oversight

Managing for Results: Prospects for Effective Implementation of the Government Performance and Results Act

Published by the Government Accountability Office on 1997-06-03.

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

                       United States General Accounting Office

GAO                    Testimony
                       Before the Subcommittee on Management, Information
                       and Technology
                       Committee on Government Reform and Oversight
                       House of Representatives

For Release on
Delivery Expected at
9:30 a.m. EDT
                       MANAGING FOR RESULTS
Tuesday
June 3, 1997

                       Prospects for Effective
                       Implementation of
                       the Government
                       Performance and Results
                       Act
                       Statement of L. Nye Stevens, Director
                       Federal Management and Workforce Issues
                       General Government Division




GAO/T-GGD-97-113
Summary

Managing for Results: Prospects for
Effective Implementation of the
Government Performance and Results Act
              The Government Performance and Results Act, which is referred to as
              “GPRA” or “the Results Act,” seeks to shift the focus of federal management
              and decisionmaking away from a preoccupation with the activities that are
              undertaken—such as grants or inspections made—to a focus on the
              results of those activities—such as real gains in employability, safety,
              responsiveness, or environmental quality. Under the Results Act, GAO was
              to report to Congress by this week on the Act’s implementation. Yesterday,
              GAO released its report in response to that mandate.


              GAO’s work shows that to this point, the implementation of the Results Act
              has achieved mixed results, which will lead to highly uneven
              governmentwide implementation in the fall of 1997. On the one hand, GAO
              found that the experiences of some of the Results Act pilot agencies and
              related efforts by nonpilot agencies showed that significant performance
              improvements were possible when an agency adopted a disciplined
              approach to setting results-oriented goals, measuring its performance, and
              using performance information to improve effectiveness. On the other
              hand, GAO’s survey of a random sample of civilian managers and
              supervisors in 24 major executive branch agencies found that although
              there had been progress over the last 3 years, managers reported that
              many agencies did not appear to be well positioned to provide in 1997 an
              answer to the fundamental Results Act question of whether programs have
              produced real results.

              GAO  found that agencies are confronting five key challenges that have
              limited the effective implementation of the Results Act. These challenges
              include those associated with (1) establishing clear agency missions and
              strategic goals, especially when program efforts are overlapping or
              fragmented; (2) measuring performance, particularly when the federal
              contribution to a result is difficult to determine; (3) generating the
              results-oriented performance information needed to set goals and assess
              progress; (4) instilling a results-oriented organizational culture within
              agencies; and (5) linking performance plans to the budget process.

              Addressing some of these challenges will raise significant policy issues for
              Congress and the administration to consider, some of which will likely be
              very difficult to resolve. GAO noted that the Act’s success or failure should
              not be judged on whether contentious policy issues are fully resolved;
              rather, judgment of the success or failure of the Act should turn on the
              extent to which the information produced through the required
              goal-setting and performance measurement practices—once those




              Page 1                                                       GAO/T-GGD-97-113
Summary
Managing for Results: Prospects for
Effective Implementation of the
Government Performance and Results Act




practices are successfully implemented—helps inform policy decisions
and improve program management.




Page 2                                                  GAO/T-GGD-97-113
Statement

Managing for Results: Prospects for
Effective Implementation of the
Government Performance and Results Act
              Mr. Chairman and Members of the Subcommittee:

              I am pleased to be here today to discuss the status of the implementation
              of the Government Performance and Results Act of 1993 and the prospects
              for its effective governmentwide implementation. In essence, the Act,
              which is referred to as “GPRA” or “the Results Act,” seeks to shift the focus
              of federal management and decisionmaking away from a preoccupation
              with the activities that are undertaken—such as grants or inspections
              made—to a focus on the results of those activities—such as real gains in
              employability, safety, responsiveness, or environmental quality.

              Congress understood that the management changes required to effectively
              implement the Results Act would not come quickly or easily. The Act
              therefore included a phased implementation approach that began in fiscal
              year 1994 with pilot projects on the Act’s performance planning and
              reporting requirements. Under the Results Act, we were to report to
              Congress by this week on the implementation of the Act, including the
              prospects for compliance by executive agencies beyond those that
              participated in the pilot phase.

              Yesterday, we released our report responding to that mandate, and, as
              requested by the Subcommittee, my comments today are based on that
              report.1 We drew on a large body of work we have done in recent years on
              the Results Act and on related goal-setting, performance measurement,
              and accountability concepts. We also surveyed a random sample of civilian
              managers and supervisors at the general schedule (GS) and general
              management (GM) levels GS/GM-13 through Senior Executive Service (SES)
              levels in 24 major executive branch agencies.2 These 24 agencies
              accounted for over 99 percent of the federal government’s net outlays for
              fiscal year 1996. The sample was stratified by whether the manager was
              SES or non-SES and by whether the manager was working in an agency or
              agency component that was designated as a Results Act pilot and that we
              were able to isolate in drawing our sample. Of the approximately 1,300
              managers surveyed, we received usable responses from about 72 percent.

              The overall survey results are statistically generalizable to the 24 agencies
              included in the survey. The survey data in our report that I will discuss
              today are the estimated percentages of how officials would have

              1
              The Government Performance and Results Act: 1997 Governmentwide Implementation Will be
              Uneven (GAO/GGD-97-109, June 2, 1997).
              2
               In reporting this survey data, when we use the term “manager” or “federal manager,” we are referring
              to both managers and supervisors.



              Page 3                                                                          GAO/T-GGD-97-113
                       Statement
                       Managing for Results: Prospects for
                       Effective Implementation of the
                       Government Performance and Results Act




                       responded had the entire universe of eligible officials been surveyed. In
                       general, percentages reported for the entire sample have confidence
                       intervals ranging from + 5 percentage points to + 12 percentage points. In
                       other words, if all managers in the 24 agencies included in our population
                       had been surveyed, the chances are 95 out of a 100 that the results
                       obtained would not differ from the sample estimate, in the most extreme
                       case, by more than + 12 percentage points.


                       Our work shows that, to this point, the implementation of the Results Act
Progress in            has achieved mixed results, which will lead to highly uneven
Implementing the       governmentwide implementation in the fall of 1997. Although agencies are
Results Act Has Been   likely to meet the upcoming statutory deadlines for producing initial
                       strategic plans and annual performance plans, we found that those
Mixed                  documents will not be of a consistently high quality or as useful for
                       congressional and agency decisionmaking as they could be. On a more
                       positive note, the Office of Management and Budget (OMB) selected over 70
                       performance planning and reporting pilots that far exceeded the number
                       required by the Act and that should provide a rich body of experience for
                       agencies to draw on in the future. Congress, too, has shown a growing
                       interest in and support for the governmentwide implementation of the Act.
                       For example, the House Majority has established teams consisting of staff
                       from various committees to lead its strategic plan consultation efforts.
                       These teams have been reaching out to agencies to review and comment
                       on agencies’ strategic plans.

                       We also found that the experiences of some of the Results Act pilot
                       agencies and related efforts by nonpilot agencies showed that significant
                       performance improvements were possible when an agency adopted a
                       disciplined approach to setting results-oriented goals, measuring its
                       performance, and using performance information to improve
                       effectiveness. For example, the Veterans Health Administration improved
                       services to veterans by more rigorously assessing the results of the
                       medical care it provides. In particular, the Veterans Health Administration
                       reported that it used performance information to target the most
                       important improvement opportunities and thereby lowered the mortality
                       rate for cardiac procedures by an average of 13 percent over the last 8
                       years.

                       In another example, involving the Social Security Administration’s (SSA)
                       national toll-free 800 telephone number to handle citizen inquiries, SSA
                       used customer satisfaction and other performance information to identify



                       Page 4                                                      GAO/T-GGD-97-113
Statement
Managing for Results: Prospects for
Effective Implementation of the
Government Performance and Results Act




and make program changes, including providing additional staff to handle
phone calls from the public. As a result, the busy rate decreased from 49 to
34 percent, and the percentage of calls answered within 5 minutes
increased from 74 to 83 percent from fiscal year 1995 to fiscal year 1996.3

Although these and other performance improvements are noteworthy, the
reported examples of substantial performance improvements were
relatively few, and many agencies did not appear to be well positioned to
provide in 1997 a results-oriented answer to the fundamental Results Act
question: What are we accomplishing? For example, we reported in
January 1997 that the Department of Housing and Urban Development’s
(HUD) Public Housing Management Assessment Program did not collect
important information needed to manage and assess its results.4 The
program is to assess the performance of local housing authorities by
measuring factors such as the numbers of outstanding work orders and
uncollected rents. However, the system does not measure other factors,
such as housing quality, that are essential for assessing the results that
housing authorities are achieving, as well as for determining which
housing authorities are performing well or poorly.

The situation at HUD appears to be typical. We surveyed federal managers
about the extent to which critical performance measures were available
for their programs. As figure 1 shows, according to our survey, only
32 percent of federal managers said that, to a great or very great extent,
they have the types of performance measures that would demonstrate
whether their programs or operations were achieving their intended result.
The figure also shows that 38 percent or less of federal managers reported
having, to a great or very great extent, other important performance
measures, such as efficiency and quality measures.




3
 Social Security Administration: Significant Challenges Await New Commissioner (GAO/HEHS-97-53,
Feb. 20, 1997).
4
 Public Housing: HUD Should Improve the Usefulness and Accuracy of Its Management Assessment
Program (GAO/RCED-97-27, Jan. 29, 1997).



Page 5                                                                      GAO/T-GGD-97-113
                                                        Statement
                                                        Managing for Results: Prospects for
                                                        Effective Implementation of the
                                                        Government Performance and Results Act




Figure 1:




  GAO Managers' Responses Show Key
                   Performance Measures Lacking
                   Percent of managers reporting existence of measures to a great/very great extent
                   100




                    80




                    60




                    40                38
                                                             32                             32                               31
                              27                                                                                                                              26

                    20                             19                                                          19
                                                                                                                                                  17
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            Types of performance measures




                              3 years ago
                              Currently




                                                        Source: GAO survey data.




                                                        As indicated in figure 1, while still viewed as low, significantly more
                                                        managers reported the existence of results-oriented and other
                                                        performance measures to a greater extent currently than 3 years ago. For
                                                        example, when asked to recollect what the situation was 3 years ago,
                                                        19 percent of federal managers reported that, to a great or very great



                                                        Page 6                                                                                                     GAO/T-GGD-97-113
Statement
Managing for Results: Prospects for
Effective Implementation of the
Government Performance and Results Act




extent, they had results-oriented measures, compared to 32 percent who
reported that they had such measures today. This represents a
13 percentage point change over what federal managers perceived the
situation to have been 3 years ago, suggesting that results-oriented
performance information, which is essential to the success of the Results
Act, is becoming more widely available.

Obviously, it is not sufficient merely to measure current performance. The
Results Act envisions that performance information will be used to make
decisions and better manage programs. We asked federal managers about
the extent to which results-oriented performance information was used to
help make key decisions about their programs. As figure 2 shows, the
reported use of such information was limited.




Page 7                                                     GAO/T-GGD-97-113
                                                       Statement
                                                       Managing for Results: Prospects for
                                                       Effective Implementation of the
                                                       Government Performance and Results Act




Figure 2:




  GAO Managers' Responses Show Limited Use of
              Results-Oriented Performance Information
               Percent of managers reporting use of performance information to a great/very great extent
               100




                80




                60




                40



                                          21                                20
                20            16                                                                        16
                                                             14                               12                                            13
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                            3 years ago

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                                                       Source: GAO survey data.




                                                       Similar to the situation with performance measures, federal managers
                                                       reported some positive changes in what they recollected the situation to
                                                       have been 3 years ago. Although these changes are statistically significant
                                                       for most of the uses shown in the figure, these changes have been modest.




                                                       Page 8                                                                                    GAO/T-GGD-97-113
                         Statement
                         Managing for Results: Prospects for
                         Effective Implementation of the
                         Government Performance and Results Act




                         Even among those federal managers who reported that, to a great or very
                         great extent, they had measures that demonstrate their programs are
                         achieving intended results, their reported use of results-oriented
                         performance information was not high. No more than 37 percent of the
                         managers reported that performance information was used to a great or
                         very great extent to help make any of the key decisions shown in figure 2.

                         These survey results underscore how far agencies still have to progress in
                         the use of results-oriented performance information. Although there has
                         been progress over the last 3 years, many agencies still have not developed
                         the information necessary to determine whether their programs are
                         accomplishing their intended results. Where managers reported that their
                         agencies had results-oriented performance measures, the results-oriented
                         information generally was not being used to a great or very great extent to
                         help make decisions affecting their programs.


                         We found that agencies are confronting five key challenges that have
Key Challenges           limited the implementation of the Results Act. These challenges include
Remain to Effective      those associated with (1) establishing clear agency missions and strategic
Implementation of the    goals, especially when program efforts are overlapping or fragmented;
                         (2) measuring performance, particularly when the federal contribution to a
Results Act              result is difficult to determine; (3) generating the results-oriented
                         performance information needed to set goals and assess progress;
                         (4) instilling a results-oriented organizational culture within agencies; and
                         (5) linking performance plans to the budget process. As Congress
                         recognized when it passed the Results Act and as the experiences of pilot
                         agencies and related efforts by nonpilot agencies suggest, these challenges
                         will not be quickly or easily resolved. I will briefly describe each of these
                         five challenges and give some examples.


Establishing Clear       One challenge to the effective implementation of the Results Act is
Missions and Strategic   traceable to overlapping and fragmented program efforts. Crosscutting
Goals                    program efforts, such as student loan or economic development programs,
                         present the logical need to coordinate efforts to ensure that goals are
                         consistent and, as appropriate, that program efforts are mutually
                         reinforcing. We found that, when this is not done, overlapping and
                         fragmented program efforts can undermine efforts to establish clear
                         missions and goals. Such uncoordinated overlapping and fragmented
                         program efforts can frustrate program customers, waste scarce resources,
                         and limit the overall effectiveness of the federal effort.



                         Page 9                                                      GAO/T-GGD-97-113
Statement
Managing for Results: Prospects for
Effective Implementation of the
Government Performance and Results Act




For example, we reported in 1995 on the Department of Education
programs that provided loans and grants to students to help finance their
higher education.5 We found that although the student loan and Pell grant
programs provided the majority of federal financial aid to students for
postsecondary education, another 22 smaller programs were targeted to
specific segments of the postsecondary school population, such as
prospective students from disadvantaged families or women and
minorities who are underrepresented in graduate education. These 22
programs were collectively funded at $1.1 billion for fiscal year 1995. We
concluded that these smaller grant programs could be considered
candidates for consolidation—with other larger programs or among
themselves—with no adverse impact on students’ access to postsecondary
education. We also found that the federal government could anticipate
administrative savings of 10 percent each year, or a total of $550 million in
budget authority (adjusted for inflation) over 5 years.

In addition to the problem of overlapping and fragmented programs,
agencies are challenged in setting goals because those goals often must
reflect a balance of competing policy priorities. For example, we reported
in April 1997 that the Forest Service had increasingly shifted the emphasis
of its efforts from producing timber to sustaining wildlife.6 This shift was
taking place in reaction to requirements in planning and environmental
laws and their judicial interpretation—reflecting changing public values
and concerns—together with social, ecological, and other factors.
However, we noted that the demand for recreation was also expected to
grow and may increasingly conflict with efforts to sustain wildlife and
produce timber. We found that the disagreement both within the Forest
Service and among key external stakeholders, including Congress, on how
the Forest Service is to resolve conflicts or make choices among
competing uses on its lands had seriously undermined its efforts to
establish the goals and performance measures needed to ensure
accountability. We concluded that until general agreement is reached, the
Forest Service’s decisionmaking is likely to continue to be inefficient and
ineffective.




5
 Department of Education: Information on Consolidation Opportunities and Student Aid
(GAO/T-HEHS-95-130, Apr. 6, 1995); and Department of Education: Opportunities to Realize Savings
(GAO/T-HEHS-95-56, Jan. 18, 1995).
6
Forest Service Decision-Making: A Framework for Improving Performance (GAO/RCED-97-71,
Apr. 29, 1997).



Page 10                                                                       GAO/T-GGD-97-113
                          Statement
                          Managing for Results: Prospects for
                          Effective Implementation of the
                          Government Performance and Results Act




Measuring Performance     A second challenge to the effective implementation of the Results Act is
                          the often limited or indirect influence that the federal government has in
                          determining whether a desired result is achieved, which complicates the
                          effort to measure the discrete federal contribution to a specific result. Our
                          work has shown that measuring the federal contribution is particularly
                          challenging for regulatory programs; scientific research programs; and
                          programs that deliver services to taxpayers through third parties, such as
                          state and local governments. For example, determining the impact of
                          economic development programs has been a daunting task because of the
                          numerous external forces—including broad national economic trends and
                          the assistance that communities may receive from state and local
                          governments and the private sector—that may contribute to local
                          economic development.

                          Separating out the effects of federal program efforts can be extremely
                          difficult, as we observed in a 1996 review of economic development
                          programs, because it would require, first, documentation that there had
                          been some improvement in a targeted area; second, linkage of specific
                          program elements to actual economic changes; and third, measurement of
                          the growth stemming from other influences on the economy of the
                          targeted area in order to isolate the impact that could be attributed to the
                          economic development program.7

                          Some agencies are exploring approaches that begin to address the
                          difficulty they are having in developing useful results-oriented
                          performance information. Among the approaches that are detailed in our
                          report are (1) using impact evaluations; (2) using intermediate
                          performance measures; (3) using a range of measures; and (4) working
                          with stakeholders to identify and reach consensus on the most meaningful
                          measures for the program.


Generating                A third challenge to the effective implementation of the Results Act is the
Results-Oriented          lack of results-oriented performance information in many agencies, which
Performance Information   hampers efforts to identify appropriate goals and confidently assess
                          performance. Even when data exist, we have consistently found that the
                          quality of agencies’ performance data is often questionable due to several
                          factors, including the need to rely on third parties to provide data. For
                          example, Department of Veterans Affairs officials told us that some of
                          their results-oriented measures for a Loan Guaranty program were new

                          7
                          Economic Development: Limited Information Exists on the Impact of Assistance Provided by Three
                          Agencies (GAO/RCED-96-103, Apr. 3, 1996).



                          Page 11                                                                     GAO/T-GGD-97-113
                         Statement
                         Managing for Results: Prospects for
                         Effective Implementation of the
                         Government Performance and Results Act




                         and that baseline data were not available on those measures.
                         Consequently, they did not have data on past performance to use in setting
                         some of the program’s fiscal year 1998 goals. In some of these cases, the
                         Department indicated in its fiscal year 1998 budget submission that those
                         goals were “to be determined.” In another example, Department of
                         Agriculture officials said they eliminated some performance measures that
                         had been part of their Results Act pilot’s annual performance plan because
                         they did not have a way to collect data on those measures. Lacking these
                         data, they did not have an informed basis on which to set goals.


Instilling a             A fourth challenge to the effective implementation of the Results Act
Results-Oriented         centers on the need to instill within agencies an organizational culture that
Organizational Culture   focuses on results, and this remains a work in progress across the federal
                         government. According to our survey, federal managers rated the
                         commitment of top leadership to achieving results as higher currently than
                         they did 3 years ago. However, federal managers’ responses to our survey
                         also suggested that not much progress has occurred in agencies to develop
                         and sustain cultures that focus on results. For example, when we asked
                         federal managers about the extent to which they or supervisors at their
                         levels had the authority they needed to help their agencies accomplish
                         their strategic goals, the federal managers did not perceive that they had
                         more such authority currently than they recalled having 3 years ago.

                         Significantly, for federal managers from the Results Act pilots that we
                         were able to isolate for our sample, managers’ perception of the extent of
                         their authority currently was much lower than their perception of the
                         situation 3 years ago. For example, 40 percent of SES managers from
                         selected pilots reported that managers at their level had authority to help
                         the agency accomplish its strategic goals to a great or very great extent
                         currently, while their perception of this extent of authority 3 years ago was
                         56 percent—a difference of 16 percentage points.

                         These survey results suggest that as agencies implement the Results Act
                         and strive to become more results oriented, they need to pay special
                         attention to ensuring that key managers have the authority they need to
                         achieve intended results. In passing the Results Act, Congress recognized
                         that if federal managers were to be held accountable for program results,
                         they would need the authority and flexibility to achieve those results.
                         Congress also understood the importance of affording federal program
                         managers the freedom to be innovative and creative and to marshal
                         resources to achieve results.



                         Page 12                                                     GAO/T-GGD-97-113
                            Statement
                            Managing for Results: Prospects for
                            Effective Implementation of the
                            Government Performance and Results Act




                            Thus, the Results Act authorizes agencies to apply for managerial
                            flexibility waivers of nonstatutory administrative procedural requirements
                            and controls in their annual performance plans. The Act further specified
                            that managerial accountability and flexibility waivers were to be piloted
                            during fiscal years 1995 and 1996. However, as we reported in April 1997,
                            the managerial accountability and flexibility pilot did not work as
                            intended.8 We found that three major factors contributed to the failure of
                            the managerial accountability and flexibility pilot to work as intended.
                            First, changes in federal management practices and laws that occurred
                            after the Act was enacted affected agencies’ need for the waivers. Second,
                            agencies could use other, less rigorous, means to obtain waivers from
                            administrative requirements. Third, unlike its active approach to the first
                            set of Results Act pilots covering performance planning and reporting, OMB
                            did not work actively with agencies that were seeking to take part in the
                            managerial accountability and flexibility pilot.


Linking Performance Plans   Finally, a fifth challenge to the effective implementation of the Results Act
to the Budget Process       is the need to link agencies’ performance plans directly to the budget
                            process through the Results Act requirement to base the annual program
                            performance goals on the budget’s program activity structure.9 We have
                            found that the extent to which the budget’s program activity structure can
                            be directly linked to a results-oriented performance framework varies
                            widely among activities, and adjustments and accommodations in the
                            program activity structure may be needed. Reaching agreement on such
                            changes between Congress and the executive branch will be a
                            time-consuming and difficult process that will likely take more than one
                            budget cycle to resolve.


                            The Results Act is the cornerstone of a series of initiatives that are
An Augmented                intended to provide a comprehensive framework for integrating program,
Reporting Framework         cost, and budget information. Improved financial reporting and auditing
Holds Promise for           required by the Chief Financial Officers Act should strengthen the
                            reliability of cost and performance information. The Federal Accounting
Strengthening Federal       Standards Advisory Board (FASAB) has developed a new set of reporting
Decisionmaking and          concepts and accounting standards that underpin OMB’s guidance to
Accountability
                            8
                            GPRA: Managerial Accountability and Flexibility Pilot Did Not Work As Intended (GAO/GGD-97-36,
                            Apr. 10, 1997).
                            9
                            Performance Budgeting: Past Initiatives Offer Insights for GPRA Implementation (GAO/AIMD-97-46,
                            Mar. 27, 1997).



                            Page 13                                                                     GAO/T-GGD-97-113
           Statement
           Managing for Results: Prospects for
           Effective Implementation of the
           Government Performance and Results Act




           agencies on the form and content of their agencywide financial
           statements.

           FASAB  standards include a new reporting model for federal agencies geared
           to providing users with information about budgetary integrity, operating
           performance, stewardship, and systems and controls. These standards also
           include cost accounting standards that became effective beginning with
           fiscal year 1997 and are the first set of standards that are to account for
           the full costs of federal programs. For the first time, decisionmakers are to
           be provided with annual “report cards” on the costs, management, and
           effectiveness of federal agencies. The FASAB cost accounting standards, if
           successfully implemented, are to provide decisionmakers with information
           on the costs of all resources used, including the costs of services provided
           by others to support activities or programs. Such information would allow
           for comparisons of the costs of various programs and activities with their
           performance outputs and results.


           In summary, Mr. Chairman, the performance improvements already
           reported strongly suggest that the basic goal-setting and performance
           measurement model used by the Results Act, if successfully implemented,
           will be an important tool to improve federal management and
           performance. However, addressing some of the challenges that I have
           highlighted today, such as crosscutting program efforts and balances
           among competing priorities, will raise significant policy issues for
           Congress and the administration to consider, some of which will likely be
           very difficult to resolve.

           The Results Act’s success or failure should not be judged on whether
           contentious policy issues are fully resolved; rather, judgment of the
           success or failure of the Act should turn on the extent to which the
           information produced through the required goal-setting and performance
           measurement practices—once those practices are successfully
           implemented—helps inform policy decisions and improve program
           management. Although progress thus far has been mixed and
           implementation this fall will be uneven, the Results Act has shown that it
           has the potential for improving the federal government’s performance and
           sharpening executive branch and congressional decisionmaking.

           This concludes my prepared statement. I would be pleased to answer any
           questions.




(410143)   Page 14                                                     GAO/T-GGD-97-113
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