Month In Review: December 1999 Reports, Testimony, Correspondence, and Other Publications

Published by the Government Accountability Office on 1999-12-01.

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

               United States General Accounting Office

GAO            Office of Public Affairs

               MONTH IN REVIEW:
               DECEMBER 1999
               Reports, Testimony,
               Correspondence, and
               Other Publications
               2000 Census: Contingency Planning Needed to
               Address Risks That Pose a Threat to a Successful
               Census. Page 4.

               Border Patrol Hiring: Despite Recent Initiatives,
               Fiscal Year 1999 Hiring Goal Was Not Met. Page 9.

               Meat and Poultry: Improved Oversight and Training
               Will Strengthen New Food Safety System. Page 2.

               Olympic Games: Preliminary Information on Federal
               Funding and Support. Page 5.

               International Trade: Improvements Needed to
               Track and Archive Trade Agreements. Page 8.

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.

Month in Review:                                                 2
                   Agriculture and Food                          2
December 1999      Business, Industry, and Consumers             3
                   Education                                     3
                   Financial Management                          4
                   Government Operations                         4
                   Health                                        7
                   Housing                                       8
                   Information Management                        8
                   International Affairs                         8
                   Justice and Law Enforcement                   9
                   National Defense                             11
                   Natural Resources                            15
                   Social Services                              15
                   Tax Policy and Administration                15
                   Transportation                               16
                   Veterans Affairs                             17
                   Special Publications                         17
                   Reports on Agency Rules                      18

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Month in Review: December 1999

                       Meat and Poultry:
Agriculture and Food   Improved Oversight Will Strengthen New Food Safety System

                       GAO/RCED-00-16,   Dec. 8 (32 pages).

                       To reduce foodborne illnesses and improve the safety of meat and poultry
                       products, the Department of Agriculture (USDA) issued regulations
                       requiring that all meat and poultry plants adopt a science-based
                       production control system, known as Hazard Analysis and Critical Control
                       Point (HACCP), by January 2000. The HACCP approach, which was
                       recommended by USDA’s National Advisory Committee on Microbiological
                       Criteria for Foods and endorsed by the scientific community, is based on
                       seven guiding principles. These principles center around the identification
                       of biological, physical, and chemical hazards that are likely to occur in
                       meat and poultry plants and the establishment of critical points in the
                       production process where controls can be applied to prevent or reduce
                       those hazards. This report (1) determines whether the system adopted by
                       USDA in its regulations is consistent with the seven HACCP principles
                       endorsed by the Advisory Committee, (2) evaluates whether the HACCP
                       training program for USDA inspectors is adequate and science-based, and
                       (3) determines if there is an adequate dispute resolution process between
                       plants and USDA under the new inspection system. GAO found that USDA’s
                       HACCP regulations, along with guidance, are consistent with the seven
                       HACCP principles endorsed by the Advisory Committee. Generally,
                       inspectors received the training needed to oversee plants’ implementation
                       of HACCP programs, although many inspectors reported that they would
                       benefit from refresher courses. In GAO’s view, USDA’s dispute resolution
                       process provides industry with an appropriate mechanism to appeal
                       inspectors’ enforcement actions.

                       Pork Industry:
                       USDA’s Reported Prices Have Not Reflected Actual Sales

                       GAO/RCED-00-26,   Dec. 14 (37 pages).

                       The prices being paid for hogs in the open market (spot prices) plunged in
                       1998, dropping from $0.45 cents per pound in May to below $0.10 cents per
                       pound in December–well below the estimated cost of $0.35 cents per
                       pound to produce a hog. At the same time, the Department of Agriculture
                       (USDA) reported that the sharp decline in hog prices was not fully reflected
                       in pork prices at the supermarket. For this period, USDA reported that the
                       difference between the prices farmers received for their hogs and the

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                      Month in Review: December 1999

                      prices consumers paid for pork was wider than it had been in decades.
                      This report examines the (1) structural changes in the pork industry that
                      have occurred since the 1980s and their effect on production and
                      marketing, (2) reasons for the sudden and rapid decline in prices paid to
                      farmers in late 1998, and (3) extent to which USDA’s methods for obtaining
                      and reporting on prices at the farm and retail level for hogs and pork
                      products yield accurate estimates of these prices. Accurate prices are
                      important because they provide farmers with reliable information upon
                      which to base production and marketing decisions.

Business, Industry,
and Consumers

Correspondence        The Small Business Administration: Loan Origination and Debt Collection
                      Processes. GAO/AIMD-00-45R, Nov. 30.

                      Small Business Administration: A Review of SBA’s Estimate of Impact of
                      Legislative Proposals for the 7(a) Loan Guarantee Program. GAO/RCED-00-49R,
                      Dec. 15.

                      Public Education:
Education             Title I Services Provided to Students With Limited
                      English Proficiency

                      GAO/HEHS-00-25,   Dec. 10 (22 pages).

                      The number of students with limited English skills has soared during the
                      last decade. Between 1990 and 1997, the most recent year for which data
                      are available, the number of students with limited English proficiency has
                      risen by 57 percent–to about 3.5 million. The federal government has tried
                      to help states and localities improve education for all types of
                      disadvantaged children, including those who speak English with difficulty,
                      by funding programs to help these children achieve high academic
                      standards, primarily through title I of the Elementary and Secondary
                      Education Act of 1965. This report answers the following questions: How
                      many students with limited English proficiency are being served through
                      targeted and schoolwide title I programs? How are these students being
                      served through targeted and schoolwide title I programs? How many title I

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             Month in Review: December 1999

             teachers in schools serving students with limited English proficiency are
             bilingual or have other specialized training in teaching these students?
             What accommodations do states allow for these students in taking
             academic assessments, including offering tests in their native language,
             and to what extent are they participating in academic assessments?


Testimony    Financial Management: Financial Management Weaknesses at the
             Department of Education, by Gloria Jarmon, Director of Accounting and
             Financial Management Issues, before the Subcommittee on Oversight and
             Investigations, House Committee on Education and the Workforce.
             GAO/T-AIMD-00-50, Dec. 6 (13 pages).

             The Department of Education is the lead agency overseeing the more than
             $73 billion that the federal government spends each year on education
             programs. The Department also tracks about 93 million student loans and
             15 million grants. It also collects more than $150 billion owed by students.
             Consequently, the Department’s financial statements are an important
             source of information for policymakers and the public. This testimony
             discusses GAO’s review of the independent auditors’ reports of the
             Department’s financial statement for fiscal year 1998.

             2000 Census:
Government   Contingency Planning Needed to Address Risks That Pose a Threat
Operations   to a Successful Census

             GAO/GGD-00-6,   Dec. 14 (39 pages).

             With less than four months remaining until Census Day (Apr. 1, 2000),
             significant uncertainties continue to surround the Census Bureau’s efforts
             to boost participation in the census and to collect timely and accurate field
             data from nonrespondents. Obtaining adequate public participation is a
             huge challenge, one with implications for the size of the nonresponse
             follow-up workload. Data quality and scheduling could be affected if the
             nonresponse follow-up workload is greater than expected or the Bureau
             has difficulty in filling the number of enumerator positions that it

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Month in Review: December 1999

estimates will be needed for this job. These uncertainties raise concerns
that the 2000 Census may be less accurate than the 1990 Census. As a
result, the Bureau needs to have contingency plans in place to mitigate the
impact of a lower-than-expected response rate. Because so little time
remains and senior Bureau managers will be devoting most of their
attention to carrying out the census plans that are already in place, such
contingency plans will be most useful if they focus on the critical
challenges and trade-offs that the Bureau will face–such as the need to
balance schedule pressures with the need to protect data quality–if its
response rate goals are not met. Also, even though the Bureau has already
taken steps to expand the census applicant pool, additional statutory
measures could be needed, given the Bureau’s history of staffing problems
and the magnitude of the Bureau’s staffing challenge for 2000.

Olympic Games:
Preliminary Information on Federal Funding and Support

GAO/GGD-00-44,   Dec. 21 (15 pages).

At least 24 federal organizations provided or planned to provide about $2.1
billion in 1999 dollars for Olympic projects and activities for the Los
Angeles and Atlanta Summer Olympic Games and the upcoming Salt Lake
City Winter Olympic Games. About $530 million was reported to have been
provided or planned for projects and activities solely related to the
planning and staging of the Olympics, including safety and security as well
as transportation services. The remaining $1.6 billion was spent or planned
for projects, such as highway construction, transit system development,
and other capital projects, that the host cities of Atlanta and Salt Lake City
wanted to have completed in time for the Olympic Games. Federal and
state officials said that they identified these projects as Olympic-related
because their completion was generally accelerated to improve
transportation services and avoid construction during the Olympic Games.
These officials said that most of the federal funding for these projects
would have been eventually provided to the host city regardless of the
Olympic Games. Concerning the 1984 Olympic Games in Los Angeles,
federal funding and support totaled about $75 million and involved 11
federal organizations. Unlike the federal support for later Olympics, the
federal organizations reported little funding and support for capital
projects to prepare Los Angeles for the 1984 Summer Olympic Games.
Most of the federal funding and support that agencies reported providing
to the 1996 Summer Olympic Games in Atlanta and planned for the 2002
Winter Olympic Games is reported to be for infrastructure projects to

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                 Month in Review: December 1999

                 prepare the host city for the Olympics–projects that will also benefit the
                 host city and state after the Games have ended.

                 Food and Drug Administration Facility:
                 Requirements for Building on a Floodplain Met

                 GAO/GGD-00-17,   Dec. 15 (19 pages).

                 The Food and Drug Administration plans to build a facility in College Park,
                 Maryland, to house its Center for Food Safety and Applied Nutrition. This
                 report provides information on (1) the authority of the General Services
                 Administration to build this new facility in College Park, (2) whether the
                 requirements for building on a floodplain have been met, and (3) the
                 planned placement of computers in the basement of the new building. On
                 this last point, GAO discusses whether steps have been taken to reduce the
                 risk of damage from water seeping into the basement and whether the
                 staff of the Center participated in the decision to place the computer
                 operations in the basement.

                 District of Columbia:
                 The District Has Not Adequately Planned for and Managed Its New
                 Personnel and Payroll System

                 GAO/AIMD-00-19,   Dec. 17 (16 pages).

                 The District of Columbia is acquiring an automated personnel and payroll
                 system, which is based on commercial, off-the-shelf software, to improve
                 the quality of its personnel and payroll systems, modernize its personnel
                 and payroll business processes, and replace an aging legacy system. In
                 earlier testimony before Congress, GAO noted that information on the
                 District’s 40,000 employees has long been error-prone and inconsistent.
                 (See GAO/T-AIMD-95-170, June 1995.) The Comprehensive Automated
                 Personnel and Payroll System which is estimated to cost about $13 million
                 to develop, was expected to be up and running by the end of 1999. This
                 report assesses whether the District has effectively planned and managed
                 the system.

Correspondence   Subcontractor Complaints Concerning the D.C. Union Station Renovation
                 Project. GAO/GGD-00-13R, Dec. 22.

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                 Month in Review: December 1999

                 Skilled Nursing Facilities:
Health           Medicare Payment Changes Require Provider Adjustments But
                 Maintain Access.

                 GAO/HEHS-00-23,   Dec. 14 (30 pages).

                 In 1998, Medicare began the transition to a prospective payment system
                 for skilled nursing facility services provided to Medicare beneficiaries.
                 Medicare began paying fixed, preset rates for each day of care–a major
                 change from the former system of cost-based reimbursement. GAO found
                 that the ability of Medicare beneficiaries to obtain needed care does not
                 appear to have decreased since the implementation of the prospective
                 payment system, although some patients may stay longer in the hospital
                 before being admitted to a nursing home or may receive care from other
                 post-acute-care providers. The new system does appear, however, to have
                 affected the willingness or ability of some nursing homes to accept some
                 types of Medicare patients. Hospital discharge planners report that
                 facilities are reluctant to admit patients needing high-cost services,
                 including some expensive drugs and infusion therapy, because they
                 believe that Medicare payments for these patients may be too low. GAO
                 also found that nursing homes prefer Medicare patients needing
                 short-term rehabilitation, raising concerns that payments for these
                 patients may be too high. Although the new payment system has
                 significantly changed financial incentives, GAO concludes that aggregate
                 payments to providers are adequate, given that inflated costs were used to
                 establish the per diem payment rates. However, the case-mix classification
                 system used to adjust payments to reflect the needs of patients may not
                 appropriately allocate payments across patients and providers. GAO notes
                 that the preferred provider system is only one of several factors
                 contributing to the poor financial performance of Sun Healthcare Group,
                 Inc., and Vencor, Inc., two corporations that run a large number of
                 nursing homes.

Correspondence   Medicare: Reporting on the Health Care Fraud and Abuse Control Program
                 for Fiscal Years 1998 and 1999. GAO/AIMD-00-51R, Dec. 13.

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                        Month in Review: December 1999


Correspondence          Homeownership: Cancellation and Termination Provisions of the
                        Homeowners Protection Act of 1998. GAO/RCED-00-50R, Dec. 10.

                        Year 2000 Computing Challenge:
Information             Readiness of FBI’s Instant Criminal Background Check System Can
Management              Be Improved

                        GAO/AIMD/GGD-00-49,   Dec. 16 (42 pages).

                        The FBI’s National Instant Criminal Background Check System is a
                        computer system that, in concert with other FBI and state-run systems, is
                        used to do presale background checks on persons seeking to buy firearms.
                        This report, which summarizes the information presented by GAO at a
                        congressional briefing, evaluates the FBI’s efforts to make the system Year
                        2000 compliant. GAO also makes recommendations designed to strengthen
                        the Year 2000 readiness of the nation’s firearm presale background
                        check program.

                        International Trade:
International Affairs   Improvements Needed to Track and Archive Trade Agreements

                        GAO/NSIAD-00-24,   Dec. 14 (38 pages).

                        International trade has become increasingly important to the U.S.
                        economy. Since 1990, U.S. exports have risen about 70 percent–reaching
                        nearly $700 billion a year. The United States has led the world in creating a
                        system of open trade under accepted rules, in which the redution of trade
                        barriers, such as tariffs and import quotas, would help provide greater
                        market access for U.S. goods and services. The current administration has
                        sought to build on earlier efforts by negotiating several hundred separate
                        trade agreements since 1992 that are aimed at opening markets and
                        creating wider economic opportunities for Americans. This report
                        examines (1) the number of trade agreements that the United States is
                        party to, (2) the way in which the executive branch notifies Congress
                        when trade agreements are entered into, and (3) the extent to which the

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                  Month in Review: December 1999

                  public has ready access to information from government sources about
                  trade agreements.

                  Border Patrol Hiring:
Justice and Law   Despite Recent Initiatives, Fiscal Year 1999 Hiring Goal Was
Enforcement       Not Met

                  GAO/GGD-00-39,   Dec. 17 (43 pages).

                  Although the Immigration and Naturalization Service (INS) met its goal of
                  increasing the strength of the Border Patrol by 1,000 agents in both 1997
                  and 1998, it saw an increase of only 369 agents in 1999 because it was
                  unable to recruit enough qualified applicants and retain them through the
                  hiring process. Although INS attracts large numbers of applicants, few who
                  apply to the Border Patrol successfully complete the application process.
                  Some fail to pass the rigorous entry examination, medical examination, or
                  background check, while others withdraw from the process. INS assigns all
                  new Border Patrol agents to the southwest border, where 92 percent of all
                  agents are stationed. As hiring has increased, the experience level of
                  Border Patrol agents has declined agencywide, as well as along the
                  southwest border. The percentage of agents along the southwest border
                  with two years of experience or less tripled–from 14 percent to
                  39 percent–between 1994 and 1998. Also, most of the southwest border
                  sectors saw an increase in the average number of nonsupervisory agents
                  assigned to each GS-12 supervisory agent. By relying on a temporary
                  training facility in Charleston, South Carolina, the Border Patrol Academy
                  has been able to provide newly hired agents with the required training and,
                  according to a Border Patrol official, is prepared the meet the training
                  needs associated with future growth.

                  Seized Drugs and Firearms:
                  FBINeeds to Improve Certain Physical Safeguards and
                  Strengthen Accountability

                  GAO/AIMD-00-18,   Dec. 16 (54 pages).

                  During the last decade, GAO has periodically reported on government
                  operations at “high risk” for waste, fraud, abuse, and mismanagement.
                  One of these operations is the asset forfeiture program run by the Justice
                  Department. Seized items typically remain in an agency’s custody until
                  used as evidence by federal prosecutors. This report focuses on the FBI’s

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controls over seized drugs and firearms. Each of the four FBI field offices
GAO reviewed had established physical safeguards in accordance with key
FBI policy directives. However, overcrowding and inadequate packaging of
drug evidence and improper maintenance of the night depository in the
drug vault at one of the FBI field offices GAO visited increased the risk of
theft, misuse, and loss of evidence. Also, inadequate ventilation in the drug
vault at one field office could potentially harm the health and safety of
evidence control workers. The FBI’s ability to account for drug and
firearms evidence was hampered at the field offices GAO reviewed by
incomplete and missing information on chain of custody documents, the
failure to promptly issue and reconcile reports that are used to verify the
location of evidence, and poor documentation of bulk drug seizures.
Notwithstanding these problems, FBI personnel were able to locate each
item that GAO chose for testing at the field offices; for those items not in
storage, they provided documentation supporting the current location or
status of the item. GAO identified several instances in which evidence
control personnel or FBI agents entered evidence into the FBI’s Automated
Case Support System late without the required explanatory memoranda.
While reviewing selected drug items in storage at the four field offices, GAO
noted many discrepancies between the actual weight of drug items
observed during GAO’s testing and the weight of these items recorded on
attached evidence labels, which should reflect the current weight of the
item, including packaging.

Drug Control:
Assets DOD Contributes to Reducing the Illegal Drug Supply
Have Declined

GAO/NSIAD-00-9,   Dec. 21 (47 pages).

The Defense Department (DOD) supports the nation’s counterdrug efforts
by providing military personnel, detection and monitoring equipment,
intelligence support, communication systems, and training. However, DOD
has yet to develop performance measures to assess the effectiveness of its
contributions. DOD has, among other things, developed a database to
capture information that can be used to evaluate the relative performance
of its detection and monitoring equipment. DOD support for international
drug control efforts has fallen significantly since 1992. The decline in DOD
assets used for counterdrug efforts is due to (1) the lower priority assigned
to the counterdrug mission compared with that assigned to other military
missions that might involve contact with hostile forces such as
peacekeeping and (2) overall reductions in defense budgets and force

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                   Month in Review: December 1999

                   levels. DOD officials believe that their operations are more efficient today
                   than in the past and that this has partially offset the decline in assets
                   available for counterdrug operations. Because of a lack of data, however,
                   the impact of the reduced level of DOD support on drug trafficking
                   is unknown.

Correspondence     FBIAccountability for Drugs Used in Special Operations: Deficiencies
                   Identified and Actions Taken. GAO/AIMD-00-34R, Dec. 2.

                   Defense Inventory:
National Defense   Inadequate Compliance With Controls for Excess Firearms and
                   Other Sensitive Items

                   GAO/NSIAD-00-27,   Nov. 29 (20 pages).

                   This is the fourth in a series of reports on the Defense Department’s (DOD)
                   procedures for controlling excess items. GAO reported earlier on DOD’s
                   needless destruction of usable aircraft parts, on inappropriate sales of
                   parts with military technology and flight safety risks, and on items not
                   being properly controlled during shipment to disposal. (See GAO/NSIAD-98-7,
                   Oct. 1997, GAO/NSIAD-98-182, Aug. 1998, and GAO/NSIAD-99-84, July 1999.) In this
                   report, GAO found that internal control procedures designed to protect
                   firearms, items with national security implications, and pharmaceuticals
                   were not always followed at three of the seven defense components GAO
                   visited. Instead of being separated, key duties in the areas of transport,
                   destruction, and record keeping were done by the same person. Required
                   certifications that sensitive excess items were actually destroyed were
                   missing. Also, serial numbers were not always recorded on shipping
                   documents as required. For example, GAO was unable to track what
                   happened to three items slated for disposition: a digital computer used for
                   defense countermeasures on the E-2 aircraft, a high-power simulator used
                   to test early warning systems on aircraft, and 18 computers used to guide
                   MK-46 torpedoes to a target. DOD guidance requires that excess firearms
                   and pharmaceuticals be destroyed and removed from inventory records by
                   coding the transactions as “inventory decreases associated with the
                   destruction of the item.” However, the military has been removing these
                   items from inventory records by describing these transactions as “items
                   being shipped to a disposal office.” None of the items were actually
                   shipped to a disposal office, but were instead destroyed or disposed of by
                   the defense components that had the items. Weak management oversight

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Month in Review: December 1999

and computer programming errors contributed to these transactions being
incorrectly recorded. For example, during a 12-month period, the
disposition of nearly $99 million of firearms and pharmaceuticals was
incorrectly recorded in DOD’s inventory records.

Air Force Depot Maintenance:
Analysis of Its Financial Operations

GAO/AIMD/NSIAD-00-38,   Dec. 10 (24 pages).

The Air Force depot maintenance activity group provides the repair
services needed to keep air force units up and running around the world.
The group repairs and overhauls a wide range of items, from aircraft
engines to missiles to software. For example, the Air Force reported that
in 1998 the depot maintenance activity group did major overhauls on 670
aircraft, overhauled 980 engines, and repaired more than 800,000 inventory
items. The report discusses (1) the Air Force activity group’s price
increase between fiscal years 1994 and 1999 and the primary reasons for it,
(2) the activity group’s financial losses during that period and the primary
reasons for them, and (3) the Air Force’s methods for recovering
these losses.

Federal Facilities:
Alternative Land Uses Could Save Water at Fallon Naval Air
Station, Nevada

GAO/RCED/NSIAD-00-42,   Dec. 10 (35 pages).

The Navy, which runs the Fallon Naval Air Station in Nevada, uses large
amounts of water—in a region where water is scarce—to manage the land
around its runways. Since the 1950s, the Navy has maintained a
“greenbelt” at the air station that consists of acreage leased to local
farmers who grow irrigated crops on the land. In the Navy’s view, the
“greenbelt” protects the facility from fires, lowers the chance of bird
strikes or other damage to aircraft from foreign objects, and controls dust.
Since 1990, the Navy has used about 1.6 billion gallons of surface water to
irrigate this land each year. This report provides information on (1) the
aviation safety and operational requirements for the runway protection
zone at Fallon, (2) the alternative land used strategies that Fallon
identified in response to congressional direction and how it evaluated
them, and (3) the current land use strategies at five military facilities and
two commercial airports that operate in similar environments.

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Month in Review: December 1999

Battlefield Automation:
Army’s Restructured Land Warrior Program Needs More Oversight

GAO/NSIAD-00-28,   Dec. 15 (28 pages).

The Land Warrior Program is the Army’s effort to equip soldiers on the
battlefield with digitalized systems that will allow them to locate friendly
and enemy soldiers and improve communication with higher commands.
The system is comprised of a computer/radio, weapon, and
helmet-mounted display eyepiece that are linked together for sending
messages (voice and data) and imagery between soldiers and other
battlefield systems. It also includes protective clothing, body armor, and a
carrying harness to support the weight of the equipment. GAO found that
the system will not be fielded by September 2000 because crucial
technologies could not be developed in time. The estimated cost to acquire
34,000 units has risen from $1.4 billion to $2.1 billion. Oversight of the
Land Warrior program has been lax. GAO found that oversight
responsibility in the Army remained unchanged despite development
problems that threatened to lengthen the acquisition schedule and the
inability of system prototypes to pass certification tests. At present, Land
Warrior will not operate with a key digitized battlefield system. Moreover,
the Land Warrior Program has not solved technical and human factor
problems that may render the system ineffective. These problems include
overweight equipment, inadequate battery power, poor load-carrying
design, and electromagnetic interference.

Defense Transportation:
Process Reengineering Could Be Enhanced by
Performance Measures

GAO/NSIAD-00-7,   Dec. 20 (19 pages).

Since the late 1940s, several studies have characterized the organizational
structure of defense traffic management as costly and inefficient. Multiple
agencies have been involved in defense traffic management, each with
separate service and modal responsibilities. GAO reported in 1996 that the
fragmentation and duplication inherent in this structure led to higher
transportation costs for defense customers. (See GAO/NSIAD-96-60.) This
report discusses the (1) Defense Department’s (DOD) progress in
reengineering defense transportation financial management processes,
(2) challenges associated with implementing these reengineered processes

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            Month in Review: December 1999

            agencywide, and (3) extent to which DOD is assessing the infrastructure
            required to support the reengineered processes.

            Military Base Closures:
            Lack of Data Inhibits Cost-Effectiveness Analyses of
            Privatization-in-Place Initiatives

            GAO/NSIAD-00-23,   Dec. 20 (38 pages).

            Privatization-in-place is a concept in which a private sector entity takes
            over the operations of a facility that was once run by the government. So
            far, privatization-in-place has been associated with the base closure
            process and has been used by the Defense Department (DOD) to transfer
            industrial work to the private sector. With legislative constraints affecting
            DOD’s ability to close military facilities, privatization-in-place is not likely to
            be used outside the base realignment and closure process. Three
            privatization-in-place efforts have resulted so far from the base closure
            process: the Air Force Aerospace Guidance and Metrology Center in
            Newark, Ohio; the Naval Surface Warfare Center in Louisville, Kentucky;
            and the Naval Air Warfare Center in Indianapolis, Indiana. These facilities
            primarily provide industrial services for the military. This report assesses
            the status, the cost, and the effectiveness of DOD’s three
            privatization-in-place actions. GAO (1) determines how contractors are
            reacting to falling workloads at these privatized facilities, (2) compares the
            cost-effectiveness of the privatization-in-place operations to the former
            government-run operations, and (3) identifies the impact of privatization
            on excess capacity in DOD’s industrial infrastructure.

Testimony   Defense Acquisitions: Progress in Meeting F-22 Cost and Schedule Goals,
            by Louis J. Rodrigues, Director of Defense Acquisitions Issues, before the
            Subcommittee on National Security, Veterans Affairs, and International
            Relations, House Committee on Government Reform. GAO/T-NSIAD-00-58,
            Dec. 7 (10 pages).

            GAO  reported in March 1999 on the extent to which cost, schedule, and
            performance goals were being met in the F-22 aircraft’s engineering and
            manufacturing development program. (See GAO/NSIAD-99-55 and
            GAO/T-NSIAD-99-113.) This statement for the record summarizes the relevant
            parts of that report and testimony, describes the congressional actions on
            the fiscal year 2000 budget request, updates the information that GAO gave

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                    Month in Review: December 1999

                    Congress in March, and discusses initiatives by the Air Force and
                    contractors to control production costs.

Correspondence      Defense Transportation: Preliminary Personal Property Pilot Results Are
                    Inconclusive. GAO/NSIAD-00-52R, Dec. 21.

Natural Resources

Correspondence      National Park Service: Information Concerning the Gettysburg National
                    Military Park and Two of Its Partners. GAO/RCED-00-27R, Dec. 9.

                    Foster Care:
Social Services     States’ Early Experiences Implementing the Adoption and Safe
                    Families Act

                    GAO/HEHS-00-1,   Dec. 22 (32 pages).

                    The Adoption and Safe Families Act of 1997 led to fundamental changes in
                    the way that the nation’s foster care system is managed. Previously, some
                    foster children languished in temporary, out-of-home care while prolonged
                    efforts were made to reunite them with their biological families. States are
                    now required to find these children a safe, permanent home more quickly.
                    This report discusses states’ early efforts to implement the act’s
                    provisions. GAO describes (1) how the states have responded to the act
                    regarding legal, administrative, and other changes that social workers may
                    need to make in their day-to-day practice of handling welfare cases; (2) the
                    status of states’ implementation of the two provisions related to making
                    timely permanency decisions for those foster children who are unable to
                    safely return home; and (3) the steps that the Department of Health and
                    Human Services has taken to assist states and monitor the implementation
                    of these two provisions.

                    Tax Administration:
Tax Policy and      IRS’ 1999 Tax Filing Season
                    GAO/GGD-00-37,   Dec. 15 (79 pages).

                    Page 15                                                         GAO/OPA-00-3
                 Month in Review: December 1999

                 During the 1999 tax filing season, the Internal Revenue Service (IRS) met or
                 exceeded several of its performance measure goals. However, IRS fell short
                 in two key areas: the ability of taxpayers to access IRS’ toll-free telephone
                 service and the quality of IRS’ answers to taxpayers who called with tax
                 law questions. Also, IRS’ accomplishment in a third area–the timeliness of
                 refunds for paper returns–raised questions about the agency’s timeliness
                 that IRS could not answer. Other significant findings from the 1999 tax
                 filing season included the following: IRS enhanced the availability of its
                 walk-in service by increasing Saturday hours and making services more
                 convenient for taxpayers who did not have easy access to a walk-in office.
                 Use of IRS’ World Wide Web site rose significantly during the 1999 tax filing
                 season. IRS stopped millions of dollars in erroneous claims for the earned
                 income credit in 1999 by validating social security numbers and
                 scrutinizing some claims. Of the nearly 126 million tax returns filed in
                 1999, 29.3 million, or 23 percent, were filed electronically. IRS launched
                 several initiatives directed at making electronic filing paperless and thus
                 more appealing to potential users. Twenty percent of the returns filed in
                 1999 included the new child tax credit. Many of these taxpayers, however,
                 miscalculated the credit amount, and many other taxpayers who were
                 eligible for the credit failed to claim it. IRS made significant changes to the
                 computer systems that it uses to process returns and remittances without
                 any discernable processing disruptions.

                 Mass Transit:
Transportation   Use of Alternative Fuels in Transit Buses

                 GAO/RCED-00-18,   Dec. 14 (47 pages).

                 Transit buses that use diesel engines significantly contribute to air
                 pollution in U.S. cities. To help remedy this problem, various alternative
                 fuels have been proposed for use in transit buses, including compressed
                 natural gas, liquified natural gas, methane, ethanol, biodiesel fuel, and
                 propane. GAO found that alternative fuel buses account for a very small,
                 but growing, portion of the nation’s transit bus fleet. Five percent of the
                 nation’s 50,000 transit buses ran on some type of alternative fuel in 1997.
                 The most commonly used alternative to diesel fuel is compressed natural
                 gas. Transit operators are also beginning to test new propulsion system
                 technologies–hybrid electric systems and fuel cells–in their transit buses.
                 Data are limited on the extent to which alternative fuels in transit buses
                 have improved air quality in urban areas. Transit operators pay more to
                 buy, maintain, and operate buses that use compressed natural gas than

                 Page 16                                                            GAO/OPA-00-3
                       Month in Review: December 1999

                       they pay for diesel buses. When deciding whether to switch to alternative
                       fuels, transit operators consider a range of factors, including the need to
                       adhere to more stringent emissions standards, public concerns about
                       transit bus pollution, and the higher costs and reduced reliability of buses
                       that use alternative fuels.

                       VA   Health Care:
Veterans Affairs       VA’s  Management of Drugs on Its National Formulary

                       GAO/HEHS-00-34,   Dec. 14 (21 pages).

                       The Department of Veterans Affairs (VA) spent more than $1.8 billion to
                       provide pharmacy benefits to veterans in fiscal year 1999. To help manage
                       its pharmacy benefit, VA maintains a list of drugs—known as the national
                       formulary—that its doctors are expected to use when prescribing drugs
                       for veterans. VA provides free outpatient pharmacy services to veterans
                       receiving medications for the treatment of service-connected conditions
                       and to veterans whose income does not exceed the maximum VA pension,
                       regardless of a drug’s formulary status. Other veterans may be charged $2
                       for each 30-day supply of medication. This report discusses how VA
                       manages its national formulary and how drugs other than those on the
                       national formulary are made available to veterans.

                       Travel System Requirements:
Special Publications   Checklist for Reviewing Systems Under the Federal Financial
                       Management Improvement Act of 1996

                       GAO/AIMD-00-21.2.8,   Dec. 1999 (60 pages).

                       Federal agencies must implement and maintain financial management
                       systems that substantially comply with the federal financial management
                       systems requirements that are spelled out by the Joint Financial
                       Management Improvement Program (JFMIP) and the Office of Management
                       and Budget. This checklist reflects JFMIP’s revised travel system
                       requirements to help (1) agencies implement and monitor their travel
                       systems and (2) management auditors review their travel systems to
                       determine if they are complying with JFMIP’s guidelines.

                       Page 17                                                          GAO/OPA-00-3
                    Month in Review: December 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 of 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.

                    Department of Health and Human Services, Health Care Financing
                    Administration: Medicare Program; Inpatient Hospital Deductible and
                    Hospital and Extended Care Services Coinsurance Amounts for 2000.
                    GAO/OGC-00-13, Dec. 13.

                    Environmental Protection Agency: National Pollution Discharge
                    Elimination System–Regulations for Revision of Water Pollution Control
                    Program Addressing Storm Water Discharges. GAO/OGC-00-14, Dec. 20.

                    Securities and Exchange Commission: Adoption of Amendments to the
                    Intermarket Trading System Plan to Expand the ITS/Computer Assisted
                    Execution System Linkage to All Listed Securities. GAO/OGC-00-15, Dec. 22.

                    Page 18                                                          GAO/OPA-00-3
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