Results-Oriented Government: Shaping the Government to Meet 21st Century Challenges

Published by the Government Accountability Office on 2003-09-17.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                United States General Accounting Office

GAO                             Testimony
                                Before the Subcommittee on Civil Service and Agency
                                Organization, Committee on Government Reform,
                                House of Representatives

For Release on Delivery
Expected at 2:00 p.m. EDT
Wednesday, September 17, 2003
                                Shaping the Government to
                                Meet 21st Century
                                Statement of David M. Walker
                                Comptroller General of the United States

                                                September 17, 2003

                                                RESULTS-ORIENTED GOVERNMENT

                                                Shaping the Government to Meet 21st
Highlights of GAO-03-1168T, a report to         Century Challenges
the Subcommittee on Civil Service and
Agency Organization, Committee on
Government Reform, House of

GAO has sought to assist the                    Through normal evolution and inertia over the years, the United States now
Congress and the executive branch
in considering the actions needed
                                                has a government that is weighed down by organizations with significant
to support the transition to a more             performance and management problems as well as duplicative and
high-performing, results-oriented,              overlapping missions and functions. This situation is exacerbated by ways
and accountable federal                         of doing business that, in some cases, are better suited for the beginning of
                                                      th                      st
government. At the                              the 20 century than the 21 century. Given the changed circumstances and
Subcommittee’s request, GAO                     stark fiscal realities, the nation simply cannot afford unnecessary,
provided perspectives on the                    redundant, or inefficient organizations, programs, or operations.
federal government’s overall
structure and the need for                      Periodic reexamination and reevaluation of federal agencies’ activities have
reorganization to improve                       never been more important than they are today. The federal government
performance.                                    must address and adapt to major trends in the nation and around the world.
                                                At the same time, our nation faces serious, long-term fiscal challenges.
                                                Fundamental reexamination of federal agencies’ roles, functions, and
We did not make recommendations                 structure is never easy. Reorganizing government can be an immensely
in this testimony. However, we                  complex and politically charged activity. Those who would reorganize
suggested a range of options that               government must make their rationale clear and build a consensus for
the Congress could use to eliminate             change if proposed reorganizations are to succeed. All key players must be
redundancy and improve federal                  involved in the process—the Congress, the President, affected executive
operations to meet the challenges               branch agencies, their employees and unions, and other interested parties,
the federal government faces at the             including the public.
beginning of the 21st century.
                                                Regardless of the number and nature of federal entities, the government’s
                                                goal should be to create high-performing organizations. The federal
                                                government needs to look not only at what business it is in, but how it does
                                                business. Practices that were good 50 years ago may not make sense today.
                                                Old, outdated practices and systems result in inefficiency and waste of
                                                resources that the nation cannot afford. Management reform will be vitally
                                                important to agencies in transforming their cultures to address the changing
                                                role of the government in the 21 century.

                                                Strategic human capital management should be a centerpiece of any serious
                                                change management initiative or any effort to transform the cultures of
                                                government agencies. It is a vital element to the success of any government
                                                restructuring efforts, whether within an existing agency or across current
                                                agency boundaries. People are an agency’s most important organizational
                                                asset. An organization’s people define its character, affect its capacity to
                                                perform, and represent the knowledge base of the organization.


To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Patricia A.
Dalton at (202) 512-6737 or
Chairwoman Davis and Members of the Subcommittee:

I appreciate the opportunity to address this vital topic: how can the federal
government meet the large and emerging challenges it faces and become
more effective?

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 future. A number of
overarching trends, such as diffuse security threats and homeland security
needs, increasing global interdependency, the shift to knowledge-based
economies, and the looming fiscal challenges facing our nation drive the
need to reconsider the role of the federal government in the 21st century,
how the government should do business (including how it should be
structured), and in some instances who should do the government’s
business. The proposed Government Accountability and Streamlining Act
of 2003 (H.R. 2743), introduced by Chairwoman Davis, recognizes the need
to address these critical issues.

The challenges we face are significant and require action by a variety of
parties. Through normal evolution and inertia over the years, we now have
a government that is weighed down by organizations with significant
performance and management problems as well as duplicative and
overlapping missions and functions. This situation is exacerbated by ways
of doing business that, in some cases, are better suited for the beginning of
the 20th century than the 21st century. Given the changed circumstances
and stark fiscal realities, we simply cannot afford unnecessary, redundant,
or inefficient organizations, programs, or operations.

We need to begin by reexamining the base of government programs,
policies, and operations to make government more effective and relevant
to a changing society—a government that is as free as possible of
outmoded commitments and operations. This is true for at least two
reasons. First, as I will discuss briefly, known demographic and health care
cost trends drive a fiscal future that is—absent significant changes—clearly
unsustainable. Second—and this will be the main focus of this testimony—
whatever role the American people choose for the federal government, its
activities should be conducted in the most effective manner possible.

We now have both an opportunity and an obligation to take a look at what
the government should be doing and how it should go about doing its work.
Based on GAO’s recent experiences with restructuring, such a fundamental

Page 1                                                           GAO-03-1168T
                     reexamination of government missions, functions, and activities could
                     improve government effectiveness and efficiency and enhance
                     accountability by reducing the number of entities managed, thereby
                     broadening spans of control, reducing unnecessary overhead, increasing
                     flexibility, and fully integrating—rather than merely coordinating—related
                     government activities.

                     GAO has sought to assist the Congress and the executive branch in
                     considering the actions needed to support the transition to a more high-
                     performing, results-oriented, and accountable federal government. We
                     believe that it is crucial for both the Congress and the executive branch to
                     work together constructively and on a bipartisan basis in addressing a
                     range of “good government” issues.

                     My statement today will focus on six points:

                     • the impact of current trends and increasing fiscal challenges,

                     • the need to reexamine how departments and agencies are managing
                       their programs and organizations,

                     • the need to reassess how federal agencies do business,

                     • the importance of strategic human capital management,

                     • GAO as an example of positive change, and

                     • options for strengthening congressional oversight.

                     This testimony draws upon our wide-ranging, ongoing, and completed
                     work on government transformation, organization, management, human
                     capital, and budget issues. We conducted our work in accordance with
                     generally accepted government auditing standards.

Impact of Emerging   Periodic reexamination and reevaluation of federal agencies’ activities has
                     never been more important than it is today. The federal government must
Trends and Fiscal    address and adapt to major trends in our country and around the world. At
Challenges           the same time, our nation faces a serious, long-term fiscal challenge.
                     Increased pressure also comes from world events: both from the
                     recognition that we cannot consider ourselves “safe” between two
                     oceans—which has increased demands for spending on homeland

                     Page 2                                                          GAO-03-1168T
security—and from the U.S. role in combating terrorism and an
increasingly interdependent world.

Our country’s transition into the 21st century is characterized by a number
of key trends, including:

• the national and global response to terrorism and other threats to our
  personal and national security;

• the increasing interdependence of enterprises, economies, markets, civil
  societies, and national governments, commonly referred to as

• the shift to market-oriented, knowledge-based economies;

• an aging and more diverse U.S. population;

• rapid advances in science and technology and the opportunities and
  challenges created by these changes;

• challenges and opportunities to maintain and improve the quality of life
  for the nation, communities, families, and individuals; and

• the changing and increasingly diverse nature of governance structures
  and tools.

As the nation and government policymakers grapple with the challenges
presented by these evolving trends, they do so in the context of rapidly
building fiscal pressures. GAO’s long-range budget simulations show that
this nation faces a large and growing structural deficit due primarily to
known demographic trends and rising health care costs. The fiscal
pressures created by the retirement of the baby boom generation and rising
health costs threaten to overwhelm the nation’s fiscal future. As figure 1
shows, by 2040, absent reform or other major tax or spending policy
changes, projected federal revenues will likely be insufficient to pay more
than interest on publicly held debt. Further, our recent shift from surpluses
to deficits means the nation is moving into the future in a weaker fiscal

Page 3                                                           GAO-03-1168T
Figure 1: Composition of Spending as a Share of GDP Assuming Discretionary
Spending Grows with GDP after 2003 and All Expiring Tax Provisions Are Extended
 50 Percentage of GDP





              2003                     2015              2030                    2040
      Fiscal year

               Net interest

               Social Security

               Medicare and Medicaid

               All other spending

Source: GAO.

Notes: Although all expiring tax cuts are extended, revenue as a share of gross domestic product
(GDP) increases through 2013 due to (1) real bracket creep, (2) more taxpayers becoming subject to
the Alternative Minimum Tax, and (3) increased revenue from tax-deferred retirement accounts. After
2013, revenue as a share of GDP is held constant. This simulation assumes that currently scheduled
Social Security benefits are paid in full throughout the simulation period.

The United States has had a long-range budget deficit problem for a
number of years, even during recent years in which we had significant
annual budget surpluses. Unfortunately, the days of surpluses are gone, and
our current and projected budget situation has worsened significantly. The
bottom line is that our projected budget deficits are not manageable
without significant changes in “status quo” programs, policies, processes,
and operations.

Doing nothing is simply not an option nor will marginal efforts be enough.
Tough, difficult choices will have to be made. Clearly, the federal
government must start to exercise more fiscal discipline on both the
spending side and the tax side. While many spending increases and tax cuts

Page 4                                                                              GAO-03-1168T
                        may be popular, they may not all be prudent. However, there is not a single
                        solution to the problems we face, but a number of solutions are needed.
                        And, it will take the combined efforts of many parties over an extended
                        period to address these fiscal challenges successfully.

                        One needed improvement is streamlining and simplifying the federal
                        government’s organizational structure to make it more economical,
                        efficient, effective, flexible, responsive, and accountable. This includes
                        addressing both fragmentation of effort and duplicative, overlapping, and
                        conflicting government programs, policies, and operations. We need
                        governmental organizations that embrace modern management practices
                        of the 21st century, including a strategic human capital management
                        approach. Streamlining the federal government to eliminate unnecessary
                        redundancy and inefficient operations will help address our growing fiscal
                        problems. It will not by itself solve the problem, but it certainly will help.

Need to Reexamine       It is important to reexamine periodically whether current programs and
                        activities remain relevant, appropriate, and effective in delivering the
How Departments and     government that Americans want, need, and can afford. This includes
Agencies Are Managing   assessing the sustainability of the programs over time as well as the
                        effectiveness of a range of tools—such as grants, loan guarantees, tax
Their Programs and      incentives, regulation, and enforcement—that are used to achieve results.
Organizations           Many federal programs—their goals, organizations, processes, and
                        infrastructures—were designed years ago to meet the demands as
                        determined at that time and within the technological capabilities of earlier
                        eras. We currently have 15 departments and numerous independent
                        agencies. The recent report of the Volcker Commission found that “fifty
                        years have passed since the last comprehensive reorganization of the
                        government” and that “the relationship of the federal government to the
                        citizens it services became vastly broader and deeper with each passing
                        decade.” The commission recommended a fundamental reorganization of
                        the federal government into a limited number of mission-related executive
                        departments to improve its capacity to design and implement public policy.
                        I believe that GAO’s past and present work supports the validity of this
                        finding. As a result, we should begin to take the steps necessary to make
                        this recommendation a reality. This hearing is one step toward doing so.

                        I believe that a number of events over the last few years, combined with a
                        greater understanding of broad trends, have fostered growing recognition
                        that fundamental change is necessary. This presents the Congress and the
                        executive branch with an opportunity to create highly effective,

                        Page 5                                                            GAO-03-1168T
performance-based organizations that can strengthen the nation’s ability to
meet the challenges of the 21st century and reach beyond our current level
of achievement. Many departments and agencies were created in a
different time and in response to problems and priorities very different
from today’s challenges. Some have achieved their one-time missions, yet
they are still in operation. Many have accumulated responsibilities beyond
their original purposes. Others have not been able to demonstrate how they
are making a difference in real and concrete terms. Still others have
overlapping or conflicting roles and responsibilities. Redundant,
unfocused, and uncoordinated programs waste scarce resources, confuse
and frustrate program customers, and limit overall program effectiveness.

Fundamental reexamination of federal agencies’ roles, functions, and
structure is never easy. Reorganizing government can be an immensely
complex and politically charged activity. Those who would reorganize
government must make their rationale clear and build a consensus for
change if proposed reorganizations are to succeed. All key players must be
involved in the process—the Congress, the President, affected executive
branch agencies, their employees and unions, and other interested parties,
including the public.

In recent years, events have driven us to reassess several major
components of government. In response to the events of September 11,
2001, the Department of Homeland Security was established. Seeing a
pressing need, the government moved expeditiously to form this new
agency and thus consolidate many disparate homeland security functions
under a single agency. However, the formation of the Department of
Homeland Security is still a work in progress. In January of this year, we
designated the implementation and transformation of the Department of
Homeland Security as high risk.1 The size and complexity of the effort and
the challenges the department inherited will require sustained attention
over time for the department to reach its full potential.

Driven in part by the events of September 11, 2001, the Federal Bureau of
Investigation (FBI) is also undergoing a major transformation, including a
multiphase reorganization, first announced in December 2001. The first
phase is designed to strengthen the FBI’s management structure, enhance
accountability, reduce executive span of control, and establish two new

U.S. General Accounting Office, Major Management Challenges and Program Risks:
Department of Homeland Security, GAO-03-102 (Washington, D.C.: January 2003).

Page 6                                                                GAO-03-1168T
divisions for Records Management and Security. The second phase is
designed to build, among other things, a national terrorism response
capability that is larger and more mobile, agile, and flexible by shifting
resources from other areas within the FBI. In June of this year, 18 months
into the effort, we reported progress in several areas but noted that major
challenges remain. These challenges included the continued need for a
comprehensive transformation plan, an updated strategic plan, and a
human capital strategic plan.2

The tragedy of Columbia has turned a spotlight on the weaknesses in the
National Aeronautics and Space Administration’s (NASA) organization and
culture. The recent report of the Columbia Accident Investigation Board
made a number of very specific recommendations related to the NASA’s
organization. NASA now must take a hard look at its organizational
structure and culture. While NASA has undertaken numerous programs
that have greatly advanced scientific and technological knowledge, the
agency is at a critical juncture, and major management improvements are
needed. Earlier this year, we outlined several major management
challenges at NASA in human capital, contract, and financial management,
some of which have existed for years.3

Improved performance has been a primary goal of several other
restructuring efforts under way. For example, the Internal Revenue Service
(IRS) is in the midst of a long-term modernization.4 In addition, the
Department of Defense (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.5

  U.S. General Accounting Office, FBI Reorganization: Progress Made in Efforts to
Transform but Major Challenges Continue, GAO-03-759T (Washington, D.C.: June 18,
  U.S. General Accounting Office, NASA: Major Management Challenges and Program
Risks, GAO-03-849T (Washington, D.C.: June 12, 2003).
 U.S. General Accounting Office, IRS Modernization: Continued Progress Necessary for
Improving Service to Taxpayers and Ensuring Compliance, GAO-03-796T (Washington,
D.C.: May 20, 2003).
 U.S. General Accounting Office, U.S. Postal Service: Key Postal Transformation Issues,
GAO-03-812T (Washington, D.C.: May 29, 2003) and U.S. General Accounting Office,
Opportunities for Oversight and Improved Use of Taxpayer Funds: Examples from
Selected GAO Work, GAO-03-1006 (Washington, D.C.: Aug. 1, 2003).

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These are some recent examples of building consensus and undertaking
restructuring to meet new or changed missions and goals. To a great extent,
these changes were driven by catastrophic events. Even with dramatic
events demonstrating the need for change, these reorganizations and
transformations will not be easy. It is likely to be even more difficult to
build consensus for reorganization and change when there is not such an
event driving it. However, current trends, poor performance, and growing
fiscal pressures demand that we make the effort. We simply cannot afford
unnecessary redundancy and inefficiency in the government, especially in
light of impending fiscal challenges and taxpayers deserve better.

GAO’s work has documented the widespread fragmentation and overlap in
both federal missions and individual federal programs. As new needs are
identified, the common response has been to add new responsibilities and
roles within federal departments and agencies, perhaps targeted to a newly
identified clientele or involving a new program delivery approach. In the
worst-case scenario, new programs are layered onto existing programs that
have failed or performed poorly. Though our work also suggests that some
issues, such as security, may warrant the involvement of multiple agencies
or more than one approach, fragmentation and overlap often adversely
affect the economy, efficiency, and effectiveness of the federal government.

Last month, we issued a report, Opportunities for Oversight and Improved
Use of Taxpayer Funds: Examples from Selected GAO Work.6 In this
report, we highlight opportunities for and specific examples of legislative
and administrative change that might yield budgetary savings. Several
examples clearly illustrate the need to take a hard look at our
organizational structures.

• The responsibilities of the four major land management agencies—the
  National Park Service, the Bureau of Land Management (BLM), the Fish
  and Wildlife Service within the Department of the Interior, and the
  Forest Service within the Department of Agriculture (USDA)—have
  grown more similar over time. Most notably, the Forest Service and BLM
  now provide more noncommodity uses, including recreation and
  protection for fish and wildlife, on their lands. In addition, managing
  federal lands has become more complex. Managers have to reconcile
  differences among a number of laws and regulations, and the authority
  for these laws is dispersed among several federal agencies as well as


Page 8                                                          GAO-03-1168T
    state and local agencies. These changes have coincided with two other
    developments—the federal government’s increased focus on downsizing
    and budget constraints and scientists’ increased understanding of the
    importance and functioning of natural systems, the boundaries of which
    may not be consistent with existing jurisdictional and administrative
    boundaries. Together, these changes and developments suggest a basis
    for reexamining the processes and structures under which the federal
    land management agencies operate.

Two basic strategies have been proposed to improve federal land
management: (1) streamlining the existing structure by coordinating and
integrating functions, systems, activities, programs, and field locations and
(2) reorganizing the structure by combining agencies. The two strategies
are not mutually exclusive. Some small steps have been taken. For
example, the Forest Service and BLM have colocated some offices or
shared space with other federal agencies. However, more needs to be done.

• In 1987, the Congress passed the Stewart B. McKinney Act (Pub. L. No.
  100-77) to address the multiple needs of homeless people. The act
  encompasses both existing and new programs. Over the years, some of
  the original McKinney programs have been consolidated or eliminated,
  and some new programs have been added. Today, homeless people
  receive assistance through these programs as well as other federal
  programs that are not authorized under the McKinney Act but are
  nevertheless specifically targeted to serve the homeless population. In
  February 1999, we reported that seven federal agencies administer 16
  programs that serve the homeless population, with the Department of
  Housing and Urban Development (HUD) responsible for most of the
  funds.7 Consolidating all of the homeless assistance programs under
  HUD could increase administrative and operational efficiencies at the
  federal level as well as reduce administrative and coordination burdens
  for state and local governments, which also face fiscal challenges.

• Each of the three military departments (Army, Navy, and Air Force)
  operates its own health care system, providing medical care to active
  duty personnel, their dependents, retirees, and survivors of military
  personnel. To a large extent, these separate, costly systems perform
  many of the same administrative, management, and operational

U.S. General Accounting Office, Homeless: Coordination and Evaluation of Programs Are
Essential, GAO/RCED-99-49 (Washington, D.C.: Feb. 26, 1999).

Page 9                                                                  GAO-03-1168T
   functions. Since 1949, numerous studies, the most recent completed in
   2001, have reviewed whether a central entity should be created within
   DOD to manage and administer the three health care systems. Most of
   these studies encouraged some form of organizational consolidation. A
   DOD health agency would consolidate the three military medical
   systems into one centrally managed system, eliminating duplicative
   administrative, management, and operational functions.

   Similarly, there are potential benefits to be achieved by greater
   coordination with the veterans health care system. In an effort to save
   federal health care dollars, the Department of Veterans Affairs (VA) and
   DOD have sought ways to work together to gain efficiencies. For
   example, some local VA and DOD facilities have entered into joint
   venture agreements, pooling resources to build a joint facility or
   capitalizing on an existing facility. To ensure maximize use of federal
   health care dollars, this area needs continued attention.

• A multitude of agencies oversee food safety, with two agencies
  accounting for most federal spending on, and regulatory responsibilities
  for, food safety. The Food Safety and Inspection Service, under USDA, is
  responsible for the safety of meat, poultry, eggs, and some egg products,
  while the Food and Drug Administration, under the Department of
  Health and Human Services, is responsible for the safety of most other

   The current food safety system emerged from a patchwork of often
   archaic laws and grew into a structure that actually hampers efforts to
   address existing and emerging food safety risks. Moreover, the current
   regulatory framework concentrates on only a segment—primarily food
   processing—of the continuum of activities that bring food from farm to
   table. The threat of deliberate contamination of the food supply and
   scientific and technical advances in the production of food, such as the
   development of genetically modified foods, have further complicated
   the responsibilities of the existing federal food safety structure. The
   food safety system suffers from overlapping and duplicative
   inspections, poor coordination, and inefficient allocation of resources.
   Consolidation of the federal food safety agencies under a single,
   independent agency or under a single department could improve both
   the efficiency and effectiveness of the system.

These examples illustrate a few of the opportunities that exist to improve
effectiveness and efficiency by reexamining the government’s

Page 10                                                        GAO-03-1168T
organizational structure. As part of this reexamination, it is important to
ask the fundamental question of whether an existing program, policy, or
activity “fits” the work we face today and will face in the future. It is
important not to accept all existing activities as givens by subjecting new
proposals to greater scrutiny than existing ones undergo. However, such a
fundamental reexamination is not easy. Success will depend on
establishing clear goals, having all the key players actively involved, and
using a process that can help build consensus.

Throughout the 20th century, efforts to structure the federal government to
address the economic and political concerns of the time met with varying
degrees of success. The first Hoover Commission,8 which lasted from 1947
through 1949, is considered by many to have been the most successful of
government restructuring efforts. The membership of the commission was
bipartisan, including members from the administration and both houses of
the Congress. Half of the members were from outside government. The
commission had a clear vision, making reorganization proposals that
promoted what it referred to as “greater rationality” in the organization and
operation of government agencies, and enhanced the President’s role as the
manager of the government—principles that were understood and
accepted by both the White House and the Congress.9 Former President
Hoover himself guided the creation of a citizens’ committee to build public
support for the commission’s work. More than 70 percent of the first
Hoover Commission’s recommendations were implemented, including 26
reorganization plans. According to the Congressional Research Service,
“the ease with which most of the reorganization plans became effective
reflected two factors: the existence of a consensus that the President ought
to be given deference and assistance by Congress in meeting his managerial
responsibilities, and the fact that most of the reorganization plans were
pretty straightforward proposals of an organizational character.”10

  The commission’s formal name was the Commission on Organization of the Executive
Branch. Its membership was as follows: Former President Herbert Hoover, Dean Acheson,
Senator George Aiken, Representative Clarence Brown, Arthur Flemming, James A.
Forrestal, Joseph P. Kennedy, Representative Carter Manasco, Senator John L. McClellan,
George Mead, James K. Pollock, and James Rowe.
 Ronald C. Moe, The Hoover Commissions Revisited (Boulder, Colo.: Westview Press,
1982), 2.
 Congressional Research Service, The President’s Reorganization Authority: Review and
Analysis (Washington, D.C.: Mar. 8, 2001).

Page 11                                                                   GAO-03-1168T
                       History teaches lessons that are applicable today. Those who would
                       reorganize government must make their rationale clear and must build a
                       consensus for change before submitting specific proposals to the Congress
                       if these efforts are to succeed. To achieve substantive changes, it is
                       important that all players, particularly the Congress and the President,
                       agree on restructuring goals and establish processes to achieve their
                       objectives that provides needed transparency. The processes used may
                       vary depending on the significance of the changes sought. However, the
                       risk of failure is high if key players are not involved and no processes for
                       reaching consensus on specific reorganization proposals submitted to the
                       Congress for consideration are in place. Both having the right processes
                       and the right players are critical to success.

                       Restructuring existing programs is part of the solution to meeting the
                       challenges faced by our government. However, those decisions are not the
                       end of the story. Restructuring is not easy and takes time to fully
                       implement, even once consensus exists on specific proposals. This is why
                       we have designated the implementation and transformation of the
                       Department of Homeland Security as high risk.11 In addition to the
                       implementation actions taken within the executive branch, congressional
                       oversight throughout the implementation will be crucial to ultimate

Need to Reassess How   Regardless of the number and nature of federal entities, the government’s
                       goal should be to create high-performing organizations. We need to look at
Federal Agencies Do    not only at what business we are in, but how we do business. Practices that
Business               were good 50 years ago may not make sense today. Old, outdated practices
                       and systems result in inefficiency and waste of resources that we cannot

                       Our work has identified opportunities to change how the government does
                       business.12 The following three examples illustrate opportunities to
                       improve business practices and to make them more efficient and effective.

                       • USDA’s meat and poultry inspection system is hampered by inflexible
                         legal requirements and relies on outdated inspection methods. Current


                       Page 12                                                         GAO-03-1168T
     law requires mandatory inspections that do not factor in risk. Inspectors
     continue to largely rely on their sense of sight, smell, and touch in
     making judgments about disease conditions, contamination, and
     sanitation. Microbial testing for such things as salmonella, listeria, and
     generic E. coli has increased but is still not sufficient. Legislative
     revisions could allow USDA to emphasize risk-based inspections. Much
     of the funding used to fulfill current, mandatory meat and poultry
     inspection activities could be redirected to support more effective food
     safety initiatives, such as increasing the frequency of inspections at
     high-risk food plants.

• Recently, GAO identified at least 21 different grant programs that can be
  used by the nation’s first responders to address homeland security
  needs.13 Multiple, fragmented grant programs can create a confusing and
  administratively burdensome process for state and local officials
  seeking to use federal resources to meet pressing homeland security
  needs. In addressing the fragmentation prompted by the current
  homeland security grant system, the Congress has taken the initial step
  of bringing many of these programs under the Department of Homeland
  Security. Additional administrative and legislative steps, such as block
  grants, waivers, performance partnerships, and grant waivers, might be
  considered. These approaches could provide state and local
  governments with increased flexibility while potentially improving
  intergovernmental efficiency and homeland security program outcomes.
  Better integration, including consolidation, of programs could yield
  administrative efficiencies that result in savings or improved
  performance. In taking any additional steps, it will be important to
  ensure accountability for both performance and funding.

• The U.S. overseas presence at more than 260 overseas posts consists of
  more than 90,000 people (including dependents of federal workers). The
  workforce has been estimated at as many as 60,000 employees,
  representing over 30 agencies. The Department of State employs about a
  third of the U.S. workforce overseas, and its embassies and consulates
  have become bases for the operations of agencies involved in hundreds
  of activities. The costs of overseas operations and related security
  requirements are directly linked to the size of the overseas workforce.
  By reducing the number of employees at posts where U.S. interests are a

 U.S. General Accounting Office, Homeland Security: Reforming Federal Grants to Better
Meet Outstanding Needs, GAO-03-1146T (Washington, D.C.: Sept. 3, 2003).

Page 13                                                                 GAO-03-1168T
       lower priority, consolidating functions, establishing regional centers, or
       relocating personnel to the United States, the costs of overseas
       operations could be significantly reduced. In August 2001, The
       President’s Management Agenda noted that the U.S. overseas presence
       is costly, increasingly complex, and of growing security concern.14 It
       concluded that the cost and security considerations demand that the
       overseas staffing process be improved.

Creating high performing organizations will require a cultural
transformation in government agencies and new ways of doing business.
Hierarchical management approaches will need to yield to partnerial
approaches. Process-oriented ways of doing business will need to yield to
results-oriented ones. “Siloed” organizations will need to become more
horizontal and integrated to make the most of the knowledge, skills, and
abilities of their people. Internally focused agencies will need to focus
externally to meet the needs and expectations of their ultimate clients—the
American people. Major programs and operations need urgent attention
and transformation to ensure that the government functions as
economically, efficiently, and effectively as possible. Management reform
will be vitally important for agencies to transform their cultures to address
the changing role of the government in the 21st century.

The key to effective public management in the 21st century is to ensure that
organizations have the characteristics and capabilities needed to
effectively influence and leverage partners, people, processes, and
technology to achieve results. As part of a continuing series of forums,
GAO will convene a forum in November that will focus specifically on the
implications of the public management environment in the 21st century for
federal agencies as they strive to become high performing organizations.
This forum is intended to help identify key characteristics and capabilities
of high-performing organizations in this environment, challenges facing
federal agencies in transitioning into high-performing organizations, and
ways in which the Congress and the executive branch can foster these
transformation efforts.


Page 14                                                              GAO-03-1168T
Importance of        Strategic human capital management should be a centerpiece of any
                     serious change management initiative or any effort to transform the
Strategic Human      cultures of government agencies. It is a vital element to the success of any
Capital Management   government restructuring efforts, whether within an existing agency or
                     across current agency boundaries. People are an agency’s most important
                     organizational asset. An organization’s people define its character, affect its
                     capacity to perform, and represent the knowledge base of the organization.
                     Human capital issues have been a focus of this Congress and certainly this
                     Subcommittee. They will require continuing attention.

                     Since 2001, we have designated human capital as a governmentwide high
                     risk. The Congress and the executive branch have taken a number of steps
                     to address the federal government’s human capital shortfalls. However,
                     serious human capital challenges continue to erode the ability of many
                     agencies, and threaten the ability of others, to perform their missions
                     economically, efficiently, and effectively. A consistent strategic approach to
                     maximize government performance and ensure its accountability is vital to
                     the success of any reorganization efforts as well as to transforming existing

                     A high-performing organization should focus on human capital. Human
                     capital approaches are aligned with accomplishing missions and goals.
                     Strategies are designed, implemented, and assessed based on their ability
                     to achieve results and contribute to an organization’s mission. Leaders and
                     managers stay alert to emerging demands and human capital challenges.
                     They reevaluate their human capital approaches through the use of valid,
                     reliable, and current data, including inventories of employee skills and
                     competencies. Recruiting, hiring, professional development, and retention
                     strategies focus on ensuring that an agency has the needed talent to meet
                     organizational goals. Individual performance is clearly linked with
                     organizational performance. Effective performance management systems
                     provide a “line of sight” showing how unit, team, and individual
                     performance can contribute to overall organizational goals.

                     The first step in meeting the government’s human capital challenges is for
                     agency leaders to identify and make use of all the appropriate
                     administrative authorities available to them to manage their people both
                     effectively and equitably. The second step is for policymakers to purse
                     incremental legislative reforms. Most recently, the Congress has been
                     considering legislative proposals for the DOD.

                     Page 15                                                            GAO-03-1168T
                       As we have previously testified, agency-specific human capital reforms
                       should be enacted to the extent that the problems being addressed and the
                       solutions offered are specific to a particular agency (e.g., military
                       personnel reforms for DOD). In addition, targeted reforms should be
                       considered in situations in which additional testing or piloting is needed for
                       fundamental governmentwide reform.

                       Moving forward, we believe it would be preferable to employ a
                       governmentwide approach to address human capital issues and the need
                       for certain flexibilities that have broad-based application and serious
                       potential implications for the civil service system, in general, and for the
                       Office of Personnel Management (OPM), in particular. Some examples, that
                       have been pursed, include broadbanding, pay for performance,
                       reemployment, and pension offset waivers. As federal agencies compete
                       for resources, it is important to maintain a level playing field among

                       However, whether through a governmentwide authority or agency-specific
                       legislation, in our view, such additional authorities should be put in
                       operation only when an agency has the institutional infrastructure in place
                       to use the new authorities effectively. This institutional infrastructure
                       includes, at a minimum, a human capital planning process that integrates
                       the agency’s human capital policies, strategies, and programs with its
                       program goals, mission, and desired outcomes; the capabilities to develop
                       and implement a new human capital system effectively; and a modern,
                       effective, and credible performance management system that includes
                       adequate safeguards, including reasonable transparency and appropriate
                       accountability mechanisms, to ensure the fair, effective, and
                       nondiscriminatory implementation of the system.

GAO as an Example of   Transforming an organization is not an easy endeavor. It requires a
                       comprehensive, strategic approach that takes leadership, time, and
Positive Change        commitment. Because GAO is the agency that reviews others, we strive to
                       lead by example. To create a model federal agency and world-class
                       professional services organization, we have undertaken a comprehensive
                       transformation effort over the past few years. Our strategic plan, which is
                       developed in consultation with the Congress, is forward-looking and built
                       on the key trends emerging at the beginning of the 21st century that were
                       discussed earlier and relate to the United States and its position in the
                       world community.

                       Page 16                                                           GAO-03-1168T
We also have restructured our organization to align with our goals,
resulting in significant consolidation—going from 35 to 13 teams,
eliminating an extra organizational layer, and reducing the number of field
offices from 16 to 11. We have become more strategic, results-oriented,
partnerial, integrated, and externally focused. Our scope of activities
includes a range of oversight-, insight-, foresight-related engagements. We
have expanded and revised our product lines to better meet client needs.
We also continue to provide certain legal and adjudicatory services, as
specified in our authorizing legislation. In addition, we have redefined
success in result-oriented terms and linked our institutional and individual
performance measures. We have strengthened our client relations and
employed a “constructive engagement approach” with the entities we
review. The impact on our results has been dramatic. Client feedback
reports show significant improvement, and results for several of our key
performance indicators have almost doubled in only 4 years.

There are four lessons to be learned from our experiences. First, one
should not minimize how challenging it is for an organization to undertake
a comprehensive transformation. Second, transformation is multifaceted
and takes time. Our transformation began in 2000 and continues to be a
work in progress. Third, transformation must be based on the best, most
up-to-date management practices to reach its full potential. Fourth,
transformation requires continual management commitment, monitoring,
and oversight. Because of the 15-year terms for comptrollers general, GAO
has the advantage of stable, long-term leadership that many other agencies
do not have. However, our approach—based on best management
practices—can serve as a guide to others.

We employed a strategic, not an incremental, approach to transforming
GAO. Our approach is based on a regularly updated 6-year strategic plan
for serving the Congress. GAO’s strategic plan, which is currently being
updated, established clear goals and objectives. Three goals aimed at
providing Congress timely, quality service to: (1) address challenges to the
well-being and financial security of the American people, (2) respond to
changing security threats and the challenges of global interdependence,
and (3) transform the federal government’s role and how it does business.
Our fourth goal is to be a model federal agency and a world-class
professional organization. Our strategic plan provides a firm foundation
from which to identify priorities and opportunities for eliminating
redundancies and improving operations. It is the basis for our workforce
planning. It also sets the stage for maximizing our effectiveness and
efficiency. Our strategic planning process provides for updates with each

Page 17                                                         GAO-03-1168T
new Congress, ongoing analysis of emerging conditions and trends,
extensive consultations with congressional clients and outside experts, and
assessments of our internal capabilities and needs.

Our strategic plan formed the basis for a major organizational realignment.
This realignment focused the organization on our goals and resulted in
significant streamlining. The process employed to accomplish the
realignment required time, energy, and commitment from GAO’s senior
leadership. Input was sought from GAO executives and employees at all
levels throughout the process. Extensive communications with GAO staff
and key congressional stakeholders were maintained on an ongoing basis.
The result has been a more agile, effective, responsive, and accountable
organization that has been able to effectively respond to the many new
challenges presented to it.

People are an organization’s most important asset. Modern, effective, and
credible human capital policies are critical to the successful functioning of
any enterprise. This has been the case at GAO. In 2000, we sought and
received certain narrowly tailored human capital authorities, including
early out and buyout authorities. We have used these authorities
responsibly to strategically reshape GAO. In addition, we have
implemented a comprehensive recruiting program, instituted a
competency-based performance management system, made significant
investments in training and staff development, and continued to refine our
staffing process to maximize resource utilization. We continually seek to
refine and improve our human capital practices. Recently, I have sought
additional flexibilities for GAO to ensure quality service to the Congress;
continue leading by example in government transformation; and continue
to attract, retain, motivate, and reward a quality and high-performing
workforce. I appreciated the support from you Chairwoman Davis and the
Subcommittee on this request.

Continual communication with GAO staff is a critical feature of our human
capital strategy. Among other things, we periodically survey staff on a wide
range of human capital and organizational issues. I am pleased to report
that the results of our latest comprehensive survey, completed last month,
continued to demonstrate remarkably positive results.

Finally, we are continually evaluating, reengineering, and refining our work
processes to reflect the best management practices to ensure the most
effective and efficient service delivery. For example, we have employed
two new management strategies within the organization—risk

Page 18                                                          GAO-03-1168T
                management and matrix management. GAO’s risk management approach
                allows management to identify and involve internal stakeholders with
                needed subject matter expertise throughout an engagement to transcend
                traditional organizational boundaries, maximize institutional value, and
                minimize related risks. GAO’s matrix management approach maximizes our
                value to the Congress by leveraging the knowledge, skills, and experience
                of all employees to ensure the highest quality products and services and to
                help the Congress address the challenging, complex, changing, and
                multidimensional problems facing the nation. As part of this effort, we
                continually strive to provide GAO’s people with necessary tools,
                technology, and training, and a world-class working environment.

                GAO’s transformation can provide lessons about what can be
                accomplished. To measure ourselves, we use a balanced scorecard,
                measuring client service, results, and employees. On all three dimensions,
                we are reporting very positive results. To illustrate, in fiscal year 2002,
                GAO’s efforts helped the Congress and government leaders achieve
                $37.7 billion in financial benefits—an $88 return on every dollar invested in
                GAO, up from $19.7 billion and $58 return in fiscal 1998. The return on the
                public’s investment in GAO extends beyond dollar savings to improvements
                in how the government serves its citizens. The results in 2002 are in part
                attributed to work we have done to transform GAO using a strategic,
                comprehensive approach.

                Similar benefits can be achieved in other governmental organizations.
                Building on GAO’s experience, a comprehensive approach grounded in a
                sound strategic plan and appropriate organizational alignment, and based
                on the best management practices, including human capital management,
                can yield optimal results in terms of effectiveness and efficiency.
                Successful transformation is not easy. It will take strong, committed, and
                persistent leadership, and it will take time. We are still working on it, but
                we are ahead of schedule and are pleased with our progress.

Options for     The challenges facing our nation are many and difficult. Clearly, there is a
                need to reexamine how the federal government is organized both in the
Strengthening   executive and legislative branches. We need to reassess how the federal
Congressional   government does business. Fundamental questions need to be asked about
                what the federal government should be doing and who should be doing it,
Oversight       given past changes and 21st century challenges. Clearly any major
                organizational change is both complex and controversial. In considering
                government restructuring and changes in business practices, it is important

                Page 19                                                           GAO-03-1168T
to focus not just on the present but on the future trends and challenges.
Identifying goals for addressing these trends and challenges can provide a
framework for achieving the needed consensus. In fact, the effects of any
changes will be felt more in the future than they are today. Because the
world is not static and never will be, it is vital to take the long view,
positioning the government to meet challenges throughout the 21st century.

There is no easy answer to the challenges federal departments and
agencies face in transforming themselves. Multiple actions are required.
This is illustrated by the examples I have provided today. As the Congress
moves forward, it will be important to keep three things in focus: goals,
players, and processes. Clear goals are essential. Defining clear goals
forces decision makers to reach a shared understanding of what really
needs to be fixed in government, what the federal role ought to be, how to
balance differing objectives, and what steps need to be taken to create not
just short-term progress but long-term success. All key players must be
engaged if viable solutions are to be achieved—this means the Congress
and the President, as well as other parties with vested interests. Excluding
key players increases the risk of failure. Finally, the process used must be
tailored to the task at hand. Straightforward changes, such as the
consolidation of agency payment operations, may call for agency-centered
processes, requiring minimal involvement by the Congress or others. Other
changes, such as revamping the U.S. food safety system, will require a
process that involves key congressional stakeholders and administration
officials as well as others, ranging from food processors to consumers.
Even more ambitious changes like reorganizing the executive branch or
rationalizing the existing federal infrastructure will likely require
commission approaches similar to the Hoover Commission that I discussed

On September 24, 2002, GAO convened a forum to identify and discuss
useful practices and lessons learned from major private and public sector
organizational mergers, acquisitions, and transformations that federal
agencies could implement to transform their cultures successfully.15 While
there is no one right way to manage a successful merger, acquisition, or
transformation, the experiences of both successful and unsuccessful

 U.S. General Accounting Office, Highlights of a GAO Forum: Mergers and
Transformation: Lessons Learned for a Department of Homeland Security and Other
Federal Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 2002), and Results-Oriented
Cultures: Implementation Steps to Assist Mergers and Organizational Transformations,
GAO-03-669 (Washington, D.C. July 2, 2003).

Page 20                                                                  GAO-03-1168T
efforts suggest that there are practices that are key to their success. These
key practices should be considered as federal agencies seek to transform
their cultures in response to governance challenges. These practices
include the following.

• Ensure that top leadership drives the transformation.

• Establish a coherent mission and integrated strategic goals to guide the

• Focus on a key set of principles and priorities at the outset of the

• Set implementation goals and a timeline to build momentum and show
  progress from day one.

• Dedicate an implementation team to manage the transformation

• Use the performance management system to define responsibility and
  ensure accountability for change.

• Establish a communication strategy to create shared expectations and
  report related progress.

• Involve employees to obtain their ideas and gain their sense of
  ownership of the transformation.

• Build a world-class organization.

Eliminating redundancy and improving federal operations are critical to
meeting the challenges we are facing at the beginning of the 21st century.
Chairwoman Davis has introduced the Government Accountability and
Streamlining Act of 2003. This bill is aimed at stopping the creation of any
additional unnecessary redundancy. As it considers this proposal, the
Congress may also want to consider other options, such as reinstituting
some form of budget controls, granting the President executive
reorganization authority, establishing special commissions, and enhancing
oversight. The Congress may want to consider giving federal department
and agencies additional tools to assist in the transformations that they
undertake, including creating chief operating officer positions in selected
departments and agencies and human capital reforms. As I have

Page 21                                                          GAO-03-1168T
emphasized, multiple approaches are needed to address not only future but
also existing redundancy and inefficiency in federal operations. Each of the
following seven tools has merit depending on the situation.

• Government Accountability and Streamlining Act of 2003. This
  proposal would require GAO to prepare statements for bills and
  resolutions reported by congressional committees and subcommittees
  on whether the responsibilities of any proposed new federal entities,
  programs, or functions are redundant. While I appreciate the respect for
  our work shown by this proposal, I also think it is important that we be
  practical in designing such a mandate. This kind of evaluation is very
  resource intensive, and there are currently no agreed-upon criteria for
  determining whether an activity is actually duplicative or redundant.
  Each year, there are hundreds of bills proposed by committees alone.
  Though not all bills would have potential redundancy implications, the
  number might be significant and could affect our other work for the
  Congress. An alternative might be to provide the Chair of the House
  Committee on Government Reform and its Senate counterpart with the
  authority to request such an evaluation for any bill before it goes to the
  floor. At a minimum, some way to limit the number of bills analyzed
  would be necessary.

• Reinstitution of budget controls. The appropriations caps and “pay-go”
  requirements—which expired in 2002—limited the expansion and
  creation of new government programs and activities. Such controls
  could be beneficial given our current and future fiscal challenges. In
  addition, the reconciliation process could be used more to force trade-
  offs as well as a reexamination of existing programs.

• Executive reorganization authority. Earlier this year, the House
  Committee on Government Reform held hearings on reinstating the
  President’s executive reorganization authority. Though a bill has not yet
  been introduced, this authority could provide a useful tool in
  reexamining the federal government’s organizational structure.
  Essentially, it would reinstate the authority of the President to submit
  government restructuring plans to the Congress and obtain expedited
  review. Such authority can better enable the President to propose
  government organization designs that would be more efficient and
  effective in meeting existing and emerging challenges. But it is
  important to achieve consensus on identified problems, needs, and
  solutions. The Congress has a vital role in this process. As I testified at
  the April 2003 hearing, some expedited congressional consideration may

Page 22                                                          GAO-03-1168T
     be appropriate for specific issues.16 However, the Congress may want to
     consider different tracks for proposals that encompass significant
     policy changes versus those that focus more narrowly on specific
     government operations.

• Special commissions. In the past, there have been special commissions
  chartered to examine and make recommendations on difficult structural
  issues. The most successful had both executive and bipartisan
  legislative branch support. For example, the first Hoover Commission
  had more than 70 percent of its recommendations implemented,
  including 26 of 35 reorganization plans. More recently, the Base
  Realignment and Closure process was used successfully to reduce
  unneeded defense assets. Provided there is a clear statement of goals
  and the process to be used, such commissions can provide an effective
  means of examining issues in depth and formulating recommendations
  for the consideration of the Congress.

• Enhanced oversight. A management and oversight process that is
  narrowly focused or one that considers only incremental changes, while
  beneficial, will not allow the government to reach its full performance
  potential. The government is composed of organizations, programs, and
  functions that are overlapping, fragmented, and interdependent.
  Structuring management and oversight only according to preexisting
  boundaries, whether they be executive departments or congressional
  committee structures, limits the full potential of any review. The
  importance of seeing the overall picture cannot be overestimated. It is
  important to be asking the right questions.

     The traditional oversight that the Congress provides to individual
     organizations, programs, and activities has an important role in
     eliminating redundancy and inefficiencies. There are important benefits
     to be achieved through focused oversight if the right questions are asked
     about program design and management. Five key questions for program
     oversight are as follows:

     • Does the program duplicate or even work at cross-purposes with
       related programs and tools?

 U.S. General Accounting Office, Executive Reauthorization Authority: Balancing
Executive and Congressional Roles in Shaping the Federal Government’s Structure, GAO-
03-624T (Washington, D.C.: Apr. 3, 2003).

Page 23                                                                GAO-03-1168T
   • Is the program targeted properly?

   • Is the program financially sustainable and are there opportunities for
     instituting appropriate cost-sharing and recovery mechanisms?

   • Can the program be made more efficient through reengineering or
     streamlining processes or restructuring organizational roles and

   • Are there clear goals, measures, and data with which to track
     progress built into its planning and reporting systems?

• Chief operating officer (COO). Transformation of a large organization
  is a difficult undertaking, especially in government. Success depends on
  committed, top-level leadership and sustained attention to management
  issues. A COO could provide the sustained management attention
  essential for addressing key infrastructure and stewardship issues and
  could facilitate the transformation process. Establishing a COO in
  selected federal agencies could provide a number of benefits. A COO
  would be the focal point for elevating attention on management issues
  and transformational change, integrating various key management and
  transformation efforts, and instituting accountability for addressing
  management issues and leading transformational change. A COO would
  provide a single organizational position for key management functions,
  such as human capital, financial management, information technology,
  acquisition management, and performance management as well as for
  transformational change initiatives. To be successful, in many cases, a
  COO will need to be among an agency’s top leadership (e.g., deputy
  secretary or under secretary). However, consistent with the desire to
  integrate responsibilities, the creation of a senior management position
  needs to be considered with careful regard to existing positions and
  responsibilities so that it does not result in unnecessary “layering” at an
  agency. Consideration also should be given to providing a term
  appointment, such as a 5—7 year term. A term appointment would
  provide sustained leadership. No matter how the positions are
  structured, it is critical that the people appointed to these positions have
  a proven track records in similar positions and be vested with sufficient
  authority to achieve results. To further clarify expectations and
  responsibilities, the COO should be subject to a clearly defined, results-
  oriented performance contract with appropriate incentives, rewards,
  and accountability mechanisms. For selected agencies, a COO should be
  subject to a Senate confirmation. In creating such a position, the

Page 24                                                           GAO-03-1168T
                        Congress might consider making certain subordinate positions, such as
                        the chief financial officer, not subject to Senate confirmation.

                     • Governmentwide human capital reforms. There are a number of
                       reforms that might be considered. As I have previously testified,
                       Congress should consider providing governmentwide authority to
                       implement broadbanding, other pay for performance systems, and other
                       authorities whereby whole agencies are allowed to use additional
                       authorities after OPM has certified that they have the institutional
                       infrastructures in place to use them effectively and fairly. In addition to
                       requiring a human capital strategic plan from each agency, the Congress
                       should establish statutory principles for standards that an agency must
                       have in place before OPM can grant additional pay flexibilities.
                       Additional efforts should be taken to move the Senior Executive Service
                       to an approach wherein pay and rewards are more closely tied to
                       performance. Further, the Congress might consider establishing a
                       governmentwide fund where agencies, based on a sound business case,
                       could apply to OPM for funds to be used to modernize their
                       performance management systems and ensure that those systems have
                       adequate safeguards to prevent abuse. The governmentwide fund would
                       provide for targeted investments needed to prepare agencies to use their
                       performance management systems as strategic tools to achieve
                       organizational results and drive organizational change.

                     Government leaders are responsible and accountable for making needed
                     changes to position the federal government to meet current and future
                     challenges and to take advantage of emerging opportunities. In meeting
                     this responsibility, leaders must take advantage of every tool that is
                     available to them. Each of the seven tools that I have discussed has unique
                     characteristics and benefits that can be highly effective depending on the
                     goals to be achieved.

Concluding Remarks   In view of the trends and fiscal challenges facing the nation, there is a need
                     to consider the proper role of the federal government, how the government
                     should be structured, how the government should do business, and in some
                     instances who should do the government’s business. We cannot afford
                     unnecessary redundancy and inefficient operations, and taxpayers deserve
                     better. The federal government’s large and growing fiscal gap means that
                     doing nothing is simply not an option. Tough choices will have to be made
                     by elected officials. The Congress and the administration will need to use
                     every tool at their disposal to address these challenges. In addressing these

                     Page 25                                                           GAO-03-1168T
           challenges, it will be important to set clear goals, involve all key players,
           and establish viable processes that will lead to positive and sustainable
           results. We in GAO take our responsibility to assist the Congress in these
           crucial efforts very seriously.

(450256)   Page 26                                                           GAO-03-1168T
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