oversight

Month in Review: November 1999 Reports, Testimony, Correspondence, and Other Publications

Published by the Government Accountability Office on 1999-11-01.

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

               United States Gene ral Accounting Office

GAO            Office of Public Affairs




               MONTH IN REVIEW:
               NOVEMBER 1999
               Reports, Testimony,
               Correspondence, and
               Other Publications
               Highlights
               Large Bank Mergers: Fair Lending Review Could Be
               Enhanced With Better Coordination. Page 6.

               Social Security: Evaluating Reform Proposals.
               Page 12.

               Financial Management: Increased Attention Needed
               to Prevent Billions in Improper Payments. Page 7.

               Budget Surplus: Experiences of Other Nations and
               Implications for the United States. Page 2.

               DOD Personnel: Inadequate Personnel Security
               Investigations Pose National Security Risks. Page 19.




                          G A O
                      Accountability· Integrfty· Reliability


GAO/OPA-OO-2
If you have questions about the Month in Review, please call Susan
Becker, Acting Director of Public Affairs, at (202)512-4800. For
information on specific reports, please contact appropriate GAO
staff. GAO publishes the names of key contacts and their
telephone numbers in each report.
Contents



Month in Review:
                   Agriculture and Food                           2
November 1999      Budget and Spending                            2
                   Business, Industry, and Consumers             3
                   Education                                     4
                   Energy                                         5
                   Environmental Protection                       5
                   Financial Institutions                         6
                   Financial Management                           7
                   Government Operations                         8
                   Health                                        9
                   Housing                                      12
                   Income Security                              12
                   Information Management                       14
                   International Affairs                        16
                   Justice and Law Enforcement                  17
                   National Defense                             19
                   Natural Resources                            25
                   Science, Space, and Technology               26
                   Social Services                              26
                   Transportation                               28
                   Veterans Affairs                             29
                   Special Publications                         29
                   Reports on Agency Rules                      32




                   Page 1                              GAO/OPA-OO-2
Month in Review: November 1999


                       Food Safety:
Agriculture and Food   Agencies Should Further Test Plans for Responding to
                       Deliberate Contamination

                       GAOIRCED-OO-3,    Oct. 27 (10 pages).

                       Are federal food safety regulatory agencies prepared to respond to acts or
                       threats of deliberate food contamination, including those by terrorists?
                       The agencies primarily responsible are the Food Safety and Inspection
                       Service and the Food and Drug Administration. Deliberate contamination
                       of food with a biological agent has rarely occurred in the United States.
                       However, GAO identified two acts since 1984, which produced short-term
                       illnesses among more than 750 people, but no deaths. In addition, from
                       1995 through 1999, the federal agencies reported three threats-two were
                       hoaxes and the other is still under investigation. This report describes the
                       plans and procedures that federal agencies have in place to cope with
                       threats and acts of deliberate food contamination with a biological agent.

                       U.S. Department of Agriculture:
                       Marketing Assistance Loan Program Should Better Reflect
                       Market Conditions

                       GAOIRCED-OO-9,    Nov. 23 (22 pages).

                       The marketing assistance loan program provides fanners who grow
                       certain crops with financial assistance at harvest time, when prices are
                       usually lower than at other times of the year. As of September 1999,
                       $3.4 billion of the $3.7 billion in cash payments went to producers of the
                       following four crops: corn, soybeans, wheat, and upland cotton. The top 10
                       states where producers received the assistance were Illinois, Indiana,
                       Iowa, Kansas, Minnesota, Nebraska, North Dakota, Ohio, South Dakota,
                       and Texas. This report discusses (1) which producers received cash
                       payments through the program, (2) why some producers did not
                       participate in the program, and (3) the concerns that have been raised
                       about the program's effects on cash payments and potential forfeitures.


                       Budget Surpluses:
Budget and Spending    Experiences of Other Nations and the Implications for the
                       United States

                       GAO/AIMD-OO-23,   Nov. 2 (207 pages).




                       Page 2                                                          GAO/OPA-OO-2
                      Month in Review: November 1999




                      In fiscal year 1998, the United States had a budget surplus for the first time
                      in nearly 30 years. Although balancing the federal budget has been the
                      clear and generally accepted fiscal goal for many years, there is no
                      consensus yet on the appropriate fiscal policy dUling a period of budget
                      surpluses. Should the surpluses be maintained? How should they be used?
                      This report examines the experiences of six countries that have recently
                      experienced budget surpluses-Australia, Canada, New Zealand, Norway,
                      Sweden, and the United Kingdom. GAO discusses (1) how they achieved
                      budget surpluses and what their fiscal policies were during periods of
                      surplus, (2) how they addressed long-term budgetary pressures, and
                      (3) how they adapted their budget process during a period of surplus. GAO
                      also identifies the lessons that these nations learned that might be useful
                      for the United States. GAO concludes that sustaining a surplus over time to
                      address the United States' own long-tenn needs will require a framework
                      that provides transparency through the articulation and defense of fiscal
                      policy goals; provides accountability for making progress toward those
                      goals; and balances the need to meet selected pent-up demands with the
                      need to address long-ternl budget pressures.


                      Consumer Product Safety Commission:
Business, Industry,   Additional Steps Needed to Assess Fire Hazards of
and Consumers         Upholstered Furnitm'e

                      GAOIHEHS-OO-3,   Nov. 17 (28 pages).

                      To establish a flammability standard for chairs, sofas, and other
                      upholstered furniture, the Consumer Product Safety Commission
                      quantifies the fire hazards using (1) national estimates of the total number
                      of fires in four general categories and the extent of losses that do not
                      reflect specific types of fires, such as those from upholstered furniture,
                      and (2) detailed information about specific types of fires within a portion
                      of all U.S. fires. At present, the Commission cannot ensure that its
                      methodology provides a complete picture of the national fire losses that
                      the potential standard would address because, among other things, (1) it
                      has not developed a statement of precision for the estimated losses from
                      upholstered furniture fires and therefore cannot disclose the range of the
                      standard's possible benefits and (2) its methodology for calculating fire
                      losses has the effect of including losses that the standard is not likely to
                      address, such as losses from fires that are intentionally set. GAO
                      recommends that as the Commission continues to consider the need for a
                      mandatory flammability standard for upholstered furniture, it do more




                      Page 3                                                            GAO/OPA-OO-2
            Month in Review: November 1999




            analyses to identify the level of imprecision in its methodology's
            ftmdamental assumptions and apply any necessary revisions to its
            cost-benefit analysis.


            Migrant Children: Education and HHS Need to Improve the
Education   Exchange of Participant Information

            GAO/HEHS-OO-4, Oct. 15 (51 pages).

            The Department of Education's Migrant Education Program (MEP) and the
            Depmtment of Health and Human Services' (HHS) Migrant Head Start
            Program (MHS) provide a range of health, educational, nutritional, and
            social services to migrant children. MEP'S primary goal is to give the
            children of migrant crop workers a chance to meet the same state
            educational standards as other children. Its services vary across states,
            districts, and schools. MHS ftmds infant and preschool centers that serve
            the preschool-age children of migrant crop workers. MHS'S narrower
            popUlation definition results in service gaps for some preschool children
            and for children of different ages in the same family. A broader definition
            would mean that MEP and MHS could work together to provide more orderly
            transitions for children moving from MHS into school and greater service
            coverage for all the children in a family. Analysis of the adequacy and the
            targeting of MHS'S resources and federal leadership to develop a system for
            each program to SUppOlt the exchange of essential student information
            and coordination of services are needed. Neither Education nor HHS has
            measured how well the two programs are achieving their goals. GAO
            believes that it would be economically feasible to include a sample of
            migrant children in ongoing national data collection efforts. GAO
            recommends that the types of activities included in MHS'S definition of
            agricultural work be expanded to harmonize with those included in MEP'S
            definition. GAO also recommends that both Education and HHS develop
            nationwide systems to transmit children's tracking information and that
            they include studies that measure MEP'S and MHS'S outcomes in their
            research and evaluation plans.

            Education and Care:
            Early Childhood Programs and Services for Low-Income Families

            GAOIHEHS-OO-ll, Nov. 15 (29 pages).




            Page 4                                                         GAO/OPA-OO-2
                 Month in Review: November 1999




                 The federal government, primarily through the Department of Health and
                 Hwnan Services and the Department of Educatioll, spent about $11 billion
                 in 1999 on a range of programs for early childhood care and education for
                 low-income children. The states spent nearly $4 billion. Thirty-two states
                 funded preschool programs, 15 supplemented Head Start funds, and 19
                 had child care programs that provided funding to communities.
                 Educationally oriented services were the most common in centers and
                 homes. Low-income families nevertheless found it hard to obtain infant
                 and toddler care, care for children with special needs (such as those with
                 physical disabilities), and care during evenings and weekends. Three
                 major barriers included cost, availability, and accessibility to providers.
                 Some states and localities using collaborative initiatives report varying
                 degrees of success at increasing the availability of care, depending on
                 different eligibility requirements, concerns about losing program authority,
                 and lack of information or funding for collaboration. Infant and toddler
                 care, care during nonstandard hours, and care for children with special
                 needs have the greatest need for support.



Energy

Correspondence   Tennessee Valley Authority: Response to Questions From September 22,
                 1999, Hearing. GAO/AlMD-OO-47R, Nov. 19.


                 Superfund:
Environmental    Information on the Program's Funding and Status
Protection
                 GAOIRCED-OO-25,   Oct. 29 (30 pages).

                 After nearly 20 years and outlays of more than $14 billion, the Superfund
                 program has yet to complete cleanups for 42 percent of the nation's most
                 severely contaminated hazardous waste sites. The Superfund trust fund
                 has been financed primarily by a tax on crude oil and some chemicals,
                 together with an environmental tax on corporations. This report discusses
                 (1) the status of the program's funding and expenditures, including
                 information on the Superfund trust fund so far and the money
                 appropriated from it to federal agencies other than the Environmental
                 Protection Agency for Superfund activities; (2) the costs to responsible
                 parties for all site cleanups and these parties' related transaction costs




                 Page 5                                                          GAOIOPA-OO-2
                         Month in Review: November 1999




                         from 1980 through 1998, categorize~l before and after December 1995,
                         when the authority for Superfund taxes expired; and (3) the cleanup status
                         of the 640 nonfederal sites on the National Priorities List as of APlil1999
                         and the estimated total and annual costs to finish cleaning them up.


Correspondence           Environmental Protection:        EPA'S   Use of Funds for Brownftelds.
                                       Oct. 27.
                         GAOIRCED-OO-32R,



                         Large Bank Mergers:
Financial Institutions   Fair Lending Review Could Be Enhanced

                         GAO/GGD-OO-16,   Nov. 3 (51 pages).

                         The fair lending laws prohibit discrimination on the basis of an applicant's
                         race, color, religion, gender, national origin, or other characteristics. In
                         recent years, mergers between several of the nation's largest banks have
                         prompted consumer and community groups to raise fair lending concems.
                         This report (1) describes the fair-lending issues raised by consumer and
                         community groups during the application process for six larger bank
                         holding company mergers and (2) assesses the Federal Reserve Board's
                         consideration of those issues. GAO provides information on actions that
                         regulators have taken in response to earlier GAO recommendations on fair
                         lending. GAO also provides information on emerging fair-lending issues
                         related to credit scoring, automated loan underwriting, and mortgage
                         brokers. In each of the six mergers GAO reviewed, consumer and
                         commlmity groups raised the issue of perceived high loan denial and low
                         lending rates to minorities by the mergers. The Fed considered these
                         fair-lending issues in the six merger cases by collecting, reviewing, and
                         analyzing infom1ation from various sources, including the bank holding
                         companies involved in the mergers and other federal and state agencies.
                         The Fed did not routinely contact the Federal Trade Commission or the
                         Department of Housing and Urban Development about the six mergers
                         despite their fair lending enforcement responsibilities.

                         Long-Term Capital Management:
                         Regulators Need to Focus Greater Attention on Systemic Risk

                         GAO/GGD-OO-3,   Oct. 29 (55 pages).




                         Page 6                                                                   GAO/OPA-OO-2
             Month in Review: Novembel' 1999




             In 1998, Long-Tenn Capital Management (LTcM)-one of the largest U.S.
             hedge funds-lost more than 90 percent of its capital. The Federal Reserve
             concluded that rapid liquidation of LTCM'S trading positions and related
             positions of other market pmticipants might pose a significant threat to
             already unsettled global financial markets. As a result, the Fed arranged a
             private sector recapitalization to prevent LTCM'S collapse. The
             circumstances surrounding LTCM'S near collapse and recapitalization raised
             questions that go beyond the activities of LTCM and hedge funds to how
             federal financial regulators fulfill their supervisory responsibilities and
             whether all regulators have the necessary tools to identify and address
             potential threats to the financial system. This report discusses (1) how
             LTCM'S positions became large and leveraged enough to be deemed a
             potential systemic threat, (2) what federal regulators know about LTCM and
             when they found out about its problems, (3) what the extent of
             coordination among regulators was, and (4) whether regulatory authority
             limits regulators' ability to identify and mitigate potential systemic risk.


             Financial Management:
Financial    Increased Attention Needed to Prevent Billions in
Management   Improper Payments

             GAO/AIMD-OO-lO,   Oct. 29 (69 pages).

             The federal government spends billions of dollars each year on grants,
             transfer payments, and the procurement of goods and services. In their
             fiscal year 1998 financial statements, nine federal agencies reported
             improper payments totaling $19.1 billion. GAO found that agencies are not
             performing comprehensive quality control reviews for celtain programs to
             detennine the propriety of program spending. As a result, the full extent of
             the problem-and possible solutions to it-is unknown. GAO believes that
             inadequate internal control and program design issues are the primary
             causes of improper payments for many federal programs. Economic and
             demographic projections suggest that federal outlays in certain programs
             will rise significantly. With billions of dollars at risk, agencies will need to
             continually and closely safeguard those resources entrusted to them and
             make it a priority to reduce fraud, waste, and abuse. A first step for some
             agencies will be to develop ways to identify, estimate, and report the
             nature and the extent of improper payments annually. Without this basic
             knowledge, agencies cannot be fully infonned about the magnitude,
             trends, and types of payment errors being made within their programs.




             Page 7                                                             GAOIOPA-OO-2
                 Month in Review: November 1999




Correspondence   Inspectors General: Infonnation on Resources and Selected
                 Accomplishments of Five Inspectors General. GAO/AfMD-DD-31R, Nov. 19.

                 Financial Management: National Institutes of Health Research Invention
                 Licenses and Royalties. GAO/AIMD-DD-44R, Nov. 22.


                 DC Courts:
Government       Improvements Needed in Accounting for Escrow and Other Funds
Operations
                 GAO/AIMD/OGC-DD-6,   Oct. 29 (23 pages).

                 The District of Columbia Courts did not properly account for the fW1ds in
                 half of its 18 bank accounts during fiscal year 1998, as seen in problems in
                 determining its cash balances and reconciling its accounting records to
                 supporting documentation. Although the Courts improved its
                 reconciliation procedures during fiscal year 1999 and was able to reconcile
                 fiscal year-end balances for 15 accounts, it continued to have difficulty in
                 properly accounting for the funds in three of its accounts-Child Support,
                 Civil Escrow, and Juror Fees. In addition, the Courts lacked adequate
                 controls and procedures during fiscal year 1998 to ensure that fines and
                 fees collected were adequately recorded. Although the Cowts was
                 authorized to deposit fines, fees, and penalties into a fund to provide
                 financial assistance to crime victims, in fiscal years 1998 and 1999 the
                 Courts also deposited other fines, fees, and penalties into that fund that
                 should have been deposited in the U.S. TreasUly.

                 u.s Postal Service:
                 Changes Made to Improve Acceptance Controls for Business Mail

                 GAO/GGD-DD-31,   Nov. 9 (19 pages).

                 The Postal Service discounts postage rates to customers who barcode and
                 presort their business mail before submitting it in bulk quantities to the
                 Service for processing. GAO reported in 1996 that the Service lacked
                 adequate controls to ensure that customers had properly prepared their
                 business mail and were, in fact, eligible to receive the discounted postal
                 rates. (See GAO/GGD-96-126.) This follow-up report found that the Service
                 made changes to its controls over the acceptance of business mail. These
                 changes are generally along the lines that GAO recommended in 1996, and
                 its controls overall appear to have improved. However, the Service lacks
                 information on how well its controls are working Servicewide and cannot



                 Page 8                                                          GAOIOPA-OO·2
                 Month in Review: Novembel' 1999




                 guarantee that it is collecting all the revenue due from its business
                 mail operations.


Correspondence   Decennial Census: Inforulation on the Accuracy of Address Coverage.
                 GAO/GGD-OO-29R, Nov. 19.




                 NIHClinical Trials:
Health           Various Factors Affect Patient Participation

                 GAOIHEHS-99-182,   Sept. 30 (34 pages).

                 Nearly all the 26 private health insurers, the large indemnity plan, and the
                 several health maintenance organizations that GAO interviewed approve
                 case-by-case exceptions to the general exclusion of coverage for patients'
                 participation in experimental clinical trials for the sake of finding effective
                 treatments. Insmers generally agree in approved cases to pay for standard,
                 nonexperimental care costs associated with a trial, but payments vary
                 from insmer to insurer. Uncertainty about approval and payment levels
                 results in patients and physicians being discomaged from seeking plior
                 approval for trial enrollment, although insurers may pay for medical care
                 that they are unaware is being provided in a research context. Cancer
                 research centers reported no serious difficulties in enrolling adequate
                 numbers of patients for trials sponsored by the National Cancer Institute
                 but described enrollment as challenging because of administrative
                 burdens, payment issues, and paperwork requirements. Other difficulties
                 are community physicians' being unaware of trials and patients' being
                 ineligible or uncertain about the benefits and risks of experimental
                 treatments. Available data do not document the concern expressed
                 anecdotally by the National Institutes of Health that trial enrollment
                 is declining.

                 Physician Performance:
                 Report Cards Under Development but Challenges Remain

                 GAOIHEHS-99-178,   Sept. 30 (34 pages).

                 Only a fraction of the wide valiety of services individual physicians and
                 physician groups typically perfonn can be clearly linked to measurable
                 outcomes that reflect quality of care. Current approaches to performance
                 measurement generally focus on physician groups rather than on specific



                 Page 9                                                             GAOIOPA-OO-2
Month ill Review: November 1999




doctors and measure not outcomes but processes, such as whether the
services that are provided accord with agreed-upon norms. Several plivate
and public organizations in California, New York, and Pennsylvania have
developed report cards that provide information closer to the level of the
individual physician than health plan report cards do, although they do not
always help consumers make informed choices about physicians. The
accuracy and completeness of the report card data and the adequacy of
the lisk adjustment methodologies also limit consumers' and physicians'
confidence in them. Several national accreditation organizations as well as
the Department of Health and Human Services are working to develop
common performance measures and to establish standards for
administrative claims and encounter data.

Medical Malpractice:
Effects of Varying Laws in the District of Columbia, Maryland,
and Virginia

GAOIHEHS·OO·5,   Oct. 15 (28 pages).

  Many states changed their tort law in the past 25 years in order to reduce
  malpractice insurance premiums, but the evidence of the effect of the
  changes is too limited to allow reliable cost savings estimates. Maryland
  and Virginia both adopted tort reform-albeit using different
  approaches-but the Distlict of Columbia has not. How the differences
  have affected malpractice costs is unclear. Limited data show that the
  median payment for a malpractice claim for physicians in 1996-98 was
  $200,000 in the Distlict, $150,000 in Baltimore, and $112,500 in Richmond.
  Also, premiunls for obstetlics and gynecology were higher in Baltimore
. than in the Distlict but lower for internal medicine and general surgery,
  which were lowest in Richmond. Relative to Baltimore or Richmond, high
  malpractice claim payments or insurance premiums did not reduce the
  number of physicians in the Distlict, which increased per 100,000 people
  by about 24 percent between 1985 and 1997.

Nursing Home Care:
Enhanced HCFA Oversight of State Programs Would Better
Ensure Quality

GAOIHEHS·OO·6,   Nov. 4 (45 pages).

The Health Care Financing Administration (HCFA) oversees how well each
state agency ensures quality care in nursing homes, but the mechanisms



Page 10                                                          GAOIOPA·00·2
            Month in Review: November 1999




            HeFA uses are of limited scope and effectiveness. Because the mechanisms
            are not applied consistently in HeFA's 10 regional offices, HeFA lacks
            sufficient, consistent, and reliable data with which to evaluate the
            effectiveness of state agencies' performance or the success of its recent
            initiatives to improve nursing home care. HeFA cannot be certain whether
            some states are failing to identify serious deficiencies that harm nursing
            home residents. HeFA also lacks an adequate array of effective sanctions to
            encourage state agencies to correct serious or widespread problems. GAO
            recommends that HeFA improve (1) the scope and the rigor of its oversight
            process through the state surveys and (2) the consistency in how it holds
            state survey agencies accountable by standardizing procedures for
            selecting state surveys and conducting federal monitoring surveys. GAO
            summarized this report in testimony before Congress; see:

            Nursing Homes: HeFA Should Strengthen Its Oversight of State Agencies to
            Better Ensure Quality Care, by William J. Scanlon, Director of Health,
            Financing, and Public Health Issues, before the Senate Special Committee
            on Aging. GAOrr-HEHs-OO-27, Nov. 4 (10 pages).


Testimony   Medicaid: Federal and State Leadership Needed to Control Fraud and
            Abuse, by Leslie G. Aronovitz, Associate Director for Health, Financing,
            and Public Health Issues, before the House Committee on Commerce,
            Subcommittee on Oversight and Investigations. GAOrr-HEHs-OO-30, Nov. 9
            (20 pages).

            Medicaid fraud schemes cross state lines and enforcement jurisdictions,
            engaging the different or competing priorities of federal, state, and local
            agencies in efforts to investigate, prosecute, and enforce program
            compliance. Essential components of an effective strategy with program
            integrity include coordinating the efforts of the multiple players, investing
            in preventive strategies, and dedicating adequate resources to fraud
            control units. The Health Care Financing Administration, the federal
            agency that tUns Medicaid, established a fraud and abuse national
            initiative in 1997 to bring together groups at the state level to provide
            training, share information, and address common concerns. Despite HeFA's
            efforts to facilitate the states' activities, questions remain about its role as
            a steward of Medicaid funds.




            Page 11                                                             GAO/OPA-OO-2
                  Month in Review: November 1999




Correspondence    Health Care: Fraud Schemes Committed by Career Criminals and
                  Organized Crime Groups and Impact on Consumers and Legitimate Health
                  Care Providers. GAOIOSI-OO-IR, Oct. 5.



Housing

Correspondence    Department of Housing and Urban Development: Loan Oligination and
                  Foreclosed Property Management Processes. GAO/AIMD-OO-4lR, Nov. 19.


                  Social Security:
Income Security   Evaluating Reform Proposals

                  GAO/AIMDIHEHS-OO-29,   Nov. 4 (67 pages).

                  This report analyzes the potential budgetary and economic effects of five
                  Social Security reform proposals. Under the proposed Social SecUlity
                  Guarantee Act, current retirement income would not be reduced and could
                  be higher; individual mutual fund accounts financed by refundable tax
                  credits would be mandatory; and benefit payouts would remain the same
                  as under current law or would be based on the annuitized account
                  balance, which would be gradually retUlned to Old Age and Survivors
                  Insurance and Disability (OASDI) trust funds and left to the heirs of workers
                  who die before receiving benefits. Under the proposed 2pt Century
                  Retirement Security Act, benefits would be generally lower than under
                  current law but a minimum benefit would be higher and formula changes
                  would increase the benefit structure's progressivity; mandatory individual
                  investment accounts would be modeled after the Federal Thrift Savings
                  Plan; additional revenue would be available from changes in the
                  cost-of-living adjustment and Social Security benefit taxation currently
                  financing Medicare; and retiring workers could buy annuities or take a
                  monthly pay-out with the balance after death left as a lump sun) or rolled
                  over. Under S. 1383, benefits, mandatory individual accounts, additional
                  revenues, and account distributions on retirement and after death would
                  have features similar to the previous proposal. Also, children would have
                  "KidSave" accounts from birth to age five and retiring workers would
                  take a benefit reduction to reflect government contributions to the
                  individual accounts. Under Congressman Kasich's plan, initial benefits
                  would be lower because they would be indexed to prices rather than to




                  Page 12                                                         GAOIOPA-OO-2
            Month in Review: November 1999




            wages; benefits from voluntary individual investment accounts would be
            reduced at retirement to offset goverrm1ent contributions; and the
            transition period would be financed by a loan from the general fund to the
            OASDI trust funds. The President's Social Security Transfer Proposal would
            keep benefits at current levels and general revenues would provide
            addition financing. Under his USA Proposal, workers would receive a flat
            general tax credit and a government match on individual voluntary
            investment accounts financed from general revenues by means of income
            tax credits.

            Supplemental Security Income:
            Incentive Payments Have Reduced Benefit Overpayments
            to Prisoners

            GAOIHEHS-OO-2,   Nov. 22 (23 pages).

            As a result of welfare reform, the Social Security Administration (SSA) now
            has a new way to identify ineligible prisoners receiving Supplemental
            Security Income (SSI) payments. Today, SSA receives information from 210
            additional plisons, preventing about $3.6 million in erroneous payments to
            inmates and identifying about $3.3 million in potentially recoverable
            overpayments already made. Also, SSA now receives some data on
            prisoners more frequently and in a format more usable than before,
            preventing at least $2.7 million in erroneous payments. SSA has also
            prevented $1.6 million in erroneous overpayments and identified
            $1.4 million in potentially recoverable overpayments for the Old Age and
            Survivors Insurance and Disability Insurance programs. It has developed
            new electronic monitoring and control systems for inmate data and makes
            these data available to other federal and state agencies for their assistance
            programs, such as the Food Stamp program, which may help them
            improve the accuracy of their payments. Arguments that the program's
            $10 million cost is high are balanced against benefits that are likely to
            enhance the operation of SSI and other federal programs for years to come.


Testimony   Social Security: The President's Proposal, by David M. Walker,
            Comptroller General of the United States, before the House Committee on
            Ways and Means. GAOrr-HEHS/AIMD-OO-43, Nov. 9 (20 pages).

            The President's Social Security transfer proposal, embodied in S. 1831 and
            H.R. 3165, would not in any way refonTI the basic Social Secmity program,
            although the administration is committed to long-term reforn1. The



            Page 13                                                          GAO/OPA-OO-2
                 Month in Review: November 1999




                 proposal seeks to increase the likelihood that projected unified surpluses
                 would be preserved for Social Security and debt reduction. It would
                 provide additional program funding by transferring general funds to the
                 Old Age and Survivors Insurance and Disability Insurance trust funds. This
                 shift in program financing would reduce publicly held debt but would not
                 modify the program's underlying commitments for the future. The
                 proposed transfer, by extending trust fund solvency, could create
                 complacency about the program's financing, making it more difficult to
                 engage in substantive program refonn.


Correspondence   Private Disability Insurance: Employer-Sponsored Plans.   GAOIHEHS-OO-18R,
                 Nov. 5.


                 Defense Computers:
Information      U.S. Transportation Command's Management of Y2K
Management       Operational Testing

                 GAO/AIMD-OO-21,   Nov. 15 (59 pages).

                 Complete and thorough Year 2000 end-to-end testing is essential to
                 ensuring that new or modified systems used to collectively support a core
                 business function or mission operation will not jeopardize an
                 organization's ability to deliver products and services on or after
                 January 1, 2000. This is especially true for the Defense Department, which
                 relies on a complex array of interconnected computer systems-including
                 weapons, command and control, satellite, inventory management,
                 transportation management, health care, financial, personnel, and
                 payments systems-to carry out its operations. This report (1) assesses the
                 U.S. Transportation Command's management of its end-to-end test of its
                 ability to plan and execute joint major theater war deployment operations
                 and (2) determines what the results of this test show with respect to
                 operational risks and readiness.

                 Defense Computers:
                 U.S. Space Command's Management of Its Year 2000
                 Operational Testing

                 GAO/AIMD-OO-30,   Nov. 15 (68 pages).




                 Page 14                                                         GAOIOPA-OO-2
                 Month in Review: November 1999




                 As part of GAO'S review of the military's management of various Year 2000
                 end-to-end testing efforts, this report (1) assesses the U.S. Space
                 Command's management of its end-to-end testing of space control systems
                 that are essential to major theater war and (2) discusses the test results
                 with respect to operational risks and readiness.


Testimony        Year 2000 Computing Challenge: Noteworthy Improvements in Readiness
                 but Vulnerabilities Remain, by Joel C. Willemssen, Director of Civil
                 Agencies Information Systems Issues, before the Subcommittee on
                 Technology, House Committee on Science, and the Subcommittee on
                 Government Management, Information, and Technology, House
                 Committee on Government Reform. GAOrr-AlMD-OO-37, Nov. 4 (50 pages).

                 Critical public services provided by the government and private industry
                 could be disrupted by the Year 2000 computing problem: from delayed
                 financial transactions to grounded flights to power outages. GAO found that
                 although much progress has been made to minimize these risks, more
                 work remains at the national, federal, state, and local levels to avoid major
                 service disruptions. Specifically, remediation must be completed,
                 end-to-end testing done, and business continuity and contingency plans
                 and Day One strategies developed and validated. Similar actions remain
                 that must still be completed by the nation's key sectors, such as energy,
                 transportation, and health care. Whether the United States successfully
                 confronts the Year 2000 challenge will largely depend on the efforts of
                 federal, state, and local governments as well as the private sector to work
                 together to complete these actions.


Correspondence   Reported Medicaid Year 2000 Readiness.    GAOIAlMD-OO-22R,   Oct. 5.

                 Information Security: SSA'S [Social Security Administration] Computer
                 Intrusion Detection Capabilities. GAOIAlMD-OO-16R, Oct. 27.

                 Information Security: Weaknesses at 22 Agencies. GAOIAlMD-OO-32R, Nov. 10.

                 Information Security: Responses to Posthearing Questions.       GAOIAlMD-OO-46R,
                 Nov. 30.




                 Page 15                                                                GAOIOPA-OO-2
                        Month in Review: November 1999




                        Export Controls:
International Affairs   International Space Station Technology Transfers

                        GAOINSIAD-OO-14,   Nov. 3 (28 pages).

                        The international space station, with 16 nations involved, is one of the
                        largest scientific collaborations attempted. Under international
                        agreements, NASA, as the U.s. representative, is obligated to deliver,
                        disclose, or transfer technology, data; and commodities needed to
                        implement the program. Members of Congress have raised concerns about
                        the extent of safeguards to protect technology and infonnation exported
                        in support of the space station. This report provides infonnation on (1) the
                        licenses granted to NASA to export space station-related technology and
                        commodities and plans to export encryption technology and (2) the results
                        of internal and external assessments of NASA'S export control program and
                        NASA'S actions to implement audit recommendations. Encryption
                        technology maintains the secrecy of infonnation and is needed to provide
                        secure transmission of command and control instructions between ground
                        and space components of the space station.

                        Export Controls:
                        Statutory Reporting Requirements for Computers Not
                        Fully Addressed

                        GAOINSIAD-0045,    Nov. 5 (31 pages).

                        The U.S. government controls the export of high-performance computers
                        to some countries because of foreign policy and national security
                        concerns. The Commerce Department considers a high-perfonnance
                        computer to be one that exceeds a defined perfonnance threshold, thus
                        requiring an export license. In a July 1999 report, the executive branch
                        described its plans to change the controls on the exports of
                        high-perfonnance computers by increasing the level of computing
                        perfonnance for which export licenses would be required. Congress
                        required the executive branch to issue a report justifying the proposed
                        change to export controls on computers. This report detennines
                        (1) whether the executive branch's July 1999 report to Congress satisfied
                        the requirements of the law; (2) whether the report was factually
                        supported; and (3) how many high-perforn1ance computers at the current
                        control levels have been approved for export to sensitive countries, such
                        as Russia and China, and how many have been approved for export since
                        1997 to military or other sensitive end-users.




                        Page 16                                                         GAO/OPA-OO-2
                  Month ill Review: November 1999




Correspondence    Foreign Assistance: Status of Rule of Law Program Coorctination.
                  GAOINSlAD-OO-8R, Oct. 13.



                  Crime Technology:
Justice and Law   Department of Defense Assistance to State and Local Law
Enforcement       Enforcement Agencies

                  GAO/GGD-OO-14,    Oct. 12 (27 pages).

                  This report provides information on crime technology assistance provided
                  by the Defense Department (DOD) to state and local law enforcement
                  agencies during fiscal years 1996 through 1998. GAO categories the
                  assistance into the following three areas: (1) grants of other types of direct
                  federal funding; (2) access to support services and systems, such as
                  counterdrug or other intelligence centers; and (3) in-kind transfers of
                  equipment or other assets. GAO also identifies several DOD research and
                  development efforts that may have indirectly benefited state and local law
                  enforcement agencies.

                  Seized Drugs and Weapons:
                  DEA Needs to Improve Certain Physical Safeguards and Strengthen
                  Accountability

                  GAO/AIMD-OO-17,   Nov. 30 (44 pages).

                  As part of its asset forfeiture operations, the Justice Department often
                  seizes and stores evidence-including drugs and weapons-that is later
                  used by federal prosecutors. In fiscal year 1998, the Justice Department's
                  Drug Enforcement Agency (DEA) reported that its agents seized more than
                  275,000 kilograms of illegal drugs. Each of the four DEA laboratories and
                  division offices GAO visited had physical safeguards in place that, if used
                  effectively, could help control access to and use of drug and weapon
                  evidence. However, GAO found instances of inadequate packaging of drug
                  and weapon evidence and overcrowded drug vaults that could increase the
                  risk of theft, misuse, and loss. Moreover, GAO found that some
                  requirements, such as chemists' returning dmg evidence to a vault within
                  five working days after analysis and laboratories destroying drugs within
                  90 days of receiving authorization, were not always met. GAO also found
                  weaknesses in DEA'S accountability over drug and weapon evidence,
                  including (1) incomplete and missing documentation, such as chain of
                  custody documentation; (2) inaccurate record keeping of drug and weapon



                  Page 17                                                           GAO/OPA-OO-2
            Month in Review: November 1999




            evidence; and (3) improper accounting for drug weights, including
            unverified and unexplained weight differences in drug exhibits. DEA'S
            internal inspection teams also repOlted instances of missing
            documentation and improper recordkeeping in their reports covering
            inspections done from 1996 through 1998. In commenting on this report,
            DEA officials said that the problems GAO cited do not appear to be systemic
            in nature and affected areas in which redundant controls are in place to
            ensure the integrity of evidence at all times. GAO disagrees with DEA and
            identifies several even more severe issues plaguing all, or almost all, of the
            locations GAO visited and for which redundant controls did not exist to
            compensate for the deficiencies.


Testimony   Money Laundering: Observations on Private Banking and Related
            Oversight of Selected Offshore Jurisdictions, by Thomas J. McCool,
            Director of Financial Institutions and Markets Issues, before the
            Permanent Subcommittee on Investigations, Senate Committee on
            Government Affairs. GAOrr-GGD-OO-32, Nov. 9 (15 pages).

            This testimony provides an overview of money laundering in relation to
            private banking and highlights some regulatory issues involving the
            vulnerability of selected offshore jurisdictions to money laundering. GAO
            focuses on the following four areas: regulators' oversight of private
            banking in general, regulators' oversight of private banking in selected
            offshore jurisdictions, barriers that have hampered regulators' oversight of
            offshore banking, and future challenges that confront regulators' efforts to
            combat money laundering in offshore jurisdictions.

            Private Banking: Raul Salinas, Citibank, and Alleged Money Launde1ing, by
            Robert H. Hast, Acting Assistant Comptroller General for Investigations,
            before the Permanent Subcommittee on Investigations, Senate Committee
            on Governmental Affairs. GAOrr-OsI-oO-3, Nov. 9 (10 pages).

            This testimony summarizes GAO'S 1998 investigation of alleged illegalities
            involving Raul Salinas, brother of the former President of Mexico, and
            Citibank. (See GAO/OSI-99-1, Oct. 1998.) Mr. Salinas has allegedly been
            involved in laundering money out of Mexico, through Citibank, to
            accounts in Citibank affiliates in Switzerland and the United Kingdom.




            Page 18                                                           GAO/OPA-OO-2
                   Month in Review: November 1999




                   DOD Personnel:
National Defense   Inadequate Personnel Secluity Investigations Pose National
                   Security Risks

                   GAOfNSIAD-OO-12,   Oct. 27 (62 pages).

                   Security investigations for Defense Department (DOD) personnel are
                   incomplete and are not done in a timely manner. As a result, they pose a
                   lisk to national security by making DOD vulnerable to espionage. For
                   example, 16 percent of the 530 secUlity investigations GAO reviewed
                   identified issues that the Defense Security Service did not pursue. These
                   issues included individuals' prior criminal history, alcohol and drug use,
                   and financial problems. Also, half of the 530 investigations took 204 or
                   more days to complete even though the military wants them completed in
                   90 days. This slowness causes defense contractors to incur costs because
                   their personnel cannot start work on military contracts without a security
                   clearance. Also, about 600,000 individuals holding clearances are overdue
                   for reinvestigations. DOD is talting steps to address these problems, but it
                   will take considerable time and money to identify and implement the
                   actions and additional steps needed.

                   Child Care:
                   How Do Military and Civilian Center Costs Compare?

                   GAOIHEHS-OO-7,   Oct. 14 (52 pages).

                   In the military's child development program, fees paid by parents fund the
                   salaries of caregivers. Federal dollars pay for supplies, equipment, staff
                   training, and some staff salaries. The Air Force is the only service whose
                   centers all meet the accreditation standards of the National Association
                   for the Education of Young Children. The hourly cost of child care is about
                   20 percent higher in Air Force centers than in civilian centers of
                   comparable quality because Air Force labor costs are higher and because a
                   higher proportion of the children are younger than three years old.
                   Adjusting estimated costs to account for differences in age, the cost per
                   child-hour is about seven percent higher in Air Force centers than in
                   civilian centers. The Air Force pays its centers' caregivers an average of
                   $11.20 per hour in salaries and benefits, $1.04 more than civilian centers
                   pay. GAO concludes that, with acljustments for age distribution, the costs of
                   high-quality child care in Air Force and civilian centers are not
                   substantially different.




                   Page 19                                                          GAO/OPA-OO-2
Month ill Review: November 1999




Chemical and Biological Defense:
Chemical Stockpile Emergency Preparedness Program for Oregon
and Washington

GAOINSlAD-00-13,   Oct. 26 (29 pages).

The Chemical Stockpile Emergency Preparedness Program was created to
protect the public in the event of an accident during the destruction of the
chemical weapons stockpile. Since GAO last reported on their preparedness
in 1997, the Oregon and Washington communities surrounding the
Umatilla Chemical Depot have made progress in preparing for a possible
emergency at the chemical weapons stockpile. Additional preparedness
equipment and other clitical items are now fully or partially in place. For
example, Oregon now has a working siren to alert people outdoors if an
accident occurs. However, some critical items were still not in place in
either state, including tone alert radios and shelter-in-place lots. Planning
is extremely critical for effective program management and Oregon's
program planning needs improvement. The program in Oregon lacks an
overall plan that (1) defines missions, roles, outcomes, and performance
measures and (2) includes input from all the key stakeholders, such as
local, county, and state emergency response personnel.

Combating Terrorism:
Chemical and Biological Medical Supplies Are Poorly Managed

GAOIHEHS/AIMD-00-36,   Oct. 29 (26 pages).

The ability of the United States to effectively respond to terrorist attacks
involving chemical or biological weapons is compromised by poor
management controls and the lack of items on a list of required inventory.
For example, GAO'S review of stockpiles maintained by the Department of
Veterans Affairs found discrepancies of more than 12 percent with this list.
Although most of these discrepancies were overages, GAO also fOlmd
shortages. The underlying cause of these problems is that federal agencies
have lagged in implementing basic internal controls to help ensure that all
medical supplies and phamlaceuticals are current, accounted for, and
ready for use. The stakes will be even higher in the future as the Centers
for Disease Control and Prevention (CDC) establishes the National
Pharmaceutical Stockpile Program, which will set aside large quantities of
antidotes and other medical supplies to be used in the event of domestic
chemical and biological attacks. Although CDC is still in the early stages of
developing this program, its current plan lacks comprehensive internal




Page 20                                                          GAOIOPA-OO-2
Month in Review: November 1999




controls that would prevent the types of problems that GAO found at
other agencies.

Defense Health Care:
Tri-Service Strategy Needed to Justify Medical Resources for
Readiness and Peacetime Care

GAOIHEHS-OO-IO,    Nov. 3 (48 pages).

The Department of Defense (DOD) needs to apply a tri-service strategy
nationwide to account for the resources its military treatment facilities in
the national capital area need for both readiness and peacetime care. By
also considering resources available in the local civilian community, DOD
would then have a systematic basis to justify budget requests. In the 1990s,
DOD and the services' surgeons general implemented DOD'S managed care
program, reduced the number of medical personnel, consolidated graduate
medical education programs, established partnerships with the
Depmtment of Veterans Affairs, and undertook several other improvement
initiatives. Recent efforts include a project to develop a tri-service strategy
to account for current and projected beneficiary populations, focus on the
military health system's basic wartime and peacetime care missions, and
optimally seek to realign military treatment facilities' staffing and resource
allocations. GAO suggests that DOD top management continue to scrutinize
this project and periodically repOlt to Congres on progress being made.

Defense Logistics:
Army Should Assess Cost and Benefits of the Workload
Performance System Expansion

GAOINSIAD-OO-16,   Nov. 12 (29 pages).

Accurate and consistent estimates of future worldoads are essential to
detennine personnel requirements. Congress has required the Army to
certify that its new system for estimating personnel requirements is fully
operational before undertaking a reduction-in-force at any of the Army's
five maintenance depots. The Army must provide Congress with a master
plan for implementing the new system, including future applications and
total funding for implementation. GAO assesses (1) the Army's progress in
developing and implementing its workload performance system and
(2) the extent to which the Army's April 1999 report addresses an overall
master plan for implementing the system, including its future applications
and funding needs.



Page 21                                                            GAO/OPA-OO-2
Month in Review: November 1999




Defense Inventory:
Improvements Needed to Prevent Excess Purchases by the
Air Force

GAOINSIAD-OO-5,   Nov. 10 (20 pages).

This report focuses on the inventory that the Air Force had on
contract-that is, ordered, but not yet delivered-that was excess to
current operating requirements. To determine whether the Air Force was
canceling purchases that exceeded current operating requirements, GAO
reviewed 160 items with inventory valued at $162.4 million on contracts
that exceeded current operating requirements as of September 30, 1997.
GAO found that the Air Force did not always cancel purchases that
exceeded current operating requirements. The Air Force canceled
contracts for $5.5 million of the $162.4 million excess inventory that GAO
reviewed, but it could have canceled more. Contracts for the unneeded
items are not being canceled primarily because the Air Force's process for
canceling contracts takes a long time. GAO recommends that the Air Force
strengthen management oversight procedures and internal controls over
the process for canceling purchases.

Defense Inventory:
Improved Management Framework Needed to Guide Air Force Best
Practice Initiatives

GAOINSIAD-OO-2,   Nov. 18 (25 pages).

Each of the military services must send Congress a schedule for
implementing best commercial inventory practices for the acquisition and
distribution of secondary inventory items. Best commercial practices are
defined as practices that enable the Defense Department to reduce
inventory levels while making the supply system more responsive to users'
needs. GAO found that the Air Force's schedule, which was submitted to
Congress in July 1999, is general responsive to the law's provisions.
However, the schedule provides a management framework that lacks an
overall strategy and specific elements needed to assess implementation
progress, measure success, and identify needed changes.




Page 22                                                       GAO/OPA-OO-2
Month in Review: November 1999




Foreign Military Sales:
Efforts to Improve Administration Hampered by
Insufficient Information

GAOINSIAD-OO-37,   Nov. 22 (39 pages).

Foreign military sales are an important part of the U.S. security assistance
program and also represent a key Defense Department (DOD) acquisition
strategy to help lower the unit costs of weapons systems. The Anus
Export Control Act provides several ways to price defense goods and
services transferred under the Foreign Military Sales Program, including
actual value, replacement value, and full cost, and requires that DOD
recover the full estimated cost of administering such sales. In response to
budget pressure from declining sales and customer complaints about
program inefficiencies, the Defense Security Cooperation Agency, which
runs the program, and the military services have begun several efforts to
improve the management and implementation of the Foreign Military Sales
Program. This report evaluates (1) whether the program has fully
recovered its administrative costs, (2) the Defense Security Cooperation
Agency's basis for making administrative account adjustments, and (3) the
effectiveness of various foreign military sales reinvention efforts in terms
of cost recovery.

Future Years Defense Program:
Funding Increase and Planned Savings in Fiscal Year 2000 Program
Are at Risk

GAOINSlAD-OO-U,    Nov. 22 (55 pages).

The Pentagon's Future Years Defense Program (FYDP) is the official
document that summarizes the force levels and funding associated with
specific programs that the military would like Congress to approve. The
fiscal year 2000 FYDP requested an additional $50.8 billion to the previously
requested $1,053 billion total funding for fiscal years 2000 through 2003.
This report identifies the major changes and adjustments in the 2000 FYOP
as compared to the 1999 FYOP and discusses the risks that the 2000 FYOP
faces that may prevent it from being implemented as planned.




Page 23                                                          GAO/OPA-OO-2
Month ill Review: November 1999




Defense Logistics:
New 120-mm Tank Training Round Procurement Will Result
in Savings                                             '

GAOINSlAD-OO-34,   Nov_ 22 (10 pages).

The Army could save about $52 million over five years if it exercises all
contract options for the procmement of 120-mm tank training
ammunition. The Army expects to save the money by negotiating a
decrease in price per round from the 1995 to 1999 multiyear contracts.
However, a decision by one of the contractors to use a propellant
producer other than the Radford Army Ammunition Plant-the Army's only
government-owned, contractor-run propellant production facility-cut
Radford's propellant business by 50 percent for the tank training round
program. To absorb the higher overhead costs resulting from the loss of
business, the contractor at Radford negotiated price increases for
propellant with the Army for two new contracts totaling at least
$14 million. Also, the contractor cut its workforce at Radford by 185
people. At the same time, the loss of propellant work does not affect
Radford's ability to meet its wartime replenishment mission.

Contract Management:
A Comparison of DOD and Commercial Airline Purchasing Practices

GAOINSlAD-OO-22,   Nov. 29 (14 pages).

The Defense Department (DOD) is increasing its use of commercially
available products and services. In response to congressional concerns
about the plicing of spare parts for military aircraft, GAO compared the
pmchasing and plicing practices of commercial passenger and freight
airlines with those of DOD. Airlines use various practices ,to obtain spare
parts at reasonable plices. These practices include analyzing prices,
procuring competitively, using catalog plices, negotiating long-term
agreements, buying new surplus or reconditioned parts, and asking for
justifications of plice increases. When faced with a sole-somce supplier
that demands a price that they believe is unreasonable, some airlines will
consider re-engineering the part and establishing a second source. DOD
policies call for using similar practices when buying commercial spare
parts. Contracting officers often rely on competition to ensure reasonable
prices. DOD often receives discounts on catalog prices from suppliers, and
it has also begun to negotiate longer-term agreements that set prices. In
sole-source situations, contracting personnel do some price analyses, but



Page 24                                                         GAO/OPA-OO-2
                    Month ill Review: November 1999




                    GAO'S recent review of the analyses found that they could be very limited in
                    scope. Less commonly, DOD will buy surplus parts or consider
                    re-engineering a part.


Correspondence      Summary of GAO'S Findings on the Safety and Efficacy of the Anthrax
                    Vaccine. GAOfNSIAD-OO-54R, Nov. 4.


                    National Fish Hatcheries:
Natural Resources   Classification of the Distribution of Fish and Fish Eggs
                    Needs Refinement

                    GAOIRCED-OO-IO,   Oct. 15 (31 pages).

                    Fish hatcheries operated by the U.S. Fish and Wildlife Service have been
                    around for more than 120 years. The hatcheries have helped to ensure the
                    recovery of species of fish that have been listed as threatened or
                    endangered, restored native fish stocks, replaced fisheries lost as a result
                    of water projects, and supplied fish to Indian tribes and Service lands. This
                    report provides information on (1) the funding level for the National Fish
                    Hatchery System since fiscal year 1992, (2) the cunent production level at
                    federal hatcheries, and (3) health and disease problems at the hatcheries
                    that raise concerns about releasing the fish into the wild.

                    Wildlife Management:
                    Negotiations on a Long-Term Plan for Managing Yellowstone Bison
                    Still Ongoing

                    GAOIRCED-OO-7,   Nov. 30 (47 pages).

                    The National Park Service; the Montana Department of Fish, Wildlife and
                    Parks; and the Forest Service have formed an interagency team to examine
                    alternatives for managing the bison herds in Yellowstone National Park.
                    The goal is to develop a management plan that would ensure the viability
                    of the parl<'s wild and free-ranging bison herd while at the same time
                    protecting Montana's domestic cattle from contracting brucellosis-a
                    disease that can cause cattle to abort during pregnancy. Because some
                    Yellowstone bison are infected with brucellosis, ranchers and public
                    officials in Montana fear that the bison will transmit the disease to
                    domestic cattle. This report provides information on the various
                    alternatives for the long-tern1 management of the Yellowstone bison.



                    Page 25                                                          GAO/OPA-OO·2
                      Month in Review: November 1999




Correspondence        National Park Service: Recreational Fee Demonstration Program Spending
                      Priorities. GAOIRCED-OO-37R, Nov. 18.



Science, Space, and
Technology

Correspondence        Laboratory Research: Sales and Use Tax Costs to Build   DOE'S   Spallation
                      Neutron Source Project. GAO/RCED-OO-33R, Nov. 19.


                      Foster Care:
Social Services       Effectiveness of Independent Living Services Unknown

                      GAOIHEHS-OO-13,   Nov. 5 (33 pages).

                      The Independent Living Program, which is funded by federal, state, and
                      local tax dollars, is designed to help young people move from foster care
                      to independent living. The program encourages them to complete high
                      school or pass the General Educational Development test and attend
                      postsecondary schools. The program also helps them find and keep
                      employment and provides classes in daily living skills, such as money
                      management, hygiene, housekeeping, and nutrition, and provides tips on
                      how to interact with adults, such as managing conflict. However, state and
                      local administrators say that not all the assistance youths need is always
                      available. Some programs are not linked with employers, cannot offer
                      skills practice in real-life settings, or fall short on supervised practice
                      living arrangements. Few national or local studies have assessed the
                      effectiveness of independent living services. Only one national study has
                      been completed, and only a few of the states studies have tried to measure
                      the ability of youths to become self-sufficient. The Department of Health
                      and Human Services (HHS), which oversees the program, has no method
                      for reviewing the states' progress in helping youths make the transition
                      from foster care, and the content and quality of the states' annual program
                      reports HHS relies on vary and contain little infonnation on program
                      outcomes. HHS issued a contract in 1988 to analyze a decade's worth of
                      annual program reports to find models for states to follow and measures
                      to take for improving reporting and evaluation.




                      Page 26                                                          GAO/OPA-OO-2
Month in Review: Novembel' 1999




Foster Care:
HHS Could Better Facilitate the Interjurisdictional
Adoption Process

GAOIHEHS-OO-12,   Nov. 19 (39 pages).

About 8,000 children, or about 1.5 percent of foster children, are legally
available for adoption at any given time and are waiting for an adoptive
home but have no prospects because they are older, need to be placed
with siblings, or have other special considerations. Because they are
difficult to find permanent placements for, they may be candidates for
placement across state and county jurisdictions. Although some steps in
the adoption process are beyond public welfare agencies' legal authority
to change, they have directed their efforts toward recruiting adoptive
families, using traditional methods in new ways. For example, the state
agencies enter into contracts with agencies in other states to conduct
recruitment activities in geographic areas outside their jurisdiction, and
use Internet Web sites to publicize children and recruit families. Nonprofit
groups working to improve interjmisdictional adoption processes have
targeted their efforts at the nationwide recruitment of adoptive homes for
hard-to-place foster children who are waiting and at issues related to
improving the use of home studies and the Interstate Compact on the
Placement of Children (Icpc), a uniforn1ly enacted statute that provides the
legal framework for placing children in adoptive homes across state lines.
The Department of Health and Human Services could help improve
aspects of the adoption process that are beyond the agencies' legal
authority, such as better coordinating its guidelines for state legislation on
the telmination of parental rights and assistance to the states on
ICPC issues.


Welfare Reform:
Implementing DOT'S Access to Jobs Program in Its First Year

GAOIRCED-OO-14,   Nov. 16 (16 pages).

Three-fourths of welfare recipients live in central cities or rural areas,
while two-thirds of the new jobs are found in the suburbs. Many of these
new jobs are in areas with little or no public transportation and are
accessible primarily by car. The Access to Jobs and Reverse Commute
Program authorizes the Department of Transportation to provide grants to
local agencies, nonprofit groups, and transit authorities to help address
this mismatch. Up to $750 million has been set aside through 2003 to



Page 27                                                           GAOIOPA-OO-2
                 Month in Review: November 1999




                 implement the program. This report describes (1) the Department's
                 implementation of the program, particularly its approach for selecting
                 awards in fiscal year 1999; (2) the fiscal year 1999 grantees and their
                 planned approaches for providing transportation services to low-income
                 workers; and (3) the changes that the Department is making to the
                 program in response to GAO'S earlier reconunendations, including the
                 establishment of specific objectives, performance criteria, and measurable
                 goals for evaluating the program's success.

                 Food Assistance:
                 Efforts to Control Fraud and Abuse in the Child and Adult Care
                 Food Program Should be Strengthened

                 GAOIRCED-OO-12,   Nov. 29 (21 pages).

                 The U.S. Department of Agriculture's Food and Nutrition Service runs the
                 Child and Adult Care Food Program using designated state agencies. The
                 program provides more than $1.5 billion in benefits each year to children
                 and adults in day care. In response to continuing concems about fraud and
                 abuse in the program, this report examines (1) the extent to which the
                 states have implemented controls to prevent and detect fraud and abuse
                 and (2) the Service's effectiveness in directing the states' efforts to
                 implement controls.



Transportation

Testimony        Commercial Maritime Industry: Updated Infonnation on Federal
                 Assessments, by John H. Anderson, Jr., Director of Transportation Issues,
                 before the Subcommittee on Water Resources and Environment, House
                 Committee on Transportation and Infrastructure. GAOIf-RCED-OO-36, Nov. 3
                 (eight pages).

                 This testimony discusses federal assessments, user fees, taxes, and other
                 charges levied on the commercial malitime industry. The information
                 presented is drawn from an earlier GAO report. (See GAOIRCED-99-260, Sept.
                 1999.) One of the assessments is the Harbor Maintenance Tax, whose
                 revenues fund virtually all maintenance dredging of U.S. ports. GAO
                 provides infonnation on (1) the federal agencies that levied assessments in
                 fiscal year 1998 compared with fiscal year 1991, the number of




                 Page 28                                                        GAO/OPA-OO-2
                       Month in Review: November 1999




                       assessments levied, and the amounts that they collected; (2) who pays the
                       assessments and in which funds they were deposited in fiscal years 1991
                       through 1998; and (3) new federal assessments that have been recently
                       proposed. GAO also discusses the status of the Harbor Maintenance Trust
                       Fund and its projected annual balances.


Correspondence         Transportation Safety: Information Concerning Why a 1980 Aircraft Report
                       Was Not Provided Earlier to the National Transportation Safety Board.
                       GAOIOSI-OO-2R, Nov. 3.


                       Results Act: Information on Performance Goals and Measures Contained
                       in the Department of Transportation's Fiscal Year 2000 Performance Plan.
                       GAO/RCED-OO-13R, Nov. 15.


                       VAHealth Care:
Veterans Affairs       Food Service Operations and Costs at Inpatient Facilities

                       GAOIHEHS-OO-17, Nov. 19 (18 pages).

                       The Department of Veterans Affairs (VA) spent about $429 million to
                       provide food services at 172 of its 175 inpatient health care locations in
                       fiscal year 1998. Although some of this money went for nutIition needs
                       assessments, counseling, and other patient-related activities,
                       most-$337 million-was spent on preparing and distributing meals.
                       Production and delivery costs averaged $24.50 per patient; daily costs at
                       individual locations ranged from $8 to $51. The differences reflect the
                       different requirements of, for example, hospitals and nursing homes. In the
                       same year, 27 VA locations raised $739,000 by using excess food capacity to
                       provide food services for 44 non-VA organizations, including nonprofit
                       groups and federal, state, and local government agencies.


                       Government Auditing Standards:
Special Publications   Amendment No.2-Auditor Communication

                       GAO/A-GAGAS-2,   July 1999 (72 pages).

                       This second amendment to the Government Auditing Standards adds a
                       field work standard and amends a reporting standard for financial
                       statement audits to improve auditor communication on the auditor's work



                       Page 29                                                        GAOIOPA-OO-2
Month in Review: November 1999




on compliance laws and regulations and internal control over financial
reporting. This new amendment requires specific communication with the
auditee, the individuals contracting for or requesting the audit services,
and the audit committee regarding the scope of compliance and internal
control work to be done under Government Auditing Standards. The new
amendment also requires the auditor to emphasize, in the auditor's report
on the financial statement, the inlportance of the reports on compliance
with laws and regulations and internal control over financial reporting
when these reports are issued separately from the report on the financial
statements.

Direct Loan System Requirements:
Checklist for Reviewing Systems Under the Federal Financial
Management Improvement Act of 1996

GAOIAlMD-OO-21.2.6,   Oct. 1999 (65 pages).

The Federal Financial Management Improvement Act of 1996 required that
agencies implement and maintain financial management systems that
substantially comply with federal financial management systems
requirements. These requirements are spelled out by the Joint Financial
Management Improvement Program (JFMIP) and the Office of Management
and Budget. GAO'S checklist, which reflects JFMIP'S revised requirements for
direct loan systems, is designed to assist (1) agencies in implementing and
monitoring their direct loan systems and (2) management and auditors in
reviewing their direct loan systems to determine if they are complying
with the act.

Standards for Internal Control in the Federal Government

GAO/AIMD-OO-21.3.l,   Nov. 1999 (21 pages).

The Federal Managers' Financial Integlity Act of 1982 requires GAO to issue
standards for internal control in government. Rapid advances in
infonnation technology have underscored the need for updated guidance
on internal controls over modern computer systems. At the same time, the
management of hwnan capital is increasingly recognized as an important
part of internal control. Moreover, the plivate sector has updated its
guidance on internal controls. This update, which supersedes GAO'S earlier
"Standards for Internal Controls in the Federal Government," recognizes
these three developments. The standards are effective beginning with
fiscal year 2000.



Page 30                                                         GAOIOPA-00-2
Month in Review: November 1999




Survey Methodology:
An Innovative Technique for Estimating Sensitive Survey Items

GAOIGGD-OO-30,    Nov_ 1999 (87 pages).

This staff study discusses an innovative technique that GAO has devised for
collecting data on sensitive policy-relevant topics. The "three card
method" is designed to collect sensitive information in large-scale
surveys. It is intended to allow estimation of the needed statistics while
maximizing response privacy and reducing "question threat." If
successful, this technique might eventually fill in key data gaps and
improve statistics that would be helpful in making public policy decisions.
GAO'S main goal is to spur interest in-and, where appropriate, encourage
more development and testing of-this promising, albeit not yet fully
validated, technique.

Information Security Risk Assessment-Practices of Leading
Organizations:
A Supplement to GAO'S May 1998 Executive Guide on Information
Security Management

GAOIAlMD-OO-33,   Nov. 1999 (48 pages).

Managing the risks stemming from the government's growing reliance on
information technology is a continuing challenge. This guide is intended to
help federal managers implement an ongoing information security risk
assessment. GAO provides examples, or case studies, of practical risk
assessment procedures that have been successfully adopted by four
organizations-a multinational oil company, a financial services firm, a
regulatory organization, and a computer hardware and software
company-known for implementing good risk assessment practices. More
importantly, GAO identifies, on the basis of these case studies, factors that
are important to the success of any risk assessment program, regardless of
the specific methodology used. The infonnation in this guide supplements
an earlier GAO document (GAOIAlMD-98-68, May 1999) that outlined five major
elements of risk management and 16 related information security practices
that GAO identified during a study of organizations with superior
information secwity programs.




Page 31                                                          GAOIOPA-OO-2
                    Month in Review: November 1999




                    GAO'S Office of the General Counsel regularly issues legal decisions
Reports on Agency   and opinions, reports on major rules issued by federal agencies
Rules               prior to their implementation, and decisions resolving bid protests.
                    These documents are posted daily and can be downloaded from
                    GAO'S home page on the World Wide Web (http://www.gao.gov).


                    The following is a list of reports on agency rules issued by the
                    Office of the General Counsel. In addition to being available on the
                    World Wide Web, these documents can be obtained by using the
                    order form in the back of this publication. Bid protest decisions are
                    not included in this list.


                    Enviromnental Protection Agency: Persistent Bioaccumulative Toxic (PBT)
                    Chemicals; Lowering of Reporting Thresholds for Certain PBT Chemicals;
                    Addition of Certain PBT Chemicals; Community Right-to-Know Toxic
                    Chemical Reporting. GAO/OGC-OO-S, Nov. 9.

                    Federal Communications Commission: Wireless Ractio Services;
                    Compatibility With Enhanced 911 Emergency Calling Systems. GAO/OGC-OO-7,
                    Nov. 9.

                    Department of Health and Human Services, Health Care Financing
                    Administration: Mecticare Program; Revisions to Payment Policies Under
                    the Physician Fee Schedule for Calendar Year 2000. GAO/OGC-OO-g, Nov. 15.

                    Emergency Steel Guarantee Loan Board and Emergency Oil and Gas
                    Guaranteed Loan Board: Emergency Steel Guarantee Loan Program and
                    Emergency Oil and Gas Guaranteed Loan Program, GAO/OGC-OO-lO, Nov. 19.

                    Securities and Exchange Commission: Cross-Border Tender and Exchange
                    Offers, Business Combinations and Rights Offerings. GAO/OGC-OO-ll, Nov. 19.

                    Securities and Exchange Commission: Regulation of Takeovers and
                    Security Holder Communications. GAO/OGC-OO-12, Nov. 19.

                    United States International Trade Commission; Comments on the Use of
                    ITCFunds to Pay Musicians Performing at a Cultural Awareness Program.
                    B-278805, July 21




                    Page 32                                                        GAO/OPA-OO-2
I        5898490520
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