Fiscal Year 2004 Budget Request: U.S. General Accounting Office

Published by the Government Accountability Office on 2003-03-27.

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

                            United States General Accounting Office

GAO                         Testimony
                            Before the Subcommittee on the
                            Legislative Branch, Committee on
                            Appropriations, U.S. Senate

For Release on Delivery
Expected at 1:30 p.m. EST
Thursday, March 27, 2003    FISCAL YEAR 2004
                            BUDGET REQUEST
                            U.S. General Accounting
                            Statement of David M. Walker
                            Comptroller General of the United States

    Mr. Chairman and Members of the Subcommittee:

    I am pleased to appear before the Subcommittee today as the Comptroller
    General of the United States and head of the U.S. General Accounting
    Office (GAO). GAO is a key source of objective information and analyses
    and, as such, plays a crucial role in supporting congressional decision-
    making and helping improve government for the benefit of the American
    people. My testimony today will focus on GAO’s (1) fiscal year 2002
    performance and results, (2) efforts to maximize our effectiveness,
    responsiveness and value, and (3) our budget request for fiscal year 2004
    to support the Congress and serve the American public. In summary,

•    In fiscal year 2002, GAO’s work informed the national debate on a broad
    spectrum of issues including helping the Congress answer questions about
    the associated costs and program trade-offs of the national preparedness
    strategy, including providing perspectives on how best to organize and
    manage the new Transportation Security Administration and Department
    of Homeland Security. 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. The return on the public’s investment in GAO
    extends beyond dollar savings to improvements in how the government
    serves its citizens. This includes a range of accomplishments that serve to
    improve safety, enhance security, protect privacy, and increase the
    effectiveness of a range of federal programs and activities.
•    The results of our work in fiscal year 2002 were possible, in part, because
    of changes we have made to transform GAO in order to meet our goal of
    being a model federal agency and a world-class professional services
    organization. We had already realigned GAO’s structure and resources to
    better serve the Congress in its legislative, oversight, appropriations, and
    investigative roles. Over the past year, we cultivated and fostered
    congressional and agency relations, better refined our strategic and annual
    planning and reporting processes, and enhanced our information
    technology infrastructure. We also continued to provide priority attention
    to our management challenges of human capital, information security, and
    physical security. We have made progress in addressing each of these
    challenges, but we still have work to do and plan to ask for legislation to
    help address some of these issues.
•    GAO is requesting budget authority of $473 million for fiscal year 2004.
    Our request represents a modest 4.1 percent increase in direct
    appropriations, primarily for mandatory pay and uncontrollable costs. This
    budget will allow us to maintain current operations for serving the
    Congress as outlined in our strategic plan and to continue initiatives to
    enhance our human capital, support business processes, and ensure the
    safety and security of GAO staff, facilities, and information systems.

    Page 1                                                          GAO-03-580T
                       Approximately $4.8 million, or about 1 percent, of our request relates to
                       several safety and security items that are included in our fiscal year 2003
                       supplemental request. If this supplemental request is granted, our fiscal
                       year 2004 request could be reduced accordingly.

                       Fiscal year 2002 was a year of challenges, not just for GAO but also for the
Fiscal Year 2002       Congress and the nation. The nation’s vulnerabilities were exposed in a
Performance and        series of events—America’s vulnerability to sophisticated terrorist
                       networks, bioterrorism waged through mechanisms as mundane as the
Results                daily mail, and corporate misconduct capable of wiping out jobs, pensions,
                       and investments virtually overnight. As the Congress’s priorities changed
                       to meet these crises, GAO’s challenge was to respond quickly and
                       effectively to our congressional clients’ changing needs.

                       With work already underway across a spectrum of critical policy and
                       performance issues, we had a head start toward meeting the Congress’
                       needs in a year of unexpected and often tumultuous events. For example,
                       in fiscal year 2002 GAO’s work informed the debate over national
                       preparedness strategy, helping the Congress determine how best to
                       organize and manage major new departments, assess key vulnerabilities to
                       homeland defense, and respond to the events of September 11 in areas
                       such as terrorism insurance and airline security. GAO’s input also was a
                       major factor in shaping the Sarbanes-Oxley Act, which created the Public
                       Company Accounting Oversight Board, as well as new rules to strengthen
                       corporate governance and ensure auditor independence. Further, GAO’s
                       work helped the Congress develop and enact election reform legislation in
                       the form of the Help America Vote Act of 2002 to help restore voter

                       In fiscal year 2002, GAO also served the Congress and the American
                       people by helping to:

                   •    Contribute to a national preparedness strategy at the federal, state, and
                       local levels that will make Americans safer from terrorism
                   •    Protect investors through better oversight of the securities industry and
                       the accounting profession
                   •    Ensure a safer national food supply
                   •    Expose the inadequacy of nursing home care
                   •    Make income tax collection fair, effective, and less painful to taxpayers
                   •    Strengthen public schools’ accountability for educating children
                   •    Keep sensitive American technologies out of the wrong hands

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•    Protect American armed forces confronting chemical or biological
•    Identify the risks to employees in private pension programs
•    Identify factors causing the shortage of children’s vaccines
•    Assist the postal system in addressing anthrax and various management
•    Identify security risks at ports, airports, and transit systems
•    Save billions by bringing sound business practices to the Department of
•    Foster human capital strategic management to create a capable, effective,
    well-managed federal workforce
•    Ensure that the armed forces are trained and equipped to meet the
    nation’s defense commitments
•    Enhance the safety of Americans and foreign nationals at U.S.
    installations wordwide
•    Assess ways of improving border security through biometric technologies
    and other means
•    Reduce the international debt problems faced by poor countries
•    Reform the way federal agencies manage their finances
•    Protect government computer systems from security threats
•    Enhance the transition of e-government—the new “electronic connection”
    between government and the public

    During fiscal year 2002, GAO’s analyses and recommendations contributed
    to a wide range of legislation considered by the Congress, as shown in the
    following table.

    Page 3                                                        GAO-03-580T
Table 1: Selected Public Laws to Which GAO Contributed During Fiscal Year 2002

 •   Prescription Drug User Fee Amendments of 2002, P.L. 107-188
 •   Best Pharmaceuticals for Children Act, P.L. 107-1092
 •   No Child Left Behind Act of 2001, P.L. 107-110
 •   Food Stamp Reauthorization Act of 2002, P.L. 107-171
 •   Help America Vote Act of 2002, P.L. 107-252
 •   Homeland Security Act of 2002, P.L. 107-296
 •   Public Health Security and Bioterrorism Preparedness and Response Act of 2002,
     P.L. 107-188
 •   Aviation and Transportation Security Act, P.L. 107-71
 •   Department of Defense Appropriation Act, 2003, P.L. 107-248
 •   Department of Defense and Emergency Supplemental Appropriations for Recovery
     From and Response to Terrorist Attacks on the United States Act, 2002, P.L. 107-117

 •   Bob Stump National Defense Authorization Act for Fiscal Year 2003 P.L. 107-314
 •   Foreign Relations Authorization Act, Fiscal Year 2003, P.L. 107-228
 •   Small Business Paperwork Relief Act of 2002, P.L. 107-198
 •   Federal Information Security Management Act of 2002, P.L. 107-347
 •   Sarbanes-Oxley Act of 2002, P.L. 107-204
 •   National Defense Authorization Act for Fiscal Year 2002, P.L. 107-107
 •   Legislative Branch Appropriations, Fiscal Year 2002, P.L. 107-68
 •   Improper Payments Information Act of 2002, P.L. 107-300
 •   Trade Act of 2002, P.L. 107-210
 •   Terrorism Risk Insurance Act of 2002, P.L. 107-297
 •   E-Government Act of 2002, P.L. 107-347
Source: GAO.

By year’s end, we had testified 216 times before the Congress, sometimes
on as little as 24 hours’ notice, on a range of issues. We had responded to
hundreds of urgent requests for information. We had developed 1,950
recommendations for improving the government’s operations, including,
for example, those we made to the Secretary of State calling for the
development of a governmentwide plan to help other countries combat
nuclear smuggling and those we made to the Chairman of the Federal
Energy Regulatory Commission calling for his agency to develop an action
plan for overseeing competitive energy markets. We also had continued to
track the recommendations we had made in past years, checking to see
that they had been implemented and, if not, whether we needed to do
follow-up work on problem areas. We found, in fact, that 79 percent of the
recommendations we had made in fiscal year 1998 had been implemented,
a significant step when the work we have done for the Congress becomes
a catalyst for creating tangible benefits for the American people.

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                                              Table 2 highlights, by GAO’s three external strategic goals, examples of
                                              issues on which we testified before Congress during fiscal year 2002.

Table 2: Issues on Which GAO Testified During Fiscal Year 2002

 Goal 1                                        Goal 2                                     Goal 3
 Well-Being and Financial Security of the      Changing Security Threats and              Transforming the Federal
 American People                               Challenge of Globalization                 Government’s Role
 Aviation security                             A-76 competitive sourcing                  Contract management
 Bioterrorism                                  Anthrax vaccine                            Contracting for services
 Blood supplies                                Ballistic missile defense                  Corporate governance and accountability
 Child welfare                                 Chemical and biological preparedness       Debt collection
 Childhood vaccines                            Combating terrorism                        DOD financial management
 Coast Guard’s security missions               Compact with Micronesia                    Electronic Government Act of 2002
 Customs’ cargo inspections                    Conflict diamonds                          Electronic-government security
 Disability programs                           Debt relief for poor countries             Enterprise architecture
 EPA cabinet status                            Encroachment on training ranges            Federal budget issues
 FBI reorganization                            Export controls                            Federal building security
 Federal property management reform            Food aid                                   Federal financial management reform
 Food safety                                   Foreign language needs                     Federal rulemaking requirements
 Highway trust fund                            Gulf War illnesses                         Freedom to Manage Act
 Housing                                       Information security aspects of homeland   Human capital strategy
 HUD management reform                           security                                 Illegal tax schemes and scams
 Identity theft                                International trade                        Intergovernmental aspects of homeland
 Immigration enforcement                       Nuclear smuggling                            security
 Indian tribal recognition                     Organizational aspects of homeland         IRS modernization
 Intercity passenger rail                        security                                 Medicaid financial management
 Long-term care                                SEC’s human capital challenges             NASA’s management challenges
 Medicare payments                             Strategic seaport protection               President’s Management Agenda
 Nuclear waste storage                         Terrorism insurance                        Purchase card controls
 Nursing homes                                 U.S. overseas presence                     Securing America’s borders
 Postal Service challenges                     Weapons of mass destruction                U.S. government’s financial statements
 Public health aspects of homeland security
 Retiree health insurance
 SBA’s human capital challenges
 Social Security reform
 Transit safety and security
 VA health care
 Welfare reform
 Wildfire threats
 Workforce development
Source: GAO.

                                              Congress and the executive agencies took a wide range of actions in fiscal
                                              year 2002 to improve government operations, reduce costs, or better target
                                              budget authority based on GAO analyses and recommendations, as
                                              highlighted in the following sections.

                                              Page 5                                                                 GAO-03-580T
Federal action on GAO’s findings or recommendations produced financial
benefits for the American people: a total of $37.7 billion was achieved by
making government services more efficient, improving the budgeting and
spending of tax dollars, and strengthening the management of federal
resources (see fig. 1). For example, increased funding for improved
safeguards against fraud and abuse helped the Medicare program to better
control improper payments of $8.1 billion over 2 years, and better policies
and controls reduced losses from farm loan programs by about $4.8 billion
across 5 years.

Figure 1: Financial Benefits Resulting from GAO’s Work

In fiscal year 2002, we also recorded 906 instances in which our work led
to improvements in government operations or programs (see fig. 2). For
example, by acting on GAO’s findings or recommendations, the federal
government has taken important steps toward enhancing aviation safety,
improving pediatric drug labeling based on research, better targeting of
funds to high-poverty school districts, greater accountability in the federal
acquisition process, and more effective delivery of disaster recovery
assistance to other nations, among other achievements.

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Figure 2: GAO’s Work Improving Government Operations and Services

As shown in table 3, we met all of our annual performance targets except
our timeliness target. While we provided 96 percent of our products to
their congressional requesters by the date promised, we missed this
measure’s target of 98 percent on-time delivery. The year’s turbulent
events played a part in our missing the target, causing us to delay work in
progress when higher-priority requests came in from the Congress. We
know we will continue to face factors beyond our control as we strive to
improve our performance in this area. We believe the agency protocols we
are piloting will help clarify aspects of our interactions with the agencies
we evaluate and audit and, thus, expedite our work in ways that could
improve the timeliness of our final products. We also believe that our
continuing investments in human capital and information technology will
improve our timeliness while allowing us to maintain our high level of
productivity and performance overall.

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Table 3: Annual Performance Measures and Targets

                                                                              Fiscal year
                                   1998     1999         2000         2001        2002         2002          avg.       2003         2004
 Performance measure              Actual   Actual       Actual       Actual      Target       Actual       Actual      Target       Target
 Financial benefits (dollars in
                                                                                                     a                        b
 billions)                         $19.7     $20.1       $23.2        $26.4        $30.0       $37.7        $26.9       $32.5        $35.0
 Other benefits                      537       607         788          799          770         906          775         800b         820
 Past recommendations
 implemented                        69%         70%        78%         79%          75%          79%          N/A         77%         77%
 New recommendations made            987         940      1,224       1,563        1,200        1,950       1,419       1,250b       1,250
 New products with
 recommendations                    33%         33%        39%         44%          45%          53%         42%          50%          50%
 Testimonies                         256         229        263         151          200          216         215         180b          200
 Timeliness                         93%         96%        96%         95%          98%          96%         96%          98%          98%

                                       N/A = not applicable
Source: GAO.
                                        Changes GAO made to its methodology for tabulating financial benefits caused about 11 percent of
                                       the increase in fiscal year 2002.
                                        Four targets published in GAO’s performance plan for fiscal year 2003 were subsequently revised
                                       based on more current information. Two were raised; two were lowered. The original targets were
                                       financial benefits, $35 billion; other benefits, 785; recommendations made, 1,200; and testimonies,

                                       The results of our work were possible, in part, because of changes we
Maximizing GAO’s                       have made to maximize the value of GAO. We had already realigned GAO’s
Effectiveness,                         structure and resources to better serve the Congress in its legislative,
                                       oversight, appropriations, and investigative roles. Over the past year, we
Responsiveness and                     cultivated and fostered congressional and agency relations, better refined
Value                                  our strategic and annual planning and reporting processes, and enhanced
                                       our information technology infrastructure. We also continued to provide
                                       priority attention to our management challenges of human capital,
                                       information security, and physical security. Changes we made in each of
                                       these areas helped enable us to operate in a constantly changing

Congressional and Agency               Over the course of the year, we cultivated and fostered congressional and
Relations                              agency relations in several ways. On October 23, 2001, in response to the
                                       anthrax incident on Capitol Hill, we opened our doors to 435 members of
                                       the House of Representatives and their staffs. Later in the year, we
                                       continued with our traditional hill outreach meetings and completed a 7-

                                       Page 8                                                                                GAO-03-580T
                       month pilot test of a system for obtaining clients’ views on the quality of
                       our testimonies and reports. We also developed agency protocols to
                       provide clearly defined, consistently applied, well-documented, and
                       transparent policies for conducting our work with federal agencies. We
                       have implemented our new reporting product line entitled Highlights—a
                       one-page summary that provides the key findings and recommendations
                       from a GAO engagement. We continued our policy of outreach to our
                       congressional clients, the public, and the press to enhance the
                       accessibility of GAO products. Our external web site now logs about
                       100,000 visitors each day and more than 1 million GAO products are
                       downloaded every month by our congressional clients, the public, and the

                       In light of certain records access challenges during the past few years and
                       with concerns about national and homeland security unusually high at
                       home and abroad, it may become more difficult for us to obtain
                       information from the Executive Branch and report on certain issues. If this
                       were to occur, it would hamper our ability to complete congressional
                       requests in a timely manner. We are updating GAO’s engagement
                       acceptance policies and practices to address this issue and may
                       recommend legislative changes that will help to assure that we have
                       reasonable and appropriate information that we need to conduct our work
                       for the Congress and the country.

Strategic and Annual   GAO’s strategic planning process serves as a model for the federal
Planning               government. Our plan aligns GAO’s resources to meet the needs of the
                       Congress, address emerging challenges and achieve positive results.
                       Following the spirit of the Government Performance and Results Act, we
                       established a process that provides for updates with each new Congress,
                       ongoing analysis of emerging conditions and trends, extensive
                       consultations with congressional clients and outside experts, and
                       assessments of our internal capacities and needs.

                       At the beginning of fiscal year 2002, we updated our strategic plan for
                       serving the Congress based on substantial congressional input—extending
                       the plan’s perspective out to fiscal year 2007 and factoring in
                       developments that had occurred since we first issued it in fiscal year 2000.
                       The updated plan carries forward the four strategic goals we had already
                       established as the organizing principles for a body of work that is as wide-
                       ranging as the interests and concerns of the Congress itself. Using the plan
                       as a blueprint, we lay out the areas in which we expect to conduct
                       research, audits, analyses, and evaluations to meet our clients’ needs, and

                       Page 9                                                          GAO-03-580T
we allocate the resources we receive from the Congress accordingly.
Following is our strategic plan framework. Appendix I of this statement
delineates in a bit more detail our strategic objectives and our qualitative
performance goals for fiscal years 2002 and 2003.

Page 10                                                          GAO-03-580T
                         We issued our 2001 Performance and Accountability Report that combines
                         information on our past year’s accomplishments and progress in meeting
                         our strategic goals with our plans for achieving our fiscal year 2003
                         performance goals. The report earned a Certificate of Excellence in
                         Accountability Reporting from the Association of Government
                         Accountants. We issued our fiscal year 2002 Performance and
                         Accountability Report in January 2003.

                         Our financial statements, which are integral to our performance and
                         accountability, received an unqualified opinion for the sixteenth
                         consecutive year. Furthermore, our external auditors did not identify any
                         material control weaknesses or compliance issues relating to GAO’s

Information Technology   During the past year, we acquired new hardware and software and
                         developed user-friendly systems that enhanced our productivity and
                         responsiveness to the Congress and helped meet our initial information
                         technology goals. For example, we replaced aging desktop workstations
                         with notebook computers that provide greater computing power, speed,
                         and mobility. In addition, we upgraded key desktop applications, the
                         Windows desktop operating system, and telecommunications systems to
                         ensure that GAO staff have modern technology tools to assist them in
                         carrying out their work. We also developed new, integrated, user-friendly
                         Web-based systems that eliminate duplicate data entry while ensuring the
                         reusability of existing data. As the Clinger-Cohen Act requires, GAO has an
                         enterprise architecture program in place to guide its information
                         technology planning and decision making. In designing and developing
                         systems, as well as in acquiring technology tools and services, we have
                         applied enterprise architecture principles and concepts to ensure sound
                         information technology investments and the interoperability of systems.

Human Capital            Given GAO’s role as a key provider of information and analyses to the
                         Congress, maintaining the right mix of technical knowledge and expertise
                         as well as general analytical skills is vital to achieving our mission. We
                         spend about 80 percent of our resources on our people, but without
                         excellent human capital management, we could still run the risk of being
                         unable to deliver what the Congress and the nation expect from us. At the
                         beginning of my term in early fiscal year 1999, we completed a self-
                         assessment that profiled our human capital workforce and identified a
                         number of serious challenges facing our workforce, including significant
                         issues involving succession planning and imbalances in the structure,

                         Page 11                                                        GAO-03-580T
    shape, and skills of our workforce. As presented below, through a number
    of strategically planned human capital initiatives over the past few years,
    we have made significant progress in addressing these issues. For
    example, as illustrated in figure 3, by the end of fiscal year 2002, we had
    almost a 60 percent increase in the percentage of staff at the entry-level
    (Band I) as compared with fiscal year 1998. Also, the proportion of our
    workforce at the mid-level (Band II) decreased by about 8 percent.

    Figure 3: GAO’s Human Capital Profile

    Attorneys and criminal investigators
     Mission support includes both mission and mission support offices as discussed in GAO’s budget

    Our fiscal year 2002 human capital initiatives included the following:

•    In fiscal year 2002, we hired nearly 430 permanent staff and 140 interns.
    We also developed and implemented a strategy to place more emphasis on
    diversity in campus recruiting.
•    In fiscal years 2002 and 2003, to help meet our workforce planning
    objectives, we offered voluntary early retirement under authority
    established in our October 2000 human capital legislation. Early
    retirement was granted to 52 employees in fiscal year 2002 and 24
    employees in fiscal year 2003.
•    To retain staff with critical skills and staff with less than 3 years of GAO
    experience, we implemented legislation authorizing federal agencies to
    offer student loan repayments in exchange for certain federal service
•    In fiscal year 2002, GAO implemented a new, modern, effective, and
    credible performance appraisal system for analysts and specialists,
    adapted the system for attorneys, and began modifying the system for
    administrative professional and support staff.

    Page 12                                                                            GAO-03-580T
                       •    We began developing a new core training curriculum for managers and
                           staff to provide additional training on the key competencies required to
                           perform GAO’s work.
                       •    We also took steps to achieve a fully democratically-elected Employee
                           Advisory Council to work with GAO’s Executive Committee in addressing
                           issues of mutual interest and concern.

                           The above represent just a few of many accomplishments in the human
                           capital area. GAO is the clear leader in the federal government in
                           designating and implementing 21st century human capital policies and
                           practices. We also are taking steps to work with the Congress, the Office
                           of Management and Budget, and the Office of Personnel Management, and
                           others to “help others help themselves” in the human capital area.

Information Security       Ensuring information systems security and disaster recovery systems that
                           allow for continuity of operations is a critical requirement for GAO,
                           particularly in light of the events of September 11 and the anthrax
                           incidents. The risk is that our information could be compromised and that
                           we would be unable to respond to the needs of the Congress in an
                           emergency. In light of this risk and in keeping with our goal of being a
                           model federal agency, we are implementing an information security
                           program consistent with the requirements in the Government Information
                           Security Reform provisions (commonly referred to as “GISRA”) enacted in
                           the Floyd D. Spence National Defense Authorization Act for fiscal year
                           2001. We have made progress through our efforts to, among other things,
                           implement a risk-based, agencywide security program; provide security
                           training and awareness; and develop and implement an enterprise disaster
                           recovery solution.

Physical Security          In the aftermath of the September 11 terrorist attacks and subsequent
                           anthrax incidents, our ability to provide a safe and secure workplace
                           emerged as a challenge for our agency. Protecting our people and our
                           assets is critical to our ability to meet our mission. We devoted additional
                           resources to this area and implemented measures such as reinforcing
                           vehicle and pedestrian entry points, installing an additional x-ray machine,
                           adding more security guards, and reinforcing windows.

                           GAO is requesting budget authority of $473 million for fiscal year 2004 to
GAO’s Fiscal Year          maintain current operations for serving the Congress as outlined in our
2004 Budget Request        strategic plan and to continue initiatives to enhance our human capital,

                           Page 13                                                         GAO-03-580T
support business processes, and ensure the safety and security of GAO
staff, facilities, and information systems. This funding level will allow us to
fund up to 3,269 full-time equivalent personnel. Our request includes
$466.6 million in direct appropriations and authority to use estimated
revenues of $6 million from reimbursable audit work and rental income.
Our requested increase of $18.4 million in direct appropriations represents
a modest 4.1 percent increase, primarily for mandatory pay and
uncontrollable costs. Our budget request also includes savings from
nonrecurring fiscal year 2003 investments in fiscal year 2004 that we
propose to use to fund further one-time investments in critical areas, such
as security and human capital.

We have submitted a request for $4.8 million in supplemental fiscal year
2003 funds to allow us to accelerate implementation of important security
enhancements. Our fiscal year 2004 budget includes $4.8 million for safety
and security needs that are also included in the supplemental. If the
requested fiscal year 2003 supplemental funds are provided, our fiscal year
2004 budget could be reduced by $4.8 million. Table 4 presents our fiscal
year 2003 and requested fiscal year 2004 resources by funding source.

Table 4: Fiscal Years 2003 and 2004 Resources by Funding Source

    (Dollars in thousands)
                                                                    Change – FY 2003 to 2004
                                     FY 2003        FY 2004
    Funding source                   Revised        Request                 Amount     Percent
    Total budget authority           $451,202a      $472,627                $21,425
    Less: offsetting collectionsb       (3,000)       (6,006)                (3,006)
    Direct appropriation              $448,202      $466,621                $18,419        4.1
Source: GAO.
Excludes request for supplemental funds of $4.8 million.
Offsetting collections include reimbursable audit work and rental income.

During fiscal year 2004, we plan to sustain our investments in maximizing
the productivity of our workforce by continuing to address the key
management challenges of human capital, and both information and
physical security. We will continue to take steps to “lead by example”
within the federal government in connection with these and other critical
management areas.

Over the next several years, we need to continue to address skill gaps,
maximize staff productivity and effectiveness, and reengineer our human
capital processes to make them more user-friendly. We plan to address

Page 14                                                                           GAO-03-580T
skill gaps by further refining our recruitment and hiring strategies to target
gaps identified through our workforce planning efforts, while taking into
account the significant percentage of our workforce eligible for
retirement. We will continue to take steps to reengineer our human capital
systems and practices to increase their efficiency and to take full
advantage of technology. We will also ensure that our staff have the
needed skills and training to function in this reengineered environment. In
addition, we are developing competency-based performance appraisal and
broad-banding pay systems for our mission support employees.

To ensure our ability to attract, retain, and reward high-quality staff, we
plan to devote additional resources to our employee training and
development program. We will target resources to continue initiatives to
address skill gaps, maximize staff productivity, and increase staff
effectiveness by updating our training curriculum to address
organizational and technical needs and training new staff. Also, to enhance
our recruitment and retention of staff, we will continue to offer a student
loan repayment program and transit subsidy benefit established in fiscal
year 2002. In addition, we will continue to focus our hiring efforts in fiscal
year 2004 on recruiting talented entry-level staff.

To build on the human capital flexibilities provided by the Congress in
2000, we plan to recommend legislation that would, among other things,
facilitate GAO’s continuing efforts to recruit and retain top talent, develop
a more performance-based compensation system, realign our workforce,
and facilitate our succession planning and knowledge transfer efforts. In
addition, to help attract new recruits, address certain “expectation gaps”
within and outside of the government, and better describe the modern
audit and evaluation entity GAO has become, we will work with the
Congress to explore the possibility of changing the agency’s name while
retaining our well-known acronym and global brand name of “GAO.”

On the information security front, we need to complete certain key actions
to be better able to detect intruders in our systems, identify our users, and
recover in the event of a disaster. Among our current efforts and plans for
these areas are completing the installation of software that helps us detect
intruders on all our internal servers, completing the implementation of a
secure user authentication process, and refining the disaster recover plan
we developed last year. We will need the Congress’ help to address these
remaining challenges.

We also are continuing to make the investments necessary to enhance the
safety and security of our people, facilities, and other assets for the mutual

Page 15                                                           GAO-03-580T
                     benefit of GAO and the Congress. With our fiscal year 2003 supplemental
                     funding, if provided, or if not, with fiscal year 2004 funds, we plan to
                     complete installation of our building access control and intrusion
                     detection system and supporting infrastructure, and obtain an offsite
                     facility for use by essential personnel in emergency situations. With the
                     help of the Congress, we plan to implement these projects over the next
                     several years.

                     As a result of the support and resources we have received from this
Concluding Remarks   Subcommittee and the Congress over the past several years, we have been
                     able to make a difference in government, not only in terms of financial
                     benefits and improvements in federal programs and operations that have
                     resulted from our work, but also in strengthening and increasing the
                     productivity of GAO, and making a real difference for our country and its
                     citizens. Our budget request for fiscal year 2004 is modest, but necessary
                     to sustain our current operations, continue key human capital and
                     information technology initiatives, and ensure the safety and security of
                     our most valuable asset—our people. We seek your continued support so
                     that we will be able to effectively and efficiently conduct our work on
                     behalf of the Congress and the American people.

                     As the Comptroller General of the United States, I am very proud of how,
                     in a time of uncertainty, GAO staff responded with a positive attitude and
                     did whatever their country required and demonstrated an unwavering
                     resolve to continue their work. Knowing this organization as I do, I was
                     not surprised. We at GAO look forward to continuing to help the Congress
                     and the nation meet the current and emerging challenges of the 21st

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Appendix I: GAO’s Qualitative Performance
Goals for Fiscal Years 2002 and 2003

                       This appendix lists GAO’s strategic goals and the strategic objectives for
                       each goal. They are part of our updated draft strategic plan (for fiscal
                       years 2002 through 2007).

                       Organized below each strategic objective are its qualitative performance
                       goals. The performance goals lay out the work we plan to do in fiscal years
                       2002 and 2003 to help achieve our strategic goals and objectives. We will
                       evaluate our performance at the end of fiscal year 2003.

Strategic Goal 1       Provide Timely, Quality Service to the Congress and the Federal
                       Government to Address Current and Emerging Challenges to the Well-
                       Being and Financial Security of the American People

                       To achieve this goal, we will provide information and recommendations on
                       the following:

                       the Health Care Needs of an Aging and Diverse Population

                   •    evaluate Medicare reform, financing, and operations;
                   •    assess trends and issues in private health insurance coverage;
                   •    assess actions and options for improving the Department of Veterans
                       Affairs’ and the Department of Defense’s (DOD) health care services;
                   •    evaluate the effectiveness of federal programs to promote and protect the
                       public health;
                   •    evaluate the effectiveness of federal programs to improve the nation’s
                       preparedness for the public health and medical consequences of
                   •    evaluate federal and state program strategies for financing and overseeing
                       chronic and long-term health care; and
                   •    assess states’ experiences in providing health insurance coverage for low-
                       income populations.

                       the Education and Protection of the Nation’s Children

                   •   analyze the effectiveness and efficiency of early childhood education and
                       care programs in serving their target populations;
                   •   assess options for federal programs to effectively address the educational
                       and nutritional needs of elementary and secondary students and their
                   •   determine the effectiveness and efficiency of child support enforcement
                       and child welfare programs in serving their target populations; and

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•   identify opportunities to better manage postsecondary, vocational, and
    adult education programs and deliver more effective services.

    the Promotion of Work Opportunities and the Protection of Workers

•   assess the effectiveness of federal efforts to help adults enter the
    workforce and to assist low-income workers;
•   analyze the impact of programs designed to maintain a skilled workforce
    and ensure employers have the workers they need;
•   assess the success of various enforcement strategies to protect workers
    while minimizing employers’ burden in the changing environment of work;
•   identify ways to improve federal support for people with disabilities.

    a Secure Retirement for Older Americans

•   assess the implications of various Social Security reform proposals;
•   identify opportunities to foster greater pension coverage, increase
    personal saving, and ensure adequate and secure retirement income; and
•   identify opportunities to improve the ability of federal agencies to
    administer and protect workers’ retirement benefits.

    an Effective System of Justice

•    identify ways to improve federal agencies’ ability to prevent and respond
    to major crimes, including terrorism;
•    assess the effectiveness of federal programs to control illegal drug use;
•    identify ways to administer the nation’s immigration laws to better secure
    the nation’s borders and promote appropriate treatment of legal residents;
•    assess the administrative efficiency and effectiveness of the federal court
    and prison systems.

    the Promotion of Viable Communities

•    assess federal economic development assistance and its impact on
•    assess how the federal government can balance the promotion of home
    ownership with financial risk;
•    assess the effectiveness of federal initiatives to assist small and minority-
    owned businesses;
•    assess federal efforts to enhance national preparedness and capacity to
    respond to and recover from natural and man-made disasters; and

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                   •   assess how well federally supported housing programs meet their
                       objectives and affect the well-being of recipient households and

                       Responsible Stewardship of Natural Resources and the Environment

                   •   assess the nation’s ability to ensure reliable and environmentally sound
                       energy for current and future generations;
                   •   assess federal strategies for managing land and water resources in a
                       sustainable fashion for multiple uses;
                   •   assess federal programs’ ability to ensure a plentiful and safe food supply,
                       provide economic security for farmers, and minimize agricultural
                       environmental damage;
                   •   assess federal pollution prevention and control strategies; and
                   •   assess efforts to reduce the threats posed by hazardous and nuclear

                       a Secure and Effective National Physical Infrastructure

                   •    assess strategies for identifying, evaluating, prioritizing, financing, and
                       implementing integrated solutions to the nation’s infrastructure needs;
                   •    assess the impact of transportation and telecommunications policies and
                       practices on competition and consumers;
                   •    assess efforts to improve safety and security in all transportation modes;
                   •    assess the U.S. Postal Service’s transformation efforts to ensure its
                       viability and accomplish its mission; and
                   •    assess federal efforts to plan for, acquire, manage, maintain, secure, and
                       dispose of the government’s real property assets.

Strategic Goal 2       Provide Timely, Quality Service to the Congress and the Federal
                       Government to Respond to Changing Security Threats and the
                       Challenges of Global Interdependence

                       To achieve this goal, we will provide information and recommendations on
                       the following:

                       Respond to Diffuse Threats to National and Global Security

                   •   analyze the effectiveness of the federal government’s approach to
                       providing for homeland security;
                   •   assess U.S. efforts to protect computer and telecommunications systems
                       supporting critical infrastructures in business and government; and

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•   assess the effectiveness of U.S. and international efforts to prevent the
    proliferation of nuclear, biological, chemical, and conventional weapons
    and sensitive technologies.

    Ensure Military Capabilities and Readiness

•    assess the ability of DOD to maintain adequate readiness levels while
    addressing the force structure changes needed in the 21st century;
•    assess overall human capital management practices to ensure a high-
    quality total force;
•    identify ways to improve the economy, efficiency, and effectiveness of
    DOD’s support infrastructure and business systems and processes;
•    assess the National Nuclear Security Administration’s efforts to maintain a
    safe and reliable nuclear weapons stockpile;
•    analyze and support DOD’s efforts to improve budget analyses and
    performance management;
•    assess whether DOD and the services have developed integrated
    procedures and systems to operate effectively together on the battlefield;
•    assess the ability of weapon system acquisition programs and processes
    to achieve desired outcomes.

    Advance and Protect U.S. International Interests

•    analyze the plans, strategies, costs, and results of the U.S. role in conflict
•    analyze the effectiveness and management of foreign aid programs and
    the tools used to carry them out;
•    analyze the costs and implications of changing U.S. strategic interests;
•    evaluate the efficiency and accountability of multilateral organizations
    and the extent to which they are serving U.S. interests; and
•    assess the strategies and management practices for U.S. foreign affairs
    functions and activities.

    Respond to the Impact of Global Market Forces on U.S. Economic and
    Security Interests

•    analyze how trade agreements and programs serve U.S. interests;
•    improve understanding of the effects of defense industry globalization;
•    assess how the United States can influence improvements in the world
    financial system;
•    assess the ability of the financial services industry and its regulators to
    maintain a stable and efficient global financial system;

    Page 20                                                             GAO-03-580T
                   •    evaluate how prepared financial regulators are to respond to change and
                       innovation; and
                   •    assess the effectiveness of regulatory programs and policies in ensuring
                       access to financial services and deterring fraud and abuse in financial

Strategic Goal 3       Help Transform the Government’s Role and How It Does Business to
                       Meet 21st Century Challenges

                       To achieve this goal, we will provide information and recommendations on
                       the following:

                       Analyze the Implications of the Increased Role of Public and Private
                       Parties in Achieving Federal Objectives

                   •   analyze the modern service-delivery system environment and the
                       complexity and interaction of service-delivery mechanisms;
                   •   assess how involvement of state and local governments and
                       nongovernmental organizations affect federal program implementation
                       and achievement of national goals; and
                   •   assess the effectiveness of regulatory administration and reforms in
                       achieving government objectives.

                       Assess the Government’s Human Capital and Other Capacity for Serving
                       the Public

                   •    identify and facilitate the implementation of human capital practices that
                       will improve federal economy, efficiency, and effectiveness;
                   •    identify ways to improve the financial management infrastructure
                       capacity to provide useful information to manage for results and costs day
                       to day;
                   •    assess the government’s capacity to manage information technology to
                       improve performance;
                   •    assess efforts to manage the collection, use, and dissemination of
                       government information in an era of rapidly changing technology;
                   •    assess the effectiveness of the Federal Statistical System in providing
                       relevant, reliable, and timely information that meets federal program
                       needs; and
                   •    identify more businesslike approaches that can be used by federal
                       agencies in acquiring goods and services.

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                       Support Congressional Oversight of the Federal Government’s Progress
                       toward Being More Results-Oriented, Accountable, and Relevant to
                       Society’s Needs

                   •    analyze and support efforts to instill results-oriented management across
                       the government;
                   •    highlight the federal programs and operations at highest risk and the
                       major performance and management challenges confronting agencies;
                   •    identify ways to strengthen accountability for the federal government’s
                       assets and operations;
                   •    promote accountability in the federal acquisition process;
                   •    assess the management and results of the federal investment in science
                       and technology and the effectiveness of efforts to protect intellectual
                       property; and
                   •    identify ways to improve the quality of evaluative information.
                   •    develop new resources and approaches that can be used in measuring
                       performance and progress on the nations 21 century challenges

                       Analyze the Government’s Fiscal Position and Approaches for Financing
                       the Government

                   •   analyze the long-term fiscal position of the federal government;
                   •   analyze the structure and information for budgetary choices and explore
                       alternatives for improvement;
                   •   contribute to congressional deliberations on tax policy;
                   •   support congressional oversight of the Internal Revenue Service’s
                       modernization and reform efforts; and
                   •   assess the reliability of financial information on the government’s fiscal
                       position and financing sources.

Strategic Goal 4       Maximize the Value of GAO by Being a Model Federal Agency and a
                       World-Class Professional Services Organization

                       To achieve this goal, we will do the following:

                       Sharpen GAO’s Focus on Clients’ and Customers’ Requirements

                   •   continuously update client requirements;
                   •   develop and implement stakeholder protocols and refine client protocols;
                   •   identify and refine customer requirements and measures.

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               Enhance Leadership and Promote Management Excellence

           •   foster an attitude of stewardship to ensure a commitment to GAO’s
               mission and core values;
           •   implement an integrated approach to strategic management;
           •   continue to provide leadership in strategic human capital management
               planning and execution;
           •   maintain integrity in financial management;
           •   use enabling technology to improve GAO’s crosscutting business
               processes; and
           •   provide a safe and secure workplace.

               Leverage GAO’s Institutional Knowledge and Experience

           •    improve GAO’s use of Web-based knowledge tools;
           •    develop a framework to manage the collection, use, distribution, and
               retention of organizational knowledge; and
           •    strengthen relationships with other national and international
               accountability and professional organizations.

               Continuously Improve GAO’s Business and Management Processes

           •   improve internal business and administrative processes;
           •   improve GAO’s product and service lines; and
           •   improve GAO’s job management processes.

               Become the Professional Services Employer of Choice

           •    maintain an environment that is fair, unbiased, family-friendly, and
               promotes and values opportunity and inclusiveness;
           •    improve compensation and performance management systems;
           •    develop and implement a training and professional development strategy
               targeted toward competencies; and
           •    provide GAO’s people with tools, technology, and a working environment
               that is world-class.

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