Fiscal Year 1998 Budget Estimates for the U.S. General Accounting Office

Published by the Government Accountability Office on 1997-02-11.

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

                                    United States General Accounting Office
                                    Before the Subcommitteeon Legislative, Committee on
                                    Appropriations, House of Representatives

           For releaseon Delivery
           230 p.m., EST
                                    Fiscal Year 1998 Budget
           February Il.1997         Estimates for the U.S. General
                                    Accounting Office

                                    Statementof JamesF. Hinchman, Acting Comptroller General ‘*‘‘*’
                                    of the United States

  b,’ ,”
.*; c
 :’ /
Mr.    Chairman        and Members of                the    Subcommittee:

I am pleased           to be here            today     to testify            on GAO's fiscal                    year     1998
budget      request.           GAO has undergone                   major      changes          over       the    last         few
years,      including          significant            cutbacks          in people           and resources.                     Our
budget      request      for      1998 reflects               needs        that     have       resulted          from some
of those        changes.

The General         Accounting          Office         was created                to help       ensure          that
taxpayers'        dollars         are wisely           spent.           We seek        to      fulfill          this
mission      by encouraging             honest,            efficient         management              and full
accountability           throughout            the     federal          government.                We serve            U.S.
interests        by providing           Congress,             other        policymakers,                 and the public
with     accurate       information,             unbiased           analyses,          and objective
recommendations             on the use of public                       resources.

The issues        we examine           span the            breadth         of national             and
international           concerns,            including         health         care,      financial              management
and accountability,                 law enforcement                 and banking,               information
technology,         national         security,             energy       and the        environment,                 aviation
security,        defense        procurement,               education          and employment,
transportation,             tax     administration,                 income         security,             housing,
international           relations            and trade,            and many others.

                                                                                                               was done at
    the request              of Congress.               GAO is     required         by law       (P-L.         67-13)        to do
    work       requested           by congressional               committees          and assigns              equal        status
    to requests              from      committee         chairs      and ranking            minority           members.
    More and more in recent                       years,         congressional             legislation           has
    mandated         GAO audits              and evaluations,              and to the extent                   possible
    within        resource          constraints,           GAO also          responds          to requests              from
    individual             members.           Finally,       GAO undertakes                assignments
    independently               in accordance             with     its     basic      legislative

    While       audits        and evaluations              are     the most visible                 aspects           of GAO's
    work and absorb                 the      largest      share         of its     resources,           GAO has other
    important             functions.           We prescribe              accounting          standards          for        the
    entire        federal          government,           in conjunction             with       the Office             of
    Management             and Budget          and the       Department            of the Treasury,                   and issue
    generally             accepted        government         auditing            standards       ,for    all      levels         of
    government             entities.           We also       issue        legal     decisions           on matters
    involving             government          revenues       and expenditures,                  such as protests
    against         the     award       of    federal      government             contracts.

    Fiscal        Year      1996       Accomplishments

    and      Highlights

    During        the past          year,      we marked          two important             milestones.                We bid
    farewell         to Charles              A. Bowsher,          who retired          as Comptroller                   General

                                                                                                                                  ,,   “

at the end of his                    Is-year       term on September                  30, and celebrated                   our    ' 'iii:-
75th     anniversary            of service            to Congress             and the nation.

GAO is proud            of     its     long       tradition          of service          to Congress,               the
contributions            it     has made toward                  improving           federal          government
operations,            and congressional                 actions          based on GAO recommendations.
In fiscal        year         1996,     GAO provided              Congress           and federal          agencies
with     recommendations                 for     measurable           financial          benefits         and
management improvements                         and with        numerous           testimonies,           audit       and
evaluation          products,            and legal            opinions.

As a result            of GAO's recommendations                        and audit            findings,         the
legislative            and executive               branches          took     actions          with     financial
benefits        of over         $17 billion.                  These actions             included         budget
reductions,            costs         avoided,       appropriation                 deferrals,           and revenue
enhancements            that         are directly             attributable            to or were
significantly            influenced              by GAO's work.

Further,        we made other                  recommendations               and documented              audit
findings        that     resulted              in or contributed                  to improvements             in the
effectiveness            and efficiency                 of government                operations          and services.
Although        these         improvements            cannot         always        be quantified            in monetary
terms,      their       impact         is      significant           because         they      lead     to a better-
run,     more streamlined                   government.              Past     experience              shows that          about
70 percent          of our key recommendations                              are    implemented           within       4

agencies'        corrective              actions.

In all,       we produced           1,306          audit        and evaluation                products.              These
products       include          908 reports              to Congress               and agency           officials,            217
formal       congressional           briefings,                 and 181 congressional                      testimonies
delivered        by 68 GAO executives                       before           85 congressional                committees
and subcommittees.                  We also          provided            29 statements              for      the record
to congressional                committees           and subcommittees                       and produced             3,041
legal     decisions.

Action8       Taken       to    Absorb       the

as-Percent        Budget         Reduction

As you are aware,                our budget              was reduced               in    fiscal     years       1996 and
1997 by a total                of 25 percent               from        the    1995 level.               Since        employee
compensation           constitutes            about         80 percent              of      our budget        dollars,
most of the actions                 taken          to manage the                  budget      reductions
necessitated           a loss       of people.                  Today,        as a result           of those
reductions,           GAO's staffing                is     at    its     lowest          level     since      before
World     War II.

To manage the           reduction            in staff,            we continued                the hiring             freeze
which     has been in place                  since         1992,        obtained            Congress'        permission
to pay "buyouts"                to employees               willing           to    leave      voluntarily,             and
offered       early-out          retirement              to eligible               staff.         Several       hundred

staff       were also           involuntarily                 separated              as a result         of    the closure
of      three      field       offices       and the elimination                         of many administrative,
technical,              and support          positions,               mostly          at headquarters.                In
addition,              GAO transferred               its      claims         function           to the    executive
branch.           At    the    end of       fiscal         year       1996,          we had about         3,500       staff         on
board,          which      amounted         to a 35-percent                   workforce           reduction        since
fiscal          1992.

In addition              to reducing              staff,       we also          substantially             reduced
funding           in other        areas.           For example:

--      Promotions            and awards           were       frozen         during       the     last    2 years,            and
     GAO has not               funded       bonuses           since         fiscal       year     1992.

--   We reduced               the amount budgeted                     for      office      rent      by over       $11
     million            through        the closure             of offices               and the      consolidation              of
        local      audit       sites      and offices             at our headquarters                     building.

--   We reduced               funding       for      travel,          training,           subscriptions,
        supplies,          and equipment               by almost             40 percent.

--   We have reduced                   funding         for     information               management           technology            by
        38 percent            since      fiscal        year       1995 and have deferred                       most    of our
        capital         investment.

       billion         over     the next           5 years.

       Fiscal        Year     1998      Budget          Request

       Having        worked       hard        to successfully                  implement               this        25 percent
       reduction            in our appropriations                     in       fiscal          years          1996 and 1997,                we
       believe         an increase             in our       funding            is     essential               in    fiscal        year      1998
       if   we are          to stabilize               our organization                    and maintain                  our capacity
       to serve         Congress         effectively.                We are               therefore            asking         that       the
       Subcommittee             consider          a fiscal          year        1998 budget                   of $368,828,000                  to
       support         our    staff      of      3,500      people         and an full-time                         equivalent             staff
       level        of 3,450.           The increase               included               in    this      request            is   for      five

            mandatory           pay and benefits                   increases;

#’ ,
       --   price-level               increases           to cover         the        higher           costs        of
                transportation,               printing,           supplies,               personnel            services,             and
            other       essential             mission       support            goods           and services;

% L
            pay-related               costs      for      promotions                and employee               recognition,                which
            we have foregone                   in recent           years;

                information           technology           upgrades:                and

--     maintenance            and repair         of GAO's headquarters                        building.

Mandatory            pay and benefit             increases             are     the most        important           piece       of
our request.              Without       the      funding          to cover           uncontrollable               costs
such as locality                pay,    cost      of      living,           and personnel          benefits
increases,            we will      have to reduce                 our staff           level     even further.
The people            who work at GAO are                  our most valuable                   resource,           and a
further        reduction          in staff        will       hamper our ability                   to maintain              our
current        level      of operations.

It     is    also     important        to offset           other           uncontrollable           inflationary
increases,            such as the            higher       cost        of    travel     and transportation,
printing,            and supplies.             Without           the       funding      to cover          these     costs,
further        funding        reductions          will       be necessary,               impairing           our
capacity            to function        effectively.

In addition,             funding       for     promotions              and employee            recognition              will
help        us to retain          and recruit             the     talent        needed        to continue           our
support        of Congress.             We are           losing        many of our key people                      to
executive            branch     agencies         and professional                    firms     offering           pay
incentives,            such as promotions,                   bonuses,           and awards,           that        GAO has
been unable            to offer        for     several           years.

Investment            in our      information             technology            program        is needed           to
replace        older      and nearly           obsolete           computer           equipment        and software,
as well        as to upgrade            our      systems            to support          GAO's new reengineered

‘b; ,i
  _ i;i ’ ,
       I A$‘ ’
 .i: )::    +:
    , p 3 ‘*
q$:,:        ?/   c
                      job     processes.             While        the network                 and data        coilection              software
                      applications             are       in place        and      fully          operational,              we need to upgrade
                      workstations,             software,           applications,                     and network               operating           system
                      hardware        and software.                 We need these                     upgrades           to ensure           continued
                      efficient        operation             and to maximize                     the      productivity               gains         that
                      information            technology            makes possible.

                      Finally,        the     GAO building,               built             in the        early         195Os,       continually
                      requires       maintenance              and repair                   to ensure         a safe,            healthy,           and
                      efficient        work         environment           for             our people.

                      Concluding            Remarks

                      For over        75 years,            GAO has assisted                      the      Congress          in carrying               out
                      its     legislative            and oversight                responsibilities,                       shifting           its      focus
                      and updating            its        operations          to accommodate                   changing             congressional
                      needs.        Through          the     results         of our work                  in many diverse                  areas,           GAO
                      has given        Congress            a high        rate             of return        on its         investment,               in
                      which       Congress          can take        justifiable                  pride.           Each year,            GAO's goal
                      is     to identify            at    least     $10 billion                  in    financial           benefits.
                      Although       this       amount        fluctuates                   from year         to year,            between           fiscal
                      year       1992 and 1996,              financial            benefits             totaled           over      $103 billion,
                      or nearly        $50 for            every     dollar                appropriated            for     GAO.
 - I
 $5     ,’

                      We recognize,             Mr.       Chairman,          that           resources         are        limited        throughout
                      government.             GAO is         committed            to holding               down costs              wherever

possible,         as our record           demonstrates,           and we have sought           to be
prudent         in our budget          submission.            However,      if   GAO is   to maintain
its      long    tradition          of service      to Congress,           the   agency   needs the
resources         necessary          to maintain         a strong     and effective
organization.                This    includes      the    funds     necessary      to pay for
mandatory         increases          in people-related            costs     and increases        in the
prices      of the goods and services                     we buy.     We also      need to address
those      capital      investment         and facility           maintenance         needs   that    should
not     be deferred.

This      concludes          my statement.          We would        be happy      to answer     any
questions         the Members of the               Subcommittee           may have.

1   .

            i . .
The first copy of each GAO report and testimony is free.
Additional   copies are $2 each. Orders should be sent to the
following  address, accompanied by a check or money order
made out to the Superintendent     of Documents, when
necessary. VISA and Mastercard      credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office
P.O. Box 6015
Gaithersburg, MD 20884-6015

or visit:

Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting  Office
Washington,  DC

Orders may also be placed by calling (202) 512-6000
or by using fax number (301) 2534066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and
testimony.   To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu will provide information         on
how to obtain these lists.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with “info” in the body to:


or visit GAO’s World Wide Web Home Page at:


United States
General Accounting    Office                   l3ulkRate
Washington,   D.C. 20548-0001            Postage & Fees Paid
                                     I     Permit No. GlOO     I
Official   Business
Penalty    for Private   Use $300

Address    Correction    Reauested