functions. Competitions can be based on the
established framework of the Federal Acquisition Regulation. Changes
published by the Office of Management and Budget in its Circular No. A-
76, Performance of Commercial Activities, are generally consistent with
the panel’s recommendations. However, this competitive sourcing
initiative is a major change in the way government agencies operate,
and successfully implementing the circular’s provisions will require
that adequate support be available to federal agencies and employees.
We will follow developments in this area closely.
To support the transformation to a results-oriented, high-performing
government, we will use the following performance goals:
3.2.1: analyze and support efforts to improve the human capital
infrastructure key to successfully transforming the government;
3.2.2: assess efforts to improve results-oriented management across the
government;
3.2.3: identify ways to improve the collection, dissemination, and
quality of federal information;
3.2.4: identify ways to improve financial management infrastructure
capacity to provide useful information for managing results and costs
day to day;
3.2.5: assess the government’s planning, implementation, and use of IT
to improve performance and modernize federal programs and operations;
and;
3.2.6: identify ways to improve how federal agencies acquire goods and
services.
Performance Goal 3.2.1:
Analyze and Support Efforts to Improve the Human Capital Infrastructure
Key to Successfully Transforming the Government:
Strategic human capital management must be the centerpiece of any
serious change management and transformation initiative. Although
progress has been made, it is clear that today’s federal human capital
strategies are not yet appropriately constituted to meet today’s
challenges and drive the needed transformation across the government.
For example, the composition of the workforce has been changing, with
nonpermanent employees, contractors, and other third parties performing
functions that were once carried out by career civil servants. While
this trend has given agencies more managerial flexibility, the human
capital implications of a blended, multisector workforce, including
performance, accountability, productivity, and training issues, must
also be considered. Moreover, effective compensation reforms must
consider employees’ total compensation and be market-based, performance-
oriented, and sustainable over the longer term, given known cost trends
and future fiscal imbalances. The Congress has extended additional
authorities to agencies to address human capital challenges and enacted
human capital reform initiatives to provide greater flexibility to
agencies in developing and implementing their strategic human capital
approaches. This gives additional urgency to improving agencies’
institutional infrastructure necessary for successful use of such
flexibilities. Critical elements of the needed infrastructure include
agencies’ human capital planning capabilities; the ability of their
management teams to use flexibilities effectively; and the presence of
modern, effective, and credible performance management systems with
appropriate safeguards.
Key Efforts:
* Assess the leadership, management, and delivery of human capital
products and services necessary for agencies to carry out their
missions cost effectively;
* Evaluate agencies’ efforts to develop a workforce that is flexible,
resilient, capable, and competitively compensated;
* Identify ways policies, programs, and practices can enhance
individual performance and contributions toward agency outcomes;
* Assess policies that create an inclusive environment by leveraging
diversity and preventing and resolving conflicts.
Potential Outcomes:
* More effective human capital leadership at the Office of Personnel
Management and across federal agencies;
* A blended, multisector workforce that is more agile, adaptive, and
able to accomplish agencies’ missions in a transforming environment;
* Performance management and other procedures that promote high-
performing individuals and agencies;
* Implementation strategies for promoting diversity and preventing and
resolving conflict.
Performance Goal 3.2.2:
Assess Efforts to Improve Results-Oriented Management Oversight across
the Government:
Given current trends and challenges facing the nation—including the
federal government’s long- term fiscal imbalance—we must take advantage
of opportunities to enhance performance, ensure accountability, and
position the nation for the future. To successfully navigate
transformation across the government, agencies must fundamentally
reexamine not only their business processes, but also their outdated
organizational structures; management approaches; leadership; and in
some cases, missions. This includes cultural transformation as well as
creating the institutional capacity to become high-performing
organizations by implementing more results-oriented and performance-
based approaches for doing business. To that end, it is critical to
reexamine the relevance of federal programs and their fit with national
priorities, while maximizing program performance within current and
expected resource levels.
Federal performance and accountability reforms have encouraged
producing credible, results-oriented performance information since the
1990s. However, an increased supply of performance information must
also be accompanied by a demand for and use of that information by
decision makers and managers alike. Importantly, while agency managers
reported having significantly more measures of results under the
Government Performance and Results Act, agencies differ considerably in
the extent to which they use performance information to assess whether
programs and policies remain relevant, appropriate, and effective;
support decision making; and promote accountability. It will also be
important for the Congress to take full advantage of the benefits
arising from the reform agenda under way in the executive branch; to do
so, government must find ways to foster accountability in ways the
Congress considers appropriate for meeting its role, responsibilities,
and interests.
Moving forward, progress governmentwide is particularly needed in
planning better for how mission-critical challenges and risks are to be
addressed, coordinating crosscutting programs, considering the
performance consequences of budget decisions, integrating human capital
and performance planning, and building the capacity to gather and use
performance information.
Key Efforts:
* Facilitate congressional use of performance information in decision
making;
* Monitor and evaluate efforts by agencies and the Office of Management
and Budget to use performance information for management decision
making;
* Identify and disseminate useful strategies and methodological tools
for agencies to apply to measure performance and solve analytical
challenges to evaluating program and policy results;
* Conduct targeted reviews and assessments of transformation efforts,
management, and leadership at selected agencies and other organizations
to improve effectiveness and identify efficiencies.
Potential Outcomes:
* Increased congressional use of and confidence in the integrity of
performance data for accountability, oversight, and decision making;
* Increased use of performance information within the executive branch
to improve and reward performance, inform the allocation of resources,
and share and replicate effective approaches for producing and using
performance information and reporting on program results;
* Increased agency capacity to measure and evaluate program and policy
results;
* Higher performance and greater results within governmental
organizations.
Performance Goal 3.2.3:
Identify Ways to Improve the Collection, Dissemination, and Quality of
Federal Information:
Information is a critical strategic asset; however, agencies confront
unique and sometimes conflicting demands in collecting and providing
it. Some of the ongoing management challenges that agencies face
include addressing statutory requirements to reduce reporting burdens,
protect the privacy of personal information, provide access to public
records, disseminate information effectively and appropriately, secure
information from harm or misuse, and preserve information of historical
value. Meanwhile, the ubiquity of Internet access; the growing
sophistication of electronic government techniques; and advances in
archival, search, and retrieval technologies are creating greater
opportunities to provide citizens with more efficient and improved
public access to government records and information. Agencies are being
asked not only to make information more readily available to the public
but to collect and share data far more extensively than they have in
the past. These trends have overwhelmed agencies and raised concerns
about the adequacy of the current governmentwide organizational and
policy framework and about agencies’ ability to manage information and
knowledge in this evolving environment.
The demographic statistics and information from surveys generated by
the U.S. Census Bureau inform major decisions by U.S. public and
private sector decision makers and therefore must be of the highest
quality. After the 2000 census, the bureau was criticized for
undercounting certain portions of the U.S. population and for allowing
the entry of duplicate addresses into its master address files. To
address concerns about accuracy and costs, the bureau decided to
reengineer the processes to be used for the 2010 census. At this time,
the bureau’s preparations for the 2010 decennial census have reached a
key stage. According to bureau officials, it is already too late to
make significant changes to the design of the 2010 census, and they may
need to enter into a risk mitigation mode of operations to promote the
success of the bureau’s reengineered design. We and the Congress will
be closely monitoring the bureau’s progress—including how it mitigates
risk stemming from emerging operational issues—as it makes its way
toward the 2010 census.
Better management of the federal information enterprise can yield
significant returns. A case in point is the federal statistical system.
Although the amount of money the government spends on federal
statistical agencies—roughly $4 billion a year—is a tiny portion of the
federal budget, the impact of that spending is felt throughout society,
as the information guides planning and investment decisions of the
public and private sectors. For example, population data are used for
congressional apportionment and redistricting, economic indicators are
used by the Federal Reserve Board to set monetary policy, and regional
data are used to allocate around $200 billion in federal aid to state
and local governments. Businesses use federal data to inform decisions
on where to locate new stores and production facilities. Federal
agencies use data to enforce statutory regulatory requirements. Simply
put, as the public’s demand for more responsive and cost-effective
government has increased, so too has the need for accurate, timely,
accessible, and apolitical information.
Key Efforts:
* Examine issues related to reauthorizing the Office of Management and
Budget’s Office of Information and Regulatory Affairs and overseeing
the Paperwork Reduction Act;
* Assess the government’s ability to protect the privacy of
individuals’ personal information in an era of rapidly evolving
technology;
* Review the government’s progress using electronic technology to
store, preserve, and share public records;
* Examine the employment of electronic technologies to improve public
access to federal records and enhance collecting, using, and
disseminating government information;
* Identify ways to improve the management and cost-effectiveness of the
U.S. census;
* Assess the quality and use of statistical and other U.S. data.
Potential Outcomes:
* An updated set of national policies on privacy, access, burden, data
sharing, and storage in an electronic environment;
* Improved compliance with existing privacy requirements and a better
understanding of the challenges the government faces in ensuring the
personal privacy of individuals in a rapidly expanding electronic age;
* Expanded, less costly, and more responsive ways to provide the public
access to government information;
* Improved government records management and archival programs;
* A more managed transition as the government moves away from printing
as a primary means for disseminating information to the public;
* Increased effectiveness and efficiency through better targeting
investments, eliminating overlapping and outdated information
investments, and helping develop a strategic approach to identifying,
managing, and prioritizing information needs and investments;
* A more accurate and cost-effective census in 2010;
* Assurance of the quality and usefulness of key federal statistical
data;
* Improved regional data to more closely meet the needs of formulas for
allocating federal funds.
Performance Goal 3.2.4:
Identify Ways to Improve Financial Management Infrastructure Capacity
to Provide Useful Information for Managing Results and Costs Day to
Day:
Today, the government does not have timely, accurate, and useful
financial information to measure and control costs, manage for results,
and make timely and fully informed decisions. Routinely generating good
financial information will require modern financial management systems
that (1) ensure consistent agency and governmentwide reporting; (2)
account for the full cost of programs and projects; (3) integrate
program, budget, and financial information; (4) report performance
against established metrics; and (5) implement appropriate accounting
standards. The government has not yet met this challenge nor has it
addressed the persistent financial management human capital issues and
the high-risk financial management operations we identified at several
major agencies.
Key Efforts:
* Monitor the management of projects to modernize financial management
systems and assess whether they can provide meaningful, useful
information;
* Analyze and report on agencies’ progress in implementing federal
accounting standards and other Federal Financial Management Improvement
Act requirements;
* Identify financial management best practices and suggest ways to
improve financial management operations, organizations, and related
human capital practices;
* Fulfill accounting, auditing, and internal control standards-setting
responsibilities and act as a catalyst for reform in these areas.
Potential Outcomes:
* Reliable, useful, and timely financial and budget information
routinely available to manage daily operations and properly implement a
more accountable, results-oriented government;
* Enhanced congressional oversight of agencies’ progress in
implementing federal accounting standards, improving financial systems,
and resolving high-risk financial management operations;
* Accounting, auditing, and internal control standards that are
tailored to government’s unique characteristics and special needs and
are generally accepted;
* Effective governmentwide financial management reform initiatives.
Performance Goal 3.2.5:
Assess the Government’s Planning, Implementation, and Use of IT to
Improve Performance and Modernize Federal Programs and Operations:
Today, the government spends over $57 billion annually on IT to support
virtually all government operations and assets. With the rapid pace of
technological change and innovation, including the growth of the
Internet, government agencies have unprecedented opportunities to use
IT to enhance government service to citizens, improve performance, and
reduce costs. These opportunities, however, create significant
challenges, such as the need to apply and use a wide range of complex
new electronic technologies effectively, interconnect diverse networks
and systems securely and reliably, and build improved technical
capacity among agency personnel.
Addressing these challenges requires strong and effective IT management
leadership. At the same time, federal agencies need to continue to
reduce the risk of making poor IT investment decisions and costly
mistakes that result in wasteful spending and lost opportunities for
improving performance and delivery of services to the public. Best
practices and our past work demonstrate that essential steps to
avoiding such mistakes are to adopt sound enterprise architectures;
adhere to structured IT investment practices; and implement disciplined
IT systems acquisition, development, and integration management
processes.
Key Efforts:
* Evaluate government efforts to make the complex management and
technical transformation to electronic government;
* Identify opportunities and assess efforts to outsource government IT
operations in support of mission strategies and needs;
* Assess and promote the application and use of IT investment
management best practices across the government;
* Promote adopting sound enterprise architectures and assess government
enterprise architecture efforts to engineer business processes for
implementing IT systems that optimize mission performance;
* Review federal agencies’ management and effectiveness in carrying out
systems acquisition, development, and integration efforts—including
complex, multiyear modernizations;
* Review the management of government telecommunications and
interconnected systems and federal agencies’ effectiveness in providing
secure, reliable, and fast Internet and Web connections;
* Review government progress in developing effective IT human capital
strategies and identify how to improve IT workforce training programs.
Potential Outcomes:
* Expanded and improved citizen access to public services and
information through electronic means;
* Improved service delivery and greater economy and efficiency of
government IT operations;
* Increased return on the federal government’s IT investments;
* Improved agency enterprisewide management of IT and engineering
capability to develop and acquire IT systems that support mission and
performance objectives;
* More informed congressional appropriations and oversight decisions on
major planned and ongoing IT investments;
* Greater viability, stability, and security built into the Internet
and interconnected networks and systems used by government to transmit
data and information;
* More consistent application and use of human capital strategies and
workforce training programs to address the government’s IT needs.
Performance Goal 3.2.6:
Identify Ways to Improve How Federal Agencies Acquire Goods and
Services:
Among the many 21st century challenges the nation faces is the question
of how agencies will decide who will do the business of government.
Agencies are increasingly turning to the private sector for goods and
services. Since September 11, federal procurement has jumped 50 percent
to nearly $350 billion, and all indications are that the trend will
continue. Many agencies rely extensively on contractors to help carry
out their missions, such as the Department of Energy, which spends
about 90 percent of its $25 billion budget to contract out the
operation of its laboratories and other facilities. Further, agencies
may again need to respond to emergencies and quickly acquire goods and
services for relief and recovery from natural disasters, such as
Hurricane Katrina, or an influenza pandemic.
Yet our work and that of the inspectors general continues to find that
the acquisition function at many agencies is at risk for waste and
mismanagement. Many agencies lack a sufficiently sized and qualified
workforce to help ensure positive cost, schedule, and quality outcomes.
Our high-risk list continues to include contract management at DOD, the
Department of Energy, and the National Aeronautics and Space
Administration; and more recently, we added managing interagency
contracting to the list. Questions persist regarding whether the
anticipated benefits of reforms over the last decade, which were
intended to streamline and simplify federal acquisition processes and
practices, achieve economies and efficiencies, and leverage the
government’s buying power, are being achieved.
Greater reliance on third parties to conduct the business of government
calls for an acquisition process based on realistic and well-defined
requirements and contract terms that reflect a careful balancing of
risks between the government and its contractors, as well as a skilled
acquisition workforce capable of planning, negotiating, and managing
increasingly complex contracts. In addition, accountability can be
enhanced through an effective protest forum that resolves complaints
that particular procurements may not have been conducted lawfully. In
this connection, vested with statutory authority to resolve government
contract formation disputes, we provide an objective, independent,
impartial forum for resolving bid protests and we recommend actions to
correct any procurement law violations. Our work will broadly address
improving the government’s ability to manage risks and achieve
successful contract outcomes in an increasingly dynamic environment,
including the need to acquire goods and services expeditiously in
response to natural disasters while maintaining appropriate controls to
minimize fraud and waste.
Key Efforts:
* Enhance the government’s ability to use efficient business processes
to acquire needed products, services, and technologies;
* Improve the government’s knowledge of the supplier base, ability to
select key suppliers, and capacity to manage contractors;
* Identify ways to maximize the value of contract expenditures and
mitigate the risk of potentially wasteful or abusive spending
practices;
* Determine whether contracting agencies in protested procurements
acted lawfully.
Potential Outcomes:
* Enhanced efficiency, effectiveness, and accountability for contract
decision making;
* Improved selection, management, and oversight of suppliers of goods
and services;
* More positive cost, schedule, and quality contract outcomes;
* Increased consistency in interpretations of procurement statutes and
regulations, and greater public confidence in the integrity of the
federal procurement system.
Strategic Objective 3.3:
Support Congressional Oversight of Key Management Challenges and
Program Risks to Improving Federal Operations and Ensuring
Accountability:
Strong, visionary, and persistent leadership will be needed to address
today’s challenges and prepare the nation for the future. Congressional
leadership will continue to play a vital role in achieving a broad
transformation of the government. Congressional oversight is needed to
ensure that agencies continue to build their fundamental management
capabilities, resolve high-risk areas, and address major management
challenges to effectively address the nation’s most pressing priorities
and to take advantage of emerging opportunities.
Our 2007 high-risk list identified 27 high-risk areas, as shown in
table 4. Continued persistence in addressing these high-risk areas will
ultimately yield significant benefits. Although effectively addressing
some of these issues will require time, finding lasting solutions could
potentially save billions of dollars, improve service to the American
public, strengthen public trust in the national government, and ensure
the ability of government to deliver on its promises. In fiscal year
2006, we documented financial benefits totaling $22 billion that
resulted from actions taken in response to our recommendations and
reports to address high-risk issues. However, more remains to be done
to ensure that the government has the capacity to deliver on its
promises and meet current and emerging needs.
Table 4: GAO’s 2007 High-risk list:
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Strategic Human
Capital Management[a];
Year designated high risk: 2001.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Managing Federal
Real Property[a];
Year designated high risk: 2003.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Protecting the
Federal Government’s Information Systems and the Nation’s Critical
Infrastructures;
Year designated high risk: 1997.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Implementing and
Transforming the Department of Homeland Security;
Year designated high risk: 2003.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Establishing
Appropriate and Effective Information-Sharing Mechanisms to Improve
Homeland Security;
Year designated high risk: 2005.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: DOD Approach to
Business Transformation[a];
Year designated high risk: 2005.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: DOD Business
Systems Modernization;
Year designated high risk: 1995.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: DOD Personnel
Security Clearance Program;
Year designated high risk: 2005.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: DOD Support
Infrastructure Management;
Year designated high risk: 1997.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: DOD Financial
Management;
Year designated high risk: 1995.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: DOD Supply Chain
Management;
Year designated high risk: 990.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: DOD Weapon
Systems Acquisition;
Year designated high risk: 1990.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Federal Aviation
Administration’s Air Traffic Control Modernization;
Year designated high risk: 1995.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Financing the
Nation’s Transportation System[a];
Year designated high risk: 2007.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Ensuring the
Effective Protection of Technologies Critical to U.S. National Security
Interests[a];
Year designated high risk: 2007.
High-risk areas:
Addressing Challenges in Broad-Based Transformations: Transforming
Federal Oversight of Food Safety[a];
Year designated high risk: 2007.
High-risk areas:
Managing Federal Contracting More Effectively: DOD Contract Management;
Year designated high risk: 1992.
High-risk areas:
Managing Federal Contracting More Effectively: Department of Energy
Contract Management;
Year designated high risk: 1990.
High-risk areas:
Managing Federal Contracting More Effectively: National Aeronautics and
Space Administration Contract Management;
Year designated high risk: 1990.
High-risk areas:
Managing Federal Contracting More Effectively: Management of
Interagency Contracting;
Year designated high risk: 2005.
High-risk areas:
Assessing the Efficiency and Effectiveness of Tax Law Administration:
Enforcement of Tax Laws[a];
Year designated high risk: 1990.
High-risk areas:
Assessing the Efficiency and Effectiveness of Tax Law Administration:
IRS Business Systems Modernization;
Year designated high risk: 1995.
High-risk areas:
Modernizing and Safeguarding Insurance and Benefit Programs:
Modernizing Federal Disability Programs[a];
Year designated high risk: 2003.
High-risk areas:
Modernizing and Safeguarding Insurance and Benefit Programs: Pension
Benefit Guaranty Corporation Single-Employer Insurance Program[a];
Year designated high risk: 2003.
High-risk areas:
Modernizing and Safeguarding Insurance and Benefit Programs: Medicare
Program[a];
Year designated high risk: 1990.
High-risk areas:
Modernizing and Safeguarding Insurance and Benefit Programs: Medicaid
Program[a];
Year designated high risk: 2003.
High-risk areas:
Modernizing and Safeguarding Insurance and Benefit Programs: National
Flood Insurance Program;
Year designated high risk: 2006.
Source: GAO.
[a] Legislation is likely to be necessary, as a supplement to actions
by the executive branch, in order to effectively address this high-risk
area.
[End of table]
The federal government has a stewardship obligation to safeguard the
use of taxpayer funds; prevent fraud, waste, and abuse; and ensure
financial accountability. While there has been important progress,
agencies are still working toward the goals established in financial
management reform legislation, such as the Chief Financial Officers Act
of 1990 and the Government Management Reform Act of 1994. Widespread
financial management system weaknesses, poor record keeping and
documentation, weak internal controls, and a lack of information have
prevented the government from having the information needed to
effectively and efficiently manage operations or accurately report a
large portion of its assets, liabilities, and costs. Continued
oversight is needed to ensure that agencies take steps to continuously
improve internal controls and underlying financial and management
information systems to ensure that executive branch managers and
congressional decision makers have reliable, timely, and useful
information to ensure accountability; measure, control, and manage
costs; manage for results; and make timely and fully informed decisions
about allocating limited resources.
As part of the drive to improve performance, agencies are increasingly
being called on to demonstrate that their programs are conducting
research that is relevant, of high quality, and producing results. As
part of the President’s Management Agenda, for example, the Office of
Management and Budget is focusing on developing objective criteria that
agencies can use to select, fund, and manage their research and
development programs. According to the fiscal year 2004 budget, 12 of
the top 13 agencies conducting research and development are using the
Office of Management and Budget’s Program Assessment Rating Tool, which
contains criteria for research and development investments. Science and
technology investments are critically important in improving the
quality of life and the performance of the economy in areas that
include health care, defense, energy, and the environment.
However, the increased development and use of new technologies present
challenges to the Congress in evaluating their potential and assessing
the effects on security, safety, privacy, and equity. For example,
despite many successes in space exploration, the loss of life,
unsuccessful missions, and unforeseen cost overruns have recently
increased the level of concern over the benefits of space exploration,
particularly with regard to manned activities. Congressional oversight
is critical in ensuring that the substantial federal investment in
science and technology is allocated effectively and that intellectual
property rights are protected here and abroad.
To support congressional oversight of key management challenges, we
will use the following performance goals:
3.3.1: highlight high-risk federal programs and operations and monitor
progress of executive branch management reforms;
3.3.2: identify ways to strengthen accountability for the federal
government’s assets and operations, and;
3.3.3: assess the management and results of the federal investment in
science and technology and the effectiveness of efforts to protect
intellectual property.
Performance Goal 3.3.1:
Highlight High-Risk Federal Programs and Operations and Monitor
Progress of Executive Branch Management Reforms:
We continue to provide the Congress with periodic updates on government
programs and operations that we have identified as high risk. We have
increasingly used the high-risk designation to draw attention to the
challenges faced by government programs and operations in need of broad-
based transformations to address major economy, efficiency, or
effectiveness challenges. We also continue to focus on federal programs
and operations when they are at high risk because of their greater
vulnerabilities to fraud, waste, abuse, and mismanagement. 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 the program began in 1990 with
14 areas in need of attention, the government has taken high-risk
problems more seriously and has made long-needed progress toward
correcting them. In some cases, progress has been sufficient for us to
remove the high-risk designation. For example, in 2007, 2 high-risk
areas warranted removal from the list—U.S. Postal Service
transformation efforts and long-term outlook and HUD single-family
mortgage insurance and rental housing assistance programs. In total, 18
areas have been removed from the high-risk list since the inception of
the program, 8 of them from the original list.
In our January 2007 high-risk program update, we designated three
additional areas as high risk. The first new area involves
transportation financing and capacity. In this area, revenues to
support federal transportation trust funds are eroding at a time when
investment is needed to expand capacity to address congestion caused by
increasing passenger and freight travel. The second new high-risk area
involves effective protection of technologies critical to U.S. national
security. These technologies continue to be targets for theft,
espionage, reverse engineering, and illegal export. Moreover,
government programs established decades ago to protect critical
technologies are ill-equipped to weigh competing U.S. interests as the
security environment and technological innovation continue to evolve in
the 21st century. The third area being designated as high risk involves
federal oversight of food safety because of risks to the economy and to
public health and safety. In this area, the current fragmented federal
system has caused inconsistent oversight, ineffective coordination,
and inefficient use of resources.
A number of the areas in the President’s Management Agenda focus
directly on programs and issues that we had previously designated as
high risk. Additionally, the Office of Management and Budget has
initiated an effort focused on guiding and tracking progress toward
addressing the areas that we have identified as high risk and has
directed agencies to develop individual action plans, complete with
goals and milestones for reducing risk in each of these areas.
Key Efforts:
* For each new Congress, provide an update on progress in addressing
high-risk areas, identify any areas in which progress has been
sufficient for the high-risk designation to be removed, and identify
areas to be newly designated as high risk;
* Monitor the progress and continuing challenges related to
governmentwide management reform initiatives, such as the President’s
Management Agenda and efforts to develop agency action plans to address
high-risk areas;
* Assist congressional and presidential transition efforts by
highlighting key issues and solutions needed to improve the performance
and accountability of the federal government and address high-risk
programs and operations.
Potential Outcomes:
* Greater awareness of the extent and severity of high-risk areas at
agencies at the beginning of each new Congress;
* Sustained congressional and executive branch commitment to completing
actions that will mitigate high-risk areas;
* Enhanced consideration of GAO’s recommendations to address the causes
of the government’s key management challenges, as well as federal
programs and operations, to meet broad-based transformational
objectives.
Performance Goal 3.3.2:
Identify Ways to Strengthen Accountability for the Federal Government’s
Assets and Operations:
The government faces a wide range of financial management issues that
affect program performance and accountability and that result in
substantial losses of taxpayers’ funds. For example, the President’s
Management Agenda addresses one such area: the government has
identified over $35 billion in erroneous benefit and assistance
payments. Our work provides insight and foresight into the extent,
causes of, and solutions to pressing financial management issues such
as this one and points out control weaknesses in critical government
programs.
Key Efforts:
* Perform financial analyses, undertake specifically requested
financial reviews, and conduct a wide range of statutorily mandated
financial audit work;
* Assess internal control and recommend improvements to ensure that
effective internal control is in place and operating as intended;
* Conduct forensic audits and investigations to highlight
vulnerabilities and to identify potential instances of waste, fraud,
and abuse;
* Identify and suggest improvements in a range of financial-related
areas affecting program performance and accountability, such as
managing improper payments, debt collection, cost accounting, deferred
maintenance, asset control, user fees, credit cards, and social
insurance;
* Analyze the activities and capacity of the accountability community,
including the inspectors general, in overseeing federal programs and
funds.
Potential Outcomes:
* Greater congressional insight on the viability and financial status
of major government entities;
* Stronger systems of internal control to help deter waste, fraud,
abuse, and mismanagement;
* Enhanced accountability for managing programs more efficiently,
effectively, and economically;
* Strengthened accountability community efforts to work cooperatively
and help ensure that resources are used effectively to oversee
government programs and funds.
Performance Goal 3.3.3:
Assess the Management and Results of the Federal Investment in Science
and Technology and the Effectiveness of Efforts to
Protect Intellectual Property:
The federal government’s investment in science and technology is
critical to long-term U.S. economic growth. Over the past 50 years,
developments in science and technology have generated at least half of
the nation’s productivity growth and have created millions of high-
skill, high-wage jobs. The quality of life in America has been
bolstered by the pursuit of science and technology. The National
Aeronautics and Space Administration’s exploration and development of
space has advanced scientific and technological knowledge while
expanding the imagination of the nation’s young people. These outcomes
will be further enhanced as the National Aeronautics and Space
Administration proceeds to implement its space exploration goals. Also,
intellectual property—patents, trademarks, and copyrights—has been
characterized as the fuel that drives the U.S. economic engine and is
an important component of the nation’s knowledge-based economy.
Each year, the federal government spends over $90 billion on research
and development activities and grants or registers nearly 300,000
patents and trademarks and over 500,000 copyrights. The Congress’s
challenges are to ensure that federal resources are allocated to the
most promising, highest payoff areas of research and, recognizing that
we operate in a global economy, that the nation’s investment in science
and technology—its intellectual property—is protected here and abroad.
Other challenges include ensuring that the government’s and the
public’s interests are protected in funding research and promoting the
commercialization of resulting technology.
Key Efforts:
* Assess the management and results of major federal science and
technology programs and identify ways to improve funding and
coordinating research activities across government agencies;
* Evaluate the National Aeronautics and Space Administration’s efforts
to fund, prioritize, and manage the nation’s multibillion-dollar
research investment in the International Space Station, Space Shuttle
fleet, science, and new space exploration initiatives;
* Conduct technology assessments to evaluate the implications of the
technology for public policy and congressional decision making;
* Analyze the adequacy of science agencies’ organization, human
capital, and management processes to ensure their effectiveness.
Potential Outcomes:
* Increased confidence that the federal science and technology programs
are being well managed, achieving intended results, and contributing to
the overall economic well-being of the nation;
* Better understanding of the policy options that stimulate
technological innovation and encourage partnering and cooperation among
research institutions while protecting intellectual property rights;
* A more informed congressional assessment of the National Aeronautics
and Space Administration’s ability to balance the need to maintain
legacy systems—such as completing the International Space Station and
retiring the shuttle fleet—with the development of new multibillion-
dollar systems capable of reaching the moon and beyond.
Strategic Objective 3.4:
Analyze the Government’s Fiscal Position and Strengthen Approaches for
Addressing the Current and Projected Fiscal Gap:
through which the Congress and the President balance competing views
about allocating federal resources, accountability for those resources,
and allocating responsibility between the public and private sectors
and among levels of government. The nation continues to run large
budget deficits, and the squeeze on the federal budget from the
impending retirement of the baby boom generation is becoming more
apparent in the 10-year budget window.
Our long-term budget model has consistently suggested that without
changes to the major retirement and health care programs, the nation
will ultimately have to choose between escalating federal deficits and
debt, significant tax increases, and dramatic budget cuts in other
areas. Under the Congressional Budget Office’s current 10-year budget
and economic outlook, economic growth is projected to be about half a
percentage point lower on average after 2008 because labor force growth
will slow as the baby boom generation begins to retire. At the same
time, the already rapid growth in entitlement spending for Social
Security, Medicare, and Medicaid (see fig. 14) is projected to
accelerate. As such, it will be increasingly difficult to address
today’s urgent needs without unduly exacerbating the nation’s long-term
fiscal challenges.
While Social Security and Medicare dominate the long-term outlook, they
are not the only federal programs or activities that bind the future.
Indeed, the federal government undertakes a wide range of programs,
responsibilities, and activities that obligate it to future spending or
create expectations for spending. Making government fit the challenges
of the future will require not only dealing with the
drivers—entitlements for the elderly—but also looking at the range of
other federal activities. However, the budget controls instituted to
achieve balance in the past have expired, and no agreement has been
reached on the appropriate structure or process for focusing on the
fiscal challenges that now move to center stage.
Figure 14: Federal Medicare, Medicaid, and Social Security Spending as
a Percentage of GDP, 2000–2080:
[See PDF for image]
This figure is a stacked line graph with three lines depicting Federal
Medicare, Medicaid, and Social Security Spending as a Percentage of
GDP, 2000–2080 in a composite fashion. The vertical axis of the graph
represents percentage of GDP from 0 to 30. The horizontal axis of the
graph represents fiscal years from 2000 through 2080.
Source: GAO (analysis) and the Social Security Administration, The
Centers for Medicare and Medicaid Services, and the Congressional
Budget Office (data).
[End of figure]
Part of the solution to the long-term fiscal challenges will have to
come on the revenue side of the federal budget. This will involve
reexamining not only the amount of revenue needed to finance federal
expenditures but also how that revenue is raised. The amount of revenue
raised to finance federal spending has remained fairly stable over the
last several decades when measured as a share of GDP (see fig. 15).
Revenue would have to increase if growth in federal spending is not
controlled.
Figure 15: Federal Revenue as a Percentage of GDP and by Source,
1962–2005:
[See PDF for image]
This figure is a stacked line graph with five lines depicting the
following in a composite fashion: individual income taxes; corporation
income taxes; social insurance taxes; excise and other taxes; total
taxes. The vertical axis of the graph represents percentage from 0 to
25. The horizontal axis of the graph represents fiscal year from 1962
through 2005.
Source: GAO (presentation) and the Office of Management and Budget
(data).
[End of figure]
Tax policy, which determines the design of our nation’s tax system and
thus how a given amount of revenue is raised, has profound effects on
the economy as a whole and on the decisions that individuals and
businesses make about working, saving, and investing. The federal tax
system includes numerous tax provisions intended to influence
taxpayers’ behavior throughout the economy, but little is known about
the effects of many of these provisions. Given the size and complexity
of the federal tax code, the Congress remains interested in tax reform,
particularly its simplification. Among the many causes of complexity is
the growing number of exemptions and exclusions from taxation,
deductions, credits, deferral of tax liability, and preferential tax
rates.
The federal tax system includes numerous tax provisions intended to
influence taxpayers’ behavior throughout the economy, but little is
known about the effects of many of these provisions. Given the size and
complexity of the federal tax code, the Congress remains interested in
tax reform, particularly its simplification. Among the many causes of
complexity is the growing number of exemptions and exclusions from
taxation, deductions, credits, deferral of tax liability, and
preferential tax rates. The number of tax expenditures reported by the
Department of the Treasury has more than doubled since 1974, and the
sum of revenue loss estimates for tax expenditures was nearly $847
billion in 2006. [Footnote 5] Figure 16 shows the revenue loss
estimates for the five largest tax expenditures reported for fiscal
year 2006.
Figure 16: Revenue Loss Estimates for the Five Largest Tax Expenditures
Reported for Fiscal Year 2006:
This figure is a vertical bar graph depicting the following data, with
estimated dollars in billions:
Exclusion of employer contributions for medical insurance premiums and
medical care: 125.0[a];
Deductability of mortgage interest on owner-occupied homes: 68.3;
Net exclusion of pension contributions and earnings: employer-sponsored
defined benefit plan: 49.0[b];
Capital gains (except agriculture, timber, iron ore, and coal): 48.6;
Deductability of nonbusiness state and local taxes other than on owner-
occupied homes: 43.1.
Notes: These data are from Analytical Perspectives: Budget of the
United States Government, Fiscal Year 2008. “Tax expenditures” refers
to the special tax provisions that are contained in the federal income
taxes on individuals and corporations. The Office of Management and
Budget does not include data on the forgone revenue from other federal
taxes, such as Social Security and Medicare payroll taxes.
[a] If the payroll tax exclusion were also counted here, the total tax
expenditure for employer contributions for health insurance premiums
would be about 50 percent higher or $187.5 billion.
[b] This tax expenditure does not include $40.8 billion in revenue
losses because of employer-sponsored defined contribution plans.
Source: Office of Management and Budget.
[End of figure]
To analyze the government’s fiscal position and identify ways to
strengthen approaches for financing the government, we will use the
following performance goals:
3.4.1: analyze the structure and information for budgetary choices and
explore alternatives for improvement, including implications for the
long-term fiscal position;
3.4.2: contribute to congressional deliberations on tax policy;
3.4.3: identify specific opportunities to reduce the tax gap and
improve federal tax administration; and;
3.4.4: assess the reliability of financial information on the
government’s fiscal position and financing sources.
Performance Goal 3.4.1:
Analyze the Structure and Information for Budgetary Choices and Explore
Alternatives for Improvement, Including Implications for the Long-term
Fiscal Position:
Our long-term budget model has consistently shown that current fiscal
policy is unsustainable over time as the population ages and workforce
growth slows. Social Security and Medicare largely drive this outlook,
but other programmatic and budgetary decisions also have long-term cost
implications. Further, long-standing rules and budget conventions drive
congressional decisions about resource allocation. The combination of
short-term pressures for economic stimulus, greater resource needs for
national preparedness, and long-term fiscal challenges is resulting in
the need for improvements in the budget process. While the process has
not caused the problems, a lack of procedures, discipline, and controls
can work against attempts to make difficult decisions. Conversely, a
process that illuminates the looming fiscal pressures and provides
appropriate incentives can at least help decision makers ask the right
questions.
Key Efforts:
* Analyze the long-term fiscal position of the federal government and
ways to improve recognition of the implications of current decisions;
* Explore congressional budget process and controls, including
incentive structures, leakages/gaps around established controls, and
other governments’ experiences in controlling deficits;
* Identify improvement opportunities related to budget transparency,
budget coverage, performance information, clarity of budget
presentation and scoring, and decisions that affect budget
flexibility;
* Assess agencies’ budget processes and responses to resource
decisions.
Potential Outcomes:
* More information for the Congress and the public on the long-term
implications of current and alternative fiscal policies on budget
results, the national debt, national saving, and other budgetary and
economic measures of fiscal position;
* More informed congressional decision making resulting from the
greater transparency of the budgetary implications of long-term
commitments;
* An informed debate about alternative budgetary structures and control
mechanisms, both for the short term and for the long term, and
congressional understanding of the implications of current budget
structures for the kinds of trade-offs that can be considered in the
budget.
Performance Goal 3.4.2:
Contribute to Congressional Deliberations on Tax Policy:
Concerns about the tax system’s effect on future economic performance
and the need to raise sufficient funds to meet the nation’s fiscal
challenges are drivers of the current debate about the future of that
system. The nation’s tax system has profound effects on the economy as
a whole and on individual taxpayers, both for today and tomorrow. Taxes
affect decision making throughout the economy, including decisions
concerning how much and where to work, save, and invest. These
decisions, in turn, affect economic growth and future income, and thus
future tax revenues. The growing complexity of the tax system stems in
part from the extensive use of tax expenditures to promote social and
economic objectives. Further, the U.S. position in the worldwide
economy has fundamentally changed. U.S. workers and firms must now
succeed in a world of fast-paced technological change and constantly
evolving global competition.
Key Efforts:
* Evaluate the effectiveness of individual tax expenditures and their
aggregate impacts, such as those on tax revenue, the economy, and
taxpayers;
* Analyze how changes in the tax system affect objectives, such as
equity, economic efficiency, simplicity, transparency, and ease of
administration;
* Analyze how the tax code affects business decisions, such as where to
locate and how to structure operations;
* Evaluate the consequences of tax policy for the nation’s long-term
fiscal challenges, including its effect on national savings and
competitiveness.
Potential Outcomes:
* Improved tax system policies based on fact-based, objective
analyses;
* Improved governance of tax expenditure programs and better
understanding of the effect of these programs on taxpayers and the
economy;
* Better understanding of how the tax code affects business behavior;
* Better understanding of how changes in the tax system affect
individual taxpayers, the economy as a whole, and the long-term fiscal
challenges of the federal government.
Performance Goal 3.4.3:
Identify Specific Opportunities to Reduce the Tax Gap and Improve
Federal Tax Administration:
IRS faces demands from the Congress and the public to continue
improving its taxpayer service and reduce the net tax gap, estimated to
be $290 billion in 2001 (the latest available estimate). In an era of
tight budgets, IRS’s success at improving both taxpayer service and
compliance will depend mostly on its ability to use its resources more
efficiently. Two ongoing IRS efforts are crucial to realizing
efficiency improvements: systems modernization and more general
initiatives to improve management. However, making significant
improvements to taxpayer compliance will likely require innovative
solutions external to IRS. Such solutions include increasing
withholding of taxes, expanding information reporting of income, and
reducing the complexity of the tax code.
Key Efforts:
* Identify opportunities to improve IRS’s service to taxpayers,
including submission processing, telephone services, and efforts to
boost voluntary compliance;
* Identify opportunities to improve IRS’s enforcement programs in light
of a changing U.S. and international economy, evolving technology, and
the growing tax gap;
* Evaluate IRS’s efforts devoted to systems modernization, particularly
its expenditure plans;
* Assess IRS’s crosscutting efforts to improve agencywide management,
including reengineering efforts, human capital management, and use of
research and data analyses to improve enforcement and service
programs.
Potential Outcomes:
* Improved and more efficient IRS services to taxpayers;
* Progress in addressing long-standing pockets of taxpayer
noncompliance;
* Mitigating risks inherent in modernizing IRS’s operations and
ensuring its potential success;
* Enhanced agencywide management of IRS.
Performance Goal 3.4.4:
Assess the Reliability of Financial Information on the Government’s
Fiscal Position and Financing Sources:
Since 1997, we have been statutorily required to audit the U.S.
government’s annual consolidated financial statements. We have seen
significant progress with respect to the transparency and
accountability of reporting over the federal government’s operations
and fiscal condition over the past 10 years. Accounting and financial
reporting standards have continued to evolve. Beginning in fiscal year
2006, the Statement of Social Insurance, which shows long-range
actuarial projections of scheduled social insurance benefits in excess
of earmarked revenues, became a principal financial statement. Also
beginning in fiscal year 2006, the consolidated financial statements
included reporting on earmarked funds activity separately from
nonearmarked funds activity. Nonetheless, we remain unable to render an
opinion on the government’s consolidated financial statements. Three
major impediments remain: (1) serious and pervasive financial
management problems at DOD, (2) the federal government’s inability to
adequately account for and reconcile intragovernmental activity and
balances between federal agencies, and (3) the federal government’s
ineffective process for preparing the consolidated financial
statements. Further, while financial reporting has improved, additional
financial reporting enhancements are needed to effectively convey the
U.S. government’s long-term financial condition and annual changes
therein.
We will need to invest more resources over the next several years to
effectively address these challenges. We are working cooperatively with
DOD to develop strategies to address its financial management problems
and identify effective and efficient audit approaches. Also, additional
resources will be required to review the financial statement audit work
of the inspectors general and external auditors at 35 significant
agencies. In addition, because of the significance of federal revenue
and debt to the federal government’s overall fiscal position, we plan
to continue carrying out annual financial statement audits at the
Department of the Treasury’s IRS and Bureau of the Public Debt.
Key Efforts:
* Annually audit and report on the U.S. government’s financial
statements and the adequacy of related internal control;
* Annually audit the Department of the Treasury’s IRS revenue
collection activities and the Bureau of the Public Debt because of the
significance of federal revenue and debt to the federal government’s
overall fiscal position;
* Provide technical advice to the Office of Management and Budget, the
Department of the Treasury, and the agencies for addressing impediments
to forming an opinion on the U.S. government’s consolidated financial
statements;
* Provide technical advice to the Office of Management and Budget, the
Department of the Treasury, and the agencies to (1) suggest solutions
to material weaknesses in internal control, (2) improve the ability of
agency financial information to be audited, and (3) reduce the use of
extraordinary efforts to prepare financial statements.
Potential Outcomes:
* Enhanced assessment of the government’s overall fiscal position and
financing sources based on information that is timely, accurate, and
useful;
* Improved financial reporting for making budgetary decisions on and
effectively managing areas significantly affecting the government’s
fiscal position, such as credit program costs and environmental
liabilities;
* Assurance as to the reliability of financial information covering
major government financing sources, such as tax revenue and
receivables, and the effectiveness in managing tax refund and
collection activities;
* Actions to address agencies’ material control weaknesses and to help
ensure compliance with laws and regulations in key areas.
[End of section]
Goal 4:
Maximize the Value of GAO by Being a Model Federal Agency and a World-
class Professional Services Organization:
To successfully carry out its responsibilities to the Congress for the
benefit of the American people, GAO in its work must be professional,
objective, fact-based, nonpartisan, nonideological, fair, and balanced.
To achieve our strategic goal of being a model federal agency we must
lead by example, ensuring that our organization is client and customer
driven, has strategic leadership focused on achieving results,
leverages its institutional knowledge and experience, continuously
enhances the services that support its engagements, and is regarded as
an employer of choice.
In this respect, the focus of goal 4 for the period 2007 through 2012
is largely unchanged from the previous plan. We have refined some of
the performance goals under goal 4 to reflect the numerous new key
efforts to be undertaken over the next 3 years.
To accomplish our goal of being a model federal agency and a world-
class professional services organization, we have established strategic
objectives to:
4.1: improve client and customer satisfaction and stakeholder
relationships;
4.2: lead strategically to achieve enhanced results;
4.3: leverage our institutional knowledge and experience;
4.4: enhance our business and management processes, and;
4.5: become a professional services employer of choice.
Strategic Objective 4.1:
Improve Client and Customer Satisfaction and Stakeholder
Relationships:
We interact and work with a diverse set of external clients and
internal customers. Our principal client is the Congress, but our work
is also important to other stakeholders, including federal and
nonfederal agencies and organizations and international institutions.
Our internal customers are our staff who deliver quality service to our
clients. Therefore, being a model agency depends on both determining
and meeting the requirements of our external clients and our internal
customers.
For congressional clients, we will continue to update our understanding
of their needs and expectations and investigate ways to communicate our
results to them more timely and effectively. We will also take
proactive measures to enhance communication with key committees to
ensure a fuller understanding of emerging issues, will seek client
feedback on our work, and will act on the feedback provided. To improve
our capability to identify client needs, we will identify and implement
technologies, methods, and strategies to increase response rates to the
client feedback survey. Internally, we will work to improve the amount,
quality, and timeliness of data in the Congressional Contact System to
ensure a shared understanding and improved communications with our
clients.
For internal customers, we will refine the customer satisfaction survey
to include key administrative services and identify strategies to
increase the survey response rate. We will act on customer feedback to
improve delivery of internal products and services, and develop a
mechanism to provide information to staff on improvements made in
response to their feedback.
For external stakeholders, we plan to strengthen relationships through
leadership in and sponsorship of forums, symposia, and meetings with a
wide range of government accountability and professional organizations.
We will also devote our efforts toward fostering initiatives in the
federal, national, and international accountability, audit, and
evaluation communities to build capacity and implement strategic plans
that promote professional standards and knowledge sharing. We will also
seek to improve our institutional capacity building through training
and seminars for our national audit office counterparts around the
world and our International Fellows Program. We intend to work
proactively with our teams to enhance communication and coordination
with our stakeholders. Finally, we will continue to identify and
support opportunities to leverage our resources and minimize risk by
partnering with other accountability organizations, especially those
that we consider our accountability partners—members of good-government
organizations and working groups that are composed of our counterparts
in local, state, federal, and international organizations.
To support the objective to improve client and customer satisfaction
and stakeholder relationships, we will use the following performance
goals:
4.1.1: strengthen communication with congressional clients;
4.1.2: measure our clients’ satisfaction with our work and act on
client feedback;
4.1.3: assess internal customer satisfaction with our services and
processes and implement and measure improvement efforts; and;
4.1.4: modernize and transform the accountability profession in the
public and private sectors, both domestically and internationally, to
leverage our resources and better meet the challenges of the 21st
century.
Performance Goal 4.1.1:
Strengthen Communication with Congressional Clients:
To respond to our congressional clients’ needs, we must foster
exemplary communications with our clients. We will refine our protocols
for working with our congressional clients to better address their
needs and expectations. In response to the feedback received through
our Web-based survey to measure client satisfaction with our services
and work, we will focus on communicating results more effectively and
timely, obtaining a fuller understanding of issues important to our
clients, and improving coordination of internal GAO communications
related to our relationship and work for our clients.
Key Efforts:
* Expand the use of enhanced technology and alternative media to
communicate our results more effectively and timely;
* Proactively work with teams to enhance communication with key
committees and ensure that we have a full understanding of emerging
issues;
* Ensure a seamless GAO presence to the Congress by enhancing
coordination between Congressional Relations and the teams;
* Improve the quality and timeliness of the data in the Congressional
Contact System to ensure a shared understanding and improved
communications with our clients;
* Monitor and, if necessary, revise our protocols for working with the
Congress to address its needs.
Potential Outcomes:
* Improved quality and timeliness of our products and services;
* Improved understanding of emerging issues important to our clients;
* Enhanced accessibility to GAO services for our clients.
Performance Goal 4.1.2:
Measure Our Clients’ Satisfaction with Our Work and Act on Client
Feedback:
In order to improve our services and products further, we will continue
to seek ways in which we can improve the volume of client feedback that
we receive. We have always met with key committees to obtain feedback
and will continue this practice. In addition, we must determine how we
can increase the response rate to our client feedback survey so that we
can ensure we are responsive to our clients’ needs.
Key Efforts:
* Meet with key committees to obtain client feedback on our work and
act on the feedback provided;
* Identify and implement additional strategies and technologies to make
the client feedback survey more user-friendly and increase the response
rate, further strengthening the usefulness of the feedback in improving
our capability to identify clients’ needs.
Potential Outcomes:
* Improved services and products;
* Improved client needs identification capability.
Performance Goal 4.1.3:
Assess Internal Customer Satisfaction with Our Services and Processes
and Implement and Measure Improvement Efforts:
To be a high-performing organization, it is essential that we provide
effective engagement and infrastructure support services to our
internal customers. For several years, we have conducted an internal
customer satisfaction survey on administrative services once a year. We
now seek to ensure that the survey content is comprehensive, and to
further increase our current good response rate so that we have the
most complete understanding of internal customer needs. We will use the
results of our internal customer satisfaction survey to obtain
feedback, analyze results, set targets for improvements, and implement
improvements. To measure the impact of these improvements, we will use
two performance measures related to our internal operations; these were
included in our agencywide performance measures beginning in fiscal
year 2006.
Key Efforts:
* Enhance the usefulness of the internal customer satisfaction survey
on administrative services by ensuring that all appropriate services
are included and implementing strategies to further increase the
overall response rate;
* Collect and assess customer feedback on specific administrative
programs and act on that feedback, incorporating best practices to
improve the delivery of Chief Administrative Office products and
services;
* Develop and implement a proactive and visible approach for
communicating to staff information on service delivery improvements
made in response to their feedback and recommendations.
Potential Outcomes:
* Increased customer satisfaction with services;
* Increased focus on our customers’ top priority issues;
* Increased understanding on the part of our customers of what we have
done in response to their feedback.
Performance Goal 4.1.4:
Modernize and Transform the Accountability Profession in the Public and
Private Sectors, Both Domestically and Internationally, to Leverage Our
Resources and Better Meet the Challenges of the 21st Century:
To address the challenges of the 21st century, the role of the federal
government needs to adapt to evolving trends along with the manner in
which it delivers programs. Specifically, program delivery now crosses
borders domestically, involving federal, state, and local governments
as well as the private and nonprofit sectors. With increased global
interdependence, federal programs and activities increasingly cross
international borders, involving other nations and geographic regions.
Our ability to assess program performance and results in this changing
environment requires us to work closely with our sister agencies and
the broader audit and accountability community. In seeking to
strengthen the capacity of the accountability community, we plan to
leverage our resources through other accountability organizations that
support oversight of federal expenditures, assess program
implementation and efficacy, and engage in collaborative work. In
addition, we will take actions to promote the adoption, understanding,
and application of the professional standards that we set for audits of
government programs and activities by the accountability profession
operating in the public and private sectors, both at home and abroad.
Related to this effort are our work on federal accounting and auditing
standards (see performance goal 3.3.2) and our work on corporate
governance (see performance goal 2.4.5).
Key Efforts:
* Identify additional opportunities for leveraging our resources and
minimizing risk by collaborating with other organizations, such as the
Comptroller General’s Advisory Board, the Domestic Working Group, the
Global Working Group, accountability organizations, private
foundations, academia, and international development organizations;
* Foster a program evaluation community of practice to help federal
agencies build capacity to evaluate the implementation and effects of
their policies and programs;
* Evaluate and improve our institutional capacity-building efforts
through initiatives such as the International Fellows Program, an audit
training seminar for our national audit office counterparts in Iraq,
and a pilot seminar on organizational transformation under INTOSAI
auspices for our counterparts in developing countries;
* Foster implementing INTOSAI’s and the National Intergovernmental
Audit Forum’s strategic goals of promoting professional standards,
capacity building, knowledge sharing, and becoming a model
organization;
* Strengthen and document the process for working with teams to enhance
communication and coordination with stakeholders, including the
inspectors general, the Congressional Research Service, the
Congressional Budget Office, state and local auditors, and our national
audit office counterparts, to minimize duplication of effort and ensure
effective and efficient use of our resources.
Potential Outcomes:
* More effective and efficient use of our resources;
* Increased adoption and application of government auditing standards;
* Improved program evaluation capacity.
Strategic Objective 4.2:
Lead Strategically to Achieve Enhanced Results:
We will continue to strengthen and further integrate our strategic
planning and our performance, financial, and IT management to maximize
results, manage risks, enhance responsiveness, and ensure exemplary
practices and systems. To accomplish this objective, we will build on
our established base of strategic planning, sound financial management,
performance management, IT best practices, and leadership initiatives.
To support the objective to lead strategically to achieve enhanced
results, we will use the following performance goals:
4.2.1: ensure a seamless strategic planning, workforce planning, and
budget process to maximize results and manage risks within current and
expected resources;
4.2.2: strengthen our strategic human capital management to achieve
enhanced results;
4.2.3: ensure exemplary practices and systems in our fiscal operations;
and;
4.2.4: further enhance IT governance to achieve strategic results by
applying emerging best practices in IT processes and management.
Performance Goal 4.2.1:
Ensure a Seamless Strategic Planning, Workforce Planning, and Budget
Process to Maximize Results and Manage Risks within Current and
Expected Resources:
We require an integrated approach to strategic and workforce planning
and the budget process to enhance our ability to make timely,
consistent, and responsive budget, strategic, and staffing decisions.
As the need to enhance or shift requirements or resources occurs, we
seek to ensure through the integrated approach that all components
affected by such changes are included in the decision-making process.
Key Efforts:
* Strengthen our strategic planning process by enhancing the
documentation of our 3-year strategic planning cycle;
* Improve and document the process for convening new Comptroller
General forums and the GAO speakers’ series, “Conversations on 21st
Century Challenges,” to inform our strategic planning process and
promote a continuous learning environment;
* Enhance the budget process to ensure the most effective and efficient
use of our resources in support of human capital, engagement support,
and infrastructure operations;
* Better integrate cost and staffing data to ensure timely, consistent,
and responsive decisions on our workforce plan and budget;
* Maximize the flexibility of workforce planning efforts to ensure
seamless allocation of resources in support of shifting strategic areas
and budgetary constraints;
* Enhance the workforce planning and succession planning processes by
fully integrating learning and development needs;
* Continue strengthening the workforce planning process and document it
in a guide that will enhance internal and external understanding of the
process.
Potential Outcomes:
* Timely, consistent, and responsive workforce plan and budget
decisions;
* Increased flexibility in allocating resources;
* Effective and efficient use of resources.
Performance Goal 4.2.2:
Strengthen Our Strategic Human Capital Management to Achieve Enhanced
Results:
We will reexamine, update, refine, and implement improvements to our
human capital strategic plan, recruitment and hiring strategies,
performance management systems, and the Human Resource Information
System to enhance our ability to attract, retain, motivate, and reward
staff. Through exchange programs, we will be able to leverage our
resources.
Key Efforts:
* Update and revise our human capital strategic plan to provide a
foundation for our human capital programs and initiatives;
* Reexamine our recruitment and hiring strategy and process and
implement improvements as identified;
* Develop and communicate coherent, unified, role-based curriculums
that support development of the competencies identified in our
performance management system;
* Further refine performance management systems in support of market-
based pay;
* Modernize and integrate human capital systems to improve the delivery
of services and information by maximizing the use of additional modules
to our human resource information systems;
* Leverage our resources by promoting exchanges with the public and
private sectors, including academia, through such authorities as the
Executive Exchange Program and the Intergovernmental Personnel Act.
Potential Outcomes:
* Productive employees who are fairly compensated for their work;
* Enhanced development of staff competencies;
* Enhanced capability to attract talented and diverse staff;
* Improved timeliness and availability of services and information.
Performance Goal 4.2.3:
Ensure Exemplary Practices and Systems in Our Fiscal Operations:
Integrity in how we manage our fiscal operations is critical. We should
be a model for other agencies in both operational and fiscal management
by implementing and using systems that comply substantially with
federal financial management guidelines; reviewing, updating, and
improving those systems as necessary; and identifying efficiencies to
be gained through cooperative efforts with the legislative branch.
Key Efforts:
* Ensure exemplary financial management practices through implementing
and coordinating the Federal Managers’ Financial Integrity Act and the
Office of Management and Budget’s Circular No. A-123, Management’s
Responsibility for Internal Control;
* Implement a modern financial management system, including purchasing
and contract management, that ensures auditable financial statements
and provides a foundation for our future financial management needs;
* Identify and reengineer financial management business practices,
facilitated by the new financial management system;
* Reexamine acquisition processes for efficiency and effectiveness and
identify and implement improvements;
* Assist the Legislative Branch Financial Managers’ Council in
identifying crosscutting technology related to improved fiscal
operations for the legislative branch.
Potential Outcomes:
* Clean opinion on the financial audit;
* Better management of GAO through sound financial management
principles and best practices;
* Efficiencies in fiscal operations through crosscutting technology.
Performance Goal 4.2.4:
Further Enhance IT Governance to Achieve Strategic Results by Applying
Emerging Best Practices in IT Processes and Management:
IT is no longer simply a tool that enables users to carry out their
work or organizations to conduct their businesses. IT must contribute
to the organization’s strategic and business goals and provide value.
It must become transparent to the users and organization and must be
sufficiently agile to meet evolving needs and emergent issues. And, it
must do so securely, seamlessly, and within a managed cost framework.
To achieve these objectives and to lead by example, we must have strong
IT governance practices in place.
Key Efforts:
* Update the IT plan to provide a foundation for technology initiatives
and ensure support of our strategic and business goals;
* Complete and maintain a GAO enterprise architecture that provides an
integrated view of our lines of business and business processes;
* Strengthen partnerships between business and IT to identify
requirements and determine technology solutions and services that best
meet business needs;
* Adopt the IT Infrastructure Library framework for IT service and
process management to manage change and ensure that IT aligns with our
business;
* Implement an IT work management system that enables work flow and
incorporates the IT life cycle and key IT processes and methodologies
into project management.
Potential Outcomes:
* Improved IT planning and decision making and flexibility to respond
to continual improvements in business processes;
* Improved business and IT working relationships resulting in
identification of requirements and solutions to meet business needs;
* A robust, reliable, flexible, and secure technology architecture.
Strategic Objective 4.3:
Leverage Our Institutional Knowledge and Experience:
We are a knowledge-based professional services organization. As a large
number of our more senior employees reach eligibility for retirement,
we need to implement strategies we have identified to retain this
knowledge and expertise and increase organizational knowledge sharing.
In addition, to further facilitate organizational knowledge sharing, we
need to increase the volume of organizational information available,
enhance our communications strategies to increase accessibility of the
information, and employ improved electronic and Web-based technologies
in support of this objective. We also will build on our past and
current participation in programs, events, and efforts focused on
enhancing knowledge sharing with other national and international
accountability and professional organizations.
To support the objective to leverage our institutional knowledge and
experience, we will use the following performance goals:
4.3.1: maximize the collection, use, and retention of essential
organizational knowledge;
4.3.2: increase our knowledge-sharing capability; and;
4.3.3: enhance knowledge sharing with other national and international
accountability and professional organizations.
Performance Goal 4.3.1:
Maximize the Collection, Use, and Retention of Essential Organizational
Knowledge:
Managing information and knowledge so that it serves not only our staff
and managers but also our congressional clients requires an integrated
approach for identifying, managing, and sharing our information and
intellectual assets. These assets include databases, plans, analyses,
documents, reports, policies, procedures, management information, and
staff expertise. Effective information and knowledge management is
crucial to accessing and preserving these valuable assets.
Key Efforts:
* Identify and increase accessibility of organizational reference
record collections by incorporating them into the Electronic Records
Management System;
* Enhance search capability for GAO reports;
* Identify and develop a GAO corporate taxonomy to enhance sharing and
retrieval of information through GAO portals and improve overall search
and retrieval of our organizational knowledge;
* Perform a cost-benefit analysis of continued digitization of our
legislative history collection;
* Enhance essential organizational knowledge through individual Web-
based team resource pages.
Potential Outcomes:
* Ability to capitalize on our intellectual assets;
* Enhanced processes for capturing, maintaining, and sharing
institutional knowledge;
* Improved processes and methods for sharing relevant information among
our staff;
* Improved capture of and access to the agency’s essential
information;
* Improved quality of engagements, which will better meet the needs of
the clients.
Performance Goal 4.3.2:
Increase Our Knowledge-Sharing Capability:
As we improve our internal communication strategies and implement new
Web-based technologies, the availability and usefulness of our
products, information, and services are increased. Accessibility to,
user-friendliness of, and client and customer awareness of these
products, data, and services enhance our value to our clients and the
public.
Key Efforts:
* Increase the accessibility of our products to the press, the public,
and other stakeholders;
* Institutionalize a formal process for periodic reviews of our
Internet and intranet to identify improvements and evolving technology
solutions that facilitate access to information and enhance usability
and customer satisfaction;
* Implement an engagement management portal, providing a seamless
single point of access to enterprise knowledge, information resources,
and IT tools and applications to facilitate the conduct of our
engagements;
* Enhance internal communications strategies and approaches for
identifying and sharing our information with clients, external
organizations, and the press;
* Identify and implement an enhanced agencywide internal communication
strategy to provide timely, readily accessible, and accurate
information to our staff;
* Enhance access and user-friendliness of Web-based data on our
administrative services and operations.
Potential Outcomes:
* Better access to information that will contribute to meeting client
needs;
* Enhanced knowledge and information sharing across GAO and with our
clients, the press, the public, and other stakeholders;
* An increase our value to the public.
Performance Goal 4.3.3:
Enhance Knowledge Sharing with Other National and International
Accountability and Professional Organizations:
We work strategically with other accountability and professional
organizations to broaden and leverage our institutional knowledge and
experience and, in turn, improve our overall service to the Congress
and the American people. Our collaborative efforts with the
intergovernmental audit community help us and other accountability
organizations in identifying better ways to develop and share methods,
tools, benchmarking results, and best practices for doing our work.
Key Efforts:
* Apply technology tools to facilitate collaboration and knowledge
sharing among the accountability and professional organizations;
* Continue piloting a contact management database in order to expand
our networks with public and private sector individuals and
organizations, communicate more quickly and efficiently, and leverage
our resources by accessing knowledge, skills, and expertise;
* Transform INTOSAI’s International Journal of Government Auditing to
include a robust Web presence that leverages technology to enhance
knowledge sharing and capacity building among INTOSAI members and the
wider accountability community.
Potential Outcomes:
* Increased leveraging and sharing of knowledge throughout the
government accountability profession;
* Improved quality of engagements that better meet the needs of the
clients.
Strategic Objective 4.4:
Enhance Our Business and Management Processes:
As the federal government’s accountability organization, we undertake
engagements to evaluate the economy, efficiency, and effectiveness of a
wide range of federal policies and programs to assist the Congress and
benefit the American taxpayer. By continuously assessing and enhancing
the processes and services that support our engagements, we can
maximize our value to the Congress and the public.
To support the objective to enhance our business and management
processes, we will use the following performance goals:
4.4.1: streamline the engagement process and improve engagement
services;
4.4.2: enhance the quality, content, and appearance of our products;
and;
4.4.3: improve our administrative and management processes and use
enabling technology to improve crosscutting processes.
Performance Goal 4.4.1:
Streamline the Engagement Process and Improve Engagement Services:
By continuously assessing and enhancing the processes and services that
support our engagements, we can maximize our value to the Congress and
the public. We intend to streamline and reengineer internal business
and administrative processes where it is possible and desirable. This
will enable our engagement support services to respond to the mission
requirements of our internal customers who must deliver to our clients
high-quality products and services that consistently meet our reporting
standards.
Key Efforts:
* Develop and enhance written guidance on applied research tools and
methods to help teams better plan and implement job assignments;
* Introduce graphics and prepublications quality assurance capabilities
earlier in the publishing process to strengthen existing quality
controls;
* Identify a contracting vehicle for printing that is cost-effective
and supports both planned and on-demand distribution;
* Develop and implement publishing process improvements designed to
both simplify and standardize operations among Product Assistance
Groups and teams, and maximize use of available resources;
* Identify research request trends and make changes to research
services to enhance research timeliness and capabilities;
* Reengineer the management information systems that support our
engagements to provide real-time information and seamless links to the
engagement management system;
* Prepare for an external peer review of our quality assurance policies
and procedures related to government auditing standards and our
compliance with these standards in conducting our work;
* Develop a process to track and validate the accuracy of data for
decisions on request letters on quarterly evaluations;
* Sequence and consider the implementation of recommendations from the
engagement process streamlining efforts and, where appropriate, apply
integrated solutions that better enable GAO to meet the needs of the
client, increase staff productivity, and deliver results;
* Identify opportunities for increasing efficiencies in our annual
internal inspection program for completed engagement products;
* Refine our policy manual to reflect periodic changes to our
engagement processes.
Potential Outcomes:
* An engagement management and review process with fewer intervals that
more clearly describes the process that complies with our quality
assurance framework;
* Improved engagement reporting;
* An engagement management and documentation process that is more risk-
based and efficient, while meeting all applicable standards and
policies;
* Improvements and efficiencies in the way GAO performs and reports on
its work with continued focus on compliance with generally accepted
government auditing standards;
* Increased efficiency and improved capacity for compiling and
analyzing data used to prepare the annual inspection report;
* Improved business and administrative processes;
* More efficient and cost-effective delivery of internal services;
* Improved customer and client satisfaction with services and
products;
* Engagement support services that enable staff to perform work that
meets the needs of the Congress and facilitates improvements in
government.
Performance Goal 4.4.2:
Enhance the Quality, Content, and Appearance of Our Products:
The importance of the message in our products is enhanced when we are
able to increase the impact of the message through applying new
technologies and increase the quality of the product by improving the
consistency, timeliness, and editorial excellence.
Key Efforts:
* Create a prototype report-writing template that incorporates instant
access to reporting standards, rationales, writing tips, and sample
texts;
* Enhance our products to improve the impact of the message, including
captioning audio for the hearing impaired and descriptive text for the
visually impaired;
* Enhance our video services by improving the format quality;
* Enhance the consistency, timeliness, and quality of the editing
process through new initiatives and emerging technologies.
Potential Outcomes:
* Consistency in approach, appearance, and format of our products;
* Increased availability of our products for the visually or hearing
impaired;
* Increased impact of our written products through use of emerging
technologies.
Performance Goal 4.4.3:
Improve Our Administrative and Management Processes and Use Enabling
Technology to Improve Crosscutting Processes:
To lead by example, we must use enabling technology and maximize the
benefits IT can provide in facilitating our work. Identifying and
implementing new and emerging technologies is essential to our
continued efforts to provide efficient, timely, and effective services
to our internal customers and to our clients, as we carry out our
oversight, insight, and foresight work in support of the Congress.
Key Efforts:
* Upgrade and enhance technology tools and systems supporting myriad
business processes to ensure availability, reliability, and ease of use
and to promote process efficiencies;
* Evaluate and pilot emerging technologies to support business and
management processes;
* Use enhanced Web tools to collect, analyze, and report information to
the Congress;
* Improve the efficiency and effectiveness of mission support
operations through the introduction of enhanced Web tools;
* Identify trends and potential cost efficiencies for mail operations;
* Implement changes to our employee suggestion program that refine the
criteria, enhance understanding of the process, and more directly
relate the level of recognition to suggestion impact.
Potential Outcomes:
* A more productive workforce;
* Cost savings in mail operations;
* Increase in type and amount of information collected, analyzed, and
reported to the Congress.
Strategic Objective 4.5:
Become a Professional Services Employer of Choice:
To be a model organization, we must become an employer of choice—one
that attracts, retains, motivates, and rewards excellent employees and
is considered one of the best places to work. We will continue to build
upon our efforts to create and maintain a work environment that is
fair, unbiased, and inclusive and that offers the opportunity for all
employees to realize their full potential. We are committed to
providing our employees with the tools, technologies, and systems that
promote collaboration and productivity. We will also undertake new
security strategies to meet the challenges posed by terrorism and
pandemics and provide a safe and secure workplace for our employees. We
will seek to enhance employee views about GAO by assessing employee
satisfaction with selected work life programs and improving the
development programs and experiences of new staff.
To become a professional services employer of choice, we will use the
following performance goals:
4.5.1: promote an environment that is fair and unbiased and that values
opportunity and inclusiveness;
4.5.2: provide our staff with tools, technology, and a world-class
working environment;
4.5.3: provide a safe and secure workplace;
4.5.4: enhance employee views about GAO; and;
4.5.5: improve the development and experiences of newly hired staff.
Performance Goal 4.5.1:
Promote an Environment That Is Fair and Unbiased and That Values
Opportunity and Inclusiveness:
Our goal is to attract, retain, motivate, and reward a highly skilled,
diverse, and capable workforce. We believe that fostering personal and
professional development for our staff in an environment that is fair
and unbiased and values opportunity and inclusiveness for all staff
will help us achieve our goal.
Key Efforts:
* Develop, implement, and monitor a mentoring program that fosters
personal and professional development opportunities for all staff;
* Monitor and recommend changes, as appropriate, to the compensation
and performance management systems to ensure they are fair and unbiased
and promote workplace excellence;
* Monitor and assess implementation of recommendations for enhanced
performance management;
* Pilot approaches to ensure that all interns are provided with a core
group of experiences that will help them make good decisions about
working at GAO.
Potential Outcomes:
* An improved work environment that recognizes and appreciates
diversity and is free of bias;
* Increased percentage of employees who concur that our work
environment is fair and unbiased;
* A more productive workforce, fulfilling personal and professional
goals;
* Enhanced ability to attract, retain, motivate, and reward a highly
skilled, diverse, and capable workforce.
Performance Goal 4.5.2:
Provide Our Staff with Tools, Technology, and a World-class Working
Environment:
We recognize the importance of providing the best work environment,
technology, and tools so that staff can effectively and efficiently
perform their work. These efforts are directed at providing the tools
and a comfortable work environment to help employees more effectively
and efficiently accomplish their work.
Key Efforts:
* Award a new consolidated facilities management contract to ensure
effective and efficient operation of the GAO building;
* Procure, design, and construct leased space that provides an
attractive and productive environment in select field offices;
* Provide modern and secure technology, tools, and systems that promote
collaboration and virtual teams and support a mobile workforce.
Potential Outcomes:
* More efficient operations;
* Improved technology that supports a mobile workforce;
* A more productive workforce.
Performance Goal 4.5.3:
Provide a Safe and Secure Workplace:
The safety and security of our staff, information, and assets against
threats—natural and man-made—must be a top priority. We continue to
place the highest importance on assessing our current security measures
and identifying and adopting practices that will enhance our overall
security program and ensure emergency preparedness and continuity of
operations.
Key Efforts:
* Provide a unified focus on emergency preparedness planning in our
headquarters and field offices through coordination among other
legislative branch agencies, local law enforcement entities, and our
Office of Emergency Preparedness;
* Develop and communicate a pandemic strategy for the agency;
* Reexamine security processes and functions to identify areas for
enhanced efficiency, economy, and effectiveness;
* Implement government standard identity card (Smartcard) technology to
meet Homeland Security Presidential Directive 12 requirements;
* Upgrade access control and intrusion detection systems for
headquarters and the field offices that fully meet the requirements of
the Integrated Electronic Security System;
* Enhance and modify the security education and awareness program based
on the information and training needs of agency staff;
* Maintain and enhance our IT security and emergency preparedness
program consistent with evolving security practices to ensure the
protection and recovery of IT assets and services.
Potential Outcomes:
* Our people, buildings, and other key assets are protected and
continuity of operations ensured;
* Our IT assets are protected;
* Our leaders and staff are prepared to respond effectively to
emergencies;
* A safe, secure, and adaptable work environment for all staff Improved
coordination on security matters with our client and local law
enforcement.
Performance Goal 4.5.4:
Enhance Employee Views about GAO:
Enhancing our family-friendly and work life programs are ways in which
we can improve the quality of life for our employees. We believe that
continuous improvement in this area, based on periodic feedback from
employees, will enable us to attract, retain, motivate, and reward our
employees.
Key Efforts:
* Assess our employees’ satisfaction with selected work life programs
and implement improvements as needed;
* Finalize expansion of headquarters day care center and explore other
options to increase enrollment and GAO staff satisfaction.
Potential Outcomes:
* Improved family-friendly policies that help staff balance work and
family lives;
* A more productive workforce;
* Ability to attract, retain, motivate, and reward a highly skilled,
diverse, and capable workforce.
Performance Goal 4.5.5:
Improve the Development and Experiences of Newly Hired Staff:
Our goal is to provide timely developmental opportunities for newly
hired staff. By effectively matching staff with assignments and
rotations, both the agency’s needs and the employees’ developmental
needs can be better met.
Key Efforts:
* More fully identify applicants’ proficiencies in the performance
competencies and integrate that knowledge with assignments and
rotations in the Professional Development Program;
* Strengthen the community of practice and strategic partnerships
between staffing managers and Professional Development Program advisors
to provide more targeted developmental opportunities for Professional
Development Program staff;
* Develop proactive steps to better and more quickly assimilate upper-
level hires into GAO;
* Develop and implement an entry-level developmental program for newly
hired staff other than analysts.
Potential Outcomes:
* Ability to attract, retain, motivate, and reward a highly skilled,
diverse, and capable workforce;
* Enhanced training and development experiences for newly hired staff.
[End of section]
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.
Page: Covers;
Source: GAO (Capitol).
Page: 2;
Source: Eyewire (eagle).
Page: 3;
Source: Eyewire (Capitol).
Page: 13;
Source: MapArt (map).
Page: 15;
Source: Eyewire (flags).
Page: 16, 17, 29, 36, 43, 48, 52, 60, 71;
Source: Eyewire (Capitol).
Page: 80, 82, 92, 103, 112;
Source: Eyewire (Statue of Liberty); Federal Emergency Management
Agency (flags); MapArt (globe).
Page: 122, 123, 126, 136, 141;
Source: Corbis (road).
[End of section]
Serving the Congress and the Nation:
GAO’s Strategic Plan:
2007–2012:
The strategic plan and our performance and accountability reports are
available through our Web site at [hyperlink,
http://www.gao.gov/sp.html].
Linked to that same page is our full family of strategic planning and
performance and accountability publications.
[hyperlink, http://www.gao.gov].
Core Values:
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 both.
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.
[End of section]
Footnotes:
[1] In fiscal years 2004 and 2005, the work performed under the
Comptroller General’s authority represented 10 percent and 13 percent,
respectively, of our engagement efforts.
[2] GAO, Motor Fuels: Understanding the Factors That Influence the
Retail Price of Gasoline, GAO-05-525SP (Washington, D.C.: May 2005),
and Social Security Reform: Answers to Key Questions, GAO-05-193SP
(Washington, D.C.: May 2005).
[3] A defined benefit pension plan generally provides benefits based on
a specific formula linked to the worker’s earnings and tenure.
Typically, a defined benefit plan is funded completely by the employer,
who bears the investment risk of such an arrangement.
[4] Defined contribution plans are much like savings accounts
maintained by the employer on behalf of each participating employee. In
a 401(k) plan, the employee, the employer, or both defer receipt of
current income to deposit it on a pretax basis into a retirement
account. When the worker retires, the retirement benefit that he or she
receives is the balance in the account, which is the sum of all the
contributions that have been made plus interest, dividends, and capital
gains (or losses).
[5] Summing the individual tax expenditure estimates is useful for
gauging the general magnitude of the federal revenue involved, but it
does not take into account possible interactions between individual
provisions.