oversight

Fiscal Year 2013 Budget Request: U.S. Government Accountability Office

Published by the Government Accountability Office on 2012-03-15.

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

                            United States Government Accountability Office

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


                            FISCAL YEAR 2013
For Release on Delivery
Expected at 2:30 p.m. EST
Thursday, March 15, 2012

                            BUDGET REQUEST
                            U.S. Government
                            Accountability Office
                            Statement of Gene L. Dodaro
                            Comptroller General of the United States




GAO-12-456T
Mr. Chairman, Ranking Member Hoeven, and Members of the
Subcommittee:

I appreciate the opportunity to be here today to discuss the U.S.
Government Accountability Office’s (GAO) budget request for fiscal
year (FY) 2013. I want to thank the subcommittee for its continued
support of GAO. We very much appreciate the confidence you have
shown in our efforts to help support the Congress in carrying out its
constitutional responsibilities and to help improve government
performance and accountability for the benefit of the American people.

GAO is requesting an appropriation of $526.2 million for FY 2013 to
support a staffing level of 3,100. This funding level represents a
modest increase of 2.9 percent over FY 2012, and is 5.4 percent below
our FY 2010 level. The majority of the requested increase represents
the first step in rebuilding our staff capacity to a level that will enable
us to optimize the benefits we yield for the Congress and the nation.

We have carefully reviewed every aspect of our operations from a zero
base to identify opportunities to reduce costs without sacrificing the
quality of our work and preserving our ability to assist the Congress in
addressing the most important priorities facing the nation. However,
given that staff costs now represent about 81 percent of our budget
and the deep reductions already taken in our infrastructure programs,
reducing the size of our workforce could not be avoided. By the end of
FY 2012, for the first time in over 75 years, GAO’s staffing level will
drop below 3,000 staff, resulting in a net reduction of 11 percent in our
staff capacity, or 365 people, in only a 2-year period.

Given the current size and scope of the federal government and the
demand for our services, this staffing reduction will result in missed
opportunities for us to identify ways to save money and generate
revenue at a time when the country needs us most. I am also very
concerned about maintaining our highly skilled workforce by both
replacing departing staff and adding more highly skilled talent to
address succession planning challenges and skill gaps. The cost to
restore our staff capacity would be more than offset by billions of
dollars in savings and other efficiencies resulting from GAO’s work.

Through productive discussions with our Managers, Union, Employee
Advisory Council, Diversity Advisory Council, and our staff, GAO has
significantly reduced spending throughout the agency in areas ranging
from human resources to travel to information technology (IT) to



Page 1                                                            GAO-12-456T
                      achieve a $45 million or 8.1 percent funding reduction since FY 2010.
                      But, now we seek your support to begin a multiyear effort to rebuild our
                      workforce to ultimately achieve a target full-time equivalent (FTE)
                      staffing level of 3,250. We believe this is the optimal level within the
                      current environment to most effectively serve the Congress and
                      produce a high return on the investment in GAO. It would be our goal
                      to return to this FTE staffing level in future year funding requests.

                      GAO is unique in our audit and evaluation capacity to support the
                      Congress by performing original research, providing technical
                      assistance, and conducting analyses to help the Congress make
                      informed decisions across all segments of the federal budget resulting
                      in tangible results and enhanced oversight needed to address the
                      seriousness of the government’s fiscal condition. In order for us to be
                      most effective, GAO needs to be of a size commensurate with the
                      current and emerging challenges facing the federal government and
                      the seriousness of its fiscal outlook. We are extremely limited in our
                      ability to target additional reductions without adversely impacting our
                      capacity to support the Congress in reducing costs and improving
                      government during this critical period.

                      GAO’s work directly contributes to improvements in a broad array of
GAO Supports          federal programs affecting Americans everywhere and remains one of
Congressional         the best investments across the federal government. With this
                      committee’s support, in FY 2011 GAO provided assistance to every
Decision-making,      standing congressional committee and about 70 percent of their
Saves Resources and   subcommittees. GAO issues hundreds of products annually in
                      response to congressional requests and mandates. Actions taken
Helps Improve         related to our findings and recommendations yielded significant results
Government            across the government, including financial benefits of $45.7 billion to
                      reduce government expenditures, reallocate funds to more productive
                      areas, or increase revenues. These benefits produced a return on
                      investment of $81 for every dollar invested in GAO.

                      In FY 2011, our work also contributed to over 1,300 improvements in
                      government operations that helped to change laws, improve services
                      to the public, and promote sound management throughout
                      government. About 32 percent of these benefits were in the area of
                      public safety and security, such as homeland security and justice
                      programs and critical technologies. Another 40 percent were related to
                      improvements in business processes and management, such as




                      Page 2                                                          GAO-12-456T
improved oversight of federal oil and gas resources and detection of
fraud, waste, and abuse. 1

GAO senior officials testified 174 times before the Congress on an
array of complex issues including military and veterans disability
systems, U.S. Postal Service fiscal sustainability, defense/weapons
systems, and Medicare and Medicaid fraud, waste, and abuse. 2 Fifty-
seven of these hearings were related to high-risk areas and programs
highlighted in GAO’s biennial high-risk report. 3 GAO’s High-risk
Program calls attention to opportunities for cost savings and
improvements in federal agency and program management that offer
the potential to save billions of dollars, dramatically improve service to
the public, and strengthen confidence and trust in the performance and
accountability of the U.S. government. In FY 2011, our work also
included several products mandated under the Dodd-Frank Wall Street
Reform Act on mortgages, securities markets, financial institutions, the
Federal Reserve, and consumer protection. Additionally, our work
included many other products related to health-care related reforms.

As the Congress and the administration debate ways to improve the
federal government’s long-term fiscal outlook, our mission becomes
ever more critical to help identify billions of dollars in cost-saving
opportunities to tighten federal budgets and identify revenue-
enhancement opportunities. GAO seeks both to help position the
government to better manage risks that could compromise the nation’s
security, health, and solvency, and to identify opportunities for
managing government resources wisely for a more sustainable future.
GAO will continue to provide high-quality, high-value, and independent
support to the Congress in ways that generate material benefits to the
nation.

GAO’s strategic plan for serving the Congress and the nation, 2010-
2015, highlights the broad scope of our efforts to help the institution of




1
  A list of selected issues on which GAO assisted the nation in fiscal year 2011 is
included as Appendix I.
2
 A list of selected issues on which GAO staff testified before Congress during fiscal
year 2011 is included as Appendix II.
3
    Our High-Risk List is included in Appendix III.




Page 3                                                                        GAO-12-456T
                     the Congress respond to domestic and international challenges, such
                     as. 4

                     •      addressing current and emerging challenges to the well-
                            being and financial security of the American people;
                     •      responding to changing security threats and the challenges of
                            global interdependence;
                     •      helping transform the federal government to address national
                            challenges; and
                     •      maximizing the value of GAO by enabling quality, timely
                            service to the Congress and being a leading practices federal
                            agency.

                     Since FY 2010, GAO has significantly reduced spending throughout
Actions Taken to     the agency. Our FY 2012 funding level is $45 million or 8.1 percent
Reduce Operational   below FY 2010. We streamlined operations and reduced costs
                     through staffing reductions, voluntary retirements, voluntary separation
Costs                incentives, and extremely limited hiring to only replace critical
                     vacancies; reducing staff retention programs, such as student loan
                     repayments and incentive awards; and reducing or deferring
                     investments in IT, facilities, and other support services. Since FY
                     2010, we have reduced engagement support costs, such as travel and
                     external specialized expertise by over 20 percent, and reduced
                     infrastructure support costs, such as IT and administrative support
                     services by over 18 percent.

                     In addition, we are continuing to explore other opportunities to reduce
                     our infrastructure costs, provide staff more flexibility and increase our
                     effectiveness and efficiency, such as streamlining our engagement-
                     management process; expanding our telework policies; reducing our
                     physical footprint both in HQ and in our field offices; exploring office-
                     sharing; expanding our video-conference capability; and attracting an
                     additional tenant in HQ to increase revenue. While we may only see
                     limited financial benefits in FY 2012, each of these initiatives provides
                     the opportunity to generate significant long-term financial benefits to
                     GAO that will help reduce our operating costs and enable us to
                     maximize our effectiveness. For example, we have identified 31
                     recommendations for engagement-management improvements; some


                     4
                         Our Strategic Plan Framework is included in Appendix IV.




                     Page 4                                                            GAO-12-456T
                     of which can be implemented quickly, while others require additional
                     study to determine the best approach for implementation. When
                     implemented, these recommendations will allow us to streamline and
                     standardize our processes to achieve greater efficiency in our work
                     without sacrificing quality, increase our responsiveness to the
                     Congress, and deliver products to the Congress and the public more
                     effectively and efficiently.

                     We are also consulting continuously with congressional committees to
                     assure that our work is focused on their highest priorities. Additionally,
                     we continue to work with committees to amend or repeal statutory
                     mandates for GAO studies that have outlived their usefulness or do not
                     represent the best use of GAO’s resources given current
                     congressional priorities.

                     Our budget request seeks to partially restore funding to allow GAO to
FY 2013 Budget       1) begin a multiyear effort to rebuild our workforce by hiring to replace
Request Would Help   departing staff to enable us to optimize the benefits we yield for the
                     Congress and the nation, 2) bolster staff recruitment and retention
Restore Essential    programs, such as student loan repayments and incentive awards, and
Capacity             3) replace end-of-life technology to ensure our technology is current
                     and remains on par with other federal agencies.

                     For the first time in over 75 years, GAO’s staffing level will drop below
                     3,000 in FY 2012, resulting in a net reduction of 11 percent in our staff
                     capacity in only a 2-year period. Further, we project losing an
                     additional 190 people in FY 2013 based on historical trends. We also
                     have a significant number of retirement eligible senior executive staff
                     (about 40%), supervisory analysts (25%), and analysts (12%). We
                     depend on a talented and diverse, high-performing, knowledge-based
                     workforce to carry out our mission to support the Congress. This
                     reduction in staff capacity is limiting our ability to support the Congress
                     during this critical period when the unique insights that GAO provides
                     are an essential element of Congressional analysis and decision-
                     making. It is imperative that we begin to replenish our workforce to
                     both replace departing staff and add more highly skilled talent to
                     address succession planning challenges and skill gaps. We have
                     been and will continue to reach out to our congressional clients to
                     ensure they help focus our work on the highest priority areas to obtain
                     the maximum benefit in this resource constrained environment.

                     Our FY 2013 budget request seeks to partially restore essential
                     funding for staff recognition and benefits programs and critical



                     Page 5                                                             GAO-12-456T
                        investments eliminated or deferred due to budget constraints.
                        Reductions in staff recognition and benefits programs jeopardize our
                        ability to attract and retain staff when other organizations with whom
                        we compete for human resources may offer these benefits. These
                        tools are also essential to recognize and motivate our high-performing
                        workforce. Moreover, all but the most critical investments in areas
                        such as facilities and information technology have been eliminated.
                        Continued deferral of needed investments in our systems and building
                        will ultimately diminish our productivity and effectiveness, likely lead to
                        more costly repairs, and affect our ability to exchange data with other
                        federal entities.

                        We are also requesting authority to use $24.3 million in offsetting
                        collections from rental income and program and financial audits. In
                        addition, we estimate about $4.7 million will be available from
                        reimbursements of programs and financial audits to help offset our
                        costs.

                        If GAO’s funding is reduced below the requested level, additional
                        reductions in our staffing level will be inevitable which would adversely
                        affect our ability to 1) produce results that can help deal with the
                        federal government’s fiscal challenges and 2) provide timely, insightful
                        analysis on congressional priorities and challenges facing the nation.
                        As a knowledge-based organization, about 81 percent of GAO’s FY
                        2013 budget is allocated for human capital costs—a slight increase
                        from the previous year as a result of mandatory cost increases, the
                        proposed increase in staffing, and deep reductions made in agency
                        operations and infrastructure. We are extremely limited in our ability to
                        target additional reductions in infrastructure-support costs beyond what
                        has already been taken in order to meet the basic operations of the
                        agency.


                        In regard to our internal operations, in FY 2011 we received a clean
Positive Results from   opinion on our system of quality control for both our financial and
External                performance audits from an external peer review conducted by a team
                        of auditors from our counterparts at national audit institutions, and
Organizations           received an unqualified opinion on our financial statements from
                        independent auditors. The Association of Government Accountants
                        awarded us its Certificate of Excellence in Accountability Reporting for
                        our FY 2010 Performance and Accountability Report. We also
                        received a “Best-in-Class” award for a concise, well-written, and highly




                        Page 6                                                             GAO-12-456T
                     readable Summary of GAO’s Performance and Financial Information
                     for FY 2010.

                     GAO was also once again recognized as one of the Best Places to
                     Work. The annual survey conducted by the Partnership for Public
                     Service identified GAO as number three in its rankings for all large
                     organizations across the entire federal government. Washingtonian
                     magazine selected GAO as one of the Best Places to Work in the
                     private and public sectors in Washington, D.C., in its annual rankings.

                     FY 2011 was a very active and challenging time for GAO. We
Concluding Remarks   succeeded at performing our mission, responding to mandates, and
                     accomplishing many of our goals while operating under budget and
                     staffing constraints. We could not have achieved this level of
                     performance without the outstanding efforts of our professional,
                     diverse, and multidisciplinary staff. We also maintained our productive
                     working relationship with the GAO Employees Organization,
                     International Federation of Professional and Technical Engineers
                     (IFPTE) which represents GAO’s analyst staff and began implementing
                     our first master collective bargaining agreement. On February 8, 2012,
                     GAO’s Administrative Professional and Support Staff voted in favor of
                     having the IFPTE serve as their exclusive representative. GAO’s
                     Visual Communications Analysts and Lead Communications Analysts
                     also voted to be included in the analysts’ bargaining unit. In addition,
                     we continue to work closely with the Employee Advisory Council and
                     the Diversity Advisory Council on a range of issues.

                     FYs 2012 and 2013 bring more challenges with responsibilities to
                     further assess and report on government programs and financial
                     regulatory reform efforts, among many other pressing issues. Our
                     budget request has been carefully developed to represent the level of
                     resources we need to continue effectively serving the important needs
                     of the Congress by providing quality products in a timely fashion and to
                     identify high opportunity areas for both eliminating waste as well as
                     enhancing revenue across the federal government.

                     I believe that you will find our budget request fiscally responsible and
                     essential to ensure that we can maintain our capacity to assist the
                     Congress and produce results for the American people. We remain
                     committed to providing accurate, objective, nonpartisan, and
                     constructive information to the Congress to help it conduct effective
                     oversight and fulfill its constitutional responsibilities.




                     Page 7                                                            GAO-12-456T
Mr. Chairman, Ranking Member Hoeven, Members of the
Subcommittee, this concludes my prepared statement. I appreciate, as
always, your careful consideration of our submission and look forward
to discussing our proposal with you.




Page 8                                                       GAO-12-456T
Appendix I: How GAO Assisted the Nation,
Fiscal Year 2011

Goal 1: Address Current and Emerging Challenges to the Well-Being and Financial Security of the American People
• Identified savings of $3.7 billion by reducing unneeded payments to Medicare Advantage plans
• Identified the need for the Department of Health and Human Services to finalize guidance on how
   antivirals would be used during a pandemic
• Identified opportunities for cost savings and reduced risk to the government in a series of reports on
   undefinitized contracts, use of blanket purchase agreements where discounts were not sought, and cost
   reimbursement contracts
• Improved consistency and compatibility of health care-associated infection data
• Led the Social Security Administration to improve oversight of its Ticket-to-Work program
• Identified opportunities to enhance investigation of online child pornography
• Recommended ways to strengthen the Federal Reserve’s management of emergency assistance to
   stabilize financial markets
• Developed a series of assessments of emerging technologies with important implications for the nation
• Found regulatory weaknesses in EPA’s water-based lead testing and treatment program
• Informed improvements in air passenger rights to compensation for mishandled baggage
Goal 2: Respond to Changing Security Threats and the Challenges of Global Interdependence
• Encouraged enhanced desktop computer security to protect sensitive information, which 22 federal
   agencies implemented
• Identified progress and remaining work to implement homeland security missions at DHS ten years after
   9/11
• Led DHS to scale back the flawed advanced radiation detector program—avoiding costs of $1.2 billion
• Identified challenges and recommended improvements in DOD’s expanding cybersecurity mission
• Surfaced potential costs and risks of contract transition during drawdown from Iraq, resulting in benefits
   of $77.5 million
• Led DOD to restructure the Joint Strike Fighter program—DOD’s most costly and ambitious acquisition
• Improved monitoring and evaluation of State, Labor, and USAID projects to combat human trafficking
Goal 3: Help Transform the Federal Government to Address National Challenges
• Provided timely information on the debt limit and budget controls to help address the long-term fiscal
   challenge
• Helped eliminate the Advanced Earned Income Tax Credit, avoiding $569 million in costs
• Suggested that the Congress extend the statute of limitations for examinations involving offshore
   financial activity
• Recommended that OMB establish realistic milestones for full implementation of the infrastructure
   needed to best use the electronic authentication capabilities of personal identify verification cards
• Identified 227,700 tax delinquents receiving federal benefits to explore ways to increase collection of
   unpaid taxes
• Found ways to incorporate required data into Centers for Medicare & Medicaid systems to better detect
   improper payments
• Issued updated government auditing standards to reflect recent developments in the accountability
   profession
• Recommended improvements to planning and implementation of federal data center consolidation at 24
   federal agencies
Source: GAO.



Page 9                                                                                     GAO-12-456T
Appendix II: Selected Testimony Topics,
Fiscal Year 2011




      Page 10                        GAO-12-456T
Appendix III: GAO’s 2011 High-Risk List



  Strengthening the Foundation for Efficiency and Effectiveness
  • Management of Federal Oil and Gas Resources (New)
  • Modernizing the Outdated U.S. Financial Regulatory System
  • Restructuring the U.S. Postal Service to Achieve Sustainable Financial Viability
  • Funding the Nation’s Surface Transportation System
  • Strategic Human Capital Management
  • Managing Federal Real Property

  Transforming DOD Program Management
  • DOD Approach to Business Transformation
  • DOD Business Systems Modernization
  • DOD Support Infrastructure Management
  • DOD Financial Management
  • DOD Supply Chain Management
  • DOD Weapon Systems Acquisition

  Ensuring Public Safety and Security
  • Implementing and Transforming the Department of Homeland Security
  • Establishing Effective Mechanisms for Sharing and Managing Terrorism-Related Information to Protect the
    Homeland
  • Protecting the Federal Government’s Information Systems and the Nation’s Cyber Critical Infrastructures
  • Ensuring the Effective Protection of Technologies Critical to U.S. National Security Interests
  • Revamping Federal Oversight of Food Safety
  • Protecting Public Health through Enhanced Oversight of Medical Products
  • Transforming EPA’s Process for Assessing and Controlling Toxic Chemicals

  Managing Federal Contracting More Effectively
  • DOD Contract Management
  • DOE’s Contract Management for the National Nuclear Security Administration and Office of Environmental
    Management
  • NASA Acquisition Management
  • Management of Interagency Contracting

  Assessing the Efficiency and Effectiveness of Tax Law Administration
  • Enforcement of Tax Laws
  • IRS Business Systems Modernization

  Modernizing and Safeguarding Insurance and Benefit Programs
  • Improving and Modernizing Federal Disability Programs
  • Pension Benefit Guaranty Corporation Insurance Programs
  • Medicare Program
  • Medicaid Program
  • National Flood Insurance Program




     Page 11                                                              GAO-12-456T
Appendix IV: GAO’s Strategic Plan
Framework




               Page 12              GAO-12-456T
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