Summary of GAO's Performance and Accountability Report Fiscal Year 2011

Published by the Government Accountability Office on 2012-01-26.

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

   U.S. Government Accountability Office


Fiscal Year 2011
    S E RV I N G T H E C O N G R E S S A N D T H E N AT I O N

       We help the Congress oversee federal programs and
       operations to ensure accountability to the American
       people. GAO’s analysts, auditors, lawyers, economists,
       information technology specialists, investigators, and
       other multidisciplinary professionals seek to enhance the
       economy, efficiency, effectiveness, and credibility of the
       federal government both in fact and in the eyes of the
       American people.

       We set high standards for ourselves in the conduct of GAO’s
       work. Our agency takes a professional, objective, fact-
       based, nonpartisan, nonideological, fair, and balanced
       approach to all activities. Integrity is the foundation of our
       reputation, and the GAO approach to work ensures it.

       We at GAO want our work to be viewed by the Congress
       and the American public as reliable. We produce high-
       quality reports, testimonies, briefings, legal opinions, and
       other products and services that are timely, accurate,
       useful, clear, and candid.

                             Scope of work
       GAO performs a range of oversight-, insight-, and
       foresight-related engagements, a vast majority of which
       are conducted in response to congressional mandates
       or requests. GAO’s engagements include evaluations
       of federal programs and performance, financial and
       management audits, policy analyses, legal opinions, bid
       protest adjudications, and investigations.

Source: See Image Sources.
                          Summary of GAO’s Performance and Financial Information  Fiscal Year 2011
                      D STAT
                   ITE      ES
                                                                             UNITED STATES
                                                                 GOVERNMENT ACCOUNTABILITY OFFICE

                                           O F F IC E
                                                               Budget, Performance, and Financial Snapshot
                                                                             Fiscal Year 2011
                 T                     L

                        C OU N TA

Who We Are
Mission: The Government Accountability Office, the audit, evaluation, and
investigative arm of the Congress, exists to support the Congress in meeting its
constitutional responsibilities and to help improve the performance and ensure
the accountability of the federal government for the benefit of the American
people. GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance to help
the Congress make informed oversight, policy, and funding decisions.
Organization and Strategic Focus: To fulfill our mission, we organize and
manage our resources to support four broad strategic goals. These include
helping to address challenges to the well-being and financial security of
the American people, responding to changing security threats and global
interdependence, and transforming the federal government to address
national challenges. Strategic goal 4 is an internal goal focused on enhancing
GAO’s value through improving its efficiency, effectiveness, and quality, and
institutional stewardship and resource management.
Human Capital: GAO maintains a workforce of highly trained professionals
across a breadth of academic and scientific disciplines. In fiscal year 2011,
about three-quarters of the approximately 3,200 employees were based at
GAO headquarters in Washington, D.C.; the rest were deployed in 11 field
offices across the country.
Budget and Financial Snapshot (Dollars in Millions)
    Current year budgetary resources                                                               Fiscal Year 2011
       600                                                              $563.6   $581.7   $573.7
                         $488.4                $491.7          $508.8                              Clean opinion on financial      Yes
       400                                                                                         statements
                                                                                                   Timely financial reporting      Yes
       200                                                                                         Material weaknesses           None
                     0                                                                             Total assets                 $125.3
                          2006                          2007    2008     2009     2010     2011    Total liabilities            $108.5
                         Fiscal year
  Source: GAO.
  Note: Current year budgetary resources include appropriations and offsetting collections.

Performance Snapshot
Accomplishments: In fiscal year 2011, we met or exceeded 13 of our 15
annual performance targets by, for example, identifying $45.7 billion in
financial benefits for the federal government—a return of $81 for every
dollar we spent—and 1,318 improvements in broad program and operational
areas across the government. The rate at which our recommendations were
implemented by federal agencies or the Congress was 80 percent, and over
two-thirds of the products issued contained recommendations. We did not
meet our testimony target but testified at 174 hearings before the Congress
on topics across our body of work, a third of which were on areas considered
at high risk for fraud, waste, abuse, and mismanagement. For people
measures, we met or exceeded all but our new hire rate.

GAO-12-5SP                                                              Budget, Performance, and Financial Snapshot                      1
      Summary of GAO’s Performance and Financial Information  Fiscal Year 2011

Challenges: In fiscal year 2011, we continued to address three management
challenges—physical security, information security, and human capital.
For example, we made significant progress on design of a new performance
management system. For fiscal year 2012, we have removed physical and
information security based on progress in those areas, identified several
high-priority actions in the human capital area, and identified a new
challenge related to improving the efficiency and effectiveness of our
Key GAO Performance Results and Targets for Fiscal Years 2006–2011
To help determine how well we are meeting the needs of the Congress
and the nation and maximizing its value as a leading practices agency, we
assesses our performance annually using a balanced set of quantitative
measures. Below are 9 of the 15 annual performance measures that highlight
the agency’s performance in significant areas related to the implementation
of its mission.
To establish targets for all of our performance measures, we examine our
past performance and the external factors that could influence our work
and discuss with our senior executives what could be accomplished in the
upcoming fiscal year. We may adjust these targets after we initially publish
our annual performance plan based on changes in planned work or level of
                                      2006 2007 2008 2009 2010              2011
Performance measure
                                     actual actual actual actual actual target actual
 Financial benefits
                                      $51.0       $45.9        $58.1       $43.0       $49.9      $42.0 $45.7
 (dollars in billions)
 Nonfinancial benefits                1,342       1,354        1,398       1,315       1,361      1,200 1,318
 Past recommendations
                                       82%         82%         83%         80%         82%         80%       80%
 New products with
                                       65%         66%         66%         68%         61%         60%       68%
 Testimonies                            240         276         298         203         192        200        174
 Staff development                     76%         76%         77%         79%         79%         76%       79%
 Staff utilization                     75%         73%         75%         78%         77%         75%       78%
 Effective leadership by
                                       79%         79%         81%         83%         83%         80%       83%
 Organizational climate                73%         74%         77%         79%         79%         75%       80%
Source: GAO.

Notes: See table 1 on page 9 for information on all of our performance measures.
Information explaining all of the measures included in this table appears in the Appendix on Data Quality on page 126
of our full fiscal year 2011 performance and accountability report or at http://www.gao.gov/products/GAO-12-4SP.

2                     Budget, Performance, and Financial Snapshot                                    GAO-12-5SP
         From the Comptroller General

Source: See Image Sources.

January 2012

I am pleased to present GAO’s summary of the performance and
accountability report for fiscal year 2011. This year our products covered
a wide spectrum of issues—from banking to health care and retirement to
defense, homeland, and information security. We issued our biennial high-risk
report calling attention to opportunities for cost savings and improvements in
federal agency and program management. We issued our first annual report
under a new mandate in which we identified duplication, overlap, cost-
saving opportunities, and revenue enhancements in government programs.
We issued several products under the Dodd-Frank Wall Street Reform
Act on mortgages, securities markets, financial institutions, the Federal
Reserve, and consumer protection and many other products related to
health insurance reform. We also reported and testified on the Department
of Homeland Security’s progress and challenges ten years after 9/11. We
continued to regularly report the results of our work related to the Troubled
Asset Relief Program and the American Recovery and Reinvestment Act.
Additionally, we updated our Yellow Book on government auditing standards
to reflect recent developments in the accountability profession.
We again received from independent auditors an unqualified or “clean”
opinion on our financial statements for fiscal year 2011. We began to
implement the requirements of the Government Performance and Results
Modernization Act of 2010 and identified financial and nonfinancial benefits
as our priority measures. This year, we documented $45.7 billion in financial
benefits for the federal government—a return of $81 for every dollar
invested in GAO. We also recorded 1,318 other benefits in broad program
and operational areas cutting across the government. I am confident that the
performance and financial information in this report is complete and reliable
and meets our high standards for accuracy and transparency.
The 112th Congress relied on us to inform its work on national and
international issues, with our senior officials testifying at 174 hearings.
Getting our message out is crucial; to better serve our clients and the public
we continued to pilot our e-report—formatted for faster and easier Internet
access to key aspects of our reports—and we launched Facebook and Flickr
pages to reach a wider audience.
We undertook and received a clean opinion on our triennial external peer
review conducted by an international team of our counterparts at national
audit institutions. This was our third international peer review and the
first to examine both financial and performance audits. The peer review
team identified a number of good practices that should interest other audit

GAO-12-5SP                                                                   3
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

offices as well as future changes for us to consider to further strengthen our
We could not have achieved this level of performance without the
outstanding efforts of our professional, diverse, and multidisciplinary staff.
Through their hard work and dedication in uncertain times, we met our
clients’ needs with 95 percent on-time delivery. Our people and internal
operations measures indicate that our employees feel they have the
developmental opportunities, work experiences and environment, and
operational support they need to produce high-quality products. We met
or exceeded six of the targets for our seven people measures—retention
rate (with and without retirements), staff development, staff utilization,
effective leadership by supervisors, and organizational climate. We did not
meet our target for new hires as we curtailed hiring to filling only critical
needs because of budget constraints. We ranked third among large agencies,
and first in supporting diversity, in the Best Places to Work in the federal
government rankings of the Partnership for Public Service.
We have updated our internal management challenges—removing physical
security and information security based on progress in those areas.
We continue to focus on human capital by completing work on a new
performance management system and enhancing efforts on succession
planning, training, critical hiring, and alternative staff rewards and
recognition. This year, we are adding a new engagement efficiency
challenge focused on making improvements in three areas given constrained
resources: managing and conducting engagements, utilizing resources, and
communicating our message.
We maintained our productive working relationship with the employees’
union, GAO Employees Organization, International Federation of Professional
and Technical Engineers, Local 1921, and began implementing our first master
collective bargaining agreement. We are also working with the Employee
Advisory Council and the Diversity Advisory Council on a range of issues.
Fiscal year 2011 continued a very active and challenging time for GAO, yet
we succeeded at performing our mission, responding to mandates, and
accomplishing many of our goals while managing budget constraints. Fiscal
year 2012 brings more challenges with responsibilities to further assess and
report on duplicative government programs and financial regulatory reform
efforts among many other pressing issues. At the same time, in anticipation
of a lower budget, we are reducing spending through limiting hiring, attrition,
and scaling back or rescoping mission support contracts. We look forward to
continuing to serve the Congress and the public in the coming year.

Gene L. Dodaro
Comptroller General
of the United States

4                                                                     GAO-12-5SP

Source: See Image Sources.

GAO is an independent, nonpartisan professional services agency in the
legislative branch of the federal government. Commonly known as the audit
and investigative arm of the Congress or the “congressional watchdog,” we
examine how taxpayer dollars are spent and advise lawmakers and agency
heads on ways to make government work better. As a legislative branch
agency, we are exempt from many laws that apply to the executive branch
agencies. However, we generally hold ourselves to the spirit of many of
the laws, including the Federal Managers’ Financial Integrity Act of 1982
(FMFIA), the Government Performance and Results Act (GPRA), as amended,
and the Federal Financial Management Improvement Act of 1996 (FFMIA).1
Accordingly, this performance and accountability report for fiscal year 2011
provides what we consider to be information comparable to that reported
by executive branch agencies in their annual performance and accountability
reports. This report also fulfills our requirement to report annually on the
work of the Comptroller General under 31 U.S.C. 719.
Our mission is to support
the Congress in meeting its         GAO’s History
constitutional responsibilities     The Budget and Accounting Act of 1921 required the
and to help improve the             President to issue an annual federal budget and established
performance and ensure the          GAO as an independent agency to investigate how federal
accountability of the federal       dollars are spent. In the early years, we mainly audited
                                    vouchers, but after World War II we started to perform more
government for the benefit          comprehensive financial audits that examined the economy
of the American people.             and efficiency of government operations. By the 1960s,
The strategies and means            GAO had begun to perform the type of work we are noted
that we use to accomplish           for today—program evaluation—which examines whether
                                    government programs are meeting their objectives.
this mission are described
in the following pages
(see figs. 1 and 2). In short, we accomplish our mission by providing objective
and reliable information and informed analysis to the Congress, to federal
agencies, and to the public, and we recommend improvements, when
appropriate, on a wide variety of issues. Three core values—accountability,
integrity, and reliability—form the basis for all of our work, regardless of its
origin. These are described on the inside front cover of this report.
  FMFIA requires ongoing evaluations and annual reports on the adequacy of internal accounting and administrative
control systems of each agency. GPRA seeks to improve public confidence in federal agency performance by
requiring that federally funded agencies develop and implement accountability systems based on performance
measurement that include goals and objectives and measure progress toward them. The GPRA Modernization Act of
2010 incorporates additional requirements for reporting and transparency, which we have begun to implement. FFMIA
emphasizes the need to improve federal financial management by requiring that federal agencies implement and
maintain systems that comply with federal financial management systems requirements, applicable federal accounting
standards, and the U.S. Government Standard General Ledger at the transaction level.

GAO-12-5SP                                                                                                       5
               Summary of GAO’s Performance and Financial Information Fiscal Year 2011

    Figure 1: GAO’s Strategic Plan Framework

                                 Serving the Congress and the Nation
                                 GAO’s Strategic Plan Framework
                                                    GAO      exists to support the Congress in
                                                             meeting its constitutional responsibilities
                                                    and to help improve the performance and ensure
                                                    the accountability of the federal government for
                                                    the benefit of the American people.

 National    Fiscal      Economic      Global     Science and Networks and Shifting Roles Demographic
 Security Sustainability Recovery Interdependence Technology Virtualization of Government and Societal
 Threats Challenges and Growth                                                              Change

                       Goals                                                         Objectives
  Provide Timely, Quality Service to the Congress        ● Health care needs            ● Viable communities
  and the Federal Government to…                         ● Lifelong learning            ● Stable financial system and
                                                         ● Benefits and                   consumer protection
      …Address Current and Emerging                        protections for workers,     ● Stewardship of natural

       Challenges to the Well-being and                    families, and children         resources and the
       Financial Security of the American                ● Financial security             environment
                                                                                        ● Infrastructure
       People related to…                                ● Effective system of


      …Respond to Changing Security
       Threats and the Challenges of Global              ●   Homeland security          ●   U.S. foreign policy interests
       Interdependence involving…                        ●   Military capabilities      ●   Global market forces
                                                             and readiness

  Help Transform the Federal Government to               ● Government’s fiscal     ● Major management

  Address National Challenges by assessing…                position and options for challenges and program risks
                                                           closing gap
                                                         ● Fraud, waste, and abuse

  Maximize the Value of GAO by Enabling
                                                           Efficiency, effectiveness,     Professional networks and
  Quality, Timely Service to the Congress and
                                                         ●                              ●

                                                           and quality                    collaboration
  Being a Leading Practices Federal Agency in            ● Diverse and inclusive        ● Institutional stewardship and
  the areas of…                                            work environment               resource management

                                                CORE VALUES
   Accountability                                    Integrity                                               Reliability
Source: GAO.                                                                                            GAO Strategic Plan 2010–2015
Source: GAO.                                                                                     GAO Strategic Plan 2010–2015

    6                                                                                                GAO-12-5SP
        Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Figure 2: 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
 ƒƒIdentified savings of $3.7 billion by reducing unneeded payments to Medicare
   Advantage plans
 ƒƒIdentified opportunities to enhance investigation of online child pornography
 ƒƒRecommended ways to strengthen the Federal Reserve’s management of emergency
   assistance to stabilize financial markets
 ƒƒDeveloped a series of assessments of emerging technologies with important
   implications for the nation
 ƒƒFound regulatory weaknesses in EPA’s water-based lead testing and treatment program
 ƒƒInformed improvements in air passenger rights to compensation for mishandled
  Goal 2: Respond to Changing Security Threats and the Challenges of Global
 ƒƒEncouraged enhanced desktop computer security to protect sensitive information,
    which 22 federal agencies implemented
 ƒƒIdentified progress and remaining work to implement homeland security missions at
   DHS 10 years after 9/11
 ƒƒSurfaced potential costs and risks of contract transition during drawdown from Iraq,
   resulting in benefits of $77.5 million
 ƒƒLed DOD to restructure the Joint Strike Fighter program—DOD’s most costly and
   ambitious acquisition
 ƒƒIncreased USAID focus on planning, coordination, and monitoring of Afghan water
  Goal 3: Help Transform the Federal Government to Address National Challenges
 ƒƒProvided timely information on the debt limit and budget controls to help address the
   long-term fiscal challenge
 ƒƒIdentified 227,700 tax delinquents receiving federal benefits to explore ways to
   increase collection of unpaid taxes
 ƒƒFound ways to incorporate required data into Centers for Medicare & Medicaid
   systems to better detect improper payments
 ƒƒIssued updated government auditing standards to reflect recent developments in the
   accountability profession
 ƒƒIdentified opportunities to reduce risk and achieve cost savings in several types of
   government contracting
 ƒƒRecommended improvements to planning and implementation of federal data center
   consolidation at 24 federal agencies
  Goal 4: Maximize the Value of GAO by Enabling Quality, Timely Service to the
         Congress and Being a Leading Practices Federal Agency
 ƒƒCompleted training for all staff on diversity and inclusion awareness issues
 ƒƒBegan implementing our first Master Collective Bargaining Agreement with GAO’s
   Employees Organization, IFPTE, Local 1921
 ƒƒReceived a clean opinion on our third international triennial peer review
Source: GAO.

Note: Additional information on accomplishments by goal is highlighted in part II of the full report.

GAO-12-5SP                                                                                              7
        Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Fiscal Year 2011 Performance
In fiscal year 2011, the most pressing and demanding issues faced by the
Congress and the public helped to define our priorities. Our reporting helped
inform the Congress and the administration in developing policies and
executing programs in areas such as duplication and overlap in government
programs, the Dodd-Frank Wall Street Reform Act, our high-risk update,
and nationwide funding provided through the American Recovery and
Reinvestment Act of 2009 (Recovery Act) and the Troubled Asset Relief
Program (TARP), as well as our continued oversight of areas across the
This work also allowed us to achieve many of our performance goals, and
we monitored how well we performed and supported our staff using 15
annual performance measures. The results of our efforts are reflected in
our solid performance in fiscal year 2011—we met or exceeded all but two of
the performance targets we set for our client and people measures—those
for which data are available (see table 1). We exceeded our targets for our
two priority measures—financial and nonfinancial benefits. We achieved
$45.7 billion in financial benefits, exceeding our target of $42 billion by
$3.7 billion.2 This represents an $81 return on every dollar the Congress
invested in us. We recorded 1,318 nonfinancial benefits, exceeding our target
of 1,200 by 118 benefits. We met our target for past recommendations
implemented and we exceeded our target for new products with
recommendations by 8 percentage points. We did not meet our target of 200
hearings at which we were asked to testify, due to fewer-than-anticipated
hearings in a range of subject areas. We did meet the target for delivering
our products and testimonies to our clients in a timely manner. We also met
or exceeded our annual targets for six of seven of our people measures.
Concerning our two internal operations measures, we assess our
performance related to how well our internal administrative services (e.g.,
computer support and physical security) help employees get their jobs done
or impact employees’ quality of work life based on responses to an annual
internal survey. These measures are directly related to our efforts under goal
4 of our strategic plan to enable quality, timely service to the Congress and
being a leading practices federal agency. The survey asks staff to indicate
their satisfaction with internal services. There always is a lag in reporting
on this measure because our customer feedback survey is conducted after
we issue the performance and accountability report. In fiscal year 2010, our
scores were 3.94 for each of our measures to help get the job done and for
our quality of work life. We did not meet our targets of 4.0 for both scores.
However, on a scale of 1 to 5, with 5 being the highest, these scores indicate
that our employees were largely satisfied with the internal administrative
services we provide.

  A financial benefit is an estimate of the federal cost reduction of agency or congressional actions.

8                                                                                                        GAO-12-5SP
          Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Table 1: Agencywide Summary of Annual Measures and Targets
    Performance             2006 2007               2008 2009 2010                    2011       Met/ 2012
    measure                actual actual           actual actual actual           target actual not met target
     Financial benefits    $51.0 $45.9             $58.1     $43.0     $49.9      $42.0     $45.7      Met      $40.0
     (dollars in billions)
     Nonfinancial benefits 1,342 1,354             1,398     1,315     1,361      1,200     1,318      Met      1,200
     Past recommenda-       82% 82%                 83%       80%       82%       80%        80%       Met      80%
     tions implemented
     New products with      65% 66%                 66%       68%       61%       60%        68%       Met      60%
     Testimonies             240   276              298       203       192       200        174 Not met 180
     Timelinessa            93% 95%                 95%       95%       95%       95%        95%  Met 90%
     New hire rate          94% 96%                 96%       99%       95%       95%        84% Not met 95%
     Retention rate
        With retirements    90% 90%                 90%       94%       94%       90%        92%       Met      90%
        Without             94% 94%                 93%       96%       96%       94%        96%       Met      94%
     Staff development   b
                            76% 76%                 77%       79%       79%       76%        79%       Met      76%

      Staff utilizationb,c      75%       73%       75%       78%       77%       75%        78%       Met      75%
      Effective leadership      79%       79%       81%       83%       83%       80%        83%       Met      80%
      by supervisorsb,d
      Organizational            73%       74%       77%       79%       79%       75%        80%       Met      75%
    Internal operationse
      Help get job done          4.1      4.05       4.0      4.03      3.94       4.0       N/A       N/A       4.0
      Quality of work life       4.0      3.98      4.01      4.01      3.94       4.0       N/A       N/A       4.0
Source: GAO.

Note: Information explaining all of the measures included in this table appears in the Appendix on Data Quality on page
126 of the full report.
 The timeliness measure is based on one question on a form sent out to selected clients. The response rate for the
form in fiscal year 2011 was 25 percent, and 98 percent of the clients who responded answered this question. The
percentage shown in the table represents the percentage of respondents who answered favorably to this question on
the form.
 This measure is derived from our annual agencywide employee feedback survey. From the staff who expressed an
opinion, we calculated the percentage of those who selected favorable responses to the related survey questions.
Responses of “no basis to judge/not applicable” or “no answer” were excluded from the calculation. While including
these responses in the calculation would result in a different percentage, our method of calculation is an acceptable
survey practice, and we believe it produces a better and more valid measure because it represents only those
employees who have an opinion on the questions.
 Our employee feedback survey asks staff how often the following occurred in the last 12 months: (1) my job made
good use of my skills; (2) GAO provided me with opportunities to do challenging work; and (3) in general, I was utilized
 In fiscal year 2009, we changed the name of this measure from “Leadership” to its current nomenclature to clarify
that the measure reflects employees’ satisfaction with their immediate supervisors’ leadership. In fiscal year 2010, we
changed one of the questions for this measure.
 For our internal operations measures, we ask staff to rank 32 internal services available to them and to indicate on a
scale from 1 to 5, with 5 being the highest, their satisfaction with each service. These measures are described in more
detail on page 17. We will report actual data for fiscal year 2011 once data from our November 2011 internal customer
satisfaction survey have been analyzed. N/A indicates that the data are not yet available.

GAO-12-5SP                                                                                                                9
        Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Financial Benefits and Nonfinancial Benefits
We describe many of the results produced by our work as either financial
or nonfinancial benefits. In many cases, the benefits we claimed in fiscal
year 2011 are based on work we did in past years because it often takes the
Congress and agencies time to implement our recommendations or to act on
our findings.
Financial Benefits
Our findings and recommendations produce measurable financial benefits for
the federal government after the Congress acts on or agencies implement
them and the funds are made available to reduce government expenditures
or are reallocated to other areas. The financial benefit can be the result of
changes in business operations and activities; the restructuring of federal
programs; or modifications to entitlements, taxes, or user fees.
In fiscal year 2011, our work generated about $45.7 billion in financial benefits
(see fig. 3). We exceeded our target by almost 9 percent because of several
large unanticipated accomplishments. Part II of the full report provides more
information on these accomplishments by goal. In light of resource constraints
that may affect our ability to follow up on actions taken, we have reduced
our target for financial benefits to $40 billion in 2012.

Figure 3: Financial Benefits GAO Recorded
Dollars in billions
60                     $58.1
      $51.0                             $49.9
50             $45.9                                    $45.7
                                $43.0           $42.0




      2006     2007    2008     2009    2010     2011   2011
                       Actual                   Target Actual
Source: GAO.

Financial benefits included in our performance measures are net benefits—
that is, estimates of financial benefits that have been reduced by the
estimated costs associated with taking the action that we recommended.
We convert all estimates involving past and future years to their net present
value and use actual dollars to represent estimates involving only the current
year. Financial benefit amounts vary depending on the nature of the benefit,
and we can claim financial benefits over multiple years based on a single
agency or congressional action. We limit the period over which benefits from
an accomplishment can accrue to no more than 5 years.

10                                                                       GAO-12-5SP
        Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Estimates used to calculate our financial benefits come from non-GAO sources.
These non-GAO sources are typically the agency that acted on our work,
a congressional committee, or the Congressional Budget Office. Additional
examples of financial benefits can be found in Part II of the full report.

 Selected Fiscal Year 2011 Financial Benefits
 „ „ Termination of Future Combat System (FCS) Manned Ground Vehicle: $11.2 billion
 „ „ Department of Defense (DOD) Transformational Satellite (TSAT) Communications System
     Termination: $5.3 billion
 „ „ Reductions in Payments to Medicare Advantage (MA) Plans: $3.6 billion
 „ „ DOD Terminates Multiple Kill Vehicle (MKV) Program: $2.7 billion
 „ „ Congress Transfers Funds into “Cash for Clunkers” Program: $2 billion
 „ „ DOD Ensures Validity of Pakistani Reimbursement Claims: $1.1 billion

Nonfinancial Benefits
Many of the benefits that result from our work cannot be measured in dollar
terms. During fiscal year 2011, we recorded a total of 1,318 nonfinancial
benefits (see fig. 4). We exceeded our target by nearly 10 percent largely
because of a number of accomplishments we documented that related to
national security, defense acquisitions, and international affairs. We have
set our 2012 target for nonfinancial benefits at 1,200 again, notwithstanding
resource constraints.

Figure 4: Nonfinancial Benefits
        1,342 1,354 1,398 1,315 1,361                 1,318




         2006   2007   2008     2009   2010   2011    2011
                       Actual                 Target Actual
Source: GAO.

GAO-12-5SP                                                                                 11
          Summary of GAO’s Performance and Financial Information Fiscal Year 2011

In fiscal year 2011 we documented actions taken across federal programs—
about 32 percent of the total nonfinancial benefits were in the area of public
safety and security, including programs such as homeland security and
justice programs and critical technologies. About 40 percent resulted from
improvements in business processes and management, such as improved
oversight of federal oil and gas resources and detection of fraud, waste, and
abuse (see fig. 5). Additional examples of nonfinancial benefits can be found
in part II of the full report.

Figure 5: Types of Fiscal Year 2011 Nonfinancial Benefits
     Percentage of total

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         t M itio

          Ad Ta

        dM P
        d E Ef

       ac uis

      an ess

     an m
    ntr Acq





Source: GAO.

Note: These categories closely align with those in our high-risk list on page 39 of the full report.
Examples of programs included in categories:
„„ Public Insurance and Benefits: Medicare, Medicaid, Department of Veterans Affairs and Department of
   Defense (DOD) health care, disability programs, national flood insurance, federal deposit insurance, and other
   insurance programs.
„„ Public Safety and Security: Homeland security and justice programs, critical infrastructure, critical
   technologies, food safety, transportation safety, telecommunications safety, international food assistance, public
   health, consumer protection, environmental issues, and national defense and foreign policy.
„„ Acquisition and Contract Management: DOD weapon system acquisition, National Aeronautics and Space
   Administration acquisition management, and all federal agency and interagency contract management.
„„ Tax Law Administration: Internal Revenue Service (IRS) business systems modernization, tax policy, and
   enforcement of tax laws.
„„ Program Efficiency and Effectiveness: Fraud, waste, and abuse; U.S. financial regulatory system; federal oil
   and gas resources; U.S. Postal Service; transportation funding; and telecommunications funding.
„„ Business Process and Management: Federal agency financial audits, federal information systems, federal real
   property, human capital management, DOD business transformation, business systems modernization, financial
   management, support infrastructure management, and supply chain management.

12                                                                                                     GAO-12-5SP
      Summary of GAO’s Performance and Financial Information Fiscal Year 2011

 Selected Fiscal Year 2011 Nonfinancial Benefits
 Public Insurance and Benefits
 „ „ Enforcement Actions Posted on Nursing Home Compare
 Public Safety and Security
 „ „ HHS Finalized Antiviral Guidance for Pharmaceutical Interventions during Influenza
 Acquisition and Contract Management
 „ „ Reduced Risk in Government Contracting
 Tax Law Administration
 „ „ Congress Increased the Statute of Limitations for Internal Revenue Service Audits of
     Offshore Financial Activity
 Program Efficiency and Effectiveness
 „ „ Small Business Administration Decertified Companies from Historically Underutilized
     Business Zone Program
 Business Process and Management
 „„ OMB Set Milestones for Implementation of the Infrastructure Needed for Use of Personal
    Identity Verification Cards

Past Recommendations Implemented
One way we measure our effect on improving the government’s
accountability, operations, and services is by tracking the percentage
of recommendations that we made 4 years ago that have since
been implemented. At the end of fiscal year 2011, 80 percent of the
recommendations we made in fiscal year 2007 had been implemented
(see table 1), primarily by executive branch agencies. The 80 percent
implementation rate for fiscal year 2011 met our target for the year.
Agencies need time to act on recommendations, and we assess
recommendations implemented after 4 years based on our experience that
recommendations remaining open after that period of time are generally not
implemented in subsequent years.
New Products Containing Recommendations
In fiscal year 2011, about 68 percent of the 592 written products we issued
(excluding testimonies) contained recommendations (see table 1). We
track the percentage of new products with recommendations because we
want to focus on developing recommendations that when implemented
by the Congress and agencies, produce financial and nonfinancial benefits
for the nation. We exceeded our target of 60 percent by 8 percentage
points. However, we have set our target again in fiscal year 2012 at
60 percent because we recognize that our products do not always include

GAO-12-5SP                                                                                   13
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

recommendations, and the Congress and agencies often find informational
reports as useful as those that contain recommendations. Our informational
reports have the same analytical rigor and meet the same quality standards
as those with recommendations and, similarly, can help to bring about
substantial financial and key nonfinancial benefits. Hence, this measure
allows us some flexibility in responding to requests that result in reports
without recommendations.

Client Measures
To fulfill the Congress’s information needs, we plan to deliver the results of
our work orally as well as in writing at a time agreed upon with our client.
Our clients often invite us to testify on our current and past work as it
relates to issues that committees are examining through the congressional
hearing process. During fiscal year 2011, experts from our staff testified at
174 congressional hearings covering a wide range of complex issues. We did
not meet our target of 200 hearings at which we testify by 26 hearings (see
table 1). This measure is client driven based on invitations to testify, and
we cannot always anticipate clients’ specific subject area interests. The
174 hearings at which the Congress asked our executives to testify in fiscal
year 2011 covered the scope of our mission areas. (See fig. 6 for selected
topics we testified on by strategic goal in fiscal year 2011.) Fifty-seven of the
hearings at which our senior executives testified were related to high-risk
areas and programs. (See page 39 of the full report.)
To be useful to the Congress, our products must be available when our
clients need them. In fiscal year 2011, we met our timeliness target of
95 percent (see table 1). We outreach directly to our clients through several
means, including an electronic feedback form. We use the results of our
client feedback form as a primary source and barometer for whether we
are getting our products to our congressional clients when they need the
information. We have reduced our fiscal year 2012 target to 90 percent
because of resource constraints that may affect our on-time delivery.

People Measures
Our highly professional, multidisciplinary, and diverse staff were critical to
the level of performance we demonstrated in fiscal year 2011. Our ability to
hire, develop, retain, and lead staff is a key factor to fulfilling our mission of
serving the Congress and the American people. In fiscal year 2011, we met or
exceeded six of seven of our people measures. These measures are directly
linked to our goal 4 strategic objective of being a leading practices federal

14                                                                    GAO-12-5SP
        Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Figure 6: Selected Testimony Topics • Fiscal Year 2011

 Goal 1: Address Current and Emerging Challenges to the Well-Being and
               Financial Security of the American People
 ƒƒSafety of Medical Devices                                       ƒƒMortgage Foreclosures Regulatory
 ƒƒDOD and VA Care Coordination Program                              Oversight
 ƒƒState Oversight of Private Health                               ƒƒFederal Oil and Gas Restructuring
   Insurance Rates                                                 ƒƒImprovements Needed for Safe
 ƒƒPotential Overlap and Duplication in                              Drinking Water
   Government Programs                                             ƒƒAirport and Airway Trust Funds
 ƒƒIncapacitated Adults                                            ƒƒUnneeded Owned and Leased
 ƒƒFederal Workers’ Compensation                                     Federal Facilities
 ƒƒMilitary and Veterans Disability System                         ƒƒVA Real Property Realignment
 ƒƒFinancial Literacy                                              ƒƒNeeded U.S. Postal Service Legislation
 Goal 2: Respond to Changing Security Threats and the Challenges of Global
 ƒƒDHS 10 Years After 9/11                                         ƒƒDiplomatic Security Training
 ƒƒElectronic Employment Eligibility                                 Challenges
   Verification                                                    ƒƒDOD Space Acquisitions
 ƒƒAviation Security Behavior Detection                            ƒƒMissile Defense Transparency and
   Program                                                           Accountability
 ƒƒVisa Overstay Enforcement                                       ƒƒCoast Guard Deepwater Program
 ƒƒCombating Nuclear Smuggling                                     ƒƒContract Oversight of non-U.S.
 ƒƒFlood Insurance Reform                                            Vendors in Afghanistan
 ƒƒEfforts to Address Terrorist Safe Havens                        ƒƒPersonnel Security Clearance Process
 ƒƒAntidumping and Countervailing Duties
 Goal 3: Help Transform the Federal Government to Address National Challenges
 ƒƒOversight and Accountability of Federal                         ƒƒProtecting Federal Information
   Grants                                                            Systems
 ƒƒReducing Improper Payments                                      ƒƒInformation Technology Investment
 ƒƒFiscal Year 2010 U.S. Government                                  Oversight
   Financial Statements                                            ƒƒFederal Information Technology
 ƒƒDOD Financial Management Challenges                               Spending
 ƒƒMedicare and Medicaid Fraud, Waste,                             ƒƒGPRA Modernization Act
   and Abuse                                                         Implementation
 ƒƒFraud Prevention in Service-Disabled                            ƒƒBudget Enforcement Mechanisms
   Veteran-Owned Small Business Program                            ƒƒ2010 Census Lessons Learned
 ƒƒFraud Prevention in SBA’s 8(a) Program                          ƒƒTax System Complexity and Taxpayer
 ƒƒTax Delinquent Recovery Act Contractors                           Compliance
Source: GAO.

Note: Additional information on selected testimonies can be found in part II, pp. 70, 78, and 86 of the full report.

GAO-12-5SP                                                                                                             15
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

New Hire Rate
Our new hire rate is the ratio of the number of people hired to the number
we planned to hire. We develop an annual workforce plan that takes into
account strategic goals; projected workload requirements; and other
changes, such as retirements, other attrition, promotions, and skill gaps.
The workforce plan specifies the number of planned hires for the upcoming
year. Adjustments to the plan are made throughout the year, if necessary,
to reflect changing needs and conditions. In fiscal year 2011, our original
plan was to hire 90 new staff. Because of the delay in receiving our final
appropriations, compounded by a significantly reduced budget, we adjusted
our plan to 56 new staff, but we were only able to bring on board 47 staff by
year-end. Table 1 shows that we did not meet our target of 95 percent of our
goal for new hires, achieving an 84 percent new hire rate.
Retention Rate
We continuously strive to make GAO a place where people want to work.
Once we have made an investment in hiring and training people, we
would like them to stay with us. This measure is one indicator of whether
we are attaining this objective. We calculate this measure by taking 100
percent minus the attrition rate, where attrition rate is defined as the
number of separations divided by the average onboard strength. We
calculate this measure with and without retirements. Our exit surveys have
shown that staff who retire do so for family, life, or health considerations;
whereas nonretirees leave for new opportunities to work elsewhere, for
family reasons, or to make better use of their skills. In fiscal year 2011,
we exceeded our overall retention (with retirements) target rate by 2
percentage points at 92 percent. We also exceeded our target for our
retention rate without retirements by 2 percentage points at 96 percent. As
with fiscal years 2009 and 2010, we attribute exceeding the target retention
rates to a slow economy, which has caused some staff to delay retirement
and reduced other attrition, such as resignations or transfers to other
Staff Development and Utilization, Effective Leadership by
Supervisors, and Organizational Climate
One way that we measure how well we are supporting our staff and
providing an environment for professional growth is through our annual
employee feedback survey. Through the survey, we encourage our staff to
indicate what they think about our overall operations, work environment,
and organizational culture and how they rate their immediate supervisors on
key aspects of their leadership styles. In fiscal year 2011, about 70 percent
of our employees completed the survey and we exceeded all four targets
(see table 1). Our fiscal year 2011 performance on all of these measures
was very consistent with our fiscal year 2010 results. Our performance on
the staff development and leadership measures was the same as last year,
and staff utilization and organizational climate were higher by 1 percentage

16                                                                    GAO-12-5SP
       Summary of GAO’s Performance and Financial Information Fiscal Year 2011

point. Given our performance on these measures over the last 5 years,
we have decided to retain our fiscal year 2011 targets for fiscal year 2012
(see table 1).

GAO’s High-Risk Program
In 1990, we began our high-risk program to highlight long-standing
challenges facing the federal government. Historically, we designated high-
risk areas based on their increased susceptibility to fraud, waste, abuse,
and mismanagement. As the program has evolved, we have also used
the high-risk designation to draw attention to the need for broad-based
transformation to achieve greater efficiency, effectiveness, accountability,
and sustainability of key government programs and operations.
Issued to coincide with the
start of each new Congress,           Our 2011 high-risk area work:
our high-risk updates have            „„ 186 reports
helped sustain attention from
members of the Congress who           „„ 57 testimonies
are responsible for oversight         „„ $29.2 billion in financial benefits
and from executive branch
officials who are accountable         „„ 544 nonfinancial benefits
for performance. Overall, our
high-risk program has served to identify and help resolve serious weaknesses
in areas that involve substantial resources and provide critical services to
the public. Since 1990, GAO has designated over 50 areas as high risk and
subsequently removed over one-third of the areas based on progress made.
As of the end of fiscal year 2011, our high-risk list highlighted 30 areas across
government. Table 7 on page 39 of the full report lists each current high-risk
area and the year it was added to the list.
In our February 2011 high-risk update, we reported that sufficient progress
had been made to remove the high-risk designation from two areas: the
DOD Personnel Security Clearance Program and the 2010 Census. We also
designated one new high-risk area—Management of Federal Oil and Gas
Resources. More information on our high-risk program is available on our
website at http://www.gao.gov/highrisk.

Duplication Mandate
In 2010, a new statutory requirement called for GAO to identify federal
programs, agencies, offices, and initiatives—either within departments
or governmentwide—that have duplicative goals or activities and report
annually to the Congress on our findings, as well as actions to reduce such
In March 2011, we issued our first annual report (GAO-11-318SP), which
identified 34 areas either where agencies, offices, or initiatives have
similar or overlapping objectives or provide similar services to the same
 Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note.

GAO-12-5SP                                                                       17
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

populations, or where government missions are fragmented across multiple
agencies or programs. For example, 82 programs designed to help improve
teacher quality are administered across 10 federal agencies. At least 31
entities within the DOD provide items urgently needed to U.S. warfighters
at a cost of over $76 billion since 2005. Overlap and fragmentation can
be indicators of unnecessary duplication, which can waste scarce federal
resources, negatively impact key federal technology and other efforts,
and result in less effective and efficient services for the American public.
However, we also noted that some degree of duplication may be necessary
given the nature or magnitude of the federal effort, as in the case of
national security and defense. In light of the nation’s fiscal pressures, we
also identified 47 other areas where the federal government may be able to
achieve cost savings or revenue enhancement. Many of these exist within
single departments or agencies, such as multiple opportunities within the
Internal Revenue Service to improve tax compliance. We further identified
several potentially significant governmentwide cost-saving opportunities,
such as promoting competition for the more than $500 billion in federal
contracts and applying strategic sourcing best practices throughout the
federal procurement system.
In many areas, we suggested actions—outlining some new options, as well as
underscoring numerous existing GAO recommendations—that policymakers
could take to reduce or eliminate unnecessary duplication, overlap, and
fragmentation or achieve other potential financial benefits. A number
of these actions can be addressed by agency officials, such as closing
collaboration and information sharing gaps and pursuing more comprehensive
and strategic approaches to managing and overseeing broad-based efforts.
Others may require executive branch or enhanced congressional oversight
or legislative action, particularly where fragmentation or overlap may be
partially due to the legislative creation of separate programs under the
jurisdiction of several different agencies, as in the case of some federal
homeless programs, and where fragmentation and overlap challenges have
been long-standing, as they have been in the federal approach to surface
transportation. We identified areas where additional information could help
determine the optimal course of action.
Streamlining federal efforts, reducing government costs, and enhancing
revenue collections can offer near-term financial and other benefits, as well
as help set the government on a more sustainable, long-term fiscal path.
Depending on the nature and extent of actions taken, these actions could
collectively result in tens of billions of dollars in annual savings. Actions
in some areas alone could produce significant savings. For example, we
estimated that addressing potentially duplicative policies designed to boost
domestic ethanol production could reduce federal revenue losses by up to
$5.7 billion annually. Estimating financial benefits was not always possible.
In some cases necessary information was not readily available, and in other
cases, the benefits that may result from reducing or eliminating duplication,
such as better law enforcement or coordination, can be difficult to monetize.

18                                                                    GAO-12-5SP
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Nevertheless, given the amount of program dollars involved in the issues we
identified, even limited adjustments to the federal approach could result in
significant savings.

Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010
The Congress passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act on July 21, 2010, to address regulatory gaps and oversight
failures in the U.S. mortgage, securities, and financial markets. The act
requires significant rule making by regulatory agencies and requires us to
conduct over 40 studies on a broad array of issues and, for a third of these
studies, to report our findings within a year of the act’s passage. As a result,
in fiscal year 2011, we issued 17 products, making 15 recommendations to
various financial regulators in the following areas:
•	 Mortgages, including appraisals and the effect of the act’s requirements
     on the mortgage market, and the potential impact on the mortgage
     market of the act’s criteria for lower-risk mortgages, credit risk retention
     requirement, and provisions concerning homeownership counseling and
     regulation of high-cost loans.
•	 Securities markets, including the risks and regulation of proprietary
     trading by banking entities, the movement of former Securities
     and Exchange employees to regulated firms, and the role of the
     Governmental Accounting Standards Board in the municipal securities
•	 Financial institutions, including the implementation of the prompt
     corrective action framework for troubled institutions, an audit of
     the Federal Reserve System’s emergency program activities, and
     bankruptcy and orderly liquidation processes for financial companies and
     international coordination related to the bankruptcy of these companies.
•	 Consumer protection issues, such as oversight issues related to financial
     planners, the regulatory requirements for mutual fund advertisements,
     regulatory approaches for person-to-person lending, and methods and
     strategies for improving financial literacy.
More information on our work on the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 can be found on page 42 of the full report.

The American Recovery and Reinvestment Act
The American Recovery and Reinvestment Act of 2009 (Recovery Act)
mandated several studies for GAO, including conducting bimonthly reviews
on the uses of Recovery Act funds in selected states and localities and
commenting on the estimates of jobs created or retained as reported
by recipients of Recovery Act funds. In fiscal year 2011, the focus of our
bimonthly reviews shifted from our prior work reporting on the uses of funds
across a wide range of programs by the selected states and the District

GAO-12-5SP                                                                     19
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

of Columbia to providing enhanced analysis of selected programs in states
and localities, with each bimonthly review highlighting a single Recovery
Act program. With this approach, we have provided the Congress and other
decision makers with more in-depth analyses of programs and their results.
To respond to the mandate to comment on jobs created or retained, we
have commented each quarter on the required Recovery Act reports of
nonfederal recipients of Recovery Act funds, including grants, contracts, and
loans. Each of these recipient reports included a list of projects or activities
for which Recovery Act funds were expended or obligated and information
concerning the amount and use of funds and jobs created or retained by
these projects and activities. In fiscal year 2011, this work focused on
recipient reporting related to the specific programs reviewed, and included
work addressing steps that states and localities took to ensure the quality of
the data they submitted. We also reviewed steps that federal agencies took
after recipients reported to ensure that their recipients’ data were of high
quality and that those required to report did so.
In fiscal year 2011, we issued several reports fulfilling these two ongoing
mandates—on Recovery Act funding for Head Start, Energy Efficiency and
Conservation Block Grants, transportation and water infrastructure projects,
and education programs. In addition to fulfilling our bimonthly and recipient
reporting mandates, our fiscal year 2011 Recovery Act-related reports have
covered funding in a wide spectrum of program and policy areas ranging
from broadband to port security to Medicaid assistance to states during
economic downturns.
Agencies have implemented more than half of the 68 recommendations we
have made since our first report was issued in April 2009, including providing
additional guidance for fulfilling reporting requirements, improving the
monitoring of recipients and subrecipients of Recovery Act funds, clarifying
approaches states can take to recover administrative costs associated
with the wide range of activities to comply with the Recovery Act, and
developing procedures to measure impact. Our presence in the selected
states and localities heightened the level of vigilance, including influencing
officials to make real-time improvements to head off problems before they
could occur. Moving forward, our capacity to continue this work has been
enhanced by the strong and productive working relationships established
with state and local government leaders.
We continue to maintain a separate page on our external website devoted
to our Recovery Act work. In one place (http://www.gao.gov/recovery), the
public can find information on the Recovery Act, see biweekly updates on
Recovery Act outlays, access our bimonthly reviews on the use of funds,
view related podcasts, use an interactive map to access reports on each
of the selected states and the District of Columbia, learn about other
mandates and related work, and find out how to report allegations of abuse
of Recovery Act funds.

20                                                                    GAO-12-5SP
        Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Managing Our Resources
Resources Used to Achieve Our Fiscal Year 2011 Performance Goals
Our financial statements for the fiscal year ending September 30, 2011,
were audited by an independent auditor, Clifton Gunderson, LLP, and
received an unqualified opinion. The auditor found our internal controls to
be effective—which means that no material weaknesses were identified—and
reported that we substantially complied with the applicable requirements
for financial systems in FFMIA. In addition, the auditor found no instances
of noncompliance with the laws or regulations in the areas tested. In the
opinion of the independent auditor, our financial statements are presented
fairly in all material respects and are in conformity with generally accepted
accounting principles. The auditor’s report, along with the statements and
their accompanying notes, begin on page 101 of the full report.4

We focus most of our financial activity on the execution of our congres-
sionally approved budget with most of our resources devoted to the people
needed for our mission. In fiscal year 2011, our budgetary resources included
new direct appropriations of $546.3 million (net of an approximate $1 million
rescission)—a reduction of $10.5 million from the fiscal year 2010 level. We
also received reimbursements from the lease of space in our Washington,
D.C., headquarters building, audits of agency financial statements, and sup-
port activities related to monitoring the implementation of TARP, including
bimonthly reporting and conducting an annual audit of the Office of Finan-
cial Stability’s financial statements on TARP. In fiscal year 2010, in addition to
our appropriation and earned reimbursements, our resources included $20.8
million to cover program reviews required by the Recovery Act.
Our total assets were $125 million, consisting mostly of property and
equipment (including the headquarters building, land and improvements,
and computer equipment and software) and funds with the U.S. Treasury.
The net property and equipment balance increased $3.9 million in fiscal year
2011 to $36.7 million. Capital asset acquisitions include replacement of the
headquarters building steam heating system with a more energy efficient
natural gas system as well as necessary information systems data storage
capacity hardware. Total liabilities of $108 million were composed largely of
employees’ accrued annual leave, employees’ salaries and benefits, amounts
owed to other government agencies, and nongovernmental accounts payable.
Overall, our net cost of operations in fiscal year 2011 is approximately
$33 million below the fiscal year 2010 level largely because of expiration of
fiscal year 2010 funding for our work under the Recovery Act and a reduced
current year appropriation. In fiscal year 2011, the Executive Committee
made resource decisions in accordance with our strategic plan and budgetary
constraints and reallocated resources between some areas of work and
reduced work in other areas. Goal 1 (Well-being and Financial Security of

 Note 14 to the financial statements on page 122 of the full report describes our Davis-Bacon Act trust function. For

more detailed Davis-Bacon Act financial information, contact our General Counsel’s Office.

GAO-12-5SP                                                                                                              21
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

the American People) increased to reflect the reallocation of resources from
goal 3 (Transform the Federal Government to Address National Challenges)
because of the expiration of fiscal year 2010 Recovery Act funds and a
reduction in the level of TARP work from goal 2 (Changing Security Threats).
Goal 1 also increased to reflect the realignment of resources from goal 2 to
goal 1, consistent with our strategic plan issued in late fiscal year 2010. Goal
4 (Maximizing the Value of GAO) resources for both contracts and staff time
declined because of budget constraints.
Financial Systems and Internal Controls
We recognize the importance of strong financial systems and internal
controls to ensure our accountability, integrity, and reliability. To achieve a
high level of quality, management maintains a quality control program and
seeks advice and evaluation from both internal and external sources.
We complied with the spirit of OMB Circular No. A-123, Management’s
Responsibility for Internal Control, which provides guidance for agencies’
assessments of internal control over financial reporting. We performed a
risk-based assessment by identifying, analyzing, and testing internal controls
for key business processes. Based on the results of the assessment, we
have reasonable assurance that internal control over financial reporting,
as of September 30, 2011, was operating effectively and that no material
control weaknesses exist in the design or operation of the internal controls
over financial reporting. Additionally, our independent auditor found that
we maintained effective internal controls over financial reporting and
compliance with laws and regulations. Consistent with our assessment, the
auditor found no material internal control weaknesses.
We are also committed to fulfilling the internal control objectives of FMFIA.
Although we are not subject to the act, we comply voluntarily with its
requirements. Our internal controls are designed to provide reasonable
assurance that transactions are properly recorded, processed, and
summarized to permit the preparation of financial statements, and that
assets are safeguarded against loss from unauthorized acquisition, use,
or disposition. Further, they are designed to ensure that transactions are
executed in accordance with the laws governing the use of budget authority
and other laws and regulations that could have a direct and material effect
on the financial statements.
In addition, we are committed to fulfilling the objectives of FFMIA. We
believe that we have implemented and maintained financial systems
that comply substantially with federal financial management systems
requirements, applicable federal accounting standards, and the U.S.
Government Standard General Ledger at the transaction level as of
September 30, 2011. We made this assessment based on criteria established
under FFMIA and guidance issued by OMB.
The Improper Payments Elimination and Recovery Act of 2010 requires that
agencies (1) periodically review activities susceptible to significant improper
payments; (2) estimate the amount of improper payments; (3) implement a

22                                                                    GAO-12-5SP
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

plan to reduce improper payments; and (4) report the estimated amount of
improper payments and the progress to reduce them. We have implemented
and maintained internal control procedures that help monitor disbursement
of federal funds for valid obligations. These controls are tested annually.
Based on the results of our tests, we made no improper payments in fiscal
year 2011.
Our Inspector General (IG) also conducts audits and investigations that are
internally focused. During fiscal year 2011, the IG evaluated the effectiveness
of our policy and procedures for preventing and detecting travel charge card
misuse and reviewed our information security program. In addition, the IG
operates an internal hotline for use by our employees and contractors to
report potential fraud, waste, and abuse of our government property, assets,
and resources and other potentially serious problems in our operations,
including the possible violation of any law or regulation. The results of
the IG’s work and actions taken by us to address IG recommendations are
highlighted in the IG’s semiannual reports to the Congress. (See, for example,
In addition, our Audit Advisory Committee assists the Comptroller General in
overseeing the effectiveness of our financial reporting and audit processes,
internal controls over financial operations, and processes that ensure
compliance with laws and regulations relevant to our financial operations.
The committee is composed of individuals who are independent of GAO
and have outstanding reputations in public service or business with financial
or legal expertise. The committee’s report appears on page 100 of the full
Networks, Collaborations, and Partnerships
Unlike the national audit offices of some countries, we have no direct
audit responsibility over states and localities. As a result, we face unique
challenges in “following the federal dollar” and ensuring accountability for
grants and other federal funds flowing out to subfederal recipients. We also
have an important role of coordinating professional audit standards, setting
audit standards for federally funded programs, and representing U.S. views
and interests in the international community. The State Department and
the U.S. Agency for International Development look to us to represent the
broader interests of the U.S. government in promoting good governance
internationally and often seek our support of educational visits by leaders
from foreign countries. Domestic audit and accountability offices look
to us for guidance, expertise, and technical assistance in implementing
professional standards.
We have leveraged our resources by collaborating with our domestic and
global networks. For example, our participation in the INTOSAI Public Debt
Working Group and our leadership of the Task Force on the Global Financial
Crisis: Challenges to Supreme Audit Institutions involves some 25 countries
and has provided us current information on global events and multiple
facets of the financial crisis. Through other networks, such as the federal

GAO-12-5SP                                                                     23
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

inspectors general and state and local auditors groups, notably the National
Association of State Auditors, Controllers, and Treasurers and Association
of Local Government Auditors, we have continued to build capacity within
our agency and among our partners to do quality work auditing programs
involving U.S. funds.
Internal Management Challenges and External Factors That Could
Affect Our Performance
The Comptroller General, the Executive Committee, and other senior
executives identify management challenges through the agency’s strategic
planning, management, internal controls, and budgeting processes. Under
strategic goal 4, several performance goals and underlying key efforts focus
attention on each of our management challenges. Each year, we ask our IG
to examine management’s assessment of the challenges and the agency’s
progress in addressing them.
For many years, we have focused high-level management attention on three
challenges—physical security, information security, and human capital.
For fiscal year 2012, we have removed the first two challenges, identified
several high-priority actions in the human capital area, and identified a
new challenge related to improving the efficiency and effectiveness of our
engagements and delivery of timely and quality information to the Congress.
Additional information on these areas is available on pages 56 through 61 of
the full report.
Physical Security Challenge
We removed physical security as a management challenge because we have
determined that our programs are mature; meet federal requirements; and
provide appropriate protections for our people, property, and other assets.
Embedded in our programs are procedures for continuous monitoring of
threats and changing requirements and practices, and processes for evolving
our programs, as needed. While we still have several projects under way
or planned to enhance our safety, security, and emergency preparedness
functions, we are confident that we have the ability to respond to and
address new threats and emergencies as they arise.
Information Security
We also removed information security as a management challenge because
we have an information systems security program that comprehensively
addresses risks and provides for continuous evolution of our processes and
controls. Of note, our program has been assessed by our IG every year
since 2003 and, for the past 3 years, has been found to be consistent with
the requirements of the Federal Information Security Management Act of
2002. However, given the constantly evolving nature of information security
threats, we will maintain management focus on continuing to support a
robust security program.

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     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

Human Capital
We are continuing to report human capital as a management challenge as
demand for our work remains high while we are facing an era of austere
budgets and the associated impact on our ability to hire, retain, and
motivate a top-performing workforce. We were able to make progress in
several key areas as planned for fiscal year 2011. Specifically, we
•• completed the first master collective bargaining agreement with the
    GAO Employees Organization, International Federation of Professional
    and Technical Engineers (IFPTE), Local 1921;
•• continued to focus on attracting and hiring staff to address our staffing
    needs in support of our strategic plan and Workforce Diversity Plan,
    while filling critical needs identified in our annual Workforce Plan;
•• completed implementation of all the short-term recommendations from
    the Performance Appraisal Study; and
•• made significant progress on design of a new performance management
    system by conducting job analyses and developing draft rating criteria
    and a new rating scale.
Additional details on these and related actions taken in fiscal year 2011 are
discussed in part II of the full report.
Looking forward, the overarching human capital challenge we face is ensuring
that we continue to support the mission of the agency with the right
resources, where and when they are needed, in the face of declining budgets,
and provide meaningful rewards and recognition needed to retain our highly
skilled workforce. In order to ensure continued high-quality and timely service
to the Congress, in fiscal year 2012, we will focus our efforts on a few top
priorities to sustain an agile, well-trained, balanced, diverse workforce—
succession planning, targeted training and hiring, and rewards and recognition.
Engagement Efficiency Challenge
For fiscal year 2012, we have identified a new management challenge
related to efficiency in how we conduct our mission work. With the many
complex challenges facing the Congress and the nation, we need to look
for ways to produce our reports and analysis more quickly and efficiently
without sacrificing quality. We have taken steps to improve management and
prioritization of the “pipeline” of congressional requests and mandates we
receive, as outlined in our Congressional Protocols and through the extensive
outreach that our Office of Congressional Relations and our senior executives
conduct in our day-to-day operations. In addition, while we have been
able to sustain high levels of productivity and continue to be an important
resource for our congressional clients, we are not immune from the concerns
about federal spending, having received a lower budget in fiscal year 2011.
With more than 80 percent of our budget devoted to personnel costs,
modest reductions or even static funding requires that we reduce staffing
levels and curtail hiring. As a result, our ability to continue to provide timely

GAO-12-5SP                                                                     25
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

information and analysis to the Congress as it debates critical issues of
national and international concern poses a significant management challenge
in this time of limited resources as compared to previous years.
Accordingly, in an environment where quality and effectiveness are
paramount and must be maintained while resources are declining, we must
improve our efficiency in responding to congressional requests and mandates
to meet the Congress’s needs and remain a trusted resource in a fast-
moving, ever-changing world. To address this challenge, we have identified
three areas of opportunity for improved efficiency and will be taking
steps to address these areas in fiscal year 2012—managing and conducting
engagements, utilizing resources, and communicating our message.
Mitigating External Factors
In addition to the resource constraints and uncertainty of the budget for
fiscal year 2012, which directly affect our internal management challenges,
other external factors that could affect our performance and progress
toward our goals include shifts in congressional interests, the ability of other
agencies to make improvements needed to implement our recommendations
in a constrained budget environment, and access to agency information. We
mitigate these factors in several ways.
While demand for our work is very high, with 929 congressional requests
and new mandates in fiscal year 2011, unanticipated shifts in congressional
priorities change the mix of work we are asked to perform. To be prepared
to address timely and relevant issues, we communicate frequently with our
congressional clients to stay abreast of their interests. In addition, each
year we conduct a very small percentage of our evaluations annually under
the Comptroller General’s authority to address priority issues we identify.
We also strive to maintain flexibility in deploying our resources in response
to shifting priorities and have successfully redirected our resources when
appropriate and maintained broad-based staff expertise.
The extent to which we can obtain access to agency information also plays an
essential role in our ability to report on issues of importance to the Congress
and the American people. While we generally receive very good cooperation,
over time we have experienced access issues at certain departments and
agencies. We actively pursue access issues as they arise, and we are engaged
in discussions and efforts across the executive branch to enhance our access
to information. In 2011, there were several developments on the access front
relating to these discussions and efforts. For example, the Department of
Justice initiated a pilot program designed to improve its responsiveness to
our requests and has agreed to make the key piloted procedures permanent.
In addition, the Director of National Intelligence issued a written directive
(Intelligence Community Directive 114), which contains a number of provisions
designed to promote constructive interaction between us and elements
of the Intelligence Community, such as establishing a presumption of
cooperation with us. These developments and other access to information
issues are described in more detail on pages 61 through 63 of the full report.

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GAO-12-5SP                                                                     27
     Summary of GAO’s Performance and Financial Information Fiscal Year 2011

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