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Meeting 

Meeting Accountability Challenges in a Dynamic Environment: 
Alabama Examiners of Public Accounts Annual Meeting: 
Montgomery, AL: 

October 17, 2011: 

Gene L. Dodaro: 
Comptroller General: 
U.S. Government Accountability Office: 

GAO-12-167CG: 

Overview: 

* GAO's Strategic Plan: 
• Trends Affecting the Government and U.S. 
* GAO's Related Work: 

GAO's Planning & Performance Documents: 

[hyperlink, http://www.gao.govisp.html] 

* Strategic Plan. 

* Performance Plan. 

* Performance & Accountability Report. 

Strategic Planning Framework: 

Goal: 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: 
Objectives: 
* Health care needs; 
* Lifelong learning; 
* Benefits and protections for workers, families, and children; 
* Financial security; 
* Effective system of justice; 
* Viable communities; 
* Stable financial system and consumer protection; 
* Stewardship of natural resources and the environment; 
* Infrastructure. 

Goal: Provide Timely, Quality Service to the Congress and the Federal 
Government to Respond to Changing Security Threats and the Challenges 
of Global Interdependence involving: 
Objectives: 
* Homeland security; 
* Military capabilities and readiness; 
* Advancement of U.S. Interests; 
* Global market forces. 

Goal: Help Transform the Federal Government to Address National 
Challenges by assessing: 
Objectives: 
* Government's fiscal position and options for closing gap; 
* Fraud, waste, and abuse; 
* Major management challenges and program risks. 

Goal: Maximize the Value of GAO by Enabling Quality, Timely Service to 
the Congress and Being a Leading Practices Federal Agency in the areas 
of: 
Objectives: 
* Efficiency, effectiveness, and quality; 
* Diverse and inclusive work environment; 
* Professional networks and collaboration; 
* Institutional stewardship and resource management. 

Trend 1: Threats Confronting U.S. National Security Interests: 

* Regional instability (Middle East, Central Asia, Africa). 

* Longstanding threats (extremism, terrorism, proliferation of 
weapons, cybersecurity). 

* Emerging threats (energy security, climate change, global recession). 

* Need for new capabilities alongside increasingly constrained 
resources. 

Related GAO work: 

* Reviewing U.S. security and reconstruction efforts related to 
Afghanistan, Iraq and other regions in conflict, including reviewing 
the effect of drawing down military resources in Iraq, and countering 
terrorism and nuclear supplier networks in Pakistan. 

* Assessing U.S. efforts to combat terrorism abroad. 

* Reviewing the government's efforts to identify and act on credible 
threats to homeland and border security, as well as those involving 
biological, chemical, and nuclear dimensions. 

* Analyzing the funding and costs of military operations and programs 
given the fiscal pressures facing the nation. 

* Evaluate efforts to ensure the reliability, security, and 
affordability of energy supply infrastructure and assess the 
implications of climate change for the federal government. 

Trend 2: Fiscal Sustainability and Debt Challenges: 

Figure: Federal Budget Trends under Different Fiscal Policy 
Simulations: 

[Refer to PDF for image: multiple line graph] 

Percentage of GDP: 

Fiscal year: 2000; 
Baseline: 2.405; 
Alternative: 2.405. 

Fiscal year: 2001; 
Baseline: 1.254; 
Alternative: 1.254. 

Fiscal year: 2002; 
Baseline: -1.497; 
Alternative: -1.497. 

Fiscal year: 2003; 
Baseline: -3.439; 
Alternative: -3.439. 

Fiscal year: 2004; 
Baseline: -3.532; 
Alternative: -3.532. 

Fiscal year: 2005; 
Baseline: -2.558; 
Alternative: -2.558. 

Fiscal year: 2006; 
Baseline: -1.877; 
Alternative: -1.877. 

Fiscal year: 2007; 
Baseline: -1.157; 
Alternative: -1.157. 

Fiscal year: 2008; 
Baseline: -3.186; 
Alternative: -3.186. 

Fiscal year: 2009; 
Baseline: -10.021; 
Alternative: -10.021. 

Fiscal year: 2010; 
Baseline: -8.917; 
Alternative: -8.917. 

Fiscal year: 2011; 
Baseline: -9.843; 
Alternative: -9.843. 

Fiscal year: 2012; 
Baseline: -7.008; 
Alternative: -7.14. 

Fiscal year: 2013; 
Baseline: -4.294; 
Alternative: -6.41. 

Fiscal year: 2014; 
Baseline: -3.091; 
Alternative: -6.421. 

Fiscal year: 2015; 
Baseline: -3.027; 
Alternative: -6.806. 

Fiscal year: 2016; 
Baseline: -3.441; 
Alternative: -7.523. 

Fiscal year: 2017; 
Baseline: -3.078; 
Alternative: -7.492. 

Fiscal year: 2018; 
Baseline: -2.915; 
Alternative: -7.666. 

Fiscal year: 2019; 
Baseline: -3.182; 
Alternative: -8.232. 

Fiscal year: 2020; 
Baseline: -3.237; 
Alternative: -8.635. 

Fiscal year: 2021; 
Baseline: -3.206; 
Alternative: -8.954. 

Fiscal year: 2022; 
Baseline: -3.537; 
Alternative: -9.63. 

Fiscal year: 2023; 
Baseline: -3.702; 
Alternative: -10.357. 

Fiscal year: 2024; 
Baseline: -3.977; 
Alternative: -11.115. 

Fiscal year: 2025; 
Baseline: -4.375; 
Alternative: -11.911. 

Fiscal year: 2026; 
Baseline: -4.553; 
Alternative: -12.513. 

Fiscal year: 2027; 
Baseline: -4.837; 
Alternative: -13.125. 

Fiscal year: 2028; 
Baseline: -5.231; 
Alternative: -13.851. 

Fiscal year: 2029; 
Baseline: -5.527; 
Alternative: -14.491. 

Fiscal year: 2030; 
Baseline: -5.816; 
Alternative: -15.131. 

Fiscal year: 2031; 
Baseline: -6.103; 
Alternative: -15.775. 

Fiscal year: 2032; 
Baseline: -6.504; 
Alternative: -16.422. 

Fiscal year: 2033; 
Baseline: -6.677; 
Alternative: -17.075. 

Fiscal year: 2034; 
Baseline: -6.958; 
Alternative: -17.735. 

Fiscal year: 2035; 
Baseline: -7.234; 
Alternative: -18.396. 

Fiscal year: 2036; 
Baseline: -7.509; 
Alternative: -19.063. 

Fiscal year: 2037; 
Baseline: -7.9; 
Alternative: -19.849. 

Fiscal year: 2038; 
Baseline: -8.159; 
Alternative: -20.506. 

Fiscal year: 2039; 
Baseline: -8.413; 
Alternative: -21.164. 

Fiscal year: 2040; 
Baseline: -8.661; 
Alternative: -21.824. 

Fiscal year: 2041; 
Baseline: -8.908; 
Alternative: -22.488. 

Fiscal year: 2042; 
Baseline: -9.153; 
Alternative: -23.157. 

Fiscal year: 2043; 
Baseline: -9.398; 
Alternative: -23.831. 

Fiscal year: 2044; 
Baseline: -9.645; 
Alternative: -24.514. 

Fiscal year: 2045; 
Baseline: -9.897; 
Alternative: -25.209. 

Fiscal year: 2046; 
Baseline: -10.286; 
Alternative: -26.045. 

Fiscal year: 2047; 
Baseline: -10.547; 
Alternative: -26.76. 

Fiscal year: 2048; 
Baseline: -10.806; 
Alternative: -27.479. 

Fiscal year: 2049; 
Baseline: -11.064; 
Alternative: -28.202. 

Fiscal year: 2050; 
Baseline: -11.192; 
Alternative: -28.947. 

Source: GAO. 

Note: Data are from GAO's January 2011 simulations based on the 
Trustees' assumptions for Social Security and the Trustees' and CMS 
Actuary's assumptions for Medicare. 

[End of figure] 

Figure: Debt Held by the Public under Two Fiscal Policy Simulations: 

[Refer to PDF for image: multiple line graph] 

Percentage of GDP: 

Historical high: 109 percent in 1946. 

Fiscal year: 2000; 
Baseline extended: 34.7; 
Alternative: 34.7. 

Fiscal year: 2001; 
Baseline extended: 32.5; 
Alternative: 32.5. 

Fiscal year: 2002; 
Baseline extended: 33.6; 
Alternative: 33.6. 

Fiscal year: 2003; 
Baseline extended: 35.6; 
Alternative: 35.6. 

Fiscal year: 2004; 
Baseline extended: 36.8; 
Alternative: 36.8. 

Fiscal year: 2005; 
Baseline extended: 36.9; 
Alternative: 36.9. 

Fiscal year: 2006; 
Baseline extended: 36.5; 
Alternative: 36.5. 

Fiscal year: 2007; 
Baseline extended: 36.2; 
Alternative: 36.2. 

Fiscal year: 2008; 
Baseline extended: 40.2; 
Alternative: 40.2. 

Fiscal year: 2009; 
Baseline extended: 53.518; 
Alternative: 53.518. 

Fiscal year: 2010; 
Baseline extended: 62.141; 
Alternative: 62.141. 

Fiscal year: 2011; 
Baseline extended: 69.375; 
Alternative: 69.375. 

Fiscal year: 2012; 
Baseline extended: 73.903; 
Alternative: 74.036. 

Fiscal year: 2013; 
Baseline extended: 75.522; 
Alternative: 77.765. 

Fiscal year: 2014; 
Baseline extended: 75.303; 
Alternative: 80.766. 

Fiscal year: 2015; 
Baseline extended: 74.883; 
Alternative: 83.843. 

Fiscal year: 2016; 
Baseline extended: 75.011; 
Alternative: 87.609. 

Fiscal year: 2017; 
Baseline extended: 75.195; 
Alternative: 91.646. 

Fiscal year: 2018; 
Baseline extended: 75.313; 
Alternative: 95.806. 

Fiscal year: 2019; 
Baseline extended: 75.752; 
Alternative: 100.432. 

Fiscal year: 2020; 
Baseline extended: 76.223; 
Alternative: 105.263. 

Fiscal year: 2021; 
Baseline extended: 76.663; 
Alternative: 110.239. 

Fiscal year: 2022; 
Baseline extended: 77.448; 
Alternative: 115.731. 

Fiscal year: 2023; 
Baseline extended: 78.201; 
Alternative: 121.476. 

Fiscal year: 2024; 
Baseline extended: 79.191; 
Alternative: 127.722. 

Fiscal year: 2025; 
Baseline extended: 80.591; 
Alternative: 134.581. 

Fiscal year: 2026; 
Baseline extended: 82.149; 
Alternative: 141.816. 

Fiscal year: 2027; 
Baseline extended: 83.912; 
Alternative: 149.334. 

Fiscal year: 2028; 
Baseline extended: 86.004; 
Alternative: 157.277. 

Fiscal year: 2029; 
Baseline extended: 88.368; 
Alternative: 165.639. 

Fiscal year: 2030; 
Baseline extended: 90.957; 
Alternative: 174.36. 

Fiscal year: 2031; 
Baseline extended: 93.703; 
Alternative: 183.32. 

Fiscal year: 2032; 
Baseline extended: 96.74; 
Alternative: 192.565. 

Fiscal year: 2033; 
Baseline extended: 99.842; 
Alternative: 202.113. 

Fiscal year: 2034; 
Baseline extended: 103.112; 
Alternative: 211.959. 

Fiscal year: 2035; 
Baseline extended: 106.54; 
Alternative: 222.096. 

Fiscal year: 2036; 
Baseline extended: 110.117; 
Alternative: 232.514. 

Fiscal year: 2037; 
Baseline extended: 113.954; 
Alternative: 243.324. 

Fiscal year: 2038; 
Baseline extended: 117.853; 
Alternative: 254.262. 

Fiscal year: 2039; 
Baseline extended: 121.895; 
Alternative: 265.518. 

Fiscal year: 2040; 
Baseline extended: 126.052; 
Alternative: 277.044. 

Fiscal year: 2041; 
Baseline extended: 130.299; 
Alternative: 288.795. 

Fiscal year: 2042; 
Baseline extended: 134.632; 
Alternative: 300.766. 

Fiscal year: 2043; 
Baseline extended: 139.047; 
Alternative: 312.955. 

Fiscal year: 2044; 
Baseline extended: 143.541; 
Alternative: 325.36. 

Fiscal year: 2045; 
Baseline extended: 148.118; 
Alternative: 337.985. 

Fiscal year: 2046; 
Baseline extended: 152.909; 
Alternative: 350.962. 

Fiscal year: 2047; 
Baseline extended: 157.78; 
Alternative: 364.157. 

Fiscal year: 2048; 
Baseline extended: 162.723; 
Alternative: 377.563. 

Fiscal year: 2049; 
Baseline extended: 167.734; 
Alternative: 391.175. 

Fiscal year: 2050; 
Baseline extended: 172.764; 
Alternative: 405.2. 

Fiscal year: 2051; 
Baseline extended: 178.038; 
Alternative: 419.522. 

Fiscal year: 2052; 
Baseline extended: 183.392; 
Alternative: 434.078. 

Fiscal year: 2053; 
Baseline extended: 188.83; 
Alternative: 448.874. 

Fiscal year: 2054; 
Baseline extended: 194.355; 
Alternative: 463.919. 

Fiscal year: 2055; 
Baseline extended: 199.974; 
Alternative: 479.218. 

Fiscal year: 2056; 
Baseline extended: 205.69; 
Alternative: 494.78. 

Fiscal year: 2057; 
Baseline extended: 211.36; 
Alternative: 510.603. 

Fiscal year: 2058; 
Baseline extended: 217.265; 
Alternative: 526.688. 

Fiscal year: 2059; 
Baseline extended: 223.261; 
Alternative: 543.034. 

Fiscal year: 2060; 
Baseline extended: 229.204; 
Alternative: 559.644. 

Source: GAO. 

Note: Data are from GAO’s January 2011 simulations based on the 
Trustees' assumptions for Social Security and the Trustees’ and CMS 
Actuary’s alternative assumptions for Medicare. 

[End of figure] 

Table: Challenges Affecting the Federal Budget in the Near Term: 

2008: 
Oldest members of the baby-boom generation became eligible for early 
Social Security retirement benefits. 

2008: 
Medicare Hospital Insurance (HI) outlays exceeded cash income. 

2010: 
Social Security runs first cash deficit in more than 25 years. 

2011: 
Oldest members of the baby-boom generation become eligible for 
Medicare. 

2021: 
Debt held by the public under GAO's Alternative simulation exceeds the 
historical high reached in the aftermath of World War II. 

Source: GAO. 

See The Federal Government's Long-Term Fiscal Outlook: January 2011 
Update, [hyperlink, http://www.gao.gov/products/GAO-11-451SP] (Mar. 
17, 2011). 

[End of table] 

Figure: Potential Fiscal Outcomes: Revenues and Composition of 
Spending under Baseline Extended Simulation: 

[Refer to PDF for image: combined stacked vertical bar and line graph] 

Percent of GDP: 

2010: 
Net interest: 1.4%; 
Social Security: 4.8%; 
Medicare & Medicaid: 5%; 
All other spending: 12.6%; 
Revenue: 14.9%. 

2020: 
Net interest: 3.3%; 
Social Security: 5.2%; 
Medicare & Medicaid: 6.3%; 
All other spending: 9.1%; 
Revenue: 20.7%. 

2030: 
Net interest: 4.2%; 
Social Security: 6%; 
Medicare & Medicaid: 7.6%; 
All other spending: 8.9%; 
Revenue: 20.8%. 

2040: 
Net interest: 5.7%; 
Social Security: 6.2%; 
Medicare & Medicaid: 8.7%;  
All other spending: 8.9%; 
Revenue: 20.8%. 

Source: GAO. 

Note: Data are from GAO’s January 2011 simulations based on the 
Trustees' assumptions for Social Security and Medicare. 

[A] This also includes spending for insurance exchange subsidies and 
CHIP. 

[End of figure] 

Figure: Potential Fiscal Outcomes: Revenues and Composition of 
Spending under Alternative Simulation: 

[Refer to PDF for image: combined stacked vertical bar and line graph] 

Percent of GDP: 

2010: 
Net interest: 1.4; 
Social Security: 4.8; 
Medicare & Medicaid: 5; 
All other spending: 12.6; 
Revenue: 14.9. 

2020: 
Net interest: 4.4; 
Social Security: 5.2; 
Medicare & Medicaid: 6.7; 
All other spending: 10.7; 
Revenue: 18.3. 

2030: 
Net interest: 7.8; 
Social Security: 6; 
Medicare & Medicaid: 8.6; 
All other spending: 10.8; 
Revenue: 18. 

2040: 
Net interest: 12.5; 
Social Security: 6.2; 
Medicare & Medicaid: 10.4;  
All other spending: 10.8; 
Revenue: 18. 

Source: GAO. 

Note: Data are from GAO’s January 2011 simulations based on the 
Trustees' assumptions for Social Security and Medicare. 

[A] This also includes spending for insurance exchange subsidies and 
CHIP. 

[End of figure] 

Figure: State and Local Operating Balance Measure, as a Percentage of 
Gross Domestic Product: 

[Refer to PDF for image: multiple line graph] 

Year: 2005: 
Percentage of GDP: 0.1. 

Year: 2006: 
Percentage of GDP: 0.3. 

Year: 2007: 
Percentage of GDP: 0.1. 

Year: 2008: 
Percentage of GDP: -0.4. 

Year: 2009: 
Percentage of GDP: 0. 

Year: 2010: 
Percentage of GDP: 0. 

Year: 2011: 
Percentage of GDP: -0.4. 

Year: 2012: 
Percentage of GDP: -0.7. 

Year: 2013: 
Percentage of GDP: -0.9. 

Year: 2014: 
Percentage of GDP: -1. 

Year: 2015: 
Percentage of GDP: -1.1. 

Year: 2016: 
Percentage of GDP: -1.2. 

Year: 2017: 
Percentage of GDP: -1.3. 

Year: 2018: 
Percentage of GDP: -1.4. 

Year: 2019: 
Percentage of GDP: -1.5. 

Year: 2020: 
Percentage of GDP: -1.6. 

Year: 2021: 
Percentage of GDP: -1.7. 

Year: 2022: 
Percentage of GDP: -1.8. 

Year: 2023: 
Percentage of GDP: -1.7. 

Year: 2024: 
Percentage of GDP: -1.8. 

Year: 2025: 
Percentage of GDP: -1.9. 

Year: 2026: 
Percentage of GDP: -1.9. 

Year: 2027: 
Percentage of GDP: -1.9. 

Year: 2028: 
Percentage of GDP: -2. 

Year: 2029: 
Percentage of GDP: -2.1. 

Year: 2030: 
Percentage of GDP: -2.1. 

Year: 2031: 
Percentage of GDP: -2.2. 

Year: 2032: 
Percentage of GDP: -2.2. 

Year: 2033: 
Percentage of GDP: -2.2. 

Year: 2034: 
Percentage of GDP: -2.3. 

Year: 2035: 
Percentage of GDP: -2.3. 

Year: 2036: 
Percentage of GDP: -2.4. 

Year: 2037: 
Percentage of GDP: -2.5. 

Year: 2038: 
Percentage of GDP: -2.5. 

Year: 2039: 
Percentage of GDP: -2.6. 

Year: 2040: 
Percentage of GDP: -2.6. 

Year: 2041: 
Percentage of GDP: -2.7. 

Year: 2042: 
Percentage of GDP: -2.7. 

Year: 2043: 
Percentage of GDP: -2.7. 

Year: 2044: 
Percentage of GDP: -2.8. 

Year: 2045: 
Percentage of GDP: -2.8. 

Year: 2046: 
Percentage of GDP: -2.9. 

Year: 2047: 
Percentage of GDP: -3. 

Year: 2048: 
Percentage of GDP: -3. 

Year: 2049: 
Percentage of GDP: -3. 

Year: 2050: 
Percentage of GDP: -3. 

Year: 2051: 
Percentage of GDP: -3.1. 

Year: 2052: 
Percentage of GDP: -3.2. 

Year: 2053: 
Percentage of GDP: -3.2. 

Year: 2054: 
Percentage of GDP: -3.2. 

Year: 2055: 
Percentage of GDP: -3.3. 

Year: 2056: 
Percentage of GDP: -3.3. 

Year: 2057: 
Percentage of GDP: -3.3. 

Year: 2058: 
Percentage of GDP: -3.4. 

Year: 2059: 
Percentage of GDP: -3.4. 

Year: 2060: 
Percentage of GDP: -3.4. 

Source: GAO simulations, updated April 2011. 

Note: Historical data are from the Bureau of Economic Analysis's 
National Income and Product Accounts from 1980 to 2009. Data in 2010 
are GAO estimates aligned with published data where available. GAO 
simulations are from 2011 to 2060, using many Congressional Budget 
Office projections and assumptions, particularly for the next 10 
years. Simulations are based on current policy. 

[End of figure] 

Related GAO work: 

* Conducting work to assess duplication and overlap among federal 
programs and agencies. 

* Identifying elements to help address the nation's financial 
challenges including Social Security, tax reform, retirement, and 
disability programs; opportunities to reduce spending; and reducing the 
gap between taxes owed and taxes collected. 

* Performing financial statement audits (IRS, Schedule of Federal Debt, 
FDIC, FHA, Consolidated Financial Statements, SEC). 

* Performing long-term fiscal simulations and analyses of federal 
deficits, federal debt levels, and the state and local sector. 

* Identifying and recommending solutions to reduce the risk of waste, 
fraud, and abuse and improper payments. 

GAO Reporting on Overlap, Fragmentation and Duplication in Federal 
Programs: 

* Section 21 of P.L. 111-139, enacted in February 2010, 14 required 
that the Comptroller General: 

- conduct routine investigations to identify programs, agencies, 
offices, and initiatives with duplicative goals and activities within 
Departments and government-wide, and: 

- report annually to Congress on the findings, including the cost of 
such duplication and with recommendations for consolidation and 
elimination to reduce duplication. 

Summary of 2011 report (GAO-11-318SP): 

* 34 areas where agencies, offices, or initiatives have similar or 
overlapping objectives or provide similar services to the same 
populations; or where government missions are fragmented across 
multiple agencies or programs. 

* 47 additional areas describing other opportunities for agencies or 
Congress to consider taking action that could either reduce the cost 
of government operations or enhance revenue collections for the 
Treasury. 

* Depending on the extent of actions taken, these savings and revenues 
could collectively result in tens of billions of dollars in annual 
savings. 

Examples of GAO duplication and cost saving or revenue enhancement 
issues: 

Duplication, Overlap, or Fragmentation: 

* DOD's military medical command structures. 

* Fragmented food safety system. 

* Multiple employment and training programs. 

* Fragmented economic development programs. 

* Fragmented federal approach to surface transportation. 

* Federal data centers. 

* Ethanol. 

Cost Saving or Revenue Enhancement: 

* Promoting competition in federal contracts. 

* Better targeting of Medicaid and Medicare improper payments. 

* Multiple opportunities to address tax expenditures and tax gap. 

Results of the FY 2010 Financial Audits: 

* 20 of 24 CFO Act Agencies received unqualified audit opinions on 
their accrual-based financial statements. (Only 6 did in 1996.) 

* Three major impediments continue to prevent GAO from rendering an 
opinion on the U.S. government's accrual-based consolidated financial 
statements: 

- Financial management problems at the Department of Defense (DOD). 

- Inability to adequately account for and reconcile intragovernmental 
activity and balances between federal entities. 

- Ineffective process for preparing the consolidated financial 
statements. 

U.S. Government's Consolidated Financial Statements - Getting to a 
Clean Opinion: 

Department of Defense (DOD): 

* Several entities have received a clean opinion: 

- U.S. Army Corp of Engineers, Defense Finance and Accounting Service, 
Defense Commissary Agency, Defense Contract Audit Agency, Military 
Retirement Fund. 

* U.S. Marine Corps working toward an auditable Statement of Budgetary 
Resources as a first step. Lessons learned may pave the way for other 
military services. 

* DOD focus on improving business systems, ensuring reliability of 
budget information, and existence and completeness of all mission-
critical assets 

* Financial Improvement and Audit Readiness plan defines path for DOD's 
plans to achieve auditability by 2017. 

Increases in Improper Payment Estimates: 

* Improper payment estimated amounts have been steadily rising over the 
years, primarily due to expansion in the number of programs being 
measured. 

* However, the fiscal year 2010 increase in the estimates was primarily 
related to an increase in reported outlays and, for the Unemployment 
Insurance and Earned Income Tax Credit programs, increases in reported 
error rates. 

* The fiscal year 2010 $125.4 billion improper payment estimate rose 
$16.2 billion from the prior year estimate of $109.2 billion. 

Figure: Fiscal Year 2010 Improper Payment Estimates by Program: 

[Refer to PDF for image: vertical bar graph] 

10 programs account for 94 percent of the fiscal year 2010 $125.4 
billion estimate. 

Program: Medicare Fee-for-Service: 
Improper payment estimate: $34.3 billion. 

Program: Medicaid (S); 
Improper payment estimate: $22.5 billion. 

Program: Unemployment Insurance (S); 
Improper payment estimate: $17.5 billion. 

Program: Earned Income Tax Credit; 
Improper payment estimate: $16.9 billion. 

Program: Medicare Advantage; 
Improper payment estimate: $13.6 billion. 

Program: Supplemental Security Income Program; 
Improper payment estimate: $4.8 billion. 

Program: Old Age and Survivor's Insurance; 
Improper payment estimate: $3.2 billion. 

Program: Supplement Nutrition Assistance Program (S); 
Improper payment estimate: $2.2 billion. 

Program: National School Lunch Program (S); 
Improper payment estimate: $1.5 billion. 

Program: Federal Student Aid--Pell Grants; 
Improper payment estimate: $1.0 billion. 

Program: Other; 
Improper payment estimate: $7.9 billion. 

(S)—State Administered Program. 

Source: GAO analysis. 

[End of figure] 

Improper Payments Elimination and Recovery Act of 2010: 

* In July 2010, the President set goals under the Accountable 
Government Initiative which include (1) reducing overall improper 
payments by $50 billion by fiscal year 2012 and (2) recapturing at 
least $2 billion in actual improper payments by fiscal year 2012. 

* On July 22, 2010, the Improper Payments Elimination and Recovery Act 
(IPERA) was enacted. 

* IPERA establishes additional requirements related to (1) manager 
accountability, (2) recovery auditing, (3) compliance and noncompliance 
determinations and reporting, and (4) an opinion on internal controls 
over improper payments. 

* IPERA requirements related to agencies' improper payment estimating 
and reporting, manager accountability, recovery auditing, and 
compliance determinations and reporting, became effective for fiscal 
year 2011 under OMB's April 14, 2011, implementing guidance. 

* OMB expects to issue guidance related to providing an opinion on 
internal controls over improper payments in the future. 

Challenges to a More Comprehensive Picture of Improper Payments: 

* Full extent of improper payments is still unknown 22 because some 
agencies have not yet reported estimates for all risk-susceptible 
programs. 

* Categories of improper payments and the root causes are not 
consistently identified in programs' improper payment estimates or 
included in aggregate estimates. 

* Corrective actions are unique to specific entities and programs 
across the federal government. 

* Need to increase the use of technology and tools to prevent, reduce, 
and recover improper payments. 

Trend 3: Economic Recovery and Restored Growth: 

* Different scenarios for economic recovery. 

* Replacement of lost jobs. 

* Role of consumers. 

* Housing and commercial real estate. 

* The timing of fiscal & monetary support. 

* Managing concerns about inflation. 

Related GAO work: 

* Assessing the effectiveness of financial and regulatory reform 
efforts and plans to ensure the stability of the overall banking, 
housing, and financial markets. 

* Monitoring and evaluating various federal assistance programs 
designed stabilize U.S. financial markets and boost the economy, 
including investments in infrastructure and job expansion. 

* Continuing to perform our responsibilities under the Recovery Act. 

* Providing analysis on the functioning of the mortgage market and the 
ultimate disposition of Fannie Mae and Freddie Mac. 

* Monitoring services to assist job seekers and supports for low-income 
families. 

Trend 4: The Changing Dynamics of Global Interdependence: 

Figure: International Reserves in Developing & Emerging Economies Have 
Increased More Than Twelvefold: 

[Refer to PDF for image: multiple line graph] 

Dollars in trillions: 
  
Year: 1990; 
Emerging and Developing Economies: $0.36; 
Advanced Economies: $0.63; 
World: $0.99. 

Year: 1991; 
Emerging and Developing Economies: $0.27; 
Advanced Economies: $0.78; 
World: $1.05. 

Year: 1992; 
Emerging and Developing Economies: $0.28; 
Advanced Economies: $0.77; 
World: $1.05. 

Year: 1993; 
Emerging and Developing Economies: $0.34; 
Advanced Economies: $0.81; 
World: $1.15. 

Year: 1994; 
Emerging and Developing Economies: $0.40; 
Advanced Economies: $0.91; 
World: $1.31. 

Year: 1995; 
Emerging and Developing Economies: $0.50; 
Advanced Economies: $1.03; 
World: $1.53. 

Year: 1996; 
Emerging and Developing Economies: $0.59; 
Advanced Economies: $1.11; 
World: $1.70. 

Year: 1997; 
Emerging and Developing Economies: $0.65; 
Advanced Economies: $1.11; 
World: $1.76. 

Year: 1998; 
Emerging and Developing Economies: $0.66; 
Advanced Economies: $1.15; 
World: $1.81. 

Year: 1999; 
Emerging and Developing Economies: $0.70; 
Advanced Economies: $1.23; 
World: $1.93. 

Year: 2000; 
Emerging and Developing Economies: $0.76; 
Advanced Economies: $1.31; 
World: $2.07. 

Year: 2001; 
Emerging and Developing Economies: $0.85; 
Advanced Economies: $1.35; 
World: $2.19. 

Year: 2002; 
Emerging and Developing Economies: $1.02; 
Advanced Economies: $1.55; 
World: $2.57. 

Year: 2003; 
Emerging and Developing Economies: $1.32; 
Advanced Economies: $1.88; 
World: $3.21. 

Year: 2004; 
Emerging and Developing Economies: $1.75; 
Advanced Economies: $2.18; 
World: $3.92. 

Year: 2005; 
Emerging and Developing Economies: $2.16; 
Advanced Economies: $2.13; 
World: $4.29. 

Year: 2006; 
Emerging and Developing Economies: $2.85; 
Advanced Economies: $2.30; 
World: $5.14. 

Year: 2007; 
Emerging and Developing Economies: $4.04; 
Advanced Economies: $2.47; 
World: $6.52. 

Year: 2008;
Emerging and Developing Economies: $4.50; 
Advanced Economies: $2.54; 
World: $7.03. 

Source: GAO analysis of International Monetary Fund data. 

[End of figure] 

Related GAO work: 

* Understanding the effects of a global supplier base on U.S. national 
security interests and evaluating the effectiveness of programs to 
protect critical technologies. 

* Evaluating efforts to ensure a safe food supply. 

* Evaluating the effectiveness of federal programs to prevent, prepare 
for, and respond to public health emergencies. 

* Evaluating the effectiveness of international food security and food 
aid delivery. 

* Assessing U.S. export promotion programs and other trade-related jobs 
creation efforts. 

* Analyzing energy market regulation, competition, and information. 

Trend 5: Advances in Science and Technology: 

* Nanotechnology. 

* Biomedical technology. 

* Information technology. 

- Quantum computing. 

- Cloud computing. 

- Virtualization technologies. 

- Health IT. 

Figure: China Has Caught Up to the United States in Terms of the 
Number of Scientific Researchers Full-time equivalents: 

[Refer to PDF for image: multiple line graph] 

Full-time equivalents (in thousands): 

Year: 1995; 
Russia: 8; 
Taiwan: No data; 
Singapore: 610; 
China: 522; 
South Korea: 100; 
Japan: 673; 
European Union: 964; 
United States: 1036. 

Year: 1996; 
Russia: 9; 
Taiwan: 46; 
Singapore: 562; 
China: 548; 
South Korea: 99; 
Japan: 617; 
European Union: 960; 
United States: 1098. 

Year: 1997; 
Russia: 10; 
Taiwan: 48; 
Singapore: 533; 
China: 589; 
South Korea: 103; 
Japan: 625; 
European Union: 956; 
United States: 1160. 

Year: 1998; 
Russia: 11; 
Taiwan: 54; 
Singapore: 493; 
China: 486; 
South Korea: 93; 
Japan: 653; 
European Union: 994; 
United States: 1210. 

Year: 1999; 
Russia: 13; 
Taiwan: 55; 
Singapore: 497; 
China: 531; 
South Korea: 100; 
Japan: 659; 
European Union: 1036; 
United States: 1261. 

Year: 2000; 
Russia: 17; 
Taiwan: 56; 
Singapore: 506; 
China: 695; 
South Korea: 108; 
Japan: 648; 
European Union: 1079; 
United States: 1289. 

Year: 2001; 
Russia: 17; 
Taiwan: 60; 
Singapore: 506; 
China: 743; 
South Korea: 136; 
Japan: 676; 
European Union: 1116; 
United States: 1320. 

Year: 2002; 
Russia: 18; 
Taiwan: 70; 
Singapore: 492; 
China: 811; 
South Korea: 142; 
Japan: 647; 
European Union: 1174; 
United States: 1343. 

Year: 2003; 
Russia: 20; 
Taiwan: 75; 
Singapore: 488; 
China: 862; 
South Korea: 151; 
Japan: 675; 
European Union: 1206; 
United States: 1431. 

Year: 2004; 
Russia: 21; 
Taiwan: 81; 
Singapore: 478; 
China: 926; 
South Korea: 156; 
Japan: 677; 
European Union: 1239; 
United States: 1394. 

Year: 2005; 
Russia: 24; 
Taiwan: 89; 
Singapore: 465; 
China: 1119; 
South Korea: 180; 
Japan: 705; 
European Union: 1292; 
United States: 1388. 

Year: 2006; 
Russia: 25; 
Taiwan: 95; 
Singapore: 464; 
China: 1224; 
South Korea: 200; 
Japan: 710; 
European Union: 1342; 
United States: 1426. 

Year: 2007; 
Russia: 27; 
Taiwan: 104; 
Singapore: 469; 
China: 1423; 
South Korea: 222; 
Japan: 710; 
European Union: 1360; 
United States: 1442. 

Source: National Science Board. 

Note: 2007 data for United States are estimated based on annual growth 
rate between 1995 and 2006. 

[End of figure] 

Related GAO work: 

* Performing specialized studies and technology assessments of a wide 
range of science and technology issues, such as climate change, 
biotechnology, border security, the challenges of developing 
sophisticated space and defense systems, and renewable and sustainable 
energy. 

* Reviewing the effectiveness of computer and network security at 
federal agencies to better ensure the protection of government and 
personal information. 

* Assessing the government's planning, implementation, and use of IT. 

* Assessing the management and results of the federal investment in 
science and technology and the effectiveness of efforts to protect 
intellectual property. 

* Reviewing federal efforts to turn around low-performing schools and 
serve special populations. 

Trend 6: Increasing Impact of Networks and Virtualization: 

* Less-expensive technology that is increasingly more powerful. 

* Greater prevalence of wireless networks. 

* More powerful portable devices. 

* Increased collaboration and sharing at home, in school, and at work. 

* Consumers are becoming content creators. 

* Location and time independence (telework, virtual meetings). 

Related GAO work: 

* Assessing federal efforts to promote affordable access to telephone 
and broadband Internet services, including cloud computing. 

* Reviewing the management of government telecommunications and 
interconnected systems and federal agencies' effectiveness in providing 
secure, reliable, and fast Internet and Web connections. 

* Assessing DOD and DHS's efforts to enhance the resiliency of critical 
national assets, networks, and systems. 

* Analyzing and supporting efforts to improve the federal workforce 
infrastructure. 

Trend 7: Shifting Roles in Government and Governance: 

* Evolving roles for the public, private, and NGO sectors. 

* Contracting. 

* State and local government. 

• Non-profit and non-governmental organizations. 

Related GAO work: 

* Focusing on major areas that are at high-risk, including the U.S. 
Postal Service's financial condition, and on implementation of 
Government Performance and Results Act (GPRA) Modernization Act of 
2010. 

* Assessing the government's strategy for managing its reliance on 
contractors to ensure that agencies determine the right mix of as well 
as proper roles and responsibilities for government and contractor 
employees. 

* Identifying ways to improve the acquisition of goods and services by 
federal agencies. 

* Identifying opportunities to improve the coordination, collaboration, 
and governance of networks of governmental and nongovernmental 
organizations to address complex national issues. 

GPRA Modernization Act Goals: 

* Adopting a more coordinated and crosscutting approach to achieving 
common goals. 

* Addressing weaknesses in major management functions. 

* Ensuring performance information is both useful and used in decision 
making. 

* Instilling sustained leadership commitment and accountability for 
achieving results. 

* Engaging Congress in identifying management and performance issues to 
address. 

Coordinated and Crosscutting Approaches to Achieve Common Goals: 

* The act requires OMB, in coordination with 35 agencies, to: 

- Develop long-term, outcome-oriented goals for a limited number of 
crosscutting policy areas. 

- Provide information annually on how these crosscutting goals will be 
achieved. 

* Effective implementation of these requirements could help inform 
reexamination or restructuring efforts. 

Addressing Weaknesses in Major Management Functions:  

* Agencies need more effective management capabilities 36 to better 
implement programs and policies. 

* GPRA Modernization Act requires OMB to develop goals to improve 
management functions across the government, including in the following 
areas: 

- Financial management. 

- Human capital. 

- Information technology. 

- Procurement and acquisition. 

- Real property. 

Trend 8: Demographic and Societal Changes Confronting Young and Old: 

Figure: Fewer Workers Will Be Supporting Each Retiree: 

[Refer to PDF for image: line graph] 
 
Year: 1960; 
Covered workers per OASDI beneficiary (percentage), Historical: 5.1. 
 
Year: 1970; 
Covered workers per OASDI beneficiary (percentage), Historical: 3.7. 
 
Year: 1980; 
Covered workers per OASDI beneficiary (percentage), Historical: 3.2. 

Year: 1990; 
Covered workers per OASDI beneficiary (percentage), Historical: 3.4. 

Year: 2000; 
Covered workers per OASDI beneficiary (percentage), Historical: 3.4 

Year: 2010; 
Covered workers per OASDI beneficiary (percentage), Estimated: 3.0. 

Year: 2020; 
Covered workers per OASDI beneficiary (percentage), Estimated: 2.4. 

Year: 2030; 
Covered workers per OASDI beneficiary (percentage), Estimated: 2.2. 

Year: 2040; 
Covered workers per OASDI beneficiary (percentage), Estimated: 2.1. 

Year: 2050; 
Covered workers per OASDI beneficiary (percentage), Estimated: 2.1. 

Year: 2060; 
Covered workers per OASDI beneficiary (percentage), Estimated: 2.1. 

Year: 2070; 
Covered workers per OASDI beneficiary (percentage), Estimated: 2.0. 

Year: 2080; 
Covered workers per OASDI beneficiary (percentage), Estimated: 2.0. 

Year: 2085; 
Covered workers per OASDI beneficiary (percentage), Estimated: 1.9. 

Source: Social Security and Medicare Boards of Trustees. 

[End of figure] 

Related GAO work: 

* Supporting health care financing and reform efforts through analyses 
of Medicare, Medicaid, and other health programs. 

* Assessing policy and administrative challenges to the federal 
government in providing for Americans' financial security in 
retirement, as well as options and strategies to help individuals 
ensure retirement security for themselves and their families. 

* Assessing financial and administrative challenges to providing 
employer-sponsored pensions and retaining older Americans in the 
workforce, and their implications for retirement security. 

* Evaluating the federal government's efforts to assist communities 
with combating crime and to safely and effectively manage a growing 
federal prison population. 

[End of section] 

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[End of presentation]